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.

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

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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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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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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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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.

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

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