Lock In Customer Gratitude

Consumers say they look for a retailer they can trust. In surveys conducted by Advertising Age/ARC, consumers in every age group from teenagers on up said that what was most important to them was brand trustworthiness. For retailers, your store is your brand.
     But once the customer finds that retailer, what builds lasting loyalty is not so much trust as gratitude. In the U.S., researchers at University of Washington, Southern Illinois University-Carbondale, San Jose State University, and University of Cincinnati found that when a customer is aware of their gratitude to a retailer, they become more likely to purchase items from that retailer.
     In Italy, researchers at Università Commerciale Luigi Bocconi looked at relationships between six emotions and what the shopper with those emotions did after completion of the purchase. The six emotions were anger, gratitude, guilt, happiness, pride, and sadness. The four behaviors were complaining to the retailer, criticizing the retailer when talking to other people (negative word of mouth), expressing an intention to make a future purchase, and praising the retailer when talking to other people (positive word of mouth).
     The greater the extent to which customers said they felt grateful to the retailer for helping to solve a problem or satisfy a need, the more likely the customer was to praise the retailer to others and to say they intended to shop with that retailer again. In the study, there were no significant correlations between customer happiness, on the one hand, and either positive word of mouth or repurchase intention, on the other hand.
     Continually give your customers reasons to be grateful to you and to your store. Then solidify your relationships with customers by locking in their gratitude to you.

• Even better than general praise are thank you’s for specific actions you’ve taken to benefit the customer. When a customer shares one with you, reply, “I’m pleased I could help you out.”
• On any customer attitude surveys, ask for specifics of what your store did well. When the customer replies, that’s helping to lock in the gratitude.
• Consider asking for paybacks. Research at University of Toronto indicates that with customers you know by name, asking the person to recommend you to family and friends in the future works well. With customers you don’t know by name, asking them to complete a comments card immediately is a better choice.

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Go for Customer Gratitude and Guilt

Pitch the Synergy of Multifunction Items

Why would your shopper want a toothpaste that only cleans their teeth when they could buy a paste which also freshens their breath? Why did Samsung Electronics gear up to get into the standalone camera business when combination camera/phone/GPS/gaming devices are available in abundance?
     Well, there’s a variety of reasons. But one answer from researchers at Northwestern University is that although shoppers are attracted to multi-solution products, a number of those shoppers believe such products are inferior in each of the capabilities when compared to single-solution products. The product which promises to be a jack of all trades risks being seen as a master of none.
     Carrying multifunction products has an advantage for you. You can reduce the total of different items you need to have in stock. If you’re out of the toothpaste that just cleans, you could point the shopper toward the one that cleans plus more. But this works out only if the shopper accepts the quality of the combination offering.
     The Northwestern University researchers found that one way to overcome the inferred inferiority is to set a premium price on the multifunction product. The extra cost helps convince shoppers that the product can indeed do more.
     But in a retailing environment where consumers are highly price sensitive, you might choose to take a different approach. Research findings from Singapore Management University and Korea’s Kyung Hee University suggest a technique: Describe to the potential purchaser how well the various functions work together. Instead of focusing on the different capabilities, focus on the added benefits that comes from the synergy.
     The Singapore/Kyung Hee research indicates that this is especially useful with items the shopper considers to have a high level of technological performance. It is more important with smart phones than with toothpaste. In fact, the researchers concluded that at low levels of technological performance, people overwhelmingly preferred the combination products.
     Because cultures vary in the thresholds consumers set for high technology, the value and effectiveness of pitching the synergy differs by culture. Assess what works with your customer base.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Set Healthy Margins on Multi-Solution Products
Notice Customers’ Cultural Aspirations

Exchange Retailing Ideas with Lots of Others

Finland’s Nokia was the world’s mobile phone powerhouse. But a recent Bloomberg Businessweek article describes the company as having been in “steep decline” in recent years. Nokia has many strengths to bounce them back to extraordinary success. They still hold more than 30% of the market for global mobile phone sales. Still, what happened to Nokia can serve us as a cautionary tale.
     Bloomberg Businessweek attributes Nokia’s problems to an isolation that kept the company from challenging their own business assumptions. As a consequence, they failed to keep up with what consumers came to expect in product capabilities and handset design. Nokia had a reputation for hiring from within. It was only earlier this month that Nokia selected, for the first time, a non-Finn as its CEO. Their ideas stayed within. The operating system for their phones is used by no company other than Nokia.
     The lesson for us? Cut through isolation. Exchange ideas with lots of other business people.

• Broaden the range of people to learn from. Yes, you can’t learn from everybody. For one thing, you don’t have the time if you’re operating your business. For another thing, not everyone who catches your attention has lessons that apply to your business. But look for teachers outside your usual channels. As you read my posting now, do you find yourself thinking things like, “How can I learn from what happened to Nokia. They’re a manufacturer, and I’m a retailer,” or “What could I possibly learn from the experiences of a company like Nokia that is so much bigger than my business”? If you’re thinking like that, you’re at risk for isolation.
• How often do you and your staff interact with other businesspeople? The Bloomberg Businessweek article pointed to the physical isolation of Nokia’s headquarters, far distant from other consumer-electronics and Internet-development firms. There might be something to that. Texting, blogs, and videoconferencing can provide important information. But compared to face-to-face interaction, communication from a distance falls short in spreading the passion. Encourage your staff to participate in workshops and professional conferences.
• Every week or two, consciously question your business assumptions to see how they hold up. Decades of social psychology research—such as at University of Colorado, State College of Colorado, and Ohio State University—highlight how having a point of view primes us to ignore contradictory evidence we’d benefit by noticing.

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Visit Other Retailers
Call on Structural Equation Modeling

Recalibrate for Shopper Gender Trends

In the U.S. at least, it’s likely that husbands will be doing more of the shopping than in the past, and when a wife does do the shopping, she’s more likely than in the past to bring along family and/or friends. Neither of these trends is monumental in magnitude. However, it’s your attention to marginal, but persistent, differences that can give you a retailer’s edge in profitability.
     The chain of logic behind the changes is reflected in an analysis conducted at University of New Hampshire of survey data: During the U.S. economic downturn, husbands were more likely to lose their jobs than were wives, and now, husbands are encountering more difficulty than wives in finding employment.
     As a result, a higher percentage of wives than in the past are finding it necessary, in order to pay the bills, to enter the labor force or to expand their work hours. They’d prefer to be home more with family, but that’s not feasible. One likely consequence of this is that more household responsibilities, including shopping, are being handled by the husbands.
     There are broad individual differences among male shoppers and among female shoppers, but a solid body of research finds that, overall, men tend to think about shopping and conduct themselves as shoppers differently than do women. For instance, researchers at Stanford University asked samples of men and women to contemplate the task of shopping for a new wardrobe. Later, each participant was assigned to plot the route for a cross-country road trip.
     The women in the study were much more likely than the men to plot out a scenic route rather than a direct route. Male shoppers are more purpose-driven. Women are more possibilities-driven.
     Along with this, women are more likely to find emotional comfort from shopping than are men. Put this together with the fact that the wives going to work will long for time with family and friends. When the wife does do the shopping, she’ll want to bring along family and/or friends.
     Recalibrate your merchandising and patterns of salesperson-shopper interactions to turn these shopper gender trends to the advantage of both you and your customers.

