Produce Aha Experiences for Shoppers

Can you guess what the following sentence means?
     “The haystack was important because the cloth would rip.”
     Researchers at State University of New York-Stony Brook, University of Minnesota, and Vanderbilt University asked people to remember sentences like that, which at first hearing seem to be nonsense.
     It’s the sort of thing your customer might experience when they ask you a question and you assume they have knowledge they don’t have. You’d be requiring your customer to make a guess, to fill in the blanks. The customer might do this for you or might say, “I don’t understand what you mean. Please tell me more.” But there’s also a good chance they’ll turn around and walk away from the sale you’d like to make.
     Sometimes it is only one word that makes all the difference. In my guessing game, I’ll make a guess. I think that if I say to you the word “parachute,” the sentence “The haystack was important because the cloth would rip” not only makes sense, but also produces a memorable mental image.
     This is the sort of phenomenon we’d like to produce when answering a customer’s question. An aha experience in which what you’ve said to the customer brings things together for them.
     Want another example from the research study? The sentence is “The notes were sour because the seam was split.”
     Again, one word can make all the difference, turning nonsense into perfect sense. In your retailing, it often will take more than one word to produce the aha experience as you explain an answer you’ve given to a customer. But in this case, the word “bagpipe” should do it.
     Am I recommending that you give encyclopedic answers to each question a customer asks? No, actually I’m recommending the opposite. If you assess that the customer is an expert, you might actually hold back on a comprehensive answer to signal respect for the person’s knowledge. With all customers, keep each answer brief and to the point. Finish it off with the item of information that brings it all together. The punch line.
     That’s how the best stories produce the aha experience. An example? With credit to Reader’s Digest and emailsanta.com, here’s what seven-year-old Bri wrote to the big guy: “I’m sorry for putting all that Ex-lax in your milk last year, but I wasn’t sure if you were real. My dad was really mad.”

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Give a Vocabulary for Richer Shopping
Respect Customers Who Claim Expertise
Offer Aspirational Shoppers Subtle Signals
Joke Around to Facilitate the Sale
Use Humor in Unexpected Ways

Appeal to Holiday Shoppers’ Ecommerce Brains

The Christmas shopping season is underway.

• The New York Times reports that Sears has started running “Black Friday” ads, and the week before Halloween, Abercrombie & Fitch sent e-mails to customers with the subject line: “We’re feeling naughty and sneaking Christmas in early!”
• Ecommerce retailers are even further along. According to the latest eHoliday survey sponsored by the National Retail Federation’s Shop.org, about 80% of online stores have already launched their holiday promotions.

     Recognize that ecommerce has changed the mentality of the shopper. Here are a few consumer psychology tips on appealing to holiday shoppers’ ecommerce brains:

• Help shoppers avoid unwanted crowds. Yes, many people find enjoyment in the busy bustle of holiday shopping. The ecommerce brain—especially the female ecommerce brain—finds that being with others who are in a holiday mood gives a sense of community energy. But although these women love the bustle, they hate to be jostled. It’s the unwanted crowds which make the shopper want to run home to their computer to finish the purchases. In the bricks-and-mortar store, establish store operating hours that spread out any crowds. Up the merchandise density for the holidays, but leave spaces—such as pristine restrooms—to which shoppers can retreat from crowds for a few minutes.
• Let customers say thank you. 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 Università Commerciale Luigi Bocconi and another set from University of Maryland and Yale University together suggest that giving the customer an opportunity to express gratitude to staff facilitates loyalty to the retailer. This seems to become more important during the holiday season because of the spirit of giving. 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. It is the opportunity to say thank you rather than an obligation to say it which makes the difference. Lots of shoppers want to complete their transaction as quickly as possible.
• Give shopper rewards right now. The ecommerce brain expects speed. JCPenney predicts their holiday JCPca$h promotion—which offers 20% instant rebates—will have a clear advantage for shoppers over programs such as Kohl’s Cash—which rewards with a 20% discount for the customer’s next shopping trip.

