Portray Relative Risk via Pricing Which Fits

Price can portray relative risk. In an Arizona State University and Tulane University study, groups of students were advised to get a flu shot. Some were told the price of the inoculation was $25, while the rest were told it was $125. So that the decision to get the shot wasn’t influenced by whether the student could afford it, all were told the fee would be reimbursed by health insurance. Each participant was then asked to estimate how likely it is they would contract the flu if not receiving the shot.
     The group told the shot cost $25 judged themselves as more likely to get the flu. The researchers’ explanation is that a lower price signifies a need for greater accessibility, and therefore a higher risk of nonuse. People are more likely to get the shot if the price is lower because it is more affordable, but also because the prospect of not getting it is scarier.
     Using a different scenario, an Aalborg University, University of Zurich, and Goethe University study produced a contrasting conclusion: A higher price portrays greater risk.
     These study participants perused an ad for a canyoning or a whitewater rafting adventure at a $100 price. Offered as an option was insurance to reimburse up to $100,000 in medical bills if the person was injured during the adventure. Some participants were told the price of this insurance was $9.90, while the others were told it was $79.90.
     The question in this study was not the likelihood of purchasing the insurance, but instead the likelihood of purchasing the tour whether or not the insurance was purchased. The answer is that people quoted a higher price for the insurance were less likely to indicate interest in purchasing the tour. Companion studies by the researchers gave evidence this was because those people considered the tour to be riskier.
     The effect is stable, but not large when calculated as an average across a group of people. Namely, for each 10% increase in the insurance price, the likelihood of purchasing the tour dropped by between 1% and 2%. A retailer could probably set a price for insurance which yields a substantial profit without the price sabotaging sales of the base item.
     Still, why isn’t that 1% to 2% higher? Perhaps because it’s an average for a group and within any group are adventurers who are attracted by signals of higher risk.

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Imply High Risk with Low-Price Sacred Goods 

Pain a Stimulating Picture 

Present Warranties as Insurance, not Assurance 

Externalize Surcharges in Partitioned Pricing

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Serve People Just What They Expect

Surprisingly, if you exceed your customers’ expectations for service quality, this can decrease customer satisfaction.
     The University of South Carolina research team points out how customer expectations for service quality depend on characteristics of the particular transaction. Consider the example of a diner who generally expects highly attentive service, with the waiter checking frequently throughout the meal, but who wants limited interruptions when accompanied by a friend who’s seeking a confidential conversation.
     This example was the basis for scenarios the researchers used in their studies where degree of server attention and degree of desired privacy were varied. When these two variables aligned, customer satisfaction was highest. The greatest disruption of customer satisfaction occurred in the situation of a customer with low service expectations receiving service which exceeded those expectations.
     It's clear how service falling short of expectations lowers customer satisfaction. But overly solicitous service also has negative consequences. The researchers cite prior studies showing that positive misalignment can cause customers to feel embarrassed, guilty, and unpleasantly indebted to the service provider. It’s possible to thank customers too much.
     An exception to the general conclusion occurred with another study conducted by the researchers where the scenario reflected a severe service failure, namely a diner needing to wait one hour to receive the meal they ordered and the food arriving overcooked. In these circumstances, subsequent service quality exceeding customer expectations didn’t lessen satisfaction. The customer probably felt they deserved the bonus.
     Providing service consumes resources. When service quality exceeds customer expectations, that could harm the organization financially and precipitate employee burnout. And over time, the situation gets progressively worse. Each time you exceed expectations, it can nudge the expectations up for the next time the customer visits. At some point, it would no longer be profitable to keep raising the bar for yourself.
     Actually, the customer might not even notice if you do manage to exceed their expectations unless the excess is dramatic. When shoppers’ expectations are exceeded, the shoppers could take it for granted and don't give lots of credit.
     The University of South Carolina researchers’ core advice is that the nature of optimal service depends on the characteristics of the shopper and situation. Certainly, there is a challenge for the provider in assessing these as a transaction progresses. It requires attending closely to the customer’s actions and reactions. But isn’t that itself an essential component of optimal customer service?

