Thursday, December 31, 2015

Use Premium House Brands to Brag Green

Many retailers adopt environmentally-friendly practices in hopes of achieving business advantages. But going green will lead to misunderstandings with your customers if you expect too much from them. Your shoppers want to look and feel environmentally conscientious. Still, when it comes down to it, they prefer the appearance over the sacrifice necessary to truly do the deeds.
     So give them the store appearance. Researchers at Catholic University of Pusan and Pusan National University found that in-store visual merchandising themed around eco-friendliness increases positive attitudes toward the retailer. The mechanism behind the effect is shoppers’ better feelings about themselves and more confidence in how people around them in the store will judge them.
     A particularly influential channel for accomplishing this is the private label, house brand items you carry. More specifically, the premium versions of those house brands. Researchers at Concordia University evaluated the effects of the retailer’s attention to social and environmental issues on attitudes toward a range of products on store shelves. The outcome was that the attention was most helpful with private label brands which shoppers considered as being of high quality. The cue for high quality was most often a relatively high price.
     Consumers think differently about private label, house brands than national label brands. Researchers at Monash University explored the situation in which a retailer introduces a value version of a house brand to add to a premium version on the shelves. Here’s what happens:
  • Prior to introduction of the value version, the premium version is likely to be considered by consumers to be of standard, not premium, quality. 
  • After introduction of the value version, consumers’ quality assessments of the premium version increase. 
  • If a premium version is introduced to an existing value version, the assessment of the value version doesn’t change noticeably. 
  • Consumers’ perceptions of product quality vary directly with the price they expect to pay for the house branded item. 
     On the other hand, researchers at Miami University and France’s ESSEC Business School found that addition on store shelves of a value version to a premium version of a national label product leads to lower quality ratings of the premium version. Examples included the introduction by Charmin of a lower-quality Charmin Basic product and Foster’s Beer producing a lower-quality Foster’s Grog.
     Why the difference between house brands and national label brands? Much of it is due to heavy manufacturer advertising for the nationals.

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

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Be Clear What You Mean by Going Green
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Monday, December 28, 2015

Return to Reconsider Your Return Policy

Retailers offering and publicizing lenient return policies tend to profit. The gains from additional purchases outweigh the losses from additional merchandise returns.
     That’s been verified by many consumer behavior studies. But researchers at University of Texas-Arlington and University of Texas-Dallas wondered which characteristics of the return policies made the most difference. They reviewed twenty-one prior papers on the topic. Here’s my version of what they found:
  • Policies that appear simple to the shopper and offer money or monetary credit for the return have the greatest effect on increasing subsequent purchases. 
  • Policies that offer exchanges rather than money or monetary credit reduce the rates of return. 
  • Return rates are greater for retailers who are lenient about the time by which a return must be made or about allowable reasons for the return. 
     The chief takeaway is to keep it simple.
  • Yes, you're posting the return policy. But if customers are in line at a returns desk, can they easily see the policy while waiting? A printed notice isn't as good as a wall posting. Consumers often don't pay attention to what return policies are until they bring in an item. If they're returning a gift, they might not be familiar with your store at all. Can't fit the returns policy onto a posting on the wall? Make a note to simplify the policy soon. How frustrating to a customer to wait in line to make a return only to be surprised to learn the return won't be accepted! 
  • Yes, you've trained staff on all the terms of the return policy. But can staff members keep their explanations to irritated customers brief? Staff members who are flustered often resort to reciting too much of the policy instead of explaining in plain language only the specific part of the policy that applies. 
  • Yes, you know that asking each customer the reason for the return is a good way both to improve your inventory and to curb fraud. But are you training and coaching your staff to make this a service-oriented inquiry, not an inquisition? Keep questions brief. If a customer asks, "Why do you need to know this?," reply, “I realize it’s a bother to you to have to return merchandise you’ve bought from us. I want to be sure we deal with suppliers who will provide you, your family, and your friends with reliable products the first time, every time.” 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Thursday, December 24, 2015

Rough Up Customers a Bit

A few rough spots in an otherwise smooth shopping experience increase customer tolerance for the inevitable shortfalls. Rough spots, I mean, for the haptic sense—the sense of touch, according to researchers at Drexel University, University of British Columbia, and Cheung Kong Graduate School of Business. They found that consumers feeling rough surfaces became more empathic toward others than did an equivalent set of consumers feeling smooth surfaces.
     Empathy in the direction of retailer to shopper is important. It, along with the related traits of attentiveness and friendliness, influenced customer satisfaction to a greater extent than did service outcome factors in studies from Chinese University of Hong Kong and Nankai University in China. Those outcome factors included how well a clothes dryer worked after being repaired, if the cruise ship vacation met expectations, and even the extent of financial returns on investments.
     Empathy by shoppers toward the retailer is also useful. Consider the finding by Bayer Healthcare, Columbia University, and Maastricht University researchers that placing a mirror behind the places where a retailer accepts complaints reduces the intensity of customers’ dissatisfaction. When a consumer sees an image of herself, her self-awareness increases. She, consciously or unconsciously, considers what part she may have played in the unsatisfactory experience. She realizes she and the retailer are in this together. Empathy.
     Installing mirrors in your store would seem easier than ensuring each customer runs their hands over sandpaper, let’s say. In addition, people differ in their receptiveness to haptic cues, and some shoppers would be repelled by physically abrasive surfaces. So it might be best to interpret the “rough surface” findings metaphorically: Shoppers who encounter a little difficulty in an otherwise smooth shopping experience often develop increased commitment to the retailer.
     Researchers at University of Chicago found that shoppers who characterized themselves as “smart” rather than “not smart” expressed a higher preference for products they’d have to travel across town to get over equivalent products they could purchase nearby. These shoppers also evaluated products more positively when the products had been pushed back on the shelves rather than being in easy reach.
     A parallel effect occurs in collecting donations. People who described themselves as “pioneers” dropped higher amounts of money into a charity box when they had to stretch four feet to make the contribution rather than just drop it in without stretching. This difference did not appear among people describing themselves as “followers.”

