Posts tagged ‘Experience Enhancement’

Perception and Pricing

Earlier this year researchers from the Stanford Graduate School of Business and the California Institute of Technology published the results of a study on the effect of price relative to preference in the Proceedings of the National Academy of Sciences. Not typically a widely reported on publication, but the outcome of the study caused many in the mainstream media to sit up and take notice. As covered in the New York Times, The Economist, CNet and others, Antonio Rangel, along with Baba Shiv and John O’Doherty conducted a very interesting wine-tasting.

Participants in the study were presented with two glasses of wine and given no other information other than that one wine was $5/glass and the other was $45/glass. Using functional magnetic resonance imaging (fMRI) they documented that the part of the brain that experiences pleasure becomes more active when the drinker thinks he/she is enjoying the more expensive wine. Of course, both glasses of wine were from the same bottle.

“What we documented,” said Shiv, “is that price is not just about inferences of quality…but that price changes a person’s experience with a product.”

The researchers ran different variations of the test, for example, when one wines was said to cost $10 a bottle it was rated less than half as good as when people were told it cost $90 a bottle, its true retail price. Moreover, when the team carried out a follow-up blind tasting without price information they got different results. The volunteers reported differences between the three “real” wines but not between the same wines when served twice.

Rangel, having only studied consumer reactions to wine pricing, is hesitant to extrapolate too much, but says he believes that the bias toward higher prices occurs in many areas. And history has certainly shown that conspicuous consumption and waste are an important part of many societies.

There are many instances of this price-placebo effect, and many companies throughout the years have used it to their advantage. One my favorite, all-time examples is the L’Oréal slogan “Because I’m Worth It”: The L’Oréal products cost more than the other haircare and make-up options on the shelves, but extra cost was rendered incidental by the branding. And while there are many considerations to keep in mind when pricing a product or service–your local market, demand, profit and revenue goals, etc.-it important to realize the additional information and now, clearly, experience value, that pricing plays in terms of branding and positioning.

What’s your take on this? Do you think you’re in a position to bump your prices and improve your customers’ experience?

6 May 2008 at 6:34 pm 1 comment

Understanding Happiness

Daniel Gilbert, the Harvard psychologist who wrote Stumbling on Happiness was interviewed in the NYTimes the other day. His book examines most people’s fundamental inability to truly predict what will make us happy-or unhappy. As he puts it: 

Bad things don’t affect us as profoundly as we expect them to. But that’s
true of good things, too. We adapt very quickly to either. So the good news
is that going blind is not going to make you as unhappy as you think it will.
The bad news is that winning the lottery will not make you as happy as
you expect.

If you haven’t read his book, it’s worth it; a great combination of humor, insight, examples and information that can make an immediate difference in your life. But in the interview he summarizes one of the significant studies described in the book.

…we know from studies is that people tend to take more
pleasure in experiences than in things. So if you have “x”
amount of dollars to spend on a vacation or a good meal
or movies, it will get you more happiness than a durable
good or an object. One reason for this is that experiences
tend to be shared with other people and objects usually aren’t.

The value of the experience, especially in the custom design process, should never be underestimated. What are you doing to add experience value to your design services?

24 April 2008 at 4:35 pm Leave a comment

Emotional Marketing

I spent several years in the trenches of various advertising and marketing agencies and every few months there was another industry genius whose campaign or strategy was the ultimate solution. But sometimes there were real gems of truth to be found among the hype. One of the names I followed since then is Terry O’Reilly, a fixture in the Canadian advertising biz. I recently came across several of his comments that made sense to me back then and still do.

“Emotions should be felt, never stated.” Think about the most powerful moments in your favorite movies, the commercials that move you, even if they’re for products/services you’re not interested in…that’s the power of emotional understatement. 

“People don’t want to be targeted, they want to be understood.” Again, sometimes we lose track of what the message should be when we’re in the midst developing it, but it’s important to keep in mind that custom window treatments are not purchased to cover windows, but for thousands of other emotional reasons, that designers as therapists need to understand.

22 April 2008 at 7:48 pm Leave a comment


We started out the DBRx Atlanta session with the 10 Stories exercise…and I know some of you probably thought we were a bit odd! But just this week I received an e-mail promotion from a show called the Buyers Market of American Craft.

Part of an e-mail promotion for the Buyers Market of American Craft

This is a perfect example of story-selling, giving a bit of personal history, individuality and authenticity to a designer in what I’m sure is the very crowded jewelry-design market. Which of the 10 stories does this sound like?

12 April 2008 at 9:31 pm Leave a comment

If it’s happening in fashion…

Can the home industry really be far behind? Take a look at this article in the NYTimes about how a mass-market manufacturer of men’s suits will be adding a hang-tag to its products to provide carbon dioxide emission information. 

We’ve spoken about how consumers today are information hunters & gatherers…trolling the internet for every detail they can find. We’ve also spoken about how overall, this area of the industry is remarkably under-branded. Here’s an opportunity to create value for your clients and branding for yourselves through the introduction of your own hangtags. These can be eco-inspired, story-driven, etc.

It will require research on your part, and you’ll have to be honest with your clients as there’s no way it will be 100% complete, but it’s a start, and 110% more than your competition or the rest of the industry is doing. 

This image shows a mock up of environmental usage for a bronze piece of hardware. Timberland’s Green Index hangtag is another example of eco-awareness labeling, while the cult fashion line Trovata creates a full story line for each season’s offering and weaves in even greater detail through its tags and labeling. 

Your thoughts?

11 April 2008 at 6:55 am Leave a comment

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