Monday, December 31, 2018

Transform Loyalty with Store Workshops

Many retailers have offered workshops for their prospective customers. Some of these are in-store and free, such as the do-it-yourself sessions of The Home Depot. Some are online, such as the “Healthy Eating Education” programs from Whole Foods Market. Some include a modest fee, such as “Women’s Trails and Ales” hikes organized by REI.
     Researchers at Germany’s WHU cite those three among examples in their exploration of the advantages to retailers of “transformative retail services.” TRS are characterized by contributing toward consumers’ well-being. The researchers find that when the participants appreciate the improvements in their physical or mental wellness and haven’t paid for the program, the participants’ gratitude leads to significant increases in store loyalty and modest increases in both expertise about brands carried by the store and positive feelings about purchasing those brands at the store.
     Fee-based TRS do not produce these advantages for the sponsoring retailer nearly as well. This is expected because paying money negates the gratitude which led to the loyalty. What is less expected is that charging a fee also decreases improvements in the participants’ feelings of well-being, even when the nature of the program is the same as with the free. This appears to be because an attitude of appreciation in itself nourishes the psyche.
     As a result, the researchers argue for offering TRS at no cost, designing the curriculum around improving well-being, and checking that those benefits are recognized by those who complete the program.
     Researchers at University of North Carolina and Winthrop University find that when members of a community feel gratitude toward a particular store, the loyalty they build results in a greater likelihood of repeat patronage, and also more. They begin to share news of the store with each other, develop rituals and traditions associated with the store, and help the retail business serve its customers. The help might include assisting other customers who happen to be shopping in the store at the same time; giving suggestions to the store owner for improvements; and enforcing store standards, such as tipping off staff about a shoplifter.
     However, what the sense of store community did not produce was a willingness to pay more for store items. The revenue gains come from more frequent purchases associated with store loyalty and from the operating expense savings attributable to the good citizenship behavior of those considering themselves to be members of the store community.

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Monday, December 24, 2018

Modify Dislike of the Genetically Modified

Years ago when grocery stores began putting onto produce those tiny labels the cashier or scanner would use to identify the item, there were shoppers who strongly objected. The strength with which these people expressed their dislike led me to think they were labeling the labels as downright immoral.
     They very well might have, according to the reasoning of researchers at Canada’s Western University and York University. The researchers’ studies were concerned with genetically modified (GM) foods, not labels on produce, but the argument is that both these are considered pollution of nature’s bounty and this pollution is morally wrong. The objections to GM items were strongest among those who believe in general that human intervention unethically deprives nature of its virtues.
     About 70% of processed foods in the U.S. contain GM organisms, substituting non-GM ingredients would increase food prices 10% to 50%, and there is no compelling evidence that use of GM organisms in itself compromises health, safety, taste, or quality. With all this in mind, it can be to the advantage of both consumers and retailers to ease any shoppers’ dislike which has arisen on moral grounds.
     If you choose to do this, a strategy is to baldly present GM items as manufactured. In the studies, this was successfully accomplished by indicating on the packaging that the item has been processed, depicting the item in a color not generally found in nature for that item, and stocking the item in an aisle featuring processed foods rather than among non-GM produce. These were all done in addition to labeling the item as GM. Just using such a label without also cuing the fact that the item is manufactured elicited negative responses from the consumers in the study. Worse yet was if there were cues that the item was equivalent to natural. When that happened, consumers felt the marketer was trying to mislead them, and this predictably exaggerated the moral objections to the whole situation.
     Sometimes people fool themselves into thinking a food item is different from what it truly is. Researchers at University of South Carolina and Loyola University found that dieters ate more of a mix of vegetables, pasta, salami, and cheese if it was called a salad than if it was called a pasta dish, and the dieters didn’t question the salad name. But it seems that when it comes to GM, willful ignorance isn’t operative.

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Monday, December 17, 2018

Chimp Away Sales Resistances Using Scarcity

Hey, marketers! Been thinking lately about the shopper psychology of chimpanzees? I’ve been, and you should be, too, at least for long enough to consider the question, “Why do scarcity appeals work with your customers?”
     Researchers at University of California, Duke University, and University of Warwick asked that sort of question after noting the ways in which consumers are often more likely to purchase items they perceive to be in short supply. In a classic consumer psychology study, participants were presented a set of Nabisco chocolate chip cookies. For some participants, two cookies were presented, while for the others, ten cookies were there. Which group gave higher ratings to the attractiveness, liking, and willingness to pay? Yes, the group that saw only two cookies.
     But do scarcity appeals hold for children as well as for adults?
     In a set of experiments, the answer turned out to be yes for six-year-olds, but no for four-year-olds. The researchers also evaluated for scarcity appeals in a set of chimpanzees. From an evolutionary perspective, chimps are human’s closest extant relatives. If they demonstrate a scarcity appeal, this would indicate the scarcity appeal for humans had evolutionary advantages. As with the children, the chimp was given a choice between one attractive item selected from a pile of identically wrapped goods or one wrapped attractive item which was standing alone.
     The chimps showed no scarcity preference. It appears that the genesis of the scarcity appeal is not in fundamental evolutionary adaptation, but instead in learned human social interactions of the sort which begin to develop at around age six. The researchers’ conclusion is that it arises from a desire to feel special. This interpretation was supported by comparing results for the children when they made the selection in the presence of other children versus when they were by themselves when choosing.
     Bringing it back to the world of maximum effectiveness in marketing to your target audiences, pair scarcity claims with benefits statements having to do with distinctiveness.
      Along with this, recognize the related research-based motivations for a scarcity appeal:
  • Desirability. “People in the know are wanting what’s available.” 
  • Status. “Many aren’t able to afford what I have.” 
  • Nostalgia. “I’ll preserve memories of expired possibilities.” 
  • Quality. “Lavish attention must have been devoted to each item.” 
  • Competitiveness. “Others who don’t have this are comparative losers.” 
  • Reactance. “I want to have what others tell me I can’t have.” 
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Monday, December 10, 2018

