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How to market sustainability that actually converts

Eduardo B. Andrade — Wed, 15 Jan 2025 12:14:02 +0000

How to market sustainability that actually converts

Eduardo B. Andrade Wed, 15/01/2025 - 12:14

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The Customer-Centric vs Nature-Centric Tension

In principle, consumers care about environmental sustainability. They want nature to be protected, and they often express strong pro‑environment attitudes. However, there is a wide gap between what consumers value in principle and what they do in practice. It’s not that consumers are disingenuous but it’s unfair to ask them to act sustainably if everything is playing against them. Accommodating the wants of the consumer with the needs of nature is our fundamental challenge in sustainable marketing.

The central flaw in traditional marketing is clear: we try to understand what consumers need, want, and wish, and then adjust our products, prices, promotional tactics, and distribution channels to satisfy them. This customer‑centric logic drives competitive success, but it often breaks down when sustainability enters the equation.

Our research shows most consumers emphasise price, functional quality, convenience, taste or visual appeal over eco-friendliness when making purchase decisions. Many don’t even think of environmental sustainability when making purchase decisions.

On top of that, there’s often a trade-off for the company, and consequently, for consumers: making a product more environmentally friendly usually means compromising elsewhere. It is an uncomfortable truth, but often, adopting a purely customer-centric view results in a company doing more harm to the environment.

Single‑use packaging is the classic example: consumers love the convenience and companies have given them what they wanted. But in doing so, we’ve placed a significant burden on the environment. Similarly, a sustainable product may not succeed beyond a niche market if following a nature-centric approach entails lower convenience, lower perceived quality, or higher price. So, can we offer a sustainable product that remains competitive on the other attributes, as well? The emerging field of sustainable marketing is all about acknowledging this trade-off and putting minds and money into turning the tension between what consumers want and what nature needs into a relationship that benefits both.

The role of governments

Government intervention is essential to ensuring companies compete fairly. Without it, firms that invest in sustainability risk being undercut by competitors who don’t.

Notpla, the seaweed‑based packaging company founded by former �ԹϺ�� students, produces packaging that is not only more sustainable but also high quality, durable, flexible and convenient. But it isn’t the cheapest option in the market.

It’s tough to compete against plastic. The prices are very low, in part because the scale is enormous, but also because the environmental costs of plastic manufacturing and disposal are not being incorporated into the balance sheets.

"It is an uncomfortable truth, but often, adopting a purely customer-centric view results in a company doing more harm to the environment."

When governments tax more harmful packaging, as is now the case in the UK, it’s an attempt to level the playing field and allow companies like Notpla to grow faster. This illustrates why policy is crucial not only for consumers and companies, but also for removing the multiple systemic obstacles that prevent sustainable behaviour.

Despite recent political swings that have had a knock-on effect on sustainability policy, the shift in the past 18 months is in part down to the early hype and an oversimplified belief that consumer demand alone would drive change.

As climate impacts become more tangible – heatwaves, water scarcity, supply chain disruptions – companies will increasingly integrate sustainability out of economic necessity. Policy priorities fluctuate, but the current policy shift away from sustainability that we’re seeing in some Western countries isn’t here to stay. The reality of the situation will eventually impose itself – it’s already happening.

Giving consumers the right information

Another key obstacle to sustainable consumption is access to information. Consumers are often unaware of which option is more sustainable, or how much more sustainable one option is relative to the other. Eco-labels are a good starting point.

But, so far, eco-labels work on a voluntary basis, and, as a result, lack simplicity and standardisation. There are hundreds of types of eco-labels out there, which doesn’t necessarily make it easier for the consumer to choose the most sustainable product.

The next major shift in this space will likely come from the digital product passports now being rolled out across the EU. These will provide detailed environmental and circularity data, increase transparency across the value chain, incentivise manufacturers to improve sustainability performance and enable easier auditing by governments, NGOs, and competitors.

This could be transformational. A digital product passport would require consumers to scan the QR code to gather the information, and this, by itself, is a source of friction. But data availability and transparency are likely to encourage companies to offer products with lower environmental impact than the competition, and other actors, such as NGOs, to rank products on environmental friendliness. In short, the market will respond to the policy.

Tips for leaders

1. Adopt a dual mindset: customer‑centric and nature‑centric

Focusing on a customer-centric approach is not enough. Leaders must explicitly integrate environmental impact into product design, pricing, distribution and communication.

2. Build cross‑functional capability

Marketing teams must work closely with sustainability experts to understand the true footprint of products. Marketing research is as important as environmental research.

3. Diagnose the obstacles

Map the obstacles that prevent your customers from purchasing, consuming, and disposing more sustainably.

4. Identify and test tactical opportunities

Develop marketing tactics able to minimise or circumvent the key obstacles, and in doing so, promote sustainable consumption.

Ultimately, sustainable consumption won’t happen simply because consumers say they want it. It will happen when businesses, governments and marketers make sustainable choices more attractive – without asking consumers to meaningfully compromise on the things they value. The challenge for marketers is to find ways to make what is good for consumers and what is good for nature work together, rather than treating them as competing priorities.

