Monday, September 25, 2023

Power Up People Before Selling Experiences

Why is it that people get greater happiness from experiences they purchase, such as a cruise or a concert, than from material acquisitions, such as a camera or a chair? Researchers at Sungkyunkwan University, University of Akron, and University of Technology Sydney cite prior studies to attribute the difference to considerations of socializing, distinctiveness, and self-identity.
     Experiences are often consumed with others, and past experiences are discussed with others. Friends show greater interest in hearing about our recent cruise than about our new camera. Happiness derives from distinctiveness, and experiences differ among themselves in content and context. A series of concerts reflects a broader range of characteristics than does a collection of chairs. And experiences shape our identity, while we shape experiences to fit our identity. It’s weaker with merchandise. We strengthen the self-identity by remembering our many experiences with the material goods.
     After citing the prior studies, the researchers hypothesize that consumers perceiving more personal power will enjoy experiences relative to material items to a greater extent. Socializing allows people to show and shape their power. Powerful people prefer purchases which differentiate them from others. And they’re highly interested in expressing themselves through their consumption.
     A set of experiments supports the hypotheses. The researchers conclude by recommending that marketers of experiential offerings target people already in powerful positions and cultivate feelings of power in potential customers.
     As to the targeting, wealth can bring a sense of power. Researchers at New York University, University of Southern California, and UCLA found that the experience economy does best when consumers feel financially confident. If the consumers instead feel highly financially constrained, their preferences shift to buying material goods that will last for a while. This is true even if the material items to be purchased are frivolous and indulgent. Emphasizing to prospects that fun experiences give enduring memories was not sufficient to overcome the effect.
     As to the cultivating feelings of power, use advertisements and store signage which emphasize the power possessed by the shopper (“At our business, you’re the boss”) rather than messages which deemphasize the power (“At our business, we take care of you”). Treating the shopper with deference instead of authority reinforces this impression. Studies at Stanford University and Tilburg University raised participants’ sense of personal power by having them sit on a tall chair and lowered it by having them sit on an ottoman.

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Leapfrog Generations to Sell Experiences 

Monday, September 18, 2023

Examine How Sharing Exaggerates Knowledge

When I recommend to you an article about retail pricing, your estimate of my knowledge about that topic increases. My recommending also increases my self-impression that I know a lot about retail pricing.
     These University of Texas findings seem trivial until you hear the rest: It happens even if I’ve read nothing at all in the body of the article I’m recommending to you. The act of sharing based on my seeing only the article title, for instance, misleadingly exaggerates my confidence in the depth of expertise about the topic.
     Considering the widespread online sharing of links among consumers, these findings argue for staying alert to your customers and clients making inadequately informed decisions. This holds true not only for those receiving links, but also for those sending out recommendations.
     One of the researchers’ studies found that consumers who share investment advice subsequently choose riskier investments. This may not be bad. A prior study by a different set of researchers concluded that subjective overestimation of financial literacy can have beneficial effects. Given the proper support, those self-confident consumers are more likely to plan well for retirement than are those who accurately assess their financial literacy. The degree of self-perceived financial ability was a better predictor of financial wellbeing than was actual financial skills.
     But this is an exception. For most consumer decisions, overconfidence is a liability. As you guide these shoppers toward properly informed choices, embrace their self-perceptions of expertise: 
  • Respect them. Do your floor staff know where all the merchandise is located? Are they aware of the comparative features of brands in their department? Can they explain them to the customer if asked? Customers want sales staff who know it all, but without acting like stuffy know-it-alls. 
  • Surprise them. Experts are attracted to categorization in ways that surprise them. Sporting equipment might be categorized by the sizes of the items. Power tools might be categorized by the type of job they could be used to complete. Clothing might be categorized by color. Foods might be categorized by country of origin. 
  • Impress them. Experts want to know technical specifications. At the same time, they often make product selections without prolonged thought. They don’t request features lists because the experts think they already know what the products can do for them. Experts are interested in technical specifications largely to justify to themselves and others that they’ve made the right choices.