Color Clients to Die Green

When you’re thinking about being six feet under, you’d prefer the grass and trees above you to thrive. That’s one interpretation of the conclusions from researchers at National Central University in Taiwan, University of Brawijaya, National Dong Hwa University, and Vietnam’s University of Economics. The researchers found that consumers who contemplate their own death with trepidation become more likely to engage in green—ecologically conscientious—actions.
     This applied to favoring actions which minimize the demolition of natural habitats, avoid the use of toxic substances, prevent pollution, and reduce wasteful consumption of energy. In the studies, death anxiety prompted these actions more strongly than did an attitude of social responsibility.
     This doesn’t mean you should arouse contemplation about death solely to encourage green behavior. But it does mean you can work toward fulfilling your responsibilities to society by encouraging customer contemplation of green behavior in circumstances where discussing death is an integral part of the sales process. This would apply to life insurance, funeral planning, and estate planning, for example. In addition, there are certain times when death is more likely to be thought about by your target markets, and therefore your arguments for ecologically conscientious actions would be particularly well received. Periods after massive natural disasters, news about dangers to life from climate change, and holidays such as Day of the Dead and Memorial Day are examples.
     Interest in dying green could be considered as coming from a desire—seen most often in elderly consumers—to leave a legacy. Ironically, green behavior also is, at least from one perspective, wasteful and indulgent. Studies at Central Michigan University and National Dong Hwa University found that consumers believe cleaning products touted as being green are less effective than others, so the consumers use more of them for the equivalent task.
     Terror Management Theory says our realization we will someday die leads us to crave the promise of life in an afterworld and to us building legacies of children, fame, and fortune. One consumer motivation for buying products which are unnecessarily luxurious is to build enough self-esteem to protect against death anxiety. Research projects at Stanford University discovered that a protection against death anxiety is high self-esteem. The colloquial phrase “I was so embarrassed I could’ve died” reflects a relationship between threats to self-esteem and one’s demise. Similarly, when consumers experience life mastery, death anxiety is less likely to produce green behavior.

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Monday, December 3, 2018

Offer Service Pricing to Fit Idiosyncrasies

Consumers make choices based on the fairness of an item’s price and on how well the item fits the shopper’s idiosyncratic characteristics. University of Passau researchers looked at the juncture of these two as it applies to pricing for ongoing service usage plans, such as might be levied by a country club, community supported agriculture program, or mobile phone service.
     The researchers verified that people enjoy the perception that their pricing plan is personalized. The implication for service providers is to have a range of tariffs, each alternative described in terms of the characteristics of a target consumer. As examples, some of the tariffs offered or suggested might be flat fee for unlimited usage with a label of “Worry-free,” others pay-per-use with a label of “You’re in control,” and still others a barebones plus add-on options with a label of “Getting started.” 
     The feeling of price being right comes both from a sense of equity and a sense of personal fit. When it comes to ongoing services, the sense of personal fit is especially important because the shopper often lacks the ability to do comparative pricing, as would be done with merchandise, and is often unsure about the how much of the service they’ll end up using. A tariff attending to idiosyncrasies gives comfort in the face of the uncertainties.
     Supporting this interpretation, the researchers found that fitting service pricing plans to shopper idiosyncrasies added the most attractiveness in circumstances where shoppers lacked confidence, such as when the service was less familiar to the consumer. A range of other studies supports the interpretation that shopper attraction to idiosyncratic marketing comes from the ability to choose, not only from the better fit of these personalized alternatives. When a pricing plan was assigned to the customer by the seller based on an assessment of the customer’s particular characteristics, the relative appeal of the personalization faded.
     Researchers at University of Pittsburgh and University of Southern California note the evidence that labeling by shopper characteristics helps, beyond pricing, with the items themselves. They point out how Hertz formerly classified its cars by attributes—four-door, trucks, minivans, SUVs, then switched to classification with labels green traveler, adrenaline, and prestige.
     Researchers at University of Virginia found that the draw of customized discount coupons occurred even if the recipient didn’t use the coupons. People like to be recognized as individuals. Personalization in any form communicates caring.

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Monday, November 26, 2018

Guide Adolescent Eyes to Nutrition Information

We hope that as young consumers gain independence to make their own food choices, they select healthy alternatives. Researchers at Queens University Belfast and College of Agriculture, Food and Rural Enterprise-Loughry say this hope is too frequently dashed. Of the adolescents whose food choices were analyzed, more than half chose unhealthy items when left on their own, and almost one out of five made a series of choices dieticians would consider to be dangerous to the adolescent’s wellbeing. This occurred even with the adolescents who were knowledgeable about the importance of good nutrition.
     Some of the explanation for this resides in the rebellion and impulsivity of the adolescent mind. Additional explanation for the poor nutritional choices can be found in the difficulty adolescents encounter in spotting the nutritional information required for good choices. A total of 41 dieticians, teachers, and students in the fields of nutrition were asked by researchers at University of Manitoba to come to consensus about the most important competencies young consumers should master for healthy eating as those consumers transition to adulthood. Chief among the competencies the group specified was the ability to compare foods by interpreting labels and packaging. Yet knowing how to use it isn’t enough. Eye tracking studies by the U.S. Food and Drug Administration verify this.
     The FDA researchers asked 60 adult grocery shoppers to wear Tobii Pro eyeglasses which tracked their eye movements as they shopped in a grocery store for snacks, soup, and cereal. The researchers discovered how any interest in finding nutrition information on the package was challenged by the visual busyness of brand logos, product imagery, product claims, displayed prices, and promotional offers either on the product package or on adjacent signage.
     Attention to the nutrition information was higher when many alternatives within the product category included the data in a similar format. This was truer of the cereal category than the snack category. In addition, logos for nutrition grading systems, such as Facts Up Front® and Health Claims drew attention to the Nutrition Facts label.
     What’s true for adults is true for adolescents who are becoming adults. For both these, guide eyes to the nutrition information:
  • Favor brands which use a nutrition grading system logo on the package 
  • Position packages so that at least one for each alternative has the Nutrition Facts label facing the shopper 
  • On signage, say, “Check the Nutrition Facts on the label” 
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Monday, November 19, 2018

