Monday, June 29, 2020

Practice Ethics with Cheat Sheets

Calamity is the surest test of integrity. At times that our survival is in doubt, we’re particularly tempted to cheat. Ironic then that ethical behavior generally fosters business longevity.
     To verify this, a team from Miami University, The University of Texas at Arlington, and University of Missouri analyzed 67 studies compromising more than 21,000 respondents. Sure enough, a strong ethical climate among frontline sales employees (FLEs) led to those employees better recognizing shopper needs and thereby proposing the right solutions for those needs.
     A related finding was that an ethical climate reduced employee stress. This in turn led to outcomes which had an indirect effect on business longevity, ranging from more relaxed and empathic interactions with customers to lower job turnover within the ranks of skilled staff. FLEs sell more when they are proud of the business for which they work, and an ethical climate generates pride.
     Slipping away from ethics can happen through falling back into bad habits. In this, as in other areas of business, cheat sheets can be helpful. Not a cheat sheet in the sense of notes which allow you to fake knowledge. Rather a cheat sheet of bullet points to be periodically reviewed to strengthen memories of what is a complex issue—enthusiastically selling without crossing over into fraud. List on the cheat sheet you distribute to your FLEs and others notes they can use to tell the ethical from the unethical.
     The standards you set for FLEs may differ from those you set for others. Maybe it’s fine for a salesperson to tell customers, “I’m 100% sure this product is ideally suited for you,” even if they aren’t 100% sure, but you don’t want your bookkeeper to say, “I’m sure our cashiers were 100% accurate yesterday,” when your bookkeeper really isn’t so sure.
     What you list on the cheat sheet depends on the degree of honesty you want your store to project both to FLEs and their customers. The fact is that some customers prefer to deal with salespeople who are what I call Rascals. The Rascal exploits other people. Especially in individualistic cultures like the U.S., consumers are fascinated with famous rascals. When the retail personality you aim for includes “exciting” and your target markets include people from individualistic cultures, you might decide to have your salespeople project an image of testing the limits and squeezing around authority. Petty cheating is tolerated.

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Inspire Store Staff by Persuading Shoppers
Say, Are You Being Ethical?
Handle Employee Dishonesty Consistently
Cultivate Creative Deviance in Your Staff
Naturalize Citizens to Serve Your Store

Friday, June 26, 2020

Reveal to Combat Customer Alienation

You know, people might relate the alienation to residue from Dr. Anthony Fauci in the midst of the coronavirus pandemic trashing the practice of shaking hands. Somebody might think the alienation derives from publicity around Joe Biden’s insight that hugging people without their explicit permission, even absent any social distancing rules, is a truly terrible idea. Or how about the overwhelming prevalence among the general population for computer-mediated over face-to-face interactions? Many consumer behavior studies advocate for physically reaching out toward your customers, not drawing away, if you want to generate in them feelings of inclusion and importance.
     Researchers at Cornell University, Technical University of Munich, Erasmus University, and WU Vienna agree that reductions in physical closeness can cause a sense of alienation consumers report in their relations with marketers. The researchers also say there’s more. The roots go longer, deeper, and wider, involving multiple characteristics of technology, industrialization, and globalization. People perceive that marketers too often treat them as objects rather than as distinctive individuals. The cost to the marketers is that customers are less forgiving of flaws in what those customers receive from the marketers.
     The researchers then catalog validated methods for overcoming the alienation. At the top are one-to-one conversations with your shoppers in which you ask about them, tell them about you, and discuss what you share in common. To accompany this, or in place of it if necessary, give personality to what you deliver. Knowing the name of the person who made the soap the shopper is considering buying leads to the shopper becoming willing to pay more for it. Being called by name when getting a cup of coffee increases subsequent purchase frequency.
     Similar methods improve work satisfaction of those delivering products and services. This can decrease turnover of good employees and potentially maintain quality in offerings. When manufacturing staff signed their work, happiness with their jobs increased. Professors at Harvard University and University College London found that when cafeteria cooks could see the diners who would be eating the food, the diners’ ratings of the food quality climbed. This held true even though the sightings were only via a video camera in the dining area and a monitor in the kitchen without sound. The cooks reported that they felt more appreciated and more willing to exert an effort to please when they saw the beneficiaries of that effort.

