Business Psychology - Latest Findings

Article No. 196
Customer Psychology Findings, by James Larsen, Ph.D.

Making It Simple

Research highlights the need to help people translate intentions into actions.

One of the frustrations of business involves customers failing to follow through with their intentions, i.e., wanting our products, forming an intention to buy them, and then failing to actually make a purchase. It's not easy or cheap to bring customers to this point, and there is no reward for either the customer or the business owner when no sale occurs.

Consider the weight loss industry.

Here we have people being persuaded to do something they don't really want to do (lose weight) and will likely fail at if they try. Businesses in this industry should fail. Yet vast amounts of money are spent producing commercials and organizing products and services to sell to these customers, and these businesses do survive and serve this clientele.

Anil Mathur, from Hofstra University, recently published a study which examined three factors that interfere with actions: 1) lack of trying, 2) a perception that a person cannot control the outcome of an intended action, and 3) the actual lack of control over outcomes. For example, customers may be persuaded through advertising to purchase a particular model of car but 1) fail to visit a dealership (lack of trying), 2) doubt they could afford it (perception of control), and 3) not have enough income to make payments (actual lack of control). These factors interfere with purchases.

Professor Mathur's study revealed that lack of trying is a clear obstruction and that actual control is also an obstruction, but there was no evidence that perceived control impeded purchasing, and that's very interesting. It suggests that people don't form perceptions independent of the facts.

Mathur's findings suggest we should pay greater attention to trying and to actual control to help our customers carry out their intentions and make purchases, but we should stop trying to influence perceptions of control. For example, T.V. ads for weight loss programs invite interested viewers to dial a telephone number. That's simple, and if you've ever dialed one of those numbers, you'll find a very friendly voice presenting you with additional simple tasks leading into their program. These are incremental steps, each intended to facilitate trying.

In our own businesses, we should examine the purchasing tasks for our products and services from our customers' perspective, and we should identify early incremental steps that lead to purchases. Next, we should incorporate ways to facilitate these steps into our marketing plan. This facilitates trying.

T.V. ads for new cars often present cost information in terms of monthly payments, and these help customers make comparisons with their income. This approach facilitates actual control - people will know if they can afford the car. Conversely, other car ads tout the interest rate of auto loans ("1.9% APR"). These ads are intended to create a perception of affordable finance charges, but according to Mathur's findings, this tactic will fail to facilitate purchasing because perceptions of control don't interfere with purchasing.

Finally, Mathur's study examined simple behaviors, and by doing so, he has revealed the value of thinking in simple terms. Business owners should focus on simple behaviors and find ways to facilitate them by offering an incentive or carrying out the step for a customer. The goal is to stimulate a cascade of quickly following simple steps that result in a purchase.

For example, an eye-catching sign at an auto dealership that invites people to stop for a free cup of coffee and a quick appraisal of the trade-in value of their present car will stimulate people to do something simple, turn into the driveway and brake to a stop. That simple step can begin a cascade of simple steps leading to a purchase, that is, if the owner has thought out the necessary steps and if the salespeople are able to execute their marketing plan.

With attention to simple steps, we could all improve our sales.

Reference: Mathur, Anil (1998) Examining Trying as a Mediator and Control and a Moderator of Intention-Behavior Relationship. Psychology and Marketing, 15 (3), 241-259.

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