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Design Store Operations for Ecommerce Brains
Set Store Searches for Ecommerce Mentalities
Help Ecommerce Customers Thank You

Fine-Tune Your Social Couponing

“Social couponing” is a promotion tactic in which a substantial discount is offered to consumers who are told the offer is activated only when a certain number of people sign up for it online. Restaurants, educational services, and salons/spas have been the most frequent users of social couponing.
     The logic of social couponing is that, even if the retailer loses money on each coupon transaction, users of the coupon will be working to get loads of their friends to give the retailer a try. The profitability from social couponing depends on convincing the right kinds of coupon users to come back soon and often.
     Rice University researchers report that about 40% of retailers who have used social couponing during the past year say they would not do it again. The major complaints were that coupon users too often failed to buy anything beyond the face value of the coupon on their visit and/or didn’t come back to make a purchase at regular prices.
     Still, this leaves the majority who said their results were positive enough that they might give social couponing a try in the future. Here are shopper psychology tips on fine-tuning social couponing so that you profit:

• Establish reasonable expectations. Social couponing draws bargain hunters. If discount prices are a marketing point for your store, fine. If your criterion of success is that people spend more than the face value of the coupon, make that a condition of the coupon use.
• On the bill you present, state the discounted price, but state the undiscounted price more prominently. There are a few reasons for this: It builds appreciation in the customer for the value they’ve received. It reduces expectations that the service they’ve received is worth less than the price you’ll expect them to pay next time they come. And in a restaurant or spa, it encourages the customer to give a tip based on the undiscounted price. This keeps your staff supportive of the coupon program. In turn, supportive staff make the coupon redeemer’s experience memorable so they’ll want to return and bring along other people.
• Be sure your services to your current customers aren’t compromised by services to the coupon customers. Tell your current customers about the coupon offer and encourage them to enroll online for their next visit. Have sufficient staff, which often means increasing your staffing.

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Keep Discount Conditions Strict Enough
Customize Your Discount Coupons
Give Coupons Early and Proudly
Offer Exclusive Price Discounts Cautiously
Have Unannounced Discounts on Common Purchases

Help People Pass the Time

A university professor and a health care researcher found that many people like to shop mostly to pass the time.
     This finding seems too obvious to justify a research study. But the details do lead to valuable ideas for retailers, in my opinion.
     The researchers—from London’s Imperial College Business School and Toronto’s Sunnybrook Health Sciences Centre—surveyed more than 3,000 visitors and outpatients at a total of seven hospitals. About 70% of their respondents said that retail businesses in a hospital added great value to the consumers’ experiences under difficult circumstances. Around the same percentage said that a retailer’s presence at a hospital would make it more likely they’d purchase from that business at another location and speak positively to others about the retailer.
     What types of stores did the visitors and patients want? The types of places you could browse in: Clothing, electronics, bookstores. Hairdressers, where you can let yourself go and primp yourself up. Banks and grocery stores, where you can pass the time without feeling you’re wasting time.
     Researchers at Envirosell report finding the same sorts of desires for retail stores among airport visitors, and again with the same motivation: To pass the time in an interesting way in a setting that could otherwise be uncomfortable.
     Here are a few tips to build good will for the store’s brand name:

• Offer the consumer options for when to complete the purchase. This gives a sense of control that can in itself ease stress. If the customer who is told, “I can check out your purchases over here,” responds with, “I can wait,” the store staff response should be an understanding nod rather than a puzzled or irritated look.
• Graciously answer the same questions more than once. Some people deal with their anxiety by seeking more information or developing a plan for making a purchase. However, if the questioning seems to become a never-ending waste of your time, say, “You might want to think about it some more on your own and then get back to me.”
• Be ready for delay to become sudden action. Some people shiver at the side of the pool and then suddenly grit their teeth, think a happy thought, and jump into the freezing water. When that happens, let your customer quickly get into the swim and get it over with.

