Justify Your Targeted Marketing

Targeted marketing by a company—for instance, sending advertising to a preselected segment of the possible audience—can benefit a consumer by reducing their handling of ads which hold little interest to them and can benefit a company by optimizing the marketing budget. Moreover, most consumers like to be acknowledged as individuals, and marketers can leverage increasingly sophisticated methods to individualize their interactions with prospects.
     Would it not be smart then for organizations to target sales promotions to specific demographic groups, such as a custom ad campaign for Blacks or for women?
     Yes, but only under certain conditions. Otherwise, say a trio of researchers at UCLA and Columbia University, stakeholders who find out about the targeting, including those receiving the special attention, are likely to consider the targeting to be unfair. This lowers engagement with the sponsor, intentions to purchase from the sponsor, and willingness to recommend the sponsor to others.
     Because the same explosion in available information and search which fuels the potential for targeting also fuels ease in discovering the targeting, consumers have at least a fair likelihood of learning about it and so sensing unfairness. As an example, the researchers cite the public outrage when journalists discovered and then reported features in Facebook which enabled ad targeting by race or gender.
     Results from the set of studies indicated that these negative consequences are less likely when the marketer explains how the targeting is relevant to a product or service characteristic. Phrasing of this sort included: 

• “The Band-Aids are available in a variety of darker shades that were tested to match the skin tones of their Black customers.” 
• “Initial testing showed that, due to the vitamin and nutrient profile of the snacks, the snacks are better suited to the biological needs of their female customers.” 
• “Specifically, testing shows that approximately 80% of women like the taste and texture, compared with only 30% of men.”

     Notice that each of these three refers to testing. This gives the statement greater credibility.
     Another method the studies indicated will ease the potential negative consequences of marketing by demographics is to explain that the organization’s budget is necessarily limited. The phrasing used here was, “A small mom-and-pop local business has developed a new product, which they believe will appeal to their female customers. This local business has very limited resources, so it must spend its modest advertising budget as carefully as possible.”

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Consider Consumer Confidentiality Concerns 

Discount Discounting for Stigmatized 

Discount Doubts About Veterans’ Discounts

Charge for Virtual Goods Interoperability

If your customer has paid for their outfit, they’ll enjoy experiences in those duds more than if they’d gotten the identical outfit for free. Researchers at Western University in Ontario, University of Edinburgh, and University of St. Thomas in Minnesota found this to be true when the purchaser would be using the outfit on an avatar in onscreen video game action.
     The explanation, supported by the set of studies, is that paying for the item builds a sense of ownership, and people have more positive feelings toward experiences using items they own.
     In the studies, the purchased outfit was non-functional since the provider did not claim the item by itself would improve the player’s performance on the video game. The purchasers’ perceptions tended to be that game play was more enjoyable, but the evidence is that this was due to feelings of item ownership, not objectively better game scores.
     Although enjoying an item more because we’ve paid for it seems to go against good economic sense, not all the rules of ownership were violated. In the studies, the effect held better when there was interoperability—the purchased outfit could be used across online games. We want to be able to employ what we own in a number of different situations.
     Together, these findings have implications for marketers who want to improve the attractiveness of their virtual goods, whether for use in video games or other online activities. Offer distinguishing alternatives for a fee rather than giving them away at no cost, and, to the maximum degree possible, provide interoperability across virtual worlds, social media sites, and system platforms.
     The researchers did not assess whether the amount of item cost made a difference. But another set of studies suggests that even a nominal fee can have advantages and for reasons other than a sense of ownership: Consumers were more likely to upgrade from an 8-inch cake to a 10-inch cake when they had been told the upgrade cost 1¢ compared to when they had been told the upgrade was free. Parallel findings held for other types of merchandise as well.
     After analyzing the shoppers’ reasoning, the researchers concluded that the token cost made it easier for shoppers to appreciate the value of the deal when compared to the price of the regular version. Zero doesn’t serve well as a shopper’s anchor for analyzing the magnitude of a difference.

