The people who used to work in commerce thirty to forty years ago will find it tough to comprehend the behaviour of contemporary buyers. It appears as if a great majority of the buyers have lost their heads. While people used to purchase the items they needed, wholly different motives dominate today.
As town geographer Jim Pooler points out in his book Why We Shop, the typical contemporary consumer stores to benefit himself, to meet psychological needs, and to feel great. He does not buy things because they are cheap. To the contrary, he buys them because they are expensive.
Children used to be excited by new things that they would put a new toy under their pillow or wear fresh jeans in the home because they could not wait till they got to go outdoors. Now adults behave the exact same way. However, an adult has somewhat different”jeans” — rather an adult has automobiles, houses, and excursions. Emotional purchases feel great — it is just like a shot of adrenaline combined with a feeling of pleasure and power.
There is no logical reason why someone should purchase a $100,000 Porsche or Lamborghini — a $20,000 Ford or Toyota will get you from point A to point B just too. And that’s the principal purpose of a vehicle. Purchasing a luxurious sports car satisfies completely distinct needs. The majority of the time, people do not even admit such needs. As Harvard professor Gerald Zaltman points out in his book How Customers Thinkup to 95 percent of all purchase decisions are made subconsciously. The consciousness is largely needed to describe one’s purchases to others (and yourself).
We’re not wrong by claiming that the client is an emotional and subconscious-driven being. This is the reason anthropologists, city geographers and merchants have carefully analyzed what makes someone purchase something and how to sensibly influence purchase decisions.
The following is a list of observations made over several decades. And if you’ve tried them all and claim that sales at your store have not improved… well then try again!
The Way to sensibly influence purchase decisions
Marketing is not the only thing that affects us. We are also affected by other men and women. The next time you see a Christmas market, consider which street food vendor you choose — the one with no single purchaser, or the one surrounded by a crowd? Or why is it that we sometimes purchase the same food as the individual before us?
Make Use of Our Desire to Imitate Others
Imitating the behaviour of others is an intrinsic quality of our subconscious which helps us bond with others and acts”the perfect way”. Imitation might also be a conscious approach. By way of instance, we frequently ask a waiter that menu items are most popular or check out the most popular books in the bookshop.
After the example of others is particularly relevant when we do not have a certain preference ourselves. Those”Popular goods” and”People who purchased A also bought C and B” prompts in online stores are there for a reason.
Social psychologist Alain Samson writes in Psychology Today that some companies have used this phenomenon to their advantage. By way of instance, Apple makes it very clear who’s part of the community. Allowing only a small choice of iPhone ring tones and just manufacturing white cans is an intentional choice.
How often do we see lists of favorite foods, wines or trolls in any particular shop? Why are not these more common? Granted, such”most popular” lists won’t work in every setting, e.g. at a women’s clothing store, where it is essential to be unique, or in regards to other products associated with our self-image (anything from lipsticks to automobiles ).
Boost Impulse Purchases and Self-rewarding
Impulsivity and the propensity to generate impulse purchases differ from person to person. Nevertheless, it would be erroneous to assert that there are individuals who remain completely unaffected by reduction offers and advertisements. A clothes business survey conducted in Estonia revealed that reductions give huge motivation for girls to go to a certain store and that around 50 percent of women make the buy decision spontaneously.
1 survey posits payday as a significant incentive — the understanding that”I have a good deal of cash right now” motivates 60 percent of people to go shopping. 51% make impulse purchases based on the”I am happy” feeling, while 35% do so based on the”I am hungry” feeling. The list of reasons to purchase goes on — Christmas, birthdays, the beginning of a holiday.
Shopping, like having sex and using recreational drugs, flooding the brain with dopamine, i.e. the pleasure molecule. Psychologists have adopted a unique notion for this thrill-seeking, emotion and fantasy-based behaviour — hedonic consumption.
If people want to benefit themselves, let them do so at your store! It’s easy to display chocolate and wine like gifts at the grocery store, but perhaps similar products should also be on display at a clothing or bicycle shop?
Need for Closure
Black Friday has spread throughout the world like wildfire. As soon as you’ve gobbled up the Thanksgiving turkey, it is time to go shopping!
Black Friday presents a clear critical — purchase a good deal and quickly — because the shops only run the offers one day (24 hours to be precise) annually. You snooze, you lose. A brand new day comes and the fairy-tale is finished. Granted, Black Friday is followed by Cyber Monday, i.e. the Monday after Thanksgiving, a day of mass online purchases.
Psychologists believe that one explanation of why this sort of mass purchasing is spreading is people’s need for closing. The idea was adopted in 1996 by scientists Kruglanski and Webster and it denotes psychological behaviour where a person wants to complete the decision-making process and to act. The motivation to act varies from person to person but most possess it. A fantastic way to fill that need is to choose one day to purchase Christmas gifts — you make the choice and act quickly.
