Kill the Excessively Ghoulish

“There has been a death in the family.”
     What a cruel message to flash onto a consumer’s computer screen unexpectedly, especially when nobody in that consumer’s family really died. Even on a Halloween day like today, scaring somebody this way is excessively ghoulish.
     To help me explain the lesson in all this for retailers, go back fifty long years:
     During much of the 1960s, Burroughs Corporation computers were among the best selling in the world, with sales revenues second only to IBM’s. Burroughs produced large computer systems—mainframes—that incorporated creative innovations designed by astoundingly clever experts. Well, astoundingly clever when it came to creative computer innovations. When it came to insights about users of the systems, they were not as smart.
     Oh, they tried to be clever. A team working on one of the Burroughs Computers configurations, for example, decided that they had to catch the attention of any user who committed an error which resulted in the system needing to be completely restarted. In the process of restarting, data would almost inevitably be lost.
     The designers of the interface could have decided to give the user a message like, “System must be restarted. Any pending data will be lost.” Better yet would have been an error message explaining what the person might have done to cause the problem and pointing the user toward a respectful, friendly tutorial about how to avoid making the error in the future.
     But all of this occurred at a time when attention to usability was in its early stages. And I guess to the Burroughs Computers employees’ technical minds, it seemed so much more clever than other error messages to flash onto the screen “There has been a death in the family.”
     I came across this example when doing research for my 1984 book Computer Confidence: A Human Approach to Computers. Much of what I wrote then is now completely out-of-date. Current computer systems seem to have more wizards than existed in all of medieval Europe. But in every business, people with technical knowledge still too often forget that smart consumers make mistakes.
     The lesson for retailers: Regularly check that you and your staff treasure customer misunderstandings as opportunities to learn how to communicate better. Insensitivity to customers can be a fatal error. Oh, yes, the message “Fatal error” is another ghoulish remnant of the earlier days of computing.

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Respect Customers Who Claim Expertise
Show Respect in Front of Customers

Increase Repeat Customers’ Unplanned Buying

Researchers at University of Pittsburgh and Baylor University say most of your shoppers intend to spend money on impulse items.
     Before starting their shopping, study participants were asked to estimate how much they planned to spend. For more than 75% of the shoppers, the amount they thought they’d spend altogether was more than the amount they estimated to be the cost of items they planned to buy. These shoppers had prepared themselves to come across both needs they’d forgotten to include on their shopping lists and items they wouldn’t realize they wanted until the items were in front of them or in their hands.
     Unplanned purchases add to your profitability. Previous research has said you can make unplanned purchases more likely by offering noticeable discounts on items that are commonly bought. Now researchers at University of Pennsylvania, Instituto de Empresa Business School in Spain, and Tilburg University in the Netherlands have added to the tactics. To spot these, the researchers focused on a certain type of shopper—the repeat customer who has defined their shopping objectives before they enter your store. These are not idle browsers, but are instead out to buy something. The objectives could range from the general (“I’m looking for something to cook for dinner”) to the specific (“I’ll buy two chicken breast fillets”).
     Based on the research findings from 441 households and covering 58 product categories, here’s how to increase unplanned buying by repeat customers who have shopping objectives:

• Encourage customers to set general shopping objectives instead of specific ones for their next visit. Do this in your advertising and in talking with customers at the cash/wrap (“Please keep in mind that we’re your store for every sort of party planning”). For shopping with general objectives, the jump in impulse purchases was about twice as much as for trips with specific objectives.
• Maximize your within-store convenience for fulfilling whatever objectives the shopper has set (“I can get almost everything right at that store”). In the research, this sort of store-specific convenience lifted the amount of unplanned buying more than 10%.
• Avoid unnecessary impressions of multi-store convenience (“If I shop at that store, it would be easy to also shop at other stores”). When your repeat customer decides to stop at a few different stores to meet their shopping objectives, they become somewhat less likely to make unplanned purchases at your store.

