Enhance Subjective Knowledge via Identity

What your shoppers think they know might not match well what they do know. This is of concern because consumers’ impressions of what they know—their subjective knowledge—is often more important in purchase decisions than is their actual, objective level of knowledge. Moreover, salespeople can inadvertently decrease subjective knowledge while trying to build objective knowledge. As shoppers learn more, they become sensitized to how much more they should be learning.
     We’d like our customers to feel confident in the decisions they make. Researchers at University of Hong Kong, University of China, and Peking University say that’s most likely to happen when our customers have excellent self-esteem in general or when they believe they have superb expertise about the particular product or service category they’re considering.
     But for the many who harbor lingering self-doubts, those researchers discovered another successful technique: Help the person become aware of the different roles they occupy in life. Ask them about their job, their family status, their leisure pursuits, their community activism.
     None of this needs to relate directly to the particular item category about which the shopper starts out feeling like they don’t know enough. They could bring to a shopping trip for tires concerns that their acquaintance with tire selection is lacking. You’ll enhance their confidence in their knowledge by asking about their occupation, then about their kids, and then about what they like to do in their off-hours. None of it needs to directly reference the shopping for tires.
     Often, you’re more likely to make a sale when you chat up the person first. Researchers at University of Minnesota, Utrecht University, and University of Twente saw how brief chitchat at the start, such as, “How are you today?,” softens up the prospect’s resistances to a solicitation which follows. Talking specifically about different identities of the shopper goes beyond such unfocused chitchat. Purposefully widening the perception of range of identities also heightens the perception of subjective knowledge about a range of products and services for sale.
     In using this tactic, stay aware that we don't want customers making misinformed purchase decisions or misusing what they buy. They could hurt themselves. They also could damage the merchandise. We want our patrons to be not only confident, but also what consumer psychologists call “well-calibrated.” In well-calibrated customers, the discrepancy between subjective knowledge and objective knowledge is small. Their shopping confidence is deserved.

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

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Reference Prices for Referrals

Customer referrals are an excellent source for building your business. There will be more people to purchase from you. And a referral reduces price sensitivity. Researchers at Goethe University Frankfurt and University of Pennsylvania found that the revenue value from a referred customer averages about 16% higher than that from a non-referred customer.
     Yet because of the referral process, these new prospects may come into your store, shop, or office with distorted impressions about what you charge. This is especially likely in services retailing, where price tags are usually less prominently displayed than with merchandise retailing.
     The distortions can be in different directions:

• In a Yale University study, a group of MBA students were asked what they’d be willing to pay for a set of DVDs of a popular television series. They were then asked to estimate what others would be willing to pay. The difference averaged 48%. Similar findings were obtained for chocolate truffles, teddy bears, artwork, and even a trip to the moon. People usually think others will pay higher prices for items than they themselves would pay. If this attitude is reflected in the referral process, the referred shopper may come to you with hesitation, expecting to pay a premium price. 
• Friends brag about savings they’ve obtained, even if this means lying. Researchers at University of Alberta, University of Calgary, and University of British Columbia concluded that when people believe they might have been able to wrangle a better deal on a product or service, this belief leads to them feeling a threat to their self-esteem and their self-image. They fear not only that others will see them as being suckers, but also that they’ll see themselves that way. The researchers found that people are especially likely to lie to coworkers about the good deals they got. Since a natural follow-up question from a coworker is, “Where did you get such a good price?,” you—the retailer—should expect some people to come into your store looking for discounts you’re not offering. They were lied to. 

     To handle this issue, reference your regular prices on documents salespeople can present to prospects and have each employee on your sales floor and at the checkout area carry copies of your store’s current ads and discount announcements. These, along with price tags, take it away from being customer versus store employee. There’s the objective source both can look at.

