Improve your sales by playing smart with ‘regret’ and the ‘maximizing mind-set'Relevant topics Archive, Conversion
With our busy lives nowadays, we can’t always attend every meeting, birthday or SALE that we want to attend. So occasionally we miss out on deals and special offers; that’s life. But do we regret this, and more importantly, does this affect our decision-making?
In the light of the famous loss aversion principle, you might think that the feeling of regret, and missing out on things is always a bad thing. However, that’s not what researchers found in a study about options associated with past and future regret. When triggered cleverly, feelings of regret might just drive customers to your future deals.
When regret paralyzes. And when it sells
Granted, it is wise for marketers to always keep the feeling of after-purchase regret as low as possible. But it can work wonders to tap from the feelings of regret that are already there.
So what’s the smartest way to advertise future promotions and deals? First, information about missing a chance in the future leads to higher dissatisfaction than having missed a chance in the past. Knowing we might miss out on a deal tomorrow sparks a stronger motivational reaction than knowing we’ve missed out on one yesterday. You can’t do anything about a missed chance in the past, but missing out on a chance in the future gives extra discomfort and higher dissatisfaction.
To avoid this dissatisfaction of missing future chances, make sure that you simultaneously inform consumers about a discount of a similar product in the past. An example: when advertising for shoes use something like; ‘Missed our Sneaker Super Sale? Next monday we start Sports Footwear Sale’. This way you give information about a discount offer in the past, which compensates for feelings of regret. Feelings of missing out a future chance induce feelings of regret, which in turn leads to customer dissatisfaction about a purchase or promotion.
Feelings of regret and price promotions
Psychologists and economists sensibly assume that people want to be well informed about their past and future options. Especially when by having this information, it can improve decision-making and saves consumers some money. Research indicated that people experience more dissatisfaction over missing out a discounted product or sale in the future, compared to in the past. Consumers choose more often for products that already have been discounted, to ensure themselves for the fact that this product will not be discounted anytime soon again. Imagine walking in the supermarket and the pasta was on sale last week. Then you might think; ‘Ah well, then it won’t be discounted anytime soon again, I will buy it now.’
Another important point is that advertising a sale, or special discount ahead of time can leave money on the table. Okay, it’s good that consumers will learn about the sale and take advantage of it, but is also decreases the likelihood that they will choose a similar product in its regular price. I mean, who wants to buy a washing machine now, if you know that in one week it’s 20% off.
So be careful with advertising ahead of time, because people want to avoid feeling regrets for having been responsible for missing the future opportunity. For example be sure that a similar product recently has been discounted. Or communicate with something like; ‘Again a great discount…..’, or ‘Missed our early booking discount? You have another possibility from…till…’
Subsequently, a main point in this area of past and future opportunities, is Every-Day-Low-Pricing against Hi-Lo retailers. A study from Danziger et al. in the Journal of Consumer research indicated that consumers found the EDLP retailer more attractive than the Hi-Lo retailer because it was not associated with concerns regarding whether a past or future opportunity was missed. Just the ease of always low pricing, brings peace of mind to consumers, whereas Hi-Lo brings throws them into an internal conflict involving past and future discounts.
Okay, let’s address one more important aspect that is a highly intertwined with this subject of regret and advertising.
The maximizing mindset
An important and complicated psychological concept is a person’s mindset: the current scope through which someone views the world. The mindset of individuals may influence the extent to which past and future missed out chances influence decision-making. Especially worthwhile to consider is the so-called maximizing mindset; a state of mind strongly geared towards being and getting the best.
But, why should marketers care? Well, a study from Ma and Roese showed that the maximizing mind-set amplifies regret and dissatisfaction, increases the likelihood of returning and switching products, and affects sensory experiences such as taste. This effect of the maximizing mind-set occurs only when consumers learn that they do or did not get the best. However, this amplification of regret and dissatisfaction does not occur when consumers do in fact, get the best.
This again emphasizes the previous conclusion: fixed low prices work and when you advertise for sales or discounts ahead of time, you need to ease the pain by sharing a glimpse of past promotion offers. In this way you won’t activate the negative maximizing mind-set, and you will keep feeling of regrets at bay.
So from now on, improve your sales and let’s leave regrets behind us.