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A Smart Marketer’s Guide to Key Research on Consumer Behavior – ParkerPowers.com
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A Smart Marketer’s Guide to Key Research on Consumer Behavior

Many groundbreaking researches that pave the way to understand what influences consumer choices and what factors drive them to buy have been recently published in the Journal of Consumer Research.

Photo: Shutterstock



Many groundbreaking researches that pave the way to understand what influences consumer choices and what factors drive them to buy have been recently published in the Journal of Consumer Research. Here are the ten most telling findings culled from different research studies. Marketers will find them invaluable when planning and running their marketing campaigns.

Consumers Devalue Products When They Are Offered as Freebies in Retail Bundles

This is the essence of the landmark study that identified the “freebie devaluation effect.” It was authored by Alexander Fedorikhin (Indiana University), Valerie Folkes (University of Southern California), and Michael Kamins (Stony Brook University-SUNY).

The retail strategy of bundling and labeling one of the items as a freebie can cheapen all the items—even the expensive product in the bundle—when they are once again sold individually. The freebie bundling leads consumers to perceive the products to have inferior quality. Consumers assume that without the freebie selling gimmick, the merchant cannot sell the product.

When resorting to this retail strategy, the only solution for a marketer is to explicitly label the freebie bundling as a means to introduce the new product to the market.

Your Low Pricing and Discounts Can Hurt Your Company in the Long Run

Authored by Hélène Deval (Dalhousie University), Susan Mantel (Ball State University), Frank Kardes (University of Cincinnati), and Steven Posavac (Vanderbilt University), the study explained how pricing influences your product’s perceived quality.

When the price is low, your consumers either think that they are getting great value or a low-quality purchase. When confronted by a high price, your consumers look at your product as one of poor value or a product of high quality.

The most telling example of this devaluation in the eyes of consumers is what the retailer J.C. Penney discovered, although belatedly. Because the company has been offering discounts and sales promotions for a long time, their customers no longer feel that they are getting a good deal from a discounted buy from J.C. Penney.

So, rethink your discounting schemes, especially if you are making them into long-term sales promotions.

If Your Rewards Program Offers “Countable” Prizes, You Risk Customer Dissatisfaction

Consider the example offered in the study to reinforce how “countable” promotional techniques can backfire. An airline that offers frequent flyer miles breeds more resentment among its customers who were unable to reach the required number of points. If the airline offered a vacation package, for instance, as reward for customer loyalty, then the level of dissatisfaction felt by costumers who did not receive the rewards would be much less. The reason: the frequent flyer miles are readily countable while the vacation package isn’t.

If the rewards are easily quantifiable, the marketer generates a high risk of eliciting customer dissatisfaction among those who cannot get the rewards.

The study, authored by Jingjing Ma and Neal J. Roese, both based in the Kellogg School of Management at Northwestern University, rationalized that countability drives people to compare, thus they get more upset if they cannot get the rewards.

The solution: think “upsize” instead of “buy one and get one item free.”

When You Introduce Novel Products, You Run into Two Types of Consumers

Funded by Unilever and spearheaded by Philip Fernbach and Steven Sloman, the study identified two types of consumers according to how much product information they need before they are willing to pay for a new product with a special feature compared to a generic one that does not contain the said feature.

The “explanation fiends” are those who are willing to buy products that contain well-detailed product information. “Explanation foes,” on the other hand, buy even when faced with shallow product information.

When the two classes of consumers are confronted and were asked about how well they understood the given product information, the explanation fiends are more willing to pay a higher price for the product while the explanation foes responded with a powerfully drastic reduced pricing—from $8 to $6.

The valuable lesson for marketers is to tailor, if possible, the product detail to balance the needs of both types of consumers. That way, sales can be had from both sides.

Ads that Contain Subtle Variations Are More Easily Remembered, Even by Distracted Consumers

The next time you plan your print advertising campaign or video marketing strategy, keep the findings of this study in mind.

