Tag: consumers



Upgrading to the newest smartphone or downloading the newest version of an app is tempting for many consumers regardless of price. In order to properly decide if it’s worth the expense, consumers should compare the upgraded product with what they already own, but new research from Olin Business School finds most consumers upgrade without comparing.  In fact, there is a wide gap between what consumers should do, and what actually happens, when it comes to the newest, most cutting-edge gadgets, products and services.

“Our research shows that when people are confronted with an upgrade and they don’t stop to think about what they already have, they tend to look at the upgrade, evaluate all of its shiny new features and lose sight of the fact that they already have some of those features in the products they currently own,” said Robyn LeBoeuf, associate professor of marketing.

leboeuf

Prof. LeBoeuf

LeBoeuf, along with co-author Aner Sela, associate professor of marketing at the University of Florida, conducted a series of five experiments involving real and hypothetical upgrade decisions for products most of us are very familiar with: smart phones and apps.

The researchers found that even when the status quo (in this case, the pre-existing phone or app) is mentioned in the decision, if consumers aren’t explicitly reminded to think about what they already have, they don’t compare it to the upgrade, increasing the chances of an upgrade purchase. It’s a concept called called comparison neglect.

“We asked some people to evaluate the upgrade and consider how likely they are to upgrade,” LeBoeuf said. “And we see those people are pretty likely to upgrade.

“We asked other people, before they make that decision, simply to stop and reflect on the status quo. This extra step reminded them about what they already had.

“And we found that those people — who are prompted to stop and think about what they already have — show a decreased likelihood of upgrading,” LeBoeuf said. “So just simply prompting people to stop and think about what they have seems to lower their upgrade likelihood, suggesting they weren’t comparing the status quo to the upgrade to begin with.”

The findings have implications for both sides of the marketplace. While optimizing comparison neglect may seem like a winning proposition for retailers, ethically it may be troubling to craft communications that draw a consumer’s attention away from their status quo options. For consumers, LeBoeuf said it’s important to remember while some upgrades are worth it, perhaps some others can wait.

“Compare and make an informed decision,” LeBoeuf said.  “And remind yourself of what you already have.”

LeBoeuf’s research was recently accepted by the Journal of Marketing Research.

Guest blogger: Erika Ebsworth-Goold





New research from Olin suggests it might be easier to lose weight if your goal is 2-4 pounds instead of 3 pounds. Sound crazy? Read on.

Consumers are more likely to pursue goals when they are ambitious yet flexible, according to a new study co-authored by Stephen M. Knowlis, the August A. Busch Jr. Distinguished Professor of Marketing at Olin Business School.

“Whether a goal is a high-low range goal (lose two to four pounds this week) or a single number goal (lose three pounds this week) has a systematic effect on goal reengagement,” writes Knowlis.

Steve Nowlis

“High-low range goals influence consumer goal reengagement through feelings of accomplishment, which itself is driven by the attainability and challenge of the goal,” Knowlis explains.

The study, ”The Effect of Goal Specificity on Consumer Goal Reengagement,” written with Maura Scott, PhD, of Florida State University, appears in the Journal of Consumer Research.

Consumers often have a choice about the types of goals they want to set for themselves, and they may want to repeat various goals over time. For example, consumers often re-engage goals such as losing weight, saving money, or improving their exercise or sports performance.

In one study conducted by the authors, consumers in a weight loss program set either high-low range goals or single number goals. At the end of the program, consumers with high-low range goals re-enrolled in the program at higher rates even though there was no difference in actual average weight loss across the two groups.

In other studies, consumers exhibited similar behaviors with other goals such as resisting tempting foods, solving puzzles or playing a grocery shopping game.

A high-low range goal can offer “the best of both worlds” compared to a single number goal due to its flexibility: the high end of the goal (lose four pounds) increases the challenge of the goal, while the low end (lose two pounds) increases its attainability.

On the other hand, a single number goal (lose three pounds) may be perceived as a compromise and therefore both less challenging and less attainable.

“Consumers are more likely to pursue a goal when they set a high-low range goal instead of a single number goal. Consumers experience a greater sense of accomplishment when a goal is both attainable and challenging, and this makes them want to continue to pursue or reengage their goal,” the authors conclude.

– Neil Schoenherr wrote this news release for WUSTL Newsroom

Scale photo credit: davidd puuikibeach, flickr