Attend to Genetic Influences in Selling

When selling to a family shopping together, do you have a sense the family’s preferences are so strong they’re attributable more to genes than experience? Researchers at Stanford University and University of Florida-Gainesville say you’re on to something.
     The reason? Adenine, guanine, cytosine, and thymine. AGCT are the four bases in each strand of DNA, our genetics, and some consumer tendencies have a strong genetic component. If you find that tendency in one family member shopping with you, expect to find it in others:

• Whether to select a compromise option or go for the choices further out. Given the choice among the $10, $20, and $30 sizes, some people will select the $20. If the choice is presented as among $20, $30, and $40, they will tend to choose the $30. When having the $30 version would serve the needs of the consumer well, present the alternatives to favor that selection.
• Whether the shopper is prevention-focused or promotion-focused. Prevention-focused shoppers put top priority on purchases which help them avoid losing what they have now. Promotion-focused shoppers put top priority on items which help them gain more than they have now. Because this tendency is genetic, a person is usually either protection-focused or promotion-focused over the course of their lifetime as a shopper. And if one member of the family is prevention-focused, other members of the family are likely to be, too.
• Whether the shopper is a satisficer or a maximizer. When considering a purchase, people will gather information until they reach a point where the effort to gather more information isn’t worth it to them because of the weight of evidence they’ve already gathered. For satisficers, this balance point is substantially lower than it is for maximizers. When you’re selling to a family of maximizers, be ready to keep feeding more information and then anticipate a series of visits to the store or website.

     The researchers also found that likings for specific products have a genetic component, such that if one member of the family likes it, there’s a good chance others in the family will, too. This can be helpful in guiding gift selections. Those product categories include chocolate, mustard, hybrid cars, science fiction movies, and jazz.
     On the other hand, there was no evidence for a genetic component in liking tattoos. Even if Caitlin is itching to get some ink, it could be tough to sell Mom on the idea.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Identify Influencers in Family Decision Making
Move the Customer to Accept Higher Prices
Sell Either Protection or Promotion

Survey Consumers Person-to-Person

Garbage In, Garbage Out. This motto of the early computer age can be applied to consumer attitude surveys. The survey questionnaire, when used well, is an invaluable tool for identifying consumer sentiments as guides to retailer action. Using it well means constructing the questionnaire with care and analyzing the answers properly. A Harvard Business Review article pointed out that the steps between questionnaire construction and data analysis also must be done well. Those middle steps include sample selection and administration of the questionnaire.
     Here are the problems:

• Telephone surveys are yielding low and unrepresentative response rates in this age of cell phones and caller ID.
• People who volunteer to take online surveys tend to be more educated than the general consumer population and are less likely to be middle-aged.
• When consumers take surveys online, they answer carelessly. A Market Strategies International research project to evaluate this issue found that about 15% of consumer respondents said they owned a Segway Personal Transporter, a rate many times higher than what sales figures indicate is true.

     Address these problems and get the best from consumer surveys by forming a person-to-person relationship with your respondents:

• Have one of your staff trained in survey methodology or have a survey consultant personally invite each consumer to participate. The invitation, like the survey itself, should be in the language most comfortable for the consumer.
• Before finalizing construction of the questionnaire, conduct one or more focus groups with a small group of consumers to explore the best ways to phrase items and motivate participation.
• During survey administration, tell each respondent the name of a person to contact with questions.
• After data analysis, conduct a focus group to check that your interpretation of the results makes sense.

     Since GIGO was first coined by George Fuechsel, an IBM 305 RAMAC instructor, to refer to Garbage In, Garbage Out, the acronym has morphed. It’s come to mean Garbage In, Gospel Out, referring to the excessive respect we have for analyses just because they’re performed by computers. When you combine computerized analysis with survey administration, retailers can be misled into accepting as gospel what is actually garbage. Retailers then take the wrong action steps.
     Be sure to select consumer samples and administer surveys in accord with professional standards. This adds to the cost. But flawed surveys are worse than worthless.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Use Consumer Attitude Survey Findings

Peek Into Bathroom Rituals

As a retailer, you’ll gain a profitable edge by knowing how your customers use the products and services you sell. This guides you in stocking items which will be most popular and in telling shoppers those benefits statements which make a sale most likely.
     For some examples of all this, peek into your customers’ bathroom rituals. Consumer rituals consist of the habitual ways products and services are used.
     A few years ago, marketing agency BBDO Worldwide studied consumer rituals. Of the five rituals identified by the study as most common throughout the world, three center around the bathroom:

• Preparing for battle, in which we get ready to face the day. Brushing our teeth. Taking a quick bath or shower to wake up and be clean. Shaving.
• Sexing up, in which we aim to become our most attractive selves. From freshening our breath to painting our face and so on. Special products make us feel special.
• Returning to camp, in which we unwind. This is another ritual in which a bath or shower is common. But analysis of the study results indicates different benefits here than from the “preparing for battle” scrub, rinse, and dry. Here, we seek luxury and, often, solitude. Along with this, of the 5,000 people interviewed for the project, about 50% said their “returning to camp” ritual includes leisurely time spent reading on the toilet.

