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Beware the Danger of Strategic Shortages: Hot ≠ Loved

July 14, 2010  

In a recent article in the Harvard Business Review, Uzma Khan discusses the results of a study she and her colleagues conducted that examined the difference between consumers' wanting a product and actually liking it. The researchers awarded an electronics store gift card to people who completed a word puzzle. Half the recipients earned the card on their first try; half failed on the first try, and so had to try again. Before receiving the card, all were asked how much they would actually pay to obtain it.

Results:

  • Those people who initially failed to win the gift card said they'd pay 43% more to get the card than people who hadn't failed initially.
  • But only 22% of the initially "jilted" group decided to keep the card (once they actually got it)—instead of trading it!

Khan likens the fickle reactions of the "jilted" group to that of folks being denied entry to an exclusive club. "When people can't get access, it becomes especially attractive. They'll work hard to get past the velvet rope," she explains. "But once they're in, they often [ask], 'This is it?'"


The message for marketers? "Our results make it clear that marketers should be cautious about using a strategic shortage to generate demand," Khan warns. "It will increase demand right now but … will have implications for other products in your brand, repeat purchases, and loyalty."

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  • by Jose Palomino Thu Jul 15, 2010 via web

    Good one! There is definitely a thick line between a customer's desire to purchase, and the desire to connect with a brand. There are different reasons why consumers may want the services and products we offer, and these may not be the same reasons why people would want to stick with our company. It takes more than spending to create a connection between buyers and a brand, and even more to establish a relationship that will ensure long-term engagement that will benefit both our businesses and audience.

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