Can You Train Customers To Do New Tricks?

Customers and changing shopping habitsIn the US, there has been a lot of talk about how the retailer, JC Penney, missed the boat when they eliminated sales and stated they were offering the lowest price without coupons or sales. In fact, JC Penney reported that they missed their expected sales goals of $3.4 billion. What happened?

Overview of the JC Penney story

After Ron Johnson, architect of Apple’s retail success, joined JC Penney as CEO, a major overhaul was begun. Previously JC Penney was a stolid retailer. With the massive change plan being implemented, the stores were remodeled so that there are mini-shops or boutiques within the store. The American retailer changed their merchandise as well as their pricing strategy. They explained that it is a “fair and square” deal to have customers pay a low price any time they shop without using coupons or attending sales.

Do customers prefer the status quo?

One theory being proposed as to why JC Penney is struggling with customers is that they prefer coupons and sales to one low price. It has been a harsh lesson for this retailer and Johnson has stated a belief that “coupons were a drug; they really drove traffic.” (An interesting note-as reported on on May 31, 2012, JC Penney is adding “Best Price Fridays”)

It sounds more like the thrill of the hunt as a shopper looks for the best deal at the best time. Is this unique to US consumers? Different countries have their own shopping cultures. In some countries, the price is the price and there are no sales. In other countries, it is expected that the customer will haggle with the seller for  a mutually satisfactory price.

Certain expectations

No matter where a customer is geographically, there are certain expectations about what type of merchandise is offered, how the store is laid out and what the price points will be like. For many customers, they are aware that the stores are marking up the price so when they get a “good deal”, shopping feels rewarding. (There are other psychological things going on too.)

But what if the store tries to change the status quo?

That is what JC Penney tried to do and it was received poorly. Customers either stopped going to the stores or reduced the number of purchases. It seems to be based more on habit. Take traffic flow in stores. In the US, shoppers start on the right side and go around counter-clockwise while in the UK, the preferred path is to start on the left and go around clockwise. Customers will continue with their habitual path even if stores design their layouts in the opposite direction.

But what about online shopping?

In an Internet Retailer article, customer behavior is becoming habitual as well. There are expectations about discounts and shipping costs. Price comparisons are a click away on laptops and mobile devices. There are apps and websites that simplify this so shoppers find what they want more efficiently. In fact, globally, online shopping is on the rise and there are distinct habitsabout where and when people shop. One such habit is using the shopping cart as a wish list and waiting for the best price to be posted. This is making online retailers scratch their heads on how to get people to just buy the item right there and then.

Can retailers change how customers shop?

This seems to be a tall order. There seem to be a lot of variables that could create failure for a retailer, regardless if they are online or a brick and mortar store. Certainly JC Penney bucked current trends by stating they did not want to do business as usual. They declared they were not marking up their merchandise just to give a false sense of saving money. But regardless if you are selling in a brick and mortar business or an online business, people are looking for the discounted price because the perception is that you are paying too much if you go with the stated price. Perhaps the consumer mindset is too set in habits?

How would you describe the shopping habits where you live?

What shopping habits were affected by the recession (or are still affected by a poor economy)?

What are the top variables a retailer needs to consider before altering how they sell to customers?

How do you train customers to shop “your” way?





Why Aren’t Women Leaders Making Progress?

Back in 1993, the movie, Groundhog Day, told the story of a weatherman who lives the same day over and over. The progress of women in high-level leadership roles seems to be having its own Groundhog Day. It can be disheartening reading some of the data, blogs and comments. There are references to a glass ceiling, the lack of women CEO’s and board members in major corporations or that somehow women are temperamentally unsuited for leadership positions. The topic of women as leaders seems to be a lightning rod.

Strong data for why women in high-level positions are beneficial to business

In 2007, two studies (Catalyst’s The Bottom Line: Corporate Performance and Women’s Representation on Boards and McKinsey’s Women Matter) reported that women in high-level leadership roles had a positive effect on the bottom line of Fortune 500 companies.