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Lavish Hugs in Your Shop
Attend to Face-to-Face Word-of-Mouth
Break Bread to Curb Breaking Bad
Step Away from Calling Stephen Stephen
Use Staff Name Tags for Accountability
Burn Out Resignation of Skilled Staff

Monday, June 22, 2020

Scare Up Price-Quality Links After Scarcity

The price-quality link—if an item costs more, it probably is better—usually serves interests of both consumers and marketers. Shoppers can sort through multiple alternatives more quickly, avoiding choice overload as they achieve their desired balance of expenditure and performance. Marketers have another way to communicate quality differences, to supplement signals such as brand name, certifications, and reviews.
     Consider then research from Michigan State University, Indiana University, and The University of Texas at San Antonio which indicates the price-quality link wanes at times of item scarcity or when thinking about scarcity, such as what occurred during the COVID-19 pandemic. This effect was seen in consumers’ considerations of an abundant versus spare assortment of vacation destinations. It also occurred when study participants were asked, before evaluating a large set of camcorders for possible purchase, to think about having experienced scarcity earlier in life.
     When an item category contains few alternatives or we’re otherwise concerned about scarcity, we put aside our natural tendency to place items from that category into subcategories. This natural tendency occurs because we want to avoid being immobilized by there being too many choices. The price-quality link allows us to subcategorize. But scarcity activates another natural consumer tendency—to have an adequate assortment to choose from.
     The consequent deactivation of the price-quality link generalizes. Although the scarcity may have been in the category of disinfect wipes, there’s a turning away for the broader cleaning products category of the relationship between item price and product quality.
     This might be fine for you. Maybe you’d like the shopper to consider alternatives which would otherwise be rejected as having insufficient quality because of their price. But in circumstances where you want to buttress the price-quality link, here are two research-based techniques:
  • In product displays, arrange items in ways and with text which associates price with quality. Then allow modest expectations of lower-priced products. Certainly, deliver full value to every customer. People love getting a good deal. But encouraging customers to believe, "You get what you pay for," can be to your benefit.
  • Bring friends into the consideration. Consumers were asked to estimate the price and quality of items ranging from yogurt to computers, assuming either that they paid for it or a friend paid for it. With the purchases made by friends, there was a more direct relationship between the price paid and the estimated quality of the item.

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Abandon Abundance After Attracting
Funnel Purchase Alternatives Maturely
Strengthen the Price-Quality Link
Inject Distance for Price-Quality Link
Experience How Experience Is Price-Quality
Depend on Interdependency for Price-Quality

Friday, June 19, 2020

Bind Senior Couples by Sharing a Bind

You’ll be confronting a married elderly adult with bad news which will require a difficult decision. You’d like to persuade the elderly adult to decide in a way which you are confident will be most beneficial to them. Because you don’t know either the husband or wife well, you realize the persuasion task requires finesse. Before conducting the meeting, you plan out what you’ll be saying and how you expect the conversation to go.
     Researchers at University of Leipzig advise you to expect a quite different conversational flow depending on whether you meet with one member of the pair alone or the couple together. If you’re meeting with just the husband or wife, expect the positivity bias to kick in. As people reach advanced age, they pay more attention to the upsides and to put a happy edge on situations. This change helps the elderly deal with inevitable discomforts and disappointments and to make best use of their limited lifespan. But if delivering news to the couple together, expect a greater expression of emotions like anger, fear, and sadness.
     The researchers say this is because sharing deeply felt emotions, whether negative or positive, strengthens emotional closeness and mutual trust for elderly adults. When with a trusted friend or family member, they let down their hair—well, whatever hair they have. A history of emotional closeness and mutual trust enables them to do this, but it is the desire to build further closeness and trust which motivates them to do this. The benevolent cycle is especially strong when there’s a romantic relationship and a history of confronting difficulties together, as would be true with an elderly married couple.
     When you are that influence agent who doesn’t know the influence target well, meet with the couple together to deliver the bad news. Compared to meeting with just the husband or wife, you’ll hear more of the range of emotions each member of the pair is feeling and you’ll bolster the togetherness which will help each member of the pair handle the difficulty.
     This research also gives one possible solution to a positivity bias mystery: Why do Chinese elderly adults not show it as strongly as American elderly adults? It might be because China is a collectivist society. Trust for decisions in difficult situations is broadly extended. Unlike in America, negative emotions show whether meeting with a family member or a stranger.

