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How Underdogs Can Win in the Service Industry … and Politics

Aug 25, 2016
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SMITH BRAIN TRUST — Selling your house and needing help? You’re likely focused on finding a competent agent with a successful track record, and it’s unlikely you’ll make extra time to seek character references. On the flip side, this setup stacks the odds against an upstart agent who wants the opportunity, but has no history of successful deals to point to. But new research from the University of Maryland's Robert H. Smith School of Business pierces this scenario in the service-marketing arena, where competence inherently is prioritized over morality.

Task-driven consumers, like the home seller, will pay attention to and potentially choose new-to-the-industry agents if those agents promote themselves in the right way, says Smith School marketing professor Amna Kirmani. Factors include the perception of moral qualities like honesty, social consciousness and environmental friendliness.

“Although consumers generally value competence more than morality when choosing between service providers, underdog positioning can help moral service providers overcome a deficit in competence,” Kirmani says. Her study, “Doing Well vs. Doing Good: The Differential Effect of Underdog Positioning on Moral and Competent Service Providers,” is forthcoming in the Journal of Marketing and co-authored by Smith PhD student Shannon Lantzy and marketing professors Rebecca Hamilton and Deborah Thompson at Georgetown University’s McDonough School of Business.

“Our findings apply particularly well to startups because their competence is often in question relative to larger, more established competitors,” Kirmani says. And, “underdog positioning is more effective for highly moral service providers who are less competent than for less moral service providers who are highly competent.”

So how can startup auto mechanics, tax preparers and other service providers position themselves as a moral underdog? “On their own website, the provider could explicitly ask customers to rate dimensions that favor the provider, such as environmental consciousness if they invest in being green, or social responsibility if they do a lot with charities,” Kirmani says. “The more evidence service providers can offer about their morality, for example through customer testimonials or ratings, the more likely it is that customers will focus on morality in the decision process.”

Cues from Branding

Moral positioning by underdogs is entrenched and thriving in branding. Prior to being acquired by Coca-Cola, Honest Tea ran marketing campaigns with a morality theme playing on their brand name. The "Our Story" section of its website continues to emphasize its underdog roots, including its founder "brewing batches of tea in his kitchen," as well as health, the environment and social responsibility, Kirmani says. Similarly, other moral underdog brands such as Nantucket Nectars, Ben & Jerry's, TOMS Shoes, Burt's Bees and Lifeway have effectively emphasized both their underdog roots and their morality on their websites.

The researchers drew similar findings based on service providers by studying online service industry reviews to measure the extent to which consumers mention competence, warmth and morality-related attributes when evaluating different types of providers. Separately they observed participants in a series of experiments choosing between a highly competent but morally deficient service provider and a highly moral but less competent service provider. 

Trump vs. Clinton

Kirmani and her coauthors further demonstrate that consumers evaluate service providers by a third trait, “warmth,” in addition to competence and morality. “Morality reflects integrity or honesty, while warmth reflects niceness and friendliness,” she says. “But competence ultimately dominates both when choosing a service provider.” And this applies across various industries — even when choosing the president.

“First, both Hillary Clinton and Donald Trump are strong on all dimensions in the eyes their base of supporters, so the undecided voter is especially critical,” Kirmani says. In the eyes of undecided voters (a block twice as large as it was in 2012), “Clinton is perceived as high on competence and low on morality, and while she’s not high on warmth, her favorability rating, which captures likeability, is better than Trump’s."

Trump at this point “is perceived as low on everything and is the underdog,” Kirmani says. Accordingly there are no competence-morality tradeoffs in play as Trump shows no attribute he can leverage. “So he needs to reverse how he’s perceived in regard to competence and morality, as these variables remain critical.” 

“Every time Trump pivots, he tries to increase both his competence and morality," Kirmani says. "But then he says or tweets something that makes people doubt both his competence and morality.”

Branding Perspectives

Smith professor of international business Peter Morici echoed this point to CNN. "Voters never digested (Trump’s) message (proposing certain tax cuts and slashing certain regulations) before they were distracted by yet another misstep,” Morici said.

Gaffes aside, “Trump has had a way of leaving you thinking, ‘Here’s a great pitchman, but how will he perform when it’s time to govern?’” says Smith School marketing professor Hank Boyd. “He’s a master at getting his brand out there,” Boyd says. “He garners top-of-the-mind awareness. He’s better at this game than Clinton.”

On the other hand, Clinton’s Secretary of State and Senate experience, along with her policy work during her husband’s administration, fuel her image “as a policy wonk who can get deep into the weeds and figure out what’s going on with the issues,” Boyd says. “She’s the quintessential political insider."

Morality Rx

Clinton subsequently has capitalized on Trump’s weaknesses to portray him as unfit to govern, Kirmani says. “Meanwhile the Trump campaign is trying to capitalize on the Clinton email server scandal by referring to her as ‘Crooked Hillary’ to portray her as untrustworthy,” she says. "But Trump should focus on improving the perception of his own morality by pivoting to being more inclusive. This also would make the Republican establishment happy and draw some independents.”

As for Clinton, “the steady trickle of email-scandal revelations continuously erodes the perception of her trustworthiness,” Kirmani says. "She should, in one swoop, disclose and account for all emails that could be construed as damaging in order to put the issue to sleep."

DC vs. Marvel Comics

Such a mea culpa would reaffirm a DC Comics vs. Marvel Comics analogy fitting this race, Boyd says. “Trump, with his unrelentingly self-confident rhetoric while rarely admitting mistakes is similar to DC Comics characters like Batman and Superman, who were portrayed as godlike with amazing powers and could never do wrong. Then Marvel came along with characters like Spider-Man and the Fantastic Four. In addition to their special abilities and powers, they were presented with human flaws and failings. Clinton’s transparently tearful breakdown during her 2008 campaign reflected this perfectly, and it should still be in voters’ minds.”

Boyd says Trump has a lot of work to do on both competence and morality issues. And warmth? Boyd says his charm comes across in a Don Rickles (insult comic) sort of way. "His culturally offensive posturing has a shock effect that excites part of his base,” Boyd says. “A great enigma throughout this campaign is how Trump, despite his privileged background, has connected with the blue collar worker. You have to give Trump credit here. That’s pretty good marketing.”

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About the University of Maryland's Robert H. Smith School of Business 

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty masters, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.