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

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Help Customers Buy Unpleasant Necessities

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

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
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Keep Up On Your Promises

“Always bear in mind what the country mother said to her daughter who was coming up to town to be apprenticed to the Bond Street millinery, ‘For heaven’s sake be good; but if you can’t be good, be careful.’”
     That’s from a 1903 book titled Pitcher in Paradise. Parallel advice for milliners in year 2010—especially if the hats they’re selling are advertised as luxury overstocks—is “Keep your promises. But if you can’t keep your promises, for heaven’s sake keep up on your promises.”
     Stay aware of your customers’ understanding of what you’re promising them, and when there are changes in what you can deliver, head off any negative effects on your customers’ long-term views of your business.
     I snuck in the part about luxury overstocks after noticing how outlet mall stores like Neiman Marcus Last Call and Saks’ Off 5th Avenue may be reneging on a promise. Customers have come to expect Gucci, Prada, and Dolce & Gabbana at bargain prices. But because high-end fashion retailers have trimmed back on inventory, there are fewer overstocks.
     Customers will still find lower prices than in the namesake stores. They’ll probably find luxury labels. But what’s increasingly being sold at the outlets are items made especially for those stores and to less refined standards than the originals.
     In other cases in our rugged economic environment, the promises not being kept—from the customer’s perspective, at least—have to do with services and pricing. Late delivery times. Failures to be instantly available to resolve complaints. Charges for extras that used to be free.
     Building on research findings from Arizona State University, here are tips for handling such situations to avoid negative fallout:

• Announce changes in advance. Minimize the surprises.
• Take personal responsibility. If you need to raise prices because supplier prices have escalated, certainly explain that to the irritated shopper. But in doing it, even your employee furthest from ownership of the business should use an abundance of “I” and “My store.”
• Allow the customer enough time to brief you about the bother. Then respond with something that shows you understand what the customer said, For instance, you might reply, “I understand the nuisance it causes for you to have to put your project on hold because of the late delivery.”

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Keep Your Promises
Make Your Shoppers Feel Smart
Ease Customer Anger at Delivery Delays

Prolong Your Reputation as Cutting Edge

“New and improved” has been a mainstay of retail marketing for forever. But a preference for the cutting edge has exploded in shopper psychology. An upside for the smaller retailer is that it gives an opening to get customers. “Want the latest technology/fashion statement/service delivery method? Come to us rather than to the stodgy retailer that’s been around too long.” At the same time, the challenge for retailers is that once you’ve made “new and improved” a major marketing message, you risk losing that reputation—and your customers—to upstarts.
     Here are some ways to prolong your reputation as cutting edge:

• Continually introduce some new and improved items. A common sense suggestion, I know, but one that is too often overlooked by busy retailers.
• Open pop-up stores. These are stores that remain in business for a very limited time. A Bloomberg Businessweek article from a few years ago describes how even retailing giants Target and Walmart have successfully used pop-up stores. In one case, the Target pop-up was open for only four days. Your objective is to generate excitement about your bricks-and-mortar store and/or ecommerce site. With this in mind, announce the pop-up widely to the media, realizing that even after the pop-up has closed, reporters will figure their audience is still asking, “What the devil happened?” When the Bloomberg Businessweek article was published in 2007, retail was thriving, so the article said, “Unoccupied stores in hot retail locations aren’t easy to come by.” The situation is different now.
• Repackage nostalgia. Australian entertainer Peter Allen thought enough of the saying “Everything old is new again” to coauthor a song by that title. Merchants are accommodating nostalgia fans who want the cutting edge by offering items like antique toasters sold as accent pieces, music tracks from old LP records reissued as MP3 downloads, and traditional house calls augmented with Internet ordering.
• Build customer loyalty. Another common sense suggestion? Maybe, but for a reason you might not have recognized: Loyal customers are sensitive to whether the cutting edge has become overly trendy. Researchers at Concordia University and University of Wisconsin-Madison explored what happened when loyal customers’ shopping selections threatened to be associated with terms like “yuppies,” “metrosexuals,” “urban gangstas,” and “hipsters.” The research findings indicate that loyal customers’ reactions in rejecting these labels strengthen their conviction that their existing store of choice is cutting edge.

