This states that consumer choices will be influenced by how information is presented.
Presenting a positive spin
- A sign that says 10% of our customers are not fully satisfied – implies a negative connotation.
- 9/10 of our customers are fully satisfied – is a much more positive spin.
In this case the company will present the data in the most positive way – framing the data in a way which creates positive response.
Presenting price in most cost-effective way
- Saying the cost of gym membership at £500 a year sounds a lot, and may deter customers. But saying it costs just £1.37 a day ( less than a cup of coffee) sounds more attractive to consumers. At £1.37 they may be more tempted to purchase.
Loss in more significant than gain
An important framing effect is illustrating potential for loss.
- If you are told taking a vaccination may lead to a small chance of adverse reaction, that may put people off.
- If it is portrayed as this vaccination is likely on balance to improve significantly health, then it becomes much more attractive.
- If you offer a discount for paying tax early, some people will take up the option and pay early.
- However, if the government say there will be a penalty for late payment – this has been shown to significantly increase early payment rates.
- In both cases the financial cost is the same for both options, but people are moved into action by the prospect of a penalty – rather than discount.
Framing effect and questions
Related to this idea is the framing of questions.
- Do you believe the government should reduce spending on the national health service to increase spending on defence? – Very few people will agree.
- Do you believe the government should ensure adequate spending to ensure the nations defence? – Very few people will disagree.
The way the information is asked can vary enormously – and it becomes an issue of almost changing the question. But, both previous questions could be the same option, but the way it is framed will have big influence on the outcome.