The Economics Behind the Marketing of Christianity

Abstract

When religious organizations sound the alarm that the demand for religion is declining, this often revives a normative debate among scholars over whether these organizations should respond by engaging in marketing. A positive analysis of Christianity offers a different, and perhaps more appropriate, perspective on the matter. The merging of economic theory on credence goods and services marketing theory reveals that Christianity has employed marketing strategies out of necessity since its inception. This paper identifies problems—inherent in the nature of the religious product—that call for these strategies. Further, an historical examination of Christianity highlighting these strategies is used to develop a business model applicable to modern firms.

The key objective of this paper is to demonstrate whether religious marketing is real: first, by conducting a thorough analysis of the nature of the religious product; and second, by examining the actions of the Christian Church to see whether they match the strategies recommended in the economic and marketing literature. Another goal is to highlight the extent to which economic and marketing theories complement one another, following calls from the AMA and other scholars to merge economic and marketing research (Mitchell, 1978; Bloom & Krips, 1982; Zeithaml, Parasuraman, & Berry, 1985; Ford, Smith, & Swasy, 1990).

Consequently, this paper is organized as follows. The first section provides a brief introduction to religious marketing, including how and why marketing applies to religion. A full investigation of the religious product is conducted in the second section. The third section identifies strategies appropriate to marketing the religious product. This is followed by an application to Christianity and the development of a business model, in the fourth and fifth sections. Concluding remarks as well as avenues for future research are expressed in the final segment.

Marketing Religion

Although the appropriateness of religious marketing has raised controversy from a theological or ethical standpoint (Abreu, 2006; Dobocan, 2015; Moncrief, Lamb, & Hart, 1986), it has become increasingly popular in the marketing literature in recent decades and appears to be gaining acceptance as a topic worth further exploration.

But what is “religious marketing”? While there is no consensus, one of the more common interpretations among marketing scholars is that of a religious organization fulfilling its mission by satisfying the needs of potential customers (or parishioners) (Abreu, 2006; Dobocan, 2015). In comparison, Imber and Toffler (2000) broadly define marketing as the “process associated with promoting for sale goods or services…” (p. 346). For simplicity, religious marketing is defined similarly here as the process associated with promoting for sale religious goods or services. Implicit in this definition is that religious organizations promote offerings that will satisfy customer needs, such as the desire for “relief from existential dread” (Ekelund, Hébert, & Tollison, 2006).

Assuming that religious organizations provide goods or services that they market to potential customers, the question still remains: why do these organizations choose to engage in this behavior? According to Levitt (1981), the objective of marketing is “getting and keeping customers” (p. 94). When applied to religion, the inherent social nature of these organizations means that “attracting and retaining members” is essential to their survival, particularly during periods of “declining demand” (Moncrief, Lamb, & Hart, 1986, p. 56). If an organization cannot sustain itself, serving out its mission becomes far more difficult.

Marketing may also be used to “improve perceptions of quality” (Zeithaml, 1988, p. 9). Mehta and Mehta (1995) underscore the need for churches to better understand “worshippers’ perceptions of a good service” to improve their satisfaction (p. 54). In her study of a Catholic shrine in Portugal, Abreu (2006) recommends the use of “brand positioning.” She claims that religious marketing can improve perceptions among customers and perhaps the quality of offerings in the face of increasing competition. The desires to attract followers and to improve perceptions are themselves rather convincing arguments for religious marketing. Nonetheless, it is most notably the credence attribute of religion that necessitates marketing by religious organizations.

The Nature of Credence Markets

Credence goods (or services) are those whose qualities consumers find difficult to evaluate before and after purchase (Darby & Karni, 1973; Zeithaml, 1988). Darby and Karni (1973) introduce the idea of “credence qualities” (p. 68) as an extension of Nelson’s (1970) work on search and experience goods. Nelson asserts that consumers gather information about the quality of goods by searching, prior to purchase, or through post-purchase experience.

According to Ford, Smith, and Swasy (1990), consumers lack technical expertise or simply find the evaluation process too costly. Instead, they rely on seller expertise for guidance. For instance, Darby and Karni (1973) explain how consumers in the markets for medical and (auto) repair services depend on doctors or mechanics to diagnose problems and to recommend appropriate treatments. Consequently, credence markets are characterized by asymmetric information in favor of sellers.

Buyers recognize that the distorted nature of the relationship creates an incentive for sellers to act opportunistically. For example, they may engage in various forms of fraud (Darby & Karni, 1973; McCluskey, 2000; Dulleck & Kerschbamer, 2006). The “incentive to lie” leads buyers to be skeptical of seller claims, according to Ford, Smith, and Swasy (1990).

