We Love To Give – Here’s Why Marketers Bank On It
With Valentine’s Day coming, marketers will look to channel your generosity their way
Kyle Murray is a professor of marketing and the director of the School of Retailing at the University of Alberta
by Kyle B. Murray
Illustration Molly Little
It feels like I just took down the Christmas lights, repacked the tree and paid the bills of the holiday season. Now Cupid’s arrows and Valentine’s Day passion are expected to add a little heat to Alberta’s winter. Are we going to celebrate this year? If so, should it be with flowers, chocolates, jewellery, a romantic dinner or all of the above?
Gift giving has become a critical part of our discretionary spending and decisions like these are important drivers of the global economy. When consumers decide to spend – or not – their choices impact the success of local and multinational businesses. Our societies are shaped by the way we allocate our hard-earned dollars. For Valentine’s Day, North Americans spend about $13 billion. Some argue that most of these purchases are out of obligation rather than love. Others suggest that it is an artificial demand that has been nurtured by the marketing efforts of companies ranging from Hallmark to Uber (and there surely is some truth to that as anyone who has seen Hallmark’s #PutYourHeartToPaper or Uber’s #RomanceOnDemand campaigns can attest).
Interestingly, when we make decisions that involve other people – such as which restaurant we will dine at on Valentine’s Day – we often make choices that are inconsistent with our own preferences. For example, I might prefer to spend Valentine’s Day at the local pub, but I instead agree to dine at that new Turkish restaurant my wife wants to try. This type of joint decision-making, which relies on compromise, is commonplace. Yet, it has not been easy for theorists to explain. Why should we give up what we want in favour of what others prefer?
The easy answer is reciprocity – that is, I am happy with the Turkish restaurant for Valentine’s Day because my wife is willing to spend St. Patrick’s Day with me at the pub. In a long-term relationship, such interpersonal co-operation ensures that everyone gets what he or she wants at least some of the time. At a more general level, academics have argued that co-operation and altruism have evolved within families and close social circles because such behaviour maximizes the probability of our survival (and the opportunity to pass on our genes).
But the truth is more complicated. It turns out we like to co-operate, even if we don’t get what we want and there is no possibility of the favour being returned in the future. In a study that I conducted with colleagues Robert Fisher, at the University of Alberta, and Yany Grégoire, at HEC Montréal, we tested consumer co-operation in a decision context that ruled out reciprocity and the impact of relationships. Specifically, we ran a series of experiments in which we paired up participants and asked them to choose a restaurant that they would like to go to dinner at together (to make the choice a little more consequential, we gave all participants a chance to win a $75 gift certificate to the restaurant they chose).
The catch in our study was that the participants made the decision by chatting with each other anonymously online. They knew that the person they were talking to was also an undergraduate university student, but they did not know who that person was. We made sure they did not have a previous relationship with this person and they were not allowed to identify themselves. In other words, there was no potential for reciprocity. This was a one-time decision with no reasonable expectation that compromising with this person would result in a future “repayment.” In addition, we paired people up with partners that had different restaurant preferences. For example, we put people who liked Italian food best with a partner who preferred Indian cuisine and those who liked Mexican food with a partner who preferred a Chinese meal.
We also randomly assigned people to either compete (they were told that the goal of the discussion was to persuade your decision partner to select the restaurant you prefer) or to co-operate (they were told the goal of the discussion was to co-operate with your decision partner to select the restaurant that is the best for both of you).
What we found was that people who co-operated were significantly more likely to be satisfied with their restaurant decision, even though one of the partners ended up with a choice that was inconsistent with his or her preferences. This is, of course, just one study. But it is part of a growing body of research that demonstrates that people like to do things to make others happy even when it means they themselves do not get what they want.
It turns out there is a selfish component to compromise: It makes us feel good, which suggests there may be some truth in the old adage that “we make a living by what we get, but a life by what we give.” Marketers focusing on events like Valentine’s Day would certainly like you to think so.