Herding in more sales

I was watching "Are You Being Served", the old British comedy set in a department store, when the sales manager in the show began talking about trying the "new" herd sales strategy. Wow, memories of Marketing 101 and "Herd Theory" came rushing back.

"Herd Theory", sometimes called "Herd Behavior", is the study of how individuals in a group can act together without any planned direction. It can be applied to politics, sports, stock market behavior, and of course sales techniques.

Here is a basic, real world, example of how it works. Early in my career when I was an editorial cartoonist for a daily newspaper, I was asked to participate in a weekend craft fair to do caricatures. Although it was mostly for promoting the newspaper, I could keep the cash I made. So, I hung some newspaper caricatures I had done of Ronald Reagan, Jimmy Carter, Ted Kennedy, and local politicians then waited for customers. They didn't come in the quantity i was expecting. The first day was a bust. I'd do a few drawings, then nothing. I was pretty dejected when the newspaper photographer came by to take some publicity shots.

Fortunately the photographer filled me in on how I could make it work. "Hire a kid for cheap money to come by and get a caricature done throughout the day. Make sure the kid is easy to draw and can be drawn quick. Have him come by and sit down for a caricature whenever it gets slow."  So, I hired a kid for the next day. Whenever I started drawing the kid, crowds would stop to watch. People started lining up to get their caricature done. When the crowd went away, the kid would come back and with him came the crowds, and more sales.

Herd theory works. Later in my career we used it to fill seats at trade shows. Before we would do our sales presentation, we would invite people to come into the booth "just for a rest" (we had a stage area with seats). Once we had a few seats filled, we'd put up the "Demo about to begin!" sign and in came the herd! Experience had proved to us that putting up the sign to an area of empty seats just didn't get the people to stop and attend.

Some Asian countries incorporate herd theory into their everyday sales rituals. Many shop owners believe the the first customer of the day sets the sales tone for the entire day. They give great discounts to the first customer to ensure they don't leave without buying something. If you apply herd theory, the first customer DOES set the tone. Which store do undecided customers go ... to the store with a buying customer or to an empty store? If the choice adds a store with a customer walking out empty handed, they still probably go to the store where the action is taking place.

Think about how herd theory can help you increase sales. Here's one final example to help get you thinking. One sale manager I knew used to have the most successful yard sales. Sounds silly, but this was every year and was very profitable. Did he have better junk? No. Did he have his sales when no one else did? No again, in fact he made sure to hold his when all his neighbors were having theirs.

What was his secret? He put on a free little cookout for the "customers". Coffee and some cheap danishes in the morning. Hot dogs and soda in the afternoon. The cars stopped at his yard sale, mostly for the free eats, but that's where the "action" was. The herd followed. As far as the extra cost? Apparently reciprocity came into play. He found that people negotiated less and bought more.

Work on bringing in a few from the herd and the rest of the (cash) cows will follow.

Comments

[Caleb]

Herd Theory... very interesting. That's a great story, and proof that it does work. I had missed last month's blog, and my Mom told me to go back and read it... I'm glad I did!