Highlights - December 2016

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At one time or another, most consumers have clamored for upgrades such as:

  • Moving up to first class on a flight.
  • Getting the newest
  • Or adding WiFi to your car.

In order to properly decide if it’s worth the expense, consumers should compare the upgraded product with what they already own.  Most of us know to do this, but new research from Washington University shows that there is a wide gap between what we should do, and what actually happens when it comes to the newest, most cutting-edge gadgets, products and services.

The new research shows that when people are confronted with an upgrade and they don’t stop to think about what they already have, they tend to look at the upgrade, evaluate all of its shiny new features and lose sight of the fact that they already have many of those features in the products they currently own.

The Washington University team conducted a series of five experiments involving real and hypothetical upgrade decisions for smart phones and apps; products most of us are very familiar with.

The researchers found that even when the status quo (in this case, the pre-existing phone or app) is mentioned in the decision, if consumers aren’t explicitly reminded to think about what they already have, they don’t compare it to the upgrade, increasing the chances of an upgrade purchase.  It’s a concept called “comparison neglect.”

When the researchers asked people to evaluate the upgrade and consider how likely they were to upgrade they found those people were pretty likely to upgrade.

When they asked other people, before they made that decision, simply to stop and reflect on the status quo, the extra step reminded them about what they already had.  The researchers found that those people — who were prompted to stop and think about what they already had — showed a decreased likelihood of upgrading.  So simply prompting people to stop and think about what they have, seems to lower their upgrade likelihood, suggesting they weren’t comparing the status quo to the upgrade to begin with.

The findings have implications for both sides of the marketplace.  Optimizing “comparison neglect” may seem like a winning proposition for retailers.  For consumers,...

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