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Sell Impulse Items to Serve
Have Unannounced Discounts on Common Purchases

Purge Expired Products

When someone buys a product from your store, you’d like them to experience that product at its best. If the product is perishable, you’ll be concerned with expiration dates.

• Laws may require you to purge expired products from your shelves. Last week, Walmart agreed to pay the State of New Jersey $775,000, part of that to settle charges that it sold infant formula and non-prescription drugs beyond their marked expiration dates. Such sales are forbidden by federal law. Some state laws forbid sale of certain food items after their expiration dates. The publicity that could follow charges of violating national, state, or local laws would leave your target audiences with a bad taste regarding your business.
• Your customers who take home a product with a date on it can easily be confused as to what the date indicates. “Expiration date” means the last date a food should be eaten or used. But you customers might also encounter “sell by,” “best if used by,” “guaranteed fresh until,” the often cryptically-formatted “pack date,” and the “born on” seen on beer bottles. Confusion can irritate customers. Prepare your staff to answer questions about what these expiration and freshness dates mean.
• Encourage purchasers to return for exchange any unused product that goes beyond its expiration date, even if purchased months ago. Researchers at Baruch College find that after someone acquires a product and works through any initial regrets, they tend to hesitate discarding the product after an expiration date. As a result, they’ll use an inferior product, becoming less likely to purchase that sort of item and brand from you in the future.
• As I said, you’d like your customers to experience perishable products at their best. For some customers, “at their best” means they intentionally wait a while until the price goes down substantially. I’ll call this the Day Old Bread Effect. although it’s by no means limited to food items. The Syms stores’ discounting policy is an example. Stamped on the back of each price ticket on women’s dresses is the date the item was placed on the sales floor, and stamped on the front is a series of dollar amounts in descending order. Every ten selling days, the price moves to the next lower amount on the ticket.

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Promote Sales from Product Recalls
Leverage Barriers to Increase Value
Make Your Shoppers Feel Smart

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

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

Lock In Customer Gratitude

Consumers say they look for a retailer they can trust. In surveys conducted by Advertising Age/ARC, consumers in every age group from teenagers on up said that what was most important to them was brand trustworthiness. For retailers, your store is your brand.
     But once the customer finds that retailer, what builds lasting loyalty is not so much trust as gratitude. In the U.S., researchers at University of Washington, Southern Illinois University-Carbondale, San Jose State University, and University of Cincinnati found that when a customer is aware of their gratitude to a retailer, they become more likely to purchase items from that retailer.
     In Italy, researchers at Università Commerciale Luigi Bocconi looked at relationships between six emotions and what the shopper with those emotions did after completion of the purchase. The six emotions were anger, gratitude, guilt, happiness, pride, and sadness. The four behaviors were complaining to the retailer, criticizing the retailer when talking to other people (negative word of mouth), expressing an intention to make a future purchase, and praising the retailer when talking to other people (positive word of mouth).
     The greater the extent to which customers said they felt grateful to the retailer for helping to solve a problem or satisfy a need, the more likely the customer was to praise the retailer to others and to say they intended to shop with that retailer again. In the study, there were no significant correlations between customer happiness, on the one hand, and either positive word of mouth or repurchase intention, on the other hand.
     Continually give your customers reasons to be grateful to you and to your store. Then solidify your relationships with customers by locking in their gratitude to you.

• Even better than general praise are thank you’s for specific actions you’ve taken to benefit the customer. When a customer shares one with you, reply, “I’m pleased I could help you out.”
• On any customer attitude surveys, ask for specifics of what your store did well. When the customer replies, that’s helping to lock in the gratitude.
• Consider asking for paybacks. Research at University of Toronto indicates that with customers you know by name, asking the person to recommend you to family and friends in the future works well. With customers you don’t know by name, asking them to complete a comments card immediately is a better choice.

