The Power of the Unconscious on the Customer Experience

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.