Monday, April 2, 2012

Separate Soft Money from Hard Advice

Please note: The University of Groningen, Erasmus University, and University of Minnesota research which I reference in this post was later considered to have been flawed. I'm leaving the post here because I referenced it in later posts, and I don't want my blog readers to reach a dead link.

Money’s funny. Well, at least the range of consumer reactions to money is funny.
     Psychologists at University of Minnesota, Florida State University, and China’s Sun Yat-Sen University had one group of study participants count out eighty $100 bills. A matching group were assigned to count out eighty blank pieces of paper. All participants were then exposed to tasks in which they experienced social rejection and physical stress. The people who had worked with the $100 bills reported less discomfort during and after the tasks. Handling the real money gave people magical relief.
     But in another study, subtle reminders about money caused shoppers to back away from the advice of experts. Researchers at University of Groningen, Erasmus University, and University of Minnesota began by assigning participants to one of three conditions. Some were instructed to work at a computer which showed hard currency symbols. Another group were assigned to create sentences using words related to money. The objective of these first two conditions was to get the people thinking about money. People in a third condition were given tasks that were unlikely to trigger thoughts of money.
     Then in the main part of the study, participants were given directive advice by authority figures about products and next asked to evaluate the products themselves. What did thinking about money have to do with this? It turned out that the participants who had worked with the currency display or created the money sentences were quite likely to evaluate products in ways that went directly counter to what the authority figures had said. This was not true of the participants who hadn’t been cued to think about money.
     The researchers’ explanation of the findings is that thoughts of money trigger a drive for independence. The relatively soft reminders led the participants to rebel against the hard-edged advice from the authority figures.
     This happened, though, only when the money-cued people were making decisions about products for themselves. The effect disappeared when the same people were asked to evaluate products intended for use by others the people knew closely.
     Retail salespeople are taught to hold off on talk of money until it’s clear the consumer fully appreciates the benefits of making the purchase. The reasoning is that once money is mentioned, the typical consumer starts thinking only about that. This Groningen/Erasmus/Minnesota research indicates another reason is to keep the shopper’s mind open to authoritative advice.

Click below for more:
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