Repeated exposure to an ad is already known to drive “preference” in the consumer’s mind. This study enhances the level of preference and retention by looking for the ad element that even distracted consumers who are beset by their day to day concerns remember.

Authored by Stewart Shapiro (University of Delaware) and Jesper Nielsen (University of Arizona, the study was able to pinpoint that subtle variations in the same ad makes it more effective.

The example given was an ad that featured the same image but the brand logo was switched around each time the image was shown to the consumer.

If you run a series of print ads, try to make slight variations to them.

High-Level Product Features Appeal to Confident People

If your consumer base is composed mainly of confident people, then you must detail the abstract, long-term, or high-level benefits and features of your product.

Echo Wen Wan (University of Hong Kong) and Derek Rucker (Kellogg School of Management, Northwestern University), authors of the study, explained this phenomenon as follows: “When we feel confident, we think that abstract information is more relevant to us. But when we feel doubtful, we think that concrete information is more relevant. The more relevant we perceive information to be, the more we will focus on it.”

In one experiment in the study, confident individuals focused more on a health club ad that touted the idea of long-term health. The idea of deriving daily workouts, which was a low-level concrete benefit, posed less appeal to them.

The psychological confidence of your consumers is a powerful factor that governs how you write your ad copy and which product features you must highlight in order to entice who you think comprises your customer base.

Gender Differences, Product Ownership, and the Product’s Value

Authored by Sara Loughran Dommer (Georgia Institute of Technology) and Vanitha Swaminathan (University of Pittsburgh), the study uncovered how the act of owning a certain product enhances its value in the eyes of a consumer.

The price that a consumer is willing to pay to buy a particular product is considerably less than the price he agrees to when he sells the product. Consumer identity and the perceived value of possessions are greatly intertwined.

Keep this consumer behavior in mind the next time you offer a free trial. When your customers have already tried and owned the same items, then that can boost your sales.

The level of emotional association with the product, which influences its value, is also determined by the consumer’s gender.

Group distinctions play a major role when men decide to buy things. Women, on the other hand, are driven by forming emotional connections with the product and are less likely to be influenced by keeping up with the buying choices of social groups. Thus, it is generally much more difficult to persuade a female buyer.

Consumers Almost Always Choose the Product at the Center

It does not matter whether the product is a jar of tomato sauce or a bottle of lotion. Consumers are drawn to the center—specifically the horizontal center of the shelf. This is probably obvious, and many consumers are already aware of this marketing ploy. But they are still subconsciously being governed by it.

“In the context of low involvement choice between frequently purchased products, when choosing between unfamiliar yet equivalent brands, the visual search process and consumer choice are biased toward centrally located options,” wrote authors A. Selin Atalay (HEC Paris), H. Onur Bodur (Concordia University), and Dina Rasolofoarison (Aston Business School). The study used eye-tracking devices and concluded that the centrally located product is bought more frequently.

When Consumers Are Faced with Conflicting Goals, They Are Much Easier to Influence

If you have a customer who wants to lose weight and passes the fruits and veggies section before getting to the junk food aisle, that person will then struggle with the decision to buy unhealthy foods. The image of the healthy alternatives will burn in that person’s mind while browsing through the myriad of junk food.

If you want that person to buy your fresh produce, you need to reinforce the conflicting image of healthy versus unhealthy foods. It means another pass on a second fruits and veggies section on the way to the cashier, for instance.

“In short, important goals are hard to ignore because ignoring them just makes them stronger,” Kurt Carlson (Georgetown University), Margaret Meloy (Pennsylvania State University), and Elizabeth Miller (University of Massachusetts Amherst), authors of the study, wrote.

The Role of Background Noise in Selling Novelty Items

If your product is new or has features that are not seen on competitors, moderate background noise helps you to sell it. Take note that the study specifies moderate noise levels, not low or high levels.

According to Ravi Mehta (University of Illinois Urbana-Champaign), Ryu (Juliet) Zhu (University of British Columbia), and Amar Cheema (University of Virginia), authors of the study, moderate background noise makes people think at a much higher or abstract level. The distracting background noise can enhance creativity, making consumers more prone to try new and innovative products.

