Gender differences in bottle shop behaviour

An article on the gender difference in booze buying behaviour grabbed my attention the other week. "Cheap Booze for him" headlined a story about some Roy Morgan research that identified that blokes were driven by bargains, whereas women sought helpful customer service ("Cheap Booze for him" by Inga Gilchrist, MXNews 4/7/11).  The article quoted bar duty manager David Dearlove as explaining that emotions were the difference, where "females want more from a situation, so they want to be waited on. Whereas guys just say 'Give me my beer' and they're done."  Very hunter-gatherer!

Devising your customer engagement plan
As this snippet of research indicates, businesses have a lot of decisions to make when structuring the optimal customer engagement plan (*refer caveat below).  In this case, "beer on sale" would likely stimulate male foot traffic and you would tend to up-weight staff at the registers.  A promotion on "wine matching" may instead stimulate more female custom, and you would need to ensure you had staff available in the aisles to direct purchase decisions.

At what point can you influence the purchase decision?
The interesting point here I think is that men in this scenario are making the decision before entering the store - indeed it is the reason they visit the store.   Women, on the other hand, visit the store in order to make a decision, and in fact be helped to make it.  This means the retailer has different opportunities to influence what the customer walks away with.

To make the most of male customers, the retailer should place high margin wine or champagne near the beer on special, suggesting the guy keep in sweet with his lady by coming home bearing gifts.  This is a technique used in grocery where nappies sell well with beer!  This opportunity for the retailer centers around the behavioural principles of sunk cost and mental accounting. The guy has already 'spent' the amount of money for the beer before he arrives in store (sunk cost), and that means that it should be easier to up-sell because any other purchase comes out of another mental bank account.

To make the most of female customers, the retailer can of course use direct customer service, but the other opportunity is to help the decision making by noting which wines are most popular, best value, match with particular foods and so on.  You have probably seen these techniques applied on point of sale, like "staff picks" or "popular seller", and these work because they use the behavioural economics principle of herding - we go where others go.  If you know other people like the wine, then there is less chance of making a poor choice.  Use of a rating system can also help to frame the decision, so a rating system for value or taste can help influence customer purchases.

Behavioural Economics can influence both genders
Whilst I do enjoy little snippets on gender differences, more important to your business is how you can influence the behaviour demonstrated by the sexes.  Male or female, your customer can be greatly influenced by strategies to get them in the door, and then again whilst in store so it may be worth you considering what Behavioural Economics can offer at each decision point.  Until next time, happy boozing.

(*Note, whilst the article on the research pointed to some gender differences which I have used in this post, there are doubtless many exceptions and qualifiers that you would need to consider before applying carte blanche to your business. Start with accessing the source research through Roy Morgan if you are interested.)

Image from http://www.bargaineering.com/images/in_posts/wine-shop-aisle.jpg

5 Tips for better customer service from Behavioural Economics

This weekend I visited a café famous for being one of the first to bring real coffee to Melbourne.  But in my estimation, that business is surviving on its heritage alone. Both the product and, more strikingly, the service left a lot to be desired.  A sneering barista who barely grunted to acknowledge our orders and practically threw change at my friend made us feel that we were not living up to his expectations.  Needless to say, I won’t be back.  This got me thinking about five principles of Behavioural Economics that can help businesses (well, at least, those who think customer retention is important), improve areas of poor customer service.

Framing

In Behavioural Economics framing refers to the language and context you use when interacting with a customer.  It has been shown that using language like “can’t”, “won’t” and “that’s our policy” inflames the customer experience.  Offering to “take you through the steps…” is much more constructive than “you can’t do that before you do this” because you have framed it in the affirmative. 

Drop in the Bucket Effect

In environments like call centres where the sheer volume of customer inquiries can be overwhelming, it can be difficult for your staff to feel they can make a difference – the drop in the bucket effect.  The knack is to think of the one rather than the many.  Metrics like “How many customers you helped” is better at motivating staff than measurements like call handling time because it takes performance back to the one-to-one relationship.  Likewise, celebrate the success stories where a staff member has helped a customer – noting it doesn’t have to always be ‘going above and beyond’, it should be the goal of every interaction. 

