Perception is everything: Don’t under-price your products
There was a TV ad that ran years ago. Though the product being flogged has been lost in the sands of time (the sands in my mind, anyway), the tag line was “Always buy the best and you’ll never be disappointed.”
Research published last month in Proceedings of the National Academy of Sciences certainly backs up the premise that if you think it’s expensive, it certainly tastes better.
I would venture that things perceived as expensive look, sound, smell, and feel better, too.
The California Institute of Technology study used 21 volunteers to sample wines in a blind taste test. The researchers ran the test 15 times, putting five bottles of Cabernet Sauvignon wine in a random order, asking the volunteers to rank them in order of preference.
The volunteers were given two of the wines twice; once with the real price, once with a fake price. A $90 bottle was passed off as a $10 bottle, and a $5 bottle was passed off as a $45 one.
The participants also had their brains scanned for activity related to pleasure.
It comes as no surprise to me that the “expensive” wines both produced more activity in the pleasure centers of the subjects’ brains and also resulted in higher ratings.
“If you believe that the experience is better…the rewards center of the brain encodes it as feeling better.” said team leader Antonio Rangel, an associate professor of economics at CIT.
The bottom line? Enjoyment increased in direct proportion to price.
So don’t short your customers’ experience. Test for your ideal price point, and you might increase your joy and theirs.