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Top Networking Tips: What Sir Richard Branson Did When I Told Him He Was Wrong

To promote your start-up or when looking for investors, you’ll need to get your message out there. Networking is the best way to do that.



Photo: Parker Powers w/ Sir Richard Branson at his private home - Necker Island

To promote your start-up or when looking for investors, you’ll need to get your message out there. Networking is the best way to do that.

If you want your business to be successful and profitable you need to make sure that you are not doing the things, which could cause your business to fail. To promote your start-up or when looking for investors, you’ll need to get your message out there. Networking is the best way to do that.

Get Out There

You don’t have to be a social butterfly, but you do have to put yourself into the right places. If cocktail parties are out of your comfort zone, look for opportunities that suit your personality. You could volunteer with associations connected to your niche, offer to assist investor groups with tasks or attend lectures put on by financial firms, incubators, etc.

Don’t just attend events with people the same as you, though. Plunge into places where people who know people can connect you with the right people. Also use networking to find team members that will give your start-up the depth it may be missing.

Listen and ask questions as much as you talk about yourself. Come away from networking opportunities more knowledgeable than when you first arrived. Augment your networking with follow-up coffees, email exchanges, and other opportunities as appropriate.

Speak Up

Of course, the purpose of any networking activity is to communicate your message. Practice an elevator speech (a short 60-second introduction about what you do). Your mini-speech isn’t something to spew out to any innocent bystander. Develop relationships with small talk first and sense whether a person might be open to hearing what you have to say.

Politely introduce yourself and give others the floor by letting them talk. If given the chance to discuss more than the weather, jump in with a great but natural opening line, or what is called a hook. A hook is a quick phrase that precedes your elevator speech. It is a sentence that in 20 seconds or less causes a listener’s ears to perk up, and hooks them into wanting to hear more. You could include a question, humor, or simply an opening line that begs more information. After sharing your hook, pause to look for verbal or non-verbal cues that invite you to share more.

When given a cue to proceed, use your elevator speech. Try telling a captivating story the person you’re talking to can connect with. A well rehearsed touching story will be more memorable than a presentation of facts and figures. Don’t make assumptions though. For instance, instead of assuming the person next to you skis and starting with, “You know when you’re skiing and the…” change it to “I like to ski, but a problem I find is…”,

Be Honest

The first time I was invited to Sir Richard Branson’s private island; Necker Island, I got his attention in a much different way than most would probably consider as effective networking. Later that evening, after a day of group discussions on how to use business as a force for good with his Virgin Unite team and a few others; I saw my opportunity and I took it.

It was shortly after Richard and I lost a game of pool against our opponents (thanks to me, because I missed every single shot, he didn’t), I figured I’d take a different kind of shot. I bluntly asked THE Richard Branson, “Can we sit and talk for a minute, so I can explain what it is you’re doing wrong”?

It was obvious to him the question was in regards to Virgin Unite, (Virgin’s philanthropic division, not my horrible pool playing), we had been discussing earlier that day, “Of course”, he quickly responded, “Let’s sit right over there”, while pointing to his large table across the room.

We sat down and I immediately said to him, “You’re Richard Branson, and no one here can or ever will be Richard Branson. Most of us here are serial entrepreneurs, industry leaders, influencers, humanitarians, or celebrities, who have a sphere of influence in our own small part of the world, rather than make everyone conform to a strict platform, let us bring awareness and participation from others out there in our own way. You’ve built this playground, I’m asking you consider just giving all of us a sandbox on your playground, rather than having to create our own.”

While that analogy may not resonate with you, it very much did so to him based on our discussions we had earlier that day on how to build upon and support Virgin Unite initiatives effectively, yet independently. He quickly responded, “Please say what you just said again.”, I instantly repeated. He said, “One moment”, as he reached across the table and grabbed a nearby pen and small pad of paper.

