Monday, February 28, 2011

Arouse Lovers by Flaunting Haters

Around ten years ago, Chrysler Group—the company selling the Dodge Ram truck—paid for a marketing campaign which included hate mail about Dodge Ram drivers. Why? Well, the objective was to stimulate protestations of love for the truck.
     Reverse psychology is a risky strategy. Still, there are circumstances and ways in which you can boost profits by using hate messages to arouse love messages. At the same time, this Dodge Ram campaign was based on a succession of lies, so it also provides lessons about what not to do.
     First, the campaign’s designers set up a website on which was posted a video of a drag race won by a Dodge Ram. There was no mention of the name, only images of the distinctive grill design. The website also included invitations to set up drag races. The impression from looking at the site was that it was designed by and intended for fans of the Dodge Ram. In fact, though, it had been set up by the guerrilla marketing team.
     Next, the team starting sending letters to newspaper editors bemoaning the increase in drag racing and blaming Dodge Ram drivers for it. The letters carried the names of individuals, but had been written by the team.
     What this produced was a bold image for the Dodge Ram along with genuine, spontaneous statements of praise for the truck and its owners.
     Now consider a more honest, more recent way to go about it: Think Miracle Whip. A bland-looking spread that adds flavor and texture, but is never the lead contributor to an entrée’s appeal. So let’s add some drama with a controversy. A current Miracle Whip marketing campaign urges consumers to take a stand, posting either their love (“…not fancy-dancy elite….”) or hate (“…spreadable disappointment….”) on YouTube and Facebook.
     Track what’s being said about you on the Internet. Then judge if there are ways to profitably arouse those who love your store by flaunting extreme comments from those who say they hate you.
     A caution, though: Research at Case Western Reserve University points out that customers with complaints range from those who just want to have an “I’m sorry” up to activists who plan to go to the media or to government agencies. When one of your customers complains, assess the agenda. The Miracle Whip campaign works because the complaints are playful. Not even an “I’m sorry” is expected.

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Track Internet Gossip About You
Resolve Customer Complaints Carefully

Sunday, February 27, 2011

Design Business Logos For Fan Enthusiasm

Tonight is the Academy Awards broadcast. Get ready to slouch on the couch and predict the winners. Just keep in mind that we’re all retailing professionals here. So don’t waste all your attention on those trivial categories for the Oscar, such as Best Picture, Best Sound Mixing, and Best Adapted Screenplay. Save some crystal ball gazing for the most important one of all. I’m talking about you judging tonight’s entry in the category of Best Adapted Retail Logo. Will it be a winner or a loser?
     JC Penny Company, which has been the exclusive retail sponsor of the Academy Awards broadcast for a decade, is using the advertising occasion to unveil their new store logo. The new design, like the former one, uses red lettering and a Helvetica font. A major change is that “jcp” appears in lowercase and in a solid-colored square.
     That box triggers a memory of the ill-fated logo change by Gap last fall. It also introduced a square box to complement the Helvetica font. In the following days, plenty of critics said the Gap logo looked like something from a Microsoft clipart library. Not at all stylish
     Keeping your store’s image up-to-date is essential, and your business logo is one clear projection of your store’s image. Still, changing your store logo is a delicate matter.
  • Welcome ideas from a range of stakeholders. JC Penny invited ideas not only from design agencies, but also from the company’s employees, the art school at University of Cincinnati, and the Rhode Island School of Design. About 200 ideas were submitted.
  • Use marketing research. Find out how consumers are likely to react to the changes. Based on what you learn, you might decide to unroll the introduction rather than do it all at once and everywhere. When Sun-Maid Growers of California decided to update their Sun-Maid Raisin girl logo, they used the new version in ads, but kept the older logo on product boxes.
  • Listen to your fans. Tropicana Pure Premium orange juice changed logos to the new and then back again. The old one was a straw sticking into an orange. The new one was a glass of orange juice. It wasn’t that the majority of shoppers liked the old image better. It was that Tropicana soon discovered the most vehement objections were coming from their most faithful customers. You never want to offend your fans.
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Analyze Errors Accurately
Keep Your Store’s Dress Codes in Fashion

Saturday, February 26, 2011

Rationalize Your Inventory by Pooling

“SKU rationalization” refers to a retailer regularly reviewing the inventory mix to rationally decide which items—referred to as Stock-Keeping Units—to add, which to retain, and which to eliminate. The impetus for the development of SKU rationalization methodologies was the growing body of research evidence that each consumer tends to use an infinitesimal fraction of the numerous items available. For instance, a recent article in The Wall Street Journal points out that although almost everybody uses just one brand and type of toothpaste, there are currently more than 350 toothpaste varieties available in the marketplace. Retailers can reduce inventory ordering and storage costs by stocking fewer different SKUs.
     But will those retailers still sell as much? From a shopper psychology perspective, the three biggest challenges with SKU rationalization are:
  • Consumers have fortress brands. These are the ones which win deep allegiance from the consumer by becoming highly integrated into daily rituals, even quite mundane routines. Brushing my teeth doesn't feel right unless the taste of the paste and the look and feel of the tube are familiar. One source told the WSJ reporter of fears that if the retailer who supplies a faithful customer’s toothpaste deletes the fortress brand, there’s a measurable possibility the consumer will go elsewhere to look for it, and while there, buy the rest of the items on their shopping list.
  • Consumers want customization. Over the past years, shopper desires have been drifting from the general to the specific, from the one-size-fits-all to the specialty and the personalized. If a retailer offers only a limited selection, the shopper will strike out to find the trendy shop.
  • Consumers want choice availability, even when they will select the identical option repeatedly. People overestimate the extent to which they’ll get tired of the same types of cereals and sunglasses. They think they’ll want to make a change when, in fact, they’ll end up sticking with a favorite.
     Research findings from University of Navarra in Spain and UCLA indicate that one way to lessen these problems is to do SKU rationalization by pooling product images. In advertising and signage, use different marketing messages for the same product. This works best when combined with personalizing the face-to-face selling. Maintain pleasant eye contact in ways that are culturally appropriate, call customers by name when possible, and ask customers questions that include the word “you.”

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Switch Brand Selection with Shopper Anxiety
Update Your Niche Whenever Necessary
See Through Consumers’ Boredom Fears
Personalize the Selling Message
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Friday, February 25, 2011

Number Costs and Benefits for Desired Effects

The way in which you state numbers to a shopper influences their purchase decisions. When deciding which measuring stick to use for the numbers, consider what fits your business ethics and how to best highlight selling points.
  • Larger numbers can make a benefit sound better. Researchers at Ghent University in Belgium and Tilburg University in the Netherlands asked consumers to compare the advantages of a seven-year warranty and a nine-year warranty. To one group, the duration was stated as seven years compared to nine years. To another group, the identical duration was stated as 84 months compared to 108 months. Those consumers presented the months figures saw the difference between the warranties as larger than did the consumers hearing the comparison in years.
  • When resources are stated as larger numbers, consumers are more willing to take risks in their expenditures. Researchers at INSEAD-France, INSEAD-Singapore, and University of Toronto found that international travelers were willing to gamble almost twice as much when the currency in which they placed their bets produced face values that were 100 times as much. This might occur when the bets—or merchandise prices—are stated in Japanese yen as compared to U.S. dollars. In a retail store, it could occur when frequent buyer points are awarded in units of 100 instead of single units.
  • Statements in unexpected units increase the consumer’s interest in understanding reasons to make the purchase and distract the consumer from thinking of reasons not to buy. Researchers at University of Cincinnati, University of Indiana, and University of Twente told study participants that a candy bar would cost 100 cents, membership in a student interest group would cost 300 cents, and a tuition increase of 7500 cents was slated. The participants given this information, rather than the amounts in more conventional dollar figures, became increasingly anxious to make a purchase decision and increasingly certain of any positive judgments of the product, activity, or cost.
  • Prices written out as words are seen as lower than prices stated in dollar figures. Similarly, researchers at HEC Paris and University of Pennsylvania found that a price stated as “one forty-eight twenty nine” sounds higher than the same amount stated as “one hundred forty eight dollars and twenty nine cents.”
     But an important point to note is that after consumers are educated about these cognitive distortions from the measuring stick, the effects fade substantially.

