The leaders edge: Insight & information
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Part II: Peer Influence Positive and Negatives in Management in Marketing

February 6th, 2008 by Will Phillips

CUSTOMERS ARE INFLUENCED BY CUSTOMERS
A further experiment was done in several hotels where it is common to display a card urging guests to conserve energy and water by reusing their towels. In several hotels, three different types of cards were used.

  • One, “help save the environment”. 
  • Two, “partner with us to help save the environment”. 
  • Three, “join your fellow guests in helping save the environment”. 

The third card led to 34% increase in towel reuse over the first two appeals. Interestingly today, no hotel has adopted this. Frequently, when managers attempt to institute a new policy, procedure or some other change, they seek out the most effective communicators to deliver the message. The most effective communicators may be the least effective implementers.

A more effective strategy is to choose those who are most similar to the individuals they are trying to impact. To communicate to old timers chose an old timer who has embraced the change.To communicate to new hires, choose a new hire who is on board with the new system.

STIMULATING DEMAND FOR NEW PRODUCTS
In 1934, Sylvan Goldman had acquired several small grocery stores. He noticed his customers would stop buying items when their hand held shopping baskets became too heavy. This led him to develop the first shopping cart. It was somewhat crude, a chair on wheels with baskets hanging of it. Absolutely no one would use them even though he plentifully stocked his stores with these new shopping carts.

As a last resort, Sylvan hired several people to use these carts on a regular basis in his stores and pile them full of goods. Very quickly, other shoppers adopted this new tactic having seen their peers use it. [Interestingly Goldman’s insight was lost in pharmacies. It took hundreds of hours of video taping of customers to gave the answer to this question ‘What determines the average size of the purchase in a pharmacy?”

RESEARCH INSIGHTS
Paco
Underhill
research pointed out that when a shoppers hands get full and started dropping things they checked out. And where were the little shopping baskets? At the front of the store, exactly where a rational manager would place them for high customer service. Reported in Why We Buy-The Science of Shopping

Fast food stores that carefully test market each new menu item but never tell you when they introduce it how strong their peers supported this new product.

SUBWAY CHARITY
In a subway station in New York where musicians were common and put their hat or guitar case in front of them to collect the contributions, this model of impacting behavior was tested by having a colleague make a dollar contribution whenever they saw someone approaching. Having a fair amount of data on the normal contribution rate and frequency by passersby they were impressed by the results of having a colleague make a contribution just before a passerby arrived.

Passersby who saw someone make a contribution or eight times more likely to contribute than those who did not. Most interestingly, none of those who did contribute attributed their action to the fact that they had seen someone else.

PEOPLE DON’T RECOGNIZE WHY THEY DO WHAT THEY DO
These points out how poor people are at recognizing what causes them to behave as they do.
Decision Making When gathering information about the wisdom of a particular decision, executives often solicit data from a wide range of resources of within and without of their business yet it turns out that this input can unduly shape the decision making process.

Managers should resist the tendency to casting the widest net possible for input and then later discounting the information that is not relevant that potential pitfall is that this approach in search the filtering process too late after the irrelevant data, they have already have a subconscious impact on the person’s decision making without there realizing it.

The trick is a screen information before his best biased the decision making process. Almost everyone who has worked in a retail establishment has experienced the fact that an empty tip jar does not solicit tips but a tip jar with cash in it fills quickly.

WHAT ABOUT YOU?
This powerful and local source of persuasion remains systematically underused by managers and marketers.
How can you use these use thes insights in marketing or managing?

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