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

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Monday, December 21, 2015

Ally with Alliteration

Which of these fetches the most favor from folks seeking a flapjack flavor?
  • 4 Pancakes: $3.87 
  • 4 Pancakes: $4.13 
  • 4 Flapjacks: $3.87 
  • 4 Flapjacks: $4.13 
     Hints to the correct answer are in the title and first sentence of this post.
     That correct answer is the last of the alternatives. I’ve listed the four alternatives in order from least to most compelling to consumers.
     Researchers at University of Miami, Virginia Tech, and Baruch College say the explanation lies in alliteration—the use of the same initial sound in words within the same group. The three “f” sounds in that fourth choice lead to positive evaluations because the similarity of the sounds makes the phrasing seem more familiar; what is familiar is easier for the brain to process; and what’s easier for the brain to process is liked more, everything else being equal.
     Among the most familiar words to our brain are those in our name. A set of studies at Clark University and Babson College found that when an item’s price resembles the sound of the shopper’s name or birthdate, the shopper will like the price better. A price of fifty-five dollars has extra appeal for consumers named Fred or Ms. Fine. A price of $49.15 has extra appeal for a consumer born on 9/15 or even 4/15.
     In some circumstances, this means the shopper will prefer that price to a lower price which sounds nothing like the shopper’s identifying information. Similarly, the Miami/Virginia/Baruch researchers discovered that “Two T-shirts $21” received more positive evaluations from consumers than did the better bargain “Two T-shirts $19.” This finding was especially impressive because prices ending in 9 usually carry an extra oomph for shoppers.
     Alliteration creates a rhythm that can drum the sales message into the prospect’s head. In fact, advertising professionals call the tactics “drumbeats.” Notice how the first sentence in this post uses not just alliteration, but also the drumbeat rhythm of rhyme.
     Rhythmic elements build credibility. Psychologists at Lafayette College found that rhythmically rhyming claims are more likely to be perceived as true than those which do not have this attribute. Any Southern Baptist minister and most campaigning politicians could have told the scientists the value of rhyming jingles. The rhythm soothes our defenses, and the repetition of sounds lends the sort of familiarity we associate with truth.
     Also, drumbeats energize us, and energy gives us the perception of success.

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

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Thursday, December 17, 2015

Reap Loads from Solo

Shoppers are going solo. Households are getting smaller as more people choose to remain single or are living alone in their senior citizen years. Sociological studies document drops in people’s reports of having truly close friends and of active membership in organizations not related to work. Anecdotal reports suggest that, because of dual careers, couples are making more purchase decisions on their own.
     Or maybe shoppers are not ending up going solo. Going to concerts, bowling alleys, museums, restaurants, and movies, that is. Researchers at University of Maryland and Georgetown University say there are two reasons:
  • People think the activity wouldn’t be as much fun if done alone than if done with a companion. Conversations during a visit to an art gallery enrich the experience. A little competition on the miniature golf course is energizing. 
  • People are concerned that others at the activity would judge them negatively if they come alone. There’s evidence that the larger the expected number of others in attendance, the greater the solo’s inhibition about participating. 
     Both these reasons operate more strongly with hedonic—pleasure-oriented—activities like going to the movies than with utilitarian activities like grocery shopping. The research findings also indicate consumers worry excessively that coming to an activity solo will severely impact enjoyment. Therefore, if retailers can convince these consumers to give it a try, there’s the clear potential for high customer satisfaction:
  • Develop utilitarian—task-oriented—angles on hedonic activities. For instance, give an incentive to the solo for attending each concert during a season or having ordered each appetizer on the restaurant menu. 
  • Openly welcome individual attendees, such as reserving seating for people arriving alone and areas in stores for conversation about the merchandise. 
     The second of these could encourage matchmaking for subsequent visits. That’s good. When people shop with a companion, each person’s cart tends to ring up a higher total than if those same people had shopped alone. They are more likely to make what we think of as impulse purchases. Consumers in groups become more willing to take on risks, and it is the fear of risks behind much of resistances to buying.
     Matchmaking also potentiates repeat business. Researchers at American University, University of Arizona, and Northwestern University find that one major reason consumers will revisit the already done is that they enjoy being there while a new friend encounters a movie or destination for the first time.

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

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Monday, December 14, 2015

Look Lively!

Shoppers like stimulation. We know this. So what's the added value from the research finding that video portrayals of items in retail ads sell better than still photos? Well, the Babson College and University of Miami study increased the usefulness by saying the dynamic portrayal advantage works most strongly with hedonic—pleasure-oriented—products and services. Product preferences and willingness to pay a higher price both go up.
     The research also found how the increment has a shelf life. That is, if the consumer sees a video presentation for one item, the bigger interest level carries over to the next item advertised, whether or not it’s presented with a video or a still picture. Therefore, you don’t need to spring for videos throughout. A combination of video and still can work fine.
     In fact, it probably works better. Overstimulation distracts people from making purchases. Loud sounds, such as might be found in video ads, cause us to tighten our muscles, and as research from National University of Singapore and University of Chicago confirms, tense muscles keep people from being sold what they’re not fully convinced they want.
     Findings from State University of New York-Buffalo indicate that as a video ad progresses, you can safely introduce greater levels of movement. Viewers adapt to the energy. This set of studies also adds to the advice about the ads: The benefits of liveliness are greatest for items that are extensions of what’s already familiar to the viewer. If the stretch is too great, such as introducing a radically innovative product, there’s the risk of the kinetic energy in the ad distracting from what’s needed to understand the novel item.
     For face-to-face selling, dynamism helps, too. After making the same sales presentation hundreds of times, you and your staff may start sounding as if you’re delivering a news report devoid of passion. Remember to keep it exciting.
     You also can improve sales by having the shopper move. In an International University Bremen study, consumers who were induced to nod their head up and down then afterwards thought more positively about purchase alternatives than those who hadn’t nodded.
     Stanford University researchers point out successes in getting customers to make purchases by having text—such as on signage and packaging—set in narrow adjacent columns. The reason this works: In order to read the text, a shopper needs to slowly nod their head up and down.

