The mention of money, or seeing money changes how people behave and interact with each other. Watch the video and find out how:
Kathleen Vohs, a Professor of Marketing at the University of Minnesota has researched the effect that money has on people. She doesn’t even use actual money. It turns out that just the concept of money changes behavior.
Dr. Vohs concludes that the concept of money leads people to behave self-sufficiently. If you want people to be self-sufficient, then prime them with the idea of, or pictures of, money. If you want people to be collaborative and help others, then avoid the mention of, or pictures of, money.
For more information check out:
Kathleen D. Vohs, et al.
The Psychological Consequences of Money Science 314, 1154 (2006)
and my new book (when it comes out in March 2013 — available for pre-order now at Amazon) How To Get People To Do Stuff
What do you think? Is money a good incentive to get people to do things or work harder?
You are out for a Sunday bike ride on your favorite biking path, and you come across a pair of kids selling lemonade. Do you stop and buy some lemonade? Do you like the lemonade? Does your buying or liking the lemonade have anything to do with the wording on the sign next to the lemonade stand? Apparently so.
Cassie Mogilner and Jennifer Aaker from the Stanford Graduate School of Business conducted a series of experiments to see whether references to time or references to money would affect whether people stop to buy, how much people are willing to pay, and how satisfied people are with the products they buy. They conducted 5 experiments. The first one was the lemonade stand described above:
Sometimes there was a sign that said, “Spend a little time, and enjoy C & D’s lemonade.” This was the “time” condition. Sometimes the sign said, “Spend a little money, and enjoy C & D’s lemonade.” (money condition) and then there was a control condition where the sign said, “Enjoy C & D’s lemonade”.
391 people passed by either walking or on bikes. Those who stopped to purchase lemonade ranged in age from 14-50 years old, and there was a mix of gender, occupations etc. Customers could pay anywhere between $1 and $3 for a cup of lemonade — they could decide the price. The authors comment that the high price was justified by the fact that the customers got to keep the high quality plastic cup. (Ok, excuse me if I date myself here and comment that when I had a lemonade stand as a kid I think we charged like 10 cents). After customers drank their lemonade they also completed a survey.
More people stopped to buy lemonade when the sign mentioned time (14%), in fact twice as many people stopped when time was mentioned than when money was mentioned (7%). In addition, customers in the time condition paid more money for the lemonade (on average $2.50) compared to the money condition (on average $1.38). Interestingly, the control condition was in between on both # of people stopping to purchase and the average price. In other words, mentioning time brought the most customers and the most money, mentioning money brought the least customers and the least money, and mentioning neither was in between. The same effect was true when customers filled out the satisfaction survey.
Does time = personal connection? – The researchers came up with the hypothesis that when you invoke time in the message you make more of a personal connection than when you invoke money. To test this idea out, they conducted 4 more experiments in the lab rather than in the “field” to see how the time vs. money messaging affected people’s ideas about purchasing iPods, laptops, jeans, and cars.
Personal connection = time = experiences… well, mostly, but not always – At the end of all the experiments, the researchers concluded that people are more willing to buy, spend more money, and like their purchases better if there is a feeling of personal connection. Most of the time that feeling of personal connection is triggered by references to time instead of money. The idea is that mentioning time highlights the experience you are having with the product, and it is this thinking about experiences that makes the personal connection.
But not for prestige products or “materialists” – For certain products, such as designer jeans or prestige cars, and/or for certain consumers – those who value possessions more than experiences – personal connection is highlighted by mentioning money more than by mentioning time. These people are in the minority, but they are out there.
So where does this leave us? Here are the take-aways as I see them:
a) The best thing to do is, of course, know your market/audience. If they are people who are influenced by prestige and possessions, then by all means mention money.
b) Be aware, though that most people, most of the time, will be more influenced by time/experiences as the personal connection rather than money or possessions.
c) If you don’t have time or budget to know your audience well, and if you are selling non-prestige items or services, then err on the side of time/experiences, and delay the mention of money as long as possible.
What do you think the take-aways are?
And for those of you who like to read the research:
Mogilner, Cassie and Jennifer Aaker (2009) “The Time versus Money Effect: Shifting Product Attitudes and Decisions through Personal Connection,” Journal of Consumer Research, 36 (August), 277-291.
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