“Okay, go ahead Parker.” In all honesty, as I repeated the analogy to him I jokingly thought to myself, “Holy sh*t, friggin’ Richard Branson is taking friggin’ notes on what I’m saying!” As soon as I could think that, he had apparently already made a decision that would change my life in many ways. He put down the pen and quipped, “Can I just give you my email and you send it to me instead and we go from there?”

My hands began nervously fidgeting with my phone in an effort to get it unlocked. Finally, I did and he had to repeat it several times as I entered the information. I have been back with my wife and business partner Bernadette Powers to Necker Island and Moskito Island to see Richard and Joan, as well as going back soon for a project I cannot mention as it’s not been made public yet. “Always ask” is on one of my mantras, because a no is the worst that can happen.

Richard and I exchange emails from time to time, he has sent business my way, and I get to stay involved with some of the cool stuff he is doing. Two things enabled that to happen, I’m honest with people as a principal, even if they are a Billionaire, second and most importantly, there was a great leader willing to listen to how perhaps he was not getting it right. Whether or not I was right or wrong is irrelevant; to quote Andy Stanley, “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.” No, he never actually hit me as one might guess from the image at the top, it was a fake punch done for a charity function I was putting together.

Be Clear

Just as the story above is, your story, solutions, services, and ideas while relatable, should also be communicated in simple terms. The listener needs to understand and get it, or it’s pointless. Make your story is granular with specific examples about how your product, solution or ideas have been used and by whom. Know what your objectives are and be able to describe what sets you apart.

Remember, an elevator pitch is short, interesting and to the point. Be brief and wait for feedback or prompting before carrying on. Whatever you do, don’t act like a know-it-all. Yes, demonstrating confidence and intelligence is important, but never imply you know more than everyone else. Investors and advisors want to work with someone that is aggressive and hard working, but still very teachable.

Research in advance who the people are you’ll be meeting, if possible. Find out their niche, what they’ve done, and what they’re presently involved in. Don’t hesitate to ask the people you meet for further help or to touch base again. Be savvy though. Make sure you’ve earned the right to ask for help or they may think you just want to use them.

Be a Giver

Always offer to add value where you can to someone with no expectation of anything in return. My philosophy is; build relationships, add value and the money will appear, always value people before profits. This applies to employees, customers, partners, vendors, etc.

You can call it karma, reap what you sow, or whatever, but most breakthroughs, major business, financial or personal growth in my life has almost exclusively been preceded by me being a giver. Whether it’s helping out a fellow entrepreneur, cutting a check to a non-profit, donating my time or rescuing kids in the jungle and giving them a home and education like in the photo above.

Giving and helping people has always been a passion, and it just so happens great things personally, professionally, and profitably do come out of it. If you have a purpose, mission and a vision that includes helping others, you will almost never fail at what you set your mind too.

Build a Solid Team

No man or woman is an island and most good businesses need a balanced team of smart people involved. Hang out with and rally the right people. Networking is a great way to build a team or gather a board of advisors. The right people will help build your reputation and platform as well as guide you in the right direction.

Keep adding to your business-building repertoire over time. Great things may not happen from just one meeting. The same goes for pitching a book to publishers. There are many great books—best sellers even—that were pitched over 20 times before being picked up.

Test Your Product

Learn from each experience and keep building and testing your product. Take your product to the public. Find out who understands or needs your solution, and let them try it. Collect as much hard data on these trials as you can. You might want to video the sessions, do online focus testing or follow-up surveys with the participants.

When you relay these points to investors and advisors, don’t be afraid to tell them what didn’t work and how you’ve needed to tweak things. They don’t necessarily want to hear the entire history or about laboratory test results and what your family and friends think. Get the feedback you need from the people who will be your customers.

UsabilityHub.com happens to be one of my favorites, I have no affiliation, they are just the one I prefer to receive real, and honest feedback on brand names, designs, usability, product offerings, etc, from the public.

