Today in Digital Marketing - Is "Production Enjoyment" the New Marketing Hack?

Starting point is 00:00:00 Have you ever noticed how we tend to appreciate things more when we know that they were made with love? Whether it's a handmade craft from Etsy or a barista's intricate latte art, something about passion in the creation process makes us feel the product is better, worth more, and more enjoyable to own. But does this perception extend to how much buyers are willing to pay? And even more surprisingly, how much we sellers are willing to charge? That's what Robert Smith set out to discover. He and his colleagues recently published a research paper on the topic in the Journal of

Starting point is 00:00:36 Marketing. He's an associate professor of marketing at Tilburg University in the Netherlands. And that is where he joins me from right now. Dr. Smith, welcome. Thank you, Todd. It's a pleasure to be here. Thank you. Why do It's a pleasure to be here. Thank you. Why do buyers tend to pay more for products when they know the seller enjoyed making them? Buyers seem to be inferring higher quality. So the second they believe or hear that someone enjoys baking bread or brewing beer or whatever it is that they're thinking of purchasing, they make an inference. They have the idea that, oh, this is probably a high-quality product or

Starting point is 00:01:08 service that this person is making. And we think there's a few reasons why they might come to that conclusion. But that's, according to our research, the main driver of this effect. Sure. What are those reasons? There's a few. So one of them is the idea that generally enjoyment is associated with Sure. What are those reasons? not enjoying the process, that might be just because I'm burned out, or it might be because I feel dissatisfied with kind of the result of my labor. So maybe people are thinking about it that way, that enjoyment signals this person is kind of satisfied with the thing that they're making. I think also people have kind of at least some idea of what we psychologists call intrinsic motivation. This idea that we might be doing something for the pleasure of doing it, and that that's somehow associated with better skills or better ability

Starting point is 00:02:13 than someone who's just making music for money. And so if I told you, you know, I found this great band, they're really cool, they're really just in it for the money, you should check them out, I think most people aren't going to be very impressed by that. They're really doing it for the love of the music. That's going to be a lot more of a compelling argument for me to get you to listen to this band. And your research measured buyers' willingness to pay

Starting point is 00:02:36 and also sellers' willingness to charge. How did you measure that in the real world? We did it in a few different ways. The most interesting one was we got on Upwork.com, and we just recruited people who were selling their labor as kind of workers. And we said, can you name two things that you do for work here at Upwork.com, one of which you should kind of enjoy maybe more than others and one of which you might enjoy less than other people.

Starting point is 00:03:11 And so people are pretty good at saying, okay, I enjoy doing this thing that I do and I enjoy this other one less. And then we say, how much does a normal person at your skill level or at your kind of experience level charge for this service? And how of experience level charge for this service? And how much do you charge for this service? And so we found, you know, people would basically say, okay, I do copy editing online.

Starting point is 00:03:38 Most people on Upwork charge 20 per hour. This is something I really enjoy. I charge 15 per hour. Or this is something I really don't enjoy as much as others might, and I charge 20 or 25 an hour. This is something I really enjoy. I charge $15 per hour. Or this is something I really don't enjoy as much as others might, and I charge $20 or $25 an hour. Sellers charge less for products that they enjoy making. Is that what your research found? Yeah, that's correct. Why do you think that happens? We think quite simply, if I enjoy doing something, I need less compensation for me to do it for you, right? If I really enjoy baking bread, I'm willing to bake bread for less money. And so when we asked these people, hey, how good do you think you are at doing this? Or how high quality is the product that you make?

Starting point is 00:04:21 We find that the sellers were just like buyers. They say, yep, this is the thing I enjoy. I think it's a higher quality product, but I'm still willing to charge less. So much like buyers, they're making this belief that production enjoyment is associated with high quality, but they're still charging less for it. And we think that part of that is related to the idea that buyers are really, really thinking about quality. Buyers are really focused on, okay, what's the highest quality product I can buy for my money? And sellers think about that too. Okay, how high quality is my product? And if it's high quality, I should probably charge more. But they also think about it a bit more in terms of, well, if I hate doing this, you should probably pay me more to make it worth my while to do it additionally.

