Consumer Behavior →
- 20 Aug 2014
- Research & Ideas
Why the ALS Ice Bucket Challenge is a Social Media Blockbuster
Most companies should envy the financial and brand awareness brought about by the ALS Ice Bucket Challenge. The campaign's key ingredient, says John Deighton, is that participants enhance their personal capital in performance of a good deed. Open for comment; 0 Comments.
- 11 Aug 2014
- HBS Case
The Business of Behavioral Economics
Leslie John and Michael Norton explore how behavioral economics can help people overcome bad habits and change for the better. Open for comment; 0 Comments.
- 14 Jul 2014
- Research & Ideas
Pay Attention To Your ‘Extreme Consumers’
Jill Avery and Michael Norton explain what marketers can learn from consumers whose preferences lie outside of the mainstream. Open for comment; 0 Comments.
- 04 Jun 2014
- What Do You Think?
Does Internet Technology Threaten Brand Loyalty?
Internet technologies may not kill off brands, but they certainly magnify both the bad and good decisions of marketers. Jim Heskett's readers weigh in on this month's question. Open for comment; 0 Comments.
- 23 Apr 2014
- HBS Case
Are Electronic Cigarettes a Public Good or Health Hazard?
A new case study by John Quelch charts the growing popularity of electronic cigarettes and how tobacco companies and regulators are responding. Open for comment; 0 Comments.
- 26 Feb 2014
- Research & Ideas
How Grocery Bags Manipulate Your Mind
People who bring personal shopping bags to the grocery store to help the environment are more likely to buy organic items—but also to treat themselves to ice cream and cookies, according to new research by Uma R. Karmarkar and Bryan Bollinger. What's the Quinoa-Häagen-Dazs connection? Closed for comment; 0 Comments.
- 29 Jan 2014
- Working Paper Summaries
The Rising Cost of Consumer Attention: Why You Should Care, and What You Can Do about It
Attention is the allocation of mental resources, visual or cognitive, to visible or conceptual objects. Before consumers can be affected by advertising messages, they first need to be paying attention. As Thales S. Teixeira writes in this paper, the quality of consumer attention has been falling for decades. Consumers have lost interest in the information content of ads because they can access more and better information on‐demand on the Web. In addition, the price of marketers' acquiring high-quality attention has increased by as much as nine‐fold in the past two decades. To compensate for these circumstances marketers have typically responded by advertising more or by pursuing other means, such as price promotions, to acquire customers. However, these tactics risk eroding current profits and future revenues. A better solution, argues Teixeira, is to find cheaper attention or increase its conversion into sales. Novel approaches described in the paper, such as Lean Advertising and Viral Ad Symbiosis, can help to mitigate the rising cost of attention. Ultimately, in order to effectively manage the valuable resource of consumer attention, marketers will need to tailor their advertising strategies to the attention contingently available to them. This paper shows how to achieve this through Teixeira's Attention‐Contingent Advertising Strategy. He also lays out the fundamental principles of the economics of attention, an emerging field. Key concepts include: The value of consumer attention is rising. Marketers need to manage consumer attention better. This paper is intended to help them in this regard. The cost of acquiring consumer attention has increased dramatically (seven- to nine-fold) in the past two decades. Marketers can tailor their advertising strategies to the attention contingently available to them. When marketers stop asking "What do I want to achieve from the advertisement?" and begin asking "What can my consumers achieve if they share the advertisement?" they then start the process of creating truly consumer‐centered advertising, that which benefits the consumer's social needs. Closed for comment; 0 Comments.
- 22 Jan 2014
- Working Paper Summaries
Separating Homophily and Peer Influence with Latent Space
People are often more willing to try new things when they see others doing so. This phenomenon, which academics call "social influence", has a profound impact on many aspects of customer decision-making and marketing. For example, social influence affects consumers' willingness to take up new technologies, adopt and use social networks, and ask their physicians for particular prescription medicines. Marketers are thus eager to understand how and to what extent social influence affects people's consumption decisions. To date, however, it has been difficult to pinpoint the effects of social influence, as researchers have struggled to separate it from a simple fact that like-minded people tend to enjoy the same things, per the adage "Birds of a feather flock together." The authors use the field of mobile app adoption in Japan to examine this problem. Japan is an ideal testing ground because approximately 80-85 percent of all page views occur through mobile. In addition, mobile apps are often social in nature, especially those that are linked to a social network platform. The authors devise a new method to assess social influence by controlling for other factors that usually complicate the picture. Overall, the findings show that peer usage accounts for more than a quarter of all mobile app adoptions. The paper also highlights a risk that firms could overestimate social influence by 40 percent on average, even up to 100 percent in certain cases. The authors' method helps overcome this risk. Key concepts include: Social influence is clearly important in customer decision making and marketing. It has a profound impact on the adoption of new technologies, social network usage and adoption, eCommerce, new prescriptions of pharmaceutical drugs, ad effectiveness, group decision making, and customer retention. Using a new approach, this paper documents the impact of peer behavior on the adoption of mobile apps in a social network. Results show that peers drive more than a quarter of all mobile app adoptions. Results also show that firms risk overestimating the impact of social influence by 40% on average, even up to 100% in certain cases. The authors' method helps overcome this risk. Closed for comment; 0 Comments.