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Invest in Financial Literacy Overconfidence 

Monday, September 11, 2023

Launch Items Which Arouse Competitiveness

Being among the first to own a just-released iPhone or Nike sneaker bestows honor in the iPhone or Nike sneaker community. People will wait in long lines at the store or will jockey to be early in the internet queue.
     These and other brands with rabid fan bases can benefit from the consumer competition at product launches. It’s true that in-store, the competition could get dangerously aggressive. Shoppers shove each other, wrench items from each other, or worse. But if managed properly, the competition boosts initial sales revenues—valuable for marketers, who want to quickly recoup product development costs—and for retailers, when they recognize the demand lets them set premium prices on the items.
     Researchers at Hankuk University of Foreign Studies developed a statistical model to identify which product characteristics arouse the desire to compete to be the first to own. A basic is item uniqueness. A product perceived as better than any other in that category is more than distinctive. It’s one-of-a-kind. At least until the next version is released. The Hankuk researchers also identified in their model the importance of the consumer’s need for uniqueness. If the prospective purchaser wants to be one-of-a-kind, they’ll be attracted to a product with this characteristic.
     Factoring in is item scarcity. People are willing to exert more effort to obtain desired items which are in short supply. This is true whether or not the item is newly introduced to the marketplace. But when a new introduction is a limited release, a fear of missing out triggers the sort of competitiveness necessary to awaken at 3 AM to be in the front of the queue.
     This relates to the more general theme of self-enhancement. New releases which enable the purchaser to claim authority or exert influence over others are more likely to lead to competitiveness. Here, too, there are individual differences. Self-enhancement is associated with personal gain at the expense of others’ welfare. The race to acquire is seen as producing winners and losers.
     For the owner to claim the prestige of a winner, the item needs perceived popularity. The perception can come from the queue itself. A large group competing to be among the first further fuels the competition to be among the first. This ties back into the drive arising from scarcity. Unless the new release is perceived by the individual as popular, the competitive spirit will be compromised.

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Navigate Shoppers Toward Distinctiveness 

Monday, September 4, 2023

Cancel Culture About Negations Selectively

Including negators such as “not” and “never” in marketing messages risks confounding audiences. Consumers given a list of toothpaste dispenser characteristics which included “not difficult to use” liked the dispenser less than did another group given a list of the dispenser’s characteristics identical except that it read “not easy to use.” The participants had little trouble remembering what the phrasing said. It wasn’t as if they failed to see the “not.” Instead, it was that the “easy” or the “difficult” had much greater emphasis in the decision making than did the “not.” One group was evaluating the toothpaste dispenser with “easy” in mind, while the other had “difficult” in mind.
     The recommendation for marketers: To smooth the cognitive flow when you have the objective of persuading a prospect, avoid the speed bumps of negations.
     But researchers at University of Adolfo Ibáñez and University of Nevada-Reno identify an advantage of using negations in marketing via social media—enhanced consumer engagement. In one of their studies, Facebook messages for 18 brands, including Lululemon and Monster Energy, with a greater use of negation words, such as “don’t” and “none,” had higher numbers of likes, comments, and shares. Parallel results were found with Twitter message likes, retweets, and replies and with word-of-mouth intentions of recipients of direct email marketing.
     Results from the set of studies led the researchers to explain the effect in terms of brand power: From childhood, culture shapes us to maintain positivity in interpersonal communications. Use of negations by an adult implies the power of social confidence because the adult is violating a norm. The association between negations and power carries over to brand image. People like to portray social influence, which they aim to gain by engaging with brands they find to be powerful.
     This explanation for the role of negation is supported by the researchers’ finding that the effect was stronger for consumers expressing a need for status, measured by items like, “I want to improve my social standing as compared to others.”
     The recommendation for marketers: To build consumer engagement with your brand, incorporate negations into messages.
     In navigating between these two opposite recommendations, you’ll be determining the situations in which to cancel traditional cultural expectations of positivity for interpersonal communications. To help with this, assess the probabilities of shopper confusion and need for status in your intended audiences. Also attend to the appeal among consumers of the low-status underdog at times.

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Unknot Distortions from Using “Not”