Discover a framework for making sustainable consumption more achievable

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Consumers say they care about the environment, but their behaviour tells a different story. For sustainable consumption to become a reality, businesses need to rethink the fundamentals of marketing, argues Professor Eduardo B. Andrade.

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How resilient brands keep customers in volatile markets

Andreas Eisingerich — Wed, 15 Jan 2025 12:14:02 +0000

How resilient brands keep customers in volatile markets

Andreas Eisingerich Wed, 15/01/2025 - 12:14

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Article at a glance:

Customer sentiment can shift overnight after negative news, amplified by social media
Traditional metrics such as brand love do not reliably predict who will stand by you in a crisis
The Integrated Brand Immunity Process outlines how to build brand immunity in four steps

Brand managers across industries face growing volatility. Socio-political shocks and the speed at which negative information spreads online mean that small triggers can escalate into reputational crises almost overnight.

In this environment, competitive advantage depends not only on generating customer affection, but on building relationships resilient enough to withstand sudden negative information.

The shift: from loyalty to resilience

Traditional metrics such as brand love capture how customers feel about brands, but not how they will react when things go wrong. Conversely, customers with the strongest brand connection often exhibit the most negative reactions.

This is where brand immunity becomes critical, first introduced by research at �ԹϺ�� Business School in 2023.

Brand immunity refers to a customer’s resistance to changing their perception of a brand when confronted with negative information. Customers with high immunity process bad news more carefully, weighing it against prior experience. In doing so, brand immunity provides a more reliable indicator of how customers will behave under pressure.

Focusing on customers with high brand immunity in crises helps stabilise sentiment and limit the spread of negative narratives.

A four-step process to building brand immunity

The Integrated Brand Immunity Process translates this insight into action in four steps:

Step 1: Prioritising customers

Resources are finite, and brands cannot immunise every customer. The Customer Immunity Management Matrix helps managers prioritise by mapping customers across:

Value (the impact of losing them); and
Immunity (their resilience to negative information)

Immunity can be measured through simple survey questions. For example, by asking how customers would respond if they encountered negative information about the brand.

Customer value depends on industry context. It allows managers to focus on protecting revenue, as well as the underlying sources of competitive advantage:

Economic value (e.g. banking, telecommunications, reflecting stable revenue)
Psychological value (e.g. luxury, automotive, reflecting a strong brand attachment)
Social value (e.g. travel, entertainment, where customer advocacy drives growth)
Innovation value (e.g. technology, wellness, where customers co-create)

Step 2: Understanding the threat

While the Customer Immunity Management Matrix provides a structure for building resilience, its effectiveness depends on understanding the threat. Not all crises are equal. The matrix identifies who to prioritise, but the nature of the threat determines how to respond.

Managers must distinguish between:

Performance-based threats (e.g. price increases, service disruptions). These require transparency and explanation.
Value-based threats (e.g. ethical breaches, discrimination). These require accountability, corrective action, and cultural change.

Brand immunity helps buffer moderate negativity, but it cannot replace meaningful action in serious value-based crises.

Step 3: Act on four strategic priorities

Once customers are mapped and the threat is determined, four strategies emerge which should be applied through the filter of the threat.

Anchor: high value, high immunity customers
These are your most valuable and committed customers - high spenders and loyal advocates. They should be equipped to defend the brand. In performance-based crises, transparency and data are important. In value-based crises, brands should demonstrate shared values and accountability.
Fortify: high value, low immunity customers
This is the highest-risk group. These customers are strategically important but more vulnerable as they lack a strong brand-self connection. Brands should build emotional connection and communicate proactively. In performance-based situations, early warnings and clear explanations are key. In value-based crises, a sincere apology and visible corrective action are essential.
Leverage: low value, high immunity customers
These customers may not be high spenders, but they are supportive and stable, often active in reviews, communities, or social media. Brands should amplify their voices to stabilise sentiment and influence others. Their advocacy is particularly valuable when it reinforces credible information.
Minimise: low value, low immunity customers
These customers have limited strategic value and are more likely to react negatively or amplify criticism. The priority is to limit exposure and manage communication carefully to contain potential negative spillover.

Step 4: Continuously renew resilience

Customer relationships are dynamic, and immunity can fade over time. Regular reassessment is essential to ensure that the customers who matter most remain resilient.

Brands that succeed in volatile environments are not those that simply build loyalty, but those that prepare their customers before a crisis hits. By identifying and strengthening the customer relationships that matter most, brands can turn volatility into a source of resilience, and ultimately, competitive advantage.

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A practical guide to building brand immunity across your customer base

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Does influencer marketing really work in 2026?

Omar Merlo — Wed, 15 Jan 2025 12:14:02 +0000

Does influencer marketing really work in 2026?

Omar Merlo Wed, 15/01/2025 - 12:14

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Article at a glance:

Influencer marketing is worth $24 billion as an industry, but followers are becoming cynical. Authenticity is key to building and maintaining consumer trust, but it’s not a single, fixed concept. Research by the Business School’s Omar Merlo, Associate Professor of Marketing Strategy and Andreas B. Eisingerich, Professor of Marketing, explores the vital elements to convey true authenticity and how this can be harnessed by major brands. Dr Merlo shares what will make or break influencer marketing in 2026.

Globally, the influencer marketing industry is estimated to be worth $24 billion. Influencers set trends, raise brand profiles, and shape – directly or indirectly – how many of us live. With this rising impact, however, comes greater scrutiny.

Consumers are now more discerning when consuming influencer content, following some with loyalty and trust while viewing others with suspicion. So why do consumers trust some influencers and not others?

One study found that the most important factor in deciding whether or not to follow an influencer on social media is their authentic and genuinely care about their interests. At the same time, over a third of consumers think influencers misrepresent themselves and the products they promote, and almost half think most of them are fake.

Taken together, these findings suggest that there’s a gap; consumers are seeking genuine, honest influencers, but many influencers struggle to convey this authenticity. This is a problem for brands and their chief marketing officers, as well as influencers themselves.

Figure 1: What our research suggests influencers and brands should leave behind in 2025 and take forward for 2026

Stop	Start
Focusing on formal credentials	Talking about relatable experiences
Relying on big-name recognition	Interacting and engaging to build community
Hiding influencer-brand relationships	Being honest and upfront about self-interest
Forcing brand scripts and lines into content	Leading with original storytelling
Presenting an image of perfection	Admitting flaws and mistakes
Trying to hire authenticity off the shelf	Creating the conditions for true authenticity

How to be more authentic in 2026

So, what can influencers and the brands that hire them, do to move from a transactional to a transformational relationship with the clued-in consumers of 2026?

Our research, through 185 interviews with brand managers, agencies, influencers and consumers across the world, sheds light on what authenticity means and how to better reflect it:

Experience matters more than formal credentials: Our survey respondents tended to trust amateur runners, for example, more than Olympic athletes. Consumers connect with expertise gained through real, relatable human experience.

Engagement is a two-way street: Responding, interacting and engaging with followers is key to influencers building and maintaining a community around them. It creates a space where followers feel heard and respected.

Be honest about self-interest: Research from �ԹϺ�� has shown that 96% of sponsored posts are not disclosed. People know that brands pay influencers, so trying to hide it can end up making followers feel like they are being misled, and that they are an asset to be monetised. Being clear about it helps them feel valued.

Authentic voices and stories will shine through: Imposed scripts and brand lines come across as inauthentic and artificial. Original storytelling can be a unique selling point and can even be the reason followers stick around.

Flaws are welcome: Psychologically, revealing a low-impact piece of negative information – such as a mistake or misunderstanding – makes consumers less likely to look for other negatives.

Of course, this can’t be mistaken as a checklist for brands to tick off. Findings suggest that different stakeholders prioritise each dimension differently. Consumers mostly value integrity and transparency, for example, while influencers prioritise originality and expertise.

When influencers miss the mark, they risk losing the trust of their audience. To solve this, brands need to appreciate that authenticity is not an individual trait that influencers do or do not possess – rather, it’s a collective outcome that forms when stakeholder priorities align. Shifting approach to find this alignment can be game-changing for brands, in a global market where authenticity matters most.

The era of renting credibility through one-off posts from influencers is over. Brands that treat influencers as partners rather than media channels and consumers as communities rather than impressions, will earn the most credibility. Those that don’t will simply add to the noise. In 2026, influencer marketing will work only when the conditions needed for true authenticity are prioritised.

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Authentic future: the shape of influencer marketing in 2026

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Swatch: 8 actionable lessons from a pioneering brand

Omar Merlo — Wed, 15 Jan 2025 12:14:02 +0000

Swatch: 8 actionable lessons from a pioneering brand

Omar Merlo Wed, 15/01/2025 - 12:14

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Gen Z may not have the same memories of Swatch that Baby Boomers or Gen X have, but the brand remains a gold standard in entrepreneurship, marketing and leadership. It saved an entire industry in its Swiss homeland and has had a lasting impact on the global watch market.

To ensure these lessons are not lost in the past, I have had the privilege of collaborating with a key member of the brand's original team and its first marketing director, Dr Konstantin Theile. Our book The Dawn of Swatch: Timeless Strategies in Business, Marketing, and Entrepreneurship, reveals lessons that are just as valuable for business leaders today as they were over four decades ago.

Swatch's success offers many lessons – here are just eight of the most actionable for today’s marketers, leaders and entrepreneurs.

1. Flip weaknesses into assets. Swatch was born from an industry on its knees and desperately needing to make a step-change to survive. Cue a small visionary core team of the right people at the right time. It was their perceived weaknesses — youth, naivety and irreverence — that freed them to spurn the established Swiss watch experts and turn the industry on its head. This led them to conceive an injection-moulded, non-repairable, affordable fashion accessory that just happened to tell the time.

2. Marketing can be frugal. In the early days of Swatch, budgets were tiny, and the marketing team became pioneers of guerilla marketing before the phrase was even coined. A 500ft Swatch suspended from the front of the Commerzbank building in Frankfurt would be pretty radical even by today's standards. In 1984, funded largely by the bank itself (persuaded by the potential halo benefits of the Swatch brand), it generated a huge amount of publicity for Swatch in a crucial European market.

3. Think brand experience, not product. The first prototypes (branded Delirium Vulgaris rather than Swatch) were technically impressive but commercially unsellable. The marketing team soon realised that success would hinge on more than engineering; they needed an engaging brand name and story to capture consumers’ imagination. By positioning Swatch as an affordable fashion accessory, they gave customers a reason to buy not just one but several. Their edgy tongue-in-cheek campaigns turned each watch into a statement of individuality.

4. Harness the power of serendipity. While your chance of winning the lottery is in the hands of fate, you do have to be in it to win it. By creating an environment that allows for opportunity and a willingness to take risks, business leaders can create their own luck. For example, when Swatch was struggling to break into the American market, Konstantin's persistence and a fortuitous meeting with a watch buyer named Heidi (a fitting name for a Swiss success story) gave him the opening he needed.

5. Customers may not identify their needs. When it comes to innovation, traditional market research has its limits, especially when consumers can’t yet imagine what’s possible. Early Swatch market tests, for instance, produced negative results; people simply didn’t like the idea. Yet by relying on observation, intuition and belief in their vision, the team discovered unexpressed needs that consumers couldn’t articulate.

6. Embrace change. The Swiss invented quartz watches but their fear of new technology allowed the Japanese to seize the opportunity. By the time the Swiss realised what they’d unleashed, Seiko was already leading the world. Change will happen, whether you like it or not, and at an ever-increasing rate. Ignore it at your peril. As smartwatches reshape the industry, are Swiss brands adapting quickly enough?

7. Trust your instinct. Instinct played a huge role in Swatch's early success. As Konstantin often says: "The test of a good idea is first and foremost does it make the heart sing? If it does, then – and only then – should we apply our rational minds". This prompts anyone to assess the idea emotionally and only then apply rational thought to ensure the idea isn't reckless. Konstantin built his marketing team by prioritising genuine energy, creativity and passion over experience and formal qualifications.

8. Be relentlessly consistent. Swatch executed its fashionable, affordable and imaginative character across every touchpoint with rare obsession and passion. Whether it was product design, pricing, distribution or communication, every detail told the same story: Swatch was a fashion accessory, not just a watch. From fashion-show launches to art collaborations with figures like Vivienne Westwood and Damien Hirst, every move reinforced a single, coherent brand narrative. Branding excellence lies in this obsession with detail.

Gen Z might be more familiar with brands like Apple than with Swatch, but Apple’s success (and that of many leading brands today) borrows from the same timeless lessons Swatch pioneered decades earlier. Let’s make sure those lessons live on.

Note: This article was updated on 11 November 2025 to reflect the author's name and designation in the standfirst.

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Dr Omar Merlo, Associate Professor of Marketing Strategy, offers insights from his latest book on the Swiss watch industry crusader

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Jónas Oddur Jónasson on how healthcare systems can work better for people

Shamita Harsh — Wed, 15 Jan 2025 12:14:02 +0000

Jónas Oddur Jónasson on how healthcare systems can work better for people

Shamita Harsh Wed, 15/01/2025 - 12:14

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Dr Jónasson’s research focuses on how analytics and operations can improve healthcare delivery in resource-limited settings. As Associate Professor of Analytics & Operations at �ԹϺ�� Business School, Dr Jónasson is keen to continue developing models that link operational decisions to patient outcomes and public health. His work spans emergency medical services, behavioural health interventions and global health delivery, with collaborations in the UK, Africa and beyond.

His work develops data-driven models to address the pressing operational challenges faced by health systems—from emergency medical services in urban centres to behavioural health interventions and community-based care in lower-income regions.

A defining feature of Dr Jónasson’s approach is his commitment to making research actionable. His collaborations with organisations such as the London Ambulance Service, Riders for Health in Malawi, Keheala in Kenya and the Clinton Health Access Initiative in Mozambique, demonstrate how carefully designed operations models can be translated into meaningful improvements on the ground.

This focus on impact is also evident in his scholarship. His research has been published in leading journals including Operations Research, Management Science, Manufacturing & Service Operations Management, and BMJ Global Health. Beyond publication, he contributes to shaping the field as an associate editor for Management Science and IISE Transactions on Healthcare Systems Engineering.

Academic journey and recognition for research excellence

Dr Jónasson began his academic career in Europe, earning a BSc in Industrial Engineering from the University of Iceland before pursuing postgraduate study in the UK. He completed an MSc in Operational Research at the London School of Economics, an MPhil at the University of Cambridge, and both an MRes and a PhD in Management Science & Operations at London Business School.

Before joining �ԹϺ��, he spent nearly a decade at the Massachusetts Institute of Technology (MIT) Sloan School of Management, where he rose from Assistant to Associate Professor of Operations Management. His time at MIT further cemented his reputation as a leader in the study of healthcare operations, while also giving him the opportunity to work closely with healthcare practitioners and global health organisations.

Dr Jónasson’s contributions have earned international recognition. He received the prestigious Bonder Scholarship for applied Operations Research in Health Services in 2014. His work has since been awarded the M&SOM Practice-Based Research Competition prize (2021) and the William Pierskalla award for best paper in Healthcare Management Science (2024). He has also been a finalist for the Sanjay and Panna Mehrotra Research Excellence Award (2021) and twice for the MSOM Society Award for Responsible Research (in 2019 and 2024). These honours underscore the impact of his research in advancing both rigorous scholarship and socially responsible practice.

Looking ahead at �ԹϺ��

At �ԹϺ��, Dr Jónasson is excited to continue building bridges between rigorous research and healthcare practice.

Reflecting on his move, he said: "I am thrilled to join �ԹϺ�� Business School and to work alongside outstanding colleagues in Analytics and Operations. What makes this especially exciting for me is that few business schools in the world can match �ԹϺ��’s environment: a top technical university, an exceptional medical school and a leading school of public health. For someone working on health and healthcare, this combination—in my favourite city—is a rare and special opportunity.”

Dr Jónasson looks forward to advancing research that not only deepens academic understanding of healthcare operations but also creates lasting impact for healthcare provides policymakers, patients and communities worldwide.

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Designing systems that build bridges between rigorous research and healthcare practice

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Dr Heeyoung Yoon on consumer judgment, bias and better decision-making

Shamita Harsh — Wed, 15 Jan 2025 12:14:02 +0000

Dr Heeyoung Yoon on consumer judgment, bias and better decision-making

Shamita Harsh Wed, 15/01/2025 - 12:14

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Dr Yoon’s research investigates how consumers predict their consumption and experiences, why those predictions are often systematically biased, and how better-designed choices can improve both individual well-being and broader societal outcomes.

As Assistant Professor of Marketing at �ԹϺ�� Business School, Heeyoung Yoon brings a research agenda that blends consumer psychology, marketing, and public policy. Her work focuses on the ways in which consumers form expectations, how these expectations deviate from reality, and how such biases influence everyday choices.

At the heart of her research is the question: why do people so often mispredict their own behaviours? From overestimating how much they will enjoy a product, to underestimating the influence of situational and contextual factors, these biases can have far-reaching consequences. Dr Yoon’s research sheds light on the psychological processes behind these systematic errors, while also identifying interventions that can guide individuals toward more beneficial and sustainable decisions.

From consumer psychology to societal impact

Dr Yoon’s research is motivated not only by curiosity about how people think but also by the desire to improve outcomes for individuals and society. She studies how consumer mispredictions influence decisions with long-term implications for well-being, sustainability, and even carbon emissions. For example, her work reveals how consumers’ misplaced confidence in preference as the primary driver of consumption can lead to inaccurate forecasts and suboptimal decisions.

By highlighting the role of overlooked factors such as habits, motivation and availability, her research demonstrates that small shifts in framing, design, or choice architecture can promote better consumer outcomes. This focus places her work at the intersection of academic inquiry and practical solutions, offering insights for marketers, policymakers, and organisations seeking to encourage prosocial and sustainable behaviour.

The gap between prediction and reality

In a recent article published in the Journal of Consumer Research, Dr Yoon shows that consumers systematically overestimate the role of personal preference in determining how much they consume. While people predict that “liking” will drive consumption quantity, contextual factors like availability and habit often play a stronger role. This disconnect helps explain why consumption predictions are frequently inaccurate and why interventions that take account of these overlooked influences may be more effective in guiding healthier and more sustainable decisions.

In her ongoing projects, she continues to investigate biases in assortment choices, comparison judgments, and sustainability decisions. These lines of inquiry build a comprehensive picture of how expectations and decision structures shape consumer behaviour.

Dr Yoon completed her PhD in Marketing at New York University’s Stern School of Business. Her academic training and research experience equip her with a strong foundation in both experimental methods and theory-driven inquiry. By bringing these approaches to �ԹϺ��, she aims to expand collaborations that cut across marketing, psychology, and public policy.

On joining �ԹϺ��, she reflected: “�ԹϺ��’s commitment to world-leading research and global impact makes it an inspiring place to be. I’m excited to contribute to and learn from colleagues who are advancing solutions to some of the most pressing challenges of our time.”

At �ԹϺ�� Business School, Dr Yoon looks forward to continuing her research into consumer judgment and decision-making while building connections with colleagues working on sustainability, behavioural science, and social impact. Her goal is to develop insights that not only advance academic knowledge but also create meaningful benefits for consumers and society.

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Dr Yoon talks about consumer behaviour and interventions that can guide towards more sustainable decisions.

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How platforms can win by selling smarter, not harder

Jiahua Wu — Wed, 15 Jan 2025 12:14:02 +0000

How platforms can win by selling smarter, not harder

Jiahua Wu Wed, 15/01/2025 - 12:14

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Many online service platforms - think HomeAdvisor, RatedPeople, or Porch - face a common challenge: they sell job leads to providers who must then compete fiercely for customer attention. Allowing customers to post short-term jobs, these service providers can pay for access. However, if the competition is perceived to be too high, they’ll hold back, hurting both the platforms’ revenues and their growth potential.

We explore an innovative way these online platforms can strategically use information to manage provider expectations, boosting participation and revenues simultaneously.

Understanding provider behaviour

Service providers buy leads hoping to win jobs from customers. However, too many providers chasing a single lead decreases the value of participation. This fear of excessive competition can discourage them from buying leads in the first place.

Platforms possess critical information - the number of providers interested in a particular job -that they typically don’t share openly. This lack of transparency creates uncertainty, often making providers overly cautious.

One of the key benefits highlighted in the study is that partial information disclosure can help manage provider expectations based on the level of competition.

Nudging providers towards participation

Our study uses a framework known as Bayesian persuasion - the strategic sharing of information to influence someone’s decision by shaping what they believe. The framework allowed us to analyse how platforms can optimise the information they reveal about provider competition. The key insight: carefully tailored partial information can significantly increase lead purchases.

One of the key benefits highlighted in the study is that partial information disclosure can help manage provider expectations based on the level of competition. When competition is below a certain threshold, the mechanism allows interested providers to see clear value, as their chances of securing the job remain favourable. Conversely, for leads facing intense competition, i.e., above the threshold, a fixed, limited number of providers are encouraged to purchase the lead, regardless of how many are actually interested. Interestingly, providers respond positively to this consistent approach, perceiving their chances as favourable even in more competitive situations.

Why fixed prices beat flexible ones

Platforms often try dynamic pricing, changing lead prices based on real-time competition. Interestingly, the research finds this common practice is suboptimal. A well-designed fixed-price approach, paired with strategic information disclosure, generates more revenue.

Why? Providers perceive dynamic pricing as a direct signal of competition intensity - higher prices might mean higher demand, but also tougher competition. This direct correlation reduces their willingness to participate. In contrast, a fixed price coupled with carefully managed information reduces uncertainty, minimises coordination failures among providers, and consistently boosts revenue.

Effective real-world implementation

Implementing these insights is straightforward. Platforms need only set clear limits on how many providers can purchase each lead. This is already practiced informally by some platforms, but the study provides a precise method to identify optimal numbers, maximising provider participation and platform profits simultaneously.

By harnessing these insights, platforms can unlock new growth opportunities, sing revenues through smarter management of provider competition, rather than just harder selling.

This article reflects on findings from the paper "Information Design and Pricing in Lead-Selling Platforms with Supply Competition" by Jiahua Wu with co-authors Yanwei Sun, Niloofar Zamani-Foroushani and Zhe Liu from the �ԹϺ�� Business School.

This article was updated on 1 August 2025 to credit all the co-authors of the original research paper and their findings cited in the article.

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How does wealth affect your diet?

Bernardo Andretti — Tue, 17 Dec 2024 12:33:22 +0000

How does wealth affect your diet?

Bernardo Andretti Tue, 17/12/2024 - 12:33

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How we choose what to eat

In a series of experiments, we’ve been able to unpick an extra element that informs people’s choices – and we’ve deduced that this differs among the very rich and the very poor.

There are three key qualities that shape people's food choices: healthiness, taste and how filling it is. It's that last factor that has an outsized impact on people from poorer communities. Nearly nine in 10 people from poorer backgrounds say it’s important, one of our experiments shows, and they feel it’s more important than how healthy a food is.

For these groups, a full stomach is far more important than it is among their richer counterparts. By contrast, the more affluent populations tend to prefer food that is healthy over food that is filling.

Access to healthy foods is critical but it’s only half the battle

Marketing messages from food companies selling unhealthy and ultra-processed foods have long emphasised how their products will fill us up. “Aren’t you hungry?” asked Burger King, while Snickers has used marketing lines such as, “You’re not 'you' when you’re hungry!”.

These preferences might seem logical: the more a food satisfies appetite, the better value for money it appears. People who experience food insecurity will naturally seek food to tide them over and keep hunger at bay. But in our experiments, we’ve shown that, even when cost and supply aren’t an issue, people from poorer backgrounds shun healthy food in favour of what they believe are more filling and tasty options.

Interestingly, while they might differ on preferences for healthy versus filling foods, both rich and poor have one thing in common – no one wants to compromise on taste – it’s just what they perceive to be tasty that differs. People from more disadvantaged backgrounds are more likely to perceive healthy food as bland rather than tasty.

Portion sizes matter

So, what’s going on? Access to filling food appears to be psychologically important for people from disadvantaged backgrounds, beyond the impact of price and availability. And the belief we discovered among poorer people that healthy food is neither filling nor tasty is an effective barrier for the types of healthy eating initiatives we’ve seen over the recent decades.

In the last of our experiments, which we ran in a low-income neighbourhood in Rio de Janeiro, we dug deeper into what might motivate poorer populations to choose healthier and fresher food options.

Is the answer to do as the food industry does and market foods as filling and satisfying, and apply this to healthy fare? Our work shows not: simply telling people that the healthier food option was tasty and filling didn’t really work. People’s beliefs about food are so ingrained, they are hard to tackle, and marketing strategies must be credible. Out of the four different strategies to make healthier food more appealing that we tested, only one seemed to have a positive and clear effect on people’s choices, and it appears linked to portion sizes.

The more a food satisfies appetite, the better value for money it appears

We asked participants to choose between two dishes. Both were the typical Brazilian dish of rice and chicken, but crucially one plate, otherwise identical, was laden with salad, and it’s this that participants chose – perhaps because it appeared fuller despite containing food that we know some consider less tasty and filling.

If policymakers wish to target the kind of nutritional inequality that affects most societies, they need to understand the subtle influences at play. Even today, most policies that try to increase healthy food choices are still overly focused on supply, and yet the results are poor. Access to healthy foods is critical but it’s only half the battle. Does the answer lie in a delicate mix of messages that combine value for money, health, taste and, critically, how filling it is? Could food packaging and marketing be tweaked to convey these messages?

Only by tackling supply and appeal together is it possible to encourage healthier eating across poorer communities.

This article draws on findings from "How Socioeconomic Status Shapes Food Preferences and Perceptions" by Bernardo Andretti (�ԹϺ�� London), Yan Vieites (Escola Brasileira de Administração Pública e de Empresas), Larissa Elmor (Escola Brasileira de Administração Pública e de Empresas) and Eduardo B. Andrade (�ԹϺ�� London).

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We have complex reasons for choosing what we eat, and a limited understanding of our motives may be behind decades of unsuccessful and expensive healthy eating policies.

Bernardo Andretti

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The hidden benefits of releasing your product later than your rivals

Mushegh Harutyunyan — Mon, 04 Nov 2024 11:05:22 +0000

The hidden benefits of releasing your product later than your rivals

Mushegh Harutyunyan Mon, 04/11/2024 - 11:05

4 November 2024

The benefits of being first to market are well known. But new research from �ԹϺ�� Business School shows that, in certain cases, biding your time could increase your profits.

Conventional wisdom warns against being late to market: a product that launches after its rivals risks losing potential customers and ceding market share to competitors.

And yet, we see some brands aren’t keen to rush to market, despite leaked reports and industry rumours suggesting their products are ready to go. Apple for instance didn’t release its smartwatch until 2015, later than predicted, and a year behind Samsung’s smartwatch.

These delays aren’t new. Back in the mid-1990s, Sony decided to wait four months to release its PlayStation in the US after Sega launched its Saturn gaming console – although Sony’s machine had already launched in some countries.

So, why delay? In the past, researchers have suggested that companies are making last minute improvements to their product or assessing an uncertain market – but consumer technology markets are fairly stable and enjoy healthy demand.

Staggered product release

Our work suggests that deliberate delays in launching can benefit both the early bird and the latecomer. We’ve created a mathematical model to compare two notional firms with shelf-ready products competing in the same market – and the results are surprising.

When a product is launched, some consumers will buy it immediately, but others will wait, safe in the knowledge that their favourite brand will launch a similar model down the line. And if two rival products aren’t competing simultaneously for the same group of consumers, this means they don’t need to compete on price so aggressively. Staggered product release dates mean both the early bird and latecomer can charge a premium for their products – it’s a win-win scenario (although not for the consumer).

Persuading consumers that this is a product worth waiting for is key

Even though a company may be missing out on customers, the higher prices it will charge due to diminished competitive pressure can more than make up for the lower sales, our model shows. We wanted to know if this theory held water across brands with different profiles. Would high-quality brands still benefit from a later launch than their lesser-known or lower quality rivals?

If the difference in quality and reputation between two companies is extreme, we found, both are better off releasing their products early. Delaying entry would significantly harm the low-quality brand because few consumers would be willing to wait. For the high-quality firm, given its huge advantage, the marginal benefit from delaying is again slim.

But for brands with a less pronounced difference in quality, the higher quality brand may have more incentives to delay the product launch. This is because consumers are more likely to wait for a higher quality brand than a low-quality one. The high-quality brand doesn’t lose too many customers by delaying, but gains substantially due to less intense price competition.

Know your market

To exploit these insights to their advantage, companies need to know their markets inside out – particularly if they want to time and price their products for maximum profits. They need to know whether their consumers are loyal, and they need to understand where their brand sits beside rivals in terms of differentiation: late product release can be profitable only when there is enough differentiation to convince some consumers to wait for the product. And they must gauge the size of the market and keep on top of consumer numbers.

We’ve found that the latest time to enter a market with a similar product is before roughly a third of consumers intend to buy an item in the product category – if they wait longer, businesses may lose out. There are tools and analyses available that can equip strategists to estimate the size of a market, and judge whether it will pay to delay the launch of a new product.

Communicate with your customers

And if a brand decides to delay the launch rather than rush to market, then it should make it a priority to communicate clearly to consumers that its own product is on its way, and what makes it superior.

Persuading consumers that this is a product worth waiting for is key. Here, companies can use marketing tactics such as releasing early samples for influencers, holding special events, working with media to highlight features that make this product stand out and flagging the release date.

Companies need to know their markets inside out – particularly if they want to time and price their products for maximum profits

While our findings highlight the strategic benefits of delaying product launches, several questions merit further investigation:

How do varying market conditions, such as rapid technological changes or evolving consumer preferences, affect the success of staggered releases?
What role do marketing strategies play in maintaining consumer interest during these delays?
How does the growing prevalence of second-hand markets influence the dynamics of new product launches and pricing strategies?

Understanding these complexities will help companies refine their strategies to remain competitive.

This article draws on findings from "Don’t Hurry, Be Happy! The Bright Side of Late Product Release" by Mushegh Harutyunyan (�ԹϺ��) and Chakravarthi Narasimhan (Washington University in St. Louis).

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What the rise of "buy now, pay later" means for consumers and retailers

Stijn Maesen — Mon, 14 Oct 2024 10:45:36 +0000

What the rise of "buy now, pay later" means for consumers and retailers

Stijn Maesen Mon, 14/10/2024 - 10:45

14 October 2024

"Buy now, pay later" solutions have taken off as a more manageable way to pay for purchases. New research from �ԹϺ�� Business School shows how this is affecting consumer behaviour – and what it means for retailers and policymakers.

Buy now, pay later (BNPL) schemes allow customers to pay in instalments over a few weeks or months, but, unlike traditional credit options, it is typically interest-free. So, instead of paying for £100 at 12 per cent APR on a credit card, a customer can use BNPL to spread payment into four interest-free instalments of £25 over six weeks.

These schemes have exploded in popularity over the past few years, with the total number of users reaching 380 million in 2024. Major retailers including Walmart, ASOS, Adidas and H&M have partnered with BNPL providers such as Afterpay and Klarna to offer the payment option, with further growth expected over the next few years.

Alongside this rising uptake, however, BNPL schemes also attract a share of criticism, particularly as their unregulated nature risks allowing financially vulnerable customers to take on unsustainable levels of debt. In response to these perceived issues, new rules and regulations are on the horizon in the UK, potentially including affordability checks and controls on how the schemes are marketed.

Effect of BNPL

In the context of retailers and consumers flocking to BNPL schemes in their droves, and policymakers moving closer to regulation, it’s important that we understand how and why they affect consumer choices. Are they worth the investment in set-up costs and transaction fees for retailers? What makes them attractive to customers? And does their effect differ among different types of consumers?

We worked with a major US retailer to study real-world transaction data before and after the introduction of a BNPL scheme. Our research is the first to explore how BNPL schemes affect people’s spending, budgeting, and perceived financial constraints.

Those buying with credit cards (as opposed to debit cards) are impacted the most by BNPL schemes

First and foremost, we found that BNPL options boost spending. Specifically, making BNPL available as a payment option increases both the number of purchases and the average amount spent per purchase among adopters.

On average, after introducing a BNPL option, the probability of purchase increases by about nine percentage points and, when customers make a purchase, basket sizes are about 10 per cent larger. We also noted that this boost in spending is not just a short-term effect – it persists over time, lasting the entire 26 weeks in our study.

Root cause

So why does this happen? Our research shows that paying through BNPL helps people feel less financially constrained compared to lump sum payment – both upfront and delayed. This is important as, regardless of how much actual disposable income someone has, it is their perceived financial constraints that dictate their spending.

Digging deeper into this finding, we observed that the reduction in perceived financial constraint is a result of BNPL making payments appear less costly and giving people a greater sense of control over their personal budgets. Together, these effects translate into greater and more frequent spending.

Wider impact

These findings are important, as, in spite of the rising popularity and reach of BNPL options, there remains relatively little understanding of the impact they have on consumer spending.

By showing that BNPL options increase how much people buy and how often they make purchases, our research highlights the benefits they offer to retailers. This may go some way towards justifying the initial costs and ongoing transaction fees that retailers encounter in setting up and running a BNPL scheme.

Additionally, our findings show that those buying less and those buying with credit cards (as opposed to debit cards) are impacted the most by BNPL schemes. These are more likely to be customers at risk of financial difficulty, compared to those spending with debit cards and making bigger purchases.

Our research is the first to explore how BNPL schemes affect people’s spending, budgeting, and perceived financial constraints

By exploring why this happens – for example, people feeling more in control of their budgets and less financially constrained – our research can help policymakers target regulation to ensure BNPL schemes do not have a disproportionately negative impact on those already struggling financially.

This is particularly relevant given the twin pressures of a household cost-of-living crisis and a poor medium-term outlook for the global economy, as balancing the needs of individuals with the needs of businesses will require robust data and a clear understanding of consumer behaviour. Our research provides useful evidence to support this, helping businesses and policymakers best provide for the needs of all stakeholders.

This article draws on findings from "Buy Now Pay Later: Impact of Instalment Payments on Customer Purchases" by Stijn Maesen (�ԹϺ��) and Dionysius Ang (University of Leeds).

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