Emerald Group Publishing Limited
Executive summary of “impact of consumers’ effort investment on buying decisions”
Article Type: Executive summary and implications for managers and executives From: Journal of Consumer Marketing, Volume 32, Issue 2
This summary has been provided to allow managers and executives a rapid appreciation of the content of the article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benefit of the material present.
Purchase decisions are often a complex process whereby consumers balance benefits derived from the product or service against the effort involved in acquiring it. Effort in this case can be manifested in different ways. Time spent searching for products online or by physically visiting retail outlets is compounded by effort needed to evaluate alternatives. Time and effort are frequently perceived as being intrinsically linked, yet acknowledged as discrete resources. Purchase price and the financial cost of conducting these activities are also factored into decision-making.
Conventional wisdom claims that significant time and effort expended during purchase consideration may not generate the desired outcome for retailers. Fear that such individuals may abandon their intention to buy has prompted various initiatives aimed at countering the negative effect. Strategic positioning of stores to improve convenience for shoppers, mobile shopping apps and the simplification of making online purchases are some examples.
Effort has been the subject of some research attention. Most addresses motivations for identifying circumstances which influence use of this resource. But consumer behavior after investing in effort has received little scrutiny in comparison. Limited evidence does exist, however, to suggest correlation between the degree of effort and subsequent change of consumer “preferences and valuation”. One proposal is that individuals who expend effort are more attracted toward assured small benefits rather than more substantial rewards that are not guaranteed.
Different scholars believe that consumer decision to buy or not will possibly be influenced by the sunk costs associated with the search. These costs refer here to time and effort involved in considering, finding and evaluating possible choices. Their relevance lies in the fact that they are not redeemable. Sunken costs in monetary terms can exert an even stronger impact on decision-making. Extant literature cites examples where managers will justify ongoing investment into new product development based on the financial costs already incurred. This course of action is typical even when the said project is failing.
Some inconsistencies do prevail where non-monetary sunk costs are concerned. This has prompted certain academics to predict that consumers could be less likely to go through with the intended purchase. They further claim that those who do would expect to obtain the product or service at a lower price.
Various theories have been advanced in support of the sunk cost phenomenon. In the present context, need for self-justification and desire to reduce waste are viewed as the most pertinent. The first instance is described as reflecting human need to make the right decisions and justify their choices both to themselves and significant others. It is, therefore, assumed that individuals will actually feel more motivated to purchase something they have invested considerable time and effort in choosing. Another research indication is that people are concerned about wasting resources including time, money and effort. This fear about wasted investment might persuade consumers to complete their intended purchase.
Students participated in a lab-based study designed to investigate the impact of effort on willingness to purchase and amount paid. A Web-based instrument was used, and participants were asked to evaluate four different computer brands they were provided with information about via expert reviews. The process involved rating each brand on certain attributes. Following this, responses to statements and items indicated willingness to purchase their highest-rated brand and how much they were prepared to pay. Information relating to self-justification, desire to reduce waste, affective states and demographic details were obtained in a similar manner.
Difficulty in evaluating the four brands was varied to manipulate the level of effort needed. In the high-level condition, some reviews were more awkward to access and/or difficult to read, and information was presented in decimals. A Web site log confirmed that subjects had actually read the expert reviews, thus allaying fears that some could evaluate brands using random numbers.
The study revealed that, relative to those in the low effort condition, respondents investing high levels of effort:
took longer to complete the task and considered it “more effortful”;
demonstrated a willingness to pay substantially more for their choice;
were likelier to purchase the computer, although this difference was only minimal; and
experienced higher levels of negative affect. Its presence increased the positive impact of effort on willingness to pay more, which contrasts with earlier findings.
Furthermore, the effect of self-justification was also evident on those in the high effort condition. Consumers were willing to purchase the computer and pay more to justify their decision to expend effort in the search and evaluation process. Contrary to expectation, no support was found for the belief that a desire to reduce waste would impact on purchase decision-making.
Lala et al. conducted a second study, primarily to explore the significance of control. The literature defines control as assuming that one has the freedom to actively choose between different options which aim to produce the same desired end result. Several dimensions of control have been identified, but this research restricts its focus to “decisional control”. According to prior research, sunk cost errors were less likely when individuals felt that the decision to spend money was outside of their control. On this basis, the authors predict that the influence of effort on purchase behavior will increase when decisional control is perceived.
Students were again selected to participate and were exposed to one of four conditions incorporating high or low levels of effort and decisional control. For the high control group, the feeling of being in control was manipulated. The task for these subjects involved choosing from one of two research studies that they were given different background information on via respective handouts. Those in the low control group were assigned to one of the two studies.
Analysis showed that those who spent more effort and experienced high decisional control were willing to pay more. However, willingness to buy was not significantly influenced by this relationship. But affect again strengthened the impact.
The authors have demonstrated that sunk costs also apply to non-monetary resources. Another significant indication is the influence of self-justification on willingness to pay more. They suggest that it has the capacity to “overpower” consumer expectation that investing more effort deserves greater rewards, as other scholars found.
Firms are advised not to necessarily simplify the purchasing process. For instance, Lala et al. propose that the likelihood of abandoning an online purchase is lower when checking out involves a higher number of steps. They correspondingly argue that individuals who travel further to a store might spend more than when visiting one much closer to home. Persuading consumers to invest more effort in shopping is thus recommended. Companies are also urged to develop strategies which give shoppers either real or perceived control over the process. Another consideration is the possibility that investing in more effort may assuage feelings of guilt which arise when luxury items are bought instead of essentials.
Different effort levels could be examined in subsequent work, which might additionally investigate whether effort predicts quality expectations. Ascertaining if the impact of effort extends to different purchases during a shopping trip is another option to consider. Further research into sunk costs and the use of other samples, settings and products is likewise recommended.
To read the full article enter 10.1108/JCM-08-2014-1090 into your search engine.
(A précis of the article “Impact of consumers’ effort investment on buying decisions”. Supplied by Marketing Consultants for Emerald.)