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

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Supersize Switching with Superconsumers

When customers keep shopping with you, that’s great. When those customers keep buying identical brands from you, that might not be great. There are times you’d like to encourage brand switching because it would benefit the customer and your profitability. A chief example is a switch to house brands—private label brands—which usually offer you higher profit margins than do the corresponding national label brands while also allowing you to offer your shoppers a price advantage.
     Consumers are more open to brand switching when moving from one role in life to another. This happens with college graduation, getting married or getting divorced, having a first child, and changing careers. However, you might not want to wait until a major life change occurs to switch the brand preferences. In this case, results from a set of studies at University of South Australia should interest you. These studies looked at brand switching in the opposite direction: How is it that brands attract new customers from those who had been using other brands?
     The answer is that it begins with the shopper giving the new brand a try for a while. The ten brands in the study, reflecting a range of consumer goods, which increased market share consistently were achieving more growth from trial users than from repeat purchasers.
     Building on this finding, it looks like your best odds for brand switching are with a category of shoppers researchers at Cambridge Group and Nielsen Company call superconsumers. These are people who are always seeking a broader range of products in a particular category. In the research on 124 consumer packaged goods categories, superconsumers accounted for about 10% of the category’s purchasers, but 30% to 70% of sales. Because they don’t require the same degree of marketing push to buy more from the category and because they aren’t highly price sensitive, superconsumers are a major source of revenue. The researchers identified a group of stapler superconsumers who owned, on average, eight of the devices. Researchers at Fairfield University and Louisiana State University found a similar phenomenon with shoe purchases by people they named “acquisitive shoppers.”
     These consumers are especially open to brand switching because they’re consistently expanding their horizons within the product category. Recognize the desire for ever-changing product specifications. Even though these customers stay alert to differences in seemingly identical items, assist the process by pointing out differences in brands yourself.

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

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Sense the Pleasure from Tactile Ordering

A rock-solid finding in consumer psychology is that having an undecided customer hold a pleasure-oriented product makes the customer much more likely to complete the purchase. On top of this, it turns out that having a shopper use the sense of touch in ordering a product, before the shopper could even achieve tactile contact with the item itself, tilts the odds toward selection of a pleasure-oriented alternative.
     Researchers at University of Michigan and Chinese University of Hong Kong invited consumers to choose between a fruit salad and a cheesecake slice as a reward. Some of the study participants were required to use their finger to touch a picture of their choice on an iPad or a touchscreen laptop. The remaining study participants instead placed their order by clicking an image of the choice using a mouse on a desktop or laptop.
     Those touching the image selected the cheesecake significantly more often than did those who were touching the mouse. The researchers’ explanation is that reaching out and making direct sensory contact activates thoughts of grabbing the item itself, and most of us prefer to grab pleasurable items than strictly utilitarian items.
     You’ve little influence over whether your ecommerce shoppers use a touch screen or a mouse in placing their orders from home. But for the increasing amount of in-store ordering via a computer terminal, you’re choosing the apparatus. Self-service retail technologies include countertop devices at quick service restaurants, tabletop ones at sit-down restaurants, and vending machines in merchandise stores.
     The evidence is that getting the purchaser in touch not only makes the choice of pleasurable items more likely, but also makes the retail transactions themselves more pleasant. Many people prefer to deal with the credit card slot on the gas pump than have to wait in line to hand the card to a human being who takes time processing the transaction. This fulfillment format can extend the hours in which products and services are provided, benefiting both the retailer and the consumer. Another joint benefit is the reduced dependency of the shopper on retail personnel being available.
     A downside of the touchscreen, though, is the real and perceived contamination. So install a disinfectant wipe dispenser right by the devices. Include a small sign saying, “Our complimentary wipe kills 99.9% of germs.” Keep the dispenser stocked, include a waste basket for used wipes, and be sure the waste basket is emptied frequently.

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

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Puff Up Maleness for Wind Energy Acceptance

Worldwide, interest by consumers in renewable energy sources like wind power has grown notably less quickly than interest in other environmentally conscious products and services, such as organic foods. Based on results from a study of 434 households’ electricity contracts, analysts at the Swiss Federal Office of Energy and Swedish University of Agricultural Sciences conclude that the explanation is in what psychologists call identity signaling: People using electricity generated by wind power want to be able to signal to others their worthy actions, but those selling them wind-generated electricity do not make the choice or the significance of the choice sufficiently visible. The analysts suggest providers increase the visibility. Knowing about the past studies on identity signaling, the analysts also suggest that providers involve consumers in initiatives to persuade others to use wind-generated electricity.
     Research at Utah State University, University of Notre Dame, Seattle University, University of Illinois-Chicago, and Peking University indicates this is particularly likely to succeed if the initiatives are portrayed with characteristics men consider to be masculine. Such characteristics include discipline, stability, seriousness, and decisiveness. Green behavior—environmentally conscious actions—tend to be associated with femininity in the minds of both sexes. However, because men are more concerned with gender identity maintenance than are women, marketing wind-powered electricity as masculine will add to men’s motivation to a greater extent than it will detract from women’s motivation to embrace wind power.
     Not all consumer behavior research concludes that men avoid green behaviors because of fears about identity signaling. Studies at University of Helsinki, University of Vaasa, and Jyväskylä University found that men in Finnish urban settings who professed their love of organic foods earned additional respect for being altruistic and affluent. This was not true for men in rural settings, perhaps because eating organic is not at all unusual in farm country, so no distinctive identity is being signaled.
     In all these instances, the retailer’s attention to identity signaling acknowledges a distinction between psychological risk and social risk in customers’ decisions. The psychological risk question is, “Does using this product or service conflict with the image I want to maintain of myself?” The social risk question is, “If the people I admire know I’m using this product or service, am I in danger of falling out of favor with them?” The two types of risk are related, but they’re not the same. Identity signaling concerns social risk.