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

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Have Discounted Prices End in $1.99 or $2.99
Give Shoppers a Comparison Point
Present Warranties as Insurance, Not Assurance

Thursday, February 24, 2011

Give the 3/50 Project a 360

The 3/50 Project has as its tag lines “Pick 3. Spend 50. Save your local economy” and “Saving the brick and mortars our nation is built on.” The mission is to convince consumers to each select three independently owned businesses they would miss having available if the businesses disappeared, and then spend a total of at least $50 each month at those businesses.
     The project has more than 8,500 participants from more than 100 cities and has gained media attention from CNN, Oprah, Consumer Reports, and on and on.
     However, I’m not aware of any research verifying that the 3/50 Project has improved the sustainable profitability of those participants. I would not be surprised if it had little lasting effect. That’s because the premise stops at loyalty to the retailer rather than pushing for turning shoppers into advocates. When you’ve people shopping with you because of fears you’ll close the doors, obligations to be nice to neighbors, or guilt about the shoppers going to nationally-based retailers, those shoppers can turn away from you on a dime, and there go your dollars.
     Keep your focus on building store advocacy, not just customer loyalty. Store advocacy means how often and how strongly your customers praise you to other potential shoppers with specifics. Beyond “I love to shop there,” to “I get an excellent price on top-quality herring,” “Almost everyone there listens to my questions and gives me useful answers,” and maybe most important of all, “I don’t go out of my way to recommend stores to people, but I feel real good about recommending this one to you.”
     Current customers may enjoy shopping with you, but with the exception of your family and close friends, unless you work consistently and vigorously to maintain that habit, current customers are not highly resistant to giving their business to somebody else.
     The term “customer relationship marketing” is excellent shorthand for reminding us retailing professionals of the importance of every interaction between the shopper, on the one hand, and on the other hand, the staff members, the signage, the reward programs, the cleanliness of the parking lot, and more.
     The 3/50 Project encourages consumers to shop at retailers about whom they’d say, “I really like that store, so I should take the time to go there.” But give the principles behind 3/50 a full-range 360-degree look. Don’t depend on shoppers’ fears, obligations, or guilt.

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Build Store Advocacy Beyond Customer Loyalty

Wednesday, February 23, 2011

Stem the Tide of Female Shopper Discomfort

For many years, influential Americans have worried about STEM. In his 2006 State of the Union Address, President George W. Bush announced an initiative to correct shortcomings in our students’ STEM knowledge. The National Aeronautics and Space Administration has said that without adequate attention to STEM, we’ll lose hope of superiority in space. The National Science Foundation warns that females too often resign themselves to being viewed as having poor STEM skills.
     This warning about the sense of resignation is what brings us to retail shopping behavior. STEM is the acronym for science, technology, engineering, and math. It refers to a set of disciplines ranging from actuarial science to zoology. Researchers at Korea’s Yonsei University, Canada’s Concordia University, and America’s University of Minnesota verified that women avoid situations like automobile shopping, financial planning, and tax preparation because the women fear salespeople will try to cheat them, assuming their customers lack STEM strength.
     For your products and services that might arouse these concerns in female consumers, here are some research-based ways to stem the tide of discomfort:
  • Have women salespersons available and show more female salespersons in ads. This was one of the methods Lowe’s used to make their home improvement stores more female-friendly.
  • Make the store environment less exclusively masculine. Go gently with the renovation, though. Otherwise you risk chasing off your male customers. The Yonsei/Concordia/Minnesota researchers discovered how a quite subtle change did the job: When a vanilla scent was pumped into the environment, the women’s STEM anxiety did not significantly alter their shopping behavior with male salespersons. Why vanilla? Researchers attribute the effect to vanilla being a predominant scent in breast milk, which, in turn, carries tones of female mastery.
  • Arrange and publicize women-only special events at your store. Harley-Davidson has had success with this method at their 650 U.S. dealerships.
  • Have salespersons include more explanations in their selling. Midas International trained employees to smile as they use a checklist to describe to the customer each procedure that will be carried out on the customer’s car. The measure of success comes whenever a customer is asked: “Would you be able to explain to your mother what happened at Midas?”
  • Avoid arousing anxiety from other sources that could exacerbate any STEM anxiety. For instance, researchers at Tilburg University and Arizona State University found that when female study participants looked at moderately heavy models in ads, the study participants began having unpleasant thoughts about their competence.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Explain Yourself to Female Customers
Appeal to Pride of Distinctive Consumers

Tuesday, February 22, 2011

Account for Contextual Influences on Sales

Some years ago, a group of retailing experts commented on how Walmart, unlike almost every other retailer in the world, was so powerful that they’d actually influenced the economy rather than had been at the mercy of the economy. Management consultants McKinsey & Company estimated that between 10% and 15% of the U.S. productivity gains in the late 1990s came from Walmart’s drive for efficiency.
     That was then, and this is now. Walmart is being steered by the economy to a greater extent than Walmart is steering the economy. Walmart year-to-year U.S. same-store sales have been down for six consecutive quarters.
     From a shopper psychology perspective, Walmart stumbled. They failed to sufficiently upscale their image when they decided to aim for the more upscale shoppers who were trying out Walmart for the prices. When that didn’t work, they waited too long to restore the power aisles—the shelves with the overwhelming numbers of a limited selection of products that researchers at University of Wisconsin-Green Bay and Youngstown State University had shown give the impression of low prices.
     Are those errors sufficient to explain the drop in Walmart U.S. sales? Perhaps not. The declines should be interpreted in the context of this being the worst economy in seven decades. Context counts.
     Another example of this point comes from recently-reported research findings at University of Alberta, Dartmouth College, Syracuse University, and Babson College: Tracking about 300 product categories, overall store sales were affected by the price of gasoline. Therefore, the sales figures should be interpreted in the context of gasoline prices.
     When the price of gasoline went up noticeably:
  • There was a shift away from regular-priced national brands, as you might expect, but the shift wasn’t toward private-label brands as much as it was toward any brand that was promoted heavily by the store. In the shopper’s mind, promotion implied discount.
  • Among consumers who stayed with the national brands, there was a shift in market share from bottom-tier brands to mid-tier brands rather than the other way around. It might be that the bottom-tier shoppers deferred their purchases in that category altogether. It also might be that the bottom-tier shoppers who did make it to the store on their tank of gas decided to treat themselves.
     The lesson, retailer? Ask not just “What’s happening?,” but also, “In what ways does the context help explain why this is happening?”