Tell Seniors to Get Out of Here

I realize that your surprise at what I’m about to tell you could easily lead to you replying, “Get out of here!” But it’s absolutely true, according to researchers at University of Queensland and University of Oxford: In the US, seniors account for fully 70% of all passengers on cruise ships and spend 74% more on travel and tourism than do those consumers between 18 and 49 years old. Senior tourism constitutes a prime opportunity for retailing profitability.
     So please change your meaning of “Get out of here” from signifying improbability to signifying an intention to urge seniors in your target markets to purchase travel and all the products and services which augment travel and tourism.
     Important to understand in doing this is that seniors, on the whole, have more disposable income, greater interest in using their money and time for experiences instead of material possessions, and more interest in physical activity than did seniors in the past. Considering that a substantial percentage of seniors are retired or semiretired, you’ve capabilities to fill off-season seats when marketing to this demographic due to scheduling flexibility. Because expected lifespan is increasing, your investments toward building repeat patronage are worthwhile.
     Research on senior tourism highlights the importance of appreciating the substantial heterogeneity in this market. With their longer life histories, a broader range of travel and tourism motivations are seen in seniors than in their younger counterparts. Still, there are marketing points likely to work across the segment. These include opportunities for social interaction, identity-building such as through nostalgia, and skill mastery.
     A “last chance to see” campaign can succeed because of seniors’ sensitivity to the limitations in years they have ahead of them. And although booking travel around the commitments of grandchildren can decrease scheduling flexibility, seniors are attracted to family experiences. Consumers often operate on the assumption that they'll have more time in the future, but not necessarily more money. This doesn't mean at all that the consumers are satisfied to be wasting time. On the contrary, they want to feel in control of their time. To sell family-oriented experiences, advertise the benefits for shared enjoyment. And sell all-inclusive packages. Use the ocean cruise business model. Grandparents will get irritated with you if you require them to say no too often to a grandchild’s requests.

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Monday, November 12, 2018

Open Your I’s to Customer Comfort

A salesperson’s use of the pronoun “I” when talking with shoppers can demonstrate that the salesperson is showing empathy in serving the shoppers and is prepared to take action to benefit the shoppers. The consequences include higher intentions to purchase from the salesperson, according to studies at Wilfrid Laurier University, University of Alberta, and Simon Fraser University. “I am happy to help answer your question,” is better than, “We are happy to help answer your question.”
     The effect is strongest with shoppers previously unfamiliar with the salesperson. When a shopper already knows the salesperson or similar salespeople in a store to be empathic and ready to go into action, the use of “I” versus “we” is less necessary.
     Other research agrees. For example, in responding to a customer’s complaint, it’s better for a store employee to say, “I’ll take care of it,” than, “Our store will take care of it.”
     Yet in coaching yourself and your employees to use “I,” realize it can be overdone. Other research has found that an unusually high frequency of “I” indicates the salesperson is excessively focused on themselves at the expense of the client or even deeply depressed, neither of which facilitates selling. Keep your eyes open for the proper blend of the personal pronouns.
     Researchers at University of Florida, Stanford University, and Turkey’s Koç University explored when, if ever, a misplaced “we” implies an intimacy which irritates shoppers. First, they created three versions of a Wells Fargo Bank ad to use in their studies. The difference was in the wording of one sentence:
  • “Together, we make whatever decisions necessary to ensure your life goes uninterrupted.” 
  • “Together you and Wells Fargo make whatever decisions necessary to ensure your life goes uninterrupted.” 
  • “Wells Fargo makes whatever decisions necessary to ensure your life goes uninterrupted.” 
     For current customers of the bank, the first version led to the most favorable attitudes. They liked the idea of the bank and the customer acting as if one. For non-customers, the outcome was more complex. In general, the wording made no difference. Non-customers had no psychological investment in the relationship with the bank, so probably weren’t assessing the differences in the language.
     However, when another group of non-customers were specifically asked to pay attention to the differences, the “we” phrasing was less well received than the “you and Wells Fargo.” It seems the “we” did portray a smarmy congeniality.

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Monday, November 5, 2018

Wise Up Your Shoppers

Wisdom in your shoppers is of value to you. Wise guys and gals are less susceptible to fraud, allowing you the comfort of profiting from the practice of ethical retailing.
     Wisdom has been prized throughout cultural history, but the definition of wisdom varies among cultures. Researchers at College of William & Mary and University of Virginia set out to define wisdom in consumer culture. They interviewed a set of Americans living in different areas of the nation and ranging in age from teens to 90s. Each of the interviewees had been described by others as a wise consumer. The interviewees were probed about what characterized their purchase decisions.
     The sample size in the study was only 31 people, and the selection technique was snowball sampling. A snowball sample is gathered by asking people you interview to nominate others who fit the criteria you’ve set. Snowball samples, especially when of limited size, are prone to bias. In fact, the conclusion of the study, defining what qualifies as a wise consumer, pretty much matched the definition given at the start: A shopper who balances emotions with logic, the future with the present, and others’ needs with their own. Still, people in the study fitting this description did show certain specific characteristics, such as:
  • Cultivates a clear idea of what lifestyle is meaningful in that it aligns with their distinctive values and available resources 
  • Intentionally refrains from spending money and time unless they can clearly identify a reason which feels right or makes logical sense 
  • Contemplates the results of past consumption when making decisions for future consumption 
  • To master negative emotions and facilitate positive ones, seeks out situations which promote wise consumption 
  • Displays patience fitting the significance when making consumption decisions 
  • Maintains openness in considering a range of consumption alternatives, such as renting or sharing instead of purchasing 
  • Transcends self-interest by preferring consumption options which avoid harm to the community, other consumers, or animals 
     To cultivate target audiences of shoppers with wisdom, appeal to those characteristics in your marketing.
     A New York Times article based on an abundance of research points toward ways sales people and marketers can help consumers develop and use wisdom:
  • Present shoppers with more than one alternative to satisfying a need or fulfilling a preference 
  • Tell stories about what it would be like to actually use each alternative 
  • Encourage the shopper to tell their own stories about use 
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Monday, October 29, 2018

