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Selling a juicy burger with a mouthwatering photo on Instagram? Know more about induced positive consumption simulations

Marketers must consider combining visual and verbal prompts. For instance, in the case of online reviews, consumers find it easier to process the review when the photo and text convey similar aspects of one’s experience, which, in turn, increases the review’s perceived helpfulness.

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Researchers from Yale University and University of Southern California published a new Journal of Marketing study that synthesizes and evaluates over 50 studies conducted over four decades to determine when mental simulation prompts heighten consumers’ purchases.

The study, forthcoming in the Journal of Marketing, is titled “From Mentally Doing to Actually Doing: A Meta-Analysis of Induced Positive Consumption Simulations” and is authored by Gizem Ceylan, Kristin Diehl, and Wendy Wood.

Enticing people to buy a juicy burger or the new Apple Vision Pro spatial headset computer can involve the same marketing approach: prompting consumers to mentally simulate future purchases or consumption.

Marketers often prompt mental simulations via visuals or via verbal calls to action. For example, restaurants try to entice patrons with mouthwatering photos on their Instagram accounts or menus. The Apple Vision Pro launch video shows people using the new headset computer in a hope that consumers will simulate how they would use the device. A commercial for EasyJet, a leading European airline, asks people to “Imagine Where We Can Take You” along with visuals of flying over clouds and of different holiday locations from beaches to cities.

The question is: How effective are these mental simulations? Mental simulation has been shown to improve action readiness and is thus used in advertisements and other communications to facilitate purchase and consumption. “However,” note the researchers, “although some studies have noted positive influences on behavioral intentions and behavior, others have found minimal or even negative effects. It is difficult to interpret these findings given how the modality of simulation, frequency of induction, type of consumption experience, and target populations vary widely in research and practice.”

Behavioral Impact

This new Journal of Marketing study synthesizes and evaluates over 50 studies conducted over four decades (from 1980 to 2020) to analyze when mental simulation prompts heighten consumers’ purchases. It produces several important findings for the industry:

  1. Mental simulation increases behavioral responses; however, the average effect is small, suggesting that, while mental simulation works in general, marketers must identify ways to strengthen its impact.
  2. The study identifies more powerful mental simulation prompts—such as dynamic visuals with augmented reality (AR) or 360-degree videos, along with verbal instructions to go along with visuals—and guides marketers how to use such interactive media.
  3. The frequency and spacing of the mental simulation determines its effect on consumer behavior and we offer guidance to managers for effective ad planning and delivery. For example, when marketers place the same message across different platforms, consumers may be exposed to the same content over and over again within a single episode of mental simulation. In addition to repetition being annoying in general, mass repetition is not just ineffective but it also reduces consumption, likely due to habituation.
  4. Simulation has limited impact on behavior in online samples in which participants may not be sufficiently motivated to engage in mental simulation.

“While mental simulation inductions are a common approach found across many industries and product categories, our systematic, large-scale analysis suggests that marketers should carefully consider the right approach, context, and frequency of prompting mental simulations,” the researchers say.

Real-World Implications

This study offers the following lessons for Chief Marketing Officers:

  • Using more interactive and engaging simulation prompts, such as 360-degree videos and AR tools, are especially effective in increasing behaviors. Investing in such technologies and approaches could be particularly important for companies that rely on consumers simulating a future experience or outcome.
  • Some existing technologies and channels—such as animated graphics and email marketing—can be leveraged for simulation-based communications. Luxury brands already employ unboxing videos on TikTok and Instagram to stimulate viewers’ imagination and influence their future purchases.
  • Marketers must consider combining visual and verbal prompts. For instance, in the case of online reviews, consumers find it easier to process the review when the photo and text convey similar aspects of one’s experience, which, in turn, increases the review’s perceived helpfulness.
  • For marketers employing mental simulation in their campaigns, controlling, especially limiting, daily exposure is particularly important. For instance, Hulu has taken steps to ensure its viewers can encounter the same commercial only twice per hour, four times per day, or 25 times per week. Platforms such as Facebook and Instagram now allow marketers to place limits on daily or weekly exposure, which we recommend should be set even lower than those employed by Hulu.
  • The online studies yielded nonsignificant results as opposed to in-person studies, which produced significant effects. Mental simulation prompts were ineffective for online respondents, possibly because they were not sufficiently involved or engaged in the simulation process. This finding may be particularly alarming for managers because a large chunk of advertising spending is on TV and digital channels that may be consumed during distracting activities and can lead to active disengagement from ads. As a workaround, ads that include mental simulation may better fit into channels in which consumers initiate the marketing activity, such as search ads that ensure greater consumer attention and engagement based on declared interests.

