Removing customer uncertainty
Posted: Sun Dec 22, 2024 4:43 am
The result of the uncertainty was that 45% of the people did not buy the CD player, compared to only 9% in the scenario where people were certain. The disjunction effect shows that consumers who do not have all the information available, even if the information does not change the decision, are less likely to make the decision to do something.
It is a complex phenomenon to respond to, because people tend to look for information that is not present. This can of course differ per person. My advice is therefore to be as open as possible to the customer and to offer the possibility to let customers ask questions in an accessible way. But every strategy to remove uncertainties from the customer is positive with regard to the disjunction effect.
5. Choice overload: can you have too much choice?
The ideology of our Western society is based on the idea that increasing our well-being is related to increasing our freedom. Freedom is good, valuable and offers every individual the opportunity to act as he or she wants.
The way we increase individual freedom is by increasing choice. Thus, increasing choice has become linked to increasing our freedom. This is the line of thought of Barry Schwartz, which he introduced in 2000 under the name The tyranny of choice . Research by Iyengar and Lepper (2000) shows that more choice does not always lead to more satisfaction and willingness to buy.
People did show a strong preference for the possibility of having a lot of choice. The paradox, however, was that people with less choice were more likely to make a purchase and were more satisfied with their choice. Regret plays an important role in this, because more alternatives increased the degree of regret.
6. Complex novelty
Research by Noorderwier and Van Dijk looks at the communication of product innovations. Many companies introduce a new product to the market by labeling it as brand new . However, the researchers show that product innovations are more successful if they are presented as: “similar to” or “works just like”.
People need to feel that they can handle the product. If people have that, their interest in the product will increase.
7. Copycats
By copycats we mean brands that try to profit from the name and fame of well-known brands. Often it concerns a cheaper version of, for example, Coca Cola or Starbucks.
Research by Pieters and Van Horen shows that people in an unfamiliar environment are more positive towards copycats. They indicate that a Dutch person in Shanghai is more willing to go to a copycat of Starbucks (Usabucks) than if it is in the Netherlands. So we have a preference for familiarity in an unfamiliar environment. While in a familiar environment there is an aversion towards copycats.
8. Evaluability hypothesis
The evaluability hypothesis states that our evaluation of a product depends on the possibility of comparing the product. This was demonstrated by measuring people's willingness to buy a product in two situations. Alone or together with the other product.
For example, people were given the choice of a 10,000-word dictionary with no defects or a 20,000-word dictionary with a torn cover. When the dictionaries were evaluated separately, the majority chose the 10,000-word dictionary. When the dictionaries could be compared, the majority chose the 20,000-word dictionary.
This is because the number of words is a uk whatsapp number characteristic that is difficult to assess without an alternative. A dictionary with a torn cover can always be assessed. An implication of this is that it is sometimes better to provide less information in the separate evaluation (such as torn cover). It may also be wise to provide a percentage indication in the separate evaluation compared to the average. Think of: "this processor performs 30% better than the average processor in this price range".
What to do with all that research?
The purpose of this story is to provide more insight into the irrationality of today's consumer. Psychological research is often a tangle of situations that are subject to effects. There is usually little need for this from an economic perspective because there are no formulas to attach to it. Only when it can be demonstrated that behavior is predictably irrational can it be used in the economic field.
The studies I explain above show with robust results that the consumer does not always act rationally. The predictability of irrationality makes it possible for marketing and sales departments to respond to this. Therefore, take a good look at whether these studies can be relevant for your company or organization.
It is a complex phenomenon to respond to, because people tend to look for information that is not present. This can of course differ per person. My advice is therefore to be as open as possible to the customer and to offer the possibility to let customers ask questions in an accessible way. But every strategy to remove uncertainties from the customer is positive with regard to the disjunction effect.
5. Choice overload: can you have too much choice?
The ideology of our Western society is based on the idea that increasing our well-being is related to increasing our freedom. Freedom is good, valuable and offers every individual the opportunity to act as he or she wants.
The way we increase individual freedom is by increasing choice. Thus, increasing choice has become linked to increasing our freedom. This is the line of thought of Barry Schwartz, which he introduced in 2000 under the name The tyranny of choice . Research by Iyengar and Lepper (2000) shows that more choice does not always lead to more satisfaction and willingness to buy.
People did show a strong preference for the possibility of having a lot of choice. The paradox, however, was that people with less choice were more likely to make a purchase and were more satisfied with their choice. Regret plays an important role in this, because more alternatives increased the degree of regret.
6. Complex novelty
Research by Noorderwier and Van Dijk looks at the communication of product innovations. Many companies introduce a new product to the market by labeling it as brand new . However, the researchers show that product innovations are more successful if they are presented as: “similar to” or “works just like”.
People need to feel that they can handle the product. If people have that, their interest in the product will increase.
7. Copycats
By copycats we mean brands that try to profit from the name and fame of well-known brands. Often it concerns a cheaper version of, for example, Coca Cola or Starbucks.
Research by Pieters and Van Horen shows that people in an unfamiliar environment are more positive towards copycats. They indicate that a Dutch person in Shanghai is more willing to go to a copycat of Starbucks (Usabucks) than if it is in the Netherlands. So we have a preference for familiarity in an unfamiliar environment. While in a familiar environment there is an aversion towards copycats.
8. Evaluability hypothesis
The evaluability hypothesis states that our evaluation of a product depends on the possibility of comparing the product. This was demonstrated by measuring people's willingness to buy a product in two situations. Alone or together with the other product.
For example, people were given the choice of a 10,000-word dictionary with no defects or a 20,000-word dictionary with a torn cover. When the dictionaries were evaluated separately, the majority chose the 10,000-word dictionary. When the dictionaries could be compared, the majority chose the 20,000-word dictionary.
This is because the number of words is a uk whatsapp number characteristic that is difficult to assess without an alternative. A dictionary with a torn cover can always be assessed. An implication of this is that it is sometimes better to provide less information in the separate evaluation (such as torn cover). It may also be wise to provide a percentage indication in the separate evaluation compared to the average. Think of: "this processor performs 30% better than the average processor in this price range".
What to do with all that research?
The purpose of this story is to provide more insight into the irrationality of today's consumer. Psychological research is often a tangle of situations that are subject to effects. There is usually little need for this from an economic perspective because there are no formulas to attach to it. Only when it can be demonstrated that behavior is predictably irrational can it be used in the economic field.
The studies I explain above show with robust results that the consumer does not always act rationally. The predictability of irrationality makes it possible for marketing and sales departments to respond to this. Therefore, take a good look at whether these studies can be relevant for your company or organization.