Curtail Quantity Sensitivity by Here-and-Now

When would people resist paying more to visit an amusement park with twelve attractions than one with six? Or to purchase three video games instead of a single video game? Or donate a greater amount of money to a fund to save four pandas rather than one panda?
     Stated in another way, of direct importance to the retailer, “Under what circumstance should we hesitate offering more products or experiences in a single bundle, realizing that the shopper isn’t interested in paying a higher amount for the larger quantity?”
     One answer has to do with satiation. When a customer has had enough for now, they don’t want a bigger set. But researchers at Columbia University and Singapore Management University have another answer, this one related to what consumer psychologists call “scope insensitivity.” When purchase decisions feel psychologically closer to the shopper, the shoppers are more likely to show scope insensitivity, in which a higher product count won’t strongly command a higher price.
     In the studies, psychological closeness came from saying the trip to the amusement park would occur in just a week, where the comparison group of study participants were told it would occur next year, the video games had been created recently rather than in the early 1980s, and the need for the panda-protection contribution was imminent. Prior studies found that psychological distance—the opposite of psychological closeness—is higher when a shopper:
  • Believes they’ll need to travel a longer way to obtain the item 
  • Is selecting an item to be used in the future rather than now 
  • Is selecting an item for use by someone else rather than for their own use 
  • Considers returning or exchanging an item purchased by someone else rather than by themselves 
     It’s not that people would be unwilling to pay more for a larger quantity in the set. Instead, it’s that people resist paying more than when there is psychological distance and therefore generally require extra persuasion.
     The explanation for the scope insensitivity effect is in the psychological closeness affect. Emotional decisions are, by definition, less logical than well-thought-out decisions, and consumers get more emotional when a decision is closer to the here-and-now. According to studies at University of Colorado-Boulder, University of Oviedo in Spain, and Lieberman Research Worldwide, this is true for positive emotions—such as the thrill in having the item—and negative emotions—such as anger at flawed product performance.

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Monday, October 22, 2018

Externalize Surcharges in Partitioned Pricing

When I stay at the Eldorado Resort Casino, where University of Nevada-Reno houses me for my teaching commitments, the bill includes debits not just for the lodging itself, but also for a resort fee and a tourism surcharge. If when consulting with retailers in Boston, I’d chosen to rent a car from Hertz at the airport, I’d have been subject to an airport concession fee, energy surcharge, and convention center surcharge. Choosing a taxi wouldn’t excuse me from the extras, though. There’s still an airport surcharge and possibly a surcharge for a rush-hour ride.
     What are the best ways to present surcharges to shoppers? asked researchers at Pennsylvania State University, University of Groningen, and Iskander Business Partner. More pointedly, can services retailers employ a surcharge strategy to increase profit margins without incurring the full thrust of shopper fury often resulting from price increases?
     The research-based answer is yes:
  • Minimize the number of separate surcharges. When there are multiple surcharges, the consumer becomes more likely to hold the retailer responsible regardless of the explanation for the surcharges. At the same time, findings from Adelphi University, University of Alabama-Huntsville, and University of Dayton indicate that the amount of any single surcharge should never exceed 20% of the base price. If a surcharge is a high percentage, consumers will consider the entire pricing structure unfair. That affects not only the current purchase, but also the potential for future business from that shopper. 
  • Lead off with surcharges that draw attention to other providers. A “convention center fee” is better received than a “rush hour fee.” When it isn’t possible to present surcharges as the responsibility of others, it is best to present an all-inclusive price. 
  • To the degree possible, state the reason for the surcharge in a way that highlights the benefit to the consumer. “Business center availability” can do this when “business services fee” doesn’t. 
  • Avoid labeling the surcharge as temporary. When faced with a temporary surcharge, a shopper concludes they’re paying more than others will in the near future, this leads to feelings of unfairness, and the general negative tone makes blame of the retailer more likely. 
  • Consider surcharges a form of partitioned pricing. Research finds that compared to bundled pricing, partitioned pricing increases purchase intentions with products and services that carry some financial or psychological risk for the shopper. Partitioned pricing makes less difference in purchase intentions for routine purchases. 
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Monday, October 15, 2018

