Monday, September 27, 2021

Solicit Online Questions to Fit Shoppers

Providing a question-and-answer page for your ecommerce shoppers leads to more positive item ratings from eventual customers. A prime explanation, say the Boston University researchers, is that a Q&A page enables a better fit of the item with characteristics of a purchaser.
     The timing, content, and tone of a Q&A page are different from that of customer reviews. A Q&A page is generally used by a shopper before a purchase, describes item attributes, and includes limited emotional tone. Customer reviews are posted by users after purchase and include emotional sentiments.
     In the studies, the Q&A availability decreased the frequency of negative comments about the fit of the item with customer requirements and tastes. I’d expect that to be associated with more repeat business.
     Average ratings improved by only a fraction of a star. Still, in addition to other measures, such an improvement could make a difference in a shopper’s purchase decision. In an email to me, Prof. Shrabastee Banerjee, the primary researcher, wrote, “The size of the effect depends on how much fit uncertainty consumers have about the product in the first place. So products that are more prone to mismatched purchases show the largest increase in ratings after Q&As come in.”
     Product forums and virtual fitting rooms also can resolve shopper uncertainty about item fit. Other studies have shown that these convert shoppers into buyers, build basket totals, and reduce item returns. However, virtual fitting rooms are often expensive to develop. Product forums, with their continuing contributions from item users, become unwieldy unless scrupulously edited and indexed. A Q&A page is a simpler solution than either of those alternatives.
     Consistent with the Q&A allowing shoppers to select an item fitting them, be prepared for questions from shoppers about being able to customize the item for better fit. The “IKEA Effect” refers to the finding that consumers are willing to pay more for a product they’ve had the opportunity to customize. IKEA encourages shoppers to select among sets of options in configuring a purchased item. Studies at Tulane University, Harvard University, and Duke University attributed the IKEA Effect to reinforcement of self-identity experienced via the choice of options, plus the value to a consumer which comes from validating their competence in assembling the personally-selected components.
     Yes, the “IKEA Effect” name for this does carry irony, considering that many people think their degree of IKEA assembly skills qualifies as incompetence.

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Open Up Shoppers So You Can Personalize 

Friday, September 24, 2021

Bound Your Irrationality When Pricing

When setting prices on what they sell, marketers necessarily set bounds on what they consider. There are so many factors with such variations in influence. Researchers at Ca’ Foscari University of Venice, Link√∂ping University, and Case Western Reserve University analyzed characteristics of this bounded rationality as used in the process of pricing products which are being newly introduced.
     Establishing prices for new items has distinctive importance because sales performance during the first weeks after launch of an item greatly influence an item’s subsequent success. Pricing innovative items also is a distinctively difficult challenge because there’s little or no reference history.
     The researchers’ objective was to identify psychological traits of pricing professionals which are associated with profitable marketplace performance of newly introduced items. The analysis was in terms of three approaches to setting the price: 
  • Cost-based pricing. Add a specific percentage to whatever you paid for the item. 
  • Competition-based pricing. Base the price on what others are charging for that or an equivalent item. 
  • Value-based pricing. Determine the maximum amount people will pay for the benefits offered by the item.
     One winning psychological trait for robust sales performance of recently introduced items proved to be the pricing professional’s intuitive skills. This was measured via self-reported degree-of-agreement with items like “When I make a business decision, I trust my inner feelings and reactions.” The contribution of intuition makes sense. Depending on instincts avoids being overwhelmed by the abundance of information.
     Another winning trait was conformity, which the researchers defined as recognizing in what ways other stakeholders are setting their prices and then setting your prices in response. Again, this makes sense. Pricing operates within the marketplace context. Analyses of the data indicated that managers who are more conforming can predict product performance more accurately whether they are engaged in cost-based or value-based pricing. At least part of this advantage is attributable to managers’ use of intuition.
     Other research shows that the intuition must be educated by past experience and remain open to continuing improvement.
     In stating their conclusions, the researchers recognize the bounds on their own rationality. They describe their study as exploratory rather than comprehensive, and they identify crucial questions for follow-up research. Yet, consistent with recognition of the need for marketers to move ahead based on the best conclusions available, the researchers suggest that those people responsible for pricing be selected for their demonstrated skills in intuition and conformity.