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Encourage Group Shopping
Identify Influencers in Family Decision Making
Help Customers Show Off New Products
Design Store Operations for Ecommerce Brains

Apply Systematic Desensitization to Fears

People often fail to do what they want to do. Sometimes what’s standing in the way are fears they themselves know are unjustified. Prospective customers for the local gym might join if they weren’t afraid others there would laugh at the shape they’re in—even though they realize people at the gym have much better things to do than ridicule others. Prospective purchasers of an unusual food might hold off because of fears associated with the name of the food—even though the prospective purchasers know the food is recommended by many others in the world.
     Systematic desensitization is a well-researched technique which has been successfully used by psychotherapists treating clients who have fears the clients know are unjustified. The technique consists of teaching the client to relax and then having them progressively approach what they fear. The fundamentals of systematic desensitization can be applied to helping fearful consumers. Here’s a laboratory illustration:
     Researchers at University of Chicago and University of Arizona showed study participants a can of food, then asked them to sample the food. The label on the can announced that the contents consisted of curried grasshopper, a delicacy which most of the participants had fears about eating.
     Before the sampling, each participant was assigned to one of three groups:

• People in Group 1 were simply asked to eat the curried grasshopper and then report on their evaluation of it.
• Those in Group 2 were asked to imagine themselves avoiding the can, and afterwards instructed to eat the curried grasshopper and report their evaluation.
• Group 3 participants were asked to imagine themselves approaching the can, and afterwards instructed to eat the curried grasshopper and report their evaluation.

     The Group 3 participants gave the most positive evaluations of the curried grasshopper. Imagining approach to a feared product or engaging in a feared action eased the fear and gave a more positive evaluation of the experience to the consumer.
     The key points to keep in mind when you use systematic desensitization:

• Check that the customer considers their fear to be unjustified.
• Have the customer relax, without high pressure to make a consumption decision.
• Make the sale in steps rather than deciding it all has to happen at once.
• Genuinely praise the customer for overcoming their irrational fear.

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Make the Sale a Slice at a Time
Help Customers Buy Unpleasant Necessities
Use Terror Management Theory for Status Items

Offer Exclusive Price Discounts Cautiously

When you tell a customer they’re receiving a price discount, they’ll build good will toward your store. If you add that the discount isn’t available to every other customer, the good will might be even greater. Or your announcement might make the customer uncomfortable. Shopper psychology research finds that exclusive price discounts operate in strange ways:

• Be consistent and be ready to explain the reason for the discount. Otherwise, the customer might get angry, thinking that your store pricing is highly arbitrary or even discriminatory. In year 2000, Amazon implemented a pricing policy in which some shoppers were offered a discount of 30% on a set of DVDs, while others were offered a discount of 40%. When customers discovered in online chat rooms what was going on, they had challenging questions for Amazon.
• Research findings from Baruch College, University of California-Berkeley, and San Francisco State University indicate that the sort of reasons acceptable to Western and Asian consumers differ. With consumers having a Western mindset, it’s best if the reason is demographic (“We give a 10% discount to senior citizens”) or marketing-determined (“We give a 10% discount to first-time purchasers”). For consumers having an Asian mindset, it’s best if the person concludes they earned the good fortune (“You are lucky enough to have selected an item for which we’re giving an extra 10% discount today”). When the reward appeared to be unearned, the East Asian recipients in the studies often felt it produced a menacing imbalance.
• Researchers at University of Louisville and Iowa State University found that there was one group for whom the offer of exclusive price discounts was especially likely to produce an abundance of gratitude toward the store: Men who had done business with the store before.
• These same researchers found that exclusive discounts are most effective in the long-term when the shopper concludes that they were not pressured into making the purchase, but rather view themselves as acting in an independent way.

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Earn Good Will in Giving Discounts
Have Unannounced Discounts on Common Purchases
Tailor Loyalty Programs to Customer Culture

Update Your Niche Whenever Necessary

Bargain hamburger retailer Burger King has been suffering from falling sales and profits. According to a Bloomberg Businessweek article, the niche is probably the reason: Burger King is known in many consumers’ minds as, well, a bargain hamburger retailer.
     That identity might appeal to younger men seeking a filling meal at a cheap price. Burger King’s dancing-chicken style of advertising has amused this target demographic, and there’s evidence the sometimes old, sometimes untidy restaurants have been tolerated by this target demographic. The problem is that members of Burger King’s target demographic have been dining out less often than in the past. The lesson for all sorts of retailers is to regularly assess for a need to update your niche.
     If you’re in Burger King’s marketing position, it’s not that you were wrong in selecting a niche. Considering that McDonald’s has almost three times as many restaurants worldwide as you do, a good alternative to positioning yourself as just an alternative to McDonald’s is to focus on a promising market segment.
     Consumers are drifting from the general to the specific, from the one-size-fits-all to the specialty and the customized. Another recent Bloomberg Businessweek article discusses the growing popularity of niche social networks like GoFISHn, where anglers can brag about their latest catch; Dogster, where members have been debating whether pets and their owners should bed down together; and PatientsLikeMe, where people can share progress notes on treatment for chronic medical problems, such as flea bites from lying down with dogs.
     The venture capitalists backing specialized sites like these are saying that Facebook and Twitter are great places to learn how to do social networking, but they’re insufficiently focused. Here, one lesson for all sorts of retailers is that a specialized social networking site could be a great place for you to advertise to your niche markets. Because it’s online advertising, you can promptly change your social networking presence each time you navigate your niche to a different location. Be on the Dogster pages today and the GoFISHn boards tomorrow.
     The tip from shopper psychology is not to make the changes too abrupt. Reach out with a line extension and then pull in and eliminate your weaker lines. Earlier this month, Burger King announced they were adding to the menu blueberry biscuits, a pancake platter, and seven more breakfast items. But the bargain burger stays for now.

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Maintain a Niche So You’re a Destination Location
Keep a Store-Within-A-Store Compatible

Give Customers a Clear Sense of Progress

For many retailing activities, we’re asking the customer to go through a series of steps. With a frequent shopper program, the steps consist of the various award levels. With a technologically sophisticated product, the steps consist of learning how to use the different capabilities. With a process, such as the customer returning an item for refund or credit, the steps might include checking the receipt, obtaining approval from a manager, and so on.
     In each of these cases, give customers a clear sense of progress through the steps.

• Sometimes we do this by making the steps big so that the customer easily recognizes change. Researchers at Virginia Polytechnic Institute and State University compared two versions of a loyalty rewards program in which a participant earned a 6% shopping discount after spending $100. In one version, the participant earned 10 points for each dollar spent and had to accumulate 1,000 points. In the other version, the participant earned one point for each dollar spent and had to accumulate 100 points. The researchers found that people felt more of a sense of progress with the “1,000 point” version because each step was associated with a bigger—and therefore more noticeable—number.
• Sometimes, we make the steps smaller so that it seems easier to climb up the staircase. Researchers at University at Buffalo-SUNY and Indiana University evaluated different protocols for learning to use the capabilities of products like smart phones, Wii games, and digital cameras before deciding whether to purchase the item. Based on their results, they recommend having the learning divided into small steps, with the person given intensive hands-on trial periods at each step. This method produced the most user willingness to buy.
• In almost all cases, we’ll want to give the consumer an overview of the steps at the start and then verify to the consumer when each step has been completed. More than eighty years ago, a Russian psychologist named Bluma Zeigarnik explored the reasons that waiters had a better memory for orders placed that were not served or not paid for than for those for which all the steps had been completed. Psychologists since then have used the term “Zeigarnik Effect” to refer to the mental itch we feel when a task is in limbo. Scratch that itch for your customers by announcing completion of each step along the way.

