18: Buypsy: How Smart Servers Mess with Your Mind
There is a significant amount of psychology behind salesmanship. Some techniques are so subtle as to be almost unnoticed, others are blatant attempts to pander to your ego and self-esteem. The author tells a brief anecdote about observing hucksters at a carnival - and the way that they can quickly pick a sucker out of the crowd and say just the right words to stop him in his tracks and get him to hand over his money.
Some sales tactics are very transparent, but others are based on solid psychology, and the author mentions a few writers whom he considers to be really "deep thinkers" on the topic of salesmanship:
- Paco Underhill - Why We Buy: The Science of Shopping (store design)
- Roberto Casldini - Influence: The Psychology of Persuasion (consumer decision0-making process)
- Richard Chase - Want to Perfect Your Company's Service? Use Behavioral Science (psychology of the service experience)
(EN: preserved this information - might be good to consult the original sources)
Four Simple Steps
The "hard sell" is a relic of the past: most people don't like it, and recognize a hard sell as a warning sign that the other person is trying to talk them into a bad deal. Even if it works, the customer feels that they have been taken - so the practice has largely been abandoned
(EN: the exception, which the author doesn't mention, is instances in which the seller doesn't expect or value repeat business. This is typical for infrequent purchases, such as automobiles, where the salesman wants a sale today but doesn't care if you ever come back, as he expects that by the time you're ready for your next car, he will have been promoted off the sales floor. Chances are if the product will not need to be replaced for five years, or ten, or ever, you're going to get the hard-sell.)
An alternative the author prefers is called "suggestive selling," which consists of four steps:
First, establish rapport. The author suggests making a comment about something that has nothing to do with the sale: complement them on their jacket, ask about where they are from, or make another statement that indicates you recognize them as a unique individual.
Next, try to discover the problem. Generally, a person who is looking at a product is seeking to fill a need, and if you can identify that, you can be "on their side" when it comes to finding a solution. For example, one hardware store trains its floor associates to approach customers with the question: "What's your project today?"
(EN: per another source, it's important to get them to tell you, even if it seems obvious. The act of sharing information makes a person feel more inclined to trust the person who asked the question.)
Then, offer a solution that addresses their problem - it's at this point that the customer will be receptive to your suggestions, because he's told you about his goal and will perceive it as being helpful, not an intention to "sell" things he doesn't need. You also have a clear ability to cross-sell and up-sell without seeming pushy, and can ask follow-up questions without seeming invasive.
Finally, seek to extend the relationship beyond the transaction. Give them a card and invite them to call you if they have any questions after the sale, and encourage them to contact you the next time they have needs you can serve.
Other Tips
The author goes into the usual flurry of anecdotes to communicate some random information related to successful selling:
The first is the "service legend," a compelling story that makes a product more desirable. He gives the example of a restaurant that tells customers about its ingredients - fries made from a special variety of potato that's naturally crunchier, the fact that they use eggs from younger hens because the firmer yolks make for fluffier scrambled eggs. These inessential-seeming details give the customer a reason to prefer your brand - they accept that it's a "good" French fry when they know the reason why.
The second is the value of sampling. Left to their own devices, most customers will stick to their previous choices (the example being customers at a restaurant who order the same meal every day). They won't change on their own, and if you try to talk them into something different, their defenses pop up. But if you offer them a free sample, they'll generally try it. Besides the potential to up-sell, you create a customer who is more flexible (if you're out of "the usual," they will order something else that you gave them a free sample of.)
Another tip is to get the product into the customer's hands - for many people, touching an item gives them a physical connection to it, which leads to an emotional connection, which leads to a sense of need (or loss, if they have to give it back). This is a key factor in car sales: getting the customer to "test drive" the car makes them feel more attached, and more likely to purchase.
The author suggests that this tactic is used by fundraisers, who give a person a "gift" of a flower or a small American flag, then ask for a donation. He mentions a Moonie at an airport who would ask someone to hold a book for him, then suggest the person keep the book, and ask for a donation. (EN: This is not quite the same as the 'test drive" tactic - these are forms of manipulation: the first plays on reciprocity, in that the "gift" is not really free, but now that it's been accepted, you owe a donation, and the second plays on confidence and trust.)
Another tactic is to demonstrate the product under extreme conditions to suggest its quality and value. It's common in television commercials to show products doing incredible things (a detergent that cleans a shirt that's been soaked in coffee and then baked in an oven). The effect is even more dramatic if you can do this sort of demonstration right in front of the customer.
Converts
Businesses often measure conversion rates - the percentage of people who visit a store and make a purchase right away - and seek to improve that percentage because mathematically, it seems to make sense. But over the long run, it may not.
For customers, the decision-making process can be a lengthy one, especially for items that are unfamiliar, high-ticket, or involve risk. As such, the conversion ratio varies according to the line of business and the nature of products sold.
The customer who is "just looking" may not be comfortable with making a commitment to buy, and applying pressure t push them over the line may result in an immediate sale, but a long-term regret and resentment for having been pressured.
Shoppers commit to buying over the course of several impressions (EN: brand contacts). An advertisement or promotion may take their interest, but doesn't carry as much weight as a comfortable visit to your store or showroom. Over time, when they have gathered sufficient information, they become ready to close the deal.
Personal contact has a more profound effect than any other form of impression: the customer who visits a store, but has no contact with the staff (other than a brief greeting) is less likely to become a buyer than one who gets some interaction from the floor staff.
(EN: This could probably use more elaboration. Speaking from personal experience, I find it uncomfortable when a salesman jumps me right away and dogs me as I browse - at a car dealership, a furniture store, an appliance store - and I'm more likely to leave without buying anything, and never return.)