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Go for Customer Gratitude and Guilt

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

Sell Second Opinions

Bloomberg Businessweek recently reported on ExpertConsensus, LLC, a New York-based services business that reviews medical advice. A patient diagnosed with lung cancer, for instance, could contract with ExpertConsensus to convene a panel of top specialists to critique and possibly suggest augmentations in the treatment plan developed by the patient’s physician.
     ExpertConsensus is an example of the current interest in second opinions. With the overwhelming abundance of information available to consumers, you might find a lucrative market in helping people filter through it all.
     There are considerations of business law and ethics in providing second opinions. There are also considerations from a consumer psychology perspective:

• Recognize that giving second opinions is nothing new or unusual in product and services retailing. Consumers shop around and ask for free quotes. They’re collecting second, third, and fourth opinions. What’s different here is charging for the advice. According to the Bloomberg Businessweek article, the starting fee for ExpertConsensus is around $20,000. Your fee will probably be substantially less than that, but you’ll need to tell people what value you’re adding. Distinctive expertise? Speedy analysis? Guaranteed no-fee follow-up if the consumer wants additional advice about the same issue? In fact, the true value-added from almost all second opinions is the consumer’s peace of mind that they’ve made a great decision. But research indicates people will want quantifiable benefits claims in order to justify spending money for the peace of mind.
• An important part of the value-added promised by ExpertConsensus is group decision making. This also is not a truly unusual service in an Internet era. Consider online product and service rating sites in which groups of people interactively shape up recommendations. The “risky shift” isn’t new either. First described by researchers at Massachusetts Institute of Technology, the risky shift refers to how groups of people will make more extreme recommendations than if those people were giving advice individually. A shift in the risky direction is a particular temptation when people are paying the group for advice. Imagine a cancer patient putting out $20,000 and being told, “You know, we really have nothing at all to add to what your hometown physician already recommended to you.” So in this situation protect your client and your business by making your value-added addition something like, “Based on the very latest information, here’s why we concur with the opinion you’ve been given.”

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Reduce Unwanted Risks for Your Shoppers

Assign Blame Accurately for Damage You Do

Do you have in place a plan for responding to media inquiries if a product you sell or something your store does turns out to cause serious damage?
     The recall last month of hundreds of millions of eggs affected grocery stores, restaurants, and other sorts of retailers. The impetus for the recall was evidence eggs from certain sources had been contaminated with salmonella.
     One response from industry spokespersons was to say that people who had been poisoned had failed to cook their eggs thoroughly enough. Krista Eberle of the United Egg Producers’ Egg Safety Center was quoted as going on to say, “It may sound harsh, and I don’t mean to sound that way. But all the responsibility cannot be placed on the farmer. Somewhere along the line consumers have to be responsible for what they put in their bodies.”
     In my opinion, although Ms. Eberle was correct, what she said did come across as harsh. Understandably, this led to criticisms of the industry for trying to avoid blame. But research at University of Florida indicates that when a retailer makes a major error, the public, after initial shock, becomes open to the idea that a number of parties might share responsibility. The key is for the retailer’s spokespersons, at the start, to explain credibly what happened, what’s been learned, and what’s being done differently now.
     Accomplishing this requires you not only to maintain ongoing training of possible crisis response spokespersons, but also maintain a crisis communication network within the organization. When full information is available, spokespersons can frame the message in ways that protect the interests of your business.
     Here are the types of explanations that research indicates are most likely to lead to the public accepting that responsibility for damage is shared:

• “There were circumstances we’d come across only very rarely, if at all, before. Now we’ve built in ways to spot those circumstances promptly.”
• “Here is the information we’d been given, and as you can see, it was misleading. Now we’ve developed ways to get more accurate information.”
• “Here are the legal requirements, regulations, or policies that required us to handle the situation as we did. Now we’re telling those who set these rules what happened and suggesting changes.”

