Knowledge that Transforms

Consumers often resist marketing information about death-related products and services (DRPS), let alone purchase them. Yet, there is a massive market and universal necessity for DRPS offerings like life insurance and funeral services. Proactively considering DRPS in advance allows consumers to better prepare for death and its aftermath. The current research builds on terror management theory and the literature on language use and psychological distance to propose a language-based sales communication strategy for DRPS. The findings from eight studies, including two field experiments and an eye-tracking study, indicate that DRPS sales messages appear in consumers’ second (vs. native) language (e.g., using muerte , Spanish for death, when talking to a native English speaker whose second language is Spanish) decreases consumers’ fear of death by creating greater psychological distance to death, which in turn induces more consumption (e.g., actual purchases). However, this effect becomes attenuated when consumers perceive high control over death or when the DRPS feature transcendence after death. In contrast, the effect is amplified for DRPS that require an intermediate level of customer participation. These findings offer novel insights into how marketers and policymakers can motivate consumers to consider DRPS earlier and engage in more proactive decision-making.

Mobile applications in the personal development sector increasingly integrate goal-enabling technology features (GETFs), which allow users to define a service-related end goal, set implementation strategies through subgoals, and monitor progress. Little is known, however, about how the difficulty of goals chosen during GETF adoption affects subsequent app behaviors. This study examines whether customers who set more versus less difficult end goals and subgoals show greater engagement and retention, and whether firms can nudge customers toward goal-difficulty levels conducive to sustained engagement. Using behavioral data from an investment app that introduced GETFs, the authors employ hierarchical modeling with staggered synthetic control and instrumental variable regression to address self-selection and endogeneity. Results reveal substantial heterogeneity: Many adopters show no or negative engagement changes, whereas those selecting moderately challenging goals and subgoals significantly increase in-app investment actions, though not sign-ins. Higher engagement postadoption predicts improved retention after one year. A field experiment confirms that subgoal difficulty causally drives in-app actions. These findings suggest that personalized guidance during GETF adoption can enhance sustained engagement. Marketing managers are advised to tailor goal-setting features to individual needs, providing expert-like support. This research provides novel empirical evidence on goal-difficulty levels that most effectively promote app engagement.

Distribution channels featuring a common retailer that sells competing products and makes long-term, strategic investments are widespread. Within this context, the authors study retailer investments that have differential impacts on demand for competing products, which implies that the retailer might intentionally weaken a strong supplier's bargaining position with its investment by helping a weak supplier's product become more competitive in the consumer market. The analyses show that the relative bargaining powers of suppliers who do not directly interact determine investment efficiency, product market shares, firm and channel profit, and consumer surplus. This is in contrast with single-supplier settings, where the supplier's absolute bargaining power determines the retailer's investment incentives and resulting outcomes. In further contrast to single-supplier models, the findings show that investment can be efficient (inefficient) when the investing retailer has limited (full) bargaining power, inefficiencies can manifest as under- or overinvestment, and a supplier benefits when competing suppliers have more bargaining power vis-à-vis the retailer. The insights extend to supplier investments, product-specific investments, and repeated sequential investments and contribute to the ongoing discourse on channel management with multilateral bargaining, backward integration, dominant retailers and suppliers, and consumer surplus.

Risk absorption, where one party assumes risk to support a partner, is common in business-to-business (B2B) relationships but remains underexplored both as a form of relationship marketing investment and in its economic consequences. This study investigates risk absorption in the indirect car loan market, where third-party lenders approve loans for high-risk consumers, enabling auto dealers to close sales that might otherwise fall through. Using a three-year dataset from a loan supplier working with 1,550 dealers, the authors examine both the direct costs of risk absorption (e.g., delinquency payments) and the behavioral responses of dealers. They find that dealers often reciprocate by referring more loans after receiving risk absorption, but these referrals tend to carry higher risk, suggesting opportunistic behavior. Dealer responses are heterogeneous: Those with higher operational risk exhibit both stronger reciprocity and exploitation. Moreover, reciprocal behavior grows stronger early in the relationship and fades over time, whereas exploitative tendencies do not vary with relationship length. These findings provide new insight into how risk absorption unfolds across varying dealer profiles in B2B contexts.

The World Bank estimates that 1.4 billion individuals worldwide are unbanked, lacking access to credit due to the absence of traditional credit scores. In this article, the authors demonstrate how retail transaction data can be used to construct an alternative credit score, potentially expanding credit access for these individuals. The study utilizes a unique dataset obtained through a partnership with a Peruvian company. The authors merge customer loyalty data and credit card repayment data with administrative records from the Peruvian financial system that provide individuals’ detailed financial histories. This comprehensive dataset allows the authors to construct credit scores for people both with and without a credit history. Through simulations of credit card approval decisions, they find that incorporating retail data increases approval rates for individuals without a credit history, from 16% to between 31% and 48%. In contrast, for those with an established credit history, approval rates remain largely unchanged, at around 88%. The authors investigate why retail data particularly benefits people without a credit history and discuss the broader implications of this credit scoring methodology for consumers, firms, and policy makers. The findings highlight the methodology’s potential to transform credit access for millions of previously unbanked individuals.

