Technology marketers should take consumer life-cycle into account, study says

May 28, 2014

If you want grandpa to start using the bank machine instead of standing in line for the teller, the best way to do it is to tell him to "Act now!" with a limited time offer for a banking card, shows new research.

A new study from the University of Toronto's Rotman School of Management suggests marketers should pay attention to where consumers are in their lifecycles when determining how to get them to adopt new technologies.

Marketers may have incorrectly assumed that older consumers avoid products such as debit or credit cards because they are technophobic or find them hard to learn. Instead, the paper suggests, these consumers may simply see limited future benefits to changing their current habits because of their shorter remaining lifespans.

The way to get around that, found the study, is to present a limited time sign-up bonus targeted to . And, it found, not making the offer permanent means slightly younger adults won't put off their own adoption decisions until they're old enough to get the seniors' discount.

Taking the consumer life-cycle into account, "can really change the story," said Andrew Ching, an associate professor of marketing at Rotman. He co-wrote the paper with former PhD student Botao Yang, now an assistant professor of marketing at the University of Southern California.

"When you don't take the life-cycle effect into account we see that, just like what other people think, the older you get, the of adopting a new technology are going to increase," said Prof. Ching. "But when you take life-cycle into account, the costs become more or less the same with age."

Researchers used data about Italian banking customers' banking card adoption decisions and usage patterns. They applied that information to a theoretical model to assess the costs and benefits of those decisions for different age groups of consumers.

The model found that the total adoption costs to older are actually lower than might be expected, because of their shorter remaining lifespans. Seniors did face more psychological hurdles but those challenges are not as significant as has previously been believed.

The study was recently published in Management Science.

Explore further: Research demonstrates satisfaction depends on time of purchase

Related Stories

Further IT glitch hits UK bank customers

Jan 26, 2014

Britain's Lloyds banking group apologised on Sunday after many of its debit card customers were left unable to access their money following a server hitch.

Recommended for you

Economist probes the high cost of health care

Mar 27, 2015

When Zack Cooper arrived at Yale as assistant professor of public health and economics, he gained access to a first-of-its-kind dataset. Working with the non-profit Health Care Cost Institute, Cooper and ...

Cash remains king in Chile but its days could be numbered

Mar 26, 2015

For more than a year now, Chileans have endured a crisis of cash access. Despite global moves toward new forms of payment such as contactless and mobile transfers, the crisis in Chile highlights the continuing ...

Will you ever pay off your student loan?

Mar 25, 2015

Would-be participants of higher education must be given full and transparent advice before they accumulate debts as students that follow them into the workplace, according to a report published in the International Journal of ...

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.