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Embrace Sadness in Marketing to Seniors
Provide Group Support with Customer Discomfort
Bee Aware of “Honey Do” in Retirement Plans

Monday, June 15, 2020

Estimate Imprecisely When Harboring Doubts

We’re often called on to issue numerical estimates under conditions of uncertainty. How many days will it take for the medicine to show a difference? For how many minutes should I cook the brisket? What annual return should I expect on this investment? How many calories are in that salad?
     If the consumer later learns that the estimate was highly accurate, trust in the source is established or reinforced. Therefore, sources who have the expertise to reliably issue exact estimates should do so. But what about circumstances in which the source harbors doubts about their ability to be precise? For those situations, which are arguably the most common, researchers at University of Cincinnati advise intentional imprecision.
     It’s not that people will be more satisfied with the fuzzy estimate when it’s given. No, the opposite is the case. People push for predictability. But when an estimate proves to be off, the consumer earlier given the rounded number comes away with greater trust in the source than if an exact number had been given. This happens even if the imprecision results in a larger error. When an actual value turned out to be 570, study participants given an estimate of 400 (deviation of 170) came away with greater trust in the source than did the matched study participants given an estimate of 417 (deviation of 153).
     Rounding numbers has another advantage when implying benefit durations. Researchers at University of Texas-San Antonio say that, for instance, an energy drink touting “200 mg caffeine” will be perceived as working for a longer time than one touting a higher “203 mg caffeine.” A no-iron shirt claim will garner higher trust if it’s said to last for 40 washes rather than 39 washes.
     The researchers attribute this perception to round numbers feeling more stable. Researchers from University of Florida and National University of Singapore give a related explanation for their similar findings: Rounded numbers, like 10 or 200, are encountered in daily life more often than non-rounded numbers, like 9 or 203, and familiarity builds trust.
     Rounded numbers are easier to conceptualize than precise numbers, so our minds are quite comfortable with that imprecision. Seattle University, Utah State University, and Northwestern University studies found that shoppers are no more likely to buy from a store or buy a product in that store which is rated as “In the Top 9!” than “In the Top 10!”

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Round Up Benefits for the Shopper
Measure Your Magnitude Quotes Situationally
Settle for Being in the Top 10

