Tag Archive | "consumer"

White House Drops ‘Consumer Privacy Bill Of Rights Act’ Draft

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Flow Kana Brings You Pot Straight Off The Farm

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Watch President Obama Talk Cybersecurity In Silicon Valley

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Watch Tim Cook Speak At President Obama’s Summit On Cybersecurity

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Google Glass May Be On Shaky Ground, But Sony’s Showing Off Its New Smart Eyeware

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Pricing Psychology – Your Emotions Like Rounded Numbers [Study]

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Life’s little luxuries may sell better if they’re priced with a rounded number – e.g. $20.00, rather than $19.99.  That’s the finding of a new set of five studies in the Journal of Consumer Research that looked at the impact of rounded and non-rounded pricing on product appeal.

So whilst the ‘left-hand digit’ effect (we’re too lazy to read the whole price, so $99.99 is experienced as significantly less than $100.00) may work for rational work- or task-related purchases, if your customers are buying for pleasure, you’ll probably shift more stock with ‘double 0′ style pricing.

Interpreting the results the researchers suggest that non-rounded prices can encourage reliance on rational, practical thinking because they are more complex to mentally process. The practical upshot is that a .99 suffix ‘feels’ right for a product bought on reason rather than emotion.  The opposite is true of products purchased for pleasure on emotional feel.  Emotional purchases feel right with rounded prices.

Conducted in the lab rather than in the field, the findings need to be tested, but a quick real-world test would be easy for online retailers for whom cashier theft would not be a worry. Historically, a key rationale for .99 style non-rounded pricing had little to do with pricing psychology, and much to do with forcing cashiers to ring up a record of the sale because they would need to hand back change.

Wadhwa, M., & Zhang, K. (2014). This number just feels right: The impact of roundedness of price numbers on product evaluations. Journal of Consumer Research. DOI: http://www.jstor.org/stable/10.1086/678484

Prezi Launches Nutshell, An App To Turn Photos Into ‘Mini-Movies’

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Driverless Cars On The Road To Fender Benders

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INFOGRAPHIC: Super Bowl XLIX was ‘The Big Gathering XLIX’ on Facebook

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Facebook released more statistics on Super Bowl XLIX, this time from its Facebook IQ unit, which named its infographic (below) “The Big Gathering XLIX,” based on its finding that 85 percent of U.S. users planned to watch the game with other people.

Facebook IQ also found that:

  • More than 65 million Facebook users worldwide discussed Super Bowl XLIX on the social network, generating some 265 million posts, comments and likes.
  • 63 percent of users said the best part of the event is the party, the commercials or the halftime show, while just 37 percent cited the game itself.
  • 87 percent of Super Bowl-related posts in the U.S. were made via mobile devices.
  • The top organic native video viewed on Facebook Sunday featured comedians/actors Kevin Hart and Will Ferrell, while the most-viewed video ad was “Surprise Scream” from Discover.
  • The most-talked-about topic during Super Bowl XLIX was the game itself, while the ad-related hashtag with the most volume was #likeagirl.

Facebook IQ also offered the following takeaways for marketers on Facebook looking to score on Super Bowl Sunday:

  • “Go wide” and extend your reach: Facebook is a key online destination for people watching the game. Brands advertising on TV during the Big Game can use Facebook to extend the reach of that investment and deliver an enhanced, multiscreen experience. Brands that are not running a TV campaign can use Facebook to reach and engage a tremendous number of people on mobile devices with Facebook native video.
  • Hit the “sweet spot” with accurate and complete targeting: Facebook is the place to reach highly engaged people during tent-pole events like the Big Game. Brands can leverage seasonal targeting segments like the “Football on Facebook” audience to reach people who are watching for the game, party, commercials or entertainment.
  • “Kick off” the party: Given that most Americans watch the game with others, and people increasingly use Facebook to plan their parties, the Big Game offers consumer packaged goods, spirits, entertainment and other party-related brands a big opportunity to capitalize on the gathering.

FacebookIQSuperBowlXLIXInfographic

Article courtesy of SocialTimes Feed

The Jam Study Strikes Back: When Less Choice Does Mean More Sales

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The Jam Study is one of the most famous experiments in consumer psychology, and new research to be published in the Journal of Consumer Psychology supports the Jam Study’s controversial conclusion; offering consumers less choice can be good for sales. Critically, the study reveals when precisely offering less choice may enhance your sales.

If you’re not familiar with the Jam Study, it’s here.  Basically, the study, which was conducted at upscale Bay-area supermarket Draeger’s Market by psychologists Sheena Iyengar and Mark Lepper, found that consumers were 10 times more likely to purchase jam on display when the number of jams available was reduced from 24 to 6. Less choice, more sales. More choice, fewer sales. Weird, huh?

This phenomenon, replicated in a variety of product categories from chocolate to financial services to speed dating, has come to be known as ‘Choice Overload’ or the ‘Paradox of Choice‘. It’s a paradox because rationally speaking the more choice you offer your customers, the more sales you should make simply because you’ll be satisfying more needs better. But research showed that choice actually can be demotivating, and get in the way of sales. Why?

Psychologically, the Paradox of Choice is not so much of a paradox because the more options you give people, the more time and effort they have to invest in making a choice – something they may not be prepared to do.  Moreover, giving your clients, customers or consumers a smorgasbord of options puts a psychological burden on them because what you are actually doing is giving them more opportunity to make the wrong choice, regret it and blame themselves.

Nevertheless, the Jam Study and follow-up studies (with other product types) has remained controversial – surely giving your customers more choice is a good thing?  Indeed, a meta-analysis of studies in 2010 found that the inverse link between choice and purchase likelihood is from consistent.

But now a new study, ‘Choice overload: A conceptual review and meta-analysis‘ by Kellogg researchers at Northwestern University Alexander Chernev and Ulf Böckenholt (and Joseph Goodman) has re-analaysed the data from 99 Paradox of Choice studies and has isolated when reducing choices for your customers can boost sales

  • When people want to make a quick and easy choice (effort-minimizing goal)
  • When making the right choice matters/you are selling complex products (the decision task is difficult)
  • When you show options that are difficult to compare (greater choice set complexity)
  • When your customers are unclear about their preferences (higher preference uncertainty)

So the Jam Study strikes back; more choice can harm sales – but probably only when one or more of these four criteria are met.

March 2015
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