Celebrate Earth Day in Your Own Way

Each April 22 is Earth Day, the annual commitment to environmental protection. Earth Day was created by Gaylord Nelson, then a U.S. Senator from Wisconsin, in 1970 after he witnessed the ravages of the 1969 oil spill in Santa Barbara, California. The forces mobilized by that first Earth Day were behind the formation of the U.S. Environmental Protection Agency and the Clean Air, Clean Water, and Endangered Species Acts.
     My guess is that there are retailers who don’t celebrate those accomplishment of Earth Day, viewing them as excessive federal intrusions on the conduct of business. And as an article in the Los Angeles Times pointed out, Earth Day, with the undertone of conservation, doesn’t seem a good fit for promoting retail purchases as is done on Mother’s Day and Black Friday.
     Still, the Times goes on to list what a few retailers do to commemorate Earth Day in their own ways. Here’s my adaptation of the list:

• The publicity and enthusiasm accompanying Earth Day can be used to add pizzazz to what would otherwise be a dull promotion. Some years ago, North Carolina retailers held a “Cash for Appliances” promotion funded by the state government. Purchases of qualifying energy-efficient refrigerators, freezers, clothes washers, and dishwashers got a 15% instant rebate. A prior event of this type had not pulled in much business. So for this one, the event was scheduled to start on Earth Day.
• Retailers selling cosmetics from Origins Natural Resources are, with manufacturer sponsorship, accepting a bottle of a skincare product of another brand in exchange for an Origins organic product. To keep the offer even cleaner, bottles and packaging will be recycled.
• Chipotle Mexican Grill has a real meal deal combo—you get a burrito and a lunch bag for the price of the lunch bag! Each lunch bag is made from recycled Chipotle billboard material.
• Every Target store is giving away a reusable shopping tote to each customer who asks at the guest services desk.

     How you mark Earth Day should be compatible with the degree of environmentally-friendly practices throughout your business. Going green will lead to misunderstandings with your shoppers if they expect more than you're willing to do. This can produce anger instead of good will. People feel you're claiming credentials you don't deserve.
     Lay your plans to celebrate Earth Day, as well as every other day you are ready to do business, in your own way.

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

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Add Pizzazz to Dull Promotions
Be Clear What You Mean by Going Green

Turn Customer Habits Into Rituals

As the shopkeeper spots the ten-year-old boy coming in the door, he says to a customer, “I know this is the first time you’ve been in my store. I want you to see probably the dumbest kid you will ever see in your life.”
     While the customer watches, the shopkeeper opens the cash register, takes out some money, places a dollar bill in one open palm and two quarters in the other, and says to the kid, “Okay, which do you want?”
     The boy hesitates for a moment before pointing to the hand with the two quarters. The shopkeeper shakes his head, chuckles, hands him the coins, and returns the dollar bill to the register. The boy picks up items from the shelves, comes to the counter, plunks down the two quarters, and pulls more coins out of his pocket to pay for the rest that’s due.
     This entire episode without the kid saying one word. Nothing.
     The customer who’d watched all this is intrigued. She quickly makes her purchase and follows the boy out the door. When they’re both outside, she asks, “I’m wondering, why’d you choose two quarters instead of the dollar bill?”
     “The day I take the dollar, that’s the day I stop getting fifty cents every time I come by.”
     I’d say that kid was far from dumb. I’d also say the shopkeeper was on to something, too, even if not realizing it consciously. The boy had become a reliable repeat customer. A habit of coming into the store had been turned into the ritual of a game.
     Any retailer who opens the shop early in the morning and serves fresh-brewed coffee can change customers’ habits of dropping by into a ritual so embedded in the psyche that those customers won’t feel just right unless they’ve started the day at the shop.
     With any product line and at any time of day, think of the importance of rituals in building repeat business.
     As salespeople gain experience, they learn to engage with regular customers in going through rituals. And even if not engaging, at least staying out of the way of the rituals as much as possible. Consumer rituals are compelling because of being deep-seated in the personality. Many took form early in life as the child watched others shop and was coached by parents
     Don’t let yourself be exploited. But go along with useful rituals.

