Intrigue, But Don’t Mislead

“Trick me once, shame on you. Trick me twice, shame on me.”      Using shopper psychology, retailers have the power to trick consumers into making decisions which profit the retailer, but are not in the best interests of the customer. That’s unethical. It’s also a bad business practice because you might fool your customer once, but chances of doing it again plunge substantially. The profit for the retailer is short-term as the customer concludes they’ve been cheated by the store.

      Researchers at University of Central Florida-Orlando and Erasmus University in the Netherlands looked at this issue from the standpoint of what consumer psychologists call “biasing cues.” These are bits of information given by the retailer in a way that can mislead a customer. For instance, most of us carry around a price-quality bias. We tend to assume that if we pay more for something, it must be better. Yet, many lower-priced products are quite good and many higher-priced products are quite bad. If a retailer sets an exorbitant price just to indicate higher product quality, that's a biasing cue.      Using purchase decisions about orange juice, polo shirts, and paper towels, the researchers found that biasing cues could influence a shopper once. But the probability of fooling them again was pretty much gone after the purchaser actually tried the product.

      There are times we increase a price point specifically to indicate better quality. Researchers at Northwestern University suggest this as a way to overcome the suspiciousness shoppers have that multifunction products are inferior to single function products. But we should set a higher price only when we believe the customer will find the purchase of the multifunction product was to their benefit.

      Our customers hate being tricked twice. They’ll stay away from our stores if that’s what they conclude we’re up to.