Monday, August 15, 2011

Transform Necessary Difficulty into Value

The general rule is to make it as easy as possible for shoppers to locate and use any merchandise we want to sell them. But as with all other good rules, there are exceptions. When the shopper has searched long and hard for an item, finally finding it in your store, the item can command a premium price. This is an argument for you maintaining a merchandise niche so you become a destination location.
     Difficulty bestows prestige. Iowa State University researchers decades ago explored why certain farmers were purchasing innovative technologies while others did not in circumstances where the innovations were expensive when first made available. The answer to the why was that if the farmer could spare the funds, the fact that the innovation cost lots of money was actually attractive. It gave the farmer a head start and bragging rights that they had the latest and greatest before others could get it.
     As to difficulty in using what’s purchased, consider results from another classic study, this one from University of Texas-Arlington. Researchers investigated the relationship between the taste of a potato chip and the ease of opening the package. For some participants, the potato chips were packaged in a wax-coated bag which could be easily opened. For the other participants, the polyvinyl bag was so difficult to open that participants resorted to techniques like using their teeth or standing on the bag while pulling at a seam.
     In blind tests conducted before the main study, whether the chips were in the wax-coated bag or the polyvinyl bag had no effect on people’s ratings of crispness or overall taste—as long as the researcher, not the participant, opened the package and served the chips. But when the participants had to open their own packages, which of the two types of bag resulted in higher ratings of crispness and taste?
     Yes, the polyvinyl bag.
     Asking people, “Which tastes better?,” is not the same as asking, “Which would you probably buy?” People often settle for a lower quality alternative when they can get to it more easily or inexpensively. If deciding between providing your product in the equivalent of the wax-coated bag or the polyvinyl bag, you might choose the less burdensome alternative. But if your product comes with necessary barriers to usage, look for ways to leverage those negatives so as to increase the perceived value of the item.

Click below for more:
Maintain a Niche So You're a Destination Location
Leverage Barriers to Increase Value
Encourage Customers to Be Innovative

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