Adverse Selection and Signaling

Asymmetrically informed markets are also susceptible to problems of adverse selection (Akerlof, 1970) and moral hazard. At best, these “market failures” yield an inefficient outcome in which cheating is possible (McCluskey, 2000) or worse, there is a total collapse of the market. Of particular interest in this paper is how the credence market for religion has tackled adverse selection.

In any credence market, potential buyers cannot distinguish “honest” sellers from those who make false claims. Therefore, they estimate the price of a credence good according to its expected value. Buyers assign weights based on their perceptions of the proportion of honest versus dishonest sellers in the market. As a result, high quality goods are undervalued, and honest sellers find little reason to stay in the market. Further, the prospect of obtaining a poor substitute can deter consumers from purchasing the good altogether. In this case, the market may cease to exist unless market participants can somehow overcome the lack of information.

Spence (1973) proposed signaling as a solution to adverse selection. Signaling may be used to reveal hidden information to a less informed party. Credence sellers have access to private information and therefore assume the role of signaler. Whether consumers believe sellers to be credible experts depends on the nature of the signal. According to Spence, a reliable signal is costly to produce, but marginally less costly for the seller whom it most accurately reflects. Otherwise, the same signal would be accessible to all seller types (honest and dishonest) and would not carry any information. Since consumers of credence goods cannot directly verify claims pertaining to certain product attributes, sellers instead proclaim their expertise by investing in signals that showcase their knowledge of the product and their ability to advise customers.

Updating the Religious Offering

“Religion” as a Credence Good

References to the “credence” attributes of religion originated with Iannaccone’s (1998) survey of the literature on economics and religion. Nevertheless, the application to religion rests largely on the characterization of the religious product. This paper adopts Ekelund, Hébert, and Tollison’s (1996) view, that the product of religion is essentially the knowledge required to attain salvation. Consequently, the primary role of the Church is to inform and guide individuals along the path to eternal life. In this context, as with other credence goods, consumers cannot verify the existence of eternal salvation, either before or after they have chosen to pursue a particular path. Moreover, the asymmetry of information in favor of the Church means that the potential for opportunism also exists in this market. According to Terkun Castro (2012), it is possible to conceive of cases of undertreatment or overtreatment, and overcharging in the market for religion (p. 5). However, it is not necessary to assume that religious organizations actually engage in fraud. What matters is that consumers believe such behavior to be possible because they are at an informational disadvantage.

Following Iannaccone (1998), several scholars have described religion as unique among credence goods (Ekelund, Hébert, & Tollison, 2006; Witham, 2010; Terkun Castro, 2012), although Bloom and Pailin (1995) have equated “credence” to “faith” (p. 21). In contrast to its counterparts, the market for religion exhibits an extraordinary quality. Neither the buyer nor the seller can verify whether one will attain salvation by following the prescribed path. While prospective followers perceive the Church to be an expert, one party is no more certain of the actual outcome than the other (Terkun Castro, 2012). That is, at least not in this lifetime, or until one has “crossed over.” Conversely, it is ordinarily possible for a doctor to know whether s/he has prescribed the appropriate medication for a particular malady.

Despite its unusual status among credence markets, religion is still susceptible to the problem of adverse selection. Consequently, one might expect the Church to employ signaling to ease consumer misgivings and to prevent market failure. In fact, further examination of the Church’s actions over time reveals the use of signals according to various aspects of the religious product.

Beyond Credence: Services and Experience

Ekelund, Hébert, and Tollison (2006) describe religion as a “joint product” composed of public, club, and private goods. Similarly, religion can be expressed as a combination of both credence and experience goods. For instance, while the key product (i.e., the promise of salvation) is a credence good, followers’ direct experience is with the Church as a service provider. Recall that followers rely on the Church to offer guidance along the path to salvation.

Acknowledging the service and experience features of religion enables an extension of the existing analysis to include services marketing theory and subsequently, new insight on the strategic behavior of the Church over the long run. The literature in this area of marketing is extensive and maintains that services have distinctive characteristics. Most of all, they are less tangible than goods. Choi and Kim (1996) explain the difficulty that this creates in defining quality and call attention to the resulting lack of “after-purchase confidence” (p. 49) among consumers in service markets. Additional traits of services include: simultaneous production and consumption (inseparability), typically unpredictable outcomes due to heterogeneity in performance (non-standardization), and the inability to preserve services (perishability) (Zeithaml, Parasuraman, & Berry, 1985; Murray, 1991).

Research on services also overlaps with credence goods. Choi and Kim (1996) assert that services closely resemble credence goods, since quality is unobservable ex ante and ex post, and note that the incentive for sellers to cheat is high. Bloom and Krips (1982) examine the effect of advertising in the market for dental services, which they label a “credence-type good” (p. 29). In addition, in his guide on how to market services as “intangibles,” Levitt (1981) likens the process to marketing a “promise” (p. 96) and emphasizes the need for sellers to create a “credible expectation” (p .101).