Friday, June 12, 2020

Borrow Content Analysis to Curb Loan Defaults

When events such as the COVID-19 pandemic toss a wrench into the gears of the economy, lenders get scared. Even with government guarantees of payment to the lender in case of debtor default, money sources ranging from banks to brokers to crowdfunding sites prefer borrowers who will be able and willing to pay back the loan.
     Researchers at Columbia University and University of Delaware developed a novel tool for handling this challenge from what’s being called the novel coronavirus: In the text of the loan application, look for red flags.
     Some of this you’d expect as indicators of future default. Pleas which include tales of financial hardship and profound discouragement are understandably cause for the lender’s concern. Chronic pessimism or depression disrupts the ability to earn sufficient income to make loan payments over the long term.
     Mentions of God or family and a sense of high time pressure in the phrasing aren’t such obvious flags, but the research found them to also be telling. Among the more than 120,000 loan requests included in the study, talk of God and family seemed to be primarily intended to get into the good graces of the lender. The implication is of an effort to divert attention from the flawed quality of the application, which would account for why use of this phrasing portends payment default.
     A similar explanation applies to the finding that abundant use of words like “son” and “someone” were flags. Liars minimize mention of themselves, presumably to gain psychological distance from the falsehoods they spin. Liars also prefer talking about the short-term, presumably to postpone facing the consequences.
     The researchers intend an analysis of what the applicant says to supplement other criteria, such as credit history and loan amount. In this, the importance of the content analysis is greater than in the past. Lending platforms are moving online. The applicant may never have a give-and-take conversation with a loan officer. Past research indicates that such conversations not only allowed use of educated intuition in spotting likely defaulters. The interaction also built a commitment in the lender to pay back what was borrowed.
     Still, even when an interview with the loan officer does occur, explicit rubrics for evaluating the content help avoid unintentional discrimination. Those considering the loan are judging the applicant on the phrasing they use, not on their gender or residential neighborhood, for instance, in itself.

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Encourage Responsible Debt at Life Changes
Prevent Customer Lying for Truer Selling

Monday, June 8, 2020

Leave Shoppers Feeling They’re Not Sold Out

Reverberating from the coronavirus pandemic are consumers’ emotions around retailers running out of any product. After all, tummy troubles were not primary symptoms of COVID-19 itself among most of those infected, yet frantic searches for toilet paper supplies were enough to implant memories of frustration, anger, and a flood of upset stomachs.
     Consumer behavior studies about the effects of out-of-stock (OOS) situations go back to at least year 1963. A recent study at The University of Texas-Austin, Ulsan National Institute of Science and Technology, and Kyung Hee University asked what it’s best to call an ecommerce OOS. It was ecommerce searches which for many consumers became the source of last resort.
     The answer about labeling was to use the term “sold out.” This resulted in better customer reactions than did the term “out of stock” or “unavailable.” The outage didn’t produce as much outrage.
     The researchers say that when people hear “out of stock,” they think of problems with the supply chain. The retailer failed to place an order on schedule or did not conscientiously track the order. The supplier’s production broke down. The shipper failed to deliver on time. For all of these, somebody had betrayed the customer.
     “Sold out” has the implication instead of product demand which the retailer could not have been expected to anticipate. In the study, participants judged “sold out” to be caused by unexpected sales and therefore to be of shorter duration than when “out-of-stock” is used.
     The label “unavailable” carries a burden of ambiguity. The label might be okay in a brick-and-mortar store setting, where a shopper could easily ask why the item is unavailable. In ecommerce, getting the explanation wouldn’t be nearly as easy. In the study, “unavailable” was seen by some participants as due to bad luck beyond the control of the retailer. However, the label still resulted is a greater degree of shopper disappointment than did the “sold out” wording. The researchers acknowledge that Amazon has used “unavailable,” so at least one hugely successful retail has found it acceptable.
     When labeled well, an OOS might be turned to your subsequent advantage. Indiana University-Bloomington, University of British Columbia, and Northwestern University research found that loyal customers who encounter an OOS become more likely to shop with you when discounts on high-demand items are announced. Those who have repeatedly purchased a small set of items from you will desire those items even more strongly.

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Cure Feelings of Retailer Betrayal
Turn Out-of-Stocks to Your Advantage
Curb Hoarding

