Briefs

Cost Transparency Can Increase Sales 20%

Businesses don’t typically disclose information to consumers on how much it costs to produce a product. However, the study “Lifting the Veil: The Benefits of Cost Transparency” we recently conducted — along with our colleague Leslie John of Harvard Business School — provides evidence that doing so can increase consumers’ purchase interest by more than 20 percent. We also found that cost transparency increases purchase interest even when prices are unexpectedly low or high. This holds for cost transparency instated voluntarily by a business but not when a business is forced to do so such as being required by law.

Even if prices aren’t exactly what the customer might envision, the customer appreciates the act of cost disclosure. It’s all about the psychology of disclosure and trust. Cost transparency represents an act of intimate disclosure and fosters trust. Heightened trust enhances consumers’ willingness to purchase from a business.

Cost transparency conveys more sensitive information to consumers than operational transparency alone by referring to the disclosure of the costs to produce a good or provide a service. But it can be risky because it makes the business vulnerable to experiencing negative consequences such as consumer ire or supplier price increases.

We conducted six experiments to illustrate the effects of cost transparency.

One experiment was a partnership with a dining services organization of a large university in the northeastern U.S. in which a month of lunchtime sales was studied. That organization revealed the costs of producing a bowl of chicken noodle soup, including the cost of each component and the total cost. Cost transparency is associated with a 21-percent increase in the probability of buying a bowl of soup with the probability increasing from 2.3 percent to 2.8 percent per customer.

Another experiment looked at a private online retailer and its sales of a leather wallet. For three of the wallet colors, the online product detail page included, among other information, the costs incurred to produce the wallet. The company mistakenly failed to use the graphic on two of the colors for the wallet.

We compared the daily sales between the wallet colors before and after the graphic was introduced over a 92-day period. The infographic increased sales of the wallets by 22 percent. These studies imply that the proactive revelation of costs can improve a company’s bottom line.

The study was reported in Marketing Science, a premier peer-reviewed scholarly marketing journal published by INFORMS, the leading international association for operations research and analytics professionals. —Bhavya Mohan, a professor in the marketing unit at the University of San Francisco, and Ryan Buell, a professor in the technology and operations management unit at Harvard Business School

INFORMS informs.org BYTES

by Mike Hunter

‘Walkie Talkie’ App Connects WFH Teams Distance and digitization of communications can pose a challenge to the relationships upon which great work relies. Emails can be misinterpreted. Virtual meetings can feel stressful or strange. The blurring of private home life and public work life can impact employee well-being. Zello offers a way to empower every team member, allowing them to take ownership of their workload and their availability to connect. Zello uses a push-to-talk experience, modeled on walkie talkies, that feels familiar and natural to now-virtual teams who may not be used to working from home – rather than setting up a formal meeting or waiting for someone to respond to a written (or text) message. zello.com

Online ‘Shop’ Finds Freelancers

Giggrabbers’ “Freelance Deals” helps people and companies find freelance professionals in a simplistic way that some people may recognize: online shopping. The company aims to match freelance professionals with companies looking to bring on additional talent remotely or to outsource existing services at great rates. Similar to online shopping, Giggrabbers’ new feature lets hiring personnel pick a specific service for a project from 14 different service categories, narrow down the price point and sort freelance professionals using different filters. Employers can purchase services using an “add to cart” option which then opens up virtual project management, invoicing and communication features. giggrabbers.com/freelance-deals-and-services

Mock Video Interviews Offer Feedback

Employers have begun to rely more heavily on video interviews to find the perfect employee. HR professionals appreciate their practicality and efficiency, as well as opportunity to personalize the candidates beyond their two-dimensional resume. GradeMyVideoInterview.com offers a revolutionary new service for job seekers that allows them to create a mock video interview and have it evaluated, point by point, by a team of employment experts who also provide comprehensive feedback and advice on the elements that employers consider during the hiring process. grademyvideoInterview.com

LOOKING GOOD

Local Standouts Recognized for Achievements and Philanthropy

ACHIEVEMENTS

Southwest Behavioral & Health Services: Healthy Arizona Worksite Southwest Behavioral & Health Services, an innovative leader in behavioral health, was recognized last month by the Healthy Arizona Worksites Program — a public health initiative offered by the Arizona Department of Health Services and the Maricopa County Department of Public Health.— for its efforts to positively affect the health and well-being of employees, their families and the community. healthyazworksites.org sbhservices.org

