Talking time may build a bottom line
By Peggy Binette, email@example.com; 803-777-5400
Beach rental companies could earn bigger profits this summer if they know when to market a vacation stay for two weeks rather than 14 days.
Hold it. That’s the same amount of time, right? Yes, but depending on the consumer – that is, planning ahead or making last-minute arrangements – it could be more profitable for a rental company to emphasize either the larger unit of time (weeks) or the larger number (14) of days.
The influence of time and numbers on consumer behavior is the focus of a new study completed by marketing researcher Ashwani Monga, a professor in the Darla Moore School of Business at the University of South Carolina.
His findings are featured in the Journal of Consumer Research (June 2012).
“There has been very little research done to understand a consumer’s perception of time and numbers,” said Monga. “Businesses understand the value of a pricing strategy. The implication is the same here. There is value to knowing when to accentuate units of time and when to accentuate numbers.”
Monga said consumers react differently to units of measurement depending on whether they are thinking in more concrete or abstract terms. Through a series of experiments, he showed that numbers matter more to consumers thinking about an immediate purchase (concrete) and units matter more to consumers looking to make a future purchase (abstract).
To illustrate this, let’s go back to the beach.
Take a person who is making plans in the spring for a trip he or she will take in the summer.
“This consumer is thinking abstractly in the future, which makes units of time salient,” said Monga. “In this case, a beach house manager offering a longer stay ought to use large units or weeks and small numbers to magnify the change, such as a ‘two-week stay for the price of one.’”
However, the opposite is true for the person who makes a last-minute decision to head to the beach.
“In this case, the consumer is thinking more concretely, which makes numbers more salient. The beach house manager should use small units and emphasize the larger number to magnify the change, such as a ‘14 day stay for the price of seven,’” he said.
Monga looked at the mindset of consumers in variety of contexts, including delay in product delivery, maturity of financial products, height of buildings, weight of nutrients and length of tables.
Monga said mindset mattered in all cases. He found that a concrete, or present, mindset made people more sensitive to the sizes of numbers and an abstract or future mindset made people more sensitive to the size of units.
A different example from a beach rental would be a company’s downplaying a delay in its delivery of a product.
Monga said the best strategy here would be to use terms that de-emphasize the delay. Therefore, a manager would want to talk in terms of large units for the customer thinking concretely, such as “sorry, delivery is going to take 3 weeks instead of one” and large numbers for the customer thinking abstractly such as “sorry, delivery is going to take 21 days instead of seven.”
“This has tremendous application in how businesses talk with consumers,” said Monga.
Monga co-authored the study with Rajesh Bagchi, a marketing professor at Virginia Tech.
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