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

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Thursday, December 10, 2015

Accept the OOS Redirection Exception

A number of consumer behavior researchers would recommend that if your shopper learns you’re out-of-stock (OOS) on a specific item the shopper has an emotional investment in purchasing, you should prepare to steer the shopper toward a wholly different product category than the one they came in for. The objective is to avoid a customer feeling they’re settling for second best.
     But studies at University of California-Riverside and Nanjing University find an exception to this general rule for shoppers who have a certain sequence of attitudes during the transaction:
  • They learn the desired item is OOS principally because of high demand for the item
  • They come to believe others have more expertise than they do about important item features in that category
  • They come to believe that the item is in high demand because of those features
     In these circumstances, the shopper will be pleased with an in-stock item which has those features, whether or not the item is in the same product category as the OOS item. The shopper is less likely to feel they’ve settled for an inferior choice and more likely to conclude they’ve made a useful discovery.
     Because these attitudes arise during the transaction, you might be able to influence them:
  • If the item is OOS because you didn’t place a timely order, the supplier had production problems, or there were shipping delays, you could explain this as a failure to anticipate the high demand rather than as a logistical problem.
  • By demonstrating your own expertise about your store’s products, you build the shopper’s trust that you know what the important features in the particular item category are.
     You’ll be keeping the OOS from turning to your disadvantage. Research findings from Indiana University-Bloomington, University of British Columbia, and Northwestern University provide other tips:
  • Loyal customers who encounter an OOS become more likely to come to your store promptly when sales on other high-demand items are announced. Coach your store staff to sincerely empathize with the shopper and tell the shopper when the next shipments are due.
  • For consumers who purchase a particular item at regular intervals, encountering an OOS repeatedly will lead the consumer to reconsider item preferences. When an item is OOS in your store, use signage to suggest an alternative which you do currently have in stock.
  • To lessen negative feelings, offer alternatives to an OOS item at a range of price points.
For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, December 7, 2015

Toss Positive with Heavy Abusers

If your target audience consists of consumers engaging in bad behaviors, the messages which best build interest in behavior change are different for heavy than for light abusers. Researchers at High Point University and Bradley University give us the specifics after having worked with a group of people who texted while driving and with another group who gambled excessively.
     Those who lightly engage in the problem behavior respond best to sales presentations that, without apparent exaggeration, portray the negative consequences of continuing. For heavy abusers—those who might be considered texting or gambling addicts—go positive instead, pointing out the benefits of cessation for people like them.
     The underlying consumer psychology principle is that if a person’s fear about continuing to engage in a problem behavior is too intense or if the person doesn’t see a way out, they become defensive and wave off the course of action you’re wanting to sell them.
     Tulane University and Salisbury University research results indicate that you can adjust the degree of negative and positive by the way you talk about regret, guilt, or challenge. The studies here were of consumers who failed to use sunscreen sufficiently or should include more fiber in their diet. Statements successfully arousing regret included, “I can understand why you’re sorry you haven’t done the healthy thing so far.” Guilt was stimulated with, “I’m sure you want to do all you can to protect your family.” For challenge, a prompt was, “I realize making such changes is hard for most people.”
     Empowering the consumer helps keep it positive. Researchers at University of Houston and Boston College assigned study participants to one of three groups based on what they were instructed to say to companions and to themselves to resist temptations:
  • “No, I won’t”
  • “No, I can’t”
  • “No, I don’t”
     The “No, I don’t” group reported the best success.
     If in doubt about the degree of engagement of the consumer in the problem behavior, slant toward positives. Researchers at Victoria University of Wellington, University of Western England, and American University of Sharjah in the United Arab Emirates identified a group of students showing evidence of high anxiety. The researchers sent these students messages pointing out the possibly dire consequences of failing to seek help at the university counseling center.
     The threats didn’t convince the students to seek counseling nearly as well as emphasizing positive consequences in messages to the students.

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

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Thursday, December 3, 2015

Generate Empathy for Running Retail

Consumers don’t think much about the personalities of the store owners when shopping at a Big Box. On the other hand, the brand image of a small, locally-based retailer is tightly tied to perceptions of the owner and store operator.
     Research at Drexel University, Lehigh University, and Monmouth University indicates that this humanization of the store increases sensitivity to price changes. For any product and service brands in your store with a human or quasi-human association—items like Michelin tires with the Michelin Man logo and Mrs. Paul’s fish sticks—the sensitivity to price changes is especially keen. Shoppers are more likely to see price increases as efforts by the store owner and the item supplier to profiteer. Across product categories including frozen pizza, butter, paper towels, potato chips, toilet tissue, and yogurt, the researchers saw price increases stifling demand and price decreases enhancing demand more markedly with humanized than with non-humanized brands.
     In studies at Nanyang Technological University in Singapore, consumers who considered themselves close friends of a retailer were more forgiving of the retailer when the outcome of a transaction was unfavorable. The consumers gave higher ratings on fairness and satisfaction than when the retailer was considered only an acquaintance.
     But when serving customers who consider themselves to have a personal relationship with you, clarify expectations and obligations.
     Researchers at Lingnan University in Hong Kong and Chinese University of Hong Kong presented study participants with a scenario: You’ve asked the owner of a restaurant with whom you have a close business attachment to hold an ocean-view table for your birthday bash. When you arrive, the owner explains, with a tone of regret, that all the ocean-view tables are taken.
     Each study participant was asked what their reaction would be. Past research had indicated the restaurant customer would be empathic, since the owner was, after all, like a friend. And indeed, for many of the study participants, this was the reaction. They demonstrated understanding toward the owner. However, for other participants, the reaction was anger at being betrayed by a friend.
     In the Drexel/Lehigh/Monmouth studies, empathy also made the difference. Shoppers sensitive to the needs of others responded less strongly to price changes than did shoppers focused on their own needs.
     Generate empathy in your shoppers for the challenges of running a retail business. One research-based technique for doing this is to ask your regular customers for advice.

