Filed Under:Annuities, Sales Strategies

When new and improved actually isn’t

Opinion

How can something be both
How can something be both "new" and "improved"? It can't. (Photo: iStock)

A New Year’s Eve conversation among old friends who were all in marketing and communications, and which was fueled by ample holiday cheer, led to pondering exactly why the phrase “new and improved” is so powerful with consumers.

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“After all, it doesn’t even make sense,” one conversationalist mused. “It’s an oxymoron,” meaning, if something is “new” and never before existed, it cannot, by definition, be improved.

Another member of the group suggested that his friend was being too literal and that “new” might be like a “new era” or a new iteration of something in a series; not so much brand new, but more refreshed or continued. He suggested that the phrase was more of a tautology, where two words are so similar that one is redundant.

The friendly argument was settled with another round of drinks. But it left me wondering why the seemingly confusing phrase is used so often in advertising. Research broke out, and it appears that the “new and improved” phrase and its variations might actually be counterproductive when trying to get prospects and clients to make a buying decision.

Marketing with the phrase yields a failure rate between 40 and 90 percent.

Researchers Ali Faraji-Rad, Shiri Melamuda and Gita V. Johar, presumably not fueled with as much holiday cheer, looked at this issue. Their findings provide key insights for benefits advisors trying to help their offerings and their firms stand out in a crowded, complex and confusing marketplace.

You see, for many consumers, control is more important than innovation, and “new and improved” connotes a lack or diminution of control.

In one experiment, the researchers presented college students with a smartwatch advertisement. The image never changed, but half of the faux ads had the headline, “A new approach to time,” and the other half read, “Take control of your time.”

Think about your average prospect, especially in the employer marketplace, and ask yourself which pitch would resonate best? I suspect that as with the test subjects, the “control” aspect is the key to getting their attention and being successful.

Of course, there are a great many factors that lead to success with any given product in any given market. But think for a moment about the increased interest in partially self-funded plans, especially in the mid-market. Many successful practitioners position these financing arrangements as a way for employers in that market to take control of their health care costs.

If control is the dominant driver, we might apply it across a variety of industry subjects. If you were positioning HSAs, for example, you might frame them less as a tax-preferred hedge against increasingly humongous personal responsibility amounts, and more as a way to assure employers and employees that they could strategically control their health care environment with those funds.

The conversation around transparency has begun to incorporate some of those “control” elements, but on a larger canvas rather than in a personal way.

One of the hallmarks of control is that even when applied globally, it is interpreted personally. Think about defined contribution type benefit plans and why those tend to resonate positively with employees. The employer isn’t spending any more than they were planning to spend, but they are providing employees with a wanted sense of control on a highly individualized basis.

As the research found, not everyone in a cohort craves control above all else. That makes it both a powerful and a dividing force. I suspect that is what is behind the two divergent camps on the Affordable Care Act repeal and replace argument, and why we think some of the leaders just don’t get it. In the final analysis, at the individual level, the seminal question is not about minutiae but rather who will control my health care.

As we have learned from watching the ACA unfold, sometimes “new and improved” actually isn’t.

Read more columns by David A. Saltzman:

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Nichole Morford

Nichole Morford
Managing Editor

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