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Assess the Costs of Customer Satisfaction 

Handle Customer Satisfaction As Relative 

Dazzle Your Customers 

Multiply Recovery from Double Deviation 

Burn Out Resignation of Skilled Staff

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Unwrap Blind Box Collectible Concerns

How are a bubble gum pack, a storage locker, and a Birchbox alike?
     They’ve all been marketed as blind boxes—containers purchased without the customer knowing what specific items are inside. Baseball player cards were first packaged with bubble gum in the 1920’s by Fleer and Topps brands with the objective of increasing gum sales to kids. On A&E’s “Storage Wars,” adults bid on abandoned storage units at auctions before knowing what's inside. A Birchbox subscriber receives a mystery assortment of curated beauty enhancement products each month.
     University of Newcastle and University of Sydney researchers explored the type of blind box purchases in which the contained items are collectibles for the buyer. What these researchers documented is an addictive loop of impulsive purchases. The researchers report that the addiction potential is high enough to have caught the attention of regulatory agencies.
     Consumers are drawn to blind box collectibles via the appeal of uncertainty and the urge for completion. As to uncertainty, in a University of Chicago study, people worked harder for a bag containing either two or four chocolates than did another group told the bag had four chocolates. The tickle of ambiguity stimulated these study participants to act.
     The thrill of the tease is an aspect of this. Show shoppers a gift box being slowly opened, and their evaluations of what’s inside the box will be more positive than if you just showed them the item. The unboxing video genre has gained notable numbers of YouTube followers.
     The pleasure-from-watching-the-striptease is so compelling that researchers from Chinese University of Hong Kong saw it even with an empty box. In this case, the observers of the unveiling liked the empty box itself more, on average, than an equivalent set of consumers who were only shown the box.
     As to the drive to complete the whole set, blind box collectible purchases might be compared to slot machine gambling. Because the purchaser doesn’t know what specific items in the set will be acquired, they could continue buying in hopes of filling in what’s missing in their collection. This behavior could easily become economically imprudent and potentially addictive.
     In your own use of blind box collectible marketing, stay alert for any need to nudge a compulsive buyer toward counseling just as a casino operator would with their clientele. Also consider recommending collection groups where your customers could trade their duplicates while socializing.

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Tickle with Uncertainty 

Cross to Cross-Selling with Collecting Urges 

Hide Item Features from Shoppers Sometimes 

Stumble Upon Serendipity as a Sales Tool 

Compulsive Buying Disorder. Okay, Laugh

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Complete the Teasers if Charging for More

When I post on Bluesky with a live link in the Bluesky post to one of my RIMtailing blog posts, the title of the blog post and the first 25 words or so often appear in the Bluesky post. This teaser almost always ends in the middle of a sentence and often ends in the middle of a word. My intent is to have the teaser draw people for whom the topic is relevant into looking at the extended blog post. I’m aiming for the appeal of curiosity and the urge for completion.
     Evidence is this works, according to studies by a team of researchers from TBS Business School, ALDI Data & Analytics Services GmbH, Copenhagen Business School, Karlsruhe Institute of Technology, and Stockholm School of Economics.
     But the research also says this is true largely because there’s no fee to look at the complete content. If I required payment to go beyond teasers, that would quite legitimately activate in the reader a perception I’m trying to sell them something. Such persuasion knowledge, in turn, arouses sales resistance, making it substantially less likely the reader would choose to access the content.
     Consumers dislike the feeling they’re being manipulated. Any irritation would be aggravated by a teaser which ends in the middle of a word, sentence, or video scene. The researchers recommend that if you charge a fee for accessing full content, you end the teaser with a complete thought.
     Now at the other extreme of telling consumers too little is the possible risk of teasing them with too much, such as with spoilers in movie reviews. Researchers at University of Houston and Canada’s Western University defined “spoiler intensity” as the degree to which information in the spoiler reduces uncertainty about a central theme in the experience of watching the movie. Then, using a sample of 993 movies, they statistically analyzed the relationship between spoiler intensity on IMDB—the most popular movie review site—and box office revenues for the first eight weeks of the movie’s release.
     There was a positive relationship between spoiler intensity and box office revenue. The relationship was higher for movies in limited release, which supports the idea that the uncertainty reduction accounts for the value of spoilers. Spoilers increase the credibility of marketer claims and consumer reviews, so they’re of most use with relatively unknown items. In these circumstances, it seems like there’s little need to worry about spoiling the audience. Spoilers, in fact, increase the attraction.