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Meet Needs of Divorce Market
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Become the Only Game in Town

The story, dating from the early 1900s, credited with originating the term “the only game in town” sticks any recipient of that designation with negative associations: A traveler asks the hotel desk clerk to recommend a place to play some high stakes poker. The desk clerk says, “The bar next door has high stakes poker going all the time. But I’ll tell you that the dealer there cheats people blind.” “My goodness,” the traveler asks, “why do people from around here play poker there?” The clerk replies, “Well, it’s the only game in town.”
     Why do I suggest, then, that you aim to be the only game in town? Because the distinctiveness you achieve will bring you added business. In my opinion, the hotel desk clerk’s answer to the traveler was incomplete. People played poker at that bar because it was the only game around going on whenever you wanted to play, and people were willing to accept losing their money in order to have fun playing cards, drinking, and socializing. The customers kept coming back because they received value, even though, with being cheated blind, they probably wouldn’t describe themselves as high in customer satisfaction.
     The “only game in town” dynamic came to mind as I read a prepublication version of an article scheduled for the November 2010 issue of Journal of Marketing. Researchers now at Southern Methodist University, University of California-Riverside, and Boston College found that under certain circumstances, customer satisfaction has little effect on repurchase behavior. Because you as a retailer need to expend resources to achieve high customer satisfaction, that finding is an alert to ask where there might be better alternatives for you than working to achieve outstanding customer satisfaction.
     The answer: With products and services you provide and products you carry that are essential commodities—like automobile repair services and groceries—settling for less than ideal customer satisfaction might be most profitable for you. Assess if other tactics would be less expensive ways to keep shoppers coming. Maintaining convenient hours and always being in stock, for example.
     On the other hand, with luxury, pleasure-seeking products—such as high fashion—the convenient hours and in-stock positions are important, but they won’t compensate sufficiently for low customer satisfaction. To be the only game in town, you’ll need to do it all.

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Build Up Shopping Convenience

Give Customers a Clear Sense of Progress

For many retailing activities, we’re asking the customer to go through a series of steps. With a frequent shopper program, the steps consist of the various award levels. With a technologically sophisticated product, the steps consist of learning how to use the different capabilities. With a process, such as the customer returning an item for refund or credit, the steps might include checking the receipt, obtaining approval from a manager, and so on.
     In each of these cases, give customers a clear sense of progress through the steps.

• Sometimes we do this by making the steps big so that the customer easily recognizes change. Researchers at Virginia Polytechnic Institute and State University compared two versions of a loyalty rewards program in which a participant earned a 6% shopping discount after spending $100. In one version, the participant earned 10 points for each dollar spent and had to accumulate 1,000 points. In the other version, the participant earned one point for each dollar spent and had to accumulate 100 points. The researchers found that people felt more of a sense of progress with the “1,000 point” version because each step was associated with a bigger—and therefore more noticeable—number.
• Sometimes, we make the steps smaller so that it seems easier to climb up the staircase. Researchers at University at Buffalo-SUNY and Indiana University evaluated different protocols for learning to use the capabilities of products like smart phones, Wii games, and digital cameras before deciding whether to purchase the item. Based on their results, they recommend having the learning divided into small steps, with the person given intensive hands-on trial periods at each step. This method produced the most user willingness to buy.
• In almost all cases, we’ll want to give the consumer an overview of the steps at the start and then verify to the consumer when each step has been completed. More than eighty years ago, a Russian psychologist named Bluma Zeigarnik explored the reasons that waiters had a better memory for orders placed that were not served or not paid for than for those for which all the steps had been completed. Psychologists since then have used the term “Zeigarnik Effect” to refer to the mental itch we feel when a task is in limbo. Scratch that itch for your customers by announcing completion of each step along the way.

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Help Loyalty Program Members Progress
Turn Product Training into a Profit Center
Offer a Buffet of Loyalty Program Rewards
Tailor Loyalty Programs to Customer Culture
Give Loyalty Program Members Prestige
Have Suppliers Train Staff and Shoppers

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

Woo Item Experts

Some of your customers are—or at least consider themselves to be—experts in product categories you carry. Take account of their expertise so you can transform them into advocates for your business.