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Uncover Why Your Advertising Works
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Monday, February 21, 2011

Make Your Shoppers Feel Special

Every one of your shoppers likes to feel special. Increasingly, they’re yearning for a sense of prestige. This is the argument of a recent Retail Customer Experience posting titled “The Enduring Allure of the Secret Handshake.” The evidence is that with our ecommerce world, where anybody can go anywhere in virtual space, consumers will pay for a feeling of exclusivity.
  • Whatever line of merchandise your store carries, develop for each major product category a vocabulary that describes the products. Then help each customer learn this vocabulary. Consumer researchers talk about helping customers develop a consumption vocabulary so they can better describe to the salesperson what they’re looking for. This can speed up the purchase of the item. But the research also finds that shoppers with consumption vocabularies spend more time in the store on average and they end up buying more items than the customer who lacks the vocabulary. One reason is that the shopper who knows your store’s lexicon feels a sense of pride when there.
  • Use prestige to restore the lost momentum that retailing experts find frequent shopper programs are suffering. Do the enrollment materials, the enrollment procedures, and the participant card all clearly refer to the customer as a “member”? Do you have multistep programs, in which a member can move from green to gold status, for example, by increasing the total amount and/or the frequency of purchases? When the customer shows the card to the cashier at the time of checkout, does the cashier give extra acknowledgement, such as by looking at the customer, smiling, and saying, “Thanks for being a green step member”?
  • Make prestige signals available. Create prestige for items you sell by displaying to your shoppers the contextual cues for the values your shoppers hold. Show the clothing worn, the other products used, and the sorts of physical locations that consumers associate with the people your shoppers want to be like. Do this in advertising, store displays, e-commerce pages, and to the extent you can, even in what your salespeople wear and the type of language they use.
     Do be careful, though. For example, if you give an exclusive price discount to certain customers, your announcement might make the rewarded customers uncomfortable. Be ready to explain the reason for the discount. Otherwise, the rewarded customers might get angry, thinking that your store pricing is highly arbitrary or even discriminatory.

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Offer Exclusive Price Discounts Cautiously
Tailor Loyalty Programs to Customer Culture
Give Loyalty Program Members Prestige
Cultivate Store Prestige with Context
Give a Vocabulary for Richer Shopping

Sunday, February 20, 2011

Simplify for the Shopper

Turnkey is key. Keep it as simple as possible for your shoppers. At best, all they’ll need to do is turn the key in order to realize the benefits your products and services promise them. Consider the global retailing brands that consumers say are doing well in simplifying, and learn from what those brands are doing well:
  • Walmart is praised for clear pricing and making good on promises to offer substantial discounts. It’s simpler to shop when you trust the retailer.
  • McDonald’s receives recognition for ease in food selection because of customizing for the locale. In India, McDonald’s offers the Maharaja Mac, made with lamb. In Japan, there are shrimp burgers.
  • Trader Joe’s is on the simplicity list because their careful selection of products makes shopping more efficient. While the typical grocery store carries about 50,000 different items, a Trader Joe’s store carries about 4,000.
     At the other end of the scale, Apple Stores take a hit because of the iPhone. Purchasers find that when they have complaints, the blame is bounced back and forth between Apple and AT&T. Consumers want accessibility when problems arise.
     These findings are from a report recently released by strategic branding firm Siegel+Gale. Across the US, UK, Germany, China, India, Saudi Arabia and Dubai, 6,152 consumers were asked their views about simplicity. Analyses of the results identified four primary components:
  • Clarity in communications
  • Honesty and trustworthiness
  • Efficiency in satisfying consumer needs and wants
  • Accessibility whenever there are questions
     Simplicity counts not only for the retailers, but also for the products they carry. About 70% of consumers wish simple products were available to them. That’s the conclusion of a study conducted by international advertising agency Euro RSCG Worldwide. Those results were based on responses from 5,700 adults residing in France, the Netherlands, England, the U.S., Brazil, Japan, or China.
When it comes to simplicity versus complexity, the consumer psychology trend is toward being happier with simplicity of functions from the start. Offer your customers fundamentals.
     But please don’t misunderstand. The fact that most consumers wish simpler products were available does not mean all consumers will end up buying those simpler products. Most shoppers still want their indulgences. And the large majority of shoppers enjoy customizing their products to fit their individual characteristics. The trend here is to want it available in a less complex, more intuitive format.

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Offer Fundamental Indulgences
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Saturday, February 19, 2011

Present Warranties as Insurance, not Assurance

Shoppers prefer a product that carries a warranty over a product that doesn’t, everything else being about equal. Consumers will pay more for a product when it comes with a warranty. All this suggests that an advertisement or a salesperson should specifically mention the warranty. But what should the ad copy or the salesperson say? What about the warranty makes the product more attractive?
     Both consumer behavior research and retailers’ field reports suggest four possibilities:
  • “The warranty is like an insurance policy, letting you know that if anything goes wrong, your costs to make things right will be zero. You don’t need to reserve money to pay for repairs that are covered by the warranty.”
  • “The warranty saves you from worry that you’ve made a bad purchase decision. There’s less uncertainty and more predictability when your purchase comes with a warranty.”
  • “The warranty is assurance to you of product quality. The manufacturer or retailer offering you the warranty is saying that they have high trust the product is made well and will serve you for a long time.”
  • “By purchasing a product with a warranty, you send a message to all manufacturers that you place a high importance on them standing behind the products they produce.”
     These four messages are related. They’re not completely independent, so you might want to say more than one to the shopper. However, the warranty is only one of the product features. People don’t buy a product principally because of the warranty. In addition, the consumer’s time and attention span are limited. So where should you place the primary emphasis?
     Researchers at University of Chicago and University of Singapore explored this question by analyzing consumers’ reasoning about warranties for cars—an end-consumer product—and for computer servers—a business-to-business item. They found that warranties are more likely to influence purchases when presented with one or both of the first two reasons than one or both of the second two. The shopper thinks of the warranty more in terms of insurance against loss than in terms of assurance of product quality.
     Consumers with a relatively high tolerance for risk will be more motivated by the “you don’t need to reserve money” argument. At the other end of the dimension, consumers with a low threshold for accepting risk will be more motivated by the “the warranty saves you from uncertainty” statement.