In response to possible fraudulent behaviors, services marketing theorists propose solutions akin to signaling in credence markets. Levitt (1981) advocates the use of “tangible surrogates” to reassure customers. Zeithaml (1988) offers suggestions on which “cues” are most appropriate to signal quality (i.e., “quality indicators”). Murray (1991), as well as Bloom and Pailin (1995), recommend strategies according to the information needs of services consumers. Finally, Choi and Kim (1996) focus on the use of “quality surrogates” to communicate product quality information in services industries.

Consideration is also given to the impact that sellers have on consumer perceptions. Zeithaml (1988) encourages companies to improve perceptions of quality, especially when marketing services. In keeping with Zeithaml, McCluskey and Loureiro (2005) stress the importance of perceived quality in a credence market. Whereas, Murray (1991) acknowledges that consumers perceive services as more risky than typical goods and prescribes the use of risk-reducing strategies.

Strategies Appropriate to Marketing Religion

In addition to generating a more comprehensive view of the religious product, the combined theories from economics (on credence goods and signaling) and (services) marketing offer guidance on strategies used to market such products. Further, since the religious product is a combination credence and experience good, a mix of strategies may be appropriate.

The Significance of Information

One approach is to develop a strategy based on the relevant information situation. Murray (1991) conducts an experiment to investigate the information acquisition needs of services consumers. Since services are intangible, less information is available than for goods. Therefore, consumers perceive greater risk attached to the performance claims of services. Murray posits that services consumers need more information, and more practical sources of information. Although direct observation and trials may be suitable for what he deems to be low to moderate risk goods, he concludes that services consumers prefer, find more effective, and have greater confidence in, personal sources of information. Consequently, Murray recommends promotional strategies for services that would “stimulate and/or simulate” personal sources of information, such as offering incentives to encourage word-of-mouth (WOM) referrals, and by training service employees to be knowledgeable and understanding to further enhance communication (p. 18).

Bloom and Pailin (1995) distinguish between search, experience, and credence information situationsin various professional services markets, wherein the target group’s information needs dictate the situation. Search situations yield no fraud since intrinsic attributes are easily verifiable. However, advertising, personal selling, sales materials, news media, and friends can still be used to relay this information. In an experience situation, extrinsic cues including price, brand name, and endorsements are more appropriate, and may also be relevant for consumers concerned primarily with obtaining the most expensive brands. Since consumers will learn many product qualities through experience, attribute information in this situation is secondary to free trials (encouraged by coupons, discounts, and samples) and impersonal cues (e.g., heavy advertising to signal value, guarantees or warranties, expensive buildings and the attractiveness of the atmosphere). Consumers also rely heavily on signals in a credence situation. Personal signals dominate because consumers consider them more “trustworthy”, or because they come from “likeable people” (p. 25). Bloom and Pailin also point to educational efforts (e.g., seminars, manuals, consultative selling) as longer-term strategies to teach consumers what to look for.

Marketing Services

Another approach entails how best to market services according to their traits. As noted earlier, certain characteristics distinguish services from goods. After a careful review of the literature on services marketing, Zeithaml, Parasuraman, and Berry (1985) compile a list of solutions exclusive to problems encountered when marketing services. According to Zeithaml et. al., strategies that best address intangibility include the use of personal sources and WOM, as well as efforts to establish an organizational image. The latter may be accomplished via attention to employee attire and “facilities design” (p. 41). Maintaining contact with customers “post-purchase” is also ideal (p. 35). Inseparability obliges the customer to participate directly in the production process and makes it difficult to “centralize mass production” (p. 35). Service providers can ease these burdens by selecting and training staff in customer relations (p. 40) and extending operations to multiple locations (p. 35). The same survey indicates that opposing strategies may be used to resolve quality differences, or heterogeneity, across providers of the same service. A provider could either embrace differences and tailor the service to the customer, or altogether eliminate variations through what Levitt calls “industrialization” (1972, 1976, 1981).

Levitt (1981) explores additional strategies designed to “tangibilize” (p. 97) intangible products. These include efforts to establish a long-term relationship with the buyer, such as constant reselling and post-purchase servicing. Levitt also cautions sellers to be mindful of the role that appearances play in shaping external impressions.

Additional Considerations

Quality perceptions. A problematic feature of credence goods is a consumer’s inability to evaluate product quality. According to Noll (2004), consumers “have to rely on the expectation being created by the firm’s marketing activities” (p. 232) and often base decisions on their perceptions of quality. In fact, McCluskey and Loureiro (2005) claim that the reputation of credence sellers is based on perceived quality, rather than on actual quality for experience sellers (p. 4).