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

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Monday, November 30, 2015

Sponsor in Good Company

Sponsorship marketing is usually associated with a business helping out a charity or nonprofit. It can also take other forms. Your store might financially support a business seminar for retailers in your community, staff the press room at a week-long local trade show using a few of your paid employees, or provide supplies from your store stock for a children’s soccer team for an entire season.
     A chief objective of sponsorship marketing is to build goodwill toward your business from prospective customers and from community decision makers. Knowing all this, researchers at Leibniz Universit├Ąt Hannover urge you to inquire about and then seriously consider the reputations of any cosponsors. Using sophisticated statistical analyses, the researchers verified that if a sponsor is viewed unfavorably by participants in the activity or event, those negative impressions will bleed over toward perceptions of the other sponsors. This situation could occur, for example, when your cosponsor has signed on in an initiative to turn around a widespread negative impression or to calm recent controversy.
     The bleed-over to your reputation is more likely when:
  • The cosponsor is in the same type of business as you 
  • The cosponsor is well-known 
  • The cosponsor’s name is featured in the same posters, agendas, and speakers’ expressions of gratitude as is your business name 
     Other research indicates that although there will also be a bleed-over when the reputation of a sponsor is highly positive, the influence on audiences is not as significant as with a negative bleed-over.
     It’s probably pretty much out of the question to ask event planners to withhold the identity of a cosponsor you’re concerned about. Yet there is a circumstance where you could make a case to the cosponsor to stifle the notice, and this argument holds regardless of that sponsor’s brand image:
     You might invite one of your suppliers to join you in the sponsorship marketing. After all, building sales is in the interest of both the supplier and you. And if the target is a charity, you’ll get better results in convincing others to join you in donating if you publicize the sponsor as being your store and not the supplier. Research at Michigan State University, Illinois Wesleyan University, and University of Texas-Austin suggests that when a store instead of a brand is publicized as the sponsor, consumers are more likely to see the sponsorship as a charitable act rather than only a selling technique.

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

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Thursday, November 26, 2015

Bring Value Closer

Today’s consumer thinks about today’s value. That’s why, everything else being equal, they’ll prefer products and services which give them immediate benefits over those in which the benefits are over the horizon.
     Researchers at Wayne State University and University of Arkansas saw this phenomenon when comparing messages for energy savings on light bulbs. Those like, “You can start saving a little money now on your electricity bills by using this product,” generated more purchase potential than did messages like, “Over the next three years, you’ll save a noticeable amount of money by using this product.”
     Psychological distance enters into the shopper’s preference equation in other ways, too:
  • Selecting an item to be used in the future rather than starting now 
  • Selecting an item for use by someone else rather than one’s own use 
  • Considering an item after reading an ad rather than in the store 
     Also, a need to travel a longer way to obtain the item. But this one sometimes adds to the valuation of the item instead of subtracting. Researchers at University of Chicago found that shoppers who characterized themselves as “smart” rather than “not smart” expressed a higher preference for products they’d have to travel across town to get over equivalent products they could purchase nearby. These shoppers also evaluated products more positively when the products had been pushed back on the shelves rather than being in easy reach.
     Related to the degree of valuation are these further effects of psychological distance:
  • Emotional reactions become less intense. According to studies at University of Colorado-Boulder, University of Oviedo in Spain, and Lieberman Research Worldwide, this is true for highly positive emotions—such as the thrill in having the item—and for highly negative emotions—such as anger at flawed product performance—and for all the emotions in-between. 
  • There is a stronger link in the shopper’s mind between price and quality. Researchers at Hong Kong University of Science and Technology told study participants how much had been paid for a set of items—ranging from yogurt to computers—and then asked each participant to guess the quality of each item. In some cases, the study participant was to assume she herself had made the purchase. In the other cases, the participant was to assume a friend had made the purchase. With purchases made by friends, there was a more direct relationship between the price paid and the assumed quality of the item. 
For your profitability: Sell Well: What Really Moves Your Shoppers

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Monday, November 23, 2015

Downgrade Free Upgrades

“Buy an 8-inch cake and we’ll give you a 10-inch at no extra charge!,” says the bakery salesperson to the birthday cake shopper. To the next birthday cake shopper, though, the salesperson says, “Buy an 8-inch cake and, for only a penny more, we’ll give you a 10-inch!”
     How strange that the person asked to pay the tiny extra amount is more likely to select the 10-inch model than the person who would get it absolutely free. To ascertain why, researchers at China’s Southwestern University of Finance and Economics-Liulin offered either a free or token price upgrade to real shoppers for one or another of a range of items. After analyzing the shoppers’ reasoning, the researchers concluded that the token fee made it easier to appreciate the value of the deal compared to the price of the regular version. Zero makes a poor comparison point.
     Monash University researchers saw a similar oddity that led them to say retail customers would be happier with a drop from a 5% interest rate to a 1% rate than if the drop is from 5% to 0%. Again, this is because zero doesn’t serve well as a consumer’s anchor for appreciating the magnitude.
     When the cost is more than a penny, the general principle still holds for an initial upgrade: Make the relative cost calculation easy for the shopper. They’re more likely to choose the upgraded alternative if the cost is a round number. So if the prices on the bin tags are $19.99 and $29.99, the salesperson says, “For only $10 more, here are the additional features you’d get.” The easy comparison facilitates acceptance of the upgrade.
     However, get set to pile on another oddity for subsequent upgrades during the same shopping trip. Here, shopper agreement to the upgrade is more likely when the price comparison is more difficult. Researchers at Babson College and Baruch College found that, when considering subsequent upgrades, people perceive the differences in prices between the regular and upgraded versions to be smaller if the comparison is harder to compute. For these subsequent upgrade considerations, quote the actual price points rather than rounding them, and discuss the prices in detail.
     How to explain why this works? When the shopper has expended considerable mental energy deciding whether to put out even more money on another item upgrade, their resistance to accepting an upgrade which benefits them is worn down.