If you are really into data, here is some more information (from the MBA@UNC blog) about how women play integral roles in the success of organizations:
Women at Work Infographic Via MBA@UNC
Via MBA@UNC MBA Online & Women 2.0

Little to no commitment to fostering women’s leadership skills

A 2010 study by Mercer reports that 71% of organizations lack a focused strategy or philosophy for developing women in leadership roles. Their findings are certainly mixed. Some regions of the world are showing more engagement than others in offering initiatives but overall, the numbers remain low. In a more recent study by UNC-Kenan Flagler Business School, it was reported by respondents that most organizations did not give strategic value to developing women’s leadership skills nor intended to in the near future. This continues in spite of ongoing research, like in this 2011 Zenger-Folkman study, that women have the necessary skills.

So why do we continue to struggle with developing women in leadership?

This may be the real question underneath all of this data. There are certainly perceptual gaps between men and women about access to moving up into more powerful roles. Men report that things are progressing while women report that there is a lack of progression. It is likely that there is a more sociological explanation for the ongoing gender gap.

  • Unease with powerful women-This seems to be a prevalent theme in comments about women and leadership. Maybe the comments come from very unhappy people who have had extremely harsh experiences with a particular woman and have extrapolated that all women are (fill in negative stereotype). It could be something out of psychoanalysis resulting from the mother-child relationship.
  • Change in gender roles-For many societies, there is a strong tradition that women and men play specific roles. We have a mythology of what a “real man” and a “real woman” ought to be like. Women who avoid the stereotypes of being only nice or naughty create cognitive dissonance and push-back from those who value the perpetuation of traditional roles.
  • Workers are cogs in the machine-There is still a pervasive philosophy that workers, even high-level executives, are pieces of the machine and must devote their whole lives. (We talked about that in a previous #KaizenBiz chat.) Given that women are most often required to be the primary caregivers in their families, this societal expectation may interfere with developing women leaders within an organization and relegate them to the “mommy track” or some other limited path to power.

This isn’t an easy conversation.

We know logically that there are merely people who are leaders. Neither gender has a monopoly on being the “best leader.” It isn’t even men versus women. The limits being set on developing women as leaders comes from something else.

What are the primary skills of a effective leader?

What are you observing that prevents women from being trained and promoted into leadership roles?

What perpetuates the negative stereotypes of women bosses?

How do we break these stereotypes?

What can we do to foster women to embrace leadership roles?

Join us on the Twitter chat, #KaizenBiz on Friday, May 25th at 5pm BST/12pm ET/9am PT to explore this topic.



How Marketing Frames Perception

TED talks are fascinating moments of ideas. The speakers often pull ideas from different disciplines to present their findings or a theory about the world. In a recent TEDxAthens talk, Rory Sutherland, Vice Chairman of Olgivy Group, presented his thoughts about how “Perspective is Everything“. His basic thesis is that our perspective, how we see things, is much more important the reality of our lives. He goes on to say that when we feel a sense of control, this perception really determines how we see reality. The facts don’t change, our experience of the facts predominates.

“The power of reframing things cannot be overstated.”

Reframing is the practice of taking the experience of a situation and changing the description so it feels different. For example, you might experience buying a new laptop as expensive but change the experience so it feels like an investment.

Marketing is often about telling a story in a particular way to reframe the specific product so it seems more appealing than its competitors. A great example is Febreze, a household odor eliminator. In their most recent US marketing campaign, they create a situation where people tell the story of what they’re experiencing until the blindfold comes off.

We are led to believe that the people think they are experiencing someplace lovely. The intent is that we become impressed with the product’s ability to mask and/or eliminate foul odors. While there are other products that do also mask or eliminate odors, marketers want us to have a psychological shift here.

“Hidden shallows”

In Sutherland’s talk, he reminds us that our perceptions frame our interpretation of reality. He says, “Impressions have an insane effect on what we say and what we do.” This seems in synch with Malcolm Gladwell’s book, Blink in which he proposes that we make judgements in a very rapid fashion. So, are we really operating off of our cognitive biases? (Cognitive biases are distorted thinking patterns that cause perceptual distortions, inaccurate judgements or other irrationality.)

