Don’t Bet on the Consumer

Consumers

Consumers (Photo credit: lagaleriadeARCOTANGENTE)

Being in advertising, I have a love and hate relationship with consumers. “It’s complicated” doesn’t begin to describe our feelings towards each other.

In part, I believe (or want to believe) that consumers are truly smarter and more informed than ever before. That with information at their fingertips, that decision-making should be a cakewalk for many of them.

In other parts, I am repeatedly proven wrong.

I love the consumer, but they gotta meet me halfway.

I have talked about this before, but there is a popular behavior theory out there called the Prospect Theory. In short, it suggests that people value losses more than they value gains. For example, if you have a chance of winning $10, or the chance of losing $10, consumers would give a higher value to the chance of losing $10.

Consumers then, are naturally risk-averse.

Which makes sense- that’s why word-of-mouth is still, and will continue to be, the most effective form of marketing; it shows that the product/service recommended is a low-risk venture.

When my agency compiled research about the consumers’ perception of advertising, the majority thought that more information was good. But after digging deeper into the data, they didn’t quite understand why it was good.

This is my gripe with “big data” and crowdsourcing. Will you get data, yes. Will it show you what the consumers want? Maybe. But should you base your strategy on what the consumers tell you they want?

It depends. You know how your product or service works. You know what moves you need to make to improve your product/service. Consumers don’t like risky moves, so if you’re venturing out to do something different, something a little unusual, I wouldn’t bet on them to be sage advisers.

Listen to your consumer. But don’t bet on their advice.