Psychology of customers

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Slide1: 

We are born alone, We die alone, We spend the rest of the time in denial of this fact….

The Psychology of Consumers: 

The Psychology of Consumers Sponsored by JDA By: James E. Dion Dionco Inc. – Chicago

Objectives: 

Objectives From the perspective of a retail psychologist to give you an understanding of how today’s customers have changed and the implications of these changes Personality Gender differences Compulsive shoppers Habituation Self esteem Trust To give you some insights into how you can use this knowledge to better serve your customers and consumers

If you haven’t noticed: 

If you haven’t noticed People today are “different” In more of a hurry – stressed out/time poor Less polite Have a more “relaxed” morality Don’t trust companies, stores, staff or each other! Are quicker to anger Are more demanding and not loyal Have more information and choices available to them Want it “Hot & Now” and do not suffer stores or companies that cannot deliver a seamless shopping/business experience Short term Hedonism is replacing long term Hedonism

If you haven’t noticed: 

If you haven’t noticed Companies today are different Less loyalty to staff Less latitude given to employees Driven by short term gain and not long term strategy (blame Wall Street) Speed of decisions & execution may be valued over accuracy Are made up of people so all the prior slide’s comments also apply!

Why?: 

Why? Psychology has always sought to answer the question “Why do people do what they do?” In business we ask “Why do our customers do what they do?” Customers buy from us for two broad reasons Need (real or perceived) Want (real or perceived) It is the difference in real or perceived where it gets interesting!

Reasons why people buy – Motivation: 

Reasons why people buy – Motivation Psychoanalytic Model (Freud) Superego (morality) Conscious mind (Ego) protection/enhancement Unconscious motivation (Id) Behavior Model (Skinner) Stimulus/Response/Reward Need Model (Maslow) Basic Survival/Safety Belongingness/Love Self Esteem Self Actualization S – R

Customers are People: 

Customers are People Realize that People and Companies Are not logical Generally do not follow “economic” models Are influenced by thousands of factors Are almost always driven/influenced more by emotion than reason All “filter” the world through their own eyes (experiences, personality and values) Some of them are not very nice and some are incredibly wonderful

Two important learning's: 

Two important learning's Humans resist change Therefore, remember, people need time to adjust to a new idea/concept/product – expect resistance and give time for acceptance People often say things they really don’t mean Learn to “listen between the lines!” Don’t initially press when you get resistance

Three Absolute Truths: 

Three Absolute Truths People will support what they helped to create What gets rewarded gets done Praise is the breakfast of champions

Psych 101 Test: 

Psych 101 Test

Question 1: 

Question 1 Which of the following fields determines if a retail store “works” or “doesn’t work”? Retail Anthropology Retail Psychology Marketing Market Research I don’t know

Question 1 Answer: 

Question 1 Answer Which of the following fields determines if a retail store “works” or “doesn’t work”? Retail Anthropology Retail Psychology Marketing Market Research I don’t know

Question 2: 

Question 2 What color has market research found makes customers feel like spending? Red Dark green Light purple Neutrals I don’t know

Question 2 Answer: 

Question 2 Answer What color has market research found makes customers feel like spending? Red Dark green Light purple Neutrals I don’t know

Question 3: 

Question 3 According to Paco Underhill, which is the worst location for a retail store? Next to a competitor Next to a bank In a shopping mall On a main shopping thoroughfare I don’t know

Question 3 Answer: 

Question 3 Answer According to Paco Underhill, which is the worst location for a retail store? Next to a competitor Next to a bank In a shopping mall On a main shopping thoroughfare I don’t know It takes customers 25 feet to slow down from a quick walk and because there is nothing to look at in a bank’s window customers pick up speed and don’t slow down fast enough to notice the store directly next to it!

Question 4: 

Question 4 What is important about the “transition zone” (the first 15 feet inside the door) of a retail store? It is the space in which the store’s most popular products are displayed It is the space in which a sales person offers their assistance Before this space shoppers do not feel that they are inside the store yet After this space, shoppers are considered “potential buyers” I don’t know

Question 4 Answer: 

Question 4 Answer What is important about the “transition zone” (the first 15 feet inside the door) of a retail store? It is the space in which the store’s most popular products are displayed It is the space in which a sales person offers their assistance Before this space shoppers do not feel that they are inside the store yet After this space, shoppers are considered “potential buyers” I don’t know

Question 5: 

Question 5 Upon entering a store, most shoppers head in which direction? Left Right Straight ahead It depends on the store I don’t know

Question 5 Answer: 

Question 5 Answer Upon entering a store, most shoppers head in which direction? Left Right Straight ahead It depends on the store I don’t know

Question 6: 

Question 6 Which of the 5 senses are never engaged in persuading customers to make purchases? Touch Sight Smell Hearing Taste None of the above I don’t know

Question 6 Answer: 

Question 6 Answer Which of the 5 senses are never engaged in persuading customers to make purchases? Touch Sight Smell Hearing Taste None of the above I don’t know

Question 7: 

Question 7 Which of the following “theories” helps to determine aisle width in retail stores? The Invariable Right The Decompression Zone The Body Factor The But Brush I don’t know

Question 7 Answer: 

Question 7 Answer Which of the following “theories” helps to determine aisle width in retail stores? The Invariable Right The Decompression Zone The Body Factor The But Brush I don’t know If shoppers are touched from behind they become irritated and move on, without returning to buy. Aisles must be wide enough for people to pass without being touched (unless your customers are Chinese!)

