Sunday, October 10, 2010

Give Shoppers Permission to Spend More

Suppose I ask your shoppers to think about the slogan “Save money. Live better,” and then the slogan, “The good life at a great price.” My question for you: Does thinking about those slogans make a shopper likely to spend more money or less money, or does it have no measureable effect on spending habits?
     You might recognize that the first of those slogans has been used by Walmart, and the second one by Sears. Both store names are associated with thriftiness. But I’m asking your shoppers to think about the slogans, not the store names.
     The answer to my question of you comes from research at University of Miami, Hong Kong University of Science and Technology, and University of California-Berkeley. A set of studies found that thinking about either of those slogans increases the amount of money people are willing to spend during a shopping trip. In fact, the amount was twice as much after thinking about the slogan than after thinking about the store name. With the store name, the average amount study participants were willing to spend was $94. With the slogan, it was $184.
     What’s going on? In my opinion, a good explanation for the findings is that the slogan gave shoppers permission to spend money by shifting their thinking toward a longer-term perspective. “Live Better” and “The good life” was enough to lift shoppers’ eyes from their day-to-day expenses.
     Researchers from Princeton, University of Chicago, and Digitas-Boston surveyed people entering a grocery store. One set were asked, among other things, questions about the contents of their wallets. This nudged their thoughts towards the money they had to spend in the short term. Another set of shoppers were asked instead about the different types of financial accounts they had in their investment portfolio, such as checking and savings accounts. This got those shoppers thinking long-range.
     What difference did it make? Well, the second group spent 36% more than the first group while shopping.
     In advertising and selling, regularly remind your shoppers about living the good life. State large prices not just as the total, but also as the cost per month over the expected useful life of the product. Offer extended payment terms. Have shoppers gaze over the horizon so they’ll subconsciously give themselves permission to spend more.

Click below for more:
Give Customers Long-Range Perspectives
Influence Subconsciously, Not Subliminally

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