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Help Loyalty Program Members Progress
Turn Product Training into a Profit Center
Offer a Buffet of Loyalty Program Rewards
Tailor Loyalty Programs to Customer Culture
Give Loyalty Program Members Prestige
Have Suppliers Train Staff and Shoppers

Staff Your Store for Customer Need Knowledge

Researchers at Germany’s University of Mannheim and University of Bochum explored the relationships of:

• Customer need knowledge (CNK), which the researchers defined as the extent to which a frontline employee in a store—the one who serves customers face-to-face—accurately and promptly identifies each customer’s needs and desires
• Customer satisfaction with their experience with the frontline employee
• Customer judgments of value in what they purchased from the frontline employee

     Based on their statistical analyses of information gathered from customers, employees, and store managers, the researchers found that when the CNK of employees in a store is higher, customers tend to be more satisfied and to say they’ve gotten better value from their purchases. An employee with high CNK pays close attention to each customer they’re with and is concerned with the problems of that customer.
     All this is not particularly surprising. Still, it’s nice to have experimental validation of what we suspected to be true. The research findings do go beyond this to suggest two ways to increase the CNK of your store’s employees:

• Manage employee turnover. Retailing has higher employee turnover than most other types of business. Some turnover in any organization is good. By bringing in new ideas, turnover heads off inbreeding and stagnation. Turnover can disrupt CNK, though. In the research findings, one of the top two facilitators of CNK was the customer having dealt with the employee over a period of time. Longer-term employees get more opportunity to learn what a store’s target markets are like and will like.
• Recognize and correct for the ways in which your target markets are different from your sales staff. The research found that CNK is less when there’s a large age discrepancy between the salesperson and that salesperson’s typical customers. This argues for hiring employees who are similar in age and other characteristics to your typical customers. You’ll want to be sure those employees also can learn retailing skills and that you obey antidiscrimination employment law. Working at it from the other direction, use the characteristics of your talented employees to help you attract customers like them. This expands the scope of your typical customers.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Announce Commonalities with Shoppers
Build Profits by Training to Serve

Cultivate Customers’ Hedonic Objectives

Consumers make decisions for a mix of utilitarian and hedonic reasons. The utilitarian is to get a job done. The hedonic is to feel pleasure. When buying a power saw, the utilitarian is to have a way to cut things and the hedonic is to experience pride in the clean cuts.
     Even though there’s always a mix of the two, either the utilitarian or the hedonic often predominates. With the power saw, the utilitarian is probably more important to the shopper. With a ticket to a concert, it’s probably the hedonic.
     Purchasing the same item might be mostly hedonic or mostly utilitarian based on the nature of the purchase. For example, researchers at Université de Nantes in France, Louisiana Tech University, and University of Southern Mississippi concluded that shopping for gifts does provide hedonic gains, but has a much stronger utilitarian drive.
     When you cultivate customers’ hedonic over utilitarian objectives, that can increase your profitability. Here’s why:

• Consumers seek more variety in their purchases when there are hedonic than when there are utilitarian objectives. Researchers at University of Pennsylvania used the term “hedonic treadmill” to refer to the ways in which people get bored with hedonic purchases. They buy more.
• Researchers at University of Maryland-College Park, Rice University, and Carnegie Mellon University find that after completing a purchase to meet hedonic objectives, the purchaser is more likely to want to add on an extended service contract than if the purchase was to meet utilitarian objectives. ESCs are a high margin item for retailers.
• Researchers at London Business School and University of Chicago report that when people are shopping for hedonic purposes, they are more likely to follow the retailer’s suggestions of what to purchase. Shoppers love to have choices available to them, but with hedonic items, the choice they’re more likely to make is to let you choose for them. This gives you the opportunity to sell items that meet both the customer’s desires and your bottom-line objectives.

     Want to cultivate hedonic objectives? Ask the customer how they plan to use their purchase and then emphasize the hedonic in responding to them. The shopper says, “I’m buying this power saw because I’m doing a room addition to the house.” You might respond, “The firm feel of this saw will give you the kinds of results you’ll be proud of.”

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Preoccupy Shoppers for Indulgent Choices
Sell More by Adding Variety
Make Extended Service Contracts Worthwhile

Incorporate Crowdsourcing When Designing

“Crowdsourcing” refers to inviting a community of consumers to participate in completing a task for a sponsor. First use of the term is generally credited to technology journalist Jeff Howe, and perhaps the most successful use of crowdsourcing in ecommerce can be credited to T-shirt retailer Threadless. Amateur and professional artists submit T-shirt design ideas via threadless.com, consumers vote preferences there, and the company takes the preferences into account when producing new products.
     A recent Bloomberg Businessweek article describes how Threadless is collaborating with other companies to incorporate crowdsourcing into the design process. Dell features a dozen consumer-generated images, each of which can be etched onto the exterior of a notebook computer for $85. And Brazil’s Alpargatas selected six designs from the more than 600 submitted worldwide to Threadless for use on Havaianas sandals sold online.
     Retailers inviting consumers to submit design ideas isn’t limited to ecommerce. Successful brick-and-mortar stores welcome consumer-generated content for ads, suggestions for store layout, and ways to improve the selling process. But the social networking capabilities of Web 2.0 facilitate the voting process and interactive development of designs. This is what distinguishes crowdsourcing from traditional methods for consumer input.
     Business professionals have issued legal cautions about crowdsourcing. Some of these cautions are about non-disclosure agreements and rights to subsequent use of the designs.
     Here are two tips from a consumer psychology perspective:

• Conduct the project as a contest. If your acceptance of ideas is ongoing, declare winners regularly. Research finds that after a crowdsourcing competition, even the multitudes who didn't win are likely to build a kinship with the business, feeling they’re part of a community. For example, researchers at University of Colorado had amateurs design skins for MP3 players or mobile phones. When the task was presented from the first as competition against professional designers rather than as only an invitation to customize one’s own product, the amateurs were much more likely to feel pride in their participation.
• The contest builds excitement, and that increases the number of ideas you’ll get. Take account of this, but before the kickoff, be reasonably confident you’ll have enough ideas to select a high-quality winner. Research indicates that if you reject all the ideas, members of your target markets—both those who submitted ideas and those who did not submit ideas—will be irritated at you.