So if your store has not engaged in this effort yet, what are you waiting for? Texas University professor Art Markman urges that individuals do their homework before they go shopping (research the qualities, real price range, etc. ) of a product), but whether you do so or not is your decision.
People do not rush to Black Friday sales from desperation — they really feel they want to. This urgency rewards the merchant. A buyer who’s in a hurry and annoyed has less time to consider and less control over their willpower and is more likely to make impulse buys. An experiment conducted by Psychology Today supports this. Throughout the experiment, participants were asked to choose between a salad and a chocolate cake; a few were given another task of recalling a seven-digit number. Turned out that those who were preoccupied with memorizing the amount, were a lot more likely to choose in favor of the cake. At the end of a long workday, we are also likely to be tired and trying to buy something fast.
Make the Price Work On Your Favour
All of us believe that we compare prices logically and objectively. The fact is far from it. The price is always relative and what we consider cheap or pricey can be affected.
Behavioral economics and psychology professor Dan Ariely has shown how we become irrational when dealing with cash in several of experiments. In one of his experiments, the subjects were given the option of purchasing a Ferrero Rocher chocolate for 26 cents or a Hershey’s Kiss for 1 cent. 40 percent of the participants chose Ferrero and another 40% chose the Kiss.
When the prices were reduced by 1 cent, 90 percent of the people chose the Kiss, even though the price difference between both treats was 25 cents. It is just that the Hershey’s Kiss was liberated, and something being”free of charge” is a force to be reckoned with.
An equally strong force is gaining something concrete. An experiment conducted by Minnesota University Laboratory Akshay Rao revealed that people bought 73 percent more hand lotion once the package included a bonus lotion tubing compared to if the price was reduced by an equal amount.
People just didn’t know that raising the quantity of the item by 50% is equivalent to decreasing the price of the item by 33%. The blindness to amounts continued to prevail when people made purchase decisions that clearly did them a disservice, i.e. when the price was lowered by 33% but the bonus tubing no longer comprised 50% more merchandise but only 33% more. The majority still picked the incentive package and were happy with their decision.
People also believed they gained more when a product was initially discounted by 20 percent and then a further 25%, rather than a single equal 40% reduction.
In Entrepreneur, Marketing professor, and strategy manager at Canadian bureau Jelly Marketing, Darian Kovacs lists four methods which implement psychology to make people purchase and walk away thinking they have struck a wonderful deal.
A decoy price permits you to confuse us. By way of instance, if a little beer in a bar costs $4 and massive costs $9, the consumer will find it easy to decide in favor of the little beer. But if you add a third price — little beer $4, moderate beer $8 and beer $9 — it will be simple to decide in favor of the huge beer. The big is, after all, only a dollar more expensive than the medium. National Geographic Channel reached a similar conclusion in their experimentation featuring popcorn packages. In psychology, this phenomenon which causes people to think distorted and illogical information is known as cognitive bias.
Another traditional alternative is bundling. As neuromarketing adviser and writer Roger Dooley describes in his book Brainfluence, seeing a steep price activates the region of the brain responsible for processing pain. Bundling is a simple way to ease that pain as it’s tough to grasp the price of an individual item from a package.
This procedure is common among publication and, increasingly often, car sellers. The latter no longer listing all of the extras (e.g. leather chairs, a superior sound system, etc.) individually in the price list but instead sell a mix as different package prices. Bundling is an age-old method that is also excellent for popularising new goods and much more. However, it is not the best idea to package a cheap and expensive product. Experiments have demonstrated that the affordable thing will subtract the value of this purchase for the buyer, which makes him reluctant to pay even the price of the more expensive product for the whole bundle.
The third technique is anchoring and is based on how someone produces a reference price in their mind whenever they consider purchasing a product. This benchmark price will be employed to ascertain if your product’s price is acceptable or pricey. The beauty is in the fact that the reference price can be manipulated. This phenomenon is known as anchoring bias.
When somebody has to create a (buy ) decision, their subconscious will start seeking additional information. The first bit of information that they encounter will be”anchored” in the head and have a substantial influence on the decision. The most common means of accomplishing this is really a play on prices. The former high price has been crossed out on the price tag but is clearly visible. The new price seems significantly cheaper compared to if that were the only price on the label.
Anchoring does not only concern prices. By way of instance, if you’re thinking of buying a used car and someone strategically directs your attention to the mileage, your subconscious will get anchored to it and you will easily don’t pay attention to the service history, rust, the condition of the wheel and breaks, etc..