Get Your Name Out

Go easy on issuing broad press release blasts. Many people don’t have the time to read pages and pages of analytics delivered to their inbox. Target specific people in a way they’ll know they’ve been chosen. You can also create abbreviated versions of your business plan to streamline the data for the right situation. Online business planning tools that convert your plan into professional documents will help you do this easily.

Getting your message out there, looking for funding and finding targeted clients is a lengthy process. Get off to a good start by building a great team, fine-tuning your message, and choosing good networking opportunities. If you’ve really got something, you’ll be contacted and on your way!

Do you agree? Whether it’s yes or no, please tell me why?

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5 Ways to Get More Twitter Followers

If you are using Twitter to market your business, website or blog, you need to have as many followers as possible, not just to read your tweets, but also to pass them on to their followers.



Photo: Shutterstock

If you are using Twitter to market your business, website or blog, you need to have as many followers as possible, not just to read your tweets, but also to pass them on to their followers.

It’s important to ensure your Twitter followers will be interested in what you have to say. Finding the right Twitter followers can take time and patience. Luckily, there are several things you can do to speed up the process. Here are 5 ways to get more Twitter followers.

Run a Twitter competition

Running a Twitter competition is an effective way to bring in more followers. You don’t have to offer big prizes; money-off coupons, special discounts and small prizes can work just as well. Try asking for entrants to write a 140-character poem, story or joke related to your business, product or industry.

Pull in followers from other social media platforms

Other social media platforms, like Facebook, LinkedIn and Pinterest, can provide a rich source of new Twitter followers. Reach out to your followers and fans from other social media platforms, and offer an incentive for following you on Twitter. Competition entries, special offers and discounts are always popular incentives. Most platforms allow you to export your contacts from one social media account and import into another. This allows you to have multiple connection points with your audience.

Use your company blog

Your company blog is a useful tool for publicizing your Twitter account and bringing in new followers. Try writing a blog post about your experiences on Twitter. Mention any special promotions or offers you have published on Twitter, and provide a simple link for readers to click through and follow your Twitter account.

Look at your competitors

If your competitors have their own Twitter account, have a look through their list of active followers. This can be a great way to find the right kind of followers, as these people already have an interest in products or services similar to your own. Additionally, check the follower lists of official bodies or other important organizations related to your industry.

Use Marketing Automation & Publication Tools

There are many tools available to help you find “targeted” Twitter followers – most are fake and will do much more damage than they do good. The best route to growing your Twitter following is to contribute regularly, interact with influencers and users in your target market. Research and find the best social media scheduling software that is best suited to your business interests.

Please follow me at @ParkerPowers

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3 Best Practices in Social Media Marketing and Branding

Best practices in marketing and branding through social media that exist to benefit small business owners.



Photo: Parker Powers at Zappos headquarters in Las Vegas to visit Founder & CEO Tony Hseih

For many small businesses, there is no question on whether or not to engage in social media marketing – they just don’t know how to derive any meaningful return on investment from it.

Often, small to mid-sized businesses and startups benefit from Internet marketing channels because they are affordable and efficient, not to mention relatively easy to deploy (compared to traditional marketing). This means that the ROI rendered is often worth everything put in, but this isn’t the case for social media because entrepreneurs and business managers simply don’t know how to navigate the ever-changing waters of social media marketing.

Worse still is that social media was never really meant specifically for marketing. Luckily, best practices in marketing and branding through social media exist that can point business owners and managers the right way when attempting to make the most out of their social media marketing efforts.

Social is a Two-way Street

Social media accounts setup for businesses are most typically used as push marketing channels where marketers post social updates with URLs in them, attempting to drive referral traffic to the directed webpage and consequently positively affect conversion. That’s all well and good for the webpages involved, but what about the social media account?

Social media marketing is a two-way street. Your social posts send referral traffic to specific webpages, so why shouldn’t your website’s pages send traffic to your social media accounts? Your most important webpages (your homepage, your blog, and your product or service pages) should prominently feature any important social media accounts for your target audience’s perusal. Your web design and calls to action should also actively encourage people to become followers or fans or whatever it is your social graph demands. This is the simplest step; after all, all it takes is the addition of a few buttons and some words on the webpage. This rudimentary effort shouldn’t be the only step you take, however.