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

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Counter Counterfeits’ Attraction

Many consumers choose lookalike house brands over the national brand alternatives. Sometimes the motivation is trust in and loyalty to the retailer carrying the house brand. Another common motivation is to save money. That same budget consciousness also results in what researchers at American University and University of Minnesota identify as a growing attraction to counterfeit versions of luxury brands.
     The strength of that attraction is influenced by the perceived social class of others that the shopper has seen or heard about using counterfeits of any sort of item. As you might expect, people were less likely to select the knockoff items when they believed the primary purchasers were of a lower social class than themselves. But as you might not anticipate, an attraction to the genuine article grew when people perceived that such a purchase would allow them to claim superiority over others from their in-group who were using a counterfeit version of that same item.
     Therefore, if you learn from a customer that their friends are using a counterfeit, you could turn that into a benefits statement for selling the genuine article. Because counterfeit goods are usually of inferior quality, you’ll be doing a service by helping those shoppers question whether they’re being fooled. Acknowledge the compelling appeal of counterfeits which seem genuine, then present the advantages of buying the real deal. Address the purchase motivations:

• Interest in obtaining value for money. Show the shopper how prices for counterfeits might, in reality, not be dramatically better than what you can offer. So-called discounts claimed on 8,000 rogue sites monitored by brand protection firm MarkMonitor were often in the range of 25% to 50%—not too far beyond what a shopper might obtain during your special promotion sales. 
• Pride in being able to find fakes which are indistinguishable from the genuine version. Know your merchandise well enough to describe the hidden features or easily overlooked benefits lacking in the counterfeit version. 
• Antipathy toward the merchant. Researchers at St. John Fisher College, Southern Illinois University, and University of Wisconsin–Whitewater found that people who habitually seek out counterfeits can have felt unappreciated by merchants when purchasing genuine versions of luxury items in the past. The attraction to counterfeit products could be a conscious or subconscious way of paying back legitimate retailers for these insults. Get to know the shoppers outside the store setting and treat them with obvious fairness. 

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

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Control How Shoppers Handle Low Control

As a rule, when a shopper comes into your store with a sense of low control, they’ll be especially deliberative before making purchases. The sense of low control could arise from an unfamiliarity with your store, when considering a purchase to be risky, from an enduring personality trait like low self-esteem, or even from a situational influence having little to do with your store, such as experiencing—or maybe reading about—a natural disaster.
     However, observant retailers might notice that this low-control effect can work in the opposite direction: Some shoppers become more, not less, impulsive. University of Miami researchers believe they’ve found an explanation in the person’s childhood. Kids who reported to the researchers that their parents had emphasized the importance of regulating one’s impulses showed heightened self-regulation when feeling a sense of low control while shopping as an adult. But kids who said their parents were highly permissive about expressions of impulses then demonstrated impulsiveness in adult shopping situations where they felt a low sense of control.
     So although you, as the salesperson, might not know in which direction a new customer will go, once you spot the direction, it’s likely to stay that way for the duration of your business relationship. Moreover, the tendency is likely to be stronger when that shopper is accompanied by family members.
     Other studies over the years have come at the issue with suggestions for easing the sense of low control:

• Keep shelves orderly and fully faced. 
• Unclutter aisles regularly. 
• Wherever shoppers need to wait, make it abundantly clear who has what place in line. 
• Remind customers of any time limits, and perhaps even establish time limits. “Please remember that this offer is good for the next three days.” 

