Category Archives: Consumer Psychology Files
This week, I noticed something scary happening (and yes, Halloween is already over). Retail stores have exploded with wrapping paper, bows and garlands. Radio ads proclaim “Outdoor light sale, get a jump on your decorating!” And two days ago, one of my social media acquaintances proudly boasted that their Christmas presents were bought, wrapped and already placed underneath the decorated Christmas tree.
It was November 4th.
For those that are bothered by this, it’s easy enough to ignore the premature festivity. But there is one aspect that is harder to tune out, and you can bet it will be starting soon, if it hasn’t already.
The Christmas music.
Some love it. Some hate it. Marketing wisdom tells us that it puts shoppers in the “right frame of mind”, and encourages them to buy more. It’s hard to argue with this business strategy and its bottom-line results (see last year’s post Deck the Malls for an overview).
For this reason, I’ve been waiting for someone to take Christmas music to the next level. Now that the holiday season officially runs from November to January, the next logical step is to write a new carol that reflects our modern reality. The “61 days of Christmas” seems like an appropriate title. By my calculations, it would take several days of continuous play to reach the end, and it could be placed on an endless loop in retail stores. And think of the possibilities for product advertising! “On the 49th day of Christmas my true love gave to me, a Windows 8 Surface Tablet!” It could be changed up every year to reflect the hottest products.
Then, to my relief, I came across a news article that dissuaded my fears of a 24/7-carol-o-thon. This week, Shoppers Drug Mart found itself in hot water after pumping out the Christmas tunes on November 1st. Customers complained that the pharmacy giant had overstepped the unwritten rule of “No Christmas before Remembrance Day” and the soundtrack was yanked “until further notice”. I skimmed through the 100+ comments on the article and the consensus was overwhelming: “No Christmas before December 1st please”.
Will retailers hear the message? Or will it be lost in the chorus of “fa la la la la-s” and register “cha-chings”?
Do you think the Christmas hype starts too early? Or should retailers use every sales tool at their disposal?
What’s your favourite part about the movie theatre experience? Some, no doubt, would argue it’s the popcorn. It’s not difficult to see why as it’s certainly hard to ignore. From the moment you step out of your car you can already smell it, its buttery popcorn-y goodness encircling your nostrils. Suddenly, even the fullest of stomachs can make room.
But did you know that what you really smell is payday for the theatre? The theatre industry is dependent on concession sales for its profits and uses every method at its disposal to persuade you to buy more food. To boot, that popcorn smell is really diacetyl, the artificial butter chemical favoured for its anti-spoilage properties, but perhaps more valuable for its potent smell. This chemically enhanced popcorn smells even better than the real thing. The result? People open their wallets and their mouths.
Sure, good smelling food leading to more sales is not a giant leap. But did you know even non-food retailers are using scents to sell everyday products? This marketing technique is known as environmental fragrancing; businesses use smells to elicit emotions that encourage shoppers to spend more dough.
In the cracked.com article “6 ways your sense of smell is secretly controlling your mind”, the science behind the strategy is explained. Smells are interpreted by the limbic system, one of the oldest portions of the brain. This system subconsciously associates smells with emotions, without the interference of higher brain functions like logic and reasoning. These associations are both powerful, and long-lasting. It’s why we experience sudden flashbacks when encountering a stranger wearing the same brand of perfume or cologne as an ex-lover.
This strategy not only places shoppers in “the right frame of mind”, it actually makes them spend more too. The cracked.com article recounts one study that showed “sales of men’s and women’s clothing nearly doubled when ‘masculine’ and ‘feminine’ scents were used nearby, an effect that disappeared when the smells were reversed”. It’s the same reason that car manufacturers infuse cars with “new car smell”. It’s why grocery stores place high-priced items around fresh bread and coffee, and flowers are placed right at the entrance. And it’s why home sellers will bake fresh bread and cookies before their open house. Scents make us impulsive, which invariably leads to more sales.
The next time you’re out shopping, take note of what you smell. It could really be the scent of cold hard cash.
Do you use scent-based marketing strategies? As a consumer, have you noticed this strategy while shopping?
This post is part 2 in a series on sales techniques. Click here to read part 1.