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Let Shoppers Go Through Their Rituals
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Declare WAR on Customer Loyalty Measures

Customers who profess high satisfaction with your store, high loyalty to your business, and an interest in recommending you to friends will still go to other merchants. A major reason is that those customers may also be satisfied with and loyal to the others.
     Much of this is unavoidable. However, researchers at Ipsos Loyalty, Fordham University, and Vanderbilt University find that, with proper analyses, you can reduce the drift and significantly increase your share of your customers’ expenditures for the items you sell.
     The proper analyses involve what the researchers call your “Wallet Allocation Rule.” For the sake of brevity and to add dramatic appeal, I’ll call it the WAR score. And for the sake of reality, I’ll point out that if the calculation just below seems overly complex, you can adapt the procedure to what reliably works for you.
     The distinctive addition in the WAR calculation is that you also ask your customers about where else they shop and their degree of satisfaction with each of the alternatives to shopping with you. You then look at where you rank compared to the others and plug the numbers into the WAR formula for each customer surveyed:

     To calculate your overall WAR score, average the results obtained from the customers surveyed. You can calculate the WAR score for each of the other stores in the same way.
     The WAR derives from the researchers’ tracking of the purchase habits of more than 17,000 consumers in nine countries. The correlation between the WAR score and the share of wallet was, on average, 0.9. This is extraordinarily high for any consumer behavior study. A perfect correlation is 1.0. The correlation between changes in the WAR score and changes in the share of wallet averaged 0.8. This shows that measures you take to improve your WAR score are likely to pay off well.
     The researchers suggest these steps to raise your WAR score if your rank is not Number 1:

• First, ask your survey respondents what they specifically prefer about the others.
• Turn this information into possible action steps for your business.
• Estimate the costs of implementing each change and your best guess as to how much the implementation would increase your ranking for all customers.
• Make the changes with the highest potential for profitability.
• After you’ve given the changes sufficient time to make a difference, survey customers again.

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

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Transfer Technology to Retailing Adjacencies

“Technology transfer” means putting academic research findings to practical use. It’s my main objective with the RIMtailing blog, in the sense of using the results from consumer behavior studies to develop ways for retailers and other suppliers of products and services to improve their profitability.
     But the term “technology transfer” is often used in a somewhat different sense—to refer to discoveries and inventions in the physical sciences being transformed into innovations with commercial potential. Referring to this meaning of technology transfer, Nitin Nohria, as dean of Harvard Business School, wrote in Harvard Business Review, “Ultimately, the creation of jobs and wealth has more to do with harvesting the value of an innovation than with inventing it.”
     To do this, Dean Nohria advocated for attending to what business strategists call “adjacencies.” His major example, though, came not from the physical sciences, not from the realm of CPU chips and DNA mapping, but from an ancient invention: Yoga.
     What single company arguably harvested the largest creation of wealth from this ancient invention? Retailer Lululemon Athletica, purveyor of yoga clothing and accessories. Other adjacency providers of products and services include stores selling yoga DVDs, yoga retreat operators, incense producers, and physical therapists for yoga-related injuries. All these are adjacencies to the core invention of yoga and core commercial application—yoga instruction.
     As a retailer, you can count on upcoming opportunities to use transferred technology to increase sales of your current offerings:

• The sensor that, when embedded in a point-of-sale location, analyzes each shopper’s facial structure, facial expressions, body size, posture, and movement paths. The promise is to determine the demographic breakout of those who show interest in a product and then track the degree of interest and the sequence of shopping steps for different demographic segments.
• The kiosk which uses facial recognition technology to assess the shopper’s age and gender. Next, the consumer is invited to punch in information about planned meal times and swipe her frequent shopper card, which links to data about past food purchases. The kiosk then generates meal ideas. Want a sample of an item it suggests you buy? Poke the screen with a finger.

     Less esoteric and with greater profit potential are the upcoming possibilities you can be spotting for your core product and service offerings which are technology transfer adjacencies. For each electric vehicle, there’s a market for batteries and charging stations.

