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The Power of the Unconscious on the Customer Experience

John Todor | Feb 22, 2008 158 views 3 Comments

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Pro tali numismate tales merces. (One gets what one pays for). Gabriel Biel (Dictionary of Clichés, Rogers 1985)
Recent evidence says that this applies to the customer experience and they marketers need to listen up.
We have known for some time that consumers’ beliefs and judgments influence the perception of value. Lower priced items are judge as lower quality. A couple of examples, a beverage labeled with a name brand tastes better than an unlabeled drink; meat labeled as 75% fat free tastes better than when it is labeled 25% fat.
Now there is evidence that a discounted price can unconsciously impact the actual efficacy of a product.
Here’s the gist of the research. Start with an energy drink that is supposed to improve mental acuity. Tell one group the drink retails for $2.89 but you got it at a discounted price of $0.89. Tell another group that the drink cost $2.89. Then, give them a some puzzles to solve. (The research design was a little more sophisticated and controlled).
The results, the people who were told the drink was discounted underperformed the other group, significantly. This was not perception, this was actual performance. The discounted price impacted the actual customer experience with the product.
One of the experiments demonstrated that while expectation can impact placebo effects, setting high expectations had less impact on the discounted price group. Another experiment made it clear that the impact of the discounted price happened at an unconscious level.
So what are the implications of this research?
Encouraging customers to buy on price has a negative consequence besides being less profitable. The discounted price might get the customer to chose the product over a competitor’s more expensive brand, but it can reduce the experiential impact or outcome and thus reinforce the low price-low quality perception. This perception encourages customers to buy that product on price and convenience.
But it goes deeper. Setting high expectations (marketing the desire experiential outcomes) can improve performance or efficacy—a type of placebo effect. However, when the customer is pre-tuned by a discounted price, this impact is reduced.
Certainly this is only one series of studies and it is dangerous to over-generalize. But, the results are consistent with growing evidence that mentally engaged customers are less price sensitive and derive greater experiential value.
The practical implications—if you are putting an emphasis on the customer experience, stick to things that enhance the customer experience. Don’t mix your metaphor by throwing low price into the mix.

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3 Responses to The Power of the Unconscious on the Customer Experience

  1. Daryl Choy February 23, 2008 at 8:32 am (129 comments) #

    John

    Interesting blog, but I’m a bit confused with below paragraph.

    The results, the people who were told the drink was discounted underperformed the other group, significantly. This was not perception, this was actual performance. The discounted price impacted the actual customer experience with the product.

    Do you mean “this was perception, this was not actual performance?”

    Daryl Choy
    Make Little Things Count
    wisdomboom.blogspot.com

  2. John Todor February 24, 2008 at 7:55 am (199 comments) #

    Daryl,

    We have known that people have perceptual bias that impact their judgments. What this study added was how the belief that a beverage was bought at a discount (peception of lower quality) impacted their ability to perform. The two experiemental groups drank the same beverage and performed the same mental test yet the people who thought they had consumed a discounted energy drink performed more poorly. They underperformed those where told the drink was bought at full price and they underperformed a control group that didn’t drink anything.

    For the people in the discounted drink group knowing that the drink was discounted undermined their actual ability to perform.

    Hope this clarifies the point.

    John

    John I. Todor, Ph.D.
    Author of Addicted Customers: How to Get Them Hooked on Your Company

  3. vancox March 2, 2008 at 6:10 pm (374 comments) #

    I suppose, in the consumer’s mind, the product had a bad sales perfomance, that’s why it has a big discount…consequently it is not a good product.

    [quote=choypw]John

    Interesting blog, but I’m a bit confused with below paragraph.

    The results, the people who were told the drink was discounted underperformed the other group, significantly. This was not perception, this was actual performance. The discounted price impacted the actual customer experience with the product.

    Do you mean “this was perception, this was not actual performance?”

    Daryl Choy
    Make Little Things Count
    wisdomboom.blogspot.com[/quote]
    Ribron

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