Friday, June 5, 2020

Reserve Room for Webrooming

Webrooming shoppers come into your brick-and-mortar store having done their homework online, often scouring the websites of a range of retailers, and now ready to make the purchase in a face-to-face transaction from you. Webrooming is a counterpart to showrooming, in which the shopper surveils items in your store, then makes the purchase online, usually from a retailer other than you. A range of surveys indicates that webrooming is currently more common than showrooming.
     That’s good news. Webrooming beats showrooming in benefits for you since you’re more likely to get the sale, you reduce the time spent educating the shopper, and when a shopper is in your store, the probability of additional purchases climbs.
     Researchers at Spain’s University of Zaragoza explored the psychology of the webrooming shopper to help you get the best of those advantages. The studies were conducted in the fashion sector. The conclusions apply most clearly to retail items which carry identity significance for the shopper, such as technology, vehicles, and personal enhancement categories. These are the sorts of items for which consumers would put the time into webrooming or showrooming, as distinguished from commodity products such as most work clothes and house cleaning categories.
     Smart shopping does apply to all the categories, however. A consumer’s conclusion that they are a smart shopper comes from perceptions that the results of their shopping justify their expenditures of time, money, travel, and other limited resources. Feelings of smart shopping are more prevalent when a consumer can use both ecommerce and brick-and-mortar browsing, so both webrooming and showrooming generate these feelings. But the Zaragoza studies find that webrooming generates more than does showrooming. This is because webroomers come away highly confident that their purchase is customized to their desired identity.
     To make this most likely:
  • Maintain for the webrooming information gatherer a highly informative, highly understandable website which is easy to navigate and prominently branded with your name. Position your brand as a highly trustworthy source of objective information.
  • When the webrooming prospect is in your store, keep it quick to give the feeling of good use of time, but don’t be so quick that you fail to personalize the purchase. With most shoppers, you’ll present more than one alternative. This gives a sense of control, increasing purchase likelihood. With webroomers who don’t want to evaluate alternatives, still ask what led to their choice and offer suggestions if necessary.

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Keep Ecommerce Product Returns Pleasant
Charge for Online Trustworthiness
Look at Sex to Curb Showrooming
Drive Personalization by Fostering Narcissism
Reduce Risk Fears by Introducing Choices

Monday, June 1, 2020

Brand Training as Threatening Confidence

People completing a challenging test using an MIT-branded pen average better than people of equivalent intellectual ability using a non-branded pen. It’s a matter of the MIT brand giving confidence—a process called “contagious magic” by consumer psychologists.
     Why then did researchers at University of Utah, American University, and, yes, MIT find that an MIT branding impaired the subsequent performance of people taking a training course? For the purposes of the study, participants were taught to translate between English and Na'vi, the 1,500‐word fictional language developed for the movie “Avatar.” Some of the participants were told the program was branded by MIT, while the others were told the program carried a University of Phoenix brand. A prior study indicated that the University of Phoenix brand is generally considered less prestigious. Aside from the branding announced to the study participants, the two programs were identical.
     On a translation test administered afterwards, those who completed the MIT-branded language learning did less well than those completing the program carrying the University of Phoenix brand.
     Companion studies by the researchers provided evidence that the use of the MIT-branded pen was a case of brand-as-a-servant while the MIT-branded training program was a case of brand-as-master. Labeling the language learning with MIT set the bar high, producing anxiety which interfered with task performance. Similar results were seen when a Goldman Sachs brand was used on a financial investment training program versus the same program without any branding.
     It’s the using the product rather than the product itself which evidences this type of effect. Columbia University researchers noted the outcomes when shoppers who viewed themselves as uncreative thought about purchasing an Apple computer—considered to have a creative product personality. Thinking about the purchasing led to shoppers’ estimates of the Apple computer’s creativity growing greater. The shoppers felt themselves to be competing on creativity with the product, which made them less likely to buy it.
     The way around this problem so that you can set a premium price for high-prestige branding is to turn the brand-as-master into brand-as-servant. Give the participant maximum control over the pace of mastery. Grant prestige for completion. Maybe award an Apple- or MIT-labeled pen or a financial calculator carrying the Goldman Sachs name. The contagious-magic confidence comes more readily from merchandise fabricated for our use by sponsors carrying prestige than from participation in experiences designed for us by those same sponsors.

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Catch the Power of Contagion
Reveal the Folly of Shopper/Product Rivalries