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Assessing the Effectiveness of Consumer Promotions

Assessing the Effectiveness of Consumer Promotions
Which promotions will have their intended effects on consumers, and which will backfire? Recent research demonstrates that consumer perceptions are quite malleable and that even seemingly small changes to the framing of a promotion can impact consumers’ interest.

Four recent papers from the Journal of Marketing Research reveal framing effects on consumer promotions.

In “Killing Hope with Good Intentions,” Dengfeng Yan and A.V. Muthukrishnan investigate the effects of offering small consolation prizes, in addition to a large prize, in a lottery. Offering smaller consolation prizes, such as 10 prizes valued at $200 each, is intended to make a lottery seem more appealing than if it only offered one large prize—a prize valued at $5,000, for example. The paper shows that, in fact, providing consolation prizes can make a lottery less appealing because offering consolation prizes decreases consumers’ perception that they will win the big prize and, as a result, reduces their interest in entering the lottery.

“Personal Relevance and Mental Simulation Amplify the Duration Framing Effects” by Gülden Ülkümen and Manoj Thomas examines the effects of framing a promotion in one unit of time versus another (weeks vs. months, for example). The authors find that framing a behavior, such as a long-term diet plan, in terms of years makes the behavior seem longer than when the same amount of time is described in terms of months, such as saying “one year” rather than “12 months.” Likewise, a behavior described in months seems longer than when described in days (“12 months” vs. “365 days”).

This duration framing effect is even more pronounced when the behavior is highly personally relevant and consumers visualize engaging in the focal behavior. A promotion for a diet plan, therefore, generated more consumer interest when the plan was described as lasting 365 days rather than 12 months or one year. Consumers wanted the diet to end quickly, and 365 days seemed faster than one year. Marketers should consider varying the units of time that they use to describe behaviors using smaller units, particularly for those activities that are easy for consumers to visualize, such as exercising or dieting.

In a third paper, Debora V. Thompson and Elise Chandon Ince investigate “When Disfluency Signals Competence.” The authors show that when an advertisement is hard for consumers to read, such as with a difficult-to-read font, it leads consumers to make inferences about the difficulty of the task that the service provider is promoting. Specifically, ads that are harder to read increase consumers’ perceptions of the difficulty of the tasks and also increase consumers’ perceptions of the service providers’ expertise in performing those tasks. This work extends other recent work that had shown that when something is hard to read, it is perceived as hard to do, which can be a problem in generating consumer interest if the consumer needs to complete the needed actions, himself, as with a DIY offering, but can work in marketers’ favor when they’re promoting a service.

In “Beating the Market: The Lure of Unintended Value,” Aner Sela, Itamar Simonson and Ran Kivetz show that sometimes consumers respond more favorably when the marketer de-emphasizes how good of a fit a promoted product is to the consumer’s preferences. The authors’ research found that consumers are more interested in deals when the messaging does not make it seem like the marketer knew how well the offering would suit them. Consumers like to think that they outsmarted the marketer in getting a good deal, and that the marketer did not know how well the deal would fit their preferences (and charge a higher price, accordingly). For example, a consumer reacts more favorably to a deal for a magazine subscription that targets her as someone who has an average level of interest in the magazine’s topic than as someone who has a strong interest in the magazine’s topic. Therefore, targeted ads might work best when they seem to accidentally fit consumers’ preferences, rather than having been carefully designed to fit consumers’ preferences. However, this benefit from accidental fit only emerges for familiar products; for unfamiliar products, such as an unfamiliar magazine, consumers respond more favorably when the marketer emphasizes how well the promoted product fits the consumers’ preferences.

Together, these research articles demonstrate how small changes to a deal, ad, contest or other promotion can impact consumer interest in systematic ways. In some cases, the direction of these effects is counterintuitive, as in the lottery and targeting examples. Consumers’ perceptions are driven by cues in the promotion, which impact their perception of the probability of winning, receiving expert service or getting a good deal. Understanding how consumers are impacted by these cues can help marketers avoid promotions that backfire and, instead, design promotions that work as intended.

Posted in English, Knowledge & Beyond.