Habit: Make It Easy for Your Customers to Decide
by Sam Allman
November 11, 2008
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| Take a closer look. What
have you done to simplify your customer's decision-making process? Have you
taken steps to prevent an overload of stimuli from chasing them out of your
showroom? Merchandising systems like this one from Mohawk Industries can make
it easier to shop. Here, retailers at a recent floor covering trade show
examine samples of the company's carpet. |
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You
have probably seen it countless times: The deer-in-the-headlights look
customers get as they enter your showroom. They seem astonished by the
seemingly endless displays of flooring samples. We sometimes forget that
customers find the process of choosing a floor to be complex, confusing and
even overwhelming. Confused customers suffer Cognitive Dissonance Disorder
(CDD) and cannot buy.
Cognitive dissonance is a fancy way of saying the brain is
overloaded with more stimuli than it can process. The brain cannot sort and select that much data. This explains
why many shoppers “punt”— they leave your store, postpone buying flooring, and
may even spend their money on something else.
Research from the WFCA and other groups confirms that most
consumers find purchasing flooring confusing and not fun. In focus groups,
women plead, “Simplify the process. Educate me, but don’t confuse me. I want to
buy, but I don’t want to be sold. Appeal to my sense of style.” Did you know
that most customers say they would prefer to shop without the help of a
salesperson? Does your showroom allow
customers to browse confidently without a salesperson?
What have you done to simplify your customers’ decision-making
process and prevent this CDD overload? Ask customers how easy it is to shop
your showroom. I have some
recommendations to consider.
First, study how you display products. Are they grouped by
manufacturer, category or style? Are your loop-pile Berbers inter-mixed with
textures to keep one manufacturer’s products together? Or do you display all
Berbers together? Ask yourself, “If I
knew nothing about these products, how confidently could I select flooring by
myself?”
From my visits in many stores, I find the best retailers
merchandise by product category, not the manufacturer. They select categories
that match either their consumers’ life styles or product styles. They also train salespeople to learn
something about the customer before leading her to products. For example, they may ask “Tell me about the
décor in your room. Is it casual or formal?” The answer to that question alone
may disqualify half the products you sell but it spares her from product
over-load. After a few friendly questions the salesperson can say, “Based on
what you have shared with me, I think there are four or five products that may
work for you. May I show them to you?”
Think how relieved your customer feels: “This salesperson knows what I
want. He has mentally sifted through
all these flooring products and selected only those that suit my needs. Whew!”
But it is not just product-overload, there is also
feature-overload. It too can trigger cognitive dissonance. Customers become
confused by industry jargon or any thing they can’t readily comprehend. If you
ask them, “Do you want a 50 or 60 ounce per sq. yd. carpet?” would she
understand? My rule of thumb: Never
tell the customer more than she needs to know to make a decision.
This is not to suggest you present only one sample to the
customer. They want to buy; they don’t
want to be sold. They “buy” when they choose between options. That’s why a wise salesperson presents four
or five options across a range of price-points. This opportunity to compare
products—when the choices are few enough to be understood—actually facilitates
the customer’s ability to decide. Psychologically, customers want to compare
and select by means of their own judgment.
(It’s the very opposite of CDD which destroys the ability to decide.)
Customers especially like comparing apples to apples and
oranges to oranges. But when there is
no difference between one apple and another, the only issue is price. A
salesperson who allows a customer to think that price is the only difference
between two flooring samples is not a salesperson, but merely an order-taker.
Your salespeople should never allow apples-to-apples comparisons. Rather, they
should educate the customer about each sample’s distinct features, so she can
compare all points of value, not just price.
The challenge then becomes how to educate customers without
overwhelming them. In one study,
researchers offered people a choice between a Cross pen (which costs $30, but
did not show the price) and a 5-dollar bill.
“You can have one or the other.
Which would you choose?” (If I
gave you the choice, which would you choose?)
Some 80% of the customers picked the 5-dollar bill. Then, the researches
laid down a third choice: a cheap plastic pen. When asked again which they
would choose, 80% chose the Cross pen. Why the switch? They recognized the value of the Cross pen
only after it was set next to a plastic pen.
How can you train your sales staff to this principle and help
customers understand value? First, be sure they understand that customers
cannot perceive most value differences between two flooring samples by just
looking at them (as the people in the experiment did by looking as a Cross pen
and a plastic pen.) Flooring salespeople must vividly describe the features
that set one sample apart from another.
The challenge for sales people is to create value in the consumer’s
mind.
Second, teach your salespeople about the four categories of
products: promotional products, specialty products, go-to products and
decision-enhancing products. (Of course, you do not label them as such on the
floor.) You want to segregate products
into these four categories because: 1) they enable salespeople to enhance their
customers’ ability to select the best flooring; and 2) you want to set
different margins for each category. It is not a good idea to use one margin
for all products. Even the big discount stores, known for low prices, do not
sell every product at the same low margin. Let's take a closer look at what
these producs types do:
Promotional Products drive traffic to your store. Advertise them without installation costs,
so you can promote the lowest price. They give customers the impression you are
very competitive.
Specialty Products are unusual or one-of-a-kind.
They are not margin sensitive, so you can set a higher margin. (If a customer strongly wants one, she will
pay the price.) If many competitors are
selling this product and it is popular, you may also turn it into a promotional
product.
Go-to Products are your bread and butter products,
your “horses,” because they are favored by your salespeople and most shoppers. Typically, these products comprise only 20%
of your products, yet produce 80% of your results. Set a healthy margin, but not a high one.
Decision-Enhancing Products may be products you
display that no customer has ever bought. You needn’t take them off
the floor, when they can serve an important purpose. One sub-group of these products comprises high-end flooring with
luxurious features. Price them at a high margin. (It doesn’t matter how high, you don’t sell them anyway.) The second sub-group comprises products that
are less desirable in terms of color, durability, or fashion, although not
necessarily the least expensive. (These are not inventoried.)
When you set both groups of decision-enhancing products next
to your go-to products, salespeople can convincingly contrast the value in the
go-to products. Thus, decision-enhancing products prevent cognitive dissonance
and actually help customers make decisions.
(This proximity of products is part of merchandising.)
As you merchandise your store, use these proven basic
tactics. Decrease margins on
price-sensitive items and increase them on non-sensitive products. Use
square-foot pricing on all products, to facilitate price comparisons for
different types of flooring, such as wood vs. carpet or ceramic vs. vinyl.
Eliminate 95 cent and 99 cent pricing; instead use a seven or three
as the last digit (as in $1.43/sq. ft.). These digits give customers the impression that you have lowered
the price as far as possible, instead of rounding up to $1.49. Also, mark every product. Women customers do
not trust stores where some products are not marked. Pricing helps them start shopping without a salesperson.
And use printed price tags.
Hand-written tags imply that you have set the prices casually, so they
are negotiable. Price your go-to
products to include the cost of cushion and installation labor, where possible.
Women shoppers hate hidden charges and extras later added. It’s easier to go down, than to sell up. On
the price tag, show the “by the month” price.
“You can have 1000 sq. ft. of this carpet for $39 a month.” Take the focus off the total price.
Do you have a bargain area?
I recommend it. Customers love to compare bargains to your other
products. Just limit the choices.
The joy of selling
flooring, for me, is knowing that when I use these proven merchandising
principles I am helping a customer choose the flooring she really wants in her
home or office. My motive is not to
deceive her, but to help her choose what she will feel good about for years to
come. I know she will be better served
by buying from me, so I work hard to make the best presentation I can to her. I want her to be happy and I want to like
the person I see in the bathroom mirror every morning. How about you?
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