Thursday, May 9, 2013

Mug for Shoppers Who Buy Distinction

“Thank you for coming to my store and making this purchase. Before you leave, one more thing: I might be able to offer you an unusually good deal on the insulated travel mug pictured here. They usually sell for $15 each. I was able to get a very limited quantity of them to sell for $5. If you might be interested, I’ll ask you to take one of the slips of paper from this bowl and open the paper. If it has a star on it, I’ll give you a certificate you can use to buy one mug for $5 when the mugs arrive a week from today.”
     That’s roughly the offer made by Santa Clara University researchers to two groups of consumers. What distinguished the two groups was the number of paper slips in the bowl. It was either six slips or two.
     What the consumers were not told is that every single piece of paper had a star on it. Everybody came out a winner.
     Did the number of slips make a difference in purchase behavior?
     There was no statistically significant difference in the percentage of consumers in each group who said they’d be interested in drawing out a slip of paper. But there was a big difference in how many came back to actually make the purchase. Of those who thought they’d picked a winning slip from two, about 4% returned to claim the discount. For those in the six-slip condition, about 27% returned, ready to buy.
     The researchers attribute the difference to degree of distinctiveness. Feeling exclusive, lucky, and grateful impels buying.
     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. But do be aware that your announcement could make the customer uncomfortable. Be consistent and be ready to explain the reason for the discount. Otherwise, the customer can get angry, thinking that your store pricing is highly arbitrary or even discriminatory. For American consumers, make the reason demographic (“A 10% discount to senior citizens”) or marketing-determined (“A 10% discount to first-time purchasers”).
     Researchers at University of Louisville and Iowa State University found that exclusive discounts are most effective when the shopper concludes they were not pressured into making the purchase, but rather view themselves as acting independently.

Click below for more: 
Offer Exclusive Price Discounts Cautiously 
Offer Scam-Free Scarcity 
Favor Reciprocity with a Ben Franklin Effect

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