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Why Personalized Marketing Succeeds or Backfires - Ideas for Leaders
Idea #801

Why Personalized Marketing Succeeds or Backfires

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KEY CONCEPT

Personalized ads can sometimes repel consumers rather than attract them. A new study reveals the complex psychological mechanisms and other factors that impact the success of tailored marketing. A key success factor: convincing the consumer to spend time critically thinking about your message.


IDEA SUMMARY

A study based on an exhaustive review of the research related to personalized marketing—marketing that is tailored to the interests or personalities of consumers—dissects the psychological and contextual factors that impacts how consumers react to personalized matching, including whether the marketing is more or less persuasive.

In addition to individual personality traits or interests, marketing messages can be tailored to how you think and process information (e.g., abstract vs. concrete thinking); the basis of your attitudes (e.g., focusing on moral considerations before practicality); or your goals and motivations (shoppers looking for utilitarian products will be attracted to an ad emphasizing the bug repellent effect of a candle; shoppers looking for hedonistic products will be attracted to an ad emphasizing the candle’s aromatic or relaxing effect).

In the consumer’s mind, personalized marketing can have a positive or negative psychological meaning. For example, consumers might see a matched marketing message as self-relevant—relevant to who they feel they are as a person—or elicit a sense of self-efficacy—the feeling in consumers that they are able to achieve the outcome they want. On the other hand, consumers may interpret the personalized marketing as a blatant attempt to manipulate them, or to stereotype them. 

However, the positive or negative meaning taken from a marketing message can be overridden, changing the consumer’s attitude that guides his ultimate behaviour. In other words, a consumer might have a negative reaction to a personalized marketing message and still buy, or have a positive reaction and still not be convinced. 

The explanation for this paradox lies in what psychologists refer to as elaboration, a psychological term that in this context refers to the amount of critical thinking or scrutiny a consumer dedicates to the message. Elaboration is a key factor in the persuasive success of personalized marketing. The more consumers carefully consider the marketing (aka, ‘high elaboration’), the more they are influenced by its message. In contrast, the less time they consider the message (‘low elaboration’), the less effective the personalization.

Why the difference? With low elaboration, the consumer takes the intended cue from the marketing (e.g., the use of a consumer’s name is a positive cue that is enough to tell the consumer, “This message is meant for me”) and goes no further.

In high elaboration situations, personalization can be considered an argument for the product or service. If consumers scrutinizing a personalized marketing message find the moral values at the heart of the message matches their own, for example, they may conclude, “These moral values (which match my own) are an excellent reason to buy this product/service.”

However, consideration of the marketing’s argument might lead to disappointment. For example, a consumer might at first perceive in a marketing message a match with her moral values. Further scrutiny reveals however, that the product or service does not truly have moral relevance. As a result, the consumer’s original positive attitude about the message turns negative. In a reverse situation, a consumer’s irritation by a perceived intrusion on his privacy might be convinced by a strongly matched message to consider the product or service.

High elaboration strengthens the positive or negative impact of a message. Low elaboration consumers are fickle—their attitudes about the product or service are subject to change. In contrast, consumers persuaded after spending time critically thinking about the marketing are more likely to take action or to retain positive opinions about the product or service advertised. 


BUSINESS APPLICATION

This study, based on an extensive review of research related to consumers, marketing and the psychology of persuasion, reveals the complex psychological processes that can impact the success and failure of personalized marketing. Among the lessons drawn:

  • Personalized marketing must have a strong message that stands up to close scrutiny. Appealing to a personality trait or interest can backfire if the message fails to come through.
  • Personalized marketing must choose its matching trait carefully. For example, consumers will respond negatively to marketing that appears to judge or stereotype them. 
  • Personalized marketing must be authentic. For instance, stretching the relevance of a product or service to an interest or concern of the consumer (“If you’re worried about the future of our planet, eat these healthy cookies”) highlights a company’s deception and attempt at manipulation.  
  • Personalized marketing must avoid creepiness. Consumers are more and more concerned about their privacy. If the match is clearly based on knowledge that the consumer would prefer to keep private (e.g., their browsing history at the local bookstore), the consumer will reject the marketing. 
  • Personalized marketing can backfire before you can even make your case. The psychological mechanisms described above can impact whether consumers even take the time to critically evaluate your marketing. A consumer who sees an ad linked to a personal interest or hobby might take the time to read and consider the ad. On the other hand, an ad that is obviously manipulative will be immediately discounted.

In sum, personalization is only the first step. Designing a marketing message to appeal to military history buffs or extraverts might work. Or it might not. This study reveals the complexity of the psychological journey between tailored advertisement and the purchasing decision.
 


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FURTHER READING

  Jacob Teeny’s profile at the Kellogg School of Management
  Pablo Brinol’s website
  Joseph Siev’s LinkedIn profile
  Richard Petty’s profile at The Ohio State University

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Idea conceived

April 16, 2021

Idea posted

Sep 2021
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