Starting point is 00:05:08 Did you study different categories or different industries or different product types? Yeah, that was something we really focused on in our research is can we show this very broadly? And what were some of the outliers? Like what areas did you find? What categories did you find were significantly different in your findings from other ones? It's a bit complicated

Starting point is 00:05:29 because we have kind of the asymmetry, like kind of the difference between buyers and sellers. But we also have kind of on the buyer side or the seller side, just thinking about in what cases are buyers most willing to pay when they believe that there is high production enjoyment.

Starting point is 00:05:47 That happens the most for jobs that involve a bit more creativity, jobs that are a bit more observable versus unobservable, where it's happening behind the scenes versus this is something you see or even interact with the person as they perform this product or perform this service. We also found that this happens more for serviced-based versus

Starting point is 00:06:06 product-based production. And so we think part of that might be, okay, you know, this person is a wedding photographer. It would be nice if they seem to be having a good time while they were, you know, being a photographer at my wedding or something. So this idea of observability and service-based we think is part of that. But we also found it more true for kind of more desirable jobs. And so we had the idea of, you know, if someone, let's say, is, you know, a plumber or something that we might not associate with kind of a super high level of job desirability, if someone said they really like that, we might be particularly impressed. But we actually found that, yeah, this happens more for more desirable jobs, but also more for lower paying jobs. So we kind of found some interesting moderators, as we call it, basically interesting

Starting point is 00:06:54 characteristics of the production that seem to change the strength of this effect. You know, our dishwasher recently broke down and we hired a uh we got you know one of the city's i don't know five or six appliance repair people to come in um and i said to my wife after he was gone i don't ever want to hire that company again and she said why i said because he just seemed like he didn't enjoy it like the guy that came was just he i don't think i did anything to piss off but he just seemed miserable. And not just like I'm having a bad day, it's raining because it's always raining where I live on the west coast of Canada. But it was a lot more about, you know, every time I asked him a question about the mechanics or what we can do to sort of prevent future, I got this big like, it looked like he just hated his job. And I thought,

Starting point is 00:07:47 I don't think I'm going to hire them again. So true, true to, uh, true to your research, I think, you know, a lot of the people who listen, in fact, almost everyone who listens to this podcast are marketers. What sort of practical advice would you give them if they wanted to leverage this production enjoyment in their advertising? Our advice here is pretty straightforward, that you should signal this. You should basically say that you enjoy whatever it is that you're doing. And we actually did one study where we ran some ads on Facebook, and we had people say things like, I do search engine optimization and I have a lot of experience

Starting point is 00:08:28 or I do search engine optimization and I really enjoy it and I have a lot of experience. Or even some where we just kind of compared these different things you could say, I really enjoy it versus someone else saying, I have a lot of experience. And in one study, we even looked,

Starting point is 00:08:42 and again, a Facebook context, we had the idea that maybe this wouldn't work if it was like a whole team of people. You know, all of our people at our company really enjoy doing this. And we found even that led to an increase in click-through rates as an ad. So I think it works pretty straightforward as an ad, is you just say, this is the service that I'm offering and I really enjoy doing it. Yeah, I was going to ask if you thought that large brands can use the same strategy or if this was more relevant for small businesses and peer-to-peer sellers, but it sounds like large brands might benefit as well. Yeah, that's what we found. We were surprised by that.

Starting point is 00:09:18 We figured it would work quite well with some sort of identified seller, you know, I'm the business owner and you're hiring me and I love it. But yeah, we ran one study where we put ads on Facebook and the exact wording was, our many employees help small businesses optimize their websites. That was one condition versus our many employees really enjoy helping small businesses optimize their websites. And we found that that latter one, you know, it's not any person's name. There's no pictures of these people. But still, it worked pretty well with just this. Are many employees really enjoy this? Do you know sort of what the rough order of magnitude was? Was it like double the number of clicks or 10% more? Like ballpark. I'm not looking for the actual full number.