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In Providing Services, Emphasize Empathy
Acknowledge Customers’ Willful Ignorance
Space Out “Bad News” Products on Shelves

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

Clarify Cause & Effect with Users

Be sure your customers recognize the benefits that came from their purchases. With so much going on in their busy lives, the customer can too easily forget to give credit to a service or product for the benefits they obtained. And sales staff can too easily forget to hook the effect to the cause in the customer’s mind.
     Again, this oversight can be because sales staff are busy. But there’s another reason as well: Sales staff who are thoroughly familiar with how well a particular item produces benefits can take it for granted that the customer knows, too.
     Customers usually want specifications pre-purchase, but after making the purchase, they're usually seeking reassurance. So right after the purchase, tell the customer that they’ve made a good decision. Keep it general.
     Then when the customer returns to your store later or contacts you to place a telephone or ecommerce order, assume they are now ready to sample and to shop. Deliver a different sort of reassurance about their prior purchase: Emphasize cause and effect. Point out to them how what they obtained from you produced benefits important to them.
     Do you recall what they bought? If so, ask a question like, “How did you feel the evening after you had your last massage here?” or “How did that carpeting work out for you in your family room?”
     If you don’t recall the prior purchase and can’t promptly obtain the information from your customer database, start with, “What are some of your most recent purchases from us?” It’s better to assume the person is a prior customer and be wrong than to assume the person has never shopped with you before and insult a loyal client.

• If the customer was displeased with the product, make it right with an exchange or a refund.
• If the customer has trouble coming up with benefits, say, “Here are some of the benefits I’ve heard other users talk about….”
• Then when the customer tells you the benefits, say something in the format, “I’m pleased that your purchase of [the product or service] resulted in [one or two of the benefits that seem to be most important to the customer].”

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Use Partitioned Pricing to Highlight Benefits
Ask Shoppers to Imagine Usage Benefits
Sell Benefits to Fit Shoppers’ Values
Answer Customer Questions with Enthusiasm

Acknowledge the Power of Cycles

Among the hundreds of brief posts I’ve written for this RIMtailing blog, I’ve not devoted a single one to those services retailers who sell lap dances in gentlemen’s clubs. It’s about time, don’t you think?
     But since I suspect that members of that group by no means comprise a majority of my RIMtailing readership, I want the lesson here to be useful for a wide range of retailers. That lesson: There are important cycles influencing shopper behavior which are beyond our awareness and often beyond our control. The reminder from that lesson: Give the techniques I suggest to you a chance to work. What doesn’t result in a retailer’s edge this week might make a difference next week.
     My example comes from a research report titled “Ovulatory Cycle Effects on Tip Earnings by Lap Dancers” which occupied seven pages in a 2007 issue of the journal Evolution and Human Behavior. The study was conducted by three researchers from the University of New Mexico Department of Psychology.
     Prior research had indicated that women near the most fertile point of their monthly cycle tend to be more attractive to males, as manifested in measures ranging from appealing body fragrance to selecting more fashionable clothing to enhanced verbal creativity. But does this make any difference in economic profitability?
     Yes, it does, as least in the retailing situation examined by the researchers. With what I view as an adequate methodology for data collection and a very good methodology for statistical analyses, it was found that each dancer averaged $335 in tips per five-hour shift at the time of highest fertility. This was compared to averages of $185 and $260 per shift at the other measured points in the monthly cycle. The researchers’ review of their own data plus that from prior studies showed no evidence that the dancers were conscious of the reasons for the differences in sales revenue.
     Your retailing staff and your customers—male and female—go through many sorts of cycles—biological and psychological—each day, each week, each month, each year. Businesses go through cycles, too. So keep at it. Give the profit-making tactics a chance.

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

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Help Seniors to Shop Early
Meet Customers’ Desires for Nostalgia
Avoid Panic When Cash Flow Drops
Check Your Optimism When Dealing with Vendors

Turn Product Training into a Profit Center

All sorts of retailers can turn a profit by training customers. Think about computer stores that charge people for lessons on how to get the best from the devices they’ve purchased. But the opportunities aren’t limited to high-tech items. Specialty food retailers are charging for cooking lessons, and mountain bike retailers for skill-building clinics.
     Even if you don’t charge a fee, training customers can help your bottom line. People often buy more features in a product than they know how to use, and they then become more likely to return the product when they’re unable to master the features. Or they'll rate down not only the product, but also the store, in word-of-mouth and fingers-to-keyboard reviews. Frequent product returns and negative reviews can reduce your profitability.
     When it comes to the value-added of training, you could end up making money overall, even if you lose money on doing the training.
     Here are a few research-based tips on getting the best from product training:

• Set reasonable expectations regarding the ease of learning. If the nature of the product or the nature of your trainees leads you to think the process will be tough, warn the people. If there are multiple skills to learn, teach one at a time before asking the learner to combine them. Researchers at University of South Carolina and University of Colorado-Boulder find that when consumers have reasonable expectations, their evaluations of the products are more accurate. On the other hand, if the learning process is much more difficult than they’d anticipated, they rate the product quality more negatively, generally not realizing why they’re doing this.
• Involve a variety of the learners’ senses and capabilities. Tell them in words, give it to them in writing, demonstrate it to them, have them move their muscles to demonstrate it to you or others. A broad range of research over the years confirms that this helps people acquire skills more easily and use the skills in more situations.
• Accommodate different learning styles with different sorts of training. An important example of this comes from research at State University of New York-Buffalo and Indiana University: With the people who learn best by following instructions, give brief lessons with some spacing between. With the people who learn best by actual experience, give longer lessons and/or lessons that come closer together.

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

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Give a Vocabulary for Richer Shopping
Teach Sensory Terms to Avoid Misleading
Have Suppliers Train Staff and Shoppers
Distribute Worksheets for Child Consumers

Help Ecommerce Customers Thank You

Were you watching what happened when the cashier handed change back to that customer in the store? Did you notice how the customer said “Thanks” to the cashier? Did this expression of gratitude make sense to you? The change wasn’t a gift. It belonged to the customer. What sort of favor was the cashier doing that deserved a thanks?
     Okay, the truth is the “Thanks” probably was a subconscious reflex. But it wasn’t empty of meaning. It had some significance: Customers wish to deal with retailers who help them out, and one way customers express this wish is to say thanks to store staff.
     Research findings from University of Maryland and Yale University together suggest that giving the customer an opportunity to express gratitude to one or more store staff facilitates loyalty to the retailer. And research at Trinity College, College of Charleston, and University of Toronto indicates this is especially true for elderly consumers.
     Creating opportunities to say thanks is easier for you to accomplish with in-store transactions than with ecommerce transactions, though. Where are the opportunities for the purchaser to say thanks to a salesperson or cashier when online? On some sites, the answer comes with “click to chat online” features.
     My advice to ecommerce retailers: Allow time for the customer to say thanks. Script the online helper to finish up with an open-ended question like, “What else may I help you with?,” and lastly, with a closed-ended question like, “Have I answered everything you wanted to ask for now?”
     At that point, the thank you is bound to come—as long as you and your staff have worked to earn the gratitude. When it does come, be sure to acknowledge the thanks with a personal touch.

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

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Go for Customer Gratitude and Guilt
Emphasize Emotions with Older Customers
Use Closed-Ended Questions Selectively

Discover What Purchasers Never Use

Believe it or not, there are consumer psychologists who go Dumpster diving to better understand how to be of service to customers. In this case, the service is to the services. These psychologists work for the Combat Feeding Directorate, the organization within the U.S. Department of Defense responsible for developing meals that can survive both a drop from a helicopter and the taste buds of nutrition-needy soldiers in the military services.
     By sorting through the trash, the consumer psychologists and their colleagues discover what from the meals was left uneaten. Then they find out why the items are being tossed. In some cases, it has to do with taste. The beef brisket needed more spice. In other cases, it has to do with dietary commitments. Vegetarians didn’t even try the meat dishes, which may have tasted fine.
     Be inspired by the Combat Feeding Directorate Dumpster diving. No, I’m not suggesting you follow up each purchase from your store by digging into the purchaser’s trash cans. The mess and smell aside, visiting all those houses and businesses would simply take too much of your time. But do ask your customers what products or features of products they ended up using rarely or not at all. Better yet, when they’re considering a purchase, pay attention to what they say about past disappointments with items of that type. And analyze the reasons customers give for product returns.