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Downgrade Free Upgrades 

Head Off Rejection of the Handmade

Unconditionally Gift Arriving Consumers

As a retailer, you could present a surprise gift to a customer after they’ve completed a purchase. You could present a surprise gift for participation in your store loyalty program. On the other hand, you could offer a gift when a shopper enters your store, with no consumer action required. Such a tactic of unconditional gifts can nicely complement your existing programs of promotional rewards, according to a team of researchers at Northeastern University, University of Alabama, Karlstad University, Linköping University, and Norwegian School of Management.
     The studies demonstrate that an unconditional gift creates in both new and existing customers the often unpleasant feeling of obligation, which can be relieved by store spending during the current visit, and the often pleasant feeling of gratitude, which strengthens loyalty for future patronage.
     In the study conducted at a general merchandise store, shoppers receiving an unconditional gift spent about 32% more during that visit than did an equivalent group of shoppers not receiving the gift. This should be evaluated in terms of the cost to the retailer of the gift. Fortunately, the researchers determined that the unconditional gift does not need to be expensive to be effective.
     However, in another study, Northwestern University researchers found that gift recipients do tend to compare the value of what they receive with the value of gifts they see others receiving. The researchers’ suggested solution is intriguing, even if odd. They rewarded some consumers with cash and others with a slice of cake. As you’d expect, those who received more cash expressed greater joy than did those who received less cash. Yet the size of the cake slice didn’t matter, perhaps because it’s harder to calibrate slice size than monetary amount.
     Still, there was evaluation. In the studies, gift recipient joy was influenced by the flavor of the cake.
     Limiting gift value eases another problem: A risk with unconditional gifting is that customers expect ongoing gifts. An unmet expectation has a more negative influence on a customer than a satisfied expectation has a positive effect. Researchers at Macquarie University and Universidad Torcuato Di Tella found that while a bonus reward delivered regularly by a marketer can delight a customer who feels they’re receiving the reward because they’re valuable to the business, the marketer discontinuing the reward in that situation risks revenge against the business.
     Their study results indicated that revenge intentions are less pronounced when the monetary value of the treat is small.

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Change Up with Entitled Customers 

Be Careful What You Have Customers Wish For 

Dazzle Customers with Surprise Gifts 

Request Reciprocity

Age Offerings Properly

How marketers frame a time span will influence how consumers respond to what’s offered. A research team at The University of British Columbia, Tilburg University, and Cornell University explored a specific example of this regarding the age of whiskey.
     A whiskey distilled for longer time is considered better. But what difference does it make if the marketer says “Distilled in 2005 and bottled in 2025,” which is a year-boundary format, or “20-year-old whiskey,” which is a length format? The researchers point out that these are equivalent in terms of whiskey quality, since, unlike with wines, whiskey which is stored properly after bottling does not improve or degrade with age.
     By analyzing a dataset of online whiskey auction listings, the researchers found that whiskeys described using primarily a length format sold for about 9% more than those using primarily a year-boundary format.
     The researchers’ explanation for the difference is that length framing elongates time perception compared with year-boundary framing, perhaps because year-boundary framing requires the consumer to compute the time duration.
     So when marketing whiskey, use length framing. Yet also recognize circumstances where the shopper considers a longer time as a sign of inferior quality. In their own companion studies and with reference to studies conducted by others, the researchers explore these circumstances. The results taken together lead to the following recommendations: 

• Use length framing in descriptions when age enhances value. For fine art and antiques, this might be, “Created 135 years ago.” For an organization wanting to convey a sense of enduring presence, this might be “In business for more than 25 years.” 
• Use year framing when greater age implies lesser value. Willingness to pay for secondhand goods should be higher with, “2015 model,” than, “11 years old.” 
• With products, such as wines, where quality could continue to improve through aging after bottling, but updating a length description on the individual bottle is impractical, post length framing on a shelf tag: “Bottled in 2021. Five years old.” Similarly, when a year is an important component of the item description, length framing could be added: “For Sale. Indian Banks 1699 Colonial-style house. Solidly built 327 years ago.” 
• Year framing tends to make financial payoffs seem closer. “Profitable by 2029” is better than “Profitable in three years.” When loan repayment completion is stated as length—“Paid off in ten years”—consumers place greater weight on time and less on interest rates.

