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?
I have writer’s block, and I’ve had it for a few months now. I spend at least an hour a day staring at the keyboard, waiting for words to flow. Instead, they’re stuck behind a stress-induced wall in my brain and they can’t make their way onto the page. It usually takes a while, but I eventually come up with enough words to string together to make a coherent though. Caffeine helps this process.
For most people, feeling creatively barren isn’t a big deal in their job. Even I have to admit that while this debilitating condition has affected my blogging, for the most part I’m able to continue on with my 9-5 life as per normal. But then again, my job also tends to be about data and numbers and it doesn’t require a lot of imagination or artistry. If I was in a sales position, I’d have a much bigger problem.
Most people don’t pair creativity with salesmanship, but the two really do go hand-in-hand. Being a salesperson is more than selling a product. You have to be better, smarter, and faster about selling that product than the guy in the store next door that is selling the same product. What is going to make me pick your pitch over his? It’s not because of your tie or because I like your smile. It’s because you’ve said or done something to draw my attention to you. You’ve made yourself stand out in such a way that I can see you and nothing else.
For a lot of salespeople, creativity can be a problem. They didn’t sign up for their jobs because they had great ideas and needed an outlet for them. Most salespeople are involved in an industry that they have some sort of knowledge in and therefore they can speak intelligently about a product. And don’t misunderstand – that is a very valuable tool. But unless your company is the only one on the planet that sells that product, chances are high that you’re going to have some competition in the marketplace. Knowledge of the product won’t be enough to sell it – you’re going to have to come up with an unique approach to the sale.
So if you’re not a naturally creative person, what can you do to spark that side of your brain into waking up? There are tons of great suggestions to be found online for getting you and your sales force into an inspired state of mind. Beyond that, though, you need to have the creative mentality in place in your organization. Encourage your sales reps get together to brainstorm and communicate and think outside-the-box. The one of the biggest mistakes that most companies make is that they pit their sales reps against each other in a competition to see who can get the most sales/commission. And that will usually work….to a point. If you want to build a long-lasting relationship with a customer, the foundation needs to be stronger than a load of nonsense that was served up out of desperation because your sales agent had a power bill coming due. It needs to be about being memorable. I have to see something in you and your product that makes me keep coming back. I’ve got my own power bill to pay, so scamming me and making me regret the transaction probably isn’t going to accomplish much over the long run. But if you can put some thought and imagination and resourcefulness into an approach that is going to make me want to come back to you over and over again, then everyone will benefit from that burst of originality.
Do you see a need for creativity in sales? As a salesperson, what creative methods do you use?
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?
You may, (or may not) recall that a couple of weeks ago in “The Basics of Analytics“, we started to look at Google Analytics, trying to decipher what these metrics really mean. Below is part two of that post.
As the name would imply, this is the rate at which people end up on one of your pages then ricochet off to another site entirely. The bounce rate is the percentage of people who view one of the pages on your site, then immediately exit. So… by definition, the number of pages per visit for “bouncers” is going to be a grand total of … one.
You can assume that if they land on one of your pages then jump to another site entirely, they didn’t get what they wanted, or landed on one of your pages by accident.
If you find that you have a high bounce rate, you likely need to work on your content, ensuring that on every page you have resonating copy that provides a reason to continue to explore.
Average time on site
Well… if this one is a struggle to understand, you might as well pack it up.
As you would assume, Average time on site means, very simply, the average total length of time that each visitor spends on your site. How do you break this down and what does it mean?
It could mean one of two things; a) you have a really interested prospect sitting on your site for ten minutes, genuinely engaged and enthralled by all of the information you have presented. Or b) your visitor is completely lost, desperately trying to find relevant information.
And how can you tell the difference? Look at your pages visited against total time on site. If they’re spending thirty seconds each on twenty different pages, they’re likely not all that engaged and may not be finding what it is they’re looking for. You would much rather have a page or two where your visitor is spending several minutes actually collecting and digesting the information you have provided. If you have twenty minutes on one page with little content, your visitor suffers from narcolepsy.
% New Visits
As the grouping name would suggest, % of New Visits tells you what percentage of your total visits are from new visitors.
Is a high percentage of new visits a good thing? Of course it is. It means that word about your site is travelling. Of course, if your site is one where you want continual revisits and your % of new is 99… that’s not a good thing. At all.
Make note that the new visit percentage is based on IP addresses. If Bob clears the cookies from his browser and visits your site, his visit will count as new. The reality is that people do, in fact (or should) clear cookies out of their browser with some frequency, so this number tends to be lacking in guarantee.