• Was the product or feature too much trouble to figure out? Philips Electronics says that more than half of their products which shoppers return have nothing wrong except that the purchaser couldn’t figure out how to use the features. If this is going on with your returns, there’s a market for product training or an indication that the manufacturers and your suppliers should be providing better usage instructions.
• Are products being discarded because the purchaser can’t afford the money to fix what’s broke or chooses not to spend the time? If so, there might be a market for you to offer extended service contracts and repair services.
• Do customers say they’d been misled by being sold features that did not offer the promised benefits? If so, you’ve an opportunity to caution other customers to avoid the unneeded features. This will cut down on returns. It also impresses customers that you’re wanting to save them money. The impression keeps customers coming back to you.

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

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Know How Customers Dispose of Products
Discover How the Customer Compares Items
Ask for Specifics on Merchandise Returns
Make Extended Service Contracts Worthwhile

Predict Consumer Preferences by Asking Why

To most accurately predict consumer preferences, go beyond tracking trends. Also know reasons behind each trend. An opportunity to do that came this past week with the release of a Pew Internet & American Life Project report about online confidentiality. The conclusion of the report is that young adults are becoming more cautious in what they reveal about themselves online. This was less true with older adults.
     You therefore might decide that a trend has begun for your customers—especially younger ecommerce customers—to want to keep more information to themselves. That, in fact, is what some retail consultants concluded.

      But wait. Let’s also look at what Pew said is why these young adults are getting more cautious about what they share online: It turns out that behind the fear of losing privacy is a wish to gain financial security. Savvy in the ways of Google, these folks recognize the importance of ensuring prospective employers are positively impressed during a tight job market. Nearly half of the 18- to 29-year olds report deleting comments others have made on their social networking profiles. More than 40% report removing their names from photos.

      The trend here is to be more careful when seeking a job, not for young adults to be more protective of confidentiality when buying retail. Actually, according to researchers at Quinnipiac University and Providence College, all adults are relatively willing to share personal information about themselves if it helps a retailer better meet their needs.

      Why did the Pew survey find that young adults are more concerned with confidentiality protection than older adults? Again, job seeking might be behind it. The News & Observer in Charlotte quotes a University of North Carolina-Chapel Hill researcher as opining, “…if you’ve got a pension, you can pretty much say what you want.”

Give Staff Specific Feedback

Do your staff know what you expect of them? If you answer, “Of course they do,” I’ve some follow-up questions for you: Do you watch your employees in action so you personally see that expectations are being fully met? When you see expectations being met well, do you praise the employee with specific feedback, such as, “Jean, thanks for reminding the customer that we can special order many items the customer doesn’t find on our shelves”?
     Specific feedback is much better than something like, “Good comeback when the customer said they couldn’t find the product, Jean.” With specific feedback, the employee recognizes what to do again or do better. With general feedback, the employee may have no idea what you’re praising or criticizing, but might not take the time or have the courage to ask what you meant. When they sense that you’re praising them, asking for details feels like fishing for a compliment. With criticism, the employee might fear making things worse by asking for more details.
     New employees are at special risk of missing what the supervisor expects. That’s not surprising. But it did surprise me when I first recognized how often supervisors and managers with excellent technical skills fail to clearly express expectations to the team members they oversee.
     Here’s why it happens: Some of those supervisors/managers were selected for promotion because they excelled on job tasks. It seemed to come naturally to them. But the downside of being a natural is that it’s too easy to forget how challenging the job can be for others.
     Use staff meetings, huddles at the start of each workday, and other opportunities to clearly say what you specifically expect of your employees. Don’t assume that one discussion of expectations is enough for forever. The human brain doesn’t work that way.