So now we understand that customers are defensive and resistant to contact upon entering the retail store. How do we break that paradigm and get the customers to see us as a necessary and helpful assistant in what is a difficult decision making process?
First of all, we must understand that sales at any level is equal parts “science” and “art”. Al most anyone can learn the science but the art is individual and is not as much learned as it is instinctive: hence the expression “he/she is a born salesperson”
As a salesperson you will be called upon at any given time to be a psychiatrist, an actor, an artist or technician.
The science of the initial contract is:
- Be busy, have something in your hand, appear to be going somewhere or engaged in a task. This makes you non-threatening to the customer. Never congregate with other salespeople or stand around the sales counter, etc.
- Never approach a customer from directly in front; people are protective of the space in front of them and even at a distance this is threatening.
- Catch their eye, smile, look away and go back to what you were doing. After a two count, say “Excuse me, may I ask you a question?” If you do this right, they will respond by meeting your eyes, and in some cases even taking a step toward you. From their perspective they are now meeting you for the SECOND time and your threat level has lowered. You must have a question ready that:
- Does not relate to business!
- Is open ended and cannot be easily answered by “yes or “no”
- Something as simple as “Is it still raining outside” can work, but it is better to be creative so try and ask something about them, maybe about their logo-ed clothing or a hat they are wearing. i.e.” I just love that jacket/ring/hat/shoes would you mind telling me where you found that”
Done correctly this is so powerful that you will find yourself in a conversation with a new friend, and that conversation has nothing to do with business.
Now the artistry kicks in: the “Smoozing”, or small talk, can take just a few seconds or much longer depending on the customer’s level of defensiveness. Remember to listen carefully if a customer talks about themselves. Repeating a personal detail back to them sometime later in the sale proves that you listened. i.e. “When your daughter gets home next week, she will love this” and goes a long way in building confidence.
With this as your foundation, most customers will make the transition to business without help, which is a “buying signal” in itself. If the customer is slow to make the transition, the salesperson needs to judge when the time is right.
Strangely enough you have now earned the right to ask, AS A NEW FRIEND (not a salesperson), what brings them into your store. Their response will be much more positive if you have done your job, lowered their defences and earned the right to ask the question.
From here we would follow the “railroad track” of a sale:
- Probing or qualifying
- Trial close
- Handling objections
- Closing the sale
- Adding on
- Confirmations and invitations.
Constructing a sales process is critical for success; arguably the first step that I have spent so much time explaining here is the most important. Without a solid foundation of trust and confidence between you and your customer, it will make the whole process more difficult and frustrating for both of you.
What sales techniques do you find effective? As a customer, what kind of approach do you appreciate?
I have been reading with interest the comments on the “can I help you” post. Personally, from 20+ years of retail experience (sales, training, management and ownership) I can verify this is the number one block to a successful sales experience for both the customer and the salesperson.
Teaching a salesperson to avoid the phrase or anything that sounds like that phrase MUST be the first goal of any training program.
Substituting the phrase with “what brings you in today?” “What are you looking for?” “Can I show you something?” blah, blah, blah does not help one bit. Yes. You’ve changed the question, but not the premise behind it.
The fact is; your customer is expecting to hear “Can I help you?” so even if you ask “Is it raining outside?” or “Ever run through Rome wearing nothing but shoulder pads and goat leggings?” – two out of five customers will respond “No thanks. I’m just looking”. The reality is, they’re paying very little attention to what you’re saying.
In my world of retail electronics in the 80’s, it was such a competitive environment that every new sales trainee was told in no uncertain terms that “if I hear anything that sounds like can I help you, what brings you in today etc. you are “fired”, no second chances.
So… “WHY” does this happen? Why are customers so resistant when first entering a store? They presumably have an interest or need for something your store has to offer. They recognize that at one point they will have to interact with an employee at some point.
So why the “FEAR”?
“Can I help you” is conditioning from our past, it screams “SALESMAN, SALESMAN, BEWARE, BEWARE”
It is only in relatively recent times, as our population and the quantity and the variety of available goods has exploded, that competition for customers and profit has taken centre stage. Previous to this, “sales” consisted mainly of order taking. You usually went to a General Store. You knew what you wanted. You asked for it or picked it out, paid for it, and you were out the door.
