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customer relationships

Marketing Nudges Can Affect Customer Relationships – Here’s Why

Building strong customer relationships and maintaining trust is essential for a company’s long-term success. Trust forms the foundation of consumer loyalty, which in turn drives business growth and profitability. Marketing plays a crucial role in shaping these relationships by communicating value, aligning with consumer needs, and reinforcing brand integrity. However, the use of subtle tactics, such as marketing nudges designed to steer consumers toward certain choices, can have unintended consequences. While these strategies may initially drive sales, they can also lead to consumer skepticism if perceived as manipulative. This erosion of trust can weaken the overall relationship between the company and its customers, leading to reduced brand loyalty and even the loss of business. Hence, this UCLA Anderson Review article explains how marketing nudges can affect customer relationships and trust. 

According to the article, businesses often rely on strong customer relationships as a cornerstone of their success, but a common marketing tactic might undermine this trust. The article suggests that while companies use “decoy” options to nudge consumers towards more profitable choices, research indicates this strategy can backfire. According to the article, a series of experiments found that including an inferior decoy option in a product lineup led to increased consumer distrust, as customers began questioning the company’s intentions. The article suggests that this distrust can reduce interest in the product and the company overall. However, the article also notes that third-party trust ratings can somewhat mitigate the negative impact of these decoy options, making consumers more likely to trust the company despite the manipulative tactic. This research highlights the importance of transparency and trust in maintaining strong customer relationships.

In the competitive market landscape, where trust is hard-earned but easily lost, companies must carefully balance their marketing strategies to ensure they enhance, rather than undermine, the customer relationships they seek to build. Read through the preceding text to get to know more about this.

Technology affects our world in many ways. To dive deeper into technology’s role in the business world, visit UCLA Digital Business Leadership Program (UCLA DBLP).

Cherish Kaur

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