The best use of this number is as it relates to promotions – internet or otherwise. If you’ve engaged in a Google Adwords program, this number absolutely must increase, and should increase immediately. Likewise, any traditional advertising where your website address is promoted should result in a heavy increase in new visit percentage. If not, your promotion isn’t working. Plain and simple.
And there is your basic lesson on Google Analytics. My next post will go into more depth, covering some of the more granular tools that Analytics offers and (hopefully) helping you to decipher the information that will be of most help to you.
“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?
In the next few years, augmented reality (AR) is poised to take over retail. For the uninitiated, AR uses computer-generated sensory input to alter your perception of the world in real-time. Already we are seeing its potential being harnessed in all areas of retail, including in-store, online, and through advertising.
In-store Customer Experience
Retailers have introduced AR in-store in an attempt to improve the customer experience.
Starbucks Holiday Cups
In 2011, Starbucks introduced their entertainment-focused “Holiday Cups” campaign. After downloading an app, customers could use their smart phone to make their coffee cups come alive.
AR’s in-store usefulness goes beyond entertainment. Intel has developed an AR digital display, which has interesting implications for retailers. Installed at the store entrance, the 7ft transparent display shows customers a digital floorplan and recommends products after assessing their gender. Product location is superimposed on the screen, and products can be placed on hold and brought to the cash register for payment. The aim of the technology is to help customers shop more quickly and easily.
Traditionally, the problem with online shopping has been that you can’t truly get a sense of a product from a 2 dimensional image. With AR, customers are now able to hold products in their hand, and try them on virtually.
Tesco online shopping
Tesco has already made AR a large part of their online-shopping experience. Customers select a product online, and then print a copy of the AR marker. Holding the marker to their webcam, it is transformed into a 3d model of the product. As the customer turns the marker, the 3d image rotates on screen as well. In the video below, a customer views a TV, and is able to see the ports on the back of the unit as she turns the AR marker.
Holition’s AR is as luxurious as the products it promotes. Designed for high-end products, their AR experience allows customers to virtually “try on” jewelry and watches. Holition is also working on expanding their AR so that customers can smell, hear, and feel products.
Bodymetrics Virtual dressing room
Unsurprisingly, 50% of garments bought online are returned. But what if you knew how those jeans would fit before you place your order? Bodymetrics’ Virtual dressing room uses your in-home motion capture device (such as the X-Box Kinect) to assess your body shape and virtually project clothes onto your digital frame. If you like what you see, your purchase can be completed right through your console.
AR is also finding its place in advertising.
GoldRun has already launched several successful AR advertising campaigns. One of their most interesting campaigns was when they created a virtual shoe store for Airwalk. AR markers were secretly hidden in public places in Washington, New York, and Los Angeles. Customers used their smartphones to locate the markers, and were able to view limited edition versions of Airwalk classic shoes. They could then place an order from their phone for the shoe that they found.
In my twenty-some years in marketing I’ve considered one thing more than any other; brand. What is it?
The simple answer? It is a logo or company name that you see daily, sometimes even hourly.
And that, my friends, is the wrong answer.
It is true that a well-designed logo will instigate immediate emotion. Navy blue is power. Grey is wisdom and competence. Times New Roman is obedient. Arial implies modern thinking. Straight lines are racy. Rounded lines are more personal. It all means something. A good logo can help set up the emotion that you want attached to your brand.
But a logo is not a brand.
A company name is not a brand.
Those items are simple visual symbols of a brand. Think of a logo as a thumbnail icon on your desktop. Upon seeing it, you know what the program does. You know whether or not you like that program. You know if it’s useful to you. It’s instantly recognizable because this icon stares at you every day. It reminds you of your experience (and that of others) with that product.
But you didn’t base your feelings on the icon. Yes, you recalled the program based on the icon, but you based your feelings about that image around the utility that it opens.
A brand is much more than a name or a logo. It is the emotion that a customer feels when thinking about your product.
A good brand isn’t one that has the benefit of the most clever bus station billboards, the most psychologically beneficial colour choices, the greatest frequency of radio commercials. A good brand is the one that enjoys a positive reaction because it is supported by an emotion; an emotion that ultimately comes from a good product.
Mercedes Benz has never won an award because of a really cool, easy to recall name. They’ve never been the recipient of prizes because of their revolutionary logo; a steering wheel. And yet it has become an epic symbol of quality.