AvAir: No. 2 Parts Supplier Globally Arizona-based AvAir, an industry leading inventory solutions provider for the aviation aftermarket, continues to be recognized as a global authority by earning the No. 2 position on The Aviation 100’s “Parts Supplier of the Year” rankings. AvAir offers customized solutions for customers and suppliers to buy, sell, exchange, loan, lease or consign more than 26 million in-stock aircraft parts. AvAir.aero

PHILANTHROPY

Cox Steps Up for Community Cox Communications has contributed nearly $11 million in cash and in-kind COVID-19 contributions to date in Phoenix and Southern Arizona. Its local gift of $25,000 to St. Mary’s Food Bank in Phoenix will provide 175,000 meals. Cox donated 10,000 protective shoe covers, normally worn by its field techs, to Banner Health to help protect frontline healthcare heroes against possible exposure to COVID-19, and donated the fresh bulk food from the temporarily closed Cox Café to St. Vincent de Paul’s efforts to feed and clothe those living on the streets. cox.com

U-Haul’s Fire Rescue In mid-June, with the Bush Fire in Tonto National Forest the largest active burning fire in the country and still uncontained after having burned 65,000 acres, U-Haul offered 30 days of free self-storage and U-Box® container usage at selected locations to impacted residents. “As the Bush Fire spreads, people are having to leave their homes and move to other parts of the Valley,” stated Andy Smith, U-Haul Company of Eastern Arizona president. “The fire is creating an immediate need for people to protect their belongings.” uhaul.com

Jobs, Wages and Value

As business tries to gear back up from the COVID-19 shutdown, the health of the economy is a major concern. Businesses are concerned about their profitability, and employees are concerned about their wages.

Business.org, a company that researches and compares the top business products and services, conducted a study on pay rates across the country for the “essential workers” who have recently become high-profile for getting food to our tables, packages to our doorsteps, keeping our shelves stocked and, essentially, ensuring our community keeps running.

The study found that, in every state, essential workers make far less than other occupations — ranging from a deficit of 7.8 percent in Nevada to 47.2 percent in the District of Columbia. Of the essential workers jobs considered, cashiers make the least nationwide, testing sector for cosmetic and personal care at an average of $23,600, while postal service employees make the most, at an average of $51,300. Healthcare workers were not included in the essential worker salary averages.

Arizona ranks No. 12 for essential worker salaries. The average salary of essential workers in Arizona is $32,464, while the average salary for all occupations is $38,410. Nationwide, those numbers are $32,474 and $39,810, respectively. Nationwide, essential employees earn an average of 18.2 percent less than employees in other industries. In Arizona, they make 155 percent less.

Data was drawn from the Bureau of Labor Statistics’ National Occupational Employment and Wage Estimates report from May 2019.

Business.org business.org

Phoenix Facility a Leader in Testing Hand Sanitizers and Other Skincare Products

The market for skincare products is growing SGS. “The combination of Stephens and SGS rapidly. By 2025, the global market will be Harrison Research Laboratories in New Jersey worth an estimated USD 189.3 billion. In gives SGS a leading position in this field in the the US alone, total sales of facial skincare USA.” SGS has more than 94,000 employees products were estimated at USD 62.3 billion across 2,600 offices and laboratories around in 2018, with total revenue for all skincare the world, which includes SGS Stephens. products at around USD 17.78 billion. When it comes to safety and compliance, Consumers are clearly keen to buy skincare manufacturers need to be certain in which products. In the U.S. and many other markets, category their product falls. For instance, claims attached the to use of skincare the standards applied to personal care items, products must be substantiated before the such as adult diapers and personal hygiene product can be offered onto the market. wipes, are very different from those that

SGS is the world’s leading inspection, apply to medical devices. Even within product verification, testing and certification categories, it can be a challenge to work company, recognized as the global benchmark out which standards apply. For example, in for quality and integrity. Earlier this year, SGS one of the fastest growing segments in the acquired Thomas J. Stephens & Associates, healthcare industry – wheelchairs and walking Inc., a nationally recognized clinical research aids – what standard is enforced depends on organization headquartered in Texas and with the market and the attributes of the product. a facility in Phoenix serving the cosmetic and SGS Stephens uses its expertise in testing personal care industry as a leading provider the claims made surrounding skincare products of safety & efficacy testing and contract — including the current hot commodity of hand research services. sanitizers — to help cosmetic and personal

“This acquisition expands SGS’s Consumer care product manufacturers access U.S. & Retail service portfolio in the clinical markets. —Mike Hunter —RaeAnne Marsh products in the USA,” says Frankie Ng, CEO of SGS sgs.com