The foot-in-the-door technique concentrates on obtaining a little”yes” in the client to make getting the big”yes” that much easier. A classic study on this was organized in 1966 by researchers who asked a group of individuals to put a small sticker promoting safe driving their vehicle. The other group did not need to do anything. A few weeks later, all the participants were requested to install a huge poster in their lawn to encourage safe driving. The men and women who’d been given the decal tended to agree to do so while another group wasn’t that fond of this idea. Among the more prevalent foot-in-the-door methods is having the ability to download a free eBook in exchange for your email address. Only then will the offers for different products start popping up on your mailbox.
Two other pricing methods have stood the test of time. KPCB partner Bing Gordon hails”Rethink equity!” And suggests calculating a $1,000 amount into bits. Paying 84 euros in twelve installments does not seem all that bad. The pain is gone! It does not even matter that the client really ends up paying a bit more than a thousand dollars over the twelve months.
And last but not least, deduct the number by one cent! Not $10 but $9.99. The allure pricing method still works. Despite the fact that all of us know we’re being duped (the price is just 1 cent less than ten bucks ), the mind likes to think it is nine rather than ten.
Researchers Thomas and Morwitz in Cornell University have investigated this method and point out that it does not work consistently and in every circumstance. Among else, it is essential that the amount on the left also reduces. So 5.60 vs. 5.59 will not work but 5.00 vs. 4.99 will.
However, some research suggests that when it comes to specific products, particularly the more lavish kind (e.g. champagne), an entire price might work best — not 49.99 however a nice 50 even.
Literature is abundant with price tactics that are based on psychology. However, the strategies that work in a jewelry store will probably not work in a small grocery store. But how it’s really simple to influence people’s purchases with prices just means one thing — experiment!
Do not overlook the Fear of Loss
Which minced meat do you like, the one which has 90% lean beef or the one with 10% fat? How you convey this message about minced meat should not make any difference, but amazingly it does.
To understand this, imagine, for a moment, that you find one hundred bucks on the street. Who would not be happy to locate one hundred bucks? The delight in discovering one hundred dollars is much less than the pain of losing one hundred bucks. The feelings ought to be equal, but they are not.
The pain, or more especially, fear of loss has been clinically proven and was initially characterized by economic scientists Tversky and Kahneman, who would perfect the concept. People’s behaviour is shaped by this fear. We are not as likely to take risks once we know we can win — even if it’s a small victory.
The fear of loss, however, is so strong that it affects marketing messages where you’d least expect it. Yes, also when purchasing meat. Researchers Levin and Gaeth set out to ascertain whether individuals prefer minced meat which contains 90% lean beef or that’s 10% fat. They found that by highlighting the term”lean beef” when making the sale, people tended to think that the meat was higher quality than when using the term”fat”.
Hence the skill to select the right words is extremely important in getting people to make the first purchase.
However, the decision to produce a repeated purchase is based on personal experience. The minced meat experiment also confirmed that this — the probability of a repeat purchase was exactly the same, irrespective of which advertising message the individual had heard.
Create an Environment the Buyer Does Not Want to Leave
It’s tough to read a book if you don’t know the alphabet. The same goes for producing the layout of a shop. You could always come up with something special that gets people to visit your shop. But before you come up with this terrific idea, it is reasonable to stick to a couple tried and true guidelines.
How to Design the Design of a Shop?
The first order of business is the screen window! Since the modern customer has less time than previously, the display window must instantly attract their attention. As emphasized by Shopper Marketing writers Ståhlberg and Maila, the screen window should immediately answer two questions:
- what’s the shop’s main line of business?
- Do the things sold in the store suit the client’s individual style?
It is great if the screen window tells a story, is amusing or reminiscent of a period in history. So it’s ideal to not overload a screen window, less is more. The first meters close to the store’s entrance are the acclimation zone. Do not stuff items here since the customer is coming from broad daylight or dim light. This is where you greet the customer, give her a shopping cart and possibly a helpful coupon.
Believe, when was the last time you entered a store and browsed it at a counter-clockwise circle? In case you have, you are among the few. Most people today keep walking straight or turn right when they enter a store. Thus, this is where you should set the items which are fresh in stock.
That is exactly how it is. We will need to lure the client that only came to find sausage, milk, and bread all the way into the rear of the shop. The paper is at the back of the office supply store. Beer in an alcohol store. That little extra walking is only going to benefit the client’s health.
Some products are so heavily promoted that they’re bought automatically — for cases Coca-Cola or Kellogg’s products. Such things should be displayed at eye level because people will buy them anyway. All you’ve got to do is make sure they will easily discover the item in your shop.
Creating a Cosy Atmosphere
This is only the start, the bare minimum you can do. Now the real work starts! You only have to do something — make the consumer feel comfortable to make them remain in your store for as long as possible. This is dependent upon how great they feel in your store.