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Make Extended Service Contracts Worthwhile

Friday, February 18, 2011

Look to Toys & Games for Retailing Trends

Reviewing the approximately 100,000 products on exhibit at their annual trade show, the Toy Industry Association (TIA) announced what they see as the major trends. Pay attention because these trends hint at what’s likely to be seen in retailing areas other than toys and games.
     That’s because people who purchase toys are also buying lots more. It’s also because children are a future market, with their high potential to remain or become primary customers in five to fifteen years. They’ll bring with them some of their attitudes as they move from kiddy playthings to teen and adult playthings.
     Before this happens, children are still an influence market, giving suggestions to the adults on what to purchase. The chief evidence can be seen in the cereal aisle at any grocery store. But it’s much more than this. Surveys find that about one-third of parents say their kids also actively participate in deciding which automobile the parents should buy.
     Here, then, are toy and game trends to attend to:
  • Nonstop activity. More games were designed around independent simultaneous play. It’s the difference between Scrabble and Bananagrams. Similar trends included multitasking instead of waiting your turn, cooperative play rather than independent play, and game rules that emphasize speed.
  • Internet influence. One strand was the integration of the tangible with the virtual. More toys work with apps, and virtual world games allow for online links. Another strand was the increase in the number and variety of miniature versions of toys and games, reflecting the consumer’s attraction to the portability associated with mobile electronics devices.
  • Economy. The miniature versions also are less expensive than the full-sizes already in the marketplace. A related trend here is tighter profit margins for retailers. Peter Laudin, owner of The Pattycake Doll Company, tells me that merchandise and shipping prices were up dramatically from what he’s seen at past shows for equivalent items.
  • Exercise. It appears that adult consumers are listening to the warnings about childhood obesity and so want items which encourage physical activity. There were more sports, dance, and active role-play products. Still, brain exercise was all the rage, as well. Plenty of the items foster logic and strategic thinking. The TIA is using the term “camouflage learning” to describe the wave of toys and games which have at their core heavyweight mental skill building, but wrap it all in layers of entertainment.
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Employ Purchase Triggers for Children
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Thursday, February 17, 2011

Attend to the Zeitgeist

Although Skyler McManus is a successful retailer who knows T-shirt trends, he told the San Diego NBC affiliate there’s one design he’d never carry. Mr. McManus manages Hamel’s Surf Shop, one of the most famous stores in Mission Beach, California, where all sorts of T-shirts are for sale.
     The T-shirts to which Mr. McManus takes objection feature a surveillance photo of a robber nicknamed the Geezer Bandit. Usually wearing a blazer over his button-down shirt, what appears to be an elderly man waits in line at the teller stations, and then when it’s his turn, he points a gun and says he’ll shot if the teller doesn’t give him the money. It’s reported that at the thirteen banks he’s robbed so far, he then shuffles out the door and gets away.
     The Geezer Bandit has inspired Facebook pages, and along with the T-shirts, his image is being marketed on coffee mugs, gym bags, baby bibs, and yes, Mr. McManus, even beach totes. Some of those tracking the popularity of Geezer Bandit fad items attribute the phenomenon to the zeitgeist—the spirit of the times. Banks are widely viewed as villainous and senior citizens as an underappreciated force in society. It’s a tale of the disenfranchised weak rising up against the bully.
     The latest truly heroic examples of David prevailing over Goliath occurred in Tunisia and Egypt. Our current homegrown criminal version happens to be the Geezer Bandit.
     But this is one dangerous criminal who has traumatized people. That’s why Mr. McManus doesn’t like the merchandising of the image and why the FBI and banks are offering a $20,000 reward for information that leads to conviction of the Geezer Bandit.
     Your choice not to carry Geezer Bandit merchandise may be mostly because fad items usually have a brief time span for selling. Still, the zeitgeist of the weak rising up against the bully might very well inspire the way you frame sales of your merchandise. Other current distinctive zeitgeist elements are pride in frugality and a fascination with violating privacy.
     If you do decide to create and sell Geezer Bandit T-shirts, reframing could help there, too. Instead of carrying a slogan like “Run Geezer Run,” the text by the photo could say, “Have you seen this bank robber? Call FBI with leads. $20,000 reward if conviction.”
     It won’t fit any prevailing zeitgeist, but it would be a public service.

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Wednesday, February 16, 2011

Stay in Front of Trouble

A recent Vending Times posting reports that if you sell beverages in your store, odds are increasing your shoppers will see calorie counts right on the front of cans, bottles, packaging, and vending machine buttons. So far, this initiative from the “Clear on Calories” alliance covers products from Coca-Cola Co., PepsiCo, Dr Pepper, Snapple Group, Sunny Delight Beverages, Nestlé Waters North America, Cott Beverages, and Honest Tea.
     Consumer protection organizations and consumers themselves have increasingly accused beverage manufacturers of hiding calorie information. Such suspiciousness may cause trouble for the retailers who carry those beverages. The “Clear on Calories” initiative is a reminder of the value in literally staying up front about troublesome issues.
     A more direct retailing example is the tale of Safeway and Kroger. The Center for Science in the Public Interest is suing Safeway, Inc. for failing to use data from their frequent shopper program to notify people of any recalls of products the people have purchased.
     Last week’s response from Safeway to the legal action? Using their loyalty program data for this purpose would be unnecessarily cumbersome. But as one retailing guru has opined in criticizing the Safeway response, “If just one or two customers are hurt or killed—and there's a good chance some might be children—because of the lack of notice, the legal liabilities (not to mention the PR disaster) could be devastating. So why risk it?”
     What about The Kroger Co.? In late 2009, this grocery retailer announced they would be using their sales databases to notify each customer when an item the customer previously purchased is being recalled for safety reasons. Research had suggested many consumers would consider the program as showing a caring attitude and a social consciousness.
     There’s more to the story, though. About five years earlier, in 2004, a lawsuit had been filed against Kroger similar to the recent Safeway action. Kroger’s initial response also was to fight rather than get out in front and lead. In this, they missed an early learning opportunity. For instance, Kroger’s initial experiences with their 2009 program showed that some customers didn’t like to be reminded every purchase was being tracked.
     And as to knowing calorie counts, some shoppers don’t want to. Researchers at Washington State University and University of Texas-Austin call this phenomenon “willful ignorance.”
     Those out in front of such trouble can make adjustments, achieving a competitive advantage.

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Offer Frequent Shopper Benefits Beyond Discounts
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Tuesday, February 15, 2011

Probe for Intentions in Focus Groups

Depth-oriented focus groups aim to identify consumers’ secret motivations by climbing deep into the subconscious minds of the group members. In my experience, depth-oriented focus groups can provide manufacturers and merchants with a compelling retailer’s edge.
     At the same time, in my opinion, conducting this market research technique requires thorough training in psychology. Among other things, I’ve occasionally seen instances where the digging into the subconscious then requires emotional decompression before sending the focus group participant back into the night.
     Even if you agree with my opinion, you’ll still need enough expertise to oversee the focus group facilitator. My primary advice parallels what I say about other market research techniques for which you hire an outsider because of required technical expertise: When the conclusions from the project don’t make good sense to you based on your experiences as a retailer, start out by asking yourself if you might have misunderstood what the consultant said or you might have been blind to factors the consultant discovered.
     The most valuable conclusions from retailing consultants lead to you saying, “Yes, now I see what I hadn’t recognized before.” However, if you decide you did understand the consultant correctly, you weren’t blind to important factors, and the conclusions don’t ring true, then consider what the consultant is telling you as having a high nonsense potential.
     With depth-oriented focus groups, another error I’ve noticed is a failure of the consultant to attend to the participants’ purchase intentions. So much attention is devoted to the emotional drivers and the subconscious beliefs, the facilitator overlooks the payoff theme: Where will these people make their purchases?
     Beliefs will be assessed beginning with probes such as, “To what degree do their sales staff want to get you the right product for your needs?” Feelings will be assessed starting with probes like, “When you buy a product there, how confident are you that you’ve made a good decision” But as you’re watching the video of the focus group, do you see the prelude to the money shot with a probe like, “Next time you need a product carried by that store, how likely are you to shop there?”
     Those probes are at the surface. But each determines what you’ll dig up. For your business to reach its full potential, explore all three areas via the depth-oriented focus group. Know your potential customers’ beliefs and feelings, and their intentions.