- 13 Jan 2014
- Research & Ideas
How Government Can Restore the Faith of Citizens
Would we appreciate government more if we could see what it was doing to help citizens? Research by Michael Norton and Ryan Buell. Open for comment; 0 Comments.
- 13 Nov 2013
- Research & Ideas
Should Men’s Products Fear a Woman’s Touch?
Recent research shows that loyal customers often get upset when a brand associated with men expands to include products perceived as feminine. Senior Lecturer Jill J. Avery discusses the problem of "gender contamination." Closed for comment; 0 Comments.
- 11 Nov 2013
- Research & Ideas
A Smarter Way to Reduce Customer Defections
Companies can't afford to lose hard-won customers, but in truth some are more important to keep than others. Recent research by Sunil Gupta and Aurélie Lemmens explains how to find them. Closed for comment; 0 Comments.
- 10 Oct 2013
- Working Paper Summaries
Managing Churn to Maximize Profits
Customer defection or "churn" is a widespread phenomenon across a variety of industries. As customer acquisition costs continue to rise, managing customer churn has become critically important for the profitability of companies. This paper provides a novel method for determining which customers to target in order to maximize the profit of a retention campaign. The authors developed a binary classification method that uses a gain/loss matrix, which incorporates the gain of targeting and retaining the most valuable churners and the cost of incentives to the targeted customers. Results show that this approach leads to far more profitable retention campaigns than the traditional churn modeling approaches. In addition, the additional profits come at no cost for companies. The implementation of the retention campaign is unchanged, only the composition and size of the target group changes compared to traditional approaches. Key concepts include: The authors describe a new method of customer retention that leads to substantial improvements for companies with no additional implementation cost. Closed for comment; 0 Comments.
- 23 Sep 2013
- Research & Ideas
Status: When and Why It Matters
Status plays a key role in everything from the things we buy to the partnerships we make. Professor Daniel Malter explores when status matters most. Closed for comment; 0 Comments.
- 21 Aug 2013
- Research & Ideas
To Buy Happiness, Spend Money on Other People
In a new video, Michael Norton shows that spending money on others yields more happiness than spending it on yourself. Closed for comment; 0 Comments.
- 17 Jun 2013
- Research & Ideas
Advertising Symbiosis: The Key to Viral Videos
Creating an online ad that goes viral requires more than mere entertainment. Thales S. Teixeira discusses the key to creating megahit marketing through "advertising symbiosis." Closed for comment; 0 Comments.
- 15 May 2013
- Research & Ideas
From McRibs to Maseratis: The Power of Scarcity Marketing
In the new book Happy Money: the Science of Smarter Spending, behavioral economists Elizabeth Dunn and Michael Norton describe how money can buy happiness—but only if we spend it the right way. Closed for comment; 0 Comments.
- 15 Apr 2013
- Research & Ideas
Solving the Search vs. Display Advertising Quandary
Internet advertising was supposed to make it easier for marketers to measure the impact of their ad buys. But a basic question remains: Do search ads or do display ads create more customers on the web? Research by Professor Sunil Gupta. Closed for comment; 0 Comments.
- 29 Jan 2013
- Research & Ideas
Creating the Perfect Super Bowl Ad
Professor Thales S. Teixeira says TV viewers lose purchasing interest when ads get too caught up in entertainment. His advice for the perfect pitch: tie together a good story and a compelling brand. Closed for comment; 0 Comments.
- 28 Jan 2013
- Research & Ideas
Helping Yelp Create More Accurate Reviews
Over time, Yelp's reader rating system of restaurants can make or break an operation, but professor Michael Luca shows the program has flaws. Can a more accurate, fairer system be created? Closed for comment; 0 Comments.
Has Apple Reinvented the Watch?
Will the Apple Watch reinvent wearables the way the iPhone did smartphones? Ryan Raffaelli shares his insights. Closed for comment; 0 Comments.