     More recently, researchers at Florida State University, University of Oregon, and University of Miami added another tip: Stock products with logos containing thick borders. Shoppers are more likely to complete a risky purchase if the product logo looks protected. With low risk purchases, however, a thick border on the logo doesn’t help. In fact, it hurts purchase intentions. Shoppers not suffering a control deficit subconsciously feel confined by the protected logo and so turn away.
     To make this last tip useful in the real world of retailing, let’s adapt it. Here’s what I suggest: In circumstances where your shoppers usually feel limited control, place a thick border around text on store signage.

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

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Hold Off on Hand-Holding the Experienced

Shoppers who’ve familiarity or even expertise with what you’re selling bring different expectations than do dilettante shoppers. Sometimes the difference is between delivery time and delivery quality, and that’s true with both merchandise and services.
     University of Valencia researchers analyzed 334 cruise passenger reviews of Spanish ports guided tours, some of the reviews by Europeans and the rest by North Americans. The content analysis showed how the Europeans prized the tour guide’s efficiency over the degree to which the tour guide personalized the tour to the group. For the North Americans, personalization was more important than efficiency.
     The researchers attributed the difference to culture. The argument is that Europeans put efficiency first and Americans put personalization first. But considering other studies of the cultures, an explanation for the findings that makes more sense to me: On the whole, the Europeans probably were more familiar than the Americans with ports of call in Spain. For them, the value was gauged by how much new information the guide shared in the limited duration of the tour. The Americans, by contrast, wanted more hand-holding while they were being exposed to novel experiences which they wanted to make their own.
     The same principle applies when it comes to the amount of hand-holding of those touring your store. You know that when a shopper asks where an item’s located, it’s better to walk the shopper there than to extend your finger and say, “That way.” As you walk with the shopper, you should talk about the items you’re passing by. You’ve heard what item the shopper is looking for, and you can see what items the shopper’s already selected. What else might this shopper also benefit from having, but perhaps overlook? The motivated shopper suffers from tunnel vision. Still, if this is a repeat customer who knows your store quite well, they’re likely to be more interested in efficiency than personalization, so do move the tour along.
     Experts often buy without prolonged thought. They don’t need the features lists novices want because the experts already know—or think they know—what the items can do for them. Experts are interested in technical specifications largely because they’ll use those specifications to justify to themselves and others that they’ve made the right choices. They are famously complacent about using technical information provided by a salesperson before choosing what they’ll purchase.

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

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Multiply Sales via Multiple-Quantity Discounts

Offering a discount for the purchase of multiple quantities of an item can increase the average per-sale revenue from those who do buy. But what effect does a multiple-quantity discount offer have on those who decide they wouldn’t be able to use up all those items before they’d spoil or they don’t have room to store all those boxes of the same stuff? Does knowing they’re missing out on a discount lead the shopper not to buy even a single unit at the regular price?
     Researchers at National Chung Hsing University in Taiwan have discovered a method which makes this less likely to occur: Use multiple price breaks. “Buy two and get 10% off. Buy three and get 20% off” results in more single-item purchases than “Buy two and get 10% off.” Perhaps it’s because the single-item purchaser feels more comfortable knowing that others—those who purchase two of the items, but not three—are also missing out on the best per-unit price. Supporting this interpretation is the finding that the boost in single-item purchases is greater when there are three price breaks instead of two and when there’s a greater interval between the price breaks in minimum quantity requirement and percentage discount.
     Studies at Bryant University and University of Illinois assessed how the way in which a quantity discount is stated influences shoppers. Specifically, what’s the difference between advertising “20% off if you buy at least five packages” and “20% off. Limit five packages per customer”?
     The answer: When customers are required to buy a minimum quantity to achieve the discount, they are more motivated to purchase multiple items. But when customers are allowed to purchase only a limited number of items at the discounted price, they are less motivated to purchase multiple items. Consumers live up or down to the conditions of a discount offer.
     Moreover, the nature of the motivation spreads to other purchase decisions. People buying five of the items to earn the discount will be more likely to buy in quantity other items on their list—whether or not those items are discounted. Customers who stopped at buying five items because they don’t get a discount beyond that quantity become less likely to buy in quantity other items on their shopping list. The “20% off if you buy at least five packages” is a straightforward way to increase the size of the total purchase.

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

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