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Amanda Kramer: Welcome to the Leeds Business Insights Podcast, featuring expert analysis to help you stand out from the herd. My name is Amanda Kramer. We are thrilled to be discussing consumer behavior and the pursuit of meaning in the marketplace with Lawrence Williams, associate professor of Marketing at Leeds.

Welcome to Leeds Business Insights, Lawrence, and thank you so much for being here today.

Lawrence Williams: Thank you for having me. So excited.

Kramer: We're excited for our conversation too. And let's start here, your research centers around the pursuit of meaning in the marketplace. When people have a goal of attaining meaning through consumption, how do they define meaning?

Williams: It's a great question. We struggle sometimes because what's meaningful to one person may not be meaningful to the next person. So, everyone has their own definition for what matters to them. There are some good clues from psychology literature and also from our research that people, they seem to gravitate around a few things when they're thinking about meanings.

So, one of those things is that they think about, like, how purposeful their experiences are, their choices are. They care about the goals that they hold dear to them, and they want to feel that their life has some, like, greater purpose beyond trying to get, like, everyday things done in the here and now, some long-term purpose, some big art to their life.

So, we see that in our research. We see that when people are choosing products that help them achieve things that are important to them. They find those products to be meaningful. We also see that people think that meaningful products are things that allow them to express their values or allow them to express some aspect of their identity.

And the psychology literature, we've spoken about that as, meaning is related to the sense that your life matters or that you have some significance in the grand scheme of the universe. So, being able to express yourself is one part of that, indicating that you matter in the world. And then people use products to connect with other people, and that sense of connection is such a powerful motivator, is such a key aspect of being a person. And it helps us build this sense that we have some coherent understanding of how the world works, and who we are, and how we, like, fit into some social network.

Kramer: Absolutely. It's really interesting to think about those different categories. And they may be resonating with our listeners as they think about, oh, that's why I buy that product. Speaking of feeling that way about purchases, can you tell us a little bit more about the concepts of intrinsic and extrinsic rewards, particularly related to consumption?

Williams: Yeah, for sure. A lot of times when we talk about intrinsic versus extrinsic, intrinsic is something that's coming from the inside, and extrinsic is something that's, like, out there in the world. We tend to talk about those in terms of our motivation, what's driving us to pursue a certain thing, behave in a certain way, go a certain place, buy a certain thing. And sometimes those motivations are really coming from within us.

So, like, I might have a desire to improve as a person, so I might buy a self-help book, or enroll in a class, or buy some gym equipment. Like, all of those products or services would be tied to my, like, intrinsic motivation to improve. And then whichever benefits I get out of consumption, those are going to be related to, like, my intrinsic motives. So, I would think of those as, like, the intrinsic rewards.

Whereas, often, it's easy to think about our consumption experiences as things that are tied to extrinsic motivation, out there in the world, wanting to have fun, have experiences. With extrinsic, it's about rewards that you receive that are outside of what you internally want. So, this could be, like, external recognition. It could be status, these sort of, like, extra benefits. And those, they can motivate us, but they don't have the same motivational pull as something that's coming from within us.

And the work that we've seen in the psychology literature, some of our work, it seems like meaningful things are really tied to our intrinsic motivations. These things that have this, like, long-term pull on our choices. Whereas these, like, extrinsic things, like, they're kind of like trinkets. They're nice to have, but they're not necessarily this type of sustained consumption that you might care about as a marketer.

Kramer: Sustained consumption, that is a key word there. And let's dive into that a little bit. Lawrence, can you give us a couple of examples of the ways that products and services add to the sense that we live a meaningful, or I think what you call capital M life, and perhaps how this might lead to sustained purchase?

Williams: Yeah, it's really interesting. So, we often think about our purchases, like, adding to the pleasure that we feel in life. That's really easy for us to do when we think about our purchases being useful, helping us meet low-level concerns, these everyday needs. Like I'm hungry, so therefore I buy food.

But the meaningful purchases, those are a little bit less transparent, but I think they're more important to us. So, I'm just, like, going back to this idea of purpose, like, products that we buy to help us accomplish, like, meaningful life goals. Some of those products are either, like, tangible. The gym equipment example would be one.

But then, like, other things, just like a college education, like, that's obviously, like, a very involved and complicated service that people make a tremendous financial investment, with the idea that this is going to help them accomplish meaningful goals later in life. And those might be tied to being a valued member of society, or getting the job that they want, like, having the credentials that they need. So, those types of things, like, those are really life-defining experiences, and we approach the marketplace in order to accomplish those goals.

On the connection side, I think of services like Spotify. The ability to see what other people are listening to and then to share what you care about, it's becoming such an important part of the connective tissue of society. Like, so many people are able to express who they are and then also connect with like-minded others based on their musical taste. And this streaming music service facilitates that a ton.

One of the things that I was reading about is that Spotify is, like, becoming, like, integrated into, like, dating apps, so that people are able to use their musical tastes or, like, favorite artists or their playlists in their efforts to connect with people on a real, deep and personal level. And obviously, those types of connections can be, like, some of the most important and meaningful connections that people develop over the course of their life.

Kramer: Absolutely. And Lawrence, this connectivity is making me think about whether this was happening pre-COVID or not. I think about how Peloton exploded during COVID, in part because of the sense of riding along with someone else or you hop on and you see that your friend has already been on that ride before. Was this happening pre-COVID, and do you see this continuing to happen as we move forward?

Williams: I think that with COVID, we've seen the need for connection rise up as just an important driver of choice, an important driver of consumption. But it was there before COVID. We started this research project in 2018. So, one of the nice things about our project is that we have various studies, both before and after the onset of COVID, before and during and after lockdown. And the key themes of the research persist in terms of our findings. But I think your intuition is exactly right, that there is this added need for connection when the world is stripping away our ability to have naturally forming, like, organically forming connections.

You begin to be more intentional about those things. And we've all seen that in terms of being intentional about connecting with people online, in terms of reaching out to distant associates that you might not have thought to reach out with during the COVID lockdowns. But the sort of the connection between or the relationship between meaning and connection, that's been a throughline for about as long as we've looked back in the literature.

Kramer: Thank you for that helpful information, connection being a piece that has been important and will continue to be important. I want to shift gears for a moment and dive a little bit more deeply into consumption, particularly around cost. So, Lawrence, your research found that when decision-makers are pursuing meaning, their preferences and choices flow from a heightened focus on opportunity cost. And you had a surprising finding.

When people spent any time thinking about meaning, they were more likely to choose less expensive items. So, tell us, how do consumers think about their spending as they consider meaningful purchases and purpose-driven products?

Williams: We were surprised by that initially when we started this project. As you might imagine, you think, well, meaningful things are important. Like you mentioned, this, like, capital M meaning, like, having a sense that your life is meaningful. Across countries, across people, it seems to be a really important driver of our choices.

So, going into this project, we realized, well, we don't know, like, what are people willing to give up in order to get meaning. We kind of take for granted that they want it. But in the marketplace, like, you get to be really precise with how much you want things, because you have to determine how much you're willing to pay for them.

So, that finding that when it came to meaningful experiences, when it came to meaningful pursuits, that people were willing to pay less, was very interesting, but it gave us some insight into what they're thinking about. And for us, we think that when people are thinking about pursuing meaning, you have an array of free things that come to mind.

So, like, things, to you, feel like they don't cost you any money. That could be spending time with your family or friends, going to religious services, or, like, communing with some higher power outside of yourself, meditating, being in nature. Like, these are all things that people spontaneously reflect like, oh, this is a meaningful experience, but also it doesn't cost anything.

So, when you have that set of experiences in the background, when you're thinking about making your purchase, it just kind of deflates the, like, price that you're willing to pay for anything. Because you know that while there are multiple routes to meaning, some of those don't cost anything. Some of those I might have to pay for.

But if I'm thinking about both together, I'm going to gravitate towards the less expensive things. There's not, like, a “should” with our research. So, it's not the case that, like, people who are pursuing meaning, like, should necessarily be spending more. I think in some cases it might help them, and other cases, maybe not.

And I definitely don't think that, like, if you're pursuing meaning and you're gravitating towards something that's less expensive, that you should feel bad about that in any way. Like, I think that it's totally reasonable. So, I just wanted to, like, just make sure that there wasn't any sort of, kind of, like, pejorative, which of these is the right thing to be doing. Because we talked about the finding being surprising, but I don't think it's wrong by any stretch of the imagination.

Kramer: That's so interesting. And I think it, that's a really important frame there, is that a consumer is comparing what they can buy with their money versus what they can get for free. And I think those were some great examples that you gave there in the context of that is the comparison that's taking place.

So, you found that one reason consumers pursuing meaning prefer less expensive products is because they're focused on these alternative uses for their money. Now you have an interesting case study to share with us. Tell us the story of the failed Danone socially responsible product, and what other companies can learn from this. Because this is really interesting.

Williams: Yeah, we were super excited to have some conversations with the CEO of Danone in Portugal. They had this really interesting brand launch that went wrong for them. So, there was this yogurt brand called Juntos, I believe. I don't speak Portuguese, but I think that that's how it's pronounced. But it means together. And the idea was that people would buy this yogurt, and then the company would give yogurt to, like, families in need. So, it's like a TOMS shoes model or like a, like, Warby Parker model. There's a socially responsible action that results from the consumer’s purchase.

And they had the information. They understood that this is something that consumers valued, that they thought that being socially responsible was important for these customers. They went through the process of developing this brand, developing this product, launched the product. And it was a spectacular failure for them, and they pulled it off the shelves, like, less than a year later.

They just weren't getting any uptake on it. And one of the key things that the CEO thought was that, well, they didn't think through like, well, what are people willing to pay for this product? So you imagine, like, if you have this, like, buy one we’ll give one away, like, system, like, it's going to be a little bit more expensive than your most standard version of a Danone yogurt product. And that premium was a price that people were not willing to pay.

And for us and for the CEO, when he learned of our research, the idea was like, oh, it's very important to recognize that when people are thinking about the meaningful thing, like, that doesn't necessarily translate into a higher willingness to pay.

So, in terms of what, like, firms can learn from this, I think a big part of that, it's a little bit of a market research story and being oriented not only towards what people say they will be willing to do or what people say they care about, but actually giving them the experience to put their money where their mouth is, and be a bit more sensitive to your pricing research when you have these value-driven categories in mind, in these situations in which you might have a conflict between the importance of people's values, and then the, sort of like, importance of their checkbook, or how important it is for them to maintain their budget or save money.

Kramer: Absolutely. And I'm so glad you shared that information because there's this clear tension between what people say they want and what they're actually willing to pay for it. Businesses are constantly striving to better understand consumer behavior. And brand allegiances are changing.

Are you able to speak to how a company can better understand their consumer and what they are willing to pay?

Williams: I have a few ideas. Like, they're a little bit far afield from this research. For me, this is a little bit more connected to my teaching. I teach a class, market intelligence. And in that class, we train MBA students to be better consumers of market research. So, the idea is that youl probably will be in a position where you might contract with a market research supplier. And you want to have enough knowledge about the market research process in order to get useful information from those suppliers.

And thinking about this question, it's a really classic question for research that people don't always tell you what they want. And they don't always know enough about what they want to tell you what they want. So, self-reporting and research is always a little bit suspect. And we have to take special care to figure out, like, well, what is the real insight from this research process? It's going to be more than what people say.

Like, so in this example, or examples tied to the meaning work, people can tell you what they value. They can tell you how important connection is, or how important it is to feel that products and experiences match their values, but those words may not count for much. So, what I would say is that you want to observe people. Like, look at their behavior, and use their past behavior as a guide to their future behavior.

I don't know anything about the actual research that went into that Danone experience. I don't want to talk disparagingly about that at all, because I have to imagine that they've done a spectacular job with their research. And it's just, you know, sometimes, like, the chips fall in a different way. So, this is not to disparage them. But for any firm that's trying to understand what their customers will do, like, you have to put them in a situation, give them an opportunity to do that thing. So, I would say, like, behavior first, self-reports second, last, maybe not at all.

And then, you know, there are other techniques that you can use to understand people's reactivity. So, low-level emotional reactions, sometimes you can collect that through physiological responses. Sometimes you can get that through, like, neuroscientific or neuro imaging approaches. Getting, like, people's immediate sense of their emotional reaction to a product or service is going to be a really good signal for, like, maybe not that individual person, but how the market overall moves towards those offerings.

It's a combination of, like, you want to use behavior. Behavior is a better indicator than what people say. And then if you have the capacity for anything related to low level, immediate reactivity, like, kind of like less conscious reactions to what you're putting in front of people, that's going to provide a more reliable signals, going to be, like, less mucked up by all of this kind of, you know, corrective stuff that happens over time that interferes with the initial emotional response. And then makes it a little bit less predictive in the moment of the individual's purchase behavior, but an aggregate, like, looking at the market overall, those, like, immediate emotional responses tend to be really nicely predictive.

Kramer: That's really interesting information. And I'm really glad we asked that question, Lawrence. A follow-up question I thought of, and I don't know if this is in your area of expertise. But when consumers are thinking about purchasing a product that they consider meaningful, is it typically a purchase where they see it, and they've got to have it, and they purchase it? Or is it something that they're thinking about and then perhaps will come back and purchase in terms of the consumer behavior component?

Williams: Yeah, that's a really good question. That, like, excellent research-minded question is something that I don't know the answer to. And I wish that I did. And I, I'm going to talk to a student about, like, this exact question to see what we can find out.

And in our research, we put people into situations where they were making decisions in the moment. We asked them specifically to think about this as an unplanned purchase. Some other work that I've done where I asked, like, people about their, like, purchase history, and then asked them like, well, was it meaningful? Or was it primarily meaningful as opposed to being primarily pleasurable or primarily utilitarian?

You get a mix of, like, I got a set of concert tickets I was looking forward to, and I, like, planned who I was going to go to the show with. And it's, like, very intentional and deliberate and planned over time. But you also have these kind of, like, spontaneous. Like, I was on vacation. And I walked past this restaurant, and I decided to go in. And then it was an incredibly meaningful time for me and my family or whatever the case may be.

So, I do think that there's something to this idea of, like, how much are you thinking about it in advance? It gives you a basis for expecting how meaningful an experience might be. And having those expectations could either, like, from other research we know, like, it can either delight you when your expectations are exceeded, or it can be disappointing if your expectations aren't matched. Whereas, like, you might get a different process if it's a little bit more serendipitous, a little bit more in the moment, more sort of tied to what we would typically think of as impulsive purchases. It's a great question. I wish I knew more about that.

Kramer: I'm fascinated. I can't wait to see what the future research finds. But I think that information you just shared is really helpful too, in terms of the expectation piece, because that's a key part of purchasing and striving for that meaning that we've been talking about.

I also wanted to ask, Lawrence, I saw in one of your papers that you had a section on a few suggestions for companies in terms of adjusting their marketing plans to appeal to consumers who are looking for meaning via consumption. Is that something that you could tell us more about?

Williams: Sure. Yeah. So, whenever we're doing research, we like to be very mindful of, well, how can people in the world outside of academia, how can they use this information? Like, this was published in the Journal of Consumer Research. We're very interested in telling firms or telling governments, telling any sort of body, any institution that cares about consumers, like, here's what we know, and here's how you might fruitfully apply this knowledge.

So, for us, one of the things that we thought was really important was that, if you know that people are willing to spend less when it comes to meaning, you probably don't want to make your most expensive, higher-end purchases or higher-end options the more meaningful ones in the set. You can do things where you have the high end version. I'm thinking of Apple Watch. You can get an Apple Watch for $200, $300. You can get an Apple Watch for, like, a thousand dollars, right? Those high-end ones, you might want to emphasize the pleasure of it.

And then for things that are on the lower end of the spectrum, like, you can emphasize, like, how it helps you connect or how it helps you accomplish your goals. I think that another really potentially useful learning from this research is that it seems like firms would do better to position themselves as partners in their customers' pursuit of meaning.

I don't think you want to be Apple and competing with, like, a person's religion or, like, with a person's core social identity, in terms of, like, their sources of meaning. But I do very much think that you can be an Apple or Google or whichever sort of company that you admire and say that, well, we can help you find meaning in the experiences that you already care about.

I think that the tech firms do a really great job with this. When they, in their communications, they focus on, here, look at our, like, photo sharing abilities, and look at all of the things that you can do of your pictures, and all of the ways that we can help you use our cameras to connect with your family, to be closer to the people that you care about, to express who you are creatively, artistically. It's really more about a partnership than it is about delivering that core meaning benefit directly.

Kramer: I think that's really interesting. And I'm thinking, Lawrence, too, every episode we have an LB idea or a key takeaway. And I think the key takeaway from our conversation with you is that, if you are a company, you've got to think very strategically about meeting the consumer where they're at in terms of purpose, where they value and find meaning, and price sensitivity, and really leveraging their behavior rather than what they may be talking about aspirationally to drive your business decisions.

Williams: I couldn't have put it any better myself. I think that there's a really, like, delicate balance in terms of people's desire for meaning and what they're willing to pay. And then that idea of well, how do you learn about this use? You know, like, people vote with their feet, as they say.

Use the behavior to guide your strategy. It's very easy, especially in modern world where we are incentivized to express our emotions, express our opinions almost daily, nonstop, through social media, and all of that stuff that's amplified. It's really easy to talk about what you value. But, when it's less about signaling and more about active choices, you have to look at people's behavior.

Kramer: Absolutely. Oh, perfectly said there in terms of the signaling. So, we've walked through this Danone example. Do you have examples of socially responsible brands that have been successful in the marketplace? And why do you think that has been the case?

Williams: Yeah. Two things pop into head quickly. One is an example that I would have to look up the details for it, but I believe it was Patagonia. And they had, I think they pulled, like, a full page ad. And it was, like, basically, like, don't buy this jacket. And they were promoting the idea of sustainability generally, promoting the idea of you want to hold onto things for a long time.

And for us, like, we think that that's super important because the longer that you possess something, the more meaningful it can become to you. So, we put so much of ourselves into our products. So, if you have a jacket for years and it's being mended and you have experiences where you can tell stories about each tear and each repair. And then even, like, the type of thing that you have, where you can, like, pass it down, to another generation or, someone else that you care about can get use from that, those tend to be the things that get very much elevated in our minds of like, oh, this is a meaningful product.

And we stop thinking about it as a consumption, as a good, but that doesn't change the fact that, like, it's all intimately tied to marketplace activity, like, from the initial acquisition, to the repair processes, to how you decide to get rid of it, like, all of that, you know. It's just like the central features of consumer behavior. Again, it's just like it's a little easy for us to not think of it that way. It's a little less transparent, but it's super important.

So, that ad, I think, spoke to a lot of people. It also emphasizes one of the things that I think is on the flip side of this research, which is the things that we pay more for, have more of an opportunity to become meaningful to us. Like, they tend to be higher quality. They tend to be more durable.

One of the initial examples, and we use this example in the paper, is buying a coffee maker. And you can buy a coffee maker for $20 at Walmart, or you can buy a coffee maker for thousands of dollars at a designer store.

And then there are many options in between. And for some of those, like, options on the lowest end, they're almost guaranteed to fail. It's like they're basically disposable. They're really designed for short-term purposes. Whereas some of these, like, more mid-range or some of these, more expensive ones, they're built for the duration.

Like, this is something that you should not need to go out for the rest of your life and buy this espresso machine. It's, like, built to stay. And again, that idea of, like, something that I see every day that becomes part of my morning rituals, that becomes part of my experiences with my family or with my partner, like, those are the things that have a great opportunity to provide us with a sense of meaning.

Kramer: Thank you, Lawrence, so much for being here with us today. It has been a great conversation. We've learned a ton.

Williams: Thank you so much for having me.

Kramer: Thank you again for listening to Leeds Business Insights. Don't miss a single episode, subscribe to Leeds Business Insights wherever you get your podcasts. You can also find more information about our podcast series at leeds.ly/LBIpodcast. We'll see you next time.