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Does Advertising Affect 'Mental Accounting'?
By: Dwayne W. Waite Jr.
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As we study the science of persuasion, the art of design and copy, we discover that consumers can be won and lost by the most trifling of details. Sometimes elements as simple as color or word association can make a brand lose a sale. When we describe a consumer's purchasing process, our terminology includes "perceived value," "consideration set," "cost/benefit analysis," and "opportunity cost," just to name a few.

But what about "mental accounting?"

A doctoral marketing student at University of Cincinnati uses that phrase when describing the process consumers use when categorizing and evaluating prices when they are trying to arrive at a buying decision. The student, John Dinsmore, is presenting a case that suggests that when a good or service comes with a price that's about more than just money — like time, convenience, or private information — consumers perceive more risk.

Naturally. If your choice came between Products A and B, and Product B required you to leave your phone number and email, wouldn't you be more inclined to pick Product A? Same product but no strings attached?

Overall, the research concludes that the wider variety of prices that a good or service has, the riskier it may look.

This may be an issue for many brands. As brands continue to figure out how to efficiently optimize the digital world, they are coming out with different "gates" that consumers have to open in order to get the products and services they want. For those "loyal" customers, the hoops and ladders may not be an issue. But for new and prospective customers, the risk of losing time and divulging information may be too much.

How does a brand overcome this? Can the perceived value of the good being offered outweigh the risk? That is the question brands have to answer. Is the connection between brand and consumer strong enough (or can it build to be strong) that the extra time needed, or the information requested, isn't a big deal?

It's possible.

Situations and questions like this should make social media evangelists and internet "prophets" see that AdLand and the people who create messages and entice the consumer are still needed. 

Actually, we're needed more than ever.


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About the Author
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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