Monday, October 8, 2012
Collapse to Soles When Asking for Money
A while back, researchers at University of Chicago asked undergraduates how much money they’d be willing to donate to rescue an endangered panda found in a remote Asian area. On a form asking the undergraduates the most they’d be willing to donate, some of the study participants were shown a picture of a panda, while others were shown just a dot to represent the panda to be rescued.
Students shown the picture said they’d donate $19.49 on average. The average for the dot group was $11.67. As we’d expect, the picture increased the willingness to contribute. The lesson for retailers? Show customers what they’re getting for their money.
But there was also an unexpected finding: In another part of the study, participants were told that the number of pandas to be rescued was four, not one. You might think that seeing pictures of four would yield higher average donation amounts. But this is not how it turned out. For the four identical panda pictures, the amount was actually a bit less, at $18.95 rather than $19.49 for the sole panda picture.
Now a more recent study helps clarify what’s happening. In this study, researchers at University of Michigan and London Business School analyzed funding activity on Kiva.org, a micro-financing site. On the site, photos and descriptions are presented of people seeking small loans for commercial endeavors. The researchers were interested in what happened with listings which included photos of a group of fund seekers. Some of these photos were judged in a preliminary study to show a group who looked tightly organized, as if ready to act as one.
Those appeals were more quickly funded than the appeals in which the group looked loosely organized.
The Michigan/London researchers also found that charitable donations to help poor children were higher when the children were described as belonging to the same family than when not.
The pull is stronger if a consumer is shown a single attractive entity than if shown isolated individuals.
Note that the effect works in reverse if the appeal is for entities a consumer finds unattractive. When the Michigan/London researchers described the charity recipients as a cohesive group of child prisoners, the average donation amount was less than when the children were shown as isolated individuals.
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Show Customers the Right Picture
Posted by Bruce D. Sanders, Ph.D. at 9:00 AM