Friday Research: Rude Service - Yes, Give Me More of That!

When Will You Use This?  

Creating and developing various ways of improving your customers' experience.

What’s The Red-Letter Bite Today? 

It’s quite common to hear luxury shoppers complaining about snobbery and rude salespeople at the high-end boutiques. But could this be good for your luxury brand?

Current research* examines the circumstances in which consumers increase their regard and willingness to pay after brand rejection.

Results showed that after threat, consumers have more positive attitudes and higher willingness to pay when:

1) the rejection comes from an aspirational (vs. nonaspirational) brand,
2) the consumer relates the brand to his/her ideal self-concept,
3) s/he is unable to self-affirm before rejection,
4) the salesperson delivering the threat reflects the brand,
5) the threat occurred recently.

'You think I don't belong here? Bring me everything from the menu!'

Addition To Your Bag of Tricks    

This research reveals that participants who expressed an aspiration to be associated with high-end brands also reported an increased desire to own the luxury products after being treated poorly. This was only true if the salesperson appeared to be an authentic representative of the luxury brand.

Basically, this shows that some people, when made to feel they don’t fit with the luxury brand, are motivated to prove they actually do - that is by making a purchase. When a retailer signals, “’No, you don’t deserve to be here,’ it looks like a challenge and a customer thinks, “I’m going to show you I have a right to be here.”

However, while the snobby salesperson could encourage an impulsive purchase, the experience ultimately leaves customer with a poor impression of the brand. The winning formula to increase sales for your luxury goods is to make your store and staff more approachable and less intimidating.

  

*Ward M.K., Dahl D.W., “Should the Devil Sell Prada? Retail Rejection Increases Aspiring Consumers’ Desire for the Brand.” Journal of Consumer Research, October 2014 {Thanks for the material}

P.S. When you’re done reading, I’d love for you to share your experience with luxury shopping? Leave a comment or Tweet me, let's chat!

P.P.S. Need some help on crafting your marketing message? Let's do this together.

Sunday Video: Sink Your Teeth Into Luxury Marketing

The luxury goods market has been increasing for many years.

So if you're building a luxury brand, make hay while the sun shines.

Watch this light video and be fed with a few insights on the situation and specifics of luxury marketing.

Bon appetite!

P.S. When you’re done watching, leave a comment or Tweet me how did you like it. Can't wait to hear from you!

Research Friday: How To Become The King Of Loyal Customers?

When Will You Use This? 

 

Planning and developing your commercial settings to provide meaningful experience for your customers and encourage place attachment.

What’s The Red-Letter Bite Today?

 

Place attachment is defined as one’s strong emotional bond with a specific location.

Current research* examines how people develop, experience, and act on place attachment in commercial settings. It is found that commercial place attachment emerges from experiences of familiarity, authenticity and security offered by the commercial setting, and from the associated experience of homeyness.

Moreover, it’s noted that consumers experience this unusually domesticated commercial experience as a gift from the service provider, and reciprocate with supportive behaviors toward the place, in particular volunteering, over-reciprocation, and ambassadorship.

Addition To Your Bag of Tricks    

 

Your business would only benefit from strong emotional bond with you customers. In order to provide enjoyable, extraordinary, and meaningful experience and social interaction, you don’t have to go for something extraordinary or spectacular. Make sure your customer feels comfortable at your business settings; there are a few symbolic elements that are similar to the general home environment; your interactions are always warm and respectful; your customer feels secure and safe, and it’s easy to find one’s way around a place.


*Debenedetti, Alain, Harmen Oppewal, Zeynep Arsel), Place attachment in commercial settings: A gift economy perspective, Journal of Consumer Research, 58 (Feb), 2014. {Thanks for the material}


P.S. When you’re done reading, I’d love for you to share your experience with place attachment? Do you have one specific place (not your home!) you could go to war for? Leave a comment or Tweet me, let's chat!

P.P.S. Need some help on crafting your marketing message? Let's do this together.

Friday Research: Discriminatory Pricing Is Great. But Only When I Pay Less Than You!

When Will You Use This? 

 

Identifying effective pricing strategies for different groups of customers.

What’s The Red-Letter Bite Today?

Discriminatory pricing is a common practice today but it can also induce a sense of price unfairness with one’s customers. For example, when your customer finds out that she is paying more than another individual, she may become upset and perceive unfair treatment, leading to complaining, negative reviews, decrease in purchase behavior, etc.

Current series of experiments* explore how the power state interacts with comparative references in shaping consumer perceptions of price unfairness. The evidence supports the fact that high-power consumers perceive stronger price unfairness when paying more than other consumers do, while low-power consumers perceive stronger unfairness when paying more than they themselves paid in previous transactions.

The distinction occurs because consumers experience a threat to their self-importance from different types of disadvantaged comparisons depending on their power states.

Addition To Your Bag of Tricks  

 

You might first ask now how do I differentiate between high power and lowe power people?

Well, authors suggest an idea, saying: “although market segmentation can be performed based on variables that are highly correlated with the chronic sense of power (e.g., high vs. low socio-economic status), it is also possible that feelings of power can be easily and unobtrusively activated in the real world: for example, a psychological state of power can be induced by being exposed to words and advertisements (Rucker et al. 2011) related to power. Therefore, marketers can effectively change consumers’ relative sensitivity to different comparative standards by providing environmental cues that can momentarily shift individuals’ current state of power.”

