Monday, February 27, 2017

Charge for Savoring

Two groups of basketball fans were shown the stats for a fictitious player’s performance over five seasons and asked to state how much this player should be paid in year six. The fans in one group were told that the stats were for actual performance. Those in the other group were told the stats were expert predictions of a rookie’s first five years in the league.
     For which group of basketball fans was the average of the statements of deserved pay higher do you think, and, based on your own years of performance as a retailer, why do you think that?
     The correct answer from the study, which was headed up at Stanford University: The salary estimates were about 20% higher for the rookie than for the experienced player. The researchers attribute the finding to consumers’—sports fans and others’—excitement in thinking about potential. One name for this type of excitement is “savoring,” and savoring does carry with your shoppers a definite value which allows you to set a higher item price.
     The value of savoring shows itself in ways other than money paid. In a study at University of Chicago and Chinese University of Hong Kong, some participants were asked something like, “How much effort are you willing to exert for a bag of Godiva chocolates? Oh, before deciding how hard you’ll work, you want to know how many chocolates are in the bag? Well, it’s either two or four.”
     Those participants worked noticeably harder than did those told that the bag was guaranteed to contain four chocolates. The researchers explain this by pointing out how the tickle of uncertainty stimulates consumers. They had parallel results when offering one group a guaranteed reward of two dollars and the other group only a guarantee that it would be either one or two dollars.
     The value augmentation from savoring is most pronounced with novel experiences. When shoppers have had ample familiarity with a certain type of purchase, the tickle of uncertainty fades. Also, what we see as effects of anticipation might actually be due to reality testing. Those Stanford analysts of the basketball player performance stats should note that other stats show the average career duration of a National Basketball Association player is 4.8 years. The rookie might legitimately garner a higher estimated salary because the player with five years of experience is heading into a downward performance path.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Tickle with Uncertainty
Fill In the Hourglass for Customers
Delay Assumptions About Fast Shipping

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