What’s the ROI of trust? by Alan Mitchell

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Just reading ‘Super Crunchers’ by Ian Ayres. In it, he tells the story of a South African credit card company Credit Indemnity which discovered that putting a picture of a pretty smiling woman on its promotional solicitations had the same effect in terms of response rates of reducing its interest rates by 4.9%.

Stories like this are often used to tout the benefits of evidence-based, data-driven marketing. But is this really ‘evidence’ or is it pseudo-evidence? 

I’ve heard this story about Credit Indemnity many times now. What I would like to know is, what happened next? If Credit Indemnity had discovered such an easy way of boosting its profits why didn’t it go on to take over the world? 

One reason, perhaps, is that much of ‘evidence’ that’s touted in marketing nowadays consists of an isolated snapshot of just one part of an unfolding process. A few questions:

Over the years, every marketer in the world has learned that people respond more favourably to inviting smiles than threatening grimaces, and that men tend to respond favourably to pretty women. That’s why everything we look at nowadays is draped with smiling pretty women. But where’s the research testing the comparative effects of these blandishments, or the slow de-sensitisation of poor testosterone-manipulated males as they get bombarded with these images every day? Are response rates uniformly high? Are they as high today as they were five, ten and twenty five years ago? 

And what about the effects of learning? As a red-blooded male I might be hardwired to respond positively to a seductive smile, but evolution also equipped me with the ability to stop and think. Ever since I came across this story about smiling women and credit card interest rates, I’ve adopted a different rule of thumb when looking at promotional literature. It goes something like this: “if it carries a picture of a pretty smiling girl, then you can assume they’re trying to rip you off in some way”.

Of course, being an industry ‘insider’ I’m a little more in the know that the average consumer. But these things have a habit of getting out. They make their way into the mass media, and as they do so, every revelation about every such ploy generates a new toxic emission of mistrust. Over the years, these toxic emissions of mistrust have accumulated so that nowadays, hardly anyone trusts marketing or marketers. 

Does that, I wonder, make marketing more or less effective? And who has garnered the evidence about this, for or against?  

I suspect that Credit Indemnity’s marketing is no more effective, and generating no higher returns, now than it was five years ago. But I bet you it hasn’t even tried to measure why.

Read more fron Alan Mitchell

Posted: September 28th, 2011 | Author: will.armstrong | Filed under: Growth Drivers | Tags: Alain Mitchell, alan mitchell, Credit Indemnity, Marketing Society blog, ROI | Leave a Comment »

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