     The years might change some details of these rituals, but the fundamental characteristics are probably much the same now as in, let’s say, the 1960’s portrayed in the TV show “Mad Men.”
     But there are differences by country. In preparing for battle, about 75% of people worldwide shower or bathe, but among the Japanese, the percentage is closer to 25%. There are also differences by culture and religion. The devout Muslim is forbidden from reading while using the toilet and is to use only the left hand for cleansing.
     What does all this mean for you, the retailer? Carry products, provide services, and design environments to fit the motivators for different types of rituals. The type of soap sought by the consumer might be different depending on whether a person is preparing for battle, sexing up, or returning to camp. So offer all three types. The bathtub ideal for returning to camp should also accommodate the quick cleanup the consumer will probably want when preparing for battle.

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Let Shoppers Go Through Their Rituals
Switch Brand Selection with Shopper Anxiety

Analyze Errors Accurately

Clothing retailer Gap Inc. erred. The company announced they were unveiling a new logo, the reaction was monumentally negative, and within a week, Gap made another announcement: They were keeping the old logo with GAP in all caps on a blue rectangle. The new logo with Gap in upper-and-lower case and the blue rectangle off in a corner was banished.

     As the dust settled, trade periodical Advertising Age reported the Gap explanation of what happened. Part of what Gap said illustrates lessons correctly learned, in my opinion. The rest strikes me as either a public relations deflection of responsibility or a genuine misunderstanding of the causes. Either way, the incident serves as a reminder to analyze retailing errors accurately.

• Accept the facts. The new Gap logo was almost universally panned by consumers as badly designed. Yet the company attributed the problem to the logo introduction being, “one change too many,” following new product mix, merchandising scheme, and store design initiatives.
• Be aware of the state of mind of the business over the duration of the error. In the open minds state, all sorts of input is welcomed, realizing it’s always easier to tame down an unrealistic idea than to try to make the same old ideas exciting. In the open roads state, people in the business cut back on the brainstorming, critically evaluate what they’ve got, develop plans based on what’s most

  

  likely to work for the long-term, and move on ahead for a while with minimum distractions. The open wounds state occurs when the bad news floods in so fast that you must take decisive steps; you might ask others for ideas, but your focus is on short-term bandages. The origins of errors differ among these three states.
• Take note of the stumbles as you recover. After a couple of days of complaints, Gap said they’d invite the public to design the new logo. That caused an uproar among professional design firms, at which point Gap withdrew the offer, although consumers did go ahead on their own to generate over 300 suggestions along with critical reviews.
• Isolate the factors to the degree possible. When update of the Sun-Maid Raisin girl was announced late last year, the trademarked brand symbol on product boxes from Sun-Maid Growers of California stayed the same. Only in advertising did the Sun-Maid Raisin girl take on the new look.

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Be Creative, But Only Sometimes
Keep Your Store’s Dress Codes in Fashion

Discuss Attributes to Guide Choices

By discussing with customers the product attributes important to them, you can guide both their choices and your own choices to greater profitability.
     Researchers at Carnegie Mellon University and University of Southern California find that with packaged food items with which the shopper is familiar, shoppers pay the most attention to the attributes of taste and brand name, more than they do the size of the package. Researchers at University of Pennsylvania and University of Illinois-Urbana/Champaign find that across all product categories and levels of shopper familiarity with products, the attributes of color and shape have special importance.

• Consult online reviews for products you carry. Encourage people to post product reviews. Look at the online reviews maintained by other retailers who sell the same products you sell. Read impartial reviews, such as in Consumer Reports, for the products. In all of this, notice what attributes are being mentioned. Is it color? Speed? Reliability? Guarantees? Support services? Country of origin? Researchers at New York University and University of Florida find that when a shopper sees an attribute discussed in a review, the shopper significantly increases their use of that attribute in product assessments and significantly decreases their use of other attributes. Know what your shoppers are thinking.
• Discuss benefits in terms of attributes. Every consumer from about age 7 pays closer attention when you say what the product can do for them, not just what attributes the product has. But the consumer will be better able to compare benefits of a set of products when you present them in terms of attributes. “Because this can is square and squat, you’ll be able to stack more inside the locker when you take your boat out.”
• Use attribute information to prune down inventory. Remember that I said the attribute information could guide your own choices more profitably? Those Carnegie Mellon/USC researchers found that when a major grocery retailer trimmed back stock-keeping units (SKUs) to omit product and category attributes relatively unimportant to customers, sales did not decrease. They increased 11%. The researchers say this was due to decisions being made easier for shoppers.

     You can guide the choices of your shoppers by the ways in which you arrange the merchandise. But it often works even better to present the alternatives in terms of what attributes you discover your shoppers using already.

