Tool Up for Word-of-Mouth

What stimulates your customers to spread good news about your store? Researchers at Aston University and University of Surrey set out to answer this and related questions by analyzing results from prior studies conducted on a grand total of 239,000 shoppers from 41 countries regarding 24 tools.
     The tools—also called instruments or factors—that made the biggest difference for word-of-mouth (WOM), according to the meta-analysis:

• Excellent customer service 
• A coordinated blend of attractive visual décor, appealing music, and tempting scents 
• Easy maneuverability around the store 
• A useful mix of other types of retailers in the vicinity of the store 

     These four have outsized importance because they lend themselves well to brief reminiscences shoppers can relate to family and friends about their shopping experiences.
     The researchers were initially surprised that low prices didn’t make the cut as a top tool. Their explanation is that people enjoy getting a good deal, but fear that bragging about it to others will make them look cheap, threatening their social standing. It also could be that even those figuring they got a good price think others would consider it not good enough. Studies at University of Alberta, University of Calgary, and University of British Columbia found that when people believe they might have been able to wrangle a better deal on a product or service, this conclusion 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.
     Because of WOM’s value, are you now tempted to repeatedly point out to your shoppers how you’re doing well on those top four factors identified by the meta-analysis? Curb that urge. Researchers at University of Miami and University of Pennsylvania say you’d do better by hinting at it and allowing your shoppers to discover the rest for themselves. Customers are substantially more likely to share WOM with others if they have found at least some of the information on their own. In addition to the thrill of discovery, a major reason for this is that we associate discovered information with our self-image. We are less likely to criticize the information as unfounded or uninteresting.
     The advice for retailers wanting more WOM is to build shoppers’ knowledge about what is offered, then encourage shoppers to uncover for themselves the full extent of the four tools.

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

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Indulge in Group Nostalgia

When you stimulate within your shoppers fond memories of the past, they’ll yearn to eat candies and cakes with close friends. The explanation for this strange specific finding by researchers at Monash University, East China Normal University, and Chongqing Technology and Business University leads to broader lessons about how to employ nostalgia in retail sales.
     That explanation has to do with nostalgia emphasizing positive beliefs and feelings, with flashes of the indulgences and family support from consumers’ childhoods even if the fond memories are not primarily of childhood. As a result, nostalgic shoppers become less concerned about how others will judge their consumption decisions. This effect is stronger when the nostalgic shopper is actually accompanied by supportive family or friends. In the research, the relationship between a nostalgic frame of mind and consumption of indulgent foods was weakened when the consumer was told they’d be eating with strangers or eating alone.
     For these studies, nostalgia was generated by showing participants photos from the 1970s. Fragrances have also been used. But which stimuli will work does depend on when the target audience was born. The odor of hot chocolate and cinnamon has stronger effects on shoppers born in the 1940s than on those born in the 1970s.
     Item scarcity boosts existing feelings of nostalgia. And general social trends are a force. Among consumer psychologists, there’s a sense that nostalgia appeal grows during periods of uncertainty, such as from economic downturns or cultural isolation. Researchers from Arizona State University and Erasmus University in the Netherlands concluded that if people are feeling lonely, they get interested in nostalgia. When made to feel socially uncertain by the experimental manipulation, consumers became more likely to prefer automobile makes, food brands, TV shows, movies, and even shower soaps which reminded them of their personal history.
     In another example of the relationship between nostalgia and indulgence, nostalgia appeals have been found to loosen a consumer’s purse strings. Researchers at University of Minnesota, University of Southampton, and Grenoble École de Management asked each study participant in one group, selected at random, to think about their past. The remaining study participants were asked to think about recent or future events. Then each study participant was asked how much they’d pay for a set of items which were described by the researchers. The group who’d been asked to think about their personal past came in with higher bids overall.

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

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Time Your Talk to Facilitate Transactions

Imagine that, while you are talking with the front desk clerk at a hotel, he tells you a story:

You know, some weeks ago one of our guests asked me when our bar opens. I was here in the reception when he called – at 3 a.m. I said that the bar opens at noon. About one hour later, the guest called again and asked when the bar opens. Now he sounded a bit drunk. Again, I said it opens at noon. After another hour, he called again and asked when the bar opens. I think he was more drunk this time. I said that the bar opens at noon, and that I could have room service send something up to the guest if needed. Then the guest said ‘No, I don’t want to get in…I want to get out! 