Simple. And emblematic of a simpler time.
There was little or no competition, little selection, and everyone “knew the rules”. “Can I help you” was genuine, expected and accepted as a sincere gesture in a kinder, gentler time.
The competition for customers and profit produced the “Salesperson” as a ruthless, conniving, sleazy, fast talking individual that would be expected to lie, cheat and steal to take all your money and give you little or nothing in return. This was heightened and broadcast by Television caricatures of the “used car salesman” with the loud clothes and fast talking style that everyone hated. Unfortunately due to ignorance and inadequate training “Can I help you” was carried forward
Fast forward to today: most everyone entering a store is programmed to expect a fast-talking, insincere individual who will attack immediately and force them to buy items they don’t want or need. Before they ever enter the store, they consciously or unconsciously prep themselves, raising their defences, and mutter to themselves (figuratively) “I’ll just tell him to get lost”.
And so “Can I help you” has come to mean “I see you and I’m going to pressure you into a 200-year extended warranty”. And “No thanks I’m just looking” has come to mean “Not a chance. Get away from me”.
My next post will cover the solution to this ever present challenge in today’s retail environment and explain the right way to approach your customers.
I’m a very methodical (and slow) shopper. This is especially true for big-ticket or important items. Before I make such a purchase, I spend hours researching various products. When I have made my shortlist of suitable options, I read every available online review to check for potential shortcomings. Finally, I head in-store to evaluate the possibilities in person. Finally, I make my purchase and head home…
…where I re-research the product again.
It sounds a little nutty…but chances are you’ve probably done this too.
According to a recent article by the Marketing Science Institute, my behaviour is a classic example of the well-documented “post-purchase bias”. The bias was first discovered by Ehrlich et al. in a 1957 study. They found that new car buyers read more advertisements for the car they had just purchased than for the cars that they had considered, but not purchased. This effect has been reproduced many times and is considered to be one of the most robust findings in consumer behaviour.
Why do we do this? By re-affirming the reasons for our initial purchase, we defend the wisdom of our acquisition and are able to allay the dreaded “buyer’s remorse”.
More recently, researchers have discovered that we also distort product information to reinforce our decision after a sale. When presented with such information, we ignore the bad and inflate the good. More importantly, because this interpretation is self-driven, we are more likely to believe in these positive evaluations.
This has big implications for business. Traditionally, we think of marketing as something that occurs before the sale. However, this study suggests that marketing is just as important after the sale has already occurred.
The MSI article outlines four implications for business:
1) Managers should always find ways to follow through after a recent purchase. Good customer service practices aside – when customers are given more information about a product, they positively interpret this information to create a stronger brand preference.
2) This follow-up should take place as soon as possible after the initial purchase, while the customer still feels strongly about the product.
3) After the initial purchase, we are likely to hear from some customers again – some products may be returned, others may require repair, or the customer may need additional instructions. Every encounter offers businesses the chance to strengthen the customer’s product preference.
4) The best kind of marketing is free-marketing – specifically when customers talk to friends about their experiences. The more post-purchase follow-up, the more loyal the customer, and the more likely they are to offer positive feedback regarding the product. Most importantly, because they are passionate about the product, this feedback is inherently more believable.
Remember: Your work as a retailer doesn’t end when the customer reaches the cash register – it has only just begun.
Do you research products you’ve already purchased? How does your business market itself to existing customers?
“If we wanted to figure out if a customer is pregnant, even if she didn’t want us to know, can you do that?”
This was the question posted to Target statistician Andrew Pole, as recounted in the New York Times article “How companies learn your secrets”. New parents have always been a boon for “one-stop” retailers like Target, as this life-change offers a small opportunity to alter engrained buying habits. “Coming in for diapers? Might as well pick up some supper too.” The competition for new parents’ attention is so fierce that Target wanted to get a jump on their competition and begin their marketing efforts before baby was even born.
And Pole delivered. He analyzed women’s purchase history and identified 25 products (pre-natal vitamins, maternity wear, etc.) that when considered together, generated a “pregnancy prediction score”. This allowed him to estimate who was a mommy-to-be, and approximately when she was due. Target then created custom “mommy-themed” flyers and coupons, disguised as regular flyers, and sent them specifically to these women, who were unaware of their data-gleaned origins.