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Encourage Balanced Customer Reviews
Cultivate Kids as Future Customers
Feature Country-of-Origin Advantages

Limn Words Shoppers Won’t Understand

On September 7, 2010, a front-page article in the Baltimore Sun carried the headline “Opposing votes limn difference in race.” Well, at least a few of the newspaper’s readers that day reacted as if they’d like to rip the editors limn from limn. Whoops, I mean limb from limb, which is pronounced the same way.
     As to the definition, limn shares its word root with illuminate and means to give clear, sharp detail. The headline meant that a set of opposing votes portrayed differences between the current electoral candidates in clear, sharp detail.
     But those upset readers of the headline didn’t know what “limn” meant. They were irritated at the Baltimore Sun for creating an unnecessary difficulty. One reader opined, “To put a word like ‘limn’ in the headline for the lead article on the front page of this newspaper seems to me to be unbelievably arrogant and patronizing. Could the headline writer not have fashioned a head around the word ‘illuminate,’ ‘delineate’ or ‘depict’? Perhaps then more readers would not only understand what the article is about but actually might want to read it.”
     Wrong on two counts. First, the Sun’s headline writer said he chose the word not to impress with his vocabulary, but because he needed a shorter word for “show” in a one-column space. Second, classic research by psychologist Edward Wheeler Scripture found that a bit of puzzlement in a headline—whether for a newspaper article or newspaper ad—increases interest in reading what follows. In an 1895 book, Dr. Scripture used his studies’ findings to even suggest putting commercial notices upside down in order to attract attention.
     Using a fancy word also can subtly add to your impression of distinctiveness or exclusivity in a positive way. A two-store California retailer calls themselves Limn to fit their merchandising of sharply designed high-end home furniture, lighting, and accessories.
     Now that you know what limn means, I can recommend to you that you limn for your special attention any words that your target audiences are likely not to understand correctly at first viewing or first hearing. Give each of those words clear, sharp detail as you create your marketing copy and selling scripts. Then decide for each of the words if it will arouse useful interest in your intended message or only create a distracting kerfuffle. Whoops, maybe I should say, instead, create a distracting fuss.

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Offer Aspirational Shopper Subtle Signals
Use Humor in Unexpected Ways
Joke Around to Facilitate the Sale

Refine Your Psychographics

When retailers talk about psychographics, they’re referring to personal values and the shopper habits affected by those values. Demographics (age, gender, income level) and psychographics are often two ways of looking at the same thing. For instance, women generally have different personal values and shopping habits than do men. But the psychographic approach gives the retailer more focused hints for making sales.
     Except when the analysis is insufficiently refined, that is. A recent Bloomberg Businessweek article describes how Toyota dealers suffered from this happening: Figuring that Toyota is America’s largest producer of cars, the company—along with a number of influential industry analysts—expected Toyota to swipe sales of large pickup trucks from GM, Ford, and Chrysler as the market for pickups picked up.
     But the psychographics of buyers of large trucks are different from the psychographics of car buyers. A more refined analysis using data from Nielsen Claritas indicated that compared to Toyota large truck prospects, the GM and Ford prospects are more likely to dine at Cracker Barrel restaurants, have dial-up Internet, and use the paper Yellow Pages. The Toyota prospects were more likely to dine at steakhouses, shop online, own golf clubs, and subscribe to Runner's World.
     This sort of focus gives specifics to be used in merchandising, marketing, and selling. Psychographic analysis for the PowerBar sports nutrition line produced a recommendation that the products be displayed alongside personal grooming items. The focus from refinement also protects against you being buried in trivial findings, while staying open to being surprised. A collaboration of researchers at Columbia University, Advertising Age, and the Minneapolis Star-Tribune found that people most interested in buying fishing equipment also enjoy listening to Christian rock music and reading Southern Living.
     Whether contracting with a market research firm to provide you psychographic information or gathering and analyzing your own data, always be angling for further refinement.
     At the same time, recognize there will be individual exceptions to the overall refined findings. A comment posted to the online version of the Bloomberg Businessweek article reads, “I've built several computers, use an htpc to watch the internet on my plasma, use voip instead of telco, never owned a gun, but have several bikes. I own 3 F150's and no toytas [sic].”

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Recalibrate for Shopper Gender Trends
Help Customers Show Off New Products

Clarify Item Advantages via Pricing

Present item costs as benefits that the product or service brings in units important to the shopper. This helps move your shoppers beyond a fixation on the item price so they can more accurately assess the value of the alternatives and more often consider purchasing items that bring you a higher profit.
     Researchers at London Business School and European School of Management and Technology gathered some examples of this tactic:

• Embrex (now Pfizer Poultry Health) offered poultry breeders inoculations by the egg.
• General Electric priced airline engines by the power delivered per hour.
• Goodyear dealers priced tires according to how many miles they were expected to last.
• Explosives supplier Orica charged customers according to the fragmentation of the rocks extracted.

