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18 January 2012

Does precision affect consumer decision making?

How long it will take to bake a cake? Twenty-eight minutes or half an hour? According to the Journal of Consumer Research, most consumers would trust the 28-minute estimate.

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How long it will take to bake a cake? Twenty-eight minutes or half an hour? According to a new study in the Journal of Consumer Research, most consumers would trust the 28-minute estimate, if it comes from a reliable source.

"Consumers' perception of the precision and reliability of quantitative product information looms large in their decision making," write authors Y. Charles Zhang and Norbert Schwarz (both University of Michigan).

They found that consumers generally prefer more precise or granular information to larger units. In the case of the cake, most people perceive 28 minutes to be more precise and therefore more reliable than half an hour, which sounds a bit like rounding and could presumably mean a few minutes more or less.

This observation has important implications for how consumers interpret quantitative information.

A year and 12 months leave different impressions

"Consumers perceive products as more likely to deliver on their promises when the promise is described in fine-grained rather than coarse terms and choose accordingly," the authors conclude. For example, "one year" and "12 months" refer to the same amount of time, but leave different impressions.

In one study, participants chose between GPS units: one was described as lasting up to two hours and another, which was heavier and more expensive, up to three hours. "When the units' battery life was described in hours, only 26% picked the 'up to two hours' unit—they were concerned it might run out of power prematurely," the authors write. "But when the battery was described as 'up to 120 minutes,' more than twice as many consumers (57%) were happy to pick the same unit."

The granularity effect is only effective when consumers perceive the speaker to be competent and trustworthy. If they don't, the speaker's choice of words has no influence on consumer estimates.

These findings highlight that the choice of unit needs careful consideration in product descriptions and marketing communications. "A trustworthy and cooperative communicator should be as precise as possible but not more precise than warranted," the authors conclude.

(EurekAlert, January 2012) 

 
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