Why advertisers need to be aware of trade-offs

What links cream cakes, Stella Artois and Avis?

Simple. Their iconic advertising recognised the power of trade-offs:

Naughty but nice.
Reassuringly expensive.
We're only No. 2 so we try harder.

These claims recognised that you can't get something for nothing in life. Instead, each claim became more powerful by admitting a weakness. By broadcasting that they were high calorie, expensive or had a less than leading market share, they made their core claims about taste, quality and service more believable.

This isn't just marketing myth. Experiments by Shiv and Ariely, professors at Stanford and Duke Universities, have shown that most consumers believe that there's a trade-off involved with cheap pricing. There's an assumption that low price means low quality.

In their most famous study, published in the Journal of Marketing Research, they gave consumers electric shocks before and after taking placebos. Half of the participants were told the painkiller was priced at $2.50 whilst the others were told they cost 10 cents. Whilst 85% experienced less pain when they took the pricier pill, only 61% did so when they had the cheaper ones.

This isn't a one-off. In categories, as varied as wine, perfume and energy drinks, it has been demonstrated that consumers rate identical products as worse when told they're cheap.

ZenithOptimedia wanted to see if these trade-offs extended beyond price by testing whether eco-friendly line extensions were also affected. We recruited a large group of households to trial a supposedly new washing machine tablet. All the households were given a standard supermarket own label tablet but half were told the truth and half were told it was an eco-friendly variant.

After undertaking a wash, participants rated the tablet on five metrics, such as effectiveness, likelihood to purchase and liking. On every single measure the 'green' tablet performed worse, with ratings dropping by 8% to 18% dependent on the question.

Consumer claims to prefer green products are belied by their observed behaviour. Instead a trade-off exists: if a product boosts its eco credentials then there may be a sacrifice in perceived effectiveness.

These results should cause marketers launching a green variant to pause for thought. Before progressing it is worth testing the impact of a green claim on other characteristics. Otherwise a green launch may push sales into the red.

@rshotton

First published on Mediatel: https://mediatel.co.uk/newsline/2015/05/26/why-advertisers-need-to-be-aware-of-trade-offs/