• Allow customers to show off their expertise when they’re in your store. Many consumers recommend a store and particular products after their self-esteem is raised. At the same time, a challenge with those considering themselves to be experts is that they too often don’t update their knowledge about the product category. Researchers at Duke University recommend that salespeople create an incentive for discovering what’s new. Since an incentive for many experts is showing off their knowledge, the salesperson might say to the expert something like, “It is clear that you know a lot about this type of product. May I share with you some of the latest versions we have and ask you what benefits you see that these new products hold for our customers?”
• Research at University of Pittsburgh and University of South Carolina finds that experts are attracted to categorization in ways that surprise them. Sporting equipment might be categorized by the sizes of the items. Power tools might be categorized by the type of job they could be used to complete. Clothing might be categorized by color. Foods might be categorized by country of origin. By surprising the expert, we get them to pay attention, and a customer who pays attention is more open to seeing the value in a higher priced option.
• Experts like to be served by staff who show high competence. The salesperson’s dress and body language say a lot as the prospective customer asks, “How much does this salesperson look like somebody I’d like to be?” If the store is busy, does the salesperson appear to have things under control? Then as the salesperson asks questions and answers the customer’s questions, it gets clearer. Customers don’t expect the salesperson to know everything. However they do expect the salesperson to get the answer when the salesperson doesn’t know and to do a personal handoff to another salesperson when necessary.

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Have Staff Who Show and Share Expertise
Give Experts Novel Product Categories

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
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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

Catch Customers by Helping Early

The first impression you’d like to leave with a visitor to your store is that you can help them out. Shoppers prefer to give their business to helpful people.
     A consumer’s brain starts evaluating a retailer within seconds of initial contact, and the consumer’s impressions that follow tend to be interpreted to fit in with those first impressions. If those first few seconds convey that you want to be helpful, whatever you do next becomes more likely to be interpreted by the consumer as helpful. It’s an example of what psychologists call “priming.”

• When a person unfamiliar to you enters you store, promptly greet them with an offer of help. Asking “How may I help you?” is much better than asking “May I help you?” Of course you can help them, even if it’s just to show them where the rest rooms are or how to get back out of the store. Why ask it as a yes/no question? Better yet is “What may I help you find today?”
• Reach out to them even before they enter your store to consider making a purchase today. For instance, distribute coupons as early in the shopping process as possible. Researchers at MIT found that coupons presented at the store entrance drive up sales much more than do coupons available in the aisles of stores.
• Be helpful to them at the end of their current purchase in order to prime them with the right impressions for when they’ll make their next related purchase. Mizuno, based in Japan, is partnering with U.S. sporting goods retailers to help build sales of Mizuno baseball equipment. As part of this effort, Mizuno is installing glove steamers at the retailers’ stores so that whatever brand baseball mitt you buy, you’ll see a machine with the Mizuno name helping you to break it in. Then next time you think of buying a baseball bat or equipment for golf, track, or yoga, you’ll remember the helpfulness of the retailer where you bought your mitt.

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Use Closed-Ended Questions Selectively
Give Coupons Early and Proudly

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

Set Store Searches for Ecommerce Mentalities

Ecommerce experiences create in consumers a mentality about shopping, a set of expectations that when met well by brick-and-mortar (B&M) stores gives those stores a retailer’s edge. One shopping function where this is true is the shopper’s search for the right product.
     Scientists at the Massachusetts Institute of Technology’s Media Lab identified some of these expectations. The scientists then used this information to design what they call “The Glass Infrastructure,” intended, among other things, to be a forerunner of search systems we’ll see in retail stores.
     Until those futuristic systems appear, here are ways to configure searches in your B&M store to meet the expectations of shoppers with ecommerce mentalities:

• Personalize the search. The Glass Infrastructure depends on each regular customer having an RFID (Radio Frequency Identification) tag containing information about what that particular consumer has tried out, rejected, and purchased. The hint for B&M salespeople: As part of selling, ask the shopper what alternatives they’ve tried out and what characteristics they seek in the product they’re searching for. Use data from frequent shopper programs to make in-store suggestions to the customer. Anticipate what the customer will be searching for next by considering not just what they select, but also what they reject. When a shopper turns down the top quality pillows in favor of the budget alternative, but selects the top quality mattress, and then asks us to recommend a sofa, which sofa are they most likely to purchase?
• Narrow down searches, but progressively. The Media Lab researchers noted two characteristics about B&M store searches: First, consumers often weren’t aware of every alternative available to them, since they’d have to walk all the aisles to see everything. Second, store directories—even electronic ones—often all read the same. The Glass Infrastructure starts out with a directory that covers a great many alternatives in which the consumer might be interested. But as the consumer moves toward one part of the selection, the directory narrows itself. In your B&M store, progressively narrow the search list the consumer is using
• Encourage collaborative searching. The Glass Infrastructure includes networked large LCD screens so that a set of consumers can each display and discuss their searching progress and intentions. In your B&M store designed to serve the ecommerce mentality of social networking, provide places where shoppers can collaborate.

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Keep Your Ecommerce Easy to Use
Use Search Engines to Influence Merchandising
Design Store Operations for Ecommerce Brains
Anticipate Intentions of Ecommerce Shoppers
Reduce Uncertainty for Ecommerce Customers

Keep Discount Conditions Strict Enough

I’m home today, it’s lunchtime, so interspersed with my keystrokes writing this posting, I’m taking bites from a delicious pastrami sandwich. I got it for free at a local sandwich shop using a two-for-one coupon I’d clipped out of the newspaper. Or maybe it was my wife’s sandwich I got for free.
     I’m not telling you the name of the sandwich shop because I wouldn’t want you to look them up and blab about my secret: See, I’m so accustomed to the two-for-one coupon that appears each week in the newspaper that I won’t buy a sandwich there unless I have the coupon. Oh, I give excuses for being that way. I tell myself that although the sandwiches are great, they don’t have enough counter help. Since I have to wait, I deserve a free sandwich, I mumble.
     But the truth is that if the coupon offers weren’t so frequent and liberal, I wouldn’t wait for a coupon. I’d be spending more money there. The truth is that a discount coupon can hurt sales.
     Researchers at Massachusetts Institute of Technology gave promotional coupons to customers who came into a convenience store. For some, the offer was, “Spend at least $6 and get $1 off.” For others, it was, “Spend at least $2 and get $1 off.”
     Customers lived up—or down—to the goal set by the retailer’s coupon. Those required to spend at least $6.00 did that, while those required to spend only $2.00 didn’t exceed that amount by much. To make sense of this, it’s important for me to tell you something else: The researchers knew that purchases at the convenience store averaged about $4.00. So it appears that the “Spend at least $2” customers were actually spending less than they would have without the coupon.
     Now, I see a methodological problem with this field study. It’s possible the “Spend $2” people grabbed their 50% rebate and ended up with such good will that they got in the habit of visiting the store quite frequently, spending lots more money there. Whether that sort of thing happens is something you might want measure in your store.

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Customize Your Discount Coupons
Give Coupons Early and Proudly

Sweeten Scarcity with Ample Warning

A most fundamental law of economics is supply and demand. When a product or service desired by consumers is in short supply, you can get a higher price. But there’s sometimes a price you pay for charging higher prices.
     Suppose major flooding hits your area, resulting in a shortage of flashlight batteries on your shelves. If you raise prices on your remaining stock, you might make out like a bandit in the short run, but be thought of as a crook in the longer term. Customers who pay more for a scarce item may end up developing ill will toward the retailer.
     Researchers at Stanford University came up with a surprising twist to all this, plus a suggestion for retailers to dissolve the ill will: Some participants in a study were given a gift, while the rest were denied the gift. Each participant was then asked how much they’d be willing to pay for the gift if purchasing it at a store. The average price was about 45% higher among those denied the gift than among those having gotten it. No surprise so far. The sort of denial experienced with scarcity raised the perceived value.
     Next, those participants denied the gift earlier were given the gift. Now every participant had the gift, and each of them was asked if they’d like to trade the gift for another item, which the researchers had determined was of about equal value. Of those who got the gift at first, about 40% said they’d trade. Among those denied the gift at first, about 80% said they’d trade. Denial led to dislike.
     In a follow-up study, the researchers promised some participants they could get Guess sunglasses if supplies lasted. Later, they were told the stock had run out. Those denied the Guess sunglasses ended up rating Guess watches lower and Calvin Klein watches higher than the other study participants, who hadn’t expected to win Guess sunglasses. The dislike spread to other products carrying the same brand name.
     There were a few more twists in the Stanford findings. Putting it all together, the researchers suggest that retailers can financially profit from pricing scarce items higher, but for longer-term good will toward the store, the retailer should give ample notice to customers. Warn customers about any shortages. Tell them how long you expect the shortages to last. Suggest alternatives they could purchase until the shortages ease.

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Show Fair Pricing By Contributing
Follow a Big Sales Event with a Smaller One
Boost Profits by Making Items Collectibles