UCLA

Marketers of programs that are designed to help consumers reach long-term goals (e.g., lose weight) face twin challenges of making the program attractive enough to encourage consumer signup while still motivating them to reach their desirable long-term goals. I examine how incorporating emergency reserves, pre-defined slack with a small cost, within goals influences consumers’ preferences and performance. Overall, I find that consumers not only prefer goals with emergency reserves (e.g., a goal of going to the gym 7 days of the week with 2 “emergency skip” days) to goals without emergency reserves but also perform better with them. In Chapter One, I demonstrate when and why people prefer goals with emergency reserves. Further, in Chapter One, I also reveal that consumers perform better with goals with emergency reserves than with goals without emergency reserves and other flexible goals because they try to resist using their emergency reserve in order to avoid incurring the cost (psychological, opportunity, or future) for using it, leading them to try harder to reach a more difficult reference point/goal. In Chapter Two, I demonstrate that consumers persist more after a subgoal failure with goals with emergency reserves than goals without emergency reserves; I find that the emergency reserve alleviate the negative consequences of goal violation by transforming a sense of subgoal failure into subgoal progress, leading consumers to feel more committed to their goal, and thus increasing their likelihood of persisting at their goals. By offering emergency reserves, marketers can not only attract consumers to sign-up initially but also help them reach these desirable long-term goals they have been struggling to achieve.