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

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Call on Structural Equation Modeling
Interpret Survey Results as a Retailer

Monday, February 14, 2011

Gobble Those Valentine Chocolates Guilt-Free

Retailers are consumers. So to show my Valentine’s Day affection for my RIMtailing audience, today I’m applying research findings to reveal how to avoid guilt while eating all those premium-grade chocolate candies from your countless lovers.
     Now I could tell you there are chemicals in chocolate which create such an irresistible urge that you can’t be held responsible for unrestrained gobbling.
     Except I might be fibbing. Some say the magic of chocolate comes from it triggering the release in the brain of a set of pleasure chemicals called endorphins. However, that connection is based on animal studies. As far as I know, there is no well-designed research verifying that eating chocolate triggers an endorphin rush in the human brain.
     Claims about other chemicals in chocolate causing the attraction don’t hold up well, either. For instance, chocolate contains phenylethylamine, a compound that’s been associated with falling in love. But salami and cheese, which also contain phenylethylamine, certainly don’t draw as many fervent fans as chocolate.
     At this point, a more solid biochemical explanation for why we love chocolate is that its combination of sugar, fat, and creaminess provides us extraordinary sensual satisfaction.
     Wait. That still leaves two research-based shopper psychology tips on feeling less guilty about eating chocolate:
  • People feel much better about indulging themselves when they’ve a proud sense of achievement, such as after eating a healthy food. Just thinking about ordering at a restaurant a healthy food that doesn’t taste very good, even if you don’t end up ordering it, works. So dine with your sweetheart this evening where the menu includes low-calorie arugula salad, roasted eggplant as an entrée, and Brussels sprouts as the side dish. Don’t order any of those, of course. Get the delicious stuff, then go home to gobble your low-guilt chocolates.
  • If you’re going to eat a lot of chocolates, eat them from a succession of small packages. The drop in guilt here comes from more than saying, “Well, at least I didn’t eat twenty pieces. From one box.” It’s also that when there’s a smaller quantity of something, the scarcity triggers a compelling attraction which serves to counteract any guilt. In addition, we relax our defenses against overeating when we eat from smaller packages.
     Enjoy your gobbling. And turn around what I’ve said so your customers will truly enjoy the chocolates you give or sell them.
     Hope I helped, love.

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Balance Healthy and Indulgent in Merchandise
Offer Scam-Free Scarcity
Label as Small to Increase Trial

Sunday, February 13, 2011

Draw Out Advice & Opinions from Shoppers

Ask customers their opinions of products and services you’re suggesting to them. Ask them for their advice on how to improve your store operations. Distinguish between asking customers for their opinions and asking for their advice.
     Researchers at University of California-San Diego and Northwestern University asked one group of people their opinions of a fitness center and of a restaurant. A second group was asked to give advice to each of the businesses.
     Those who offered advice became more likely to want to make purchases from the fitness center and the restaurant. Based on data analyses, the researchers concluded that giving the advice created an intimacy effect, in which the consumer felt closer to the retailer. This didn’t occur when the consumer was asked for an opinion of the business.
     However, other research finds that when a salesperson asks for opinions of an item a shopper is considering for purchase, the effect is positive. Many salespeople see it as their role to give out information about the merchandise, not to ask the customer for opinions about the merchandise. But researchers at the Hong Kong University of Science and Technology found that asking a customer their opinion is a powerful selling technique.
     To use this tactic, you need to understand something a bit strange about how it works: When a shopper is asked to select which of a small group of products the shopper prefers, the shopper gets more likely to want to buy the next product considered. The effect is strongest when a shopper is in a hurry to buy a number of different items.
     This technique can be of special value in making add-on sales. The salesperson asks, “What do you think of these different items you’ve looked at?,” and then after listening to the answer, “What other items may I help you find today?” The cashier at the checkout counter asks, “What do you think of the items you found here today?,” and then after listening, at least briefly, to the answer, suggests an add-on item for the customer to look at next time they are in the store.
     The traditional meaning of the phrase “Ask for the sale” is, “After you’ve presented all the information, don’t forget to finish by asking the customer to make a purchase before they wander away.” Now an additional meaning is to make the sale by asking customers for their opinions.

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

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Ask Customers for Their Opinions of Items
Resolve Customer Complaints Carefully

Saturday, February 12, 2011

Follow Your Customers Home

Anthropologists study people within the cultures the people are accustomed to. When companies in the retail supply chain hire anthropologists, it’s often to follow customers to their homes and businesses to discover how the company’s products are being used in the purchaser’s natural environments. It was on the advice of marketing consultants using anthropological methods that the manufacturer of Weber grills told retailers shoppers seemed to put more importance on the social fun of a barbeque than on the ease of the cooking or taste of the food.
     Then Sealy Corporation sent consultants into consumers’ homes to explore the many different ways people use their mattresses. Sealy sponsored a dozen studies in which people were interviewed individually using anthropological and ethnographic techniques. The fruit of this labor was the “Whatever you do in bed, Sealy supports it” campaign. Aside from that tag line brilliantly projecting, “Hey, our mattresses are exciting, not just commodities,” the ads suggested a broader range of benefits than consumers might have been thinking about. Viewers of “American Idol” even had a chance to see an ad featuring a Sealy mattress being used as the trampoline platform for aerial stunts.
     In the mid-1980’s as Intuit Inc. was first getting started in Palo Alto, California, company staff hung around local computer stores where Quicken was being sold. Whenever somebody would buy that flagship Intuit product, the Intuit staff member would ask the purchaser if staff could come watch what happens when the person installed the software on the home or office computer and began learning to use it. Intuit made full use of what they discovered. Quicken garnered a reputation as a user-friendly way to get boring bookkeeping out of the way.
     Asking customers if you can follow them home probably wouldn’t out well for you in all circumstances these days. The visits would take time. Customers would say no. And as a retailer, you probably won’t be hiring anthropologists to assist in marketing campaigns.
     Still, you may have opportunities to visit your customer’s home or business locations to install, service, or repair products they’ve purchased from you. In these cases, observe all you can about how they’re using the products. What are the uses you didn’t expect and can now leverage as selling points to others? What frustrations are the people experiencing that could be eased through in-store training or client-site fee-based consultation?