Elevate Expected Prices with Hot Cues

As a rule, when the weather is warm, people become more comfortable paying higher prices for products and services. Yet what’s true in general is not always true for specific cases. If the product is a snow shovel and the service is repair of the furnace, a willingness to pay more is likely to come into action during the cold months instead of during hot ones. And studies at Clicksuasion Labs in North Carolina, University of Auckland, and Western Sydney University find that the effect of warm temperature reports on price anchors operates most clearly when consumers are making their purchase decisions without complete amounts of information.
     Notice that those studies talked about reports of warm temperatures, not just warm temperatures. Participants in one of the studies who were asked to think about their activities during an 85º day subsequently estimated higher costs for a service than did participants asked to think about their activities during a 35º day. By prompting your shoppers to consider their experiences in warmer weather, you increase their comfort at paying more in circumstances where they’ll be making purchase decisions based on limited amounts of information.
     Enhancing this effect is that higher temperatures stimulate impulsivity. Shoppers during hot summer months prefer mental shortcuts to detailed analysis in making purchase decisions.
  • Pleasant heat after a time of less pleasant cold raises people’s spirits, and happier people get more interested in shopping. 
  • In temperate weather, people prefer to get their necessary shopping done with so they can move on to leisure activities. 
  • Prolonged high heat wearies shoppers, making them less alert to spotting and less resistant to discounting weak reasons for buying or not buying. 
  • Higher temperatures when shopping—as long as they’re not too high to be pleasant—lead to consumers being more likely to purchase what others in the vicinity are buying. 
     Correspondingly, colder weather leads to more deliberative decisions. University of Pennsylvania researchers analyzed the enrollment decisions of 1,284 college prospects at a campus known both for its academic strengths and its limited recreational offerings.
     If the day of the college prospect’s exploratory visit to the campus was especially cloudy, the odds that the prospect would choose to apply to that campus increased markedly.
     What made the most difference was change. Pleasant heat after a time of cold stimulated impulsiveness. Cloudiness higher than average led to more deliberative decision making.

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Monday, October 8, 2018

Level with Shoppers about Competitor Upsides

For at least some retailers, the miracle in the 1947 Christmas-themed film classic “Miracle on 34th Street” is that the department store Santa in the story recommends to a shopper she purchase her merchandise at a competing store, yet Santa still keeps his job. However, studies at Georgetown University and City University of New York conclude that such a practice can be good business, and therefore is commonplace, not a miracle at all for astute retailers.
     An example given by the researchers is set at a local art gallery. The shopper is interested in a particular painting, but isn’t sure if the price is right, so decides to delay the purchase. Here’s my version of what the retailer could say to change the shopper’s mind and make the sale: “You’ll notice that this painting is unframed. We sell frames in our store, but I suggest you consider looking for a frame at the frame warehouse two blocks from here. We carry picture frames as a convenience for our customers, but the frame warehouse specializes, so they have a broader selection and better prices.”
     The shopper who is unsure of what the painting should cost is reassured that the asking price is proper as the salesperson gives evidence of wanting to save money for the shopper. Circumstances of this sort occur if the item you’re selling is highly distinctive or the consumer purchases items in that category only infrequently. Recommending a competitor for an adjacent—a companion—product or service builds trust when the competitor offers advantages such as a better price or a more comprehensive selection. The results include increased probabilities of making the sale right then and of the customer returning in the future.
     In the experimental studies and in reports from salespeople, competitor referrals succeeded across a broad range of items, such as selling a sink while referring for the disposer, selling shoes while referring for the socks, and selling a first mortgage loan while referring for a construction loan.
     Another force for profitability in all this is that each time you refer to a competitor, they become more likely to, in turn, refer their shoppers to you. Just be sure to let the others know what you’re doing, such as by asking your customer to say who sent them.
     The mutual exchange is reminiscent of Christmas, so ties us back nicely to “Miracle on 34th Street.”

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

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Monday, October 1, 2018

Right Store Identity with Window Writing

Effective window displays introduce shoppers to what’s inside the store. Featuring merchandise in a store window grants those items an extra appeal similar to that from a celebrity endorsement as the shopper subsequently looks around inside. Displays which portray the product or service being used trigger imagination of usage by those looking at the window, and imagining usage builds purchase likelihood.
     Beyond this, researchers at University of Texas-Arlington find that the glass itself offers a canvas to introduce shoppers to what’s inside the store image. “Place identity” occurs when the words and phrases put on the windows resonate with the values of the shoppers. High place identity enhances ongoing patronage.
     In this research, consumers were asked to evaluate the idea of posters, flyers, stickers, and text on windows and doors at retail stores. The consumers rated the window writing on how interesting, appealing, impressive, eye-catching, and creative they found it to be. The consumers were also asked about likely value offered by the merchandise and about intentions to shop at stores with writing on the windows.
     Facilities with window writing the consumers liked were more likely to receive high ratings for merchandise value and shopping intentions. Moreover, the consumers rated writing on the store windows as a better way to assess for a values match than could be accomplished with advertising or with email contacts.
     What occurs is a positive version of what was found in another set of studies, those about bumper stickers. Researchers at Colorado State University found that drivers of cars with bumper stickers are more likely to honk, tailgate, cut off other vehicles, and express other aggressive behaviors than are drivers of cars without bumper stickers. Unexpectedly, this held true whether the sentiment on the bumper sticker was about aggression or acceptance. “My Kid Is an Honor Student” as well as “My Kid Can Beat Up Your Honor Student.” “Visualize World Peace” as well as “Don’t Mess With Texas.”
     People were using the personalizing of their cars to justify the expression of aggression. The bumper stickers were proclaiming territoriality. “This car is my place with my values.”
     In the case of the writing on the store windows, the territoriality is store-sponsored graffiti, again reflecting values.
     As with graffiti, many cities place limitations on store window writing. Still, working within those limits, you can right any confusion about what your store stands for.