Strategies

5 Tips for small business owners to help grow their business online

Choosing and registering a domain name for your business that’s memorable is increasingly important in an expanding digital marketplace, as it helps to shape your online business identity.

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Small businesses are embracing digitalization and catering to their customer needs through a variety of online channels. With new technologies emerging such as artificial intelligence, there is no time like the present to help your small business grow by taking advantage of the online world.

A GoDaddy 2023 global survey examined the status of small businesses including their ways to reach customers and survive in highly competitive markets. APAC countries surveyed, including Philippines, Singapore and Thailand, showed use of a business website, online store, ecommerce or a combination of them ranking at 57% of survey respondents. These results support having a strong online presence with multiple complementary channels can be vital for businesses to thrive and grow in today’s competitive digital environments.

With this in mind, GoDaddy shares five tips to help your small business grow with an online presence.

1. It starts with a domain name

When getting started, check availability of domain names for the desired name. A domain name can be considered a business’ piece of real estate and identity on the internet. It is a way for customers to easily find a business online.

Choosing and registering a domain name for your business that’s memorable is increasingly important in an expanding digital marketplace, as it helps to shape your online business identity. If the .com extension is not available, there are many new extensions available, such as: .shop; .co.; .photography; .tech, to name a few, for you to consider which can help define your business.  After choosing a domain name register it with a reliable hosting provider right away.

2. Build a website 

Websites help create visibility for small businesses and acts as a home base for your business on the internet, even if you have a brick-and-mortar store.  A website can help consumers easily find your business, learn about your product offerings and services, and contact you for more information.

A well-designed professional looking website can offer an engaging customer experience with the use of text along with photo images and video.  Having a website gives you control over the messaging about your business and can serve as a hub by linking with your social media channels.

3. Listen to your customers

The growth of your business is directly related to customer satisfaction. Listen to your customers and pay attention to the needs of your target market. Identify their problems and pain points. How can your offerings act as a solution? Is it possible to develop new products to help solve these problems?  Engage for customer feedback and keep an eye on customer behaviour changes and audience interests.

4. Develop a business support system

By developing a strong business support system, entrepreneurs can benefit from new ideas on ways to address a particular issue or ideas for growth. In addition to close family and friends, consider mentors and business coaches who can provide relevant insights into your business.

5. Review your business plan

Many entrepreneurs make a business plan at the beginning of their business journey, but do not take the time to revisit it from time-to-time. So, analysing aspects of that business plan like target audience and competitors, examining cash flows and what can make the business profitable, while also checking timelines to reach business goals is all equally essential to help ensure continued growth of your business.

For more information on how GoDaddy can help your small business: Domain Names, Websites, Hosting & Online Marketing Tools – GoDaddy PH.

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BizNews

Sticking with old technology can be a strategic move

As competitors adopt new technology in some markets, firms that stick with the old technology may experience an initial decline before actually rebounding and even reaching new heights.

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Technological innovation — especially disruptive innovation — is often heralded as the best strategy for a company. But new research published in Strategic Management Journal found that as competitors adopt new technology in some markets, firms that stick with the old technology may experience an initial decline before actually rebounding and even reaching new heights. While the rise of a discontinuous technology does pose a substitute threat to the old technology, it also further exposes niche segments where companies can gain a foothold with customers who favor the old technology.

The analysis by Xu Li, a professor at the London School of Economics and Political Science, used archival data from the traditional Chinese medicine industry in China during the 1990s. In his interviews with managers in the field, he found that some chose not to innovate along with their competitors. In many cases, Li found these companies were performing well, if not sometimes better, by not making changes. Inspired by these conversations, Li chose to study under what conditions a firm may benefit from not innovating.

