Persuasive Advertising - J. Scott Armstrong [45]
1.5.4. If a product is desirable, specify delivery dates rather than waiting times
As with many of the other principles, it is better to focus on the positive than the negative. Most customers will feel better if they think about receiving a desirable product rather than thinking about how long they must wait.
Some advertisers might advertise waiting times (delays) in hopes that customers will pay extra for faster deliveries.
Evidence on effects of delivery dates versus waiting times
In five lab experiments conducted with 489 subjects at the London School of Economics, subjects were given either waiting times or arrival dates for receiving money (e.g., $370 in 17 weeks or by the given date). Those given arrival dates were about twice as satisfied as those given waiting times (Read, Orsel, and Rahman 2005).
Here are two possible ways to advertise a rebate offer:
A. Return this coupon within one week of purchase and you will receive a $50 refund.
B. Return this coupon within one year and you will receive a $50 refund.
Which is better for the buyer? Which is better for the seller?
1.5.5. Tell customers they can achieve benefits over a long period if you want to reduce the use of an offer—and vice versa
Customers will feel more comfortable if you allow them additional time to take advantage of a refund. For example, wouldn’t you prefer that your airline frequent-flyer benefits never expire?
Sellers also benefit from a long redemption periods because customers will take more time to redeem the offer, thus providing a free loan to the seller. Furthermore, there is an increased likelihood of customers forgetting about the coupon. Overall, it is expected that fewer coupons would be redeemed.
Thus, in the above question about coupons, B is the preferred choice for both sellers and buyers.
If the purpose of a rebate is to encourage product trial, give customers only a short time to use the coupon. And when feasible, remind customers about the expiration date.
Evidence on the effects of expiration dates
In one experiment, subjects were offered $5 for answering and returning a long questionnaire. One group was given no deadline, a second was given three weeks, and a third five days. The return rates were 25 percent for those with no deadline, 42 percent for those given the three-week limit, and 60 percent for those given the five-day limit (Tversky and Shafir 1992).
Information principles are vital to advertising when you have something to say, especially for new or improved products. Checklist 1 summarizes the information principles.
Checklist 1 Information
1.1. Benefits
1.1.1. Describe specific, meaningful benefits.
1.1.2. Communicate a unique selling proposition (USP).
1.2. News
1.2.1. Provide news, but only if it is real.
1.2.2. If real news is complex, use still media.
1.3. Product
1.3.1. Provide product information that customers need.
1.3.2. Provide choices.
1.3.3. When there are many substantive multi-dimensional options, organize them and provide guidance.
1.3.4. Make the recommended choice the default choice.
1.3.5. Inform committed customers that they can delete features, rather than add them.
1.3.6. To reduce customer risk, use a product-satisfaction guarantee.
1.4. Price
1.4.1. State prices in terms that are meaningful and easy to understand.
1.4.2. Use round prices.
1.4.3. Show the price to be a good value against a reference price.
1.4.4. If quality is not a key selling point, consider advertising price reductions.
1.4.5. Consider partitioned prices when the add-on prices seem fair and are small relative to the base price.
1.4.6. To retain customers, consider linking payments to consumption.
1.4.7. Consider separating payments from benefits—if the payments are completed before the benefits end.
1.4.8. State that the price can be prepaid if it might reduce uncertainty for customers or enhance anticipation.
1.4.9. Use high costs to justify high prices.
1.4.10. When quality is high, do not emphasize price.
1.4.11. Use high prices