     Here are the steps to clarifying advantages via pricing for items you sell:

1. Ask your customers and prospective customers about the benefits they find in using the product or service for which pricing has become an issue. Questionnaires, focus groups, interviews, and customer diaries are the chief methodologies for gathering this information. Be sure to ask customers about their beliefs, their emotions, and their intentions when it comes to the product type you’re investigating. To help ensure accurate results, don’t limit yourself to one or two of these three.
2. Analyze what you’ve gathered. The most revealing, and therefore most valuable, discoveries will come from statistical techniques like conjoint analysis, factor analysis, and cluster analysis. However, since these techniques require use of an outside consultant, you might choose to employ less sophisticated looks at the data.
3. Word each main benefit in terms of units the shopper would use or process: fertile eggs, engine power, road miles, rock fragments, and so on. The units might be different for different target populations or for different roles the shopper takes on. In the role of household accountant, the consumer might be assessing cost per serving, while in the role of parent, the consumer might be assessing cost per set of daily nutritional requirements. If you’ve used the statistical analysis techniques, they’ll help you in this segmentation.
4. Set pricing in terms of the units.
5. Announce both pricing and benefits using the units.
6. Over time, regularly analyze how well this pricing structure is meeting your profit objectives, and make any necessary adjustments.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Ease Customer Pain About Item Prices
Move the Customer to Accept Higher Prices
Know Your Potential Customers' Intentions
Use Cluster Analysis on Customer Data
Keep Customers Happy About Data Collection
Analyze What Your Shoppers Say and Do

Time Your Statements of Benefits

Knowing when to do what is essential to maximizing retailing profitability. Offering cold weather merchandise when your target consumers start thinking about cold weather preferences. Ordering the heavy sweaters and recruiting the tire chain jockeys enough in advance of when they’ll be needed.
     Tony Curtis, who died last week at age 85 after having appeared in more than 140 movies, is quoted as having said, “…(M)y longevity is due to my good timing.” I don’t know who first advised, “Timing is everything,” but Albert Einstein associated time with everything when saying, “The only reason for time is so that everything doesn't happen at once.”
     Prof. Einstein’s insight applies to the best ways for you to present product and service benefits to your retail shoppers:

• Researchers at University of Connecticut and University of Virginia found that women shoppers vary between thinking, “It’s time for me” and “It’s time for others.” Analyze how your shoppers cycle between these two, then adjust your merchandise mix to fit. Retail store consultants at Envirosell performed an even more sophisticated analysis of timing, resulting in them advising a shopping mall bookstore to use cylindrical fixtures to rotate out different sorts of books for different times of the day. These approaches help you not only to sell more merchandise, but also to even out the flow of customers over the hours your store is open.
• In advertising, describe the range of alternatives you have available to each customer. If your in-store or warehouse range is, in reality, limited, you could expand it by offering special-order services. But once the shopper arrives at your store or ecommerce site, have the products presented in easily understood categories. Researchers at University of Texas-Austin describe how having a broad assortment of products available draws shoppers, but once the shoppers arrive, they seek ease of product evaluation.
• Before the sale, emphasize the number of functions the product can serve and have technical specifications easily available. Once the sale has been completed, state benefits in terms of making it easy to use the functions and reassuring the customer they’ve made the right choice. Researchers at University of Maryland-College Park found that consumers tend to choose the most feature-filled models, but then after purchase, tend to get frustrated with the complexity of what they chose.

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Merchandise to Fit Purchasing Cycles
Acknowledge the Power of Cycles
Use Signage to Categorize Items
Pitch the Synergy of Multifunction Products
Offer Fundamental Indulgences
Sell Ease of Use to Last-Minute Shoppers

Pitch the Synergy of Multifunction Items

Why would your shopper want a toothpaste that only cleans their teeth when they could buy a paste which also freshens their breath? Why did Samsung Electronics gear up to get into the standalone camera business when combination camera/phone/GPS/gaming devices are available in abundance?
     Well, there’s a variety of reasons. But one answer from researchers at Northwestern University is that although shoppers are attracted to multi-solution products, a number of those shoppers believe such products are inferior in each of the capabilities when compared to single-solution products. The product which promises to be a jack of all trades risks being seen as a master of none.
     Carrying multifunction products has an advantage for you. You can reduce the total of different items you need to have in stock. If you’re out of the toothpaste that just cleans, you could point the shopper toward the one that cleans plus more. But this works out only if the shopper accepts the quality of the combination offering.
     The Northwestern University researchers found that one way to overcome the inferred inferiority is to set a premium price on the multifunction product. The extra cost helps convince shoppers that the product can indeed do more.
     But in a retailing environment where consumers are highly price sensitive, you might choose to take a different approach. Research findings from Singapore Management University and Korea’s Kyung Hee University suggest a technique: Describe to the potential purchaser how well the various functions work together. Instead of focusing on the different capabilities, focus on the added benefits that comes from the synergy.
     The Singapore/Kyung Hee research indicates that this is especially useful with items the shopper considers to have a high level of technological performance. It is more important with smart phones than with toothpaste. In fact, the researchers concluded that at low levels of technological performance, people overwhelmingly preferred the combination products.
     Because cultures vary in the thresholds consumers set for high technology, the value and effectiveness of pitching the synergy differs by culture. Assess what works with your customer base.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Set Healthy Margins on Multi-Solution Products
Notice Customers’ Cultural Aspirations