Promoting your social profiles and pages on your webpages helps increase your social graph, which in turn improves your social presence. The act of following your page or profile, however, doesn’t offer a lot of value to your target audience (unless they’re already hardcore fans of your brand). What you need is a factor that convinces them to engage with you through social channels.  You can try persuading your website traffic to follow your social profiles and pages by giving them a sense of entitlement: show them that your social graph gets more perks or benefits compared to the typical website visitor. You can give your fans or followers some discount codes or advance notifications – so long as they get a distinct advantage for following your brand in social channels.

Relevant is Viral

Social media shows frightening potential for marketing in the form of viral content. When videos, updates, links, or any other social content goes viral, these spread like wildfire throughout the entire social network – it’s like the social media equivalent of a 30-second Super Bowl spot in terms of exposure. While there is no single secret to creating viral content, you can leverage relevance to make your content more “shareable” for your target audiences.

You need to be relevant in three principle facets: your brand, your audience, and the current social trends. To illustrate this point, say for instance your business is a sports memorabilia shop, your target audiences are sports aficionados, and the current trend is memes. That’s your formula right there. Of course, depending on the trend, some businesses might not be as successful. If, say, your business wants to portray itself in a serious, professional light, then you probably wouldn’t want to flood your fans’ or followers’ feeds with cutesy memes. You can leverage news and current events, even local events for better local marketing.

Engage. Brand.

Finally, social media – being social and all – is excellent grounds for branding. Word of mouth marketing improves your brand’s reputation and increases its visibility beyond your immediate social graph. Social branding, however, isn’t automatic. You need to work on engagement: promote it, encourage it, nurture it. Engage with your audience whenever an opportunity arises that enables you to show the value of your brand and your business. Don’t reply to every comment, but pick and choose which ones deserve your attention. Meaningful negative feedback is always a golden opportunity to resolve a problem that in turn results in happier clientele and sparkling feedback afterwards.

Now, keep in mind that your conversations with your social graph will not necessarily result in leads or conversion, maybe not even referral traffic. What you’re after here is not financial gain, but a boost in your reputation and branding. Instead of aiming to convert fans or followers into leads, convert them into influencers – people who help spread the good word about your brand. These influencers – even if they aren’t leads – help broaden your social presence. Better yet, they do it free of charge. Extend your customer service to social media and answer general queries and concerns through your pages and profiles. This provides more accessible avenues for interaction between your business and potential leads.

These three best practices in social media marketing can transform your social pages and profiles from just being mandatory push marketing channels to branding and customer service centers. That, without a doubt, is much more useful to your target audience, and delivering what’s useful for your target audience will render meaningful ROI for your business.

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About Parker

Parker Powers, is an American serial entrepreneur, recognized leader in personal branding, Top 100 ranked CEO, author, speaker and recognized internet personality.

Parker Powers has bootstrapped multiple companies over the past 20 years, generating over $100MM in revenue online.

As a contributing writer for over 25 major publications, and a humanitarian, his ventures have spanned many industries and continents over the years.

Parker is a published and respected business transformation leader followed by publications like Forbes Magazine and quoted and featured in business books, magazines, and online publications.

Through his coaching, advising, consulting, and diverse teamwork within the Blackwell SGP network, he is a known strategic growth partner for many entrepreneurs and companies across the U.S. & Europe.

Inc. 500|5000 Entrepreneur

Branding + Executive Coach

Dallas Top 100 CEO

Bootstrapped $25k to $100MM Revenue Company

Bootstrapped $5k to $10MM Revenue Company

Bootstrapped $600 to $500k Revenue Company

Top 20 Revenue Magazine

Inc. 500|5000 Entrepreneur

Mentor @RealCo Seed Fund

I help people grow brands, businesses, and exit.