You pay what you think it's worth (to you)
A few years ago an experiment was done by a team of Cornell psychologists involving chocolate brownies. This wasn’t just a taste test but in fact was the giveaway of a chocolate brownie to customers under the condition that they gave feedback on two things: how they rated the brownie and what price they would be prepared to pay for the brownie the next time they are in?
The most interesting part of this behavioural economics experiment is that people were served the brownie in 3 different ways:
On a napkin
On a paper plate
On a china plate
So to be clear, they were the same chocolate brownie, served differently. The results provides an insight into the perceived value of the serving method.
The Napkin - On average, those served on the napkin were prepared to pay 53 cents and rated it ‘OK’
The Paper Plate - On average, those served on the paper plate were prepared to pay 76 cents and rated it ‘GOOD’
The China Plate - On average, those served on the China plate were prepared to pay $1.27 and rated it ‘GREAT’
It tastes better and costs more on a plate?
So customers served their brownie on the china plate, clearly put a much higher value on the brownie both in terms of how they thought it tasted and the price they would pay for it next time. So it’s not just about the brownie is it? It’s about the value someone puts to the experience of eating the brownie. The positive emotions that are generated from the experience of eating from the plate spark value in the consumer’s mind. Should fish and chips always come wrapped in paper? Would you perceive your fish and chips to be a higher quality if they were served on a crisp cardboard ?
What are ways you can add ‘perceived’ value for little to no cost to your products and services? How can you dress up your product to provide a higher value customer experience?