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

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Discover What Purchasers Never Use

Friday, February 11, 2011

Wait a Minute Before Purging Customer Waits

Sometimes it’s more profitable to have customers wait a bit:
  • In-store research by Envirosell finds that shoppers for fashion products such as dresses and hedonic products such as perfumes prefer to take a minute or two to settle in and look around before being approached by a staff member intending to make a sale. Wait.
  • The customer might know they really should go to the income tax preparer or purchase the refill of that medicine or buy the wallpaper to replace what’s peeling and so no longer appealing. But if once the customer arrives, the retailer tells them they’ll have to wait for a while, you might hear from those customers a mighty sigh of relief. At least briefly. Researchers from Boston College, University of Miami, and Duke University point out that when it comes to buying unpleasant necessities, a longer wait—if handled properly by the retailer—can actually end up making the customer feel better about the whole experience.
  • Ensuring the customers won’t have to wait to be served on the sales floor and at the cash/wrap can cost you money if you’ll need to have richer staffing. Is there counterbalancing revenue because prompt service produces higher customer satisfaction? Research at University of Mannheim and University of Texas-Austin indicates that the answer may be no. Compared to repeatedly satisfied customers, those who are repeatedly very highly satisfied will be willing to pay higher prices. And moving a customer from being dissatisfied to being repeatedly barely satisfied will lead to customer willingness to pay you more than loss leader prices. But once you get the customer to the barely satisfied level, you’d have to push hard to get the willingness climbing further. It stays level until you get to the range of very high satisfaction.
  • Researchers at University of Maryland found that during the back and forth of negotiating a purchase price, the shopper will feel better about the final decision if the retailer waits a minute before responding with an okay or a counteroffer during each round.
  • With products like theatre tickets or premium chocolate candies, the purchaser might enjoy it more if there’s a delay before they use the product. It’s the pleasure of anticipation. This argues for making sales on a schedule which requires the purchaser to wait for consumption.
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Assess the Costs of Customer Satisfaction
Help Customers Buy Unpleasant Necessities

Thursday, February 10, 2011

Salute Sales to Concerned Patriots

If your customer feels their country or beliefs are under threat, the customer becomes motivated to buy products associated with that country or those beliefs. Have the right products ready for them at these times.
     People like to help out a friend, especially when the friend is at a disadvantage. This drive carries over to their relationships with stores and brands. Researchers at Harvard University, Simmons College, and Boston College found that when a choice of chocolate bar brands was offered to study participants, the brand positioned as the underdog was selected about 70% of the time.
     If the allegiance is to the customer’s country, we’ll call it patriotism. Researchers at Duke University, Cornell University, and University of Waterloo discovered that when Americans felt their country was under verbal attack, they became more likely to buy American. Study participants perceiving that America was being threatened were more likely to choose a Chevrolet than a Toyota, everything else being equal. They chose Nike over Adidas, even though they very well might not have been consciously thinking Adidas is based in Germany.
     This preference for American brands was substantially stronger under a certain condition: When the consumer believed not only that their country was being threatened, but also that America was having trouble responding to the threats. Those consumers who expressed absolutely no doubt America would prevail against the threats had weaker “Buy American” spirits.
     Americans certainly aren’t the only ones showing this shopper psychology patriotism. Researchers at Canada’s Carleton University and York University tracked what happened with Australian consumers before, during, and after the French government conducted nuclear testing in the Pacific in the mid-1990’s. French products were evaluated more negatively after the testing was announced and during the tests. Over the next ten years, as the memories of the threat receded, Australians’ attitudes toward French products moved back upwards again.
     Other studies indicate that the motivational push from attention to national origin takes a little while to fire off. Findings from researchers at University of Illinois and Hanyang University in South Korea suggest featuring country-of-origin information well before you present other information about the product. Mentioning country-of-origin immediately before describing other product attributes didn’t generate maximum effectiveness.
     State the country-of-origin in ads a shopper would see before coming to your store. In personal selling, state country-of-origin first, then pause briefly so the information starts brewing in the shopper’s mind.

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

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Boast About Underdog Determination
Sell Identity Affirmation to People
Feature Country-of-Origin Advantages

Wednesday, February 9, 2011

Hobnob with Your Neighborhood Retailers

How often are you visiting with neighboring retailers to learn from them? What opportunities do you take to answer their questions and offer them advice so you can mutually build shopper traffic in your area? Do you regularly carve time from your nonstop schedule to visit the competition to see what you sell that they don’t? When you spot those products and services, do you tell the floor staff how pleased you’d be to get referrals? How many of the neighborhood stores you’ve seen as competitors can also be seen as teammates?
     Your participation in business improvement districts, merchant associations, a local chamber of commerce, and informal hobnobbing can all help you discover more about your retailing neighborhood.
     One of your objectives should be to identify what shopper psychologists call “market mavens.” Positive word-of-mouth helps convince people to shop at your store, and market mavens are particularly effective at broadcasting positive word-of mouth. Market mavens are a special type of opinion leader. Rather than considering themselves expert advisors on only certain retail products and services, market mavens counsel others about the whole shopping experience and recommend specific stores.
     Team up with other local retailers to exchange information on market mavens. Research at University of Mannheim and University of Texas-Austin finds that market mavens aim to keep current about many retailers in the same geographical area. A study based at Providence College and University of Connecticut indicates that a main reason for the value to you of market mavens is the stable self-confidence with which they make recommendations to all the people they know.
     Currently, some experts are saying this sort of neighborhood cooperation is essential for retailers’ full profitability. Here’s why: Manufacturers and Payment Card Industry companies are finalizing plans to use the GPS capabilities on shoppers’ mobile devices to gather information about each shopper’s physical location, combine this with information already gathered about the person’s purchasing patterns, and then entice the shopper to go next to a nearby store that pays for the referral.
     The retailing experts are recommending you preserve your profitability by getting to know the shopping patterns people use in the stores near to you and then work out cross-referral and cross-promotion arrangements. At least one expert is highly confident groups of stores can prevail in doing this. But this assumes you start taking action now. Join in. Get to know your neighbors, retailer.

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

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Visit Other Retailers
Build Buzz with Market Mavens
Team Up in Making Your Purchases

Tuesday, February 8, 2011

Distinguish Customers from Friends

“Study: For Retail, Social Media Doesn’t Work.”
     What? There’s a research study concluding social media is ineffective for retailers? That headline over a current Marketing Daily article will strike some as being as unbelievable as the recent Fox News headline “‘UFO’ Hovers Over Jerusalem's Dome of the Rock Shrine.” And because the social media study—conducted by Foresee Results—appears to be methodologically sound, the conclusions are probably more trustworthy than the UFO report.
     A representative sample of 10,000 adults was selected and questioned using a format paralleling the respected American Customer Satisfaction Index studies. The researchers report that only 8% of respondents said social media is their preferred method of interchange with a retailer, and only 5% of visits to a retailer’s website were attributable to social media.
     These were the lowest percentages for any of the alternatives considered for the study. Consumers’ favorite method of interaction by far was e-mail, garnering 64% of the votes. The promotional methods most likely to draw shoppers to the retailer’s website included e-mails, sponsor-generated word-of-mouth aside from social media, and paid search engine placements.
     A legitimate conclusion from the Foresee Results study is that social media are being overhyped. The Marketing Daily headline might be overkill, though. After all, a Harris Interactive poll found that about 40% of American adults say they’ve received a good suggestion for something to try as a result of their use of social media.
     But consumers distinguish friends from other information sources. In the Harris Interactive poll, 26% of the respondents said their social media postings had been viewed by people they didn’t intend to see them. This means you should distinguish customers from friends.
     Here’s my version of how University of Geneva researchers described one of the distinctions:
  • Customers rely on you for quick answers to questions about purchases made from your store and for quick solutions to problems with purchases.
  • Friends want to maintain personal bonds with you, exchanging confidential information.
     There’s something else: These statistics were derived from samples of adults. Over the next years, as children develop into full-fledged retail consumers, we might very well see social media gain greater marketing influence. Evidence for this comes from the fact that in the Harris Interactive poll, a significantly higher number of young adults than older adults said they’d received a helpful suggestion from social media for a product to try.

