Author: Jay Zaltzman

How people make spending decisions

I just read Dan Ariely’s 2017 book, Dollars and Sense.  Admittedly, the book is a few years old, but Ariely’s behavioral economics approach to how people spend is more relevant than ever (and co-author Jeff Kreisler has an amusing writing style!).  The book talks about the irrational ways we spend money and how we, as consumers, can spend smarter. 

Of course, as a marketer, it also makes me think of the flip side: how marketers utilize those same mechanisms to get customers to spend more.  That’s the duality we have to contend with: as consumers, we try to watch out for the very same methods we employ as marketers.  But let’s face it – if we don’t use these methods, there’s a chance our competitors will! 

Here are some of the highlights from the book:

  • Context matters: customers will pay more or less for something based on contextual cues, such as MSRP or where it’s being purchased (e.g., convenience store vs. supermarket).  Even when we know that the seller raised the list price to then offer a “sale,” it still impacts us.  (Yes, even you!)
  • Spending buckets: even though a dollar is a dollar is a dollar, people do “mental accounting.” For example, we might not be willing to spend any more on “luxuries,” but if that same expenditure gets reframed as “education,” then we are willing to spend on it.  Marketers should consider if there are ways to reclassify their products or services to a category customers are more likely to spend on.
  • “Fair” pricing: we consider whether a person or company “deserves” the price they are charging (rather than what it’s worth to us).  For example, we get annoyed at the locksmith who fixes our lock in two minutes and charges $80, but are willing to pay $120 to the locksmith who took two hours and broke the original lock in the process.  Even though we got a greater benefit from the two-minute job, it just seems wrong.  Marketers need to make sure they emphasize all the effort that went into the product or service (Artisanal widgets?  Hours of deep thought?) so customers will feel prices are fair.
  • The importance of language: not only can descriptions make products sound better, they can literally change the way we experience things.  That is, we will enjoy a product or service more when it’s described in a way that appeals to us.  So don’t skimp on copywriting: find out what makes your product or service enjoyable to customers and tell them all about it!

The main thing I took away from the book as a consumer: when deciding whether or not to make a purchase, we should look at opportunity costs, that is, how much pleasure will the purchase provide compared to other ways we could spend our money.

How do your customers make the decision to spend?  It’s worth finding out!  Let’s discuss – email me at info at bureauwest.com.

Posted on by Jay Zaltzman

What insights leaders want

I recently had the opportunity to moderate a roundtable discussion on behalf of Ignite 360 that included insights leaders from some of the largest companies in the U.S.: Elizabeth Oates, Sr. Director, Consumer Insights at Ulta Beauty; Humayun Rashid, Director, Microsoft 365 Research & Insights; and Marlene Straszewski, former Senior Director, Consumer Insights at General Mills; along with Rob Volpe and Lisa Osborne from Ignite 360.

It was a wide-ranging conversation, covering their thoughts on how things are changing in the insights field, as well as how research agency partners can provide value to companies like theirs and more.   

One thing that has stuck in my mind from the discussion: the desire to truly understand research participants as human beings.

  • “What I would say is different today versus maybe five years ago is really shifting from thinking about a respondent or a consumer… to be talking more about people, and humans, and talking about how can we solve real human problems.” – Marlene Straszewski
  • “We find that building platforms and building things where the stakeholders are forced in some ways to participate… where the distance between the respondents and the stakeholders is becoming closer and closer and closer so that they are more in tune with those consumer user needs.” – Humayun Rashid
  • “Recently, someone asked me ‘what is gen pop’ – that’s a great question, what does that mean…   we’re looking at lots of different types of people… how do we understand people as they see themselves?” – Elizabeth Oates

I think that’s an important point that sometimes gets forgotten when we conduct market research.  Beyond asking participants specific questions about our product or service, we need to ensure we have a deep understanding of the context: customers’ lives and how our product or service fits in.

During our roundtable, Marlene, Elizabeth and Humayan also talked about:

  • The importance of considering diversity in our target audiences, not just because it’s the right thing to do – it’s also good for business
  • The value of conducting in-person research.  While they appreciate the convenience of remote research, our roundtable agreed that some of their most memorable insights came out of in-person research
  • What they want from research agency partners is flexibility, the ability to bring new thinking and “learn from the past and adapt to the new and the now”

Those are just the highlights; you can watch the whole discussion here.  And let’s talk about the best ways to learn from your customers. Email me at info at bureauwest.com.

Posted on by Jay Zaltzman

Are customers returning to normal?

My friend and colleague Rob Volpe gave a fascinating presentation at the Quirk’s Event last month.  He talked about research his company has been conducting and the fact that 72% of people are saying they DON’T want life to go back to exactly the way it was before.

So how do we marketers figure out what our customers will want as we emerge from the pandemic?  Rob recommends a “Recognize-Reimagine-Respond” approach, as follows:

Recognize

  • Understand that customers may have different needs
  • The role your brand played in the past may not be as relevant to all the same people, but there may be new prospects

Reimagine

  • Now is the time to consider scenario planning or “war games”
  • Examine the benefits, needs or JTBD is your brand is serving
  • Re-evaluate existing segmentations, journey and innovation maps

Respond

  • Build new plans based on scenarios and “rapid response” tactics
  • Get re-acquainted with your consumer and their psychology
  • Expect swings in behavior until new equilibrium is attained

Let’s talk about how your customers and prospects are changing and where the opportunities lie.  Shoot me an email: info at bureauwest.com.

Posted on by Jay Zaltzman

New macro trend: gratitude

Remember how the authenticity trend started in the 90s?  Farmers markets were starting to spring up in urban locations.  How things were made began to take on more importance to consumers.  Eventually, authenticity became a macro trend in marketing that has been around for over 20 years.

My friends at Ignite 360 looked at the data from their Navigating to a New Normal research (ongoing quant and qual research), and saw a new macro trend emerging: a focus on gratitude.  A clear majority of participants want to see change in their lives when the events of 2020 come to a close.  Appreciating what they have was most frequently cited by those seeking change.  They are looking for quality over quantity.  This macro trend is going to have an impact on how people spend their time and money. 

The new trend has immediate implications for how companies communicate with their customers and prospects and longer-term implications for the development of products, pricing, even business models.  Read more about the findings here.

Can I help you figure out how this trend impacts your customers and prospects?  Let’s discuss!  Shoot me an email: info at bureauwest.com.

Posted on by Jay Zaltzman