Marketing consultant J’Amy Owens advised Inc. magazine that when the client is in the store, you must dangle a”visual carrot” in front of them. Something exciting that’s displayed differently in the other goods and brings interest. Ideally, these carrots can be placed one after another in a long aisle. When the consumer is in the belly of the store, they get to the hot spot where things with a higher price margin are available.
Do Not Be Afraid to Flirt with the Client
In the event that you merely put the goods on a shelf and even if the purchaser does find them, trust us, they are not going to be happy about it. The buyer would like to be teased and seduced, to form a connection with the goods. A robotic lawn mower is fantastic but the effect is significantly greater when it is doing everything on a little patch of lawn in the shop. A ball is fantastic but if a small boy sees Michael Jordan skilfully land the ball in the hoop on a display, the effect will be that much higher. Better still, allow the boy try it out himself.
Many stores are already successfully implementing this method. Some sports shops even allow you to try the wetsuit on and test it out in a pool full of ice cubes. Or you may have the ability to spend the night in the store to test how good the tent, mattress and sleeping bag are.
Making bread before the clients’ eyes with the smells wafting about is much better than any advertising. But smells are not only applicable at the supermarket. By way of instance, the swimwear section at Bloomingdale’s scents like the tropics, the infant provides department such as baby powder and the women’s lingerie section like sweet violet.
Music Even Impacts the Act of Purchasing Wine
Research confirms that people spend more time at a store and buy more if the store has nice music. The same as great sex, music generates endorphins — though in a smaller volume, but enough to feel great.
The general consensus is that classical or jazz music are best suited to a store that sells somewhat more expensive products. Texas Tech University’s scientists Charles S. Aren and David Kim, however, found that classical music may also be perfect at a wine store and that shoppers spent more time in wine stores that had classical music. Although people bought the identical quantity of wine from stores that played TOP40 pop tunes, classical music made more people buy wine.
According to the representatives of the National Association of Music Merchants, superior music presents another benefit by having a positive influence on the staff’s mood, relieving stress and depression.
It is important to keep in mind the following:
1 Make sure that the music remains in the background
Music is terrific for creating atmosphere but it should not begin to dominate. Background music is sufficient to prevent a feeling of dreary silence.
2 Calm music is much better
The more sudden and heavy the music, the more pressure it generates in the buyers. Calm music calms the clients and expands the time they remain in the shop, thus increasing sales.
3 The effect of light and color
Colour influences what we expect from a product. Research on gum issued by Food Quality and Preference suggested that we feel calmer colors as more tasteful. Warm colors have a more relaxing and sensual effect, while shades of red will likely make us make more impulse buys.
It doesn’t matter if you sell a tool case — there’s a specific enticing light for each and every product. At a jewelry store, it’s critical that you find the best one!
Good Packaging Makes Us Happy
Shopper Marketing informs us that products such as Coca-Cola, Tide and Absolut Vodka are evidence that the fifth P — packaging — is just as important as the four other elements (product, price, place, and promotion). It is worth noting that packing is the least expensive of the five.
Research by Marco Hubert et al. printed in Psychology & Marketing that appeared at fMRIs of the mind revealed that appealing packages activate the areas of the brain associated with positive emotions and rewarding itself. Ugly bundles, however, activated the areas of the brain associated with negative emotions. This indicates a very clear correlation between exquisite packages and the choice to buy.
Research on water and vodka packaging also revealed that buyers prefer round (incl. Cylindrical) packaging into boxy ones. Buyers also like it when a picture or photograph is located right of the text (it simplifies scanning because we read from left to right). It’s also good to reveal what is inside the package on an illustration (e.g. a picture of a drop of water was well-received).
The packaging affects the way the goods inside it are perceived. A survey published in the global research journal Appetite suggests that a simpler and more natural soup packaging supposed that the soup has been perceived as fitter. Weight also variables in. Once an object was placed in two bundles of weight, people tended to pick the heavier one. The same applied to wine — the wine with the apparently heavier package (incl. the cork) was perceived as having better quality.
In addition, don’t forget to use small packaging for tempting products (e.g. chips, halva, and other confections, etc.). Many can say no to a major package but will give into the temptation once the product is in a little package.
Technical University of Lisbon scientist Rita Coelho do Vale researched the snacking habits of individuals who enjoy TV.
She discovered that smaller bundles presented a greater temptation. The investigators summarised the findings”Since smaller bundles are regarded as an innocent joy, they’re more likely to turn into filthy little sins.” Other research has also suggested that chronic dieters eating out of small packages tend to eat more calories than the ones who don’t care for diets.
So if people do not buy temptations in tiny packages from your shop, they will in the next.
You’re not alone in trying to determine how to increase sales at your store — countless psychologists and behavioral scientists around the world are thinking along with you. Keep your eyes and ears peeled and you will not regret it!
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