Retailers frequently advertise price promotions with purchase preconditions (i.e., minimum spending). This research provides a novel perspective for evaluating preconditions: treating them as external reference points (ERPs) that override consumers’ internal reference points (IRPs) and thus alter perceived discount magnitude. Specifically, consumers evaluate a discount without a precondition by comparing it with an IRP based on past experiences. Conversely, a discount with a precondition creates a new, salient benchmark (ERP) against which the discount is more likely to be evaluated. Due to this change in reference point, a precondition resets the consumer's discount magnitude calculus, influencing their intentions to shop at the store. This can create dominance violations in which restricted discounts are preferred to their unrestricted counterparts, contingent on whether the precondition is below or above the IRP. The influence of a precondition as an ERP on discount magnitude perceptions is attenuated when the IRP is highly accessible in memory, or when the discount magnitude is already explicit in relative (e.g., percentage) terms. Additionally, similar effects can be produced with a product category restriction equivalent in value to the precondition, and the effect of adding a precondition is attenuated when the equivalent value reference is already present.

The unique characteristics of the health care industry have given rise to an intriguing and pervasive form of joint venture between hospitals and physicians known as physician–hospital organization (PHO). With transaction cost analysis as the overarching theory, the authors draw on practitioner insights and literature to reveal the advantages and disadvantages of PHOs and identify the boundary conditions under which PHOs are more likely to enhance patient satisfaction. They test the proposed model using multiyear panel data from 19,134 observations in the U.S. health care industry. The results underscore PHOs’ capability to enhance patient satisfaction with hospital services. The significant main effect grows stronger when the market is characterized by intense competition among hospitals, high mortality rates, urban settings, and high unemployment rates. The post hoc analysis reveals that PHOs can additionally improve patient recommendation of a hospital indirectly through patient satisfaction. This study contributes to research on governance structure and customer satisfaction by establishing a connection between PHO and patient satisfaction and identifying its boundary conditions. The findings highlight several fertile avenues for research.

Consumers’ spending decisions are shaped not only by their objective financial resources but also by their subjective perceptions of wealth. This research investigates the interplay between subjective poverty (e.g., feeling financially constrained) and income in driving spending. Across five studies including real-world spending data from a U.K. financial management app, longitudinal surveys from Kenya and the United States, and controlled experiments, the authors reveal that subjective poverty increases spending among higher-income consumers but decreases spending among lower-income consumers. That is, wealthy consumers who feel financially poor tend to spend more, whereas poorer consumers who feel financially constrained tend to reduce their spending. Drawing on compensatory control theory, the authors demonstrate that subjective poverty threatens individuals’ sense of personal control over life, but people cope with this diminished sense of control differently based on their available resources. Higher-income individuals engage in compensatory consumption to restore control, while lower-income individuals adopt different strategies, including reduced spending. This research advances the understanding of how psychological and material dimensions of wealth interact to shape consumer behavior.

Time intervals can be framed either by a calendar year (e.g., “2015”) or by length (e.g., “ten years”), yet these ostensibly equivalent formats lead to systematically different judgments. Combining data from whiskey auctions with seven controlled experiments, the authors demonstrate that length framing elongates time perception compared with year framing, which they refer to as the year–length effect. As a result of changes in time perception, length framing increases the importance of time-related attributes in choice, leading to more favorable product evaluations in contexts where age enhances product value (e.g., whiskey evaluation) and to more negative evaluations in contexts where age reduces it (e.g., used goods). Process evidence implicates the logarithmic mental number line: Years with large nominal values occupy a compressed region of the line, relative to small length numerals. These findings offer practical guidance on how time framing can be used to shape time perception and customer value.

Goal failure is an important problem that is costly for both companies and consumers. Consumers often purchase products, subscribe to services, and download apps in support of valued goals, yet fail to use these tools as much as intended. But might the language consumers use to describe such goal failures affect how they subsequently pursue those goals? Nine experiments demonstrate that, compared with saying “didn’t have time,” saying “didn’t make time” increases subsequent motivation. This is driven by perceived control over time. Specifically, saying “didn’t make” (vs. “didn’t have”) time makes consumers feel more in control of their time, which increases their subsequent motivation to reengage with the goal. Notably, such make-time framing has downstream implications for consumer evaluations of goal-related products and services. Further, it can be manipulated directly as well as through firms’ promotional activities (i.e., featuring make-time language on social media). Importantly, make-time (vs. have-time) framing may be particularly beneficial in the context of goal failure, when consumers are less inclined to adopt this perspective naturally. Together, the findings shed light on how language shapes motivation, deepen understanding of time's role in goal pursuit, and have important implications for how companies manage consumer goal failure.