Toyota’s autonomous driving system is demonstrated with a Lexus GS450h in Tokyo in October.Yoshikazu Tsuno/AFP / Getty Images
The Globe's monthly roundup of research from business schools.
Even among tech-savvy consumers, there's a preference for innovative toys and gadgets that are sold as detachable accessories to an existing product, rather than integrated into the system.
That much researchers Tripat Gill and Zhenfeng Ma knew going into their latest study on radical innovations and the role design plays in our willingness to buy into a radical new product.
From self-driving cars to mind-controlled gaming consoles, "when the innovation is radical, there is a lot of perceived risk," said Dr. Gill, who teaches marketing and innovation with Dr. Ma at the Lazaridis School of Business and Economics at Wilfrid Laurier University in Waterloo, Ont.
Accordingly, by making the novel component of a particular product appear smaller, or separate to the overall design, it makes sense that the perception of risk is also reduced.
"That's a known factor in new product adoption," said Dr. Gill.
What hasn't been clear, until now, is just how much consumers are influenced by product design and how that effects our purchasing intentions.
On that point, the study results, published in the Journal of Marketing Research, were surprisingly definitive, even to the authors.
"The perceived risk associated with new technologies, especially disruptive ones, should not be underestimated," said Dr. Gill.
In one study, for instance, respondents were nearly twice as likely (61 per cent versus 33 per cent) to agree to test-drive a self-driving car if the new technology was offered as a detachable add-on, rather than built into the vehicle.
That result was mirrored in other experiments involving video game systems guided by mind control, a motion-sensing smartphone charger, and a waterless washing machine.
Overall, the researchers found that, when it comes to radical innovations, at least, consumers view add-on features as less risky, more versatile and easier to understand than those that are built-in.
It's not enough that manufacturers give consumers the option of opting in or out of a function (via an on-off switch, for example). Rather, the study found that the new technology should be optional as well as physically detachable from the base product to make an impact on consumer behaviour.
It's worth noting that these same perceptual differences do not apply to innovations that are more incremental in nature.
Online reviews boost restaurant profits – even when they're not that positive
No one likes a bad review, especially when the Internet makes it so easy for the trolls to make nasty and often unfair comments under the cover of anonymity.
But new research by Chunhua Wu, assistant professor of marketing at the University of British Columbia's Sauder School of Business, indicates that businesses can actually benefit financially from online reviews, even if the comments are only lukewarm.
Dr. Wu's study, published in Marketing Science, tracked visits by more than 5,000 people to dianping.com, a Chinese consumer review site, to see what they were looking at and where they eventually spent their money.
From that data, he was able to measure the profit gains per online comment on restaurants in Shanghai. Specifically, Dr. Wu found that restaurants included in the research had a measurable gain of approximately $1.78 for every person who reads an online review pertaining to that business.
In all, Dr. Wu calculated that the restaurants saw an uptick of 10 per cent in the typical profits reported by Chinese restaurants. (He said that the same conclusions should apply in Canada, especially for restaurants that target tourists.)
Reviews serve to give potential customers a sense of what to expect, and at what price, and should be encouraged, said Dr. Wu, adding that both average and consistency in ratings matter.
While it's true that the most glowing reviews resulted in the biggest financial benefits, even middle-of-the-road reviews had positive impact, particularly if most of the reviews were consistent in that finding.
In addition, written comments have more of an impact than numerical ratings, allowing customers to better gauge how a restaurant's offerings align with their own tastes.
"Users read and value detailed comments," Dr. Wu said.
The study is entitled The Economic Value of Online Reviews, and was authored by Dr. Wu, along with Hai Che, Tat Y. Chan and Xianghua Lu.
Empathy is key to political persuasion
The bitter verbal sparring between staunch U.S. Democratic and Republican political rivals might make for great television, but all the rhetoric in the world isn't going to persuade anyone from one side of the ideological divide to switch to the other.
To bridge that gap takes a greater understanding of the moral values held by the opposition and an ability (and willingness) to craft an argument that appeals to a set of values that differ from your own.
"If you want to be persuasive, or have any chance of having an impact with those who disagree with you, you have to try and understand them as best as possible," said Matthew Feinberg, assistant professor of organizational behaviour at the University of Toronto's Rotman School of Management.
Dr. Feinberg and Stanford University sociologist Robb Willer recently co-authored a study examining the role of empathy in the art of political persuasion. The paper was published online in the Personality and Social Psychology Bulletin.
Dr. Feinberg and Dr. Willer reached their conclusion following a series of experiments in which participants – separated by affiliation with liberal or conservative values – debate each other on traditionally divisive political issues, including same-sex marriage, universal health care and military spending.
Turns out, when it comes to politics, it's not easy to set aside one's own opinions in favour of someone else's, even when we are specifically asked to do so.
In one study, liberal participants were given free rein to write a persuasive argument on same-sex marriage that was aimed at winning over their opponents. To sweeten the offer, the researchers offered a cash prize to the person who wrote the most persuasive message.
The result? "Most people couldn't do it," said Dr. Feinberg.
Just 9 per cent of liberals were able, or willing, to complete the task. Another 69 per cent instead based their case on their own liberal values.
Among conservatives, 79 per cent of participants used some type of moral rhetoric to argue in favour of making English the official language of the United States. Just 8 per cent chose to tailor their arguments to fit with their opponents' values.
The research found both political camps were only able to break through the polarization on issues when, instead of alienating the other side and repeating their own sense of morality, they presented messages (scripted by the researchers) that better fit with that thought process.
The effects were not enormous, but, said Dr. Feinberg, "we did get them to move."
Dr. Feinberg said the same lessons apply to the business world. Effective sales people, for instance, have a good sense of what it is their clients care about, and cater to that position.