Study shows how consumers shift expectations and goals

Sep 19, 2012

Sally and Harry are about to invest in their company's 401(k) plan. Sally chooses the best performing mutual fund, which has high risks but boasts a 25 percent year-to-date return. Harry, after considering the tradeoffs between risks and rewards, opts for a lower performing fund with an 8 percent year-to-date return. When they receive their next quarterly performance reports, both Sally and Harry discover that their funds have met their initial expectations. Are they satisfied? If not, why? And how could their levels of satisfaction be improved?

One might assume that Sally and Harry would be equally pleased, since both have met their expectations. However, new research by Gita Johar, the Meyer Feldberg Professor of Business and senior vice dean of Columbia Business School, and Cecile K. Cho of the University of California, Riverside, shows that this equation is not so simple. Instead of comparing performance to an initial goal, consumers sometimes evoke an entirely different standard. In fact, poor performers tend to compare results to the highest potential results, and are therefore dissatisfied, the authors found. However, if these performers are reminded that they set their own -and that these goals were met-they are as satisfied as better performers.

The authors conducted two experiments involving -making and problem solving. In the financial decision-making experiment, participants set financial return goals and then constructed a portfolio based on information about different stocks. Participants then received feedback about their portfolios' performance and provided feedback about their levels of satisfaction. Similarly, in the problem-solving experiment, participants set a performance goal, performed the task, received feedback on their performance, and reported their levels of satisfaction.

The researchers found that in many instances, participants compared their performance to the best possible outcome, and that low performance resulted in low levels of satisfactioneven when participants achieved their initial goals. However, if the were reminded of their goals at the time that they received feedback on their performance, they reverted to their initial goals as a comparison; in those instances, low performers were as satisfied as high performers.

The study has implications for the management of consumer satisfaction. "It may be tempting, in this era of customization, to allow different customers to select their own levels of product ," the authors wrote. "Even if the product lives up to an individual customer's goal, the longing for the potential is likely to color the customer's satisfaction." More generally, the study suggests that consumers who set "safe" goals may not be maximizing their satisfaction in the end.

Explore further: Change 'authoritarian' football culture to produce future stars, says research

add to favorites email to friend print save as pdf

Related Stories

Ambitious goals = satisfaction

Aug 17, 2011

Consumers who set ambitious goals have a greater level of satisfaction compared to those who set conservative goals, according to a recently published paper by the Cecile K. Cho, a University of California, Riverside assistant ...

Too much undeserved self-praise can lead to depression

Oct 19, 2011

People who try to boost their self-esteem by telling themselves they've done a great job when they haven't could end up feeling dejected instead, according to new research published by the American Psychological Association.

Pants on fire: When consumers lie to service providers

Mar 15, 2012

Is honesty the best policy? According to a new study in the Journal of Consumer Research, consumers who lie during a service encounter are more satisfied than truth tellers when they get what they want.

When does planning interfere with achieving our goals?

May 16, 2012

It seems really simple: If you want to achieve something, set a goal and then make specific plans to implement it. But according to a new study in the Journal of Consumer Research, consumers get overwhelmed while juggling multip ...

Recommended for you

Residents of 'boom time' suburbs face unsustainable commutes

9 hours ago

People living in the 'boom time' suburbs of Dublin are more likely to endure unsustainable commutes to work than those living in older accommodation. Research shows that people living in newly constructed housing in the Greater ...

Male-biased tweeting

Apr 23, 2014

Today women take an active part in public life. Without a doubt, they also converse with other women. In fact, they even talk to each other about other things besides men. As banal as it sounds, this is far ...

Developing nations ride a motorcycle boom

Apr 23, 2014

Asia's rapidly developing economies should prepare for a full-throttle increase in motorcycle numbers as average incomes increase, a new study from The Australian National University has found.

User comments : 0

More news stories

Researchers trace HIV adaptation to its human host

"Much research has focused on how HIV adapts to antiviral drugs – we wanted to investigate how HIV adapts to us, its human host, over time," says lead author Zabrina Brumme from Simon Fraser University.