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Use Store Windows to Build Sales
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Monday, September 24, 2018

Pin Responsibility in Unhealthy Food Choice

To help your customers maintain health, accentuate their responsibility for any unhealthy choices. Researchers at University of Southern California, University of Michigan, and Simon Fraser University explored how this works with self-service versus being served unhealthy foods. Consumers in a waiting area were offered a free snack. At certain times, the snack was mixed dried fruits while at other times, and therefore for different consumers, the snack was Reese’s Pieces candies. For each group, sometimes the consumer was required to scoop the snack into a sampling cup from a large container, while for the other consumers, half-filled sampling cups were offered.
     With those offered Reese’s Pieces, about 31% of the observed people facing the prefilled cups took the candy. When required to serve themselves, absolutely none of the people accepted the offer. With those offered the healthier fruit snack, 16% took a prefilled cup, while 6% were willing to scoop for themselves.
     An interpretation of the results is that when people are required to put forth a physical effort to obtain an item, they’re less likely to do it, but this effect is much stronger for unhealthy items. Other studies by the researchers found this was because the physical effort, even if minimal, gave a sense of personal responsibility. You don’t feel as responsible for making the unhealthy choice when all you have to do is snatch it up.
     We don’t want to make choices excessively demanding for shoppers. Still, research at University of Chicago found that consumers who characterized themselves as “smart” rather than “not smart” evaluated products more positively when the products had been pushed back on the shelves rather than being in easy reach. With products where healthfulness isn’t an issue, a small challenge often boosts repeat sales.
     Not every challenge will end up decreasing overall consumption of unhealthy foods, however. Researchers at Technical University of Lisbon and at Tilburg University in the Netherlands found that people who hesitated eating a food product generally overcome their hesitations when presented with small packages more than when presented the equivalent amount in one large package. But, in addition, the people who went through the trouble of opening up a bunch of the small packages ended up eating more than did those who dug into the large package. The participants had said they thought using small packages would help them limit their consumption. Yet the opposite proved to be true.

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Monday, September 17, 2018

Argue with Me, Convinced

A sale is easier when the shopper agrees with the salesperson. But researchers at Virginia Tech documented a circumstance where it pays off to have the shopper briefly argue with us. This is when the person comes to us with a preference firmly set and we want to change that preference. Maybe a brand different from the customer’s habitual choice would both serve the customer better and increase store profitability. In the political arena, it could be that a citizen consistently votes for a certain political party and we’d like to have the citizen fairly consider an alternative.
     The challenge is that when a consumer makes the same choice many times, their mind closes against objectively evaluating alternatives. In fact, they’ll distort new information in ways that support their decisions. You could present compelling arguments for changing their reasoning, but the thrust of those arguments won’t pierce the closed mind.
     This selective perception doesn’t occur when the shopper or voter has made the choice once or only a few times in the past. Right after a consumer chooses one among options, post-decision doubt commonly causes the consumer to closely attend to the benefits that would be offered by what’s been rejected. At the other extreme, after the same choice has been made a great number of times, variety-seeking arises, at least among younger consumers, so there’s interest in considering alternatives.
     It’s between these two circumstances where we might want to disrupt the thinking. The Virginia Tech studies suggest that if the salesperson or political campaigner presents a statement which stimulates a brief debate about an issue not directly related to the purchase decision, this opens up the thinking to afterwards assessing alternatives in product, brand, or candidate.
     You don’t want to make a debatable statement that destroys your credibility as an influence agent. In the studies, statements like, “Reading is bad for the mind” and “Only people who earn a lot of money are successful” were used. I recommend against those. Instead, to apply the principle of a helpful argument, ask the shopper to defend a decision they made prior to the one where you want to change their mind. “For what reasons did you select that option?” you’ll ask, and then say, “Others might disagree with your decision.”
     Let them win the argument. Finish off by saying, “I see your point,” before moving back to the sale you’re wanting to make.

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Monday, September 10, 2018

Meddle with the Shopping Trip Middle

The price sensitivity of a shopper changes over the course of the shopping trip. Researchers at University of Kentucky and University of Groningen report that the nature of the change depends on whether the individual wants to keep to a tight budget. Budget-focused shoppers are more willing to buy higher priced options in the middle of their trip than at the beginning or as they are finishing up. On the other hand, shoppers not focused on a strict budget become relatively more price sensitive in the middle of the trip than at either end. The difference shows itself most clearly when there are a number of items being purchased and when the person is aware or made aware of the cumulative total of their expenditures as they shop.
     This phenomenon is useful to retailers who can assess whether the shopper is a budget or non-budget shopper and then track the shopper during the trip. As to the shopping trip trajectory, the salesperson asking the shopper, “What will you be looking for today?” allows that salesperson to determine what is the middle of the sequence. As to judging whether this is a budget or non-budget shopper, the choice among alternatives early in the purchase sequence is the evidence. For the budget shopper, suggest upgrades, add-ons like extended service contracts, and partner items toward the middle of the shopping trip. With the non-budget shopper, make those suggestions toward the end.
     In circumstances where a shopper intends to purchase one item on the trip, not a bunch, you might think the shopper with the budget would usually spend less money with you than the one without a budget. Surprise! Researchers at Brigham Young University and Emory University find that making a purchase with a budget in mind can lead the shopper to spend more if the budget is for one item.
     Say your customer has decided to spend no more than $150 on a mobile device. He sees price points at $80, $120, and $160. Sticking to the budget, the customer eliminates from consideration the $160 alternative. Because of how a consumer’s brain works, the result is that product quality and the inclusion of extra features become relatively more important and item price relatively less important. The customer is now more likely to select the $120 model, if it’s higher quality, than if budget wasn’t in mind at the time of choice.