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Generate WOM in the Right Places
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Learn the Relationship B2B Customers Want

Monday, February 7, 2011

Solicit Photos from Satisfied Customers

Ask your customers to share with you photos of them enjoying the products and services they buy at your store. Then feature an ever-changing portfolio of the best of these photos in your advertising, on your website, and on your brick-and-mortar store walls.
     Review all photos to eliminate inappropriate ones, and be sure your uses of the photos are legally defensible. Watch out for exhibitionists. Some want to show off imaginative ways to use your products, ways that are entertaining, but wholly unsafe. You don’t want to imply that you endorse those uses. Others seem to have misread the phrase “solicitation of photos” to say “solicitation by photos,” and so respond with more exposure than fits your business image.
     With that out of the way, here are shopper psychology tips:
  • In general, use only crystal clear images. Fuzzy images irritate most viewers. This irritation can corrupt positive impressions of your business.
  • But if you’re wanting to persuade shoppers who like a challenge, fuzzy up the photos a bit. University of Chicago researchers showed heterosexual men photos of potential female dates and asked the men to judge each woman’s attractiveness. Some of the photos were crystal clear, while the other photos were out of focus by 15%. Those men who had previously described themselves as “smooth talkers” found the women in the blurry photos to be more attractive than those in the crystal clear photos. Meeting the challenge of decoding the blurry photo added to the attractiveness. On the other hand, the men describing themselves as “shy gawkers” judged the women in the clear photos as better looking.
  • In comparative ads, do not show pictures of people using the product. University of Maryland researchers discovered that such pictures lead shoppers to start thinking about using the products themselves, and when they do this, they put too much mental energy into thinking about only the recommended product. They forget to pay attention to the comparative advantages, so the power of the comparative ad fades away.
  • Acknowledge each submission. In the same place you solicit the photos, have a note explaining that you won’t be able to use each one. Even with this, however, people will yearn for acknowledgement. They’ve sent off to you something special. The photo captures the soul of them and/or of those they care about. In addition, the photo is their work of art. So remember that these people are your satisfied customers. At any point where you find you lack the resources to acknowledge every submission, stop soliciting more submissions.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Offer Neatness to Creative Shoppers
Be Provocative, But Don’t Offend
Challenge Smart Shoppers
In Comparative Ads, Don’t Show Users

Sunday, February 6, 2011

Touch Down on Early Gains for You & Customers

My message for today has to do with the front-line employees of football franchises and the front-line employees of your retail business. But what I have in mind isn’t some motivational mumbo jumbo about teamwork. It’s about the commercials.
     I’ll take it as given that you’ve everything in place for a full sixty minutes of world class Super Bowl XLV performance by the front-line employees of the Pittsburgh Steelers and Green Bay Packers today. Are you also ready for the forty-five minutes of commercials Bleacher Report estimates will be broadcast from the pre-game through the post-game shows?
     The Bleacher Report article predicts you’ll largely forget the content of the commercials, and that’s where I derive the message for you and your front-line employees. Here’s the Bleacher Report argument in brief: Ten automobile companies have scheduled Super Bowl commercial slots. Ten years ago, a parallel situation occurred when twenty Internet-related companies ran commercials, some of those companies using multiple spots. A survey showed that only about 40% of the viewers recalled at least two of those commercials.
     But which Super Bowl commercials are recalled best? Researchers at University of Miami answered that question in terms of the memory lasting long enough and in ways that increased the probability of product purchase for commercials shown during the 2006 Super Bowl. Here’s what they found and how it applies to you:
  • The earlier in the Super Bowl a commercial was shown, the stronger the influence on purchase behavior later. When your front-line sales employees recognize that a person is shopping for more than one project, start out by helping them with the project that will produce the highest profit margin for the store and the highest degree of relief for the customer.
  • When a group of commercials is shown, the earlier the commercial comes in the group, the more likely it is to influence purchase behavior. When your front-line sales employees are presenting a group of alternatives to a customer, the one they present first will have extra influence. It serves as a reference point against which the following alternatives will be compared on price, quality, and ease of use.
  • The Miami researchers found that when a group of commercials had a fewer number of ads, each ad was remembered better. When your sales employee wants to guide a shopper toward a particular choice, limit the number of alternatives.
Click below for more:
Guide Choice by Sequence of Presentation
Make It Easy to Choose Two

Saturday, February 5, 2011

Package Your Products for Premium Pricing

Package deals are as old as retailing. Say you’ve booked a cruise. You’ll be getting your lodging and dining at a lower price than what you’d pay if you arranged for each individually. Are you considering the cable TV/telephone/internet package? You’d be saving big if you decide to get all three together from us. In the 1980’s, did you buy the entrée, the side dishes, and even the dessert in the same Swanson TV Dinner package, getting a full meal deal price?
     In these package deals, the appeal is to cost savings. But another approach is for you to improve your profitability by setting a premium price when you package products, product categories, or product benefits. The customer might ask why they’re paying more. Your answer will have to do with expertise and convenience.
  • Expertise. The florist arranges a bouquet to bring out the best from each individual flower there. Whatever products and services you sell, you’ll arrange the individual components to reinforce each other and produce a total that is greater than the sum of the parts. It’s called synergy. The chief chef for the cruise line selects each day’s dinner entrées so they don’t simply repeat what was offered the day before. You’ll pick the product and service combinations that don’t clash with each other.
  • Convenience. DiGiorno added to their frozen pizza product line a pizza and breadsticks item. The purchaser would cook both in the oven at the same time. The introduction was so successful that the company launched pizza/Toll House Cookies and pizza/chicken snacks combos. DiGiorno’s marketing messages are based on convenience: “DiGiorno Pizza & Breadsticks... the first-ever pizza and breadstick combination that America can bake up right from their own oven, saving time and effort.” When you combine products and services from your retail store, emphasize the convenience to justify the higher price you’ll set.
     DiGiorno is also using an anchoring technique to position the product price as reasonable: They’re comparing the item price to the price of a parallel purchase from a pizza parlor. Another part of their central marketing message is, “Put the phone down, lose that pizza delivery number and check your freezer….” This is a natural extension of their “It’s not delivery. It’s DiGiorno” tag line, which research indicates actually makes the consumer more likely to think that DiGiorno is comparable to restaurant fare.