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Ask Customers What You Didn’t Have
Ask the Customer for Their Opinions of Items
Ask Customers & Staff for Ideas

Sell Second Opinions

Bloomberg Businessweek recently reported on ExpertConsensus, LLC, a New York-based services business that reviews medical advice. A patient diagnosed with lung cancer, for instance, could contract with ExpertConsensus to convene a panel of top specialists to critique and possibly suggest augmentations in the treatment plan developed by the patient’s physician.
     ExpertConsensus is an example of the current interest in second opinions. With the overwhelming abundance of information available to consumers, you might find a lucrative market in helping people filter through it all.
     There are considerations of business law and ethics in providing second opinions. There are also considerations from a consumer psychology perspective:

• Recognize that giving second opinions is nothing new or unusual in product and services retailing. Consumers shop around and ask for free quotes. They’re collecting second, third, and fourth opinions. What’s different here is charging for the advice. According to the Bloomberg Businessweek article, the starting fee for ExpertConsensus is around $20,000. Your fee will probably be substantially less than that, but you’ll need to tell people what value you’re adding. Distinctive expertise? Speedy analysis? Guaranteed no-fee follow-up if the consumer wants additional advice about the same issue? In fact, the true value-added from almost all second opinions is the consumer’s peace of mind that they’ve made a great decision. But research indicates people will want quantifiable benefits claims in order to justify spending money for the peace of mind.
• An important part of the value-added promised by ExpertConsensus is group decision making. This also is not a truly unusual service in an Internet era. Consider online product and service rating sites in which groups of people interactively shape up recommendations. The “risky shift” isn’t new either. First described by researchers at Massachusetts Institute of Technology, the risky shift refers to how groups of people will make more extreme recommendations than if those people were giving advice individually. A shift in the risky direction is a particular temptation when people are paying the group for advice. Imagine a cancer patient putting out $20,000 and being told, “You know, we really have nothing at all to add to what your hometown physician already recommended to you.” So in this situation protect your client and your business by making your value-added addition something like, “Based on the very latest information, here’s why we concur with the opinion you’ve been given.”

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Reduce Unwanted Risks for Your Shoppers

Balloon Your Profitability with Music

How in the world can music increase profitability for a retailer these days? The market for selling it is competitive, seeing as there are all those 99¢ personalized music downloads. And even 99¢ is too high for some people when Pandora’s free service will learn the kind of music each of us likes best and then play it anywhere we’ve got Internet.
     Well, there are ways:

• Use music to pace customers. When you play faster music in a store or restaurant, people tend to make their selections and complete their purchases more quickly. According to researchers at Western Kentucky University, when slower music is played as background in a fine dining restaurant, patrons stay longer, but eat about the same amount of food. To make it profitable, you’d want to be sure to serve alcohol, since the researchers also found that slower music leads to more alcohol consumption.
• Play music with lyrics if you want shoppers to select items from habit without much thought. Researchers at Columbia University and Northwestern University find that noticeable music helps head off arguments shoppers might make to themselves about the purchase. On the other hand, if you want a shopper to carefully analyze the purchase decision, either do not have music or use music that is barely noticeable. If you’re wanting customers to try new brands or new products, delete intrusive music.
• Use music to project a store personality. Research findings from psychologists at University of Melbourne indicate that the music should reflect a personality that fits how your target customers want to see themselves.
• Sell music that people can’t get elsewhere. Cracker Barrel, Starbucks, Wal-Mart and Target each have arranged to sell house brand special edition CDs.
• Breed earworms. That’s the term University of Cincinnati researchers use to refer to tunes that get stuck in consumers’ brains, repeating involuntarily. When those earworms were bred from melodies heard at your store or in ads for your store, each repetition is a reminder to consider coming back again. Last spring, Holiday Inn featured a song titled “You Always Make Me Smile” in an ad campaign. The song gained popularity on its own, and now there have been well over 800,000 viewings of the music video. Perhaps it helps that the video is documenting 4,000 people setting a record for the world’s largest water balloon fight.

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Use Music to Motivate, Not Disrupt
Play and Sell Store Theme Music

Assign Blame Accurately for Damage You Do

Do you have in place a plan for responding to media inquiries if a product you sell or something your store does turns out to cause serious damage?
     The recall last month of hundreds of millions of eggs affected grocery stores, restaurants, and other sorts of retailers. The impetus for the recall was evidence eggs from certain sources had been contaminated with salmonella.
     One response from industry spokespersons was to say that people who had been poisoned had failed to cook their eggs thoroughly enough. Krista Eberle of the United Egg Producers’ Egg Safety Center was quoted as going on to say, “It may sound harsh, and I don’t mean to sound that way. But all the responsibility cannot be placed on the farmer. Somewhere along the line consumers have to be responsible for what they put in their bodies.”
     In my opinion, although Ms. Eberle was correct, what she said did come across as harsh. Understandably, this led to criticisms of the industry for trying to avoid blame. But research at University of Florida indicates that when a retailer makes a major error, the public, after initial shock, becomes open to the idea that a number of parties might share responsibility. The key is for the retailer’s spokespersons, at the start, to explain credibly what happened, what’s been learned, and what’s being done differently now.
     Accomplishing this requires you not only to maintain ongoing training of possible crisis response spokespersons, but also maintain a crisis communication network within the organization. When full information is available, spokespersons can frame the message in ways that protect the interests of your business.
     Here are the types of explanations that research indicates are most likely to lead to the public accepting that responsibility for damage is shared:

• “There were circumstances we’d come across only very rarely, if at all, before. Now we’ve built in ways to spot those circumstances promptly.”
• “Here is the information we’d been given, and as you can see, it was misleading. Now we’ve developed ways to get more accurate information.”
• “Here are the legal requirements, regulations, or policies that required us to handle the situation as we did. Now we’re telling those who set these rules what happened and suggesting changes.”

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In Providing Services, Emphasize Empathy
Acknowledge Customers’ Willful Ignorance
Space Out “Bad News” Products on Shelves

See Through Consumers’ Boredom Fears

A while back, some Carnegie Mellon students were offered a bonus treat in their economics or history class: They could select snacks to be given to them at the end of three successive class sessions. The choices included Snickers bars, Oreo cookies, milk chocolate with almonds, tortilla chips, peanuts, and cheese-peanut butter crackers.
     Since the offer was part of a consumer behavior study, though, it wasn’t all that simple. Half the participants were invited to choose one item on each of the three weeks. At each session, they weren’t told if there would be additional opportunities to choose in future classes. The other participants were told that in the first class session they were to select the treat they wanted for each of three classes in advance.
     In one of the groups, 45% of the participants ended up choosing three different items. In the other group, only 8% of the participants ended up choosing three different items. Which group exhibited a broader variety of choices, do you think? The ones who chose one each day to have that day? The ones who selected at the start the three to have on the three separate days? And why do you think there was a difference in the variety frequency of the two groups?
     Before I tell you the correct match of percentage to group, I’ll tell you a few of the explanations consumer behavior researchers have for these and similar results:

• People overestimate the extent to which they’ll get tired of eating or using the same item. They think they’ll want to make a change when, in fact, they’ll end up sticking with a favorite.
• When offered a range of alternatives, people see it as an opportunity to try out something new.
• Some people find it easier to say, “Give me one of each,” than to carefully assess the tradeoffs in the choices.

     Yes, that’s right. The students who selected all three treats at once were the 45% group.
     As a retailer, recognize that customers fear boredom, but build out product usage from what’s familiar to them.

