Shoppers Spend More When Told They Don't Have To

It’s long been obvious that branding sells products. Now, however, researchers have determined that a company’s brand name and its branded slogans can have opposite impacts on consumer behavior.

In a study of consumer reaction to stores and their slogans, consumers increased their spending when the slogans promised to save them money.

“We don’t like to be sold to,” explained University of Miami professor Juliano Laran, a co-author of the study. “We react against marketing . Reacting against it becomes automatic; it’s our default response.”

Laran and his colleagues, Amy N. Dalton at Hong Kong University of Science and Technology and Eduardo N. Andrade at the University of California, Berkeley, looked at the reactions of people to a brand name associated with saving money, and to a slogan used by that brand that emphasized savings.

Participants in the study’s five experiments were exposed to brands including Walmart, Sears, Home Depot and Dollar General, and to the slogans those brands use, such as Walmart’s “Save Money. Live Better” and Sears'  “The Good Life at a Great Price (Guaranteed).”

The results were clear: While we may like to be frugal in our spending, we don’t want to think we’re being persuaded to be prudent.

“Exposure to the retailer brand name Walmart, typically associated with saving money, reduces subsequent spending, whereas exposure to the Walmart slogan increases spending,” the authors wrote in the report appearing in the Journal of Consumer Research People.

In another experiment, participants were asked to imagine shopping in a mall and to indicate how much they were willing to spend during their shopping trip.

“While participants that had been exposed to the ‘savings’ brands were willing to spend $94 on average, participants that had been exposed to the ‘saving’ slogans were willing to spend $184 on average,” the authors reported.

In other words, brands associated with saving money led the study participants to save money, while the slogans associated with saving money led to a buyer backlash and more spending.

“Nobody has a relationship with a slogan ,” Laran told BusinessNewsDaily. “We react against marketing. People love brands; they don’t see them as an attempt to persuade them. People perceive that slogans are a strong attempt to persuade them.”

In another experiment, consumers who were subliminally exposed to the word “slogan” wanted to spend more when exposed to a savings message and less when exposed to a message that encouraged luxury spending.

“Companies may be trying to attract customers with slogans associated with saving money, but in fact, this strategy may make consumers spend more money than they would if they had not been exposed to the slogans,” the authors said.

We need to keep in mind, Laran said, that the goal of companies and brands is to sell more.

“A company like Walmart is doing the right thing by having a slogan about saving money,” he said.

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Reach BusinessNewsDaily senior writer Ned Smith at nsmith@techmedianetwork.com. Follow him on twitter @nedbsmith.