If next week a group of bright entrepreneurs launched a new retail store that sold pneumatic heel exfoliators, they would – in most cases – come up with a snazzy name. They would hire a graphic artist who delivers a brilliant logo. They would hire an ad agency that pastes that brilliant company name above brilliant copy, on every wall of every podiatry clinic in the city. They would send out creative, edgy postcards to members of walking clubs. They would join and continually post on the website “peoplewhoneedheelexfoliation.com”.
Life will be wonderful.
They have created a brand.
No, they haven’t. They have created a symbol of a brand. If that store doesn’t engage in good customer service, and their heel exfoliators don’t work, customers will forever associate those brilliantly thought-out attributes with poor quality and lousy service.
The good news? They have now created a brand. A really, really bad one.
As it relates to retail, there is a very clear lesson to be learned. If you are selling products from a company that is well-branded, you have the invaluable benefit of your customer base already having an emotion attached to that product. But if you rely solely on that product’s name, the expensive advertising, a cool slogan, and some hip colours… you’re in deep trouble.
Your suppliers have spent millions. Sometimes billions in establishing a “brand”. They have invested in and entrusted to you with something that holds remarkable value.
If your desktop icon (even though it’s a widely recognized icon) opens a program that doesn’t work, that crashes your computer, that freezes continually… are you going to continue using it because you see it daily or even hourly?
Facing this, some companies would hire a creative phenom to change the logo.
And that, my friends, is the wrong answer.
When I was attending university, I took a marketing class in which the professor was convinced that brand recognition was the only requirement of a successful business. Sure, you needed capital to get started, and you would need a good sense of the product that you were selling, and sales skills and some knowledge of your market were a bonus. But he truly believed that the only thing a company needed to do to ensure their long-term success was to make their name synonymous with their product. He pointed out examples like Kleenex, Aspirin, Band-Aid and Jeep. He made sure that we all walked out of that course with the belief that our businesses would succeed so long as our brand names were part of the public lexicon. Make your product known and you will stay in business forever.
It’s well known that Kodak has had a lot of problems in the last ten years, and the majority of those troubles are being blamed on the growth in the digital camera market. And yet for a brief period of time in 2005, Kodak was actually ranked first in the U.S. in digital cameras sales. But here we are, seven years later, with a different company in the first place slot and Kodak struggling frantically to keep afloat.
But this is Kodak! They invented the Brownie camera, which was the first camera available to amateur photographers at the start of the last century. They were the first company to produce and sell color 35mm film. Would we be able to go the movies or even watch DVDs if Kodak hadn’t been there in the early 1900s to help develop the film stock that was originally used to shoot motion pictures? Who amongst us has not had a “Kodak moment”? And here’s a little piece of irony for you: the man credited with inventing the digital camera, Steve Sasson, worked as an engineer for Kodak at the time that he developed the equipment. Kodak engineers also invented the megapixel sensor, which is a key component to making your digital pictures look so great. That’s right – the company that is currently being brought down because of increased competition in the digital photography market can actually lay claim to being part of the invention of the digital photography market.
So how does this happen to a company that has dominated the landscape for over 100 years and can lay claim to being one of the most recognizable brands in the world? It’s actually quite simple. It’s because they were dominant and had brand-recognition. Sure, they tried to expand a little and open their doors to different products and ideas. But in the mid-1990s, Kodak executives were sceptical that this whole “digital” thing would even become a thing. They were confident in their brand, and while they were willing to branch out a little into new areas they firmly believed that staying the course of their original marketing and production paths was what would keep them at the top of the heap. When others within the organization tried to say differently, they were shut down in favour of management’s plans. To say that management failed to take into account the speed with which the consumer market changes is an understatement.
Now, of course, the management at Eastman Kodak is singing a different song. And with new people and new voices being heard within the organization, there is hope that Kodak will be able to reorganize while under bankruptcy protection and come out even stronger on the other side. But this path is going to be long and painful, and what makes it worse is that it could have been avoided if the company had spent more time ensuring that their brand stayed at the top of the market rather than just assuming that it would because they were a Brand.
If I could take this information and go back ten and a few years to my university professor, I would tell him the following:
- The key to brand recognition is making sure that your brand continues to be seen by the consumer. People have short memories. If your brand disappears from the market, consumers won’t stop buying that product in protest. They’ll move on.
- Price can trump brand, but only in those cases where the brand doesn’t have legitimate strength and clear competitive advantage. If you’re going to rely on product quality as your value proposition, then you need to be sure the quality of your product allows for it.
- All the brand recognition and all the excellent product development in the world will not help your company if management fails to plan ahead and think about the future. Listen to the market, listen to your employees, and remember that what goes up must come down and nowhere does that analogy ring more true than in a capitalist marketplace.