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Use Familiar Measurement Units 

Cross Time Markers for Positive Experiences

Image at top of post based on photo by Poul Hoang from Unsplash

Sweeten Shoppers with Baby Talk

The way in which a brand name is pronounced influences the brand’s personality. In a study at University of Dundee and Nanyang Technological University, a toilet bowl cleaner given the name Goz was rated by study participants as stronger than one given the name Pas. A skin conditioner named Pota was rated as gentler than one named Vig.
     More generally, brand names containing solely consonant sounds produced with vocal cord vibration—b, d, g, v, or z—tend to be perceived as harsh, and those containing consonant sounds produced without vocal cord vibration—p, t, k, f, or s—tend to be perceived as mild. The finding holds true across languages and cultures, so is especially useful when marketers are choosing a name for a new product which will be sold internationally.
     Parallel findings hold true for how syllables in a brand name are pronounced. See if you can guess results from a related study, this one at The University of Tokyo, Chukyo University, and University of Dundee. The experimental question: For consumers seeking a sweet treat they’ve not heard about before, which brand name from each of these three pairs is more likely to be preferred and why? 

• Fipefipe or Fipeseti 
• Tepikipi or Tepitepi 
• Zopivuke or Zopizopi

     Want a hint? Look again at the title of this post and the image at the top.
     Ready to check which name from each pair was found to be more strongly associated with sweetness?
     Fipefipe, Tepitepi, and Zopizopi. Those are the alternatives in which the syllable sound repeats. The explanation was found to be that such repetition reminds consumers of baby talk, and consumers’ brains associate the cuteness of babies with sensations of sweetness. For example, across cultures internationally, some version of “I could just gobble you up” is often a response to something adorable.
     Two significant characteristics of these studies to notice as you think about applying the results: First, the brand names were not read aloud to participants, nor were participants instructed to read the names aloud. The effect depends on how the brand names are pronounced, but does not depend on consumers having heard the brand names pronounced, such as in a radio ad.
     Second, in all of the studies, the products were described as new to the marketplace. Existing products will have already established associations. Changing that name might have quite limited impact in selling more sweets.

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Cue Indulgence with Cute 

Throw Shoppers a Curve with Cursive 

Cue Adult Caring with Baby Cuteness 

Sweeten Treat Sales by Being a Sweet Thing

Align PWYW Cost Structure with Value

To broaden availability for financially constrained consumers of offerings like museum visits, dance workshops, and online courses, the provider could feature a “Pay What You Want” (PWYW) policy. Then to maintain financial viability of the offering, the provider would want purchasers to pay as much as they could. Findings by a set of researchers at University of Surrey, WU Vienna University of Economics and Business, and University of Zurich point to a method for doing this.
     In presenting the method, the researchers distinguish between what they call alignable and non-alignable costs. A provider’s alignable costs are those which align with value to the consumer. With a museum, this might be the fees for mounting an exhibit of famous works. With an online course, it might be the fees paid to skilled teachers. On the other hand, a provider’s non-alignable costs are understood as necessary, but as not by themselves providing consumer value. Examples include advertising, rent, and utility bills.
     The researchers recommend describing alignable costs as part of a PWYW offer. This requires the provider to carefully determine what the consumer will value and to ensure that this is an integral part of what’s offered. To help the consumer decide on a fair price, the researchers recommend also including a reference price—how much is usually charged for the offering.
     A provider disclosing information about themselves, such as about their costs, establishes a sense of trust and fairness which can increase PWYW amounts. But the researchers recommend listing the types of costs, not the actual monetary numbers. The numbers can be hard to estimate because they depend on usage volume, and for an expensive offering of superb quality, the actual high money figure could alienate an economically challenged consumer rather than persuade them to maximize their voluntary toll.
     In one of the studies, participants were offered PWYW enrollment in a workshop by ImPulsTanz, Europe’s largest contemporary dance festival sponsor. Prospects given alignable cost structure information (“…pay the renowned workshop teachers from all over the world”) paid about 46% more than those not given cost structure information or those given only non-alignable cost structure information (“…renting the venue… as well as the costs for the workshop office and staff …”).
     In another of the studies, the alignable cost structure appeal proved especially effective with low-pay customers--those who would have paid less than half the reference price amount otherwise.

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Serve the Underserved 

Encourage Customers to Pay What’s Right 

Disclose Yourself to Radiate Authenticity