And Target is not the only retailer doing this. As the article explains, “Almost every major retailer, from grocery chains to investment banks to the U.S. Postal Service, has a “predictive analytics” department devoted to understanding not just consumers’ shopping habits but also their personal habits, so as to more efficiently market to them.”
Does this story give you pause? Or does the prospect of a tailored-deal excite you? Either way, just wait. Those predictive analytics departments are about to get a whole lot more in-your-face thanks to mobile wallets.
The internet has been awash with talk of mobile wallets. (For the uninitiated, Jen’s post ‘The Next Step’ provides a great introduction). People are quick to talk about their convenience, the “coolness” of the technology, their lighter pockets. But less often do they mention the real reason for their existence; marketing.
A few weeks ago, I read an article that explained how RBC is poised to be the first Canadian bank to offer mobile wallets, possibly as a soon as October. Interestingly, this article also spoke at great length of the marketing advantages of the technology.
Retailers will now be able to collect purchase-data more easily than ever before, tailoring promotions to specific consumers. Combine this with your smartphone’s location-aware technology and retailers can now text you their latest flyer when you are near their store. Or alert you of their lunch special.
There are obvious advantages for both merchants and consumers alike, and it might be nice to walk into your favourite store and be provided with a list of on-sale items, or a coupon. We won’t know how this latest evolution of analytics will play out, but one thing’s for sure – we’ll all be watching. Oh, and so will they.
Do you think predictive analytics improve the retailer/customer dynamic? Or, are they an invasion of privacy?
Our very first blog post “Get it in their hands: the power of demonstration” was written by Meagan, detailing her experience of buying a new camera. She told us all how it wasn’t until she had the camera in her hands that she knew it would be the one for her. Ever since that post, I’ve actually put thought into why I buy the things that I buy. If Meagan shops based on the feeling of holding that item in her hand and trying it out, what is it that drives me to the cash register?
It wasn’t until two months ago that I knew the answer. I went to a yearly sale at a well-known Nova Scotia yarn store, and as I was wandering through the rows of yarn and wool and books and people, I realized that for me, it’s all about appearances. I would pick up the yarn and get a sense of the weight, the texture, the comfort-level. But it wasn’t that overall need to touch that drove me to a particular aisle. It was the appearance. The décor. The display. It was only when I was attracted by the look of the aisle that I would actually walk down it and pay any attention to the wares that it held.
I’m well aware that I’m a very visual person, but I never really stopped before to think about how that particular trait has influenced my life outside of school and work. Now that I’ve put two-and-two together, I can see how my shopping habits are influenced by the visual cues that I get from the stores that I walk into.
All of my favourite stores – from clothing boutiques, to book stores and craft nooks – have very distinct similarities. They’re all laid out in a way that is very organized and easy to navigate; nothing crowded or hard to walk through. They’re all bright and well-light, and I get a feeling of comfort as soon as I walk through the door, like it’s a safe environment to spend time in. There are a lot of clean lines and displays are put together with a lot of care and thought. And there’s colour. So much colour. No matter which direction I’m facing, there’s something for me to look that invites me to take a closer look. I have a hard time walking out of these stores without buying something, even when there’s nothing that I went in to buy, just because I felt like I should make a purchase.
Now at this point in the post, you’re wondering what this has to do with you. So I like to judge stores by their cover. What does this matter to everyone reading this?
Most people probably don’t care why I buy the things that I buy. But a retail store owner trying to get my business is going to have to put a lot of thought into what she or he can do to get my attention. And now, all of a sudden, I’m starting to feel bad for that store owner. Now they not only need to appeal to me and my visual signals, but also to Meagan, the kinaesthetic shopper. And what about people who take in information through auditory cues? Now your store needs to be visually appealing, people need to want to pick up your wares, and you need good tunes to listen to. What happened to the good old days when you put an item on a shelf and if someone wanted to buy it they did, and if they didn’t they moved along? Now, with so many other stores in the mall, you need to put a lot of extra effort to get my sale, and Meagan’s sale, and everyone else’s. Retail has always had an element of competition. Now it’s just a competition for attention.