Consequently, Choi and Kim (1996) argue in favor of using “quality surrogates” to communicate information regarding product quality in services industries, many of which have credence attributes. Zeithaml (1988) also suggests that marketers improve consumer perceptions by investing in “quality indicators.” In particular, she notes that extrinsic cues such as price, a brand name or logo, advertising, warranties and other “seals of approval” are more meaningful when marketing credence goods, and services, than information concerning a product’s physical attributes (p. 8). In regard to religious marketing, Abreu (2006) acknowledges the importance of consumer perceptions and encourages religious organizations to consider the consumers’ image when positioning their brand. Finally, McCluskey (2000) explains how repeat purchases paired with third party monitoring can yield high-quality credence goods. Supplemental research by McCluskey and Loureiro (2005) concludes that when consumers underestimate the quality of a credence good and there is a desire to maintain repeat purchases, an increase in monitoring creates an incentive for producers to boost quality.

Advertising. Advertising may be one of the most common signals in an asymmetrically informed environment. However, as Bloom and Krips (1982) note, advertising as a means of relaying information is a modern interpretation, in contrast with the traditional view of advertising as a barrier to entry. In their study on the effects of advertising in the credence market for professional dental services, Bloom and Krips show how advertising as information can affect consumer behavior. They find that consumers are more likely to select providers who charge relatively higher prices when they advertise. Conversely, advertising is less effective when competition is introduced among service providers.

Advertising can help a seller to establish a reputation, though Choi and Kim (1996) caution that excessive advertising could raise consumer suspicions. The latter is particularly true when advertising credence goods and services, because consumers have difficulty substantiating claims. Ford, Smith, and Swasy (1990) investigate the link between consumer skepticism toward advertising claims and the availability of information. They expect skepticism to increase as information wanes, because advertisers have more reason to be deceptive (Nelson, 1974). While their findings support greater skepticism regarding experience versus search claims, consumers appear no more skeptical of credence than experience claims. Ford, Smith, and Swasy suspect that experience claims come to resemble those for credence goods over time, which could imply that there is some overlap between signals used for experience and credence goods. According to Noll (2004), as long as a firm is concerned with repeat purchases, advertising “becomes credible and quality-ensuring” (p. 237).

Transforming a credence good. A number of articles have commented on the fluidity of credence situations vis-à-vis other information situations. For example, Bloom and Pailin (1995) describe an experience situation as “a short-term credence situation” and accept that “consumers in credence situations […] could shift into search or experience situations if information acquisition costs were somehow lowered for them” (p. 24) or with the “use of educational promotional approaches [such as] seminars” (p. 26). In addition, Ford Smith, and Swasy (1990) assert that there is a “blurry line” between experience and credence good claims over time (p. 439). Studies on the credence market for organic foods have shown that it is theoretically possible to transform a credence good into an experience good, given repeat purchases and third party monitoring (McCluskey, 2000).

Marketing Christianity

An Historical Examination

We turn now to Christianity to explore whether the approaches recommended in the literature are applicable to marketing religion. Christianity was selected for this study because of its lengthy history and continued, strong presence in the religious marketplace. Here, the “Church” represents the supplier of the religious product, consisting of credence, experience, and service attributes. Strategies are grouped largely according to the changing objectives of the Church across three stages of development.

Stage I: Getting the Word Out & Establishing Credibility

In the first stage, the objective of the Church is twofold: to bring attention to its product, and to establish credibility among potential customers. The latter is significant because the key product (i.e., the promise of salvation) is a credence good. Generally, consumers are skeptical of credence seller claims, because they lack information, and will tend to rely primarily on their perceptions. However, the use of personal signals, educational efforts and to a lesser extent, extrinsic cues such as price, can influence perceptions.

According to the literature, credence good information is best transmitted via personal sources and through educational efforts. Personal sources are viewed as more trustworthy than claims found in advertisements, whereas educational efforts imply expertise and can help to establish credibility. In the early days of the Church, Jesus, and later his Apostles, spread the gospel largely by WOM, and subsequently, via personal networks. Specifically, Stark (1996) highlights the rapid increase in Christian followers along personal networks in the first centuries AD. Mendicant friars preached similarly during the Middle Ages, and missionaries continue this practice today. Church teachings have also been expressed, by way of liturgical services, sermons, the Catechism of the Catholic Church, and Bible studies or Sunday School lessons.

In addition, price can act as a signal of value to consumers. The price paid by followers of the early Church often entailed great personal sacrifice, including martyrdom. Christians quickly earned a reputation of putting themselves in harm’s way to helps others, for instance during outbreaks of disease and natural disasters (Stark, 1996). When perceived as the value of one’s faith, these acts likely served to enhance the credibility of the Church.

