Recognize the Pervasive Impact of Emotions

What consumer task would we expect to involve less emotion than would making financial decisions? And for what job task would a worker depending on emotion be more likely to hurt than would screening loan applications? It is of note, then, that researchers at SP Jain School of Global Management, The University of Western Australia, University of Budapest, University of Southern Queensland, and Griffith University show evidence that loan officers’ decision making is influenced by emotions.
     In one study, all participants held an MBA in Finance and Accounting and had worked for at least two years in a business setting. They seemed qualified to evaluate loan applications.
     Each participant was given applications and asked to indicate how willing they’d be to approve the loan. The application’s financial information included the number of loans the firm had taken out in the past, how many of these loans were paid back on time, the judged ability of the firm’s cash flow to cover payments on the potential loan, and the value of the proposed loan collateral. These indicators were considered sufficient for the participants to rationally evaluate each application.
     Wait, there was more: In the top right corner of each loan application was a small image which contained no financial information, but had been shown in prior studies to portray a single emotion such as joy, fear, or anger.
     Analyses of the data collected from all this showed that loan applications including an emotionally positive image were more likely to be approved. Further, this effect was stronger for the male than for the female participants. The researchers attribute this gender difference to findings from past studies that men depend more than do women on visual information in decision making.
     A companion study, with a different set of people, measured each participant’s emotional reactions as they viewed the loan application. The reaction was measured by the participant’s self-report and also via galvanic skin response, which is a physiological indicator of emotion.
     Here, the men had higher loan approval likelihood for applications with positively-valenced imagery than did the women. For applications with negatively-valenced imagery, there was no significant gender difference.
     Together, the studies indicate that emotional reactions influence decisions in realms where non-emotional analyses might be expected. It also seems that images which trigger emotion can accentuate this effect, especially in men.
     Recognize the significant role of emotions in persuasion and use imagery for effectiveness.

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Appeal to the Heart 

Picture Misleading Consumers 

Borrow Content Analysis to Curb Loan Defaults

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Flex for Best with Limited-Time Offers

Limited-time offers are intended to motivate shoppers to act now. They can assist retailers by moving up the receipt of revenue, clearing out inventory more quickly, and fostering impulse buying. They can help the shoppers by dissolving indecision, easing inaction regret, saving them money, and adding excitement.
     However, researchers at McGill University, Konkuk University, and University of Texas at Austin show how setting overly rigid time constraints, using store layouts which impede navigation, or complicating purchase returns will lessen the effectiveness of limited-time offers and might even reverse the positive effects. The more restrictions, the more severe the damage. All this was seen in the consumers’ evaluations of item value and in their purchase intent. Items used in the scenarios included chocolates, headphones, cameras, printers, backpacks, and spa services. The scenarios included store sales and a fundraising offer.
     Based on their results, the researchers’ explanation is consumer reactance for this negative effect on limited-time offers of further constraining flexibility. Reactance is a phenomenon which kicks in when people sense that their freedom of choice is threatened. Consumers feel they’d be foolish to pass up the opportunity to save money, but don’t like the accompanying feeling that they’re being pressured to behave according to dictates from the seller.
     The researchers recommend that retailers implement limited-time offers in ways which preserve the shopper’s flexibility. Additionally, the researchers make a case for including in the offer pitch a statement which highlights future remorse if the offer is missed. The action imperative of a simple “Buy now or regret it later” counteracted negative results of reactance.
     With limited time as well as other restrictions on offers, the order in which you present the components matters. Lead with the bad news, say researchers from Baylor University, New York University, and University of Pittsburgh. “For today only, when you buy three items, 25% discount on the usual price.”
     The bad-good order provides the shopper a greater sense of control in the face of hurdles. People generally prefer to deliver good news before bad news. But people like to receive bad news first and finish off with the good news.
     Related to this, the discount offer maintains higher salience using the bad news-good news sequence because of its logical if/then flow (If I qualify for the offer, then I get…). The cause-and-effect preference is seen more generally in how consumers most fluently process information from sellers.

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Restrict Discount Offers to After Restrictions 

Sharpen Time Sensitivity to Reduce Returns 

Stifle Reactance to Promotional Favor Discounts 

Shower Cold on Regretful Customers 

Ping Consumers with Cause-and-Effect

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Fill with Fullness Food Marketing to Low-SES

An enduring public-policy challenge has been how to increase the attractiveness of healthy foods to low socioeconomic-status consumers. Why is it that even when the affordability and availability of those foods in low SES communities are enhanced, their purchase and use do not increase proportionately?
     A set of studies at Imperial College London and FGV EBAPE indicates the full answer includes fillingness—the ability of a food to make one feel full. Healthy meals are frequently perceived as failing to completely ease hunger, and poor people suffer from insecurity about reliable supplies of food.
     The implication of this finding is for marketers to increase the association of healthy foods with fillingness. The researchers admit that doing this will be challenging. In their studies, use of tag lines such as “the healthy cookie that fills the stomach for real” and “the cookie that satisfies hunger for a long time” did not increase that cookie’s attractiveness among low SES consumers. However, showing a picture of a healthy item as part of a fuller meal with additional vegetables did increase the subsequent preference for a healthy over an unhealthy item.
     Results from this set of studies remind us how a consumer’s socioeconomic status influences their decision making. In some cases, the behaviors are what we’d expect: Poor adults are more likely to stockpile items, when possible, since they fear deprivation. The long-term poor often give price discounts extra attention.
     In other cases, low childhood socioeconomic status exaggerates trends seen in other adults: For instance, when the security of a consumer of any age is threatened, their consumption habits move toward the repetitive. But this is especially true if the adult consumer was raised poor.
     In still other cases, the results may seem surprising: Individuals who grew up in resource-scarce families are less interested as adults in health care insurance than are individuals who grew up with ample money. The researchers’ explanation is that people raised poor are accustomed to living with risk.
     Studies at University of Central Arkansas, Auckland University of Technology, Peking University, and Florida International University add to this list a propensity for the sunk cost fallacy, which refers to staying the course even when the course is unpromising. Here, the researchers’ explanation is that, on average, people with a history of low socioeconomic status consider loss of prior investments to be more wasteful than do their counterparts raised wealthy.

