When Customized Marketing Backfires

Dec 12, 2013, 10:07 ET from American Marketing Association

CHICAGO, Dec. 12, 2013 /PRNewswire-USNewswire/ -- Marketers have long touted the benefits of customizing offers to individual consumers.  However, researchers from the University of Florida, Stanford University, and Columbia University have found that customized offers are often less attractive than offers that consumers believe happen to fit their preferences "by accident," without the marketer's intent.

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This new research demonstrates that one important factor that determines whether consumers perceive an offer as a good deal is the degree to which it appears more valuable than presumably intended by the marketer. When consumers believe that the marketer has not fully factored-in their preference for the promoted product, they often perceive the offer as more valuable than when they feel that the marketer knows how much they like or value the product.

The research, which appears in the December issue of the American Marketing Association's Journal of Marketing Research, finds that offers that are explicitly presented as customized or designed to fit the consumer's preferences can, ironically, be perceived as less attractive than offers that consumers believe happen to fit them without the marketer's intent. This finding reflects consumers' intuition that customized offers are designed to extract more value from them. Thus, contrary to a common assumption about individual customization, telling consumers that an offer is tailored for them can boomerang and weaken bargain perceptions.

Authors Aner Sela, Itamar Simonson, and Ran Kivetz say that "the findings show that consumers evaluate marketing offers based on a rather sophisticated analysis of their interaction with marketers." They caution that: "Marketers should realize that, although describing offers as designed 'especially' for consumers may lead consumers to perceive the firm as investing more effort and better matching the consumer's preferences, such explicit customization often undermines the extent to which the offer is perceived as a bargain."

Because explicit customization signals better fit, it can be an effective strategy when consumers are uncertain about the product's fit for them personally, such as when buying a fiction book, music, or clothes. Implicit customization, on the other hand, is more effective when consumers' uncertainty revolves around the deal's value, such as when buying a car or an appliance.

About the AMA

About the American Marketing Association:
The American Marketing Association (AMA) is the professional association for individuals and organizations who are leading the practice, teaching, and development of marketing worldwide. Learn more at ama.org.

Contact: Christopher Bartone – 312.542.9029 – cbartone@ama.org

SOURCE American Marketing Association