Exchange Retailing Ideas with Lots of Others

Finland’s Nokia was the world’s mobile phone powerhouse. But a recent Bloomberg Businessweek article describes the company as having been in “steep decline” in recent years. Nokia has many strengths to bounce them back to extraordinary success. They still hold more than 30% of the market for global mobile phone sales. Still, what happened to Nokia can serve us as a cautionary tale.
     Bloomberg Businessweek attributes Nokia’s problems to an isolation that kept the company from challenging their own business assumptions. As a consequence, they failed to keep up with what consumers came to expect in product capabilities and handset design. Nokia had a reputation for hiring from within. It was only earlier this month that Nokia selected, for the first time, a non-Finn as its CEO. Their ideas stayed within. The operating system for their phones is used by no company other than Nokia.
     The lesson for us? Cut through isolation. Exchange ideas with lots of other business people.

• Broaden the range of people to learn from. Yes, you can’t learn from everybody. For one thing, you don’t have the time if you’re operating your business. For another thing, not everyone who catches your attention has lessons that apply to your business. But look for teachers outside your usual channels. As you read my posting now, do you find yourself thinking things like, “How can I learn from what happened to Nokia. They’re a manufacturer, and I’m a retailer,” or “What could I possibly learn from the experiences of a company like Nokia that is so much bigger than my business”? If you’re thinking like that, you’re at risk for isolation.
• How often do you and your staff interact with other businesspeople? The Bloomberg Businessweek article pointed to the physical isolation of Nokia’s headquarters, far distant from other consumer-electronics and Internet-development firms. There might be something to that. Texting, blogs, and videoconferencing can provide important information. But compared to face-to-face interaction, communication from a distance falls short in spreading the passion. Encourage your staff to participate in workshops and professional conferences.
• Every week or two, consciously question your business assumptions to see how they hold up. Decades of social psychology research—such as at University of Colorado, State College of Colorado, and Ohio State University—highlight how having a point of view primes us to ignore contradictory evidence we’d benefit by noticing.

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Visit Other Retailers
Call on Structural Equation Modeling

Update Your Niche Whenever Necessary

Bargain hamburger retailer Burger King has been suffering from falling sales and profits. According to a Bloomberg Businessweek article, the niche is probably the reason: Burger King is known in many consumers’ minds as, well, a bargain hamburger retailer.
     That identity might appeal to younger men seeking a filling meal at a cheap price. Burger King’s dancing-chicken style of advertising has amused this target demographic, and there’s evidence the sometimes old, sometimes untidy restaurants have been tolerated by this target demographic. The problem is that members of Burger King’s target demographic have been dining out less often than in the past. The lesson for all sorts of retailers is to regularly assess for a need to update your niche.
     If you’re in Burger King’s marketing position, it’s not that you were wrong in selecting a niche. Considering that McDonald’s has almost three times as many restaurants worldwide as you do, a good alternative to positioning yourself as just an alternative to McDonald’s is to focus on a promising market segment.
     Consumers are drifting from the general to the specific, from the one-size-fits-all to the specialty and the customized. Another recent Bloomberg Businessweek article discusses the growing popularity of niche social networks like GoFISHn, where anglers can brag about their latest catch; Dogster, where members have been debating whether pets and their owners should bed down together; and PatientsLikeMe, where people can share progress notes on treatment for chronic medical problems, such as flea bites from lying down with dogs.
     The venture capitalists backing specialized sites like these are saying that Facebook and Twitter are great places to learn how to do social networking, but they’re insufficiently focused. Here, one lesson for all sorts of retailers is that a specialized social networking site could be a great place for you to advertise to your niche markets. Because it’s online advertising, you can promptly change your social networking presence each time you navigate your niche to a different location. Be on the Dogster pages today and the GoFISHn boards tomorrow.
     The tip from shopper psychology is not to make the changes too abrupt. Reach out with a line extension and then pull in and eliminate your weaker lines. Earlier this month, Burger King announced they were adding to the menu blueberry biscuits, a pancake platter, and seven more breakfast items. But the bargain burger stays for now.