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Float Former Poor Up Over a Sunk Cost Fallacy 

Sprout Homegrown in Healthy Foods 

Frequent Promotional Discounts on Sin Taxes

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Index Political Independents as Uninterested

For a long time now, American politicians have been debating about the extent of cheating in elections. The compelling evidence is that actual voting fraud is rare. But a trio of researchers from Kent State University and University of Michigan start by reporting how with regard to oversight of voting procedures by politicians, the U.S. has performed poorly on measures of integrity. Tactics like placing voting machines in ways which manipulate turnout occur too often.
     The researchers explored the relationships between partisan affiliation and tolerance, or even support, for subversion of democracy via suppression of political competition. The studies accomplished this by presenting to people the same descriptions of unambiguous deliberate attempts to manipulate elections, but with some people the perpetrators were described as Democrats and with others as Republicans.
     Not surprisingly, the study results indicated that people are more tolerant of election manipulation when it’s carried out by their own party than by the opposing party. And, as expected, citizens are more likely to cry foul when the tactic harms their party than when it helps their party.
     The researchers do report their own surprise at the study participants’ tepid response overall to the descriptions of flagrant violations of fairness and the law. The finding I consider most intriguing concerns the responses from study participants who identified themselves as political independents: They were less likely than both the Democrats and Republicans to object to a violation. Independents were better than partisans at being impartial, but worse at calling out infractions.
     Perhaps this indicates that political independents are not so much disinterested—in the sense of impartial—as they are uninterested—in the sense of detached from matters of politics. This has implications for how politicians should allocate funding for persuasive communications. Independents could be less responsive than partisans.
     The study results are consistent with studies showing that voters who support a particular candidate for elective office consider the results of a political poll as less believable when that preferred candidate does less well in the poll. The researchers at Witten/Herdecke University, University of Zurich, and University of Mannheim posit this phenomenon as harmful to society, since in a healthy democracy, voters should be keeping their beliefs correct and current.
     The research findings indicate that this motivated reasoning problem is eased when more poll results from a broader range of sources are provided over the course of a campaign.

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Pile Plenty of Political Polls on People 

Delay Negative Stereotypes to Post-Experience

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Limit Limitations of Limited Editions

The business logic of a manufacturer’s limited-edition product release is that scarcity motivates prompt purchase by triggering fear of missing out. The tactic has been used with hedonic categories such as designer accessories, sneakers, video games, and collectible toys.
     However, if a motivated shopper discovers the limited-edition item they’re desperately seeking is nowhere to be bought, their disappointment can turn into anger directed at the brand.
     What are the best ways for a manufacturer to realize advantages of limited editions while avoiding the risks?
     Based on their study results, researchers at University Witten/Herdecke, The University of Texas at Austin, University of Muenster, University of Auckland, and Arden Automobilbau GmbH recommend manufacturers produce or stock enough items to satisfy at least immediate customer demand. To avoid harming store or item brand value and repurchase intentions, ensure that any customer who wishes to purchase a limited edition at market launch can get one.
     These researchers also explored techniques for producers who choose to reject this guidance and instead build excitement by intentionally underproducing for a product launch. In my email exchange with Prof. Michael Steiner, the principal investigator, he wrote, “Nike and Adidas could reduce some of the negative effects of immediate sellouts by combining online sales with a raffle system, ensuring that each customer has an equal chance of obtaining the desired limited edition.”
     Even with this, some sellouts may be unavoidable. For such cases, a manufacturer can help check that at the retail store level, customers don’t feel they’re being mistreated. For example, retailers should use the term “sold out.” In ecommerce retailing, this resulted in better customer reactions than did the term “out of stock.” Item outage didn’t produce as much shopper outrage, according to studies at The University of Texas-Austin, Ulsan National Institute of Science and Technology, and Kyung Hee University.
     The researchers say that when people hear “out of stock,” they think of problems with the supply chain: The retailer failed to place an order or didn’t conscientiously track the order. The supplier’s production broke down. The shipper failed to deliver on time. Somebody betrayed the customer.
     “Sold out” has the implication instead of product demand which the retailer could not have been expected to anticipate. In the study, participants judged “sold out” to be caused by unexpected sales and therefore to be of shorter duration and more subject to replenishment than when “out-of-stock” was used.

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Leave Shoppers Feeling They’re Not Sold Out 

Influence with Trustworthy Scarcity 

Launch Items Which Arouse Competitiveness 

Close the Sale Close to the Source

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