Procedural Fairness

We cope better with outcomes when we feel that we have been treated fairly through the process. To this end, inform your customers of the process that will be used to evaluate their request to help them understand what happens and why.  “I’ll have to speak with my manager” is not as effective as setting up the interaction by outlining the steps and escalation points. “Just before I ask you to go into detail about your concern, I would like to explain my role in this process.  I will…then…and finally…Do you have any questions before we start?”

Uniqueness

Just as we cope better when we know what the evaluation process will be, we also want to be treated as unique individuals. As Dan Ariely writes in Predictably Irrational, we have a “need for uniqueness”.  But whilst of course we are not unique in thinking we are unique (we all do), the lesson here is never to tell a customer they are one of many because that will diminish their sense of individuality. “My issue”… “My situation”. I once had a spat with my car manufacturer because they were interested in their policy whereas I was interested in the inconvenience the car break down meant to my life. 

Endowment effect

The endowment effect means we tend to overvalue what we own.  That’s why you think your car is worth more on trade-in than the dealer. In a customer service setting, this can help explain why customers can be all consumed by their issue, which to your organisation may seem trivial. Again in my car manufacturer’s case, they saw my car breakdown as an isolated issue to be resolved through their usual process. I saw it as a failed new car purchase that stranded me for a whole weekend.  To deal with this you need to see the issue from the customer’s perspective and work with them to understand what it would take to have the concern resolved.

Customer service undoubtedly one of the trickiest areas of business management.  The good news? Whilst the challenge of balancing your organisation’s policies, procedures and resourcing with the expectations of individual customers seems to be in constant flux, there actually consistent and predictable behavioural reasons why customers react in the way they do. An understanding of Behavioural Economics can mean more effective, efficient and satisfying customer service models, so why not get started?  Until next time, happy serving. 

This article also appeared in Smartcompany http://www.smartcompany.com.au/blogs/20110822-5-tips-for-better-customer-service.html

Image source: http://www.google.com.au/imgres?q=next+teller&hl=en&gbv=2&biw=1280&bih=603&tbm=isch&tbnid=gNH_K6WLyMUTtM:&imgrefurl=http://www.posdisplays.com.au/menu_card_holder.html&docid=0UdatlbuNpnqhM&w=325&h=63&ei=AxRSTp-BFObliALctYjjAw&zoom=1

Check me out! The perplexing preference for self-service

Something has shifted in supermarket shopping. Visiting the local Woolworths last week I noticed that the queue for the self-service line was longer than the Express lane. In other words, more people were willing to scan, pay and pack their items than wanted to have a shop assistant help them.  Wow.  Sure this is part of the deal at cheap-end Aldi, but Coles and Woolies now too?

This was in the same week I attended David Chaulk's Australia Scan presentation which showed very clearly that self-service check outs were finding favour with the Australian public. 

Why?

Can it be as easy as convenience?  That we believe it is faster to handle the goods ourselves than wait?  Well, maybe this stacked up when low adoption of self-serve meant it was truly faster than going through the service lanes. But if this is no longer the case, what other than convenience is driving our behaviour?

My theory? Two factors. The first, isolation.  It's the interaction we are keen to avoid because we are becoming more isolationist (is that a word?) in our real-world dealings.  Yes we're twittering and social networking, but we'd rather deal with a beeping machine in the supermarket than a human.

The second. Fear of inactivity. We'd prefer to do something - like scanning and packing our items, than stand idly in a line waiting for service. I mean imagine, a whole 2 minutes...just waiting.  The horror! No, in this modern age we need to do do do and it freaks us out to stop.  What a different experience it would be if the queue was designed to entertain us rather than bore us.  Disney makes queuing part of their magical experience, but supermarkets choose not to use this time to delight us.