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

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Thursday, November 19, 2015

Repeat Warnings at Time of Acquisition

You would think that if you warn some shoppers “The product may cause significant hair loss, headaches, and damage to the immune system,” those shoppers would be less likely to choose to use the product than if no warning had been given. But researchers at New York University, Tel Aviv University, and INSEAD-Singapore found that, under certain circumstances, the warning ends up actually making product use more likely.
     Those circumstances occur when there’s a delay between the warning being given and the step of acquiring the item. It’s a version of what consumer psychologists call “the sleeper effect,” in which part of a message is remembered and acted upon, but the rest is forgotten or ignored. When people are warned of the dangers in using a product, they build trust in the retail source of that message as being honest. Over time, the impact of the warning fades, but the feeling of trust in the product benefits statements remains.
     For one study, researchers included within a pitch to women for a certain artificial sweetener a warning that the product could cause immune system damage. The remainder of the women in the study were not given that warning. Then for half of the women in each group, an invitation was extended to order the sweetener right then. The others were asked to return two weeks later, at which point they were invited to order the sweetener.
     Women in the immediate-choice circumstance who had been given the warning ordered about 5% the number of sweetener packages ordered by those who didn’t get the warning. The caution frightened them away. But in the two-week-later group, those who had been given the warning ordered 265% more than did those not given the warning. The warning built trust which outlasted the caution.
     Similar results for other items indicate this paradoxical influence of warnings holds for purchases of a range of products, medical procedures, and financial investments. Other research indicates that the scarier the original warning about an item the shopper desires, the more likely the warning will be forgotten. Added to the sleeper effect is willful ignorance.
     My general advice to retailers is not to give warnings to shoppers unless asked. Inform without intruding. However, I make an exception when it comes to safety. Via product labels, risk statements in ads, and face-to-face dialogue, arouse caution in shoppers at the time of product acquisition.

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

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Monday, November 16, 2015

Get Price Hike Irritation Over With

More often than not, retailers will impose price hikes less frequently, but in greater amounts, than price drops. Still, there are plenty of exceptions. This practice, which economists have named “Rockets & Feathers,” occurs about 70% of the time.
     Why not all the time? Probably because experienced retailers have come to realize that the Rockets & Feathers method is most successful in certain situations. Studies based at University of Seville identified two of the factors, saying it works best:
  • With the more expensive items within a product category at that particular store
  • When the consumer will be highly involved in use of the item rather than using the item without much conscious thought
     For items fitting these circumstances, get the pain associated with price hikes over quickly. Raise prices as infrequently as you can, and when you raise them, be sure it is by an adequate amount.
     Those are the rockets. Also remember the feathers. Do not drop prices too severely. It’s better to offer frequent smaller decreases.
      Lowering prices gently and with precision is a good way to ensure customers who visit your store often will continue to trust your pricing. Use of the word “feathers” to describe this pricing strategy fits nicely in another sense, too. One meaning of “feather” is to hit softly and precisely.

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

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Strengthen the Price-Quality Link
Sharpen Your Price Image

Thursday, November 12, 2015

Choose How to Use Unit Pricing

Stating prices in terms of units, such as per ounce, is required by law in many localities. Then, too, retailers might choose to use unit pricing even if not required to do so. They see it as a service to price-conscious consumers.
     According to researchers at Monash University, unit pricing not only serves price-consciousness, but also stimulates it. In their studies, a highlighting of price-per-unit on store shelves motivated purchase of less expensive options. This effect occurred even when the choices for the shopper contained the same quantity.
     Let’s say you offer five packages of flour, each with an identical number of ounces and each carrying a different price. Shoppers don’t have to depend on labels with unit pricing to figure out the comparison. So what happens if we contrast purchase patterns among one group of consumers given unit pricing and another not? The answer is that consumers in the first group spend less, on average, for their flour package purchase.
     This enhanced price sensitivity leaves the price-quality link intact when the packages are of different sizes, not all the same size: Why would consumers consider a cleaning product in a smaller package to be of better quality than another brand of cleaning product which comes in a larger package? According to research findings from University of Texas-San Antonio, Hong Kong University of Science and Technology, and Chinese University of Hong Kong, it’s because the smaller package generally carries a higher cost-per-unit than does the larger package. Consumers associate higher costs with better quality.
     When the researchers distracted the consumers sufficiently to keep them from estimating cost-per-unit prices, the effect disappeared: The product in the small package was no longer rated as being of higher quality than the one in the larger package.
     Judging a product to be of higher quality can make it more attractive. Perfume manufacturers depend on this when using small containers for their offerings at retail. Catch the curiosity of the shopper by highlighting that the product carries a high price. Then say why it’s worth it.
     If you can choose which units to use in unit pricing, you’ve ways to frame value statements. Based on their field study results in retail stores and shops, researchers at London Business School and European School of Management and Technology recommend you quote the price in terms of units of use. A tire retailer could state prices by how much it costs per 1,000 miles.

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

Click below for more: 
Utilize Unit Pricing
Depend on Interdependency for Price-Quality
Use Familiar Measurement Units
Put Large Quantity Before Odd Price

Monday, November 9, 2015

Know When No Warranty Is Best

As we watch the cheetah stalking a herd of gazelles on the African savanna, we notice how a few of the predator’s intended prey start hopping high into the air instead of running away. What’s going on?
     A theory of behavior called the Handicap Principle says that the hopping behavior signals to the cheetah that the gazelle is guaranteed to be highly fit and therefore not worth pursuing. And, indeed, the typical cheetah does favor pursuit of the running over the hopping gazelle.
     Researchers at NEOMA Business School in France and at The Korea Development Bank applied the Handicap Principle to exploring the question, “Is it ever better for a business to offer no warranty to customers than to compete by offering a longer warranty than another business?” The answer was yes, with the explanation that a store or brand offering no warranty is signaling that the superb quality of their outcomes makes an explicit warranty unnecessary.
     This can work because of the functions a warranty serves for the shopper. Shoppers usually prefer a product or store when it provides a warranty. However, people don’t buy a product principally because of the warranty. Researchers at University of Chicago and University of Singapore analyzed 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 in one or both of two ways:
  • “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.” 
     Shoppers think of the warranty more in terms of insurance against loss than in terms of assurance of product quality. They look elsewhere for cues of quality. If you exude quality as a retailer, think carefully whether you want to bring up the matter of warranties. To bring it up can distract from that focus on quality.
     You’d better be able to deliver, though. The physically fit hopping gazelle without a head start can still run away at more than 60 miles per hour if called on to honor the guarantee made to the cheetah.

