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Post-purchase bias

I’m a very methodical (and slow) shopper.  This is especially true for big-ticket or important items.  Before I make such a purchase, I spend hours researching various products.  When I have made my shortlist of suitable options, I read every available online review to check for potential shortcomings.  Finally, I head in-store to evaluate the possibilities in person.  Finally, I make my purchase and head home…

…where I re-research the product again.

It sounds a little nutty…but chances are you’ve probably done this too.

According to a recent article by the Marketing Science Institute, my behaviour is a classic example of the well-documented “post-purchase bias”.  The bias was first discovered by Ehrlich et al. in a 1957 study.  They found that new car buyers read more advertisements for the car they had just purchased than for the cars that they had considered, but not purchased.  This effect has been reproduced many times and is considered to be one of the most robust findings in consumer behaviour.

Why do we do this?  By re-affirming the reasons for our initial purchase, we defend the wisdom of our acquisition and are able to allay the dreaded “buyer’s remorse”.

More recently, researchers have discovered that we also distort product information to reinforce our decision after a sale.  When presented with such information, we ignore the bad and inflate the good.  More importantly, because this interpretation is self-driven, we are more likely to believe in these positive evaluations.

This has big implications for business.  Traditionally, we think of marketing as something that occurs before the sale.  However, this study suggests that marketing is just as important after the sale has already occurred.

The MSI article outlines four implications for business:

1)       Managers should always find ways to follow through after a recent purchase.  Good customer service practices aside – when customers are given more information about a product, they positively interpret this information to create a stronger brand preference.

2)      This follow-up should take place as soon as possible after the initial purchase, while the customer still feels strongly about the product.

3)      After the initial purchase, we are likely to hear from some customers again – some products may be returned, others may require repair, or the customer may need additional instructions.  Every encounter offers businesses the chance to strengthen the customer’s product preference.

4)      The best kind of marketing is free-marketing – specifically when customers talk to friends about their experiences.  The more post-purchase follow-up, the more loyal the customer, and the more likely they are to offer positive feedback regarding the product.  Most importantly, because they are passionate about the product, this feedback is inherently more believable.

Remember: Your work as a retailer doesn’t end when the customer reaches the cash register – it has only just begun.

Do you research products you’ve already purchased? How does your business market itself to existing customers?

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Thanks for reading!  For information on cellular point of sale, visit our website: mmspos.com

Bias and manipulation

I have a confession to make. As it relates to the battle of wills, I am known to succumb to good sales people every time I go shopping. It’s even worse near Christmas when I’m getting desperate to find better gifts than a gas-station jug of washer fluid.

I bought so much junk that I didn’t intend to buy that I had to take a step back and figure out what had happened to me. It turns out we’re all victims of our own minds. There are so many hidden biases trapped in our minds that it’s almost amazing we don’t constantly trade our houses and cars for magic beans.

So I looked into it a bit. It turns out we anchor our choices to a single trait when making a decision. If the salesperson knows this (and which trait to target), they only have to convince you of the one useless (but superior) feature in order to make the sale.

We also like to think we’re always right, so we look for support of a previous decision. Again, if the salesperson knows this, they can push the right buttons. This is part of the reason salespeople always ask you what you’re looking for – it’s much easier to encourage an existing opinion than to change it. That’s also probably why I bought this year’s release of the same crappy phone I was unhappy with last year – somehow it was still a good move in my mind.

These effects don’t just occur when we’re purchasing something new, but also when we’re being sold “add-ons” like extended warranties. For some reason, I’m happy to pay more to prevent the malfunction of something than I would be to just buy it for the first time. Evidently this happens to a lot of people, since they have a name for it: the ‘endowment effect’.

The surprising part of these biases is that they work on us even when we’re aware of them. And further: we all believe we are less biased than everyone else. This is related to our universal belief that we’re all above average (despite the mathematical difficulties inherent in this claim). Somehow, ninety percent of us believe we’re better than average drivers. But alas, ninety percent of skilled sales people probably already knew that.

Are your sales staff aware of these behaviour biases?  Do they utilize them when making sales?

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