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Take Charge of Your Pricing 

Monday, September 20, 2021

Box In Gift Shoppers for the Picky

Sometimes gifts are given out of obligation more than affection. The obligation becomes more burdensome when the intended recipient is what researchers at University of Delaware, Pennsylvania State University, and University of Wisconsin-Madison label as picky—having narrow, unpredictable tastes. Not that picky shoppers are a rare breed. In the study surveys, people said almost 40% of people for whom they selected gifts fit the definition.
     As a retailer, you could suggest purchase of a gift card for a picky shopper. The researchers found that, because of the dilemma when selecting for a picky person, shoppers want to get it over with quickly and with minimum thought. Gift cards allow that. These shoppers think it’s quite likely the recipient won’t appreciate the gift anyway.
     Giving a gift card can create a problem for the purchaser and another for the retailer. The purchaser might be giving out of obligation, but with an objective to signal an intended relationship with the gift recipient. Personalization of the gift is then important. The problem for the retailer is when the quick and basic decision making by the shopper lowers the amount spent.
     A tactic explored by the researchers could solve both problems. In their studies, people favored gifts intended for picky recipients when the retailer displayed thumbnail images of possible gifts alongside images of decorative wrapping or fancy gift boxes. These ancillary items shifted the focus from the merchandise to the presentation of the merchandise. Customers who hesitated spending money on a personalized item were interested in spending money on the container.
     All this does not necessarily translate to the picky gift recipient liking the present more. The prominent featuring of the wrapping and boxes makes the gift giver feel better and leads to them spending more money. Other research indicates much gift selecting is still off-base. The danger increases when a gifting objective is to signal an intended relationship.
     Researchers at Emory University and University of Texas-Austin found that the people feeling closest to a gift recipient are quite likely to pick items different from what the celebrants placed on a wish list. Study participants said they’d, “choose something the recipient would like,” over, “choose something that acknowledges or expresses the relationship you have with the recipient.” But although 25% of gift selections ended up being from outside the gift registry among distant friends, the corresponding share among close friends was 64%.

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Redeem Gift Card Profitability 

Friday, September 17, 2021

Tack On the Tactile for Brand Communities

Via social media channels, people frequently name admired brands and offer testimony of devotion. When that testimony is given in a brand community, there are extra considerations. Researchers at State University of Milan say members of a brand community are more than just fans of the brand. Brand communities require ongoing interaction of the members with each other and with authorized representatives of the brand in ways which maintain psychological identification with the brand.
     Evidence gathered at University of Pretoria signals that for the success of a brand community, positive emotions associated with the sharing are more important than the practical information exchanged. In fact, although brand communities generate brand loyalty, surveys reveal that a notable percentage of brand community members express no intention of purchasing the brand in the future. The identification with the brand depends on the brand community members’ identification with each other. In successful brand communities, each member has a clear sense of acceptance by the others and a clear sense of influence over the others.
     Classic research finds how acceptance is psychologically associated with receiving physical touch and influence is psychologically associated with reaching out to touch. Dialogues about touch would therefore be expected to facilitate brand community cohesion.
     Yet those same words might have little influence when directed to shoppers outside the brand community. Researchers at Luiss University and Universita degli Studi della Calabria asked people to evaluate a keyring based on information provided by either a brand community or the company website. In all cases, the texture, weight, and feel of the keyring were described. The participants then indicated how much they liked the item.
     Attitude about the keyring was more positive among those participants told the information was from a brand community than among those told the information was from the company. Note that chosen for this experiment was an item for which tactile information had previously been rated by another group of consumers as having little diagnostic value. When a parallel experiment was done about the attitude toward a scarf—an item where touch had previously and understandably been identified as important in a purchase decision—it made little difference whether the source was identified as a brand community or the company.
     The researchers’ explanation is that the detailed text about touch implies reliability when tactile properties aren’t important to item appeal. So even when touch doesn’t count, it counts.