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

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Present Warranties as Insurance, not Assurance
Guarantee with Care

Thursday, November 5, 2015

Prosper from Shopper Pessimism

A pessimistic shopper isn’t the same as a sad shopper. Sad shoppers often pay more than happy shoppers for an item. That’s because sad shoppers are anxious to change their current circumstances. At the same time, sad shoppers are less likely than happy shoppers to try out products or services which are new to them. But according to research at University of Chicago, shoppers who are pessimistic about upcoming events in their lives are quite open to changing habitual purchase patterns.
     And an unhappy customer isn’t exactly the same as a dissatisfied customer. Customers with a succession of justified complaints about products or services you’ve sold them aren’t prime candidates for further sales. On the other hand, dissatisfaction can be used by you as a selling opportunity. That’s because customers get dissatisfied when they want something different from what they have now. Dissatisfaction is inevitable. Every one of us sooner or later will want more from our possessions and experiences. No matter how satisfied the customer is at the time of purchase, they’ll become dissatisfied later.
     Pessimism about the future and dissatisfaction with the present often reflect the consumer’s uncertainty. Your purchase advice can help ease that uncertainty and thereby make a sale. If you'd like to encourage brand switching, do it when people are moving from one role in life to another. This happens with events like college graduation, getting married or getting divorced, having a first child, changing careers, or locating in a new country or culture. Research at Ohio University showed how recent immigrants seek out brands to give themselves acceptable status in their new culture.
     We might assume that when people are already feeling highly uncertain about what's happening in their lives, they'd actually be less likely to switch brands. Since moving from one role in life to another is a time of high uncertainty, it would seem that you trying to change brand commitments then would only end up being a big waste. But when it comes to role switching, the truth is the opposite of what we might commonly assume.
     Perhaps the ultimate pessimism is seen in a fear of dying. An entire theoretical framework in consumer psychology is based on the findings that a fear of dying leads people to purchase luxury items they would not otherwise have considered.
     Negative emotions vary and so require varying responses. Learn what distinguishes pessimism.

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

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Use Dissatisfaction as a Selling Opportunity
Use Customer Life Changes to Switch Brands
Use Terror Management Theory for Status Items
Tickle with Uncertainty

Monday, November 2, 2015

Display Interpersonal Warmth Above Digital Ads

Researchers at Babson College and Stockholm School of Economics say in-store digital display advertising hurts sales revenues when used by small retailers. Better to stick with traditional signage than install computer monitors showing animated images, this seems to mean. Moreover, traditional signage costs less and robs less merchandise space than computer monitors do.
     Yet the real takeaway from this research might not be to give up on in-store digital display advertising. Instead, use the technology strategically. After all, the research also found that digital displays in Big Box hypermarket stores were responsible for increasing sales markedly, and the increases continued for at least five months after the signs were first turned on.
     Consider how your smaller retail business can achieve similar benefits:
  • Display your website content in-store. This helps the viewer integrate the multiple shopping and promotional channels you offer. 
  • Advocate co-op advertising to your suppliers. A significant cost with digital display advertising is for production of compelling content. Ask the manufacturers of the products you sell what they have available and could produce for your use. 
  • Make it part of a state-of-the-art appeal. If you sell products which foster creative thinking, accommodate people who want to play around with the items. Interactive digital displays, such as with touch screen menus, help. 
  • Entertain the shopper. People love a story, so brief story-based ads can be highly effective as marketing tools for retailers. But don’t entertain the shopper to the point where the shopper is distracted from your primary selling message. Researchers from University of Iowa and Northwestern University found that if the ad, even if relevant to the shopper, interrupts the shopper’s flow of thinking, the consumer will dislike the ad. 
     Still, why were the Babson/Stockholm results so different for large than for small retailers? I suspect it’s because the distinctive appeal of the successful smaller retailer is in the warmth shown to the shopper by familiar faces and interpersonal conversations. Those are less important at the Big Box, where price is a primary consideration. My suspicious were strengthened when I saw that, in the research, digital displays lifted sales only when item prices were being promoted.
     Small to midsize retailers can learn from large retailers. Discern where the large retailer seems clumsy, then grab market share by being more nimble. Assess how what is working superbly for the Big Box might be successfully scaled down or adapted.

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

Click below for more: 
Integrate Multiple Shopping Channels
Play Full with the Sales Potential of “Playful”
Entertain with Story-Based Advertisements
Learn From the History of Giant Retailers

