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