• Offer what the consumer sees as variety.
• When promoting new product alternatives, keep more familiar choices in place for a while.
• When shoppers hesitate in selecting among alternatives, encourage them to buy more than one flavor.

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Sell More By Adding Variety
Give Shoppers Variety for Control
Make It Easy to Choose Two

Woo Item Experts

Some of your customers are—or at least consider themselves to be—experts in product categories you carry. Take account of their expertise so you can transform them into advocates for your business.

• Allow customers to show off their expertise when they’re in your store. Many consumers recommend a store and particular products after their self-esteem is raised. At the same time, a challenge with those considering themselves to be experts is that they too often don’t update their knowledge about the product category. Researchers at Duke University recommend that salespeople create an incentive for discovering what’s new. Since an incentive for many experts is showing off their knowledge, the salesperson might say to the expert something like, “It is clear that you know a lot about this type of product. May I share with you some of the latest versions we have and ask you what benefits you see that these new products hold for our customers?”
• Research at University of Pittsburgh and University of South Carolina finds that experts are attracted to categorization in ways that surprise them. Sporting equipment might be categorized by the sizes of the items. Power tools might be categorized by the type of job they could be used to complete. Clothing might be categorized by color. Foods might be categorized by country of origin. By surprising the expert, we get them to pay attention, and a customer who pays attention is more open to seeing the value in a higher priced option.
• Experts like to be served by staff who show high competence. The salesperson’s dress and body language say a lot as the prospective customer asks, “How much does this salesperson look like somebody I’d like to be?” If the store is busy, does the salesperson appear to have things under control? Then as the salesperson asks questions and answers the customer’s questions, it gets clearer. Customers don’t expect the salesperson to know everything. However they do expect the salesperson to get the answer when the salesperson doesn’t know and to do a personal handoff to another salesperson when necessary.

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Have Staff Who Show and Share Expertise
Give Experts Novel Product Categories

Beware Flawed Predictions from Animations

“Keep your eye on the ball” is advice often given to baseball batters to prevent them from getting ahead of themselves. Those same words might be good advice for people watching the game at home, and for the same reason. Researchers at Northwestern University and University of Minnesota point out how when people see a baseball hit with great force, they often have a momentary feeling of certainty the ball will go out of the park. Maybe a misleading feeling of certainty.
     Advancing computer technologies combined with increasingly sophisticated consumer expectations have led retailers of all sorts to use an abundance of animation in demonstrating the benefits of products and services on websites and in personal selling. The Northwestern/Minnesota researchers urge people to show special caution with these animations. It’s too easy for your shoppers to be misled when mentally projecting what will happen next.
     People readily project ahead from animations which show trajectories, such as animated charts of weight loss or completion of construction. We’re all overloaded with information, so we welcome tools that help us get to the point. Also, many consumers place extra trust in a computer-generated animation largely because the animation is using a more sophisticated technology than still pictures. “What’s newer must be better,” they say.
     And because animations are more lifelike than text descriptions or still pictures, consumers remember with enhanced certainty any mistaken conclusions. A few days later, what was actually false is recalled as true.
     Putting this all together, you protect your business and your consumers by being aware of the dangers of flawed predictions from animated demonstrations.

• Give disclaimers within the animation. Phrasing in the spirit of “Past performance is no guarantee of future results” is good. But it’s not enough. Animate the disclaimer by showing a flashing question mark at the end of the animated trajectory. Or show a variety of possible directions the trend might go.
• For items where a misinterpretation might lead to a lawsuit, regulatory inquiry, or loss of good will from an essential customer, present still images along with the animation. When the Northwestern/Minnesota researchers replaced the animation with still images the study participants could flip through at their own pace, mistaken predictions faded away.
• Be careful to interpret correctly when shown animations by a vendor. The researchers specifically warn businesspeople to watch out when interpreting animated sales projections.

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Skim the Data to Spot Leading Trends
Distinguish Accelerating from Slowing Trends

Provide Group Support with Customer Discomfort

How much indignity would your customers endure in order to save money? Let’s say you run an airline. Would your customers continue to give you business if you feature bargain fares along with the following?

• To get the lowest fare, passengers must stand during the flight, holding onto a subway-style rail with no seat belt. Whenever there’s turbulence, the people are told, “Grab on tight.”
• If a passenger’s bag is too big to stow in the passenger compartment, the passenger must load the bag into the cargo hold themselves.
• Each passenger must plan ahead for using the toilet because there’s only one for all the passengers and the passenger will need cash or a credit card to get in.

     According to a Bloomberg Businessweek profile article, these were money-saving ideas spouted by Michael O’Leary, the CEO of Dublin-based Ryanair. Not that you should take the ideas too seriously. Mr. O’Leary is quite clear about his intentions to gain publicity for his bargain-fare airline by being outrageous.
     But do take seriously the idea of customers’ willingness to endure discomfort. As testimony to this, the profile article says that in spite of passengers describing the flights as hellish, Ryanair was the first European airline to carry more than seven million passengers during a single month.
     Some observers think short-hop European tourists tolerate such discomforts more readily then would American long-haul business travelers. I believe there’s something else as well: Customers are more willing to be uncomfortable when they are with a group that’s experiencing the same sort of discomfort.
     This “misery loves company” effect has been noted by social psychologists at Vanderbilt University. When we’re in stressful circumstances, being with others suffering the same fate provides support that boosts our tolerance. People can complain to each other and commiserate. They find comfort in forming even short-term social bonds.
     In this case, it’s a Ryanair support group. Wow! Mr. O’Leary could be earning extra money for the company by having crews sell “I Survived Ryanair” T-shirts during flights.
     In your retailing, keep the unintended, but inevitable discomforts as brief as possible. But during those inevitable discomforts, protect the image of your good will by encouraging customers to discuss the experience with other customers and with staff who are around at the same time.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Let Shoppers Go Through Their Rituals
Encourage Group Shopping

Hitch Your Wagon to the Right Star

P&G is franchising dry cleaners and car washes. There are already three Tide Dry Cleaners stores and nine Mr. Clean Car Wash operations.
     Whether you’d find it profitable to participate depends on a number of business fundamentals. What are the franchise fees? Would this be a product/trademark franchise, like a Toyota dealership in which you’re paying principally for the name? Or is it a business format franchise, like a McDonald’s in which you’re paying for help with site location, quality control, accounting systems, and other aspects of the business?
     From a consumer psychology perspective, there are other considerations. That’s because what P&G is doing is as much a brand extension as a franchise opportunity. Tide Laundry Detergent washes clothes. Dry cleaning is a natural extension, but still an extension. It’s like McDonald’s marketing a line of children’s toys. The Mr. Clean Autodry Car Wash System is already on the market. For those who know about it, the extension to a car wash service is a natural.
     Here are some more questions to ask when deciding whether to brand or co-brand with a well-known name:

• Do your target consumers associate more strongly with Eastern or Western cultures? Research at University of Texas and University of Minnesota indicates that consumers who associate with the holistic thinking of India would be more likely to accept a McDonald’s shaver shop than would consumers who associate with the analytic thinking of the U.S.
• Are there already well-known brands in that business sector? Research at Purdue University, Indiana University, and University of Connecticut suggests that brand extensions are especially likely to succeed in sectors such as dry cleaning and car washes because there aren’t dominant store or operations brands. The research findings also suggest that a Tide Dry Cleaners is more likely to succeed if it opens up its doors with that name than if it changes its name from, let’s say, Don’s Dry Cleaning.
• Is there either brand fit or product fit? Researchers at Indiana University find there are two paths to success. An example of brand fit is a Nike orthopedic supplies store, based on Nike’s athletic persona. An example of product fit is a Nike audio equipment store, based on Nike’s identification with audio equipment for runners.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Compare Unknown Brand Extensions
Prepare for Upcoming Brand Extensions

Reduce Bias in Customer Reviews of Services

Why did Howard Johnson’s Restaurants take a spiraling dive into failure starting in the mid-1970’s. The oil embargo of 1974 curtailing the road travel that fueled their business? The loss of a quality image when, in response to the rise of McDonald’s, Howard Johnson’s Restaurants cut back on both staffing and food quality?
     At the time, some industry experts posited another reason: Howard Johnson’s Restaurants were placing too much importance on customer review cards filled out by people at the cashier station. As the restaurants suffered sales losses, they became increasingly insistent on asking customers for feedback and then repeatedly switching business strategy to take account of the comments.
     What the managers failed to acknowledge, said these industry experts, was that customer reviews have a negative bias. The anecdotal—perhaps overly cynical—rule of thumb is that a customer most likely to take the time to fill out a review card is somebody so upset that they’re one step short of suing the restaurant. The result is an unrepresentative sample of strong negative opinions.
     The anecdotal wisdom is that any glowing positive reviews are most likely to come from somebody who has a son or daughter working as a server or in the kitchen. Usually not enough to outweigh the negatives, although it sometimes does, which creates an unrealistic positive bias.
     In a three-nation study, researchers at Hebrew University of Jerusalem, Stanford University, and Korea University find that overall, there is indeed a negative bias in customer reviews of services. Based on those research findings and others, here are ways to reduce the bias:

• Wait until after the service is delivered before asking for an evaluation. Being told in advance that you’ll be asked to evaluate a service leads to more negative evaluations.
• Put the customer in a positive mood during the transaction. One of many ways to do this is to offer an unexpected discount.
• When you see a common theme in a set of negative evaluations, address any shortcomings in ways that are profitable for you. Then publicize the changes. Continue to ask customers to evaluate you after each service episode of that type.

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Ask The Customer for Their Opinions of Items
Ask for Specifics on Merchandise Returns
Profit from Shoppers’ Positive Moods
Have Unannounced Discounts on Common Purchases

Define Customer Service for Your People

“How do you suggest I measure how good the customer service is in our store these days?”
     Please ask that question of a few of your front-line staff—sales staff, cashiers, customer service representatives, and others who have the most direct contact with your shoppers.
     Make notes on what you hear. After that, please squeeze out a little more time so you can ask the same question of some repeat customers. How do they measure the quality of your customer service? Add to your notes.
     And the next step is to ask yourself that same question. How do you define “customer service”?
     Research at University of New South Wales indicates that you’re likely to hear one or more of three sorts of definitions:

• Giving customers what they ask for in a minimum of time and with a maximum of courtesy.
• Solving a problem with or for the customer so that a bond between the customer and the store is formed or strengthened, making it more likely the customer will want to return soon and often to the store.
• Selling products and services.

     Either of the first two definitions sounds fine, although the means to accomplish each could vary between the two. You’ll probably find that shoppers would be satisfied with either of those first two definitions.
     The third definition seems to confuse ends with means. Employees who define customer service as meeting sales quotas might have low trust in store management. Or it could be that store management gives no more than lip service to delivering what shoppers consider to be good customer service.
     The New South Wales researchers say that when customer service quality falls short of the boss’s expectations, the boss shouldn’t start by blaming the front-line employees. The cause of the shortfall could very well be unclear expectations.
     Define customer service for your staff so clearly that no confusion remains about what you expect. One method is to give staff samples of what they can say. Explain that they aren’t required to use the exact words, but rather should adapt the phrasing to fit their style.

• “What may I help you find today?”
• “I understand your complaints. What might I do to make things right?”
• “Thank you for shopping here today.”
• …and so on.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Use Closed-Ended Questions Selectively
Resolve Customer Complaints Carefully
Say Thank You, Dear
Be Clear What You Mean By Going Green

Critically Evaluate Consumer Research

Following his gift of $25 million to Deerfield Academy in Massachusetts, industrialist David Koch wanted to explain something:

“You might ask: How does David Koch happen to have the wealth to be so generous? Well, let me tell you a story. It all started when I was a little boy. One day, my father gave me an apple. I soon sold it for five dollars and bought two apples and sold them for ten. Then I bought four apples and sold them for twenty. Well, this went on day after day, week after week, month after month, year after year, until my father died. And left me three hundred million dollars.”

     That story, which appeared in a New Yorker article about Mr. Koch, popped into my mind as I’ve been combing through consumer behavior research findings. Mr. Koch’s ample wealth is not due just to his shrewd sale of apples and reinvestment of the proceeds. This parallels how in many consumer behavior studies, the researchers fail to take account of what might be the real causes of their findings. Those studies are not a good basis for tactics I can test out in real-world retailing and, if they pass the test, suggest to you in RIMtailing blog posts.
     Among the shortfalls are these:

• The research is a survey, not an experiment. Even when the survey is conducted properly, it’s difficult to draw cause-and-effect conclusions from survey findings. Statistical techniques like structural equation modeling can help.
• Study participants are not sufficiently representative of your target populations. If all the study participants were university students, how broadly can the findings be applied? If the study was conducted in a collectivist culture, will people from individualistic cultures respond in similar ways?
• The findings are outdated. Most studies I use are from peer-reviewed journals. This makes for good quality control. However, it also makes for a delay in the findings seeing the light of day. The world of retailing is one of rapid changes. Do the findings still apply?

     If there’s a research finding that intrigues you, I encourage you to critically evaluate the actual study for yourself. E-mail me at RIMtailing@gmail.com with the date of my posting. I’ll reply to you with the literature reference and/or URL so you can look it up.

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Use Consumer Attitude Survey Findings
Call On Structural Equation Modeling
Use Cluster Analysis on Customer Data
Ask Customers Their Opinions Promptly
Lead Your Customers Through Changes Gradually

Strengthen Your Barbell Retailing

Retailing is going to extremes. Industry analyst Marshal Cohen calls it the “thinning middle.” I like to place more attention on where the profits are than on where they aren’t, so inspired by a quote of economist Sung Won Sohn, I’ll call it “barbell retailing.” The strength for retailing has moved away from middle markets and toward the low and the high.
     Here are two examples from a recent Financial Times article (free registration is required to read the article):

• Mid-market Safeway’s same-store sales declined in the second quarter of 2010 compared with the 2009 results. Premium-market Whole Foods had about a 9% increase.
• Sales at budget-market McDonald’s have grown, as have sales at upper-market Morton’s. Over the same period, mid-market food retailers have not done as well.