Stage II: Attracting Followers & Building Trust

Once the Church has established its presence in the marketplace it progresses to the next stage of development. In this stage, the Church is intent on securing a followership by creating a bond with the customer. Levitt (1981) would refer to this as the “courtship” phase, during which the seller is focused on getting customers. Building a customer base and cultivating a relationship with followers requires a greater investment. The Church must demonstrate that its offering can satisfy the needs of its customers. Cleverly, it does this by assuming the role of a service provider and shifting customer attention to the experience aspect of its product, a path to salvation. While personal signals are useful when marketing credence goods, extrinsic and impersonal signals are germane to experience goods and services. According to the literature, these signals take the form of free trials, brand names or logos, heavy advertising coupled with repeat purchases, and endorsements.

The purpose of extending a free trial is to encourage consumers to try the product. In the same manner, the Church offers free trials to promote participation and to teach consumers more about its key product. Individuals can freely sample the path to salvation because there is no explicit entry fee to attend a service or mass. (This is not a comment on the cost of membership, which may require explicit or implicit costs.) Thus, it does not matter whether one is rich or poor, since all are welcome to participate. The early Church also distinguished itself by extending caretaking services freely to non-members (Stark, 1996).

A logo enables a seller to visually convey a unique message in a simple manner. Generally, the message speaks in support of the product and for the brand overall. There are many benefits to having a logo: its simplicity makes it easy to recognize and to share; it stimulates interest by others; and it offers a constant reminder of the message the more readily it is used. In addition, it can signify that the seller has managed to attain a more stable position in the marketplace, and is no longer a new entrant. Perhaps the most enduring and widely recognized “logo” of the Church is a cross, or a crucifix. These symbols embody the message that the Church offers a unique path to salvation by recalling Jesus’ Crucifixion and the Resurrection. Christians often wear these emblems, and church buildings bearing crosses have over time become a mainstay of the Christian brand.

Today, heavy advertising may mean the use of expensive television commercials and billboards, as well as Internet and newspaper ads. However, long before the advent of these outlets, the Church invested in the construction of elaborate cathedral buildings. Considering the innovative architecture, the duration of construction, and subsequently, the great expense attached to many of these buildings, cathedrals may well have been regarded as billboards in their day.

Though customers can perceive heavy advertising as a sign of value, the literature contends that repeat purchases are also needed to ensure quality, and third party monitoring is desirable. According to the Church, the path to salvation is life-long. Consequently, Church practices promote repeat purchases. For example, in the Catholic Church, members are expected to follow the Sacraments. The Sacraments span a lifetime and promote repeated engagement with the Church. In addition, religious followers are typically encouraged to recruit family members and friends, to raise children according to their faith, and to regularly attend services. Such cases could also be considered a form of repeat purchase, since they would create similar incentives for the Church to continue to satisfy consumer expectations.

The purpose of third party monitoring is to guarantee that sellers adhere to their claims. However, it can also help to build trust with consumers by setting standards and enforcing penalties. An endorsement, as a show of public support, is comparable to third party enforcement, assuming that the sponsor can withdraw support. Throughout much of its history, the Church maintained various partnerships with secular leaders. The practice of caesaropapism, in which the Church was subjugated to the rule of the emperor, characterized the relationship between the early Church and the state until the creation of the position of Holy Roman Emperor. (After the year 800, the Roman Catholic Church often exercised greater influence over secular rulers.) These partnerships could be construed as endorsements or third party monitoring of the Church by the state.

Stage III: Guaranteeing the Promise

In the third stage, the Church shifts its focus from getting customers to keeping them. Now, the aim is to develop a loyal customer base (Dobocan, 2015), replete with members who can help to ensure repeat purchases. Levitt (1981) likens this phase to a marriage. However, the sustainability of this “marriage” ultimately depends on whether the Church’s image is consistent with its original promise. This idea stems from Abreu (2006). In her paper on the importance of brand positioning in religious marketing she states, “a religious organization is perceived by its constituents as a brand, a heterogeneous set of characteristics including its key message, the people who work for it, the place where the services take place, its equipment and all the associations of its offer” (p. 141). From the standpoint of a prospective member, does the Church have the resources to support her path to salvation over the long run?

The question of resources is promptly addressed by some of the same strategies used to market services; specifically, those that help to mitigate the challenges posed by intangibility and inseparability. They include investing in appearances (of employees and facilities), a knowledgeable and sympathetic staff, and multiple service locations, in addition to maintaining recurring and long-term relations with customers.

Appearances are relevant when discussing people’s image of the Church. Frequently, clergy are identifiable by their vestments, which can reveal one’s denominational affiliation and rank. Although there are traditional or ceremonial reasons for dressing in this manner, attire can also exude credibility, much like the uniforms worn by judges, police officers, doctors, and other service providers. Another visible hallmark of Christianity is the cathedral building. The Gothic cathedral is an architectural marvel that has been inextricably linked with the Church since the High Middle Ages.