The author did some research on his own (speaking engagement) business, and found that the average customer had 8.05 contacts before buying. This includes phone calls, e-mails, referrals, and indirect contracts (reading a book or article). There are instances where someone would buy after one or two contacts (saw his book in an airport bookstore, called to schedule a speaking engagement), but those are very rare.
Step Inside
The author rattles off a number of tips for setting up a store environment to encourage sales:
- Signage is important: the display in your windows encourages (or discourages) people from entering, and what they see immediately as they enter creates a strong impression
- Seek to facilitate buying: the customer should be able to find what they want quickly and know where to check out. Shopping carts or baskets are very important in retail, which is much overlooked.
- Back off: it's been found that constant pressure toward the register is less effective in improving sales than providing a "transition zone" between shopping and purchasing.
- Manage Adjacencies: where customers can be expected to want or need a complementary product, placing it nearby improves sales (and satisfaction, in saving the customer a second trip fro an item he's forgotten)
- Consider the Last Impression: The last few steps in the shopping process will factor heavily in the memory of the service experience, hence in the customer's decision to come back next time. Don't finish with anything unpleasant, like a long wait in a checkout line.
An anecdote: the author was part of a project to find innovative ways to speed up restaurant service. They did this by eliminating the waiter - putting a phone at the table so customers could call in their order directly to the kitchen. As a result, turnover was "incredibly fast" but customer complaints am in that it was taking too long to be served. Another experiment in food service involved consolidating the multiple-line "scatter system" at fast food counters into a single line that split at the registers. Again, the stopwatch indicated a shorter average wait time, but the customers thought otherwise. Using a cafeteria-style production line (sandwich at station one, side item at station two, drink at station three) likewise resulted in a faster service time, but a longer perceived time for the customers. In the end, it was found that the solution to the problem wasn't to make service objectively faster, by the stopwatch, but to do two things: give the customer something to do while waiting, and give them a sense of progress.
(EN: a good point, that the solution is not as intuitive or even objective as one might think, though I also wonder if it's about customer culture. The author suggests that traditional table service at restaurants involves being distracted with menus and having a few interactions with the waiter, which decrease the perception of time. I don't disagree, but would posit that it's also that the customer is familiar with the ritual, and is not expecting it to be speedy, and so is less irritated with the time that it takes to get service. It's also a presumption that all customers value speed of service in all restaurants, which is not so: expectations play a role in deciding which kind of restaurant to enter in the first place, what to expect what you will get there, and if those expectations are met, the degree of customer satisfaction.)
Merchandising
Merchandising is the art of presenting the products to the customer for their consideration. It should enable the customer to inspect the merchandize (and touch it), to gather information about a product, and to make comparison between products, as a step in the decision-making process.
In many retail environments, merchandising reflects a short-term mentality: it is intended to help the customer to select and purchase the item they want on this visit, and that can be effective in retails situations where the goods of multiple manufacturers are on display and the retailer has little concern for which item the customer buys. Other retail environments focus on the buying process as a step in the overall experience, and are concerned with making it a consistent. This is most common in luxury items sold in "boutiques" devoted to a single brand, and contributes to the long-term loyalty of the customer to that brand.
It's also more likely in service marketing that the environment will be given greater consideration. Take the example of a theme park: the customer is in a controlled environment where every experience - restaurant, gift shop, ticket booth, show, and ride - must be congruous and contiguous to create an overall experience.
A few random bits: in the restaurant industry, some firms have turned the time waiting on a table into a pleasant experience be offering samples (do this right, and customers might be disappointed if service is fast and they don't "get" to wait). From personal experience, the author notes that in his own QSR, they used a sign as the customer entered the door to promote certain items, and it had a dramatic impact on sales.
Basic Service
Basic customer service is the second attribute of a store: enabling and facilitating the buying process.
Hours of operation are important. Customers are growing less tolerant of businesses that provide service when it's convenient for the company, leading to an increase in the trend of being "open 24 hours" - even though you get few sales at 2 am, the customers are glad you're open when they need you, and you gain a larger share of their "regular-hours" business as a result.
Having salespeople there to process transactions when customers are ready to buy seems basic, but a common sight in many department stores is a customer with an arm-load of merchandise, standing at an unattended counter and wondering how to get someone to help.
Some of the reasons that Internet has stolen away business from brick-and-mortar are the failings of basic service in physical stores. The Web is always there, wherever you are, ready to take orders and answer questions.
The author also includes in basic service things such as service after the sale and problem resolution. If a customer can't get your help in resolving a problem that prevents him from getting the benefit from the good he has purchased, you've failed him in a very basic way.
Customer Relations
Customer relations are the third "and least understood" attribute of service, but the most critical to your long-term success as a business. Promotion gets them in the door, merchandizing entices them to buy, basic service closes the same ... and customer relations brings them back the next time.
In general, you should have a sense of your customer: who they are, where they live and work, how they use your products, and why they prefer you to the competition. Btu you should also seek to know your customers individually. In small businesses, human memory will suffice; but for larger enterprises, they may need to rely on computers.
Creating community among customers can also increase customer loyalty. Chances are that the individuals who use the same product or shop in the same store have some things in common, though it may depend on the nature of the good provided. (Customers of a golf shop all play golf, customers of an upscale clothing store are in the same economic bracket, customers of a restaurant all live or work in the area).
Customers don't often have a relationship or sense of community with a product- but with other people who use the same product, and with the people who help them to acquire that product. And in some instances, it's a strong bond (people wear a designer label because they want to be "like" others who wear that label - the product itself is an indirect means for them to demonstrate they like a certain type of person and want to be liked by them in return.)