How do you appeal to different types of shoppers? What influences you to make a purchase?
Who doesn’t like a sale? I know I do! But did you know that not all sales are created equal (even when they are)? When it comes to sales, it turns out it’s more about perception than reality.
Last week, the Economist featured an interesting article which recounted the results of a University of Minnesota study on discounting. And because game-show-esque examples are more fun than regurgitating conclusions from a journal, it’s time to play:
Hmm. This is a tough one. Did you pick A? Most of the study participants did.
Unfortunately you have been misled, dear reader. The answer is…..
Both are equivalent deals.
This has interesting implications for retailers. If you are going to put a product on sale, science has clearly demonstrated that customers strongly prefer getting more of something for free, rather than saving money on a single item. In the study, the researchers sold 73% more of their product using the “more free” strategy.
Don’t fret if you got it wrong because you have a chance to redeem yourself in round 2. It’s once again time to play:
So what do you think this time? Are these deals the same? Most of the study’s participants thought so. (They both reference 33% after all…)
Nope. In this case, B is by far the better deal.
In the first example, we saw that customers prefer getting more of something rather than saving money on a single item. In this case, we see the same behaviour again, even when they would have saved a lot more money by choosing B.
As a retailer, you would actually stand to make more profit by offering a bit more of something for free, rather than offering a steep discount. Customers generally view the deals the same, so you might as well offer the one that is more profitable for you.
Okay, time for round three. You’ve got one last shot to redeem yourself. It’s time to play:
Now this is something I see all the time when I’m shopping. A previously discounted item has an additional discount applied to it.
What’s the better deal? The study’s participants thought A was…
And if you did too…you’d be 0/3.
Yes, they are equivalent deals!
As a retailer, this is good to know. Multiple discounts applied to the same product seem like better value, even though the cost to you is the same as one larger discount.
So why is this the case? Are we all that bad at math?
Basically…yes. And when reason goes out the window, it seems we rely on other less-reliable clues (i.e. more is always better).
Knowing these tricks could make the difference between a successful sale, and a not-so-successful one. It also offers a sneaky opportunity to compete with other retailers. Is your competitor discounting their widgets this weekend? Offer the same deal, but instead offer an equivalent amount of free bonus products and you’ll be stealing their customers in no time.
So remember, when you’re planning a sale, customers always want to feel like they got “more” for their money, even if they really got less. But don’t worry; they’ll thank you for it.
Have you used any of these pricing strategies? What has worked in your store?
I have a confession to make. As it relates to the battle of wills, I am known to succumb to good sales people every time I go shopping. It’s even worse near Christmas when I’m getting desperate to find better gifts than a gas-station jug of washer fluid.
I bought so much junk that I didn’t intend to buy that I had to take a step back and figure out what had happened to me. It turns out we’re all victims of our own minds. There are so many hidden biases trapped in our minds that it’s almost amazing we don’t constantly trade our houses and cars for magic beans.
So I looked into it a bit. It turns out we anchor our choices to a single trait when making a decision. If the salesperson knows this (and which trait to target), they only have to convince you of the one useless (but superior) feature in order to make the sale.
We also like to think we’re always right, so we look for support of a previous decision. Again, if the salesperson knows this, they can push the right buttons. This is part of the reason salespeople always ask you what you’re looking for – it’s much easier to encourage an existing opinion than to change it. That’s also probably why I bought this year’s release of the same crappy phone I was unhappy with last year – somehow it was still a good move in my mind.
These effects don’t just occur when we’re purchasing something new, but also when we’re being sold “add-ons” like extended warranties. For some reason, I’m happy to pay more to prevent the malfunction of something than I would be to just buy it for the first time. Evidently this happens to a lot of people, since they have a name for it: the ‘endowment effect’.
The surprising part of these biases is that they work on us even when we’re aware of them. And further: we all believe we are less biased than everyone else. This is related to our universal belief that we’re all above average (despite the mathematical difficulties inherent in this claim). Somehow, ninety percent of us believe we’re better than average drivers. But alas, ninety percent of skilled sales people probably already knew that.