April 30/May 7, 2018: Volume 33, Issue 23
By Lisbeth Calandrino
The other day I was helping a friend clean out her closet. She would pull out an article of clothing and declare it was on its way to the Goodwill. A couple of times I commented on the clothing’s great quality. It seemed that when I did this, the piece went back into the closet. I noticed if I liked it before she took it out of the closet, it never made it to the Goodwill bag.
I started going through the Goodwill bag and trying things on. Immediately, she decided to keep those things. My interest in the items seemed to give them more value. She suddenly wanted the pieces when she couldn’t have them.
Retail works the same way. My friend sells expensive cars. The dealer doesn’t stock many vehicles and salespeople are always complaining. At first this bothered my friend who felt it worked against him until a customer said, “There’s probably a great demand for these cars.” Most customers believe cars fly out of the door and that if you want it, you better buy it now. This is an example of scarcity appeal, which is often used in marketing to induce purchases.
An experiment that used wristwatch ads as stimuli exposed participants to one of two product descriptions: “Exclusive limited edition, hurry, limited stock” or “New edition with many items in stock.” They then had to indicate how much they would be willing to pay for the product. The average consumer agreed to pay an additional 50% if the watch was advertised as scarce.
Recent research also proposes we are often inadequate when it comes to our ability to make good decisions when we believe we have less time. Many people say they work better under pressure. However, when we have less time than we need, we frequently make bad decisions. Consider the Tenerife air disaster of 1977, in which a veteran pilot commenced takeoff without clearance and crashed into another airplane on the runway, killing 583 people.
In reviewing the tragedy, analysts pointed to a variety of time pressures. A few months earlier, a new duty-time regulation restricted the number of hours pilots could fly each month. Anyone who logged too many hours could be subject to harsh penalties.
So what does all this mean to your business? When you help customers set deadlines for their purchases, you are actually helping them buy. Setting deadlines for your employees is also beneficial. Give them artificial deadlines before the “drop-dead ones” so their proposals can be reviewed. You will find it results in fewer mistakes.
It’s also important to set up your showroom so customers believe the store is busy and feel it’s wise to buy right away. If your salespeople tell customers the merchandise is limited, they will have to prove it. This doesn’t mean you should turn your showroom into a circus, but at one point your customer must feel some internal pressure to make a decision.
RSAs should be asking, “What’s the occasion for the new flooring?” This helps create a deadline for purchase. You could also have someone call the showroom and ask you to put some merchandise on hold or even put a sold ticket on certain items. My realtor friend says when you tell the client there are other offers coming in, the customer starts getting serious.
This is what human behavior is about. Remember, without a goal everything is just a dream. If you want to turn your customer’s dreams into reality, you will have to set a deadline.
Lisbeth Calandrino has been promoting retail strategies for the last 20 years. To have her speak at your business or to schedule a consultation, contact her at lcalandrino@nycap.rr.com.