It is common for Christian denominations to require special training for their service employees, such as pastors, ministers, or priests. For example, to be ordained as an Orthodox or Catholic priest, individuals must attend a seminary. Priests also interact directly with followers, and generally have come from, or become part of, the local community. Their contact with parishioners is recurring and is intended to be long lasting.

The prediction of multiple service locations is also applicable to the Church. As Christianity expanded, so did its organizational structure, into a vast network of archbishoprics, bishoprics, and local parishes. In this way, the Church could more readily access, and interact with, a greater number of followers.

Of the three preceding stages, the second may be the most delicate, albeit most rewarding, for the Church. During this “courtship” phase, the consumer is considering whether to commit exclusively to the Church’s path by becoming a regular follower. At the same time, the Church moves beyond being a pure credence good supplier and assumes the additional role of a service provider. By sharing in the experience of a path to salvation, both parties have an opportunity to bond more closely, and the Church has created a new source for revenue collection. The importance of the path in generating revenue is expanded upon in the following section.

A Modern Business Model

“It’s About the Journey, Not the Destination.”

One of the assertions of this paper is that the product of religion—a path to salvation—has strong credence and service components. Various scholars have commented on the significance of religion among credence goods. Most notably, Ekelund, Hébert, & Tollison (2006) describe religion as a “meta-credence good” (p. 28), implying that religion stands above, or beyond, traditional credence goods. (Traditional credence goods generally include legal, repair, and medical services and have a goal that in most cases can be demonstrated.) Terkun Castro (2012) interprets the meta feature of religion more precisely as stemming from the added inability of the seller to verify the end product (i.e., salvation).

However, what makes religion truly stand out from conventional credence goods is the adoption of a unique business model that emphasizes a path toward a “promised” goal. In other words, the seller offers a metamorphosis of sorts, by presenting potential buyers with a transformational experience. Although the consumer may be focused on the destination (i.e., salvation), the producer concentrates on selling the journey.

For example, because of the credence issues surrounding salvation—specifically, that the Church cannot verify the existence of salvation—the Church readily assumes the role of a service provider. Thus, the Church draws attention to its path, rather than to the actual attainment of salvation. Since the latter cannot be proven either way, in reality, the Church bears no responsibility for the outcome.

It is also worth noting that the model does not depend on how many people achieve the goal. It is probable that more customers will set out on the path than will necessarily succeed. In other words, issues of moral hazard can also arise. (For instance, a follower may not achieve the desired outcome if she fails to follow fully the advice of the expert seller.) Hence, it is the path that is the source of revenue in this model (e.g., donations or payment for services rendered by the Church) and not the (end) product or goal. Further, since the buyer is paying for the path, it need not matter to the seller whether the customer achieves the goal.

In addition, the longer is the path, the greater is the business. The model is most effective when consumers commit long term, even lifelong. Recall that the Church employs strategies that encourage repeat purchases. Repeat purchases are mutually beneficial for both the buyer and the seller because they can help to ensure the quality of credence goods (McCluskey and Loureiro, 2005) as well as generate a long-run profit stream. In sum, while the seller dangles a particular goal as the carrot, funding ultimately stems from the path.

Contemporary Applications in Business

The factors that make up the aforementioned business model establish a foundation for what could be called a transformational (credence) good. As such, the model may be used to interpret the practices of businesses that likewise focus on selling, as well as reaping the benefits from, a path to a fluid goal.

Dieting programs. There are many programs for sale that offer a path to weight loss. Jenny Craig Weight Loss, Inc. (JCW) and Weight Watchers International (WWI) essentially offer weight management programs. Each business requires that their customers commit to the program by becoming “members” or “subscribers”, and each uses “consultants” or “coaches” to assist customers with their plans (JCW, 2017; WWI, 2017). Although prospective customers might find the promise of losing 20 lbs in a month to be enticing, the programs are not directly selling the goal of losing weight. Customers often will pay for guidance up front (e.g., in the form of a membership fee), regardless of whether they achieve their intended objective. WWI will give customers a $100 pre-paid card if they lose at least 10 lbs in the first three months of membership. However, they must first purchase a subscription to be eligible for this reward (WWI, 2017). In addition, JCW requires a food purchase (JCW, 2017). The return to the seller comes from the sale of the program and consequently, on keeping the customer on the path.

Admittedly, for some customers the goal is achievable. However, because a greater number of people are likely to start a diet than to succeed (in losing weight), diet programs can maximize their revenue by charging for the path, rather than the end goal. Furthermore, if a customer fails to lose weight, he cannot necessarily blame the provider (due to moral hazard), and may instead find fault in his own actions. The success or failure of the program could be attributed to: the person’s drive, how seriously they are willing to take the program, whether they supplement the diet with exercise, and their underlying genetics.