Starting point is 00:10:03 Yeah, I think in these studies with click-through rates, we generally as researchers find something like a 30 or 40 or 50% increase. It's really hard to double a click rate. But even 30 or 40%, you know, can be the difference between profitability and not profitability if those clicks go on to convert. Yeah, absolutely. I think it's difficult to find something like twice as much of effect because often when you're looking at these click-through rates, you have a lot of things like bots on Facebook and you're not quite sure. I had one friend who was doing research on these Facebook ads and he basically said, you know, if you look at what happens to people when they click this ad, you'll find that something like 30 or 40% of them were on your web page for less than a second. And so I think there's a lot of bots and stuff that are kind of distorting some of these click-through rates.

Starting point is 00:10:50 But when it happens kind of in a controlled A-B test in a place like Facebook or Meta, then we find ourselves relatively confident that that's kind of a real effect. There's difficulty as well with some of these Facebook studies where they don't do perfect randomization, where there's different algorithms and so on. But that's generally kind of one of many types of studies that we do. But yeah, we generally found some sort of variable where the opposite effect

Starting point is 00:11:25 happened, where you would talk about the enjoyment of production, but it actually hurt the brand. Did you find, did you run up to any of those? We really thought we would, and we never did. And this is something that reviewers at the Journal of Marketing really, really asked us for. They basically said, this can't always be true. Show me an instance where, where the opposite happens. Show me an instance where the signal is really working in an opposite direction. The editor of the journal at the time had the idea that this really shouldn't work in an issue where their metaphor that I think they went to was skiing on the bunny slope, right? This is something that really you're only supposed to do if you're not very good at this thing. You should really only enjoy skiing on the bunny slope if you're not very good at skiing. And so we've looked at it in context like that, where we

Starting point is 00:12:18 thought, okay, it really shouldn't happen here. I had the idea that, you know, in a place like Etsy, we have this idea that as consumers, some people are really serious artisans on there and some people are, you know, super casual and don't have any experience and are just doing this as kind of a hobby and maybe that would be bad. But we didn't really find any situations where we're saying I enjoy doing this is bad. From the highest kind of high-tech, you know, I'm an IT specialist to the lowest, yeah, I make, you know, jewelry on my couch. It seemed to work pretty broadly.

Starting point is 00:12:54 There's one more thing I'd add as kind of a conclusion of this research for your listeners. So first is signal, you know, say this stuff about production enjoyment. We did some research where we looked at how common it is for people to say this stuff about production enjoyment. We did some research where we looked at how common it is for people to say this on places like Etsy and Upwork. And we found that it was quite rare. Not many people were mentioning this. So we really

Starting point is 00:13:13 encourage people to say that. But in addition, this idea of the selling prices, I'd advise your listeners not to sell themselves short. I think often we have this idea of, oh, well, I enjoy it, so I don't need to charge too much. But buyers really are respecting the fact that you enjoy it and there is an opportunity for you to charge a little more.

Starting point is 00:13:34 So first, say it. And second, yeah, you can charge a little more for these things that you enjoy. It's okay. Well, this paper was fascinating to read. It's super helpful, I think, for our industry. Thank you so much for joining us.

Starting point is 00:13:47 Yeah, my pleasure. Thanks for having me. Robert Smith is an associate professor of marketing at Tilburg University in the Netherlands. His paper is called Production Enjoyment Asymmetrically Impacts Buyer's Willingness to Pay and Seller's Willingness to Charge. It is in the Journal of Marketing. I'm Todd Maffin. Thank you for listening. See you Friday for our wrap-up of the week's news in digital marketing.

Today in Digital Marketing - Is "Production Enjoyment" the New Marketing Hack?

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