Tag Archives: habit

Decision Paralysis in Hawker Centre

Singapore is a tremendous place for foodie. I am especially fond of the concept of Hawker centres. For those unfamiliar, they are open air food complexes serving great but inexpensive food. I try to visit new stalls and new centres every week and try out new dishes.

In the beginning, my knowledge of local dishes was fairly limited. I wanted to test out new food, but as the hawker stall can be quite hectic place especially during the lunch hour, I nearly always made similar order (prawn noodles, to be precise). So after getting worried about my diet getting too monotonous, I made a simple rule to guide my lunch decision-making:

Only buy from Hawker stalls which sell only one food item.

The reasoning was two-folded:

1. If stall can make living by only selling one dish, the dish must be pretty good.

2. When you have only one alternative, your decision process is quite straightforward.

What I experienced on the stalls offering too many alternatives, was decision paralysis. And many times I still experience that. So it is probably me blocking the queue at the stall when not able to make my mind up between Mee Siam and Mee Rebus. Sorry.

The more you give alternatives to customer, the more difficult it is to make the decision and more likely that customer sticks to his learned formula of behavior. So if you have accustomed to eat chicken rice, the more new alternatives you get the more likely you are to stick with that chicken rice.

This raises couple of issues to companies. If you have only one product, the customer selection is definitely easy. It is also easy to decide against your product. So you have to have variety to address different target audience needs. However, the more you add alternatives the more difficult the selection becomes. In FMCG this usually also results to product cannibalization. The category variants do not take market share from competitor products but actually eat up the market share of your core product. Companies have to provide variety but also easy decision at the same time. Below are couple of tips to overcome this paradox.

How you can help clients to overcome decision paralysis?

1. Recommend

How many times have you taken Chef´s Special in the restaurant? If customer seems hesitant, ask and recommend. Whether you are hawker stall owner or webstore, you are also expert of your products. Highlight that expertise and make qualified recommendation to your client.

2. Show popularity

When showing Top 5 of the most popular dishes, the probabilities are quite high that the customer selects  some of them. Or just check the most popular media sites, they are always highlighting the most read stories. Popularity is a cue of superiority and it helps to make decisions.

3. Encourage word-of-mouth

Only times when I have varied from my hawker stall selection criteria was when I had recommendation from my friend or read a story about certain stall or dish on Straits Times. There is no shortcut for positive feedback. You have to provide good experience and the word-of-mouth will follow. In digital sphere you can make recommendations more visible with social media integration (showing Facebook likes, comments, FourSquare check-ins or Twitter updates regarding your company).

4. Help customer to apply his decision making rules

“I always buy the cheapest”, “I always buy the most expensive”, “I always try the new dish” or “I always eat beef on Fridays”. These are some of the rules your customer might use when selecting products. When you highlight those different motivational triggers, you make your customers selection easier. To exactly know the motivation and the rules for your customers, it requires constant monitoring and research of customer habits.

5.  Help customer to make one choice at a time

Some of the decisions are not always easy. There might be thousands of alternatives. Or there might be only couple of alternatives, but thousands different parameters affecting your choice. Especially with more complicated products, it helps if you break the decision to different parts. It is hard to make buying decision right away, but you can always take steps closer to it. Decision making in elections is great example of this, finding the right candidate requires variety of questions affecting various different categories (example: Republican primaries 2012).

Nowadays as I have learned more about different dishes I have ventured to stalls offering more variety. But even then I utilize one simple rule:

Always go to the stalls with the longest queue.

“More choice does not necessarily correlate with more business”

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Kicking the Habit: Five Tips to Capture the Habitual Shopper

“We knew that if we could identify them (pregnant women) in their second trimester, there’s a good chance we could capture them for years”
-Andrew Pole, statistician (Target)

One of the most thought-provoking articles I have read this year  was “How Companies Lean Your Secrets” by Charles Duhigg. Besides that it is quite unbelievable feat that you can actually track from data when your customer is in her second trimester, it had me also to think about power of habit and habitual purchases. When our conscious thinking and habits collide, usually the habit will win. Just ask anyone trying to stop smoking!

We, consumers, do not spend enourmous amount of brainpower to make everyday buying decisions. When we stroll in the aisles in our grocery store and pack our shopping carts, we usually think totally other things. We are guided by certain buying rules and only thing which might change our shopping behavior is that certain product is over. Especially when working with FMCG, the habitual buying processes are something which you cannot ignore when crafting your marketing strategy and tactics.

Five Tips to Capture the Habitual Shopper

1. Identify the habitual cues
Although consumer might shop in autopilot mode and does not really think about what he is buying, he is guided with certain habitual cues to make his selection. Certain people might make their selection based on price, others with brand and others just to minimize their walking in the store. Nielsen gives following examples of common Omega Rules:

“I always buy brand X …unless guests are coming!”
“I buy the cheapest brand on special, as long as it’s not X!”
“Brand X works for my family, but if Y is on special, I buy that!”

It is crucial to identify what is your product´s main habitual cues and rules of buying. Because if it is mainly price, even a slightest price increase might make your customer think other alternatives. And if it is not, you actually have a good opportunity to raise prices and customer will continue business as usual.

2. Avoid making the customer think during the autopilot phase.
Advertising might even be countereffective, when dealing with habitual shoppers. When customer starts to think actively about your category, he starts to also think about the competitors as well. To simplify things: if you are market leader in your category you should try to actively encourage the autopilot. If you are challenger you should try to disrupt the habitual buying process. Also advertising is crucial for the new products, because only way besides price-dumping is to get people to interested about it and buy it because of the buzz.

3. Identify the events when the habits change
Why Target is so interested about the state of pregnancy of their customers? Within certain life events, even the most permanent habits of people might change. For example these events can be the following (but not limited to): moving, having a child, changing job, getting married or divorced. Not surprisingly these are also the most stressing moments of your life. Although you have decided that you never change your morning cereal brand, when encountering above-mentioned changes, it might not be that big deal anymore.

4. Remember that customer is not always in autopilot
Consumer might be totally different shopper during weekdays compared to weekends. On weekdays we stroll like zombies trying to get our shopping done as fast as possible, but when saturday comes we might be actually seeking variety and inspiration within the same aisles. Some might also say that finding something new is also habitual behavior for humans. There are at least the following motivational segments when buying:

Bargain: You are looking for the best deal. (The weapon of choice: Discounts)
Buzz: You are excited to find certain product because of the recommendation, advertising, product placement or news mention. (The weapon of choice: In-store promotion to ensure that the first buzz does not die off)
Variety-seeking: You are actively looking for new experiences. (The weapon of choice: Trials in the store)

Important to notice is that people might shift through these different motivational ways. Also your product can be bought from many motivational standpoints. It is essential to find the main motivational cue for majority of your customers.

5. Customer satisfaction does not mean a thing for habitual purchases.
Average customer satisfaction is usually 75-85 on the scale of 100. Company might think that they are scoring well, but actually that result is just average. Other shocking statistic is that customer satisfaction explains only 8% of repurchase*. With mundane every day products, when conducting a customer satisfaction survey you actually trigger totally artificial thought process. Consumer starts to rationalize his habitual shopping behavior and basically just starts lying.

So habits are strong factor of our buying behavior. If you do not recognize that, you might do fatal mistakes as a marketer.

Recommended reading
Charles Duhigg: The Power Of Habit
Neale Martin: Habit: The 95% of Behavior Marketers Ignore*
Nielsen Deltaqual

“Recognize and leverage the power of habit and identify the opportunities to try to alter it”

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