New age programs. (New Age is interpreted loosely here as a synthesis of Eastern and Western philosophies, primarily in relation to spirituality and religious beliefs.) New Age practices—running the gamut from spiritual reflection, self-help and healing, to the use of meditation and relaxation techniques, yoga, and mindfulness—have been popular in the West for nearly half a century. With the advent of the Internet, programs that focus on New Age practices have become readily accessible online. For instance, iTunes has whole categories devoted to Podcast Apps that offer lessons in “Self-Help” and on “Spirituality” (2017b; 2017c). Some of the Apps require payment for the initial download. However, those that are free may also be subject to a paid subscription to gain access to additional content (iTunes, 2017a). Scientology employs a comparable model, offering free “Life Improvement Courses” online while soliciting “donations” for subsequent auditing sessions (Scientology Los Angeles, 2017).

New Age programs are most similar to religion because their goals tend to be less tangible, and therefore more subjective, than measuring one’s progress while dieting. In other words, consumers are largely responsible for gauging their own advancement. However, in all cases, the goal may become a constantly shifting endpoint. Some consumers may be satisfied with their level of achievement as they steadily progress (e.g., toward “enlightenment”), while others feel that they are falling short. To the benefit of the seller, the latter can incentivize the customer to keep trying, subsequently extending the path. Above all, these applications illustrate a desire on the part of sellers to concentrate sales efforts principally, if not exclusively, on the path.

Concluding Remarks

This study is unique because of its interdisciplinary approach and because it exhibits a link between the core components of the religious product and the strategic behavior of the Church over the long run. Specifically, the existing literature on religious marketing tends to focus heavily on whether religious organizations should engage in marketing. This paper contends that the Church has no option but to market its product, due to the inherent credence, experience, and service components of the religious offering.

These components give rise to market inefficiencies that subsequently call for specific actions on the part of the Church as a credence good seller and service provider. Thus, the more relevant question is whether the Church is employing strategies appropriate to counter these inefficiencies. This first look at Church behavior across different stages of development suggests that the Church is following strategies in line with those recommended in the economic and marketing literature.

Although the religious marketplace has much in common with other markets that offer credence services, this analysis also sets religion apart from conventional applications (e.g., legal, medical, and repair services). The blending of economic and marketing theories has shown that religious providers place great emphasis on the path to salvation. Further, the development of an accompanying business model provides a motive as to why we observe this behavior.

The perspective presented in this paper principally has been historical. However, the expectation is that the model will remain relevant, to the extent that religious organizations continue to sell a transformational (credence) good. In addition, the accompanying, modern business applications reveal that the model also reaches beyond religion. These findings suggest that marketing strategies similar to those long employed by the Church could apply to other firms that follow the transformational good business model. Consequently, this knowledge may be used as a foundation to evaluate the behavior of firms that offer transformational goods and possibly, to improve marketing strategies. Nevertheless, there is room for further research on this topic.

Future Research

This study offers a prescription for those strategies most useful to marketing the religious offering, based on economic and marketing theories as well as on anecdotal evidence from a historical review of Christianity. However, to fully transcend the conceptual phase of this analysis, additional statistical evidence is warranted.

For example, survey data collection could be used to further strengthen the conclusions presented here by demonstrating whether religious organizations today are using this particular mix of strategies. Questions posed could concentrate on the extent to which the organization employs these strategies. Further consideration should also be given to the “stage” of development of the organization since the changing objectives of the organization could alter the ideal combination of strategies. (That is, whether a parish is relatively new to the marketplace or more established.)

Finally, it would be worthwhile to test whether a transformational good business model indeed exists in, as well as beyond, the religious marketplace. One method could be to identify businesses’ primary sources of revenue to verify that they derive from the offered path. Data is readily available online for the modern business applications highlighted here. Moreover, Podcasts have the greatest potential to produce results, with pricing data displayed on iTunes. If the data corroborate the existence of an all-inclusive (transformational) good that extends beyond religion, then more direct comparisons could be made between religious organizations and firms in other industries.