Li found some prior research on why companies would stick with older technology, but none explored why — during times of disruptive change in the market — sometimes firms are able to survive and even perform better within a small niche with old technology. What Li’s paper showed was that adhering to the old technology can, in some cases, be an effective strategy that ultimately improves firm performance.

The data showed a U-curve effect for traditional Chinese medicine firms that chose not to adopt new technology: The decline in performance began as a few competitors started launching a new technology, but later recovered and reached new heights as most competitors had adopted the new technology and exited the old technology market. But a lack of competition within the niche group of consumers who prefer older technology essentially gave these firms a monopoly within a smaller market as fewer competitors remained.

“Even though the new technology is often superior in terms of functionality, it doesn’t mean that every single customer or customer segment will be willing to move to the new technology,” Li says. “It’s important to understand what customers like about your product. We tend to assume that if a firm introduces something new, then customers must appreciate the new thing or the newness of the offering. But that’s not always true. The emergence of new technology can actually reveal people’s preference for something older.”

The research also refutes the idea that when the market is small, a company won’t perform better — but that depends on how many firms are still serving this niche. If only a few firms are left to serve this market, a company has far more power to charge higher prices among loyal customers with few other options.

“When you see a firm that is not actively innovating, we tend to believe the firm must be either incapable or is suffering — it’s always a bit of a negative tone,” Li says. “Sometimes staying with old technology might actually be a strategic choice, because by doing so it might also lead to better performance.”

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BizNews

Customers prefer text over video to provide service feedback

More people indicated they would likely leave written compliments or complaints about service on a restaurant-provided tablet powered by artificial intelligence. A video message option appeared to discourage leaving feedback.

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At a time when one viral video can damage a business, some companies are turning to their own commenting platforms rather than letting social media be the main outlet for customer feedback. Only one wrinkle: in this context, customers appear to prefer writing a message rather than leaving a video.

In a recent study, more participants indicated they would likely leave written compliments or complaints about service on a restaurant-provided tablet powered by artificial intelligence. A video message option appeared to discourage leaving feedback.

With more restaurants and hotels turning to AI to enhance their service, the findings indicate that methods that require “low self-disclosure” would work better, meaning ones that don’t require customers to provide very much identifiable information.

“Some restaurants and hotels actually ask customers to create video testimonials that they can share, but for general customers, it seems they feel more comfortable with low self-disclosure. This is probably because people still do not trust AI to that level,” said lead author Ruiying Cai, a researcher in Washington State University’s Carson College of Business.

With a lot of hype around AI technology, many people have misperceptions about what it can do, Cai pointed out, perhaps believing it is capable of a lot more than simply recording a message.

The study participants reported being concerned about what would be done with their information in all the scenarios, but this was heightened with the option to leave a video.

For the study, published in the International Journal of Hospitality Management, Cai and her colleagues presented different online scenarios to a total of 439 people. The participants were first asked to imagine a restaurant where they had either good or bad service. Then they reported how willing they were to give the server compliments, or complaints, with either text or video on an AI-enabled tablet.

The researchers found that the participants were more willing to give feedback using text, whether positive or negative.

The scenarios also had participants receiving a theoretical immediate or delayed reward to provide feedback, namely a 5% discount of their current meal or a future one. For complaints, the reward timing did not appear to make much difference, which the authors said was not surprising as people tend to be more highly motivated to complain than compliment.

For compliments, the researchers found an interesting connection: with more participants choosing the delayed reward over the immediate one. This may indicate that giving the compliment itself is its own reward as it makes the giver feel good, Cai said.

“It’s a good start to think about how to encourage customers to leave more compliments which could be very important for frontline employees. It could also be beneficial for the customers themselves,” she said.

Even complaints are important to encourage, Cai added. As her previous research suggests, restaurants and hotels should make it easier for customers to complain to them directly rather than go elsewhere to air their grievances.

“There have been episodes when customers were not afraid of posting angry videos on their own social media,” Cai said. “If restaurants and hotels can encourage customers to complain directly to them, then they may be able to recover and solve that service failure before it goes viral online.”

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