Thursday, October 29, 2015

Leave Well Enough Alone if Well Enough

After I paid off my smart phone under my Verizon contract, my monthly bill didn’t go down. I called Verizon about it, and as soon as I responded to the prompt by punching in my phone number, an enthusiastic recorded voice told me I qualified for a phone upgrade. But I wanted a fee reduction, not a phone upgrade.
     Pressing another key brought me to a customer service rep who, after hearing my request, said my bill amount would be reduced and I’d be given a credit for the past overcharge. He added, “Wait, I think I can find you another way to save if we change your monthly data transmission allocation!” “Yes, I can! Your bill will go down another $10 a month.”
     I thanked the customer service rep profusely. I was thrilled. Until I started thinking about it some more. What if I hadn’t called? I’d have continued to pay too much.
     All this reminded me of a consumer behavior study based at Columbia University, University of Pennsylvania, and Universidad Austral. In collaboration with a wireless communications retailer, the researchers compiled a list of thousands of the retailer’s customers who could lower their monthly fee by changing their monthly plan. Some of these customers were contacted with news of this opportunity. The others were not.
     Of those contacted, about 10% cancelled their service within three months. Of those not contacted, about 6% had cancelled. It appeared that being told they could have been saving money led to subscriber disquiet.
     Still, there’s an important distinction between my Verizon experience and the experiences of the subscribers in the Columbia/Pennsylvania study: I initiated the contact with the retailer. It may have been the contact by the retailer which precipitated the customer dissatisfaction. Once your customers conclude that you’re a competent services provider, they usually prefer not to keep shopping around. The services provider is pleased to have the customer keep coming back, and the consumer is pleased to feel comfortable having a services provider to keep coming back to. But being reminded that there are price or outcome differences among services providers disturbs the inertia.
     This is different than with product sales, where a surprise special generally boosts customer loyalty, according to University of Arizona, Arizona State University, and University of Pennsylvania researchers. When you’re doing well enough for the services customer, it can be best to leave well enough alone.

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

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Exude Conceptual Fluency in Services Retailing
Dazzle Customers with Surprise Gifts
Suggest Ways Shoppers Can Save Money

Monday, October 26, 2015

Get A Head, Except for Ladies’ Clothing

Who would’ve thought that in Alice’s Adventures in Wonderland, Lewis Carroll slyly implanted a priceless gem of advice for retailers of ladies’ clothing? And this was way back in 1865! It’s right there when the Queen of Hearts says, “Off with her head.”
     It now seems clear to me that Mr. Carroll was presaging a Stockholm School of Economics research finding: Female shoppers give higher ratings to fashion items on models whose heads aren’t shown. So in your ads and on your mannequins, leave off what’s above the neck. But only if the shoppers are women and the model depicts a woman. In all other gender combinations of shopper and model, the Stockholm researchers found no reason to cut off their heads.
     The explanation for this from a body of research on body image is that female clothes shoppers are quick to compare themselves to others. If they see an especially attractive woman wearing a particular outfit, they tend to think to themselves, “That dress wouldn’t look as good on me.” Models in ads and mannequins in stores generally have pretty faces, so that can depress purchase intentions.
     Researchers at Arizona State University, University of British Columbia, and University of Alberta found that when a woman who is unsure about her appearance tries on a dress and then sees a pretty saleswoman wearing the same dress, that shopper loses interest in buying it. Importantly, this doesn’t happen if the salesperson is just carrying the dress, not wearing it, or if the shopper sees the saleswoman only before or after trying on the dress herself.
     However, as you might expect, it did happen if the woman, while wearing the dress herself, sees the same dress being worn by another shopper who is especially attractive. The researchers suggest retailers provide full-length mirrors in private dressing rooms so that a shopper isn’t required to step out into the store to use a publicly shared mirror.
     Jealousy of the attractive could become hostility. Researchers at University of Saskatchewan and Santa Clara University explored the success of a grotesque Dolce & Gabbana ad portraying one woman skewering another in the neck. The sharp reader of Alice’s Adventures would have already known all about such things, though.
     Now I’m thinking there must be other gems of retailing advice in the story. Such as the idea that items claiming to shrink female shoppers would sell well.

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

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Fashion Profits by Thinking Bigger
Shock Consumers, But Morally

Thursday, October 22, 2015

Overachieve as the Underdog

A small to midsize retail business may aim to garner attention by describing itself as an underdog, operating in the shadows of or in an unbalanced contention with larger retailers. However, unless handled well, that strategy could have undesirable results. While consumers root for the underdog, those same consumers like to associate with winners. Therefore, to get the best from portraying yourself as an underdog retailer, project your commitment to winning. Show perseverance in meeting the shopper’s needs.
     Researchers at Xi'An JiaoTong University and National Hsinchu University of Education presented one group of study participants with a story of a brand which already established itself as having endurance and another group of participants with a story of a new, emerging brand. In the story, half of each group were told explicitly how the brand was an underdog. For the other half of each group, the underdog position was only hinted at. Afterwards, the degree of brand preference was assessed among the members of the groups.
     The results showed how an underdog portrayal raises brand preference best when the portrayal is explicit and the brand has already shown it has lasting power.
     Notice that the two institutions sponsoring the research are both in an Asian culture. Other research suggests that the influence of underdog portrayals is even stronger in Western cultures. Researchers at Harvard University, Simmons College, and Boston College found that when a choice of chocolate bar brands was offered to the study participants, the brand positioned as the underdog was selected about 70% of the time. Overall, the effect was there for all the participant groups. Still, the effect was stronger among the American study participants than among those from Singapore. The power of the come-from-behind fits well with the distinctively American stories of successful immigrants and of second chances met with passionate determination.
     Once you become the Big Dog winning retailer instead of the overachieving underdog, take care in your comparative advertising. You could advertise with a negative frame or a positive frame. The negative frame is of the form “The other store is bad, and our store is good.” The positive frame is of the form “The other store is good, and our store is even better.”
     I recommend always accentuating the positive in comparatives. Negatively framed comparatives draw more counterarguments from shoppers. Again, people will support the underdog.