Marketing and the message

If perception is how we make decisions to a new product or continue our consumer relationship with a particular company, marketers have to understand where psychology and economics intersect. Cause marketing is one way that a for-profit company can introduce the perception that its products and/or services are better, It goes beyond “I just bought a widget.” The reframe the customer has now is the feeling that they are getting something more. They not only bought a great widget but they did some good in the world. They perceive that they have created some change in the world by using their money to buy that particular widget. Some will even pay a premium because of their perception that their money is doing humanitarian work.

“Perception is leaky”

Sutherland’s point about leaky perceptions is that we cannot tell the difference between the quality of the item and our environment. The perception of Apple products is that having an iPhone or iPad or any of their other products makes us hip, innovative and tech-savvy. It makes us part of a club, so to speak. There are things about their products that do not work well but somehow that is less important. The way they have marketed their products reinforces this perception. If you have SIRI, you can talk to your phone about the weather, food, music or your to-do list and your phone talks back to you. With the iPad, you can present on-the-go to your clients with all kinds of amazing applications that provide a “wow” factor.

It could be chicken and egg

We recognize the facts of a situation but we add our psychological twist to them. That iswhere the reframe comes in. Reframes are not always inaccurate. They can help us understand our circumstances or mislead us. Marketing has used this behavior to guide our reframes for years.

How is marketing really changing reality?

Do companies who do cause marketing understand the intersection between psychology and economics?

When reality and perception are completely asynchronous, how can a company connect with its customer?






Is Mark Zuckerberg Changing How Companies Are Controlled?

Mark Zuckerberg and Facebook IPOYou might like or hate Facebook and it seems unlikely that Facebook could be any more ubiquitous but there you have it. The IPO is imminent and huge. A particularly interesting detail is how Zuckerberg has positioned himself to maintain the majority control over Facebook.

Could Zuckerberg be on to something here?

Public companies usually have the CEO, the executive team and the board of directors looking out for the shareholders. While customers are providing the revenue, it is the shareholders who tend to get preferred treatment. Generally, the CEO is appointed by the board so he or she may have to obtain approval for some decisions. Overall, CEO’s are the  major decision makers and consequently hold a lot of power.

But what is different here is how Mark Zuckerberg holds the lion’s share and thus, a lot more power than is usual in public companies.  According to an article by Matthew Yglesias on Slate, Zuckerberg has a work-around so that he will end up with 57% of the voting rights due to ownership of Class A and of Class B stock that becomes Class A when sold. Yglesias explains that when Zuckerberg’s partners cash out, he adds this to the stock he already owns. This is how he ends up with 57% and majority control.

Maybe Zuckerberg isn’t that unusual?

Other companies like Ford Motor Company and Google do something similar. Split shares are used so that founders and/or family members can maintain ownership and the power to steer the company in their preferred direction with minimal interference. In fact, Google just announced its stock split in April of 2012 (at the time of this post,

The other key factor is that Facebook will be considered a “controlled company” with exemptions. This structure enables Zuckerberg to have the leeway to do things like have Facebook acquire Instagram without a lot of checks and balances.

A need to be nimble

There are lots of things that can be said about founders of startups. Zuckerberg fits in with his high level of confidence and a vision of how Facebook can change the world. But Google’s recent announcement of creating split shares adds an interesting angle to the way Facebook will be owned. In a letter published by the Business Insider, Larry Page and Sergey Brin wrote,

.”..after careful consideration with our board of directors, we have decided that maintaining this founder-led approach is in the best interests of Google, our shareholders and our users. Having the flexibility to use stock without diluting our structure will help ensure we are set up for success for decades to come.”

It seems that Zuckerberg might be thinking along the same lines. If he has control over how decisions are made, this keeps Facebook able to respond to trends and changes.

Is Zuckerberg on the vanguard of how founders transition into CEO’s of a publicly traded company? Why or why not?