Question 8: 

Question 8 Marketers plan campaigns to appeal to which side of the brain? Left Right Neither Both I don’t know

Question 8 Answer: 

Question 8 Answer Marketers plan campaigns to appeal to which side of the brain? Left Right Neither Both I don’t know The right side of the brain is where emotions and the unconscious mind reside. This side is more susceptible to images and suggestions

Question 9: 

Question 9 Retail store buyers are most influenced by? Price Brands Terms Sell through performance All of the above

Question 9 Answer: 

Question 9 Answer Retail store buyers are most influenced by? Price Brands Terms Sell through performance All of the above

Question 10: 

Question 10 Personality, as psychologists define it, is “locked in” by what age? 21 15 8 2 None of the above

Question 10 Answer: 

Question 10 Answer Personality, as psychologists define it, is “locked in” by what age? 21 15 8 2 None of the above

Men are from Sears, Women are from Neiman Marcus: 

Men are from Sears, Women are from Neiman Marcus Men and women shop differently because they are wired differently It is difficult to design a store or product for both, so you have to err on the side of the majority of your customers (most likely women)

Men : 

Men Are more task oriented They go in, they buy, they leave. There's no deciding on color or asking Do I need it? or Should I buy now or wait for later? Be careful, because there are a few men who enjoy shopping and some women who hate it Generally buy later in the season than female customers do, and they are looking for gifts that are already wrapped and ready to go Will tend to browse and look for something that hits them Prefer face-to-face conversations and not side to side

Top 10 Things Men Know About Women:: 

Top 10 Things Men Know About Women:

Women: 

Women Often come into stores with a specific list Turn shopping into a recreational sport Spend more time shopping than men Are the overwhelming majority of shoppers Today are more concerned with time and have less time to “graze” Approach more closely, and seem to prefer side-by-side conversations

Men, Women and Malls: 

Men, Women and Malls Although women spend more time (16 minutes more than men) at the mall, men actually manage to spend more money ($2.76) per trip Men appear to dislike shopping so much that even when they are at the mall, they still try to avoid shopping To avoid the merchandise hunt, men spend more of their money and time buying food at the restaurants and watching movies Men are able to go to a mall with no list or ideas about what they want to purchase, find and buy the items they need, feed themselves, watch a movie, and still get out of the mall in less time than women Source: International Council of Shopping Centers

Compulsive Shoppers: 

Compulsive Shoppers Psychological disorder (OCD) Effects about 5% of the population Shopping is used to ward off feelings of low self esteem and depression Cannot stop shopping and spending money, they have to do it every day But they make great customers!

Habituation: 

Habituation Humans are not “built” for what we are experiencing today Habituation to our environment is the single biggest psychological factor facing marketers today

Consider: 

Consider 100 – 100,000 years ago Today Our capacity of perception Stereotyping = Mental Health Breaking through to our customer Change, change, change Every day make it different in some way

Self Esteem (Ego) : 

Self Esteem (Ego) Probably the most important factor in our mental health It is our view of our self People will use all types of behavior to support, enhance, protect and keep it Always inform customers of the quality of your company, stores and products Look for ways to increase customers sense of well being in your stores and/or when they do business with you

Trust: 

Trust It takes years to build and seconds to shatter Always be honest with your customers Never lie to them Treat them as you would like to be treated Take time to truly educate them about what you do for them Hire people who genuinely like people (empathetic)

Check your stores/company: 

Check your stores/company Do your policies and practices match your “mission statement?” Are your stores suited to your target customer’s comfort? What are you doing to enhance the experience for your customers in your stores and/or with your company? How are you rewarding your customers for shopping in your stores and/or doing business with you? Do you meet the minimum requirements for basic needs that Maslow defines? What are you doing to build trust and loyalty? What are you doing to enhance the “ego experience” of customers in your store and/or in your business?

Last Thought: 

Last Thought It has been estimated that over 10% of the population has some form of mental illness Your customers & employees come from this population Identify the good customers and staff and go out of your way for them Identify the not so good customers and staff and gently remove them from your business and do not let them change your business – make sure your company has a plan/process for dealing with difficult customers/employees

Thank you and keep in touch: 

Thank you and keep in touch The Future of Commerce Dionco Inc. 312 673-0187 jimdion@dionco.com http://www.dionco.com