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Maintain a Niche So You’re a Destination Location
Keep a Store-Within-A-Store Compatible

Beware Flawed Predictions from Animations

“Keep your eye on the ball” is advice often given to baseball batters to prevent them from getting ahead of themselves. Those same words might be good advice for people watching the game at home, and for the same reason. Researchers at Northwestern University and University of Minnesota point out how when people see a baseball hit with great force, they often have a momentary feeling of certainty the ball will go out of the park. Maybe a misleading feeling of certainty.
     Advancing computer technologies combined with increasingly sophisticated consumer expectations have led retailers of all sorts to use an abundance of animation in demonstrating the benefits of products and services on websites and in personal selling. The Northwestern/Minnesota researchers urge people to show special caution with these animations. It’s too easy for your shoppers to be misled when mentally projecting what will happen next.
     People readily project ahead from animations which show trajectories, such as animated charts of weight loss or completion of construction. We’re all overloaded with information, so we welcome tools that help us get to the point. Also, many consumers place extra trust in a computer-generated animation largely because the animation is using a more sophisticated technology than still pictures. “What’s newer must be better,” they say.
     And because animations are more lifelike than text descriptions or still pictures, consumers remember with enhanced certainty any mistaken conclusions. A few days later, what was actually false is recalled as true.
     Putting this all together, you protect your business and your consumers by being aware of the dangers of flawed predictions from animated demonstrations.

• Give disclaimers within the animation. Phrasing in the spirit of “Past performance is no guarantee of future results” is good. But it’s not enough. Animate the disclaimer by showing a flashing question mark at the end of the animated trajectory. Or show a variety of possible directions the trend might go.
• For items where a misinterpretation might lead to a lawsuit, regulatory inquiry, or loss of good will from an essential customer, present still images along with the animation. When the Northwestern/Minnesota researchers replaced the animation with still images the study participants could flip through at their own pace, mistaken predictions faded away.
• Be careful to interpret correctly when shown animations by a vendor. The researchers specifically warn businesspeople to watch out when interpreting animated sales projections.

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Skim the Data to Spot Leading Trends
Distinguish Accelerating from Slowing Trends

Reduce Bias in Customer Reviews of Services

Why did Howard Johnson’s Restaurants take a spiraling dive into failure starting in the mid-1970’s. The oil embargo of 1974 curtailing the road travel that fueled their business? The loss of a quality image when, in response to the rise of McDonald’s, Howard Johnson’s Restaurants cut back on both staffing and food quality?
     At the time, some industry experts posited another reason: Howard Johnson’s Restaurants were placing too much importance on customer review cards filled out by people at the cashier station. As the restaurants suffered sales losses, they became increasingly insistent on asking customers for feedback and then repeatedly switching business strategy to take account of the comments.
     What the managers failed to acknowledge, said these industry experts, was that customer reviews have a negative bias. The anecdotal—perhaps overly cynical—rule of thumb is that a customer most likely to take the time to fill out a review card is somebody so upset that they’re one step short of suing the restaurant. The result is an unrepresentative sample of strong negative opinions.
     The anecdotal wisdom is that any glowing positive reviews are most likely to come from somebody who has a son or daughter working as a server or in the kitchen. Usually not enough to outweigh the negatives, although it sometimes does, which creates an unrealistic positive bias.
     In a three-nation study, researchers at Hebrew University of Jerusalem, Stanford University, and Korea University find that overall, there is indeed a negative bias in customer reviews of services. Based on those research findings and others, here are ways to reduce the bias:

• Wait until after the service is delivered before asking for an evaluation. Being told in advance that you’ll be asked to evaluate a service leads to more negative evaluations.
• Put the customer in a positive mood during the transaction. One of many ways to do this is to offer an unexpected discount.
• When you see a common theme in a set of negative evaluations, address any shortcomings in ways that are profitable for you. Then publicize the changes. Continue to ask customers to evaluate you after each service episode of that type.

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Ask The Customer for Their Opinions of Items
Ask for Specifics on Merchandise Returns
Profit from Shoppers’ Positive Moods
Have Unannounced Discounts on Common Purchases

Define Customer Service for Your People

“How do you suggest I measure how good the customer service is in our store these days?”
     Please ask that question of a few of your front-line staff—sales staff, cashiers, customer service representatives, and others who have the most direct contact with your shoppers.
     Make notes on what you hear. After that, please squeeze out a little more time so you can ask the same question of some repeat customers. How do they measure the quality of your customer service? Add to your notes.
     And the next step is to ask yourself that same question. How do you define “customer service”?
     Research at University of New South Wales indicates that you’re likely to hear one or more of three sorts of definitions:

• Giving customers what they ask for in a minimum of time and with a maximum of courtesy.
• Solving a problem with or for the customer so that a bond between the customer and the store is formed or strengthened, making it more likely the customer will want to return soon and often to the store.
• Selling products and services.

     Either of the first two definitions sounds fine, although the means to accomplish each could vary between the two. You’ll probably find that shoppers would be satisfied with either of those first two definitions.
     The third definition seems to confuse ends with means. Employees who define customer service as meeting sales quotas might have low trust in store management. Or it could be that store management gives no more than lip service to delivering what shoppers consider to be good customer service.
     The New South Wales researchers say that when customer service quality falls short of the boss’s expectations, the boss shouldn’t start by blaming the front-line employees. The cause of the shortfall could very well be unclear expectations.
     Define customer service for your staff so clearly that no confusion remains about what you expect. One method is to give staff samples of what they can say. Explain that they aren’t required to use the exact words, but rather should adapt the phrasing to fit their style.