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Monday, September 3, 2018

Toy Around with Impacts of Toilet Training

Psychoanalytic theory has fruitfully impacted marketing by bringing attention to subconscious motivations and merchandise symbolism. In 1956, psychologist Ernest Dichter, called by AdAge “the father of motivational research,” developed the highly successful “Put a tiger in your tank” slogan for gasoline company Esso/Exxon on the basis that people associate cars with power. The attractiveness to women of high heel shoes in spite of the shoes’ physical discomfort has been attributed to women’s subconscious drive to conquer penis envy. Hey, there are two of those phallic-shaped heels rather than the man’s one true phallus. Psychoanalysts would refer to this as women’s overcompensation.
     Now add to those impacts a research study about constipation, of all things. Researchers at University of Salento and York University based their studies on Sigmund Freud’s conceptualization of young children’s toilet training. This founder of psychoanalytic thinking described harsh or especially early toilet training as resulting in what some call an anal-retentive personality
     Study participants would be expected to hesitate candidly discussing their early childhood toilet training and their current position on a constipation-diarrhea self-rating scale. Therefore, the researchers used projective stimuli to make indirect qualitative inquiries. The outcome was that those who gave evidence of harsh toilet training were substantially more likely than the others to also show tightwad habits, discomfort with disorder, and stubbornness in consumer transactions, along with bowel constipation.
          The most compelling implications of these findings would be for medical professionals, such as physicians and pharmacists, when responding to symptoms of digestive disorders. Patients who report chronic constipation are especially likely to adhere to treatment regimens which emphasize neatness and, if financial expenditures are involved, to buy-in when money-off discounts are prominently featured.
Regarding other marketers, the researchers suggest that when you see tightwad tendencies, you expect to also see a high interest in cleaning products and a persistence in expressing complaints. The more general implication, though, is an appreciation for the influence of early childhood experiences on current consumer behavior.
     Still, beware of excessive application of psychoanalytic theory. As a prime example, though psychoanalytic interpretations emphasize the symbolism of phallic objects such as high heels, a quote often attributed to Dr. Freud himself is, “Sometimes a cigar is just a cigar.” Actually, the evidence is that the doctor never actually said or wrote this. But the existence of the quote does illustrate concerns about overdoing the interpretations. Concerns residing subconsciously, most likely.

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Monday, August 27, 2018

Back Up Shoppers at the Front of the Line

Retailers’ concerns about shopper queues generally center on those last few at the back of the line and on the experience of those last few as they’re waiting. Now researchers at RWTH Aachen University and WHU, both in Germany, urge retailers to also take into account the experiences of those in front of a long line once they get the service of a salesperson or cashier. The finding is that these consumers feel pressured to transact their business promptly because of a sense of others breathing down their neck, and this results in less satisfying impressions of the store, the staff, and the merchandise. When this happens at the store checkout, the dangers are particularly great, since this becomes the customer’s last memory of the retailer.
     The researchers went on to determine that two techniques ease these negative effects:
  • Have the salesperson or cashier encourage the consumer not to feel at all rushed in getting the help they want. This works because it places the responsibility for the extra time on the salesperson, removing the social pressure on the consumer. 
  • Maintain distance between the waiting line and the location where service is being delivered. In the studies, this was accomplished by keeping the line out of sight of the service location. My store experience indicates to me that greater distance, even when sight lines are maintained, can work well. 
     Additional research-based tips for easing the irritation of all those in the queue:
  • If you can see the end of the line, greet each person as they join, even if only with a brief smile and a nod. 
  • Periodically say to those in line, “I apologize for the delay. I’ll be with you soon.” 
  • As you welcome each new person coming to you, acknowledge that they’ve been waiting. 
  • If the lines are unusually long, remark about a possible reason, saying, for example, “My goodness, people seem to really like today’s sale.” 
  • Maintain quality internet access so people can pass the time with mobile devices. 
     When in a store queue, shoppers become highly vigilant. One reason is the extra stress caused by being in close physical proximity to people we don’t know. Another reason is to be sure social norms are respected, such as nobody butting into line and each person waiting about an equal amount of time. So the best way to handle queues is to keep those lines moving.

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Monday, August 20, 2018

Observe Risks of Your Obsolescence

Satisfy your customers, but not completely, some might say. Consider the retail services category of matchmaking. Researchers at University of Pittsburgh, Carnegie Mellon University, and INSEAD claim there’s a fundamental conflict of interest between businesses like eHarmony and their clients: If the matchmaking is too good, members will cement a relationship and discontinue their paid subscriptions. A parallel conflict would be suspected in job-hunting sites. As soon as you find the perfect fit between you and an employer, you terminate use of the service.
     Another INSEAD research collaboration, this one with Boston Consulting Group, explores other examples of a product, service, or provider becoming obsolescent for a customer. Appliance retailers and residential real estate agents are no longer needed for an extended time once the purchase of the refrigerator or the home is completed. Customers for smoking cessation aids stop being customers if the product is sufficiently effective. Purchases of pureed baby food stop when the ultimate consumer gets older, regardless of how well the product fulfilled its objectives.
     The advice is to recognize the risks and plan to avoid the obsolescence.
  • Broaden the range of interest in your services. Job search customers could be encouraged to continue their subscriptions in order to stay current on what’s available in order to plan their next career move. Matchmaking services can appeal to shoppers looking for a succession of dating companions rather than settling into a search for a marriage partner. Consumers from cultures accustomed to arranged marriages might be most comfortable with meeting a range of promising prospects from which a choice can be made. The Ashley Madison tag line—Having An Affair Made Easy—indicates there is even a market for matchmaking among those who are already married, although you might choose not to exploit that one. 
  • Provide a progression path. Gerber welcomes its eaters who have outgrown pureed to move on to a line which encourages the use of utensils. Appliance retailers can offer bargain models. Misrepresenting the durability of items you sell is bad business. But offering low-priced versions which are not designed to last as long as the traditional models provides a path for economically challenged consumers to get started and then upgrade as their financial situation improves. 
  • Encourage satisfied customers to recommend their friends to you and to recommend those friends recommend you to their friends. Weak links in referrals nicely augment the strong links. 
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Monday, August 13, 2018

