- Which demographics affect consumer behavior related to specific categories of products?
- What is the primary motivation for a purchase? Why does a consumer choose one product over a comparable one?
- At what times are consumers more likely to be merely browsing rather than making an actual purchase decision?
What Motivates Consumers To Embrace Upgrades?
Understanding why consumers behave as they do requires a basic understanding of the underlying psychology. This is especially true when trying to determine why the word “upgrade” tends to evoke such a strong urge to buy among most consumers. Although individuals vary, the following motivations are the most common ones that are present when consumers decide that it is time to upgrade.
Humans have a basic need to feel as if they belong to a group. Most prefer to blend in with their peers when it comes to the cars they drive, the electronics they own and the clothes they wear. If their peers are raving about the latest smartphone, members of the group may tend to feel that they need to upgrade to avoid being ridiculed. However, at a deeper level, the individual may feel somehow excluded from the group if he or she does not follow the trend that the other members are sharing. Although many people believe that peer pressure is reserved for adolescents, the desire to conform can be present at any age.
Status and Ego
Some people are driven by the need to have the “latest and greatest” so that they can impress others and/or give themselves an ego boost. For example, hosting a party to watch an important sporting event on a newly acquired, state-of-the-art, big-screen television with a superior sound system can elicit compliments from friends or impress coworkers. Many times, the desire for social status leads consumers to make purchases that are intended to give the impression that they earn more than they actually do or belong to a different social set.
The bandwagon principle has some of the same elements of peer pressure, including the desire to belong. However, it can be much more intense. People tend to believe that an upgrade must be important if a large number of others are embracing it.
Some needs are real; people need food, shelter, basic clothing, medical care and a certain amount of money to be at their happiest. Other needs are actually “wants,” but wants can sometimes be perceived as needs. For example, a star athlete might appear in a commercial for a particular brand of new and improved sneakers, generating a subconscious message that the sneakers are the key to his or her athletic performance. Individuals who aspire to achieve the same level of performance can believe that they need the shoes to reach their personal goals.
The stronger an individual’s sense of self-worth is the more likely he or she will be to justify an upgrade as a deserved reward. Whether the behavior triggering the justification involves earning high grades, completing a difficult project at work or simply meeting basic daily responsibilities, the individual may demonstrate an attitude of “I’m worth it.”
Consumers Are Often Irrational About Upgrade Decisions
One of the best examples is Apple’s strategy for getting consumers to upgrade their iPhones so frequently. The company has built a loyal customer base that eagerly embraces every new model that Apple releases. Because the motivation to upgrade is often emotional, however, many consumers do not behave logically.
Evidence of the irrational behavior exhibited by consumers was revealed in a recent study conducted by Washington University’s Robyn LeBoeuf and Aner Sela of the University of Florida. Sela and LeBoeuf conducted five studies involving over 1,000 smartphone users ranging in age from 18 to 78. In one study, 95 percent of the respondents indicated that comparing the current option to the upgrade was important and 78 percent rated the comparison as necessary. However, when it came time to make the decision, most consumers did not actually follow through on comparisons.
The term for this is “comparison neglect.” It occurs when buyers fail to evaluate the differences between their current product and an upgraded version. Instead, the allure of an upgraded product appears to cloud their judgment.
Interestingly, it was not until study participants were reminded of the need to compare features that the tendency to upgrade decreased. Even when provided with a side-by-side comparison of features, most people skipped the comparison unless explicitly told to evaluate the different features. Most of the participants choosing to upgrade could not explain why the upgraded product was better or even what the differences were between the new model and the model that they currently owned.
Planned Obsolescence or Valuable Improvements?
For many years, manufacturers have faced criticism for producing goods with an eye to ensuring that they become obsolete in a deliberately short time. One example cited by many critics occurred a few years ago and involved the Droid Razr. These phones became an instant hit despite a relatively short battery life when running over a 4G network. Three months after the Droid Razr debuted, however, Motorola released the Razr Maxx, which had a battery life of almost twice that of the original but was otherwise virtually unchanged. Within the year, the Droid Razr HD was released.
There were certainly differences between the three models that Motorola released. However, despite the fact that consumers embraced each new model, some critics referred to the phenomenon as “upgrade insanity.” Many consumers upgraded to every new model even if they had to pay a premium price for the phones or buy out their contracts.
The forces that motivate consumers to respond so positively to upgraded products are powerful. Companies know this — and they also know that upgrades can drive sales and profits.