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

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Boast About Underdog Determination
Position Your Team a Little Bit Behind
Combine Positive with Negative Comparatives

Monday, October 19, 2015

Beat Around the Bushwhack

In a Journal of Consumer Psychology article titled “Does It Pay to Beat Around the Bush? The Case of the Obfuscating Salesperson,” consumer researchers from Boston University, Temple University, and University of Missouri explored the effects of giving unclear answers to shoppers’ questions. The study’s conclusion was that muddled replies rarely help and could hurt.
     Most consumers expect some obfuscation from people trying to sell something. But that doesn’t mean consumers always attribute obfuscation to dishonesty. The salesperson could be struggling to give a useful answer to a difficult question or address an area in which the salesperson has limited expertise. The group of Boston/Temple/Missouri researchers found that when a sales prospect was expecting dishonesty, a muddled answer reduced purchase intentions much more than would an honest “I don’t know.” However, for those instances where the prospect trusted the intentions of the salesperson, a muddled answer produced no difference in purchase intentions from an "I don't know."
     So is there ever a place for obfuscation in retail selling? Should a salesperson ever babble for a while rather than just admit a lack of knowledge? Yes, says other research.
  • A fuzzy answer could begin a collaborative dialogue between the shopper and the retailer which culminates in a useful answer to the question. The shopper might know the answer, but needs to talk it out with the salesperson in order to realize that. 
  • The babbling can give the shopper time to develop other questions the salesperson is able to answer clearly, whereas the “I don’t know” could close the opportunity for the sale rather than close the sale. If you do say, “I don’t know,” be sure to add, “I’ll find out an answer, and here’s when I’ll get back to you.” 
  • Shoppers who consider themselves experts in a product category often will ask questions when shopping for items in that category mostly to show off to the salesperson or to people shopping with them. They are notoriously complacent about taking into account the information they’re given in replies. 
  • Unclear information about a topic of interest to the shopper can cause the shopper to process other information more sharply, resulting in better purchase decisions. 
     In beating around the bush, never psychologically bushwhack the shopper—assaulting their vulnerabilities. Know how what you’re doing benefits both the consumer and you. When you give an unclear answer, have clear objectives.

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

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Know Where to Go for Answers
Embrace Shopper Expertise

Thursday, October 15, 2015

Assess for Employee Integrity Honestly

Two fellows apply for the same job opening at a local store. After interviewing each of them, the owner tells her bookkeeper that both applicants seem equally qualified. The bookkeeper replies, “Whoever you hire is going to be taking payments and making change. To help you decide, why not call them both back in and give them a little math test?”
     A few days later, the owner thanks the bookkeeper for the idea, saying the results let her make the decision without any doubt. “Did one of them get many more items right?,” the bookkeeper asks. “No, actually, each of them missed only one item.” “Hmm, then how did you choose?” “Well, on that one item, Sam wrote, ‘Don’t know,’ and Chuck wrote, ‘Me neither.’”
     The two fellows may have colluded in answering the items, but even then, it appears Sam was the leader and therefore the better candidate. However, a more likely possibility is that the little math test functioned as an ad hoc integrity assessment.
     Professionally-designed integrity tests do help predict the probability of employee dishonesty. Researchers at Manhattan College find that inventories which assess conscientiousness and agreeableness are especially useful. High scores on these two are associated with lower rates of workplace theft, absenteeism, tardiness, and uncooperativeness.
     Still, be aware of limitations in assessments of honesty. The personality tests aren’t perfect. Also, situational factors enter into employee decisions to steal. Severe economic deprivation, seeing other staff steal, and getting ready to leave store employment are among these factors. Researchers at Penn State Erie, Mercyhurst College, Benedictine University, and Wm. Wrigley Jr. Company found that fast food employees in their sample said they’d be more likely to steal if leaving employment in two weeks than in two years.
     And, honestly, many lies from employees you’ve already hired are harmless self-defenses. It doesn’t serve your interests to pressure the person into admitting the falsehood. Gather what information you can about the problem, clarify your expectations about future actions, and move on. Let the lie just lie there. People will frequently change without ever admitting to others that they were wrong.
     As part of clarifying your expectations, say, “Please be an honest person when talking with me about what happened.” Research at University of California-San Diego, London Business School, and Stanford University indicates this self-identity phrasing works better than, “Please be honest when talking with me about what happened.”

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

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Avoid Specific Feedback on Integrity Tests
Let Sleepy Lies Lie
Compare Notes on Body Language
Handle Employee Dishonesty Consistently

Monday, October 12, 2015

Tickle with Uncertainty

“How much effort are you willing to exert for a bag of Godiva chocolates? Oh, before deciding how hard you’ll work, you want to know how many chocolates are in the bag? Well, it’s either two or four.”
     Now here’s the amazing thing: Study participants given instructions like the above worked noticeably harder than did those told that the bag was guaranteed to contain four chocolates. The researchers, from University of Chicago, explain this by pointing out how the tickle of uncertainty stimulates consumers. They had parallel results when offering one group a guaranteed reward of two dollars and the other group only a guarantee that it would be either one or two dollars.
     Consumers are, by and large, an optimistic lot. If you advertise “Up to 45% off regular prices,” they’ll think the item they’re seeking will be one of those tagged for the full discount. But the Godiva chocolate setup went beyond this. Decreasing the probability of getting the top payoff paradoxically increased the purchase motivation.
     The researchers attribute the effect to what’s called “savoring.” That’s the fun which comes from anticipation of discovering the contents as we unwrap the gift or plan for the rock concert two weeks hence. People say they’d prefer not to wait, but that’s not how they end up behaving. Consumer behavior researchers at University of Miami and Greece’s ALBA Graduate Business School say a retailer’s use of a gift as a promotion will benefit from uncertainty if love’s involved. When the product considered for purchase is for pleasure, not knowing which of a set of possible gifts will end up being the bonus tends to increase purchase likelihood.
     In times of high turmoil or when the retail transaction already involves risk, don’t add lots of extra uncertainty about the payoff. People going to the dentist or an auto repair shop prefer to know the parameters of the pain. But in these circumstances, a touch of uncertainty can still be helpful for making the sale. In an article wonderfully titled "Believe Me, I Have No Idea What I'm Talking About," researchers from Stanford University reported that expert restaurant reviewers are more influential when saying they're less than completely certain about their conclusions.
     To help the shopper become more comfortable asking you questions and expressing concerns, avoid coming across as absolutely certain in the recommendations you're making.

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

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Advertise Tensile Pricing Selectively
Give the Gift of Uncertainty, Love
Gambol with Gambled Price Discounts
Extract Uncertainty When Pulling Teeth
Sell More by Being Less Certain