How could the marketplace be so volatile that so much agility is required to stay competitive?

Is this practice is not so unusual, why is there so much attention being paid to Zuckerberg’s majority ownership?

*Photo credit: Steve Miller


Passion and Adversity

Frederique Murphy Turning Points

Frederique Murphy

Overcoming adversity lies in using keys derived from beliefs to passion.

Once we accept and take the responsibility that we are capable, we reach a place of empowerment. We can leverage these adverse events positively and move forward with our life, and our work.

The Turning Points project

About a year ago, Kate Cobb, approached Frederique Murphy about her Turning Points book project, and Frederique became one of the authors. As Kate says:

Kate Cobb Turning Points

Kate Cobb

“When things go wrong and we reach rock bottom, we have a choice: to stay in the depths of despair, or to stop, take stock and turn our lives around. These dark moments are our Turning Points.”

Turning Points, #1 Amazon Best Seller Book, was not about writing about these dark moments at all. The authors focused on sharing what they have learned and inspiring, and helping other people overcome their adversity.

Your mindset is critical

While there are no standard reactions, there are strategies, attitudes, and behaviours that can be modelled to help us overcome the adversity we face in our life, and our work.

The first key is your language

One of the mindset keys is to transform these adverse events into turning points. Take a look at these 2 sentences:

That was such an adversity in my life.

That was such a turning point in my life.

What do you see?

As you notice how the juxtaposition of the two statements feel, you are referring to the same event. The circumstances have not changed but everything has changed.

This is where your power and control lies; as Frederique says:

“Yes, some events are out of your control, but, you can, at 100%, control your reactions to that event, and letting “it” impacts you, is your choice. The adverse event (or events) does not have power over you, unless, you let it have power over you.”

The second key comes from your beliefs

Frederique explains that “Your beliefs are like a pair of glasses you use to view the world.” Each and every one of us have a series of beliefs. Some are empowering. Some are not. Our beliefs can help, or limit us , in our work and our lives. The actual words we use reveal our beliefs and help in overcoming adversity. When a crisis happens, we might ask “Why me?” — a very disempowering question. Changing it to “Yes me!” is, based on the fact that the adverse event is shaping you into the person you will be tomorrow. Both of these distinctions are new perspectives.

The third key is learning

Another key is to take stock and draw a list of lessons learned. This process — very often used in large organisations, is tremendously helpful in our own life too, as it enables you to take strength from these events.

Fourth Key: Passion!

Passion is a real driver. When things go wrong, and we need to dig deep, connecting with our passion gives us that oomph to carry us forward.

What does it mean to leverage adversity so it becomes beneficial?

Adversity can come from anywhere and then affect our work. How do we use work as a panacea?

What do we learn about ourselves through our work that illuminates our personal power?

How could our personal power teach us about our work?

How could an organisation learn from adversity?

About our guests:

Meet our international guests, from Ireland and the UK with a French touch!!!

Kate Cobb and Frederique Murphy, bestseller authors of Turning Points

Frederique Murphy (Ireland) is a business mindset strategist, who believes in guiding her clients through unforgettable journeys towards their own true wealth, with amazing breakthroughs, empowering transformation, fantastic implementation, and outstanding results. Thanks to her Mountain Moving Mindset (M3) platform, Frederique empowers business owners, entrepreneurs, and corporate executives to master their mindset, so that they can move mountains and bring their life, business, and organisation, to a whole new level!

Turning Points is available on Amazon, or if you’d like your copy to be personalised by Frederique, then visit her site directly!

Kate Cobb (UK, living in France) is a coach and business writer who supports entrepreneurs enhance their business message by providing the written word they can’t or don’t want to for themselves. Through her Freedom from Writing consultancy she can live her passion for writing which began with her first book 20 years ago and was brought up to date with the publication of Turning Points last year.

Please join us on Friday, May 4, 2012 at 5pm BST/12pm ET/9am PT for the Twitter chat, #KaizenBiz. You can access the chat by using TweetChat or TweetGrid (unless you already use TweetDeck).