     Was that joke good enough to draw a chuckle from you? Would the joke give you more positive feelings about the desk clerk and the hotel?
     Now I’ll add some details. Let’s say the desk clerk starts telling you this story late in the evening when you’re checking in to the hotel and are anxious to get to your room. Researchers at Stockholm School of Economics and University of Oulu found in that situation, the joke facilitated perceptions of the desk clerk as a fun person, but lowered customer satisfaction with the hotel.
     The ready explanation is that hotel guests in this situation aren’t purchasing the services of a fun person. They’re paying for smooth hotel check-in, not a standup comedy routine. The astute front desk clerk—or retail store salesperson or professional practitioner—will time their talk to facilitate transactions. Further, even when the consumer isn’t in a hurry, humor can be a promotional vampire. The audience starts paying more attention to the joke than to the sales message.
     This doesn’t argue against ever joking around with a consumer. There are many situations in which a light touch eases a shopper’s decision making or dissolves a customer’s post-purchase doubts. Humor draws attention and generates word-of-mouth about the sales conversation. Humor heads off mental counterarguments. The shopper is too busy chuckling to challenge the sales pitch of the ad. And when happy, customers are more likely to make a decision to buy.
     Just remember that excellent timing counts when telling a joke, and also in when to tell a joke.

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

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Top Off Preferences for More or Less

Some product attributes are MIB and others are LIB. For most shoppers, More Is Better applies to characteristics such as the number of pockets in a backpack or the abrasion resistance of paint. The quintessential Less Is Better attribute for all items usually is price. Sometimes, though, what is LIB for one shopper is MIB for another. Price level signals financial sacrifice, but also signals the extent of quality. A low caloric count tends to be perceived as both more healthfulness and less pleasant taste.
     This MIB / LIB typology was used by researchers at University of South Carolina, Wayne State University, Babson College, Indiana State University, and Stockholm School of Economics to develop recommendations for how to display and advertising offerings. To improve sales, arrange MIB alternatives within a product category so that the ones with a higher rating on that attribute are shelved above the others. With LIB alternatives, place those with a lower rating below the other choices. Follow the parallel logic in comparative advertising and with in-store signage which lists the alternatives.
     Often, a particular item will have a mix of MIB and LIB attributes. With a robotic vacuum, battery life is MIB while battery recharge time is LIB. In these circumstances, configure the options based on which of the attributes you want to feature, considering what shoppers come to you seeking in that product category.
     You’ll also want to consider other factors in the arrangements of merchandise on the shelves and item listings in ads and signs. For instance, researchers at Ghent University say 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. Features of products you sell can be concrete—such as the average time between repairs—or abstract—such as a general claim of high quality.
     And placing heavier items on lower shelves makes it easier for customers to lift them and helps stabilize the shelves. Moreover, that configuration feels more natural to people’s brains, and what feels more natural is more likely to be purchased. The preference is so strong that it spreads to color considerations. Lighter-colored packages sell better when placed above rather than below darker-colored packages on the shelves.
     With all these considerations, experiment to discover what tops off profits for you.

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

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Cure Feelings of Retailer Betrayal

A customer’s feelings of betrayal are substantially stronger than a customer’s feelings of disappointment, and the consequences can be substantially more serious. The dominant motives of most dissatisfied customers are to restore a sense of fairness and vent negative emotions. But researchers at University of Bern and University of Texas-Austin found that a customer who feels betrayed by a marketer will frequently devote substantial efforts to harming the marketer’s reputation.
     Based on a subsequent set of studies, another team of researchers—from University of Texas-El Paso, University of Leeds, University of Cyprus, and Dokuz Eylül University—describe the characteristics of the betrayal feelings and, more importantly, ways to cure these destructive emotions.
     Betrayal occurs when the trustworthiness norms of a close relationship are violated. With marketer-customer relationships, the closeness is based on a series of sales transactions. Business relationships aren’t the same as personal relationships, although an advantage available to smaller organizations is the enhanced opportunity to create friendships with customers and clients. Such friendships might ease feelings of betrayal as long as expectations in the relationship are clear to all parties. When expectations are unclear, the hybrid business-personal transactions can instead aggravate a sense of betrayal.
     So clarifying expectations is a potent preventative and cure. The studies find this to be especially important around issues of what information will be disclosed. Customers don’t want to be overwhelmed with details, but they want to be informed. Marketers too often have a different view than do shoppers about what to share. Failure to disclose conflicts of interest were one trigger for feelings of betrayal, according to the studies. Another trigger was a failure to notify the customer that a promise made previously was at risk of not being kept. A retailer may well have thought, “I’ll be able to straighten things out before the promise is due,” while the customer ends up thinking, “If the retailer had told me early on that the promise might not be honored, I would have been disappointed when it wasn’t, but I wouldn’t have felt betrayed.”
     Catalyzing the consumer’s outrage is a sense of powerlessness. Restore the customer’s sense of influence by asking, “What can I do to make things right?” Just being asked and listened to can prevent the active sabotage. If the answer you get involves actions you’re not able or willing to take, you can come back with a reasonable alternative.

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

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