     Barbell retailing is an example of what social psychologists call “group polarization.” When a group of consumers are making decisions jointly, they are most likely to move toward more risky alternatives, such as spending on luxury items. But if they don’t move in that direction, they’re most likely to move toward more timid actions, such as spending like tightwads. What they are least likely to do is to stay in the middle.
     This is a change in the consumer behavior many retailers are accustomed to. Traditionally, shoppers show extremeness aversion. When presented with the bargain, midrange, and luxury choices, the average shopper picks the midrange. But group polarization becomes more likely at times of uncertainty, and consumers worldwide are collectively experiencing economic uncertainty.

• In your merchandising, feature both premium and bargain choices for product lines. If you need to save on inventory expenses, deemphasize the midrange choices.
• For any midrange lines you do carry, project a strong lifestyle personality of staying the course and showing perseverance in the face of uncertainty.
• Avoid the extreme extremes. When the weightlifter loads up the barbell for a total 130 lb lift, they’ll put the 50 lb weights on first, then the 10 lb weights outside the 50 lb ones, and then the 5 lb weights outside the 10 lb ones. Keep the shape of that barbell in mind. Your shoppers are moving out from the center, but only a minority are moving all the way out to the highest luxury or the deepest discount preferences.

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Move the Customer to Accept Higher Prices

Provide Portability for Your Shoppers

Chances are your target customers want portability, so give it to them.
     In a recent interview with Bloomberg Television’s “InBusiness,” Susan Lyne, CEO of Gilt Groupe, Inc. and former CEO of Martha Stewart Living, said, “People expect to be able to shop where and when they want…. [B]eing able to have your iPhone, pull it out,… shop at that moment.”
     Gilt Groupe is a “flash retailer,” at which a product is offered at a substantial discount for a limited number of hours. Ms. Lyne reports that although the percentage of online transactions with Gilt Groupe made via mobile devices is still less than 10%, she expects that percentage to grow rapidly.

• If you sell any sort of mobile devices, select your merchandise on the basis of long battery lives. Although we might remember the Apple iPod as having been an instant success, the truth is that first-generation models frustrated purchasers because they needed such frequent recharges. Micromax, which took on cell phone giant Nokia in India, made initial gains in market share by equipping the phone with a large battery.
• Accommodate the drive to portability for each stage of consumer behavior. Think of ways you can enable your customers and potential customers to be flexible in when and where they seek out information about you and your products; complete a purchase; use the product; and dispose of the product, such as making a return or exchange.
• Be ready for the appeal of portability to stay especially high for as long as our current era of economic and social uncertainty lasts. It’s not just improved mobile technology that’s motivating the trend. Research at University of South Carolina finds that during times of stress and upheaval, we become more anxious to wander to different possibilities.
• Because it’s getting harder to pin down your target markets in their purchasing habits, assess for changes regularly. Where and how they’ll be shopping next month has a fair chance of being at least a bit different from where and how they shopped last month. Don’t overreact to small changes. But do assess.

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Use Customer Life Changes to Switch Brands
Slow Switching By Asking About Prior Choices
Know Your Potential Customers’ Intentions
Be Creative, But Only Sometimes

Repeat the Truth in Different Ways

Repetition is a powerful persuasion technique for retailers. Repeat the benefits of a product to a shopper often enough and the shopper becomes convinced what you are saying is true. The effect is so well-established by decades of research that consumer psychologists use the term “truth effect” to refer to it.
     But repetition works best if you repeat the product benefits, selling points, or usage instructions in different ways.

• When you deliver an identical message again and again and again, the shopper might come to believe it, but at some point, they also start disliking you and the product. Consumer psychologists have a name for this one, too: wear out. Wear out is more likely when the shopper is carefully evaluating what you’re saying. That’s why many TV ads can get away with rote repetition: Nobody’s listening that carefully.
• When people shop together, their memories for what a salesperson tell them tends to be inferior to what they remember when they’re shopping as individuals. So repeat the information more often when selling to a group. You don't want to offend your shoppers, though, and repeating the same information word-for-word could offend—or at least bore—any shoppers in the group who did understand you the first time and remember what you said. With some product information, you can repeat the message in different ways. Tell the group of shoppers verbally. Then show them written material that repeats the information. Next, demonstrate your points by showing the shoppers what you mean. And check for understanding by asking the shoppers their opinions about what you've said. Multi-channel teaching always helps improve learning.
• Research at Baruch College has refined some assumptions about what gives the best payback for a retailer’s advertising dollars when running a series of text ads: Each ad should show movement forward from the prior ad. This is more effective than a campaign that repeats all the same content in each ad. However, in each ad, use some of the same elements that relate to the theme of the campaign. Although the ads show progress, repetition drills the messages into consumers’ long-term memories. Pictures can be effective devices for this.

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Use Both Repetition and Progression in Ads
Repeat Information When Selling to a Group

Merchandise to Fit Purchasing Cycles

Annual weather cycles are somewhat predictable and they affect large segments of your target customers the same way, so you can plan your merchandising to take account of them. In early January, you can pretty much count on everybody being cold if they go outside when your store is in Buffalo, New York and quite warm when outside a store in Adelaide, South Australia. So you’ll stock more stay-at-home and go-out-protected items at one time of year than at the others.
     Consumer behavior research shows that there are also monthly cycles which influence successful merchandising. What makes them different from weather cycles is that the effects vary by customer segment. Still, by being aware of these cycles, you might gain a retailer’s edge.
     Here are two examples to get you thinking about purchasing cycles your store encounters and how to merchandise to fit those cycles:

• Researchers at University of Utah and University of Iowa find that monthly paycheck cycles affect not only how much money people will spend on merchandise, but also the types of merchandise they’ll find most attractive. In the days soon after receiving a paycheck, consumers with full-time jobs become more interested in products and services that help them gain more than what they currently have. This is a time for you to feature the latest technologies and the toothpaste which promises to whiten teeth. Then as the days after the paycheck pass, the person becomes progressively more interested in products and services which help them avoid losing what they have now. They'll become more interested in nostalgia items, familiar brands, and the cavity-fighter toothpaste. The researchers determined that this cycling was not due to a declining checking account balance or to the pricing of different types of products.
• Researchers at University of Minnesota, Texas Christian University, and University of Texas-Austin find that women near the most fertile point of their monthly cycle are about 10% more likely to seek out sexier fashions than at other times of the month. When shopping for shoes, they’ll lean toward the stilettos over pumps and toward revealing blouses over roomy sweaters. The evidence is that this cycle involves competitiveness. If the females in the study were told that attractive women frequented the neighborhood, things moved from 10% more likely to 25% more likely.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Sell Either Protection or Promotion
Acknowledge the Power of Cycles

Locate Mobile Shoppers in Your Space

It’s said that when William T. Dillard—who founded the Dillard’s department store chain—was asked what were the three most important factors for the success of a retail operation, he answered, “Location. Location. Location.” He’s often credited with originating that phrase.
     Developing technologies are adding a new meaning to the importance of location: Brick-and-mortar retailers should use information about the physical location of their target customers. The GPS capabilities of mobile devices will be allowing you, among other things, to track when a potential shopper is approaching your store and how a visitor is navigating through the aisles.

