In this Science Digested blog, I took a look at a recently published article titled “The satiating effect of pricing: The influence of price on enjoyment over time” authored by Kelly Haws and colleagues. The paper, published earlier this year, explores whether or not having the pricing of a product present would impact the consumer’s enjoyment over time. In other words, does having the price of the product present impact the consumers’ decision to buy, or continue buying.
I picked this particular article to review because I often hear debate from both consumers and business owners alike on whether or not pricing should be clear and transparent from the start.
These discussions generally involved businesses that provide a service, or a product that serves and doesn’t necessarily apply to retail products. For example, when you’re researching online for a particular service, you’ll notice that a lot of the time the site won’t give you a clear answer to how much the service costs.
Let’s say I want to know how much my tooth fill might cost by scoping out the dentist’s website. Again nothing! Not even a range. Or I’m looking at different agencies to compare pricing for services like SEO optimization packages. Heck, even the pricing for insurance packages isn't displayed on the websites of insurance brokers.
But I hear and understand both sides. The information isn’t explicit because of so many variables involved that could skew the actual costs, and no business wants to be put in a place where they’re forced to honor a statement that may not be accurate to what the end result might be.
People even argue that it’s a marketing ploy – you are more likely to fill out a question form asking for the price or an estimate when there’s no price listed (duh). This not only increases involvement because of the click-through rates but it gets the potential buyer’s e-mail; win-win!
Then there’s the other argument where the key concept is transparency. Sometimes not having a pricing chart can actually turn away customers, especially if they’re in their initial stages of researching and comparing competing services. Not having a clear pricing chart might even come off as scammy or distrustful. Personally, that’s how I feel. But then again I’m not too shy that I won’t ask for an estimate.
But let’s get back to the point. This article
looks at whether pricing effects “satiation” during consumption. The
researchers define “satiation” as a decline in enjoyment during repeating consumption of the product. They make a note that when pricing is examined in relation to products, there is often an emphasis on quality expectations or receiving a good
But for the purpose of this article, they only focus on the presence or absence of pricing information. Price can be “painful, which makes repeated exposure lead to less enjoyment. The price also reminds the consumers whether or not the experience of the product provides enough benefits to justify the price.
research has explored how a price of the product can act as a cue for the
quality of the product. It can even drive the initial enjoyment of the products.
Another similar study showed that consumers who were primed with wealth were
less likely to engage in consumption experiences. After being shown a picture
of money, participants ate chocolate faster and savored it less than when
participants were shown a neutral picture.
Another study showed that when people were forced to think about their income as an hourly wage, it decreased their happiness with leisure experiences. Wealth and wage are quite different from a product’s price of course, but they do share a common factor – they encourage financial evaluation. There is a relationship between financial considerations and enjoