Labelling affects customer decisions. Here’s how to get it right

The label we give something has more impact than we might imagine, and has dramatic implications for whether we successfully influence our customers. Not only does it provide information about what the product or service is, a label comes with pre-existing psychological associations that can work for or against a customer’s desire to engage with us.

Take using a brand label, for instance. People told their cocktail contained Red Bull were more likely to believe themselves to be — and act — intoxicated, than those who were given the same cocktail without the brand association.

Labels in letters work, too. The NSW government was able to increase payment of overdue fines by $1 million by using a prominent “Pay now” stamp together with “You owe”, rather than “Act Now” accompanied by “Amount owed”.

Let’s not forget the use of evocative labels, either.

Diners purchased 25% more when plain old sweet potatoes were instead described as ““zesty ginger-turmeric sweet potatoes”, and dieters given “fruit chews” ate almost twice as many as dieters given the same treat described as “candy chews”.

More recently, researchers from the University of California were interested in working out whether labelling a menu item in a university cafeteria either “plant-based” or “vegan” drove sales best. 

After analysing more than 150,000 consumer decisions, they had their answer. Sales increased 24% when the dish was called “vegan/vegetarian”, like “vegan BBQ Chicken Quesadilla”, rather than the same dish being called “plant-based”, like “plant-based BBQ Chicken Quesadilla”.

Surprised by the result, the researchers speculate that familiarity and social currency may have been in play.  In other words, people were more familiar with what a vegan/vegetarian meal meant, and there was cachet in linking their identity with veganism.

How to choose labels

Clearly labels have a big bearing on customer decisions, so we need to think about the language we use in our calls-to-action, product names, email subject lines, policy documents, point of sale, invoices and menus.

But aside from running a 10-week experiment and analysing hundreds of thousands of decisions, how can we choose labels that are most likely to be effective?

Three guidelines to follow

1. Avoid ambiguity

   Ambiguity leaves room for doubt, and doubt can lead to avoidance. “Pay now”, for example, tells people what they need to do, whereas “act now” requires them to understand what acting now entails.

   “You owe” places them in the hot seat, using the first person pronoun “you” to leave no doubt as to who the action is for. “Amount owed”, on the other hand, is passive and leaves accountability unspecified.

2. Sound it out 

   When considering a name or label, say it out loud. Does it sound sharp or flat? Thanks to “phonetic symbolism”, people prefer the sound a name makes to match the product’s shape, so sharp sounds are best for a knife, flat or dull sounds for a hammer.

   While you are at it, make it easy to pronounce. Name fluency — in this case the name of job candidates — has been found to impact career prospects. Put yourself in your customer’s shoes — will they trip over your product or brand name when trying to tell someone about it? If so, perhaps look for something more straightforward.

3. Avoid inflammatory language

   Unless you’re a lawyer or debt collector, to stay in the good graces of your customer it’s best to steer clear of inflammatory language. Referring to their benefit “ceasing”, for example, is more inflammatory than their benefit “changing”, and a “price adjustment” is less confronting than a “price increase”.