• Give real and virtual rewards for digitally checking in. Shopkick gives consumers gift certificates for certain numbers of check-ins at the stores of their retail clients. Starbucks grants the title of store mayor to the smartphone owner who has the most check-ins with that store during a 60-day period. These are really technology-augmented frequent shopper programs. Researchers at University of Southern California and University of Pennsylvania find that such programs work better if you give the new user a head start with a couple of extra credits as they begin.
• Involve the consumer beyond just checking in. Campbell Soup Company plans to encourage grocery store shoppers to scan the UPC code on a can in return for the opportunity to compare prices and write reviews. A number of retailers are building game mechanics—such as scavenger hunts—into the apps for shoppers. Researchers at Bournemouth University in the U.K. find that when real store brands meet with online games like this, it’s important to keep the games fresh. So change the rules and the challenges periodically.
• Encourage shoppers to use their mobile devices to keep each other posted about their shopping experiences and to invite others to participate. Don’t limit this to the people at home. How about, “Did someone come shopping with you today, but is in a different part of the store? Get in touch with them using your mobile device, tell them where you are, and get their thoughts on what you’re shopping for.” A repeated finding in consumer behavior research is that when people shop in groups, they buy more than when they shop alone.

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Give Loyalty Program Head Starts
Encourage Group Shopping

Catch Customers by Helping Early

The first impression you’d like to leave with a visitor to your store is that you can help them out. Shoppers prefer to give their business to helpful people.
     A consumer’s brain starts evaluating a retailer within seconds of initial contact, and the consumer’s impressions that follow tend to be interpreted to fit in with those first impressions. If those first few seconds convey that you want to be helpful, whatever you do next becomes more likely to be interpreted by the consumer as helpful. It’s an example of what psychologists call “priming.”

• When a person unfamiliar to you enters you store, promptly greet them with an offer of help. Asking “How may I help you?” is much better than asking “May I help you?” Of course you can help them, even if it’s just to show them where the rest rooms are or how to get back out of the store. Why ask it as a yes/no question? Better yet is “What may I help you find today?”
• Reach out to them even before they enter your store to consider making a purchase today. For instance, distribute coupons as early in the shopping process as possible. Researchers at MIT found that coupons presented at the store entrance drive up sales much more than do coupons available in the aisles of stores.
• Be helpful to them at the end of their current purchase in order to prime them with the right impressions for when they’ll make their next related purchase. Mizuno, based in Japan, is partnering with U.S. sporting goods retailers to help build sales of Mizuno baseball equipment. As part of this effort, Mizuno is installing glove steamers at the retailers’ stores so that whatever brand baseball mitt you buy, you’ll see a machine with the Mizuno name helping you to break it in. Then next time you think of buying a baseball bat or equipment for golf, track, or yoga, you’ll remember the helpfulness of the retailer where you bought your mitt.

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Use Closed-Ended Questions Selectively
Give Coupons Early and Proudly

Select Celebrity Endorsers Who Have Credibility

Marketing agency Zeta Interactive says that positive buzz on the Internet about bicyclist Lance Armstrong dropped dramatically from early July into early August, the drop closely matching in direction, but exceeding in extent, what happened to RadioShack’s Internet buzz during the same time period. RadioShack retained Mr. Armstrong as a celebrity endorser. Zeta Interactive attributes the excessive drop to suspicions Mr. Armstrong used performance-enhancing drugs during races.
     Golfsmith International, who call themselves the world’s largest golf superstore, reports that their sales of Tiger Wood’s signature line of golf clothes are down by over 7% during a time that golf apparel sales overall have climbed about 11%. Golfsmith attributes the drop to Mr. Wood’s failures to bring home the money in PGA Tour tournament wins during that period.
     Guard against endorsers of your store, products, or services having low credibility. Research at University of Massachusetts-Amherst identifies two types of endorser credibility consumers use when making purchase decisions:

• Knowledge credibility comes from expertise in the field. Tiger Wood’s ability to sell golf clothes is tied to his skills as a championship golfer. People who bought and wore the signature line could feel some of that expertise rubbing off the fabric and onto them. If Mr. Woods wasn’t winning, there seemed to be less expertise to rub off. When 64% of recent online posts about Mr. Armstrong include the word “steroids,” that’s a signal Mr. Armstrong’s true expertise is in doubt at the point where the rubber meets the road.
• Reporting credibility comes from consumer trust that the endorser is telling us the whole truth. When Mr. Woods abruptly switches from endorsing Rolex Tudor watches to endorsing Tag Heuer watches, we might lose trust in his recommendations. When 29% of recent online posts about Mr. Armstrong include the word “lie,” “lies,” or “liar,” that’s a signal trust is eroding.

     Research suggests that both types of credibility are greater if the person isn’t endorsing large numbers of other businesses or products. Avoid what the LA Times referred to as the “Jackie Chan Curse.” International film star Chan has endorsed so many retail business—including an auto repair school now accused of being no more than a diploma mill—that at least a few of the retailers were bound to have problems later, making Mr. Chan and the other retailers he endorsed look bad.

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Publicize What You Distinctively Offer
Get Endorsements from Groups
Make Your Sales Staff Celebrity Endorsers
Make Your Product Reviews Credible

Strengthen Store Identification Using Bags

Can a shopping bag build a bond between your customer and your store? Maybe so, according to University of Minnesota researchers.
     Female participants in a study were asked to carry a shopping bag for an hour as they walked around a mall. Some of the women carried a Victoria’s Secret shopping bag. The rest carried a pink shopping bag with no store or brand identification. At the end of the hour, each woman returned to the research site and was asked to rate herself on a list of personality traits.
     Compared to those who carried the plain bag, the women who carried the Victoria’s Secret bag were more likely to rate themselves as feminine, glamorous, and physically attractive. These are characteristics associated with the Victoria’s Secret store and merchandise brands.
     Does this mean that giving your customers a shopping bag with your logo on it significantly strengthens their identification with your store? Well, the study design was more complicated than what I’ve told you so far, and those complexities shape the best ways to profitably use the findings.
     Here are the two complexities:

• Each woman in the study chose whether to carry the Victoria’s Secret bag or the plain bag. Therefore, one explanation of the findings is that women who choose a bag with the store brand on it are saying they want to be considered as having personality traits like the store brand. A classic philosophical question is, “Which came first, the chicken or the egg?” In this study, we can ask, “Does carrying the bag influence the shopper’s personality, or does the shopper’s intended personality influence the bag they select to carry?” The answer to that second question is, “It works in both directions.”
• Carrying the Victoria’s Secret bag did not have an effect on all the women shoppers. Those for whom it did have the most effect were shoppers who aspired to be better in some way, but felt they couldn’t do it on their own. They are the type of people who depend on brands to help them achieve their self-esteem aspirations.

     The advice for you: For the aspirational merchandise you sell, make branded paper bags available to the customer.
     And, oh yes, a bonus tip: If you sell merchandise like Victoria’s Secret sells, consider that some shoppers might like to conceal their purchase inside a plain paper bag while walking the mall.

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Project Your Store’s Personality
Offer Aspirational Shoppers Subtle Signals