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Spoil Your Audience with Spoilers 

Unwrap Purchase Alternatives Seductively 

Cruise Through When People Suspect Selling

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Request Attribute Ratings of the Subpar

There are many ways in which a purchased experience can fall short of the purchaser’s definition of perfection. Particular attributes might have flaws or the way in which they all fit together isn’t quite right. Researchers at University of Alberta and University of Pennsylvania find that numerical ratings of subpar experiences are more positive if the customer has also been asked to evaluate each of the attributes.
     In one of the studies, participants were asked to remember a restaurant or rideshare experience which had both good and bad attributes. All of the participants were then asked to give a single overall rating of their experience using a five-star scale. Some of the participants were also asked to give a rating on a five-star scale for the attributes. With the restaurant, this included food, service, ambiance, and value. With the rideshare, the attributes were driving quality, driver quality, vehicle quality, pick-up/drop-off locations, and navigation/route.
     Those who also rated the attributes gave somewhat higher overall ratings. In other studies, the researchers found similar results for airflight, Airbnb, dental care, and painting gallery experiences.
     The design of their studies allowed the researchers to attribute this positivity push to people’s preference for being nice to service providers. Unless the experience was thoroughly terrible, customers who rated one or more attributes of the experience down felt a need to avoid doubling down on the criticism when they assigned the overall rating.
     Shoppers pay more attention to overall ratings than to attribute ratings because they like to simplify their decision making. So it’s logical for marketers to prefer positivity in received ratings. Asking customers to rate attributes along with the overall rating helps accomplish this. The increase in ratings in the studies was equivalent to about only a third of a star on a five-star rating scale, but the researchers point out this translates to roughly a 30% chance of changing a two-star rating into a three-star rating, for example.
     Still, the positivity push is a distortion from the actual customer opinion. While expecting our shoppers to look at overall ratings, we should peruse the attribute ratings so we can meaningfully improve the experiences for our future customers. A caution here from the findings is to check that your list of attributes covers all important aspects of the experience and that you ask each rater to give an assessment on all the attributes.

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Mean More with Mean Ratings 

Reveal Limitations of Mystery Shoppers 

Dial In to Dialectical Thinking

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Distract Complainants from Feeling Ostracized

We’d like to promptly and carefully respond to every complaint from customers. Constraints in time and money often prevent us from doing so. Researchers at University of Surrey and University of Southampton identify problems caused by this shortfall and then indicate two low-cost methods for easing those problems.
     The innovative approach of the researchers was based on recognizing that a customer might have their complaint resolved in the physical or online presence of other customers with complaints. What are the reactions of observers whose complaints are not resolved?
     The researchers’ answer is that these observers generally perceive they’ve been socially excluded. Social exclusion produces the painful feeling of ostracism. A common reaction of an ostracized individual is striving to restore control of the situation. In the case of an observer who sees another’s complaint being resolved, the effort to restore control can consist of escalating the extent or the intensity of their own complaints.
     The problems are aggravated if someone who registers a complaint later has their complaint addressed prior to that of the observer who complained earlier. This could easily happen with a situation such as a cancelled airflight. For one thing, many complainants will descend on the limited number of staff simultaneously. For another thing, some of the remedies, such as rebooking on a frequently flown route, are quicker to arrange. Still, one takeaway from the research study is to, insofar as possible, adhere to first-in-first-out addressing of complaints.
     The other low-cost method for easing the problems consists of distraction. In the study, participants were asked to imagine a situation in which they returned to a gym to complain about being overcharged for enrollment and while waiting for a resolution, observed another customer registering the same complaint. Those study participants assigned to complete a distracting activity during the wait reported less upset when served out of turn compared to reports from those participants not assigned to complete the activity. The activity consisted of slowly paging through a slide presentation which showed what to eat before workouts. The researchers say this helped because the activity distracted from preoccupation with perceptions of exclusion.
     Resolving a complaint is an opportunity for the organization to build good will. Don’t allow perceptions of exclusion to spoil the gains.

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Open Wide to Calm Complaint Intensity 

Prioritize Private Complainers 

Compensate Group Service Failure Collectively

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