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ASU expert offers tips to make sales in rough economy

December 12, 2008

With holiday shopping season in full swing, retailers are hoping to make up some of the sales ground they’ve lost because of the recession. Many small businesses and chain stores have been floundering, and a top expert is offering a few techniques that may help them start to turn things around.

“Three principles are especially powerful in motivating people in an uncertain economic climate,” says Professor Robert Cialdini, a New York Times best-selling business author and Distinguished Professor of Marketing at the W. P. Carey School of Business at Arizona State University. “These ideas can be used in the way retailers label their inventory and choose their marketing techniques. Businesses should focus their advertising and marketing dollars on these principles.”

Cialdini is internationally known for his work in the science of persuasion. His book “Influence: The Psychology of Persuasion” has appeared in 22 languages and is listed by Fortune magazine as one of the “75 Smartest Business Books.” He explains there are basic tendencies of human behavior that help generate a positive response from customers. He says three of them are excellent for use when people are worried about spending money.

1. Explain what they will lose if they don’t buy.

“People can freeze and sit on a fence because of uncertainty,” he says. “They become especially loss averse. You shouldn’t explain what the customer stands to gain from making a purchase, but rather what he or she will lose if no purchase is made. For example, they should consider the loss of the level of satisfaction and the loss of the joy of family members in receiving and using the product.”

2. Use the authority of experts and peers.

“When people are unsure, they don’t look inside themselves for what to do, where they find uncertainty; they look outside themselves,” says Cialdini. “They look for the recommendations of legitimate experts and to reviews from people just like them. For example, when an item is sold using expert testimonials or labeled as a ‘most popular item’ on a menu, sales immediately go up.”

3. Utilize the idea that the product is scarce.

“A great deal of evidence shows that items and opportunities become more desirable to us as they become less available,” Cialdini says. “Loss is the ultimate form of scarcity, and this is the time to give people a way to avoid losing opportunities. That will mobilize them to act.  This can include ‘limited time only’ promotions and other special offers.”

Cialdini emphasizes that businesses should always be honest about their offerings, to employ these techniques only in ethical ways. He believes that’s the right thing to do, and it’s also the way to build long-term customer relationships.

He frequently teaches these ideas in his classes at the W. P. Carey School of Business, as well as in his seminars with big-name companies interested in boosting sales revenues and recruiting. Cialdini is heavily involved in the Professional Sales and Relationship Management Initiative, a program offered through the W. P. Carey School of Business’ Marketing Department. He says that while most business schools have almost no sales focus – instead centering mainly on the marketing and advertising side -- sales are taught in a more formal way through this groundbreaking program.

Cialdini explains the crux of his suggestions is simple, “You should never have a single sales strategy, and you must change your sales approach when circumstances and the psychology of consumers change.”