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Secrete Loyalty with Secret Consumption 

Monday, September 13, 2021

Retreat Briefly After Incivility

When your child throws a temper tantrum, the best remedy is usually a timeout. The same is true for your consumers, although instead of sending them off to a backroom, you’ll go there yourself for a short time. If you’re the supervisor of front-line employees who do this, think how the technique can improve, not interfere with, overall employee performance.
     Evidence about the value of the backroom retreat comes from researchers at University of Edinburgh, University of Sydney, and UNSW Business School and concerns a category of frontline employee especially likely to provoke temper tantrums—parking enforcement officers.
     After enduring an angry offender, the officer could immediately move on to the next enforcement situation or could take a short break. The problem with the first alternative is that the officer is likely still agitated, so the quality of professional service is impaired. Another way of looking at this is that maintaining courtesy toward consumers requires energy, and energy is depleted by handling incivility. Bad feelings also have been shown to spill over into rudeness toward coworkers.
     Briefly stepping away from the work situation was found to work better for the parking enforcement officers and then, in another study, for nurses in a children’s hospital. All the positive results were for brief breaks. The researchers point out how prolonged absences from the servicescape decrease employee performance. There are more uncompleted tasks to be made up, and irritation of other staff disrupts teamwork.
     Similar conclusions for these two quite different types of service workers indicate that the results are generalizable. The researchers’ review of past studies about a short retreat after incivility yielded tips about optimal use of the time: A snack can ease exhaustion. Chatting with colleagues about topics not related to work can restore perspective. Upon return to the servicescape, this perspective might lead to recognition of how to more effectively handle incivility, such as temper tantrums, in the future. One formula: 
  • Let customers express anger in bursts of up to about thirty seconds. This gives you time to understand their points. Beyond about thirty seconds, people often get more wound up. 
  • Avoid interrupting in the middle of a sentence. Wait for a breath. Keep your voice decisive, but calm. 
  • If the shopping experience has been responsible for the consumer’s anger, ask questions like, “What may I do to make things right?” Then say what you’ll do.

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Proceed to Protect Your Staff from Insults 


Friday, September 10, 2021

Look Out for Where They’re Gazing

To derive full effectiveness from our ads, we’d like the viewer to be mentally transported into the story portrayed by the ad. Researchers at University of Houston say that with a still image ad featuring a human model, this transportation is influenced by the direction of the model’s gaze. An ad for a product or service appealing to positive emotions works best when the model’s eyes are averted rather than looking straight at the shopper. In one of the experiments—using a Facebook ad for a woman’s sun hat—people were 30% more likely to buy when the model had an averted compared to a direct gaze.
     There’s a downside to the averted gaze, though. It lessens spokesperson credibility. When credibility is essential, such as in ads primarily designed to deliver information, use a direct gaze by the model, advise the researchers. This is also best when we want to buffer the viewer’s mental transportation into the ad because of negative emotional content. The pain from full identification with the ad content can result in the viewer resisting involvement with the message. A model’s direct instead of averted gaze eases the defensive reflex. The researchers used a domestic violence awareness campaign to illustrate how this operates.
     These rules apply for ads, which are a relatively impersonal form of interpersonal communication. Other research argues for a direct, although certainly not harsh, gaze in face-to-face sales transactions. In such transactions, learn how to proceed by noticing where and how your shoppers are looking. Your credibility counts here, as does the credibility of the consumer. Liars shift their gaze rapidly, or in an effort to control this sign, the liar will fix their gaze on something aside from your face and will resist looking elsewhere. If you say, “May I show you the item once again before you leave?,” they’ll evidence signs of trouble looking directly at it.
     Watching the ways in which your shoppers move their eyes also gives you clues toward figuring out what interests those shoppers. Researchers at University of Minnesota and Chinese University of Hong Kong find this extends to what your shoppers will be interested in later in their shopping trip. Eyeball movement patterns persist. If a consumer tends to look toward the left or look upwards early in the shopping trip, it becomes more likely they’ll be gazing in that same direction later in the trip.

