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Merchandizers, The Compromise Effect Has Gone – User Reviews Overcome Marketing Manipulation

I was recently boarding a flight in New York and started reading the New York Times. One article jumped out: “User reviews make it harder for marketers to manipulate.” A Stanford University research report proves a wealth of product information and user reviews is causing a fundamental shift in how consumers make decisions.

 Consumers rely more on one another

The latest research from Dr. Simonson and Emanual Rosen is based on an experiment performed decades ago at Duke University. In the experiment participants had to choose from a group of either two or three cameras. The research found that consumers chose the cheaper product when being offered two options, but when given three choices, most went with the middle one. It was called the “compromise effect,” which has been used by marketers to impact buying decisions.

But an updated version of the experiment allowed participants to read product ratings and reviews before choosing one of the three cameras. While a portion of the participants always choose the lowest-priced product, in this new scenario more participants are selecting the most expensive product over the middle-priced product based on customer reviews.

“The compromise effect is gone,” says Dr. Simonson in this New York Times article. The Book “Absolute Value” comes with a more in depth explanation: (http://www.absolutevaluebook.com/).

 product comparison

Imagine if you could own and control both customer opinion and product information? The next wave taking omnichannel commerce to the next level will address information relevancy at every channel and all customer interactions – called Commerce Relevancy.

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Posted in Manufacturing, Master Data Management, PiM, Product Information Management, Retail, Uncategorized | Tagged , , , , , | Leave a comment