It is important to identify effective pricing strategies for different groups of customers. As authors note, “ compared with high-power individuals, low-power individuals may need a stronger justification for price increases, but at the same time, the relative insensitivity of these consumers to other-comparisons may be helpful when firms provide differentiated products to different groups of customers.”

Also, when marketing to high-power customers, one can better elicit preference by highlighting the special treatment that they are receiving in relation to other customers.

*Liyin Jin, Yanqun He, and Ying Zhang. “How Power States Influence Consumers’ Perceptions of Price Unfairness.” Journal of Consumer Research: February 2014. {Thanks for the material}

P.S. When you’re done reading, I’d love for you to share your experience with the discriminatory pricing? Leave a comment or Tweet me, let's chat!

P.P.S. Need some help on crafting your marketing message? Let's do this together.

Research Friday: VIP Consumers Want To Share Their Rewards

When Will You Use This? 

 

Creating rewards for your most important clientele (i.e., “VIPs”).

What’s The Red-Letter Bite Today?

Many businesses often segment their customers according to consumption and loyalty, and offer exclusive products and services (e.g. special discounts, exclusive lounges) to reward the most loyal customers and make them feel a sense of status.

Many of these preferential treatment programs allow VIPs to share their special benefits with a guest, so called 'entourage'. Does the presence of an entourage affect a VIP’s felt status during the preferential treatment?

Current series of experiments* examine how the presence of guests alters the status during VIP experiences. Evidence support the hypothesis that experiencing preferential treatment along with one’s entourage enhances a VIP’s felt status, even when the exclusivity of the reward itself is compromised.

Addition To Your Bag of Tricks  

 

It has been known that preferential treatment affects one’s perceived status, can lead to stronger bond between company and customer, and increase customer satisfaction so you should try integrating it into your marketing too:

- As a common rule (the 80/20) the majority of your sales come from a small amount of customers so don't forget to reward that exclusive loyal group;

- If your budget allows, permit your VIP customer to experience preferential treatment with his/her entourage

*Brent McFerran and Jennifer J. Argo. "The Entourage Effect." Journal of Consumer Research: February 2014 {Thanks for the material}.


P.S. When you’re done reading, I’d love for you to share your experience with the VIP treatment? Leave a comment or Tweet me, let's chat!

P.P.S. Need some help on crafting your marketing message? Let's do this together.

Research Friday: Don't Reward Him When Someone's Watching

When Will You Use This? 

Creating your preferential consumer treatment programs. Most managers think that customers prefer to receive extra benefits in front of others, however, the recent study shows that this is not always the case.

What’s For Dessert Today? 

Previous studies* confirmed that preferential treatment programs (where only a few people from a crowd are offered extra benefits ) are effective at generating sales, creating stronger consumer-brand relationships and more positive word of mouth.

The current series of experiments** examine preferential treatment that is earned through effort or loyalty versus unearned preferential treatment that is awarded by chance or spontaneously. It is revealed that receiving unearned preferential treatment in front of others generates feelings of unease and discomfort and lowers consumer satisfaction. It also results in customers, receiving unearned preferential treatment, leaving the store faster and purchasing less.

These results are mainly explained by the fact that people who receive undeserved rewards in front of others feel awkward and self-conscious because other equally deserving individuals judge and examine them.

My Personal Example As Consumer

I received unearned preferential treatment only once. I was entering the cosmetic shop in London when a shop assistant asked me to fill a short form for an hourly lucky draw. You guessed it right - I won it. The winner was announced through microphone and asked to come near the counter to receive the prize. I waited for 15 minutes after announcement to approach the counter because I didn’t want to look desperate and I didn’t want any looks from unlucky shoppers. Although I was happy about the prize, it was a bit awkward too, especially when I dropped by the store to get a lip balm only. I also hadn't felt any strong positive emotions towards the shop - I simply felt I was lucky and it was an effortless win. I shopped at that place twice afterwards.

 I feel quite different about the loyalty based preferential treatments. As many promotional loyalty programs inform about the rewards you can expect for your support for the brand, I really like being in control and choosing what benefits I want to “work for”. I like getting private emails about my rewards and sharing those with my family and friends. This way a brand reaches me in a more intimate and cozy way (which I appreciate) and in return I become a more frequent shopper.

Addition To Your Bag of Tricks

• As social environment is an important part of preferential treatment program, you should consider it carefully: if you carry out an unearned preferential treatment strategy (complementary gift, scratch and save discount, instant-win promo), use private communication channels to reach your customers – face to face, insider’s email, private call, personalized postcard, etc. 

• Loyality or effort based campaigns are always appreciated by consumer and received well in public settings. You might want to experiment with your own Frequent shopper program with special benefits and bonuses. 

*Lacey, Russell, Jaebeom Suh, and Robert M. Morgan. Differential Effects of Preferential Treatment Levels on Relational Outcomes. Journal of Service Research, 9 (February), 2007. {Thanks for the material!}

** Lan Jiang, JoAndrea Hoegg, and Darren W. Dahl. Consumer Reaction to Unearned Preferential Treatment. Journal of Consumer Research, October 2013. {Thanks for the material!}
 

P.S. Need some help on creating your Promotional Campaign? Let's do this together.