Get Second Chance for Good Impression

“You have only one chance to make a good first impression.” When it comes to handling customer complaints, consumer behavior findings support the saying. If you respond quickly to address an initial complaint, your customer stays as likely as before to make future purchases from you. In fact, a prompt, thorough resolution of the problem often leads to the customer becoming even more likely to come back to buy more.
     But researchers at University of Virginia find that if a customer has the same sort of problem again, repurchase intentions tend to drop sharply. The customer might not even bother to return to the store to complain, instead just shifting their business elsewhere. This means you might not be aware why you’ve lost the business.
     Here are two tips to avoid this happening:

• Whenever you think you’ve resolved a complaint, ask the customer, “Are you fully satisfied?” If they reply that they are not, see what you can do to change it to yes. Then when you get the yes, say, “If you ever have a problem like this again, please be sure to let me know. Here is my business card.” Use “I,” “me,” and “my” instead of “our store.” Take personal responsibility. Then be sure all staff know that if a customer calls or comes in asking for you by name, staff either get you or say you’re not available now and add, “May I please see if I can help you?”
• If you have a frequent buyer program that allows this, look for regular customers who have not come to your store for a while. Contact them to ask, “Are there any problems with your shopping here that I can solve? What might I do to make it more likely you’ll shop here soon again?”

Respect the Internet’s Speedy Reach

We’ve another reminder about the potential dangers for retailers because of the very fast, very widespread reach of the Internet:
     Kmart recently offered selected customers a coupon for $10 off a $20 purchase. Each customer receiving the coupon offer had given their e-mail address to Kmart and shopped in a community in which Kmart had recently updated the store.
     Missing from the coupon, though, was a notice that it could be used only in certain locations. No surprise that the distribution quickly turned from a targeted e-mailing into a massive number of Internet hits. Also no surprise that when customers brought their coupon into the nonparticipating stores, store staff told them the coupon would not be honored. Actually, it appears that it got much worse than this. A bunch of people posted on Kmart’s Facebook page that they’d been accused by store staff of trying to defraud the store.
     Here are a few of the reminders inspired by this Kmart episode in the Internet age:

• Proofread, even when there is time pressure to start a promotional campaign. Make that especially when there is time pressure. Mistakes like the promise of a 50% discount will spread so rapidly you won’t be able to catch them.
• Coach staff to fix the problem, not fix the blame. My impression after reading and hearing reports of what happened is that many store staff sincerely believed the coupons were fraudulent. It looked like an Internet hoax. I believe store staff, including managers, said to customers, “This coupon is fraudulent,” and the customer heard, “You’re a dishonest cheat.”
• Acknowledge the seriousness of a problem. KOMO TV reported that in a telephone interview, the Kmart spokesperson said what happened was, “simply an error.” That quote got very fast, very widespread circulation on the Internet.

Weigh Flat-Fee Pricing

Many types of retailers charge customers a flat fee per month for unlimited use of services. Here are some consumer psychology factors to consider in deciding if and how flat-fee pricing for services can work well for your business:

• A variety of surveys find that people hesitate committing to a flat-fee plan unless they believe they can quit at any time, even if there’s a penalty for midterm cancellation. The reality to keep in mind, though, is that because of mental inertia and the comfort of not having to worry about piecemeal purchases, people are unlikely to cancel a flat-fee arrangement until the next renewal date.
• Research at University of Pennsylvania and University of Southern California suggests that people agreeing to a flat-fee arrangement are more likely to build commitment to the retailer and recommend the retailer to others if the customers are referred to as “members of the plan” rather than as “subscribers to the plan.”
• Do you have the capacity to provide for the maximum quantities and the ranges in demands that customers will request? According to researchers at University of Southern California, most consumers overestimate how much of the service they will use in the future when first purchasing a flat-fee agreement. Take this into account when doing your planning for how many customers you can accept and how many service providers you’ll require.
• Research at Harvard University and University of Toronto finds that, as a general rule, usage is highest in the initial weeks after agreement to the plan, and usage fades over the following periods of time. Because the customer’s rate of use tends to be lowest right before renewal time, it is especially important that you—the retailer—present advantages of renewal and encourage use as the renewal date approaches.

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