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Found Influence with Founders’ Stories 

Monday, September 6, 2021

Pick an Argument, Pipsqueak

If your business’s market share is small, I’ll argue you should loudly take a stand on a controversial political issue. I anchor my argument on a set of studies at California Polytechnic State University and Georgetown University which indicates the benefits will outweigh the risks.
     You might think the major risk is that your strong stand will alienate all those in your target markets who disagree with you. Pipsqueak-size enterprises can’t afford to lose bunches of customers. They lack the revenue cushion and market momentum enjoyed by the major players. Ergo, I am willing to admit my advice fails if you plan on advocating the political equivalent of the torture of puppies.
     Instead, pick your argument topic from those where people could recognize legitimate points on both sides. Then, the research indicates, the chief benefit becomes the attention to your business your strong advocacy garners. The net effect proves to be an influx of potential customers which more than compensates for the exit of angry current customers.
     In one of their experiments, U.K. participants were asked to choose between renting a car from a company having large or small market share. Among those participants told the small-share company had taken a stand favoring the U.K. exiting from the European Union, the percentage choosing the small-share company was 16%. The share was only 5% for a matched set of study participants who were not told the company had taken a stand on Brexit. This was in spite of 72% of the overall sample having said they were against Brexit.
     The set of studies also showed how for picking an argument to pay off, it’s important that your audiences consider your advocacy as authentic. That’s easier if you genuinely believe what you’re saying. Some or all of your employees may agree with your stand and others may not. Another important element for success, then, is that you prepare them to handle the flack. Lastly, recognize that truly hot controversies may draw attention away from the main selling points of your business. Blazing heat chases people away.
     Studies at Georgia Institute of Technology and University of Pennsylvania plotted the relationship between controversy about a topic and people’s interest. As the amount of controversy increased, people wanted to talk about the topic more. However, when the degree of controversy reached a certain tipping point, interest in discussion was outweighed by discomfort even thinking about the matter.

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Use or Sidestep Political Polarization 

Friday, September 3, 2021

Steepen Flat-Rate Bids in B2B

Experienced purchasing professionals have a flat rate bias. They prefer purchase terms in which a fixed amount is paid for a period of consumption of an item or service over purchase terms in which there’s a separate charge for each usage. This tends to be true even when the flat rate fee is likely to be more expensive than that for a per-usage agreement.
     The study findings from Sweden’s Link√∂ping University and Finland’s Centre for Relationship Marketing and Service Management documenting this bias indicate administrative savings as an explanation. Managers with experience in purchasing for their organizations might easily perceive that it’s easier to administer a fixed rate agreement. This could be especially true for organizations anticipating high fluctuation in demand for what they’re buying. The flat rate serves as insurance.
     That’s logical. Still, the study also supports explanations which suggest experienced purchasing managers are not wholly rational about this. For instance, in choosing between the two arrangements, disproportionate weight was given to the maximum past usage figure. This favored the flat rate.
     There are also factors that may or may not be rational. The study findings indicate a flat-rate bias is more likely when there’s been a long-term relationship between the provider and the business customer. This could be quite logical in the sense that a new user of an item benefits from monitoring per-usage costs in order to determine the value of the fixed fee price. But it’s not logical if the user has already had experience with another supplier or if the emotional nature of the business relationship makes a difference.
     Business-to-business customers often expect a person-to-person relationship. According to research at University of Geneva, there are two dimensions to that expectation: 
  • Secure business attachment. Your B2B customer may want to rely on you for quick answers to questions about purchases made from your business and for quick solutions to problems with purchases. 
  • Close business attachment. Your B2B customer may want to develop personal bonds with you or your outside sales agent, exchanging information about family and friends, for instance.
     A flat rate may benefit the marketer because revenues are more predictable than with per-usage plans. If this is true for you, steepen your use of flat-rate bids in B2B negotiations. Detect which of the rationales for a flat rate would be compelling for the prospect and maintain the type of business attachment the prospect prefers.

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Stay Aware of B2B Distinctions