What I find interesting for marketers is that we keep reading and hearing about the importance of Customer Service. And yet, our shopping behaviour suggests that a less personal type of customer service is what we want.  We prefer seem to prefer technology (except of course in ads where we want to see check-out chicks and chaps and smiling bank managers). And just like the introduction of ATMs, initial public concerns about how the technology would replace jobs has now been forgotten.

So kudos to the supermarkets for risking this change. They've gambled that less personal service is the way to go, and they are being proved right.  For me, this suggests three things;
1. like the supermarkets, you can force people to trial technology by making the other options unpalatable (in behavioural terms, by 'nudging' them to your preferred channel)
2. people will adapt to technology despite initial resistance if there is sufficient personal benefit, and
3. Customer Service does not always mean personal service

So what does that mean for your business and the way you think about Customer Service? 

Image from http://aca.ninemsn.com.au/article.aspx?id=1065793

Moving a customer's mind from buying to owning

Imagine you are a boutique fashion retailer. Time and again people come in to your store, start their walk (usually clockwise) around the perimeter, acknowledge your greeting with a strained smile and maybe a "just having a browse" mumble, and then exit without trying any of the clothes.  That's me - I'm your nightmare. Money to spend, interest in buying, but inert when it comes to engaging with the purchase process.

How is it then that I happily and impulsively spent a few hundred dollars on a dress that I hadn't imagined owning before I stepped into the store?

Great salespeople are a great experience. 

What got me into the store?
I'm pretty basic - it was a sale sign.  But I wouldn't have bothered chasing a sale unless the window display was evocative.  Subtle lighting, natural tones, textured faux-stone display materials - the store fit out made me feel like a was entering a place of nature.  And what's more pleasant than strolling around a place of natural beauty?  It felt special, the clothes were obviously cared for, and the warmth generated by the store rippled through me as I started my perimeter stroll. 

How did the sales assistant engage me? 
Catherine (yes I learnt her name through the exercise) greeted me from a non-encroaching distance. "Anything I was looking for?" "No just browsing."  But then her genius move - "Can I try this jacket on you?". And she did.  She effectively was asking a favour of me - and through so doing she won my trust because the jacket was great.  But then, "There's a dress that would really suit you" - and off she skipped to the other side of the store, presenting the dress for my reaction.  She'd already managed to engage me through the jacket and I knew through this exercise she had expertly appraised my figure and gained my trust.  Most of all, it felt like she was truly interested in me not in making a sale. She had invested herself in the experience.

How did she make the sale?
The dress went on and was great. But then the show began. The other sales assistant tagged teamed as they demonstrated all the features - yes features - of this wonder dress. Tie it this way, tie it that way - multiple looks as a result of this beautifully, cleverly and practically designed dress.  Add a cummerbund and add another layer of versatility. 

Was I thinking price at this point...kind of. But by that stage it was a question of how much I would pay, not whether I would.  By that point I could have justified almost any price because I had moved way beyond 'buying' and was already in 'owning' land. And did I feel I was being sold to? No. I felt like they were helping me.

So what are the lessons for we marketers?
Make the experience concrete not abstract - asking me if I was looking for something in particular would have been less effective than asking me to try on a jacket.  For online sites, telling me to click for the product catalogue is less effective than telling me to click to view details, availability and pricing for 23 skirts.

Create a consistent experience throughout the process - in this case, the store fit-out was consistent with both the clothes and the warm attitude of the staff.  Don't set up a consumer campaign that celebrates fun, connection and happiness if you grind your customers down with a bureaucratic, boring and cumbersome purchase experience - you'll confuse people about your Brand integrity and savage your conversion rate.

Consider reciprocation - asking me for a favour was a way of making the relationship two way.  I was then prone to ask the sales assistant a "favour" ie I was more prone to ask for what I wanted - the 'power balance' was equalised.  Seems strange given I was the buyer with the purchasing power, but when dealing with an inert shopper like me, it was a great strategy to get me to act.  How can you create a two way relationship with your customers with the aim of making them more comfortable to do business with you?

Have you had a great sales experience and if so, what were some of the lessons you took with you?