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

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Bundle Pricing, But Limit BOGOs
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Avoid “Not” in Influencing Shoppers
Move the Customer to Accept Higher Prices

Friday, February 4, 2011

Betray the Betrayal Effect

A marketing researcher at University of Texas-Austin and forensic researcher at Northwestern University asked study participants to say which of two automobiles they’d prefer. The only difference between the two cars was in the performance of the airbag in the car. Car 1 had an airbag that was more likely to save a life than was the airbag in Car 2. However, the airbag in Car 1 also had a small, but measurable, chance of causing death because of the force necessary to deploy the bag. The airbag in Car 2 had such a tiny probability of this happening that it wasn’t even measurable.
     Please stop for a moment and predict which of the cars your customers would choose. Is it Car 1, which is more likely to save a life in case of a crash? Is it Car 2, which you can count on not to kill you from deployment of the airbag?
     Are you ready to know what the research found so you can compare that to your prediction? Okay, then. In the study, more of the participants chose Car 2 than chose Car 1. They were placing greater importance on possibilities than on probabilities. The researchers called this the “betrayal effect.” Car 1 might betray their trust. Emotions trumped logic.
     This occurs because thinking of possibilities is easier than weighing a set of probabilities. When your customers make purchase decisions, they use shortcuts. Otherwise the amount of information to process would be overwhelming, particularly when emotional decisions like life and death are involved. The shopper’s aiming to balance a whole set of risks, ranging from financial—“Is this price too much, too little, or just right?”—to psychological—“How well does the personality of this store and this product fit my values?”
     As a general rule, help keep it simple for your shoppers. Emphasize possibilities, not probabilities. Research says this is what your customers want to hear.
     However, when it comes to public safety, you might prefer to guide your customers toward more objective reasoning. The Texas/Northwestern researchers found that two techniques help:
  • Before asking shoppers to make the decisions for themselves, ask them what they’d recommend strangers should choose. This eases the excess emotions.
  • Show the shoppers graphs which are formatted to allow visual comparison of the alternatives. As long as the graphical portrayal is accurate, this appeals to the shoppers’ rational thinking.
Click below for more:
Emphasize Possibilities, Not Probabilities
Show Customers the Right Picture

Thursday, February 3, 2011

Alert Consumers When You’re Kidding Around

Different things make different people laugh. Students of the psychological inventory named the Myers-Briggs Type Indicator, in which each individual is characterized by a combination of four letters, say that if an INTJ type tells a joke to an ENTJ type, just that one letter difference in type could easily lead to the story falling flat.
     It follows that if a retailer starts kidding around with consumers they don’t know well, the consumers might not get the joke. This could have consequences which are not amusing at all for the retailer’s business. It’s a particular danger when the audience hasn’t been alerted that the retailer’s kidding around.
     It’s a lesson Allstate Corporation learned these past few days. Last week, the company issued a press release describing dramatic differences in auto accident numbers based on astrological signs. They said their analysis of 2010 claims data showed Virgos were involved in almost eight times as many accidents as were Scorpios.
     Maybe the press release was hitchhiking on all the recent publicity when astronomers from the Minnesota Planetarium Society announced that because of the moon's gravitational pull on Earth, the alignment of the stars had changed since astrological signs were last calibrated. Horrors! The signs were off by about one month, it seemed. In any case, Allstate was just kidding around.
     But according to a Insurance Network News report, many people mistakenly took the story to mean Allstate was angling to set insurance rates based on the applicant’s astrological sign. A few days later, Allstate issued a firm denial, a denial which carried not one iota of humor.
     The traditional advice is that financial institutions and funeral homes should abstain from humor in their ads. As with other such rules, there are times you’ll violate the advice because surprised consumers are more likely to listen to your message. Researchers at University of Cincinnati and St. Vincent College in Pennsylvania found that humor in retailing is most effective when it is novel and unexpected.
     A joke which isn't immediately understood can still be effective in making a sale. Research says the shopper's mental energies are taken with trying to figure out the humor, and this distracts the customer from thinking about reasons not to buy. So humor can be useful in moving the indecisive customer to the cashier.
     However, it works best if the customer is alert that you are making a joke.

Click below for more:
Joke Around to Facilitate the Sale
Use Humor in Unexpected Ways

Wednesday, February 2, 2011

Define Your Niches by Your Shoppers’ Desires

Among advice most often given small to midsize retail businesses is to develop niches. That’s how to hold your own in the face of much larger competitors, it’s said. Be sure, though, your niche is defined by what the shopper wants. That sounds obvious, and it is. Still, I’ve seen retailers fail because they choose as their niche something they enjoy doing, failing to sufficiently attend to the desires, needs, and demands of their target populations.
     A feature article in the South Florida Sun Sentinel last week provides instructive examples of independent pharmacies developing niches the right way. Here is what the article said:
  • Commcare Pharmacy has carved out expertise in programs for people needing dialysis, treatment for hepatitis, and aftercare for organ transplants. The stores carry only prescription drugs, not over-the-counter medications.
  • Pride Pharmacy caters to a gay clientele. The welcoming touches include a “patient confidentiality room,” wood floors, and a sea-themed mural. Unlike many larger operations, Pride Pharmacy offers free home delivery.
  • Arthur’s Original Pharmacy and Medical Supply is true to their name by not just selling, but also certified custom-fitting items including shoes for diabetic patients, braces, walkers, and wheelchairs.
     Whatever your retail business and whatever the size of your operations, how can you distinguish yourself in the consumer’s mind from the alternatives? As you think about that, here are a few tips:
  • Diversify. Never limit yourself to only one niche. A tiny Sunglass Hut store carries accessories. Zappos got their start in shoes and now outfits the body above the feet. On the other hand—or more precisely, on one foot along with the other foot—Amazon will sell you shoes.
  • To bring what you love to offer your marketplace closer to what the marketplace wants, cultivate the desire for the niches. Show customers what you think they should be hungry for, then evaluate how thoroughly they buy your pitch and your products.
  • Update your niches whenever necessary. Consumers are drifting from the general to the specific, from the one-size-fits-all to the specialty and the customized. In introducing niches, reach out with a line extension and then pull in and eliminate your weaker lines. Avoid abrupt changes in your merchandise mix unless one of your niches is itself defined as always having something new for the customer to consider, as Grocery Outlet and Cost Plus World Market do.
Click below for more:
Maintain a Niche So You’re a Destination Location
Recognize a Need, Then Fill It
Update Your Niche Whenever Necessary

Tuesday, February 1, 2011

Phrase Consumer Survey Questions Carefully

Ask the question in the wrong way, and you’ll get misleading answers. Here’s a consumer survey case in point: A recent Advertising Age article reported that about 51% of U.S. men say they are the primary grocery shoppers in their households. The source was a study sponsored by Yahoo in which 2,400 U.S. men ages 18 to 64 were interviewed. The Advertising Age article used the Yahoo finding to make a case for grocery retailers steering their advertising toward the particular psyches of male consumers.
     There’s nothing wrong with advertising to men. You do want to recalibrate for shopper gender trends. And in the U.S., at least, it’s likely that husbands will be doing more of the shopping than in the past. The logic is reflected in an analysis conducted at University of New Hampshire:
     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.
     But is it true now that 51% of the grocery shopping is being done by men? That’s important to know because a retailer’s advertising budget has limits and because the two genders often process marketing messages differently. Steering more of your advertising toward the male psyche would mean steering more of it away from the female psyche. Is a 51%/49% split about right?
     Maybe not. Further on down in the same Advertising Age article is a note that Saatchi & Saatchi X says 35%, not 51%, of grocery and mass-merchandise shoppers are men. What’s going on?
     It’s in how the question is asked. The Yahoo survey item asked who did most of the shopping. It omitted the alternative of shared responsibility. When The Future Company’s Yankelovich MONITOR asked about the matter differently, 34% of men ages 18 to 64 said they have primary responsibility, and 52% said they have shared responsibility.
     In creating your consumer survey questions or approving a vendor’s questionnaire, check that the phrasing allows for the full range of possibilities.

Click below for more:
Recalibrate for Shopper Gender Trends
Survey Consumers Person-to-Person
Interpret Survey Results as a Retailer
Use Consumer Attitude Survey Findings