Cap Off Profits with Endcap Impetus

Few among successful retailers ignore the selling appeal of endcaps—displays of products at the end of an aisle on a shelf or rack perpendicular to the aisle. In studies at University of South Australia, endcaps at the front of a store, facing the entrance or the checkout counters, uplifted sales by an average of 346%. Endcaps at the back of the store, facing the storage area or the building’s rear wall, uplifted sales by 416% on average. One explanation is that it’s easier to see products on endcaps than on aisle shelving.
     Tripling or quadrupling sales certainly enhances profitability, even considering that retailers commonly feature discounts on end-capped items. Actually, another explanation for the sales lift achieved from endcaps is that shoppers come to associate endcaps with good discounts and so pick out end-capped products because of subconscious habit. In other studies, the sales lift ranged from 23% to 1200%. Further, because only a small percentage of items can be displayed on endcaps in a typical store layout, a retailer can negotiate with suppliers to get slotting fee payments for endcap placement of products. This adds to the profitability.
     But those University of South Australia researchers were interested in the substantial difference between 346% and 416%. Why did rear endcaps lift sales more than did front endcaps? One reason is that the rear of a store is generally less crowded than is the front, so shoppers are more likely to linger at the back. But a more intriguing reason revealed itself when the researchers tracked down what led to the sales lift. For the front endcaps, it came mostly from increased purchases of the specific items that were on the endcaps. But for the rear endcaps, the sales uplift came largely from increased purchases of items on the aisle shelves adjacent to the endcaps. The rear endcaps were attention magnets, drawing people into the aisles.
     University of Minnesota studies indicate that you can increase this sales lift by featuring in the adjacent aisles items which are companions to those on the endcap and carry the same brand name. When a customer purchases an item carrying a specific brand name, the customer becomes more likely to prefer the same brand name when going on to select an accompanying item. Matching brand labels suggest to shoppers that the two products were specifically designed and tested to work well together.

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Monday, August 6, 2018

Construe to Fit Comparative Price

A chocolate candy might be thought of concretely in terms of the appeal of its particular ingredients or abstractly in terms of how good eating it leads one to feel. An ad for a diamond pendant could use the tag line, “Flawless quality and pure color,” in order to appeal to concrete thinkers, or “Make it unforgettable,” to appeal to abstract thinkers.
     Researchers at University of British Columbia and Nanyang Technological University find that the comparative price of the item often influences whether you’re better off using concrete or abstract benefits statements. If the price is comparatively low for that product category, shoppers show greater preference for the item when hearing or seeing concrete statements. If the price is comparatively high, use abstract statements.
     To demonstrate this had to do more with the comparative price than with the price itself, the researchers placed one-dollar chocolates next to ten- dollar slabs of artisanal chocolate during certain hours at a candy store. During other hours, the one-dollar chocolates were placed next to a group of twenty-five cent Tootsie Rolls.
     Shoppers during the first set of hours were more likely to purchaser the one-dollar chocolates when a low-construal, concrete, message was used. The other shoppers showed greater purchase frequencies of the same style of chocolates when a high-construal, abstract, message had been used. Similar results were found in studies involving expressed preferences for energy drinks, electric toothbrushes, and diamond pendants.
     There are other considerations in whether to use concrete or abstract statements. With unfamiliar items, consumers are more likely to believe concrete than abstract benefits statements. Touching products stimulates sales more strongly with low construal levels.
     And there are methods other than benefits statements to mesh with the shopper’s construal level. Researchers at Ghent University discovered that shoppers are relatively more interested in concrete features when gazing down at the merchandise and relatively more interested in abstract claims when peering up.
     Consumers had been asked to state which of two printers they preferred. One printer was described as reliable and the other as being of high quality. Those consumers who needed to look down to see the printers favored the “reliable” printer on average. Those consumers who needed to look up tended to prefer the “high quality” printer.

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Monday, July 30, 2018

Absorb for Family Firm Success

Absorptive capacity is essential for your family-run store to thrive. Studies at University of Castilla-La Mancha supported this conclusion by using an instrument to measure the four components of absorptive capacity as generally agreed on by business scientists. Here is my version of those four along with why they are especially important for the family-run enterprise:
  • Acquisition. The business regularly exchanges information with others in the industry. This overcomes an inbreeding danger for the family-run store, in which management decisions are always made by the same select group. 
  • Assimilation. Ideas for improving the business are continually communicated and critiqued. Otherwise, senior family members can mistakenly believe junior family members understand the reasons for decisions, and junior members can hesitate questioning flawed ideas for fear of disrupting family peace. 
  • Transformation. The accumulated and critiqued information fuels innovation. One of the frequent upsides of a family-run business is stability, but without a strong transformation capability, the stability results in the business falling behind the marketplace. 
  • Exploitation. The business tests out prototypes before undertaking full implementations. This component of absorptive capacity facilitates both the innovation and the opportunities for critiques. 
     In a sample of 1,045 family firms, those reliably practicing the four above showed greater sales growth, profit growth, and growth in market share. An entrepreneurial spirit also proved important to success, but it operated through absorptive capacity.
     Family-owned stores too often lack longevity. That reality transcends languages and cultures. Consider the English-language versions of these maxims:
  • “Father merchant, son gentleman, grandson beggar” (Mexico) 
  • “Rich father, noble son, poor grandson” (Brazil) 
  • “From the stables to the stars and back to the stables” (Italy) 
  • “Wealth never survives three generations” (China) 
  • “Shirtsleeves to shirtsleeves in three generations” (U.S.) 
     Those were collected by investigators at Boston Consulting Group and Cambridge Advisors to Family Enterprise to flesh out the fact that only about one out of every ten privately-held businesses makes it through to the third generation.
     Family-run businesses have advantages. The loyalty among management members helps to persevere through the tough times. As long as the senior members cultivate a life outside the business, developing a succession plan is straightforward. The business projects an authentic sense of family to customers and prospective customers. According to research at University of Geneva, giving a sense of family is useful for retailer-to-business relationships, too.
     By incorporating absorptive capacity, your family-run business can realize these advantages for the long-term.

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