• “What may I help you find today?”
• “I understand your complaints. What might I do to make things right?”
• “Thank you for shopping here today.”
• …and so on.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Use Closed-Ended Questions Selectively
Resolve Customer Complaints Carefully
Say Thank You, Dear
Be Clear What You Mean By Going Green

Critically Evaluate Consumer Research

Following his gift of $25 million to Deerfield Academy in Massachusetts, industrialist David Koch wanted to explain something:

“You might ask: How does David Koch happen to have the wealth to be so generous? Well, let me tell you a story. It all started when I was a little boy. One day, my father gave me an apple. I soon sold it for five dollars and bought two apples and sold them for ten. Then I bought four apples and sold them for twenty. Well, this went on day after day, week after week, month after month, year after year, until my father died. And left me three hundred million dollars.”

     That story, which appeared in a New Yorker article about Mr. Koch, popped into my mind as I’ve been combing through consumer behavior research findings. Mr. Koch’s ample wealth is not due just to his shrewd sale of apples and reinvestment of the proceeds. This parallels how in many consumer behavior studies, the researchers fail to take account of what might be the real causes of their findings. Those studies are not a good basis for tactics I can test out in real-world retailing and, if they pass the test, suggest to you in RIMtailing blog posts.
     Among the shortfalls are these:

• The research is a survey, not an experiment. Even when the survey is conducted properly, it’s difficult to draw cause-and-effect conclusions from survey findings. Statistical techniques like structural equation modeling can help.
• Study participants are not sufficiently representative of your target populations. If all the study participants were university students, how broadly can the findings be applied? If the study was conducted in a collectivist culture, will people from individualistic cultures respond in similar ways?
• The findings are outdated. Most studies I use are from peer-reviewed journals. This makes for good quality control. However, it also makes for a delay in the findings seeing the light of day. The world of retailing is one of rapid changes. Do the findings still apply?

     If there’s a research finding that intrigues you, I encourage you to critically evaluate the actual study for yourself. E-mail me at RIMtailing@gmail.com with the date of my posting. I’ll reply to you with the literature reference and/or URL so you can look it up.

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Use Consumer Attitude Survey Findings
Call On Structural Equation Modeling
Use Cluster Analysis on Customer Data
Ask Customers Their Opinions Promptly
Lead Your Customers Through Changes Gradually

Provide Portability for Your Shoppers

Chances are your target customers want portability, so give it to them.
     In a recent interview with Bloomberg Television’s “InBusiness,” Susan Lyne, CEO of Gilt Groupe, Inc. and former CEO of Martha Stewart Living, said, “People expect to be able to shop where and when they want…. [B]eing able to have your iPhone, pull it out,… shop at that moment.”
     Gilt Groupe is a “flash retailer,” at which a product is offered at a substantial discount for a limited number of hours. Ms. Lyne reports that although the percentage of online transactions with Gilt Groupe made via mobile devices is still less than 10%, she expects that percentage to grow rapidly.

• If you sell any sort of mobile devices, select your merchandise on the basis of long battery lives. Although we might remember the Apple iPod as having been an instant success, the truth is that first-generation models frustrated purchasers because they needed such frequent recharges. Micromax, which took on cell phone giant Nokia in India, made initial gains in market share by equipping the phone with a large battery.
• Accommodate the drive to portability for each stage of consumer behavior. Think of ways you can enable your customers and potential customers to be flexible in when and where they seek out information about you and your products; complete a purchase; use the product; and dispose of the product, such as making a return or exchange.
• Be ready for the appeal of portability to stay especially high for as long as our current era of economic and social uncertainty lasts. It’s not just improved mobile technology that’s motivating the trend. Research at University of South Carolina finds that during times of stress and upheaval, we become more anxious to wander to different possibilities.
• Because it’s getting harder to pin down your target markets in their purchasing habits, assess for changes regularly. Where and how they’ll be shopping next month has a fair chance of being at least a bit different from where and how they shopped last month. Don’t overreact to small changes. But do assess.

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Use Customer Life Changes to Switch Brands
Slow Switching By Asking About Prior Choices
Know Your Potential Customers’ Intentions
Be Creative, But Only Sometimes

Merchandise to Fit Purchasing Cycles

Annual weather cycles are somewhat predictable and they affect large segments of your target customers the same way, so you can plan your merchandising to take account of them. In early January, you can pretty much count on everybody being cold if they go outside when your store is in Buffalo, New York and quite warm when outside a store in Adelaide, South Australia. So you’ll stock more stay-at-home and go-out-protected items at one time of year than at the others.
     Consumer behavior research shows that there are also monthly cycles which influence successful merchandising. What makes them different from weather cycles is that the effects vary by customer segment. Still, by being aware of these cycles, you might gain a retailer’s edge.
     Here are two examples to get you thinking about purchasing cycles your store encounters and how to merchandise to fit those cycles:

• Researchers at University of Utah and University of Iowa find that monthly paycheck cycles affect not only how much money people will spend on merchandise, but also the types of merchandise they’ll find most attractive. In the days soon after receiving a paycheck, consumers with full-time jobs become more interested in products and services that help them gain more than what they currently have. This is a time for you to feature the latest technologies and the toothpaste which promises to whiten teeth. Then as the days after the paycheck pass, the person becomes progressively more interested in products and services which help them avoid losing what they have now. They'll become more interested in nostalgia items, familiar brands, and the cavity-fighter toothpaste. The researchers determined that this cycling was not due to a declining checking account balance or to the pricing of different types of products.
• Researchers at University of Minnesota, Texas Christian University, and University of Texas-Austin find that women near the most fertile point of their monthly cycle are about 10% more likely to seek out sexier fashions than at other times of the month. When shopping for shoes, they’ll lean toward the stilettos over pumps and toward revealing blouses over roomy sweaters. The evidence is that this cycle involves competitiveness. If the females in the study were told that attractive women frequented the neighborhood, things moved from 10% more likely to 25% more likely.

For your profitability: Sell Well: What Really Moves Your Shoppers

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Sell Either Protection or Promotion
Acknowledge the Power of Cycles

Meter Your Customer Service

“Too much of a good thing can be wonderful,” according to Mae West, preeminent American sex symbol of the 1930s. Still, an international study conducted by the Corporate Executive Board, which is headquartered in Arlington, Virginia, indicates that Ms. West’s advice doesn’t hold well when it comes to retail customer service. Too much customer service can be a financial drag on a business.
     About 75,000 people who had interacted with customer service staff were surveyed in the study, and hundreds of customer service staff members were interviewed. The results? By and large, what customers seek is not an ever-escalating drive to surprise and delight them. They want to be dazzled by customer service, all right, but what does the trick is for the retailer to find ways to simplify problem resolution.
     A more formal study by researchers at University of Mannheim in Germany and University of Texas-Austin found that customers who are adequately satisfied are willing to pay higher prices than are customers who are barely satisfied. But the researchers also found that developing customer willingness to pay even higher prices generally requires ensuring those customers are consistently very highly satisfied. The costs of doing that might make it unprofitable. Your best course might be to be satisfied with delivering adequate customer satisfaction.
     Businesses have found that good customer service can distinguish them from the competition and so earn them additional sales. Yet it is akin to superstition to believe that if some customer service is good, that loads of customer service must be great.
     To be sure, some retailers gain success by pampering their clientele in ways that create legendary tales. It’s a form of niche retailing which requires premium pricing. And there are deep-discount retailers who are financially successful in the face of legendary flawed customer service. Meter and regularly monitor your business’s level of customer service to find what works best for your store personality and target markets.
     Just as it is superstitious to believe that if a little is good, more is better, it’s superstitious to stop trying out variations on the customer service you offer. Mae West would agree, I think. You see, she also said, “Between two evils, I always pick the one I never tried before.”

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Assess the Costs of Customer Satisfaction
Implement Tactics Strategically

Choose Between Percentages & Frequencies

Is it better to say “73% of our 70 products currently meet all applicable ANSI safety standards” or “51 of our 70 products currently meet all applicable ANSI safety standards”?

• A classic finding in consumer research is that percentages are easier than raw frequencies for a person to understand and remember. Therefore, if ease of comprehension is important, present the percentage format. This would be especially true if your statement has lots of elements to understand and remember aside from the frequency itself. The ANSI safety standards example has enough gobbledygook to meet that criterion.
• If you’re asking prospects to average a set of frequencies, use percentages when your prospects have low motivation to understand the results, but present raw frequencies if the prospects aim to be highly confident of the results. Researchers at Bentley University in Massachusetts, University of Kansas, and Columbia University concluded that people who are clearly interested in the results will work harder to analyze the data when they’re presented raw frequencies than when presented percentages to average. The averages will be more accurate, and the people will be more confident of the calculations. So it’s best to say, “51 out of the 70 case mountings and 13 out of the 18 leveling devices meet your specifications,” and expect the prospect to calculate the percentages.
• If you’re asking prospects to calculate a percentage of a percentage, do the work for them and present the outcome. For instance, say: “73% of our 70 products currently meet all applicable ANSI safety standards, and of those 73%, you’ll find that 80% meet the parameters you’ve stated in your proposal. So this means that 41 out of our total set of 70, or between 58% and 59% meet both the ANSI safety standards and your parameters.” Research at University of Miami and University of Minnesota suggests that most consumers come up with erroneous frequency conclusions when calculating percentages of percentages.
• Unless absolute precision is required, ease the cognitive load for all parties by rounding off percentages once you’ve come up with the final result. “About 60%....” is easier for the prospect to work with in their head than “Between 58% and 59%.”

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Tell Positive Stories About Your Products
Have Discounted Prices End In $1.99 or $2.99