References

Abreu, M. (2006). The brand positioning and image of a religious organization: An empirical analysis. International Journal of Nonprofit and Voluntary Sector Marketing, 11.2, 139-146.
Akerlof, G. A. (1970). The market for “lemons”: Quality uncertainty and the market mechanism. The Quarterly Journal of Economics, 84.3, 488-500.
Bloom, P. N., & Krips, J. (1982). An experiment in the economics of advertising. Journal of Marketing & Public Policy 1, 25-42.
Bloom, P. N., & Pailin, J. E. (1995). Using information situations to guide marketing strategy. Journal of Consumer Marketing 12.2, 19-27.
Choi, C. J., & Kim, J-B. (1996). Reputation, learning and quality uncertainty. Journal of Consumer Marketing 13.5, 47.
Darby, M. R., & Karni, E. (1973). Free competition and the optimal amount of fraud. The Journal of Law and Economics 16.1, 67-88.
Dobocan F. C. (2015). Religious marketing – A means of satisfying parishioners’ needs and determining their loyalty. Journal for the Study of Religions and Ideologies 14.40, 112-130.
Dulleck, U., & Kerschbamer, R. (2006). On doctors, mechanics, and computer specialists: The economics of credence goods. Journal of Economic Literature 44, 5–42.
Ekelund, R. B., Hébert, R. F., & Tollison, R. D. (2006). The marketplace of Christianity. Cambridge, MA: MIT Press.
Ekelund, R. B., Hébert, R. F., Tollison, R. D., Anderson, G. M., & Davidson, A. B. (1996). Sacred trust: The medieval church as an economic firm. New York, NY: Oxford University Press.
Ford, G. T., Smith, D. B., & Swasy, J. L. (1990). Consumer skepticism of advertising claims: Testing hypotheses from economics of information. Journal of Consumer Research 16.4, 433-441.
Iannaccone, L. R. (1998). Introduction to the economics of religion. Journal of Economic Literature 36.3, 1465-1495.
Imber, J., & Toffler, B. (2000). Dictionary of Marketing Terms. Hauppauge, NY: Barron’s.
iTunes. (2017a, February 19). Gaia: Conscious Yoga, Meditation, and Spirituality. Retrieved from https://itunes.apple.com/us/app/gaia-conscious-yoga-meditation/id821068605?mt=8
iTunes. (2017b, February 19). iTunes Preview: Podcasts > Health > Self-Help. Retrieved from https://itunes.apple.com/us/genre/podcasts-health-self-help/id1420?mt=2
iTunes. (2017c, February 19). iTunes Preview: Podcasts > Religion & Spirituality > Spirituality. Retrieved from https://itunes.apple.com/us/genre/podcasts-spirituality/id1444?mt=2
Jenny Craig Weight Loss, Inc. (2017, February 19). Retrieved from http://www.jennycraig.com/site/alt
Levitt, T. (1972). Production-line approach to service. Harvard Business Review 50.5, 41-52. Business Source Complete. Web. 11 Oct. 2016.
———-. (1976). The industrialization of service. Harvard Business Review 54.5, 63-74. Business Source Complete. Web. 11 Oct. 2016.
———-. (1981). Marketing intangible products and product intangibles. Harvard Business Review 59.3, 94-102. Business Source Complete. Web. 11 Oct. 2016.
McCluskey, J. J. (2000). A game theoretic approach to organic foods: An analysis of asymmetric information and policy. Agricultural and Resource Economics Review 29.01, 1-9.
McCluskey, J. J., & Loureiro, M. L. (2005). Reputation and production standards. Journal of Agricultural and Resource Economics 30.1, 1-11.
Mehta, S. S., & Mehta, G. B. (1995). Marketing of churches: An empirical study of important attributes. Journal of Professional Services Marketing 13.1, 53.
Moncrief, W. C., Lamb, C. W., & Hart, S. H. (1986). Marketing the church. Journal of Professional Services Marketing 1.4, 55-63.
Murray, K.B. (1991). A test of services marketing theory: Consumer information acquisition activities. Journal of Marketing 55.1, 10-25.
Nelson, P. (1970). Information and consumer behavior. Journal of Political Economy 78, 311–329.
———-. (1974). Advertising as information. Journal of Political Economy 82, 729–754.
Noll, J. (2004). Comparing quality signals as tools of consumer protection: Are warranties always better than advertisements to promote higher product quality? International Review of Law and Economics 24.2, 227-239.
Scientology Los Angeles. (2017, February 19). Retrieved from http://www.scientology-losangeles.org/beginning-services/scientology-life-improvement-courses.html
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics 87.3, 355-374.
Stark, R. (1996). The rise of Christianity: How the obscure, marginal Jesus movement became the dominant religious force in the western world in a few centuries. New York, NY: Harper Collins.
Terkun Castro, K. (2012). Religion as a credence good and the case against Galileo. Interdisciplinary Journal of Research on Religion 8.
Weight Watchers International. (2017, February 19). Retrieved from https://www.weightwatchers.com/us/
Witham, L. (2010). Marketplace of the gods: How economics explains religion. Oxford, UK: Oxford University Press.
Wrenn, B. (2010). Religious marketing is different. Services Marketing Quarterly 32.1, 44-59.
Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end model and synthesis of evidence. Journal of Marketing 52.3, 2-22.
Zeithaml, V. A., Parasuraman, A., & Berry. L. L. (1985). Problems and strategies in services marketing. Journal of Marketing 49.2, 33-46.