Rethinking Marketing: Rebecca Hamilton

What makes consumers and marketers better off? Is there a win-win solution? One opportunity marketers have to make the world a better place is to help consumers predict their own preferences more accurately.

As consumers, we often mispredict what we want. Consumers may predict that they’ll use a lot of features on a product, but then they experience feature fatigue from all of the options and don’t use as many as they predicted. In this situation, consumers are using resources to pay for features that they don’t need and marketers are using resources to add features that consumers don’t benefit from. It’s a lose-lose situation.

The domain of substitution gives another example of both consumers and marketers missing out. When there is a stock out, consumers tend to pick a similar product as a substitute. However, research suggests that their desire for their initial choice is reduced more by consuming a substitute that’s more different. Similarly, consumers may miss out on fun experiences because they believe they won’t have fun doing them by themselves. Consumers have more fun doing activities alone than they predict they will. (Note that we’re not comparing the consumer’s predictions to a normative standard or what someone else thinks they should choose, but to their own future experiences.) Consumers are missing a chance to have fun, and marketers are missing out on revenues. 

Research in marketing, psychology, and economics has documented that people systematically mispredict their preferences. A few examples include expectancy disconfirmation, affective misforecasting, and projection bias. How can we help consumers choose better? In some cases, consumers mispredict because they learn their preferences through experience. If marketers can fast forward the learning process to help consumers choose options that are more consistent with their long-term preferences, we can make these situations more of a win-win. Consumers will be more satisfied with their experiences, less likely to complain or return items, and more likely to return. In other cases, consumers mispredict because the context in which they make predictions differs from the context in which they consume products and services. Technologies such as virtual reality and virtual prototypes may be able to help consumers predict their experienced utility and make better choices. Or, marketers can also share feedback from other consumers, such as online reviews, to help consumers imagine how they will feel after consumption. Interventions like these may help consumers predict their preferences, benefiting both consumers and marketers. 

Finding these opportunities for both consumers and marketers to win is one way that marketing can make the world a better place.

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