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

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Offer Neatness to Creative Shoppers
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Fire with Small Steps Before Aiming

Profitable retailers are action-oriented. They realize that in the fast-changing reality of retailing, those who stand still are sure to be left behind. Their operating principle is often “Ready. Fire. Aim.” Rather than “Ready. Aim. Fire.” They are “Give it a try and see what happens” people.
     Researchers working at Babson College, Innovation Associates, and The New York Times support this approach—but only for retailers who adhere to certain rules. Here’s my version of those rules, incorporating other research findings:

• Act from purpose, not panic. “Don’t just stand there, do something” or some version of it has been shouted at one time or another by every manager throughout history. But there’s another side to it: “Don’t just do something, stand there,” has been publically proclaimed by a wide range of well-known individuals, from 1960’s radical Abbie Hoffman to U.S. President Ronald Reagan to the White Rabbit in the Disney version of “Alice in Wonderland.” In addition to freezing us into destructive inaction, panic can cause premature action. Instead of thinking through the alternatives and selecting the least bad choice, the retailer moves too soon.
• Start with small steps. Use resources at hand or within easy reach before taking large steps which require stretching to acquire substantial new resources. Until you’ve achieved experience and momentum, aim for quick, inexpensive, incremental improvements rather than transformational change. One reason for this is that if you depend on many other people for project implementation, chances are some of those people will aim to impede your success. Those kinds of people lurk everywhere in the world of business.
• Set safety limits. Clearly state how much you’re willing to lose before you’ll pull the plug on the initiative. Agree with yourself that you might change this limit, but require yourself to temporarily retreat from the project for a careful assessment before making any such change. Keep your promises to yourself and to others optimistic, while at the same time realistic.
• Anticipate danger. As you’re moving along the open road, look straight ahead most of the time. However, also scan for risks approaching from unexpected directions and take evasive action.
• Publicize achievements. These are opportunities to recruit additional resources along the way.
• Satisfice. In the 1950s, psychologist/economist Herbert Simon coined that term to refer to his finding that successful people accept less-than-perfect alternatives so they can move on to the next ideas they want to implement.

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

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Depend on the Kindness of Strangers

At the point in the play “A Streetcar Named Desire” when the character Blanche DuBois says, “Whoever you are, I have always depended on the kindness of strangers,” the character is portrayed as mentally ill. Results of a “Nielsen Global Trust in Advertising” survey indicate that it is the retailers who fail to depend on the good will of strangers who might be considered crazy.
     The survey polled more than 28,000 consumers in 56 countries. The results were statistically weighted to be representative of consumers who use the internet in each country.
     One major finding is that shoppers are more likely to trust the advice of strangers than ads sponsored by retailers or manufacturers. About 70% of respondents said they trust online consumer reviews posted by people they may not know personally. Four years previously, the percentage was about 55%, and the 70% figure is second only to the 92% who said they trust recommendations from friends and family.
     Only 47% said they trust paid ads, a decline from about 67% a few years previously. There is still some trust in online ads, but it’s declining and it’s notably less than the trust placed in the opinions of strangers.
     There were differences in results among areas of the world. For example, half the survey respondents in Africa, Pakistan, and the Middle East find TV ads to be personally relevant during product information searches, but only a third of European respondents had this trust in TV ads.
     Continue to inspire your satisfied customers to tell family and friends about their experiences. And don’t give up on advertising in traditional and newer media. However, also continue to encourage your customers to post and talk about your store to people they don’t know well.
     Aiming for referrals to weak connections spreads the good news about your store more widely. Weak links don’t substitute for strong ones; they augment them. It can be the difference between saying to customers, “Please recommend us to your friends,” and, “Please recommend us to your friends, and recommend those friends talk about us to their friends.”
     Encourage reviews which include both positives and negatives. These develop in prospective shoppers trust and curiosity which leads to the prospects wanting to check things out for themselves. Research at Rutgers University concluded that direct experience with the retailer affects how any negative information is interpreted.

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

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Inspire Customers to Post Repeatedly
Grab On with Weak Connections
Encourage Balanced Customer Reviews