Wednesday, December 21, 2011

Grabbing The Next Deal

Why do consumers act on promotional requests?

A lot of promotions are limited in quantity or time; "if you're one of the first 100 customers who call in the next 10 minutes" is a common approach to creating the sense of scarcity.  But what if you're dealing with products that aren't in short supply and are always available.   Some researchers from Santa Clara University asked the question:  Does a unique opportunity alone impact compliance with an offer?

The answer is 'yes'. 

It turns out that "the unique opportunity effect appears to be the result of heuristic processing, i.e., people relying on a rule of thumb that says they should grab an opportunity available to few others."   So that direct mail piece that you got saying you were pre-screened for a loan works because it stimulates some innate process that triggers the brain into acting.  

While the question as to why our (Western) culture relies on this rule goes unanswered, there are some potential implications for marketers.
  1. Always try to create the sense of exclusivity that the consumer can recognize. 
  2. Communicate the use of segmentation and targetting to explain why an offer is unique to the recipient.
  3. Allow the consumer to strut their stuff; find ways to facilitate the sharing of not only the offer but also the acceptance of it. 
But be wary of the conclusion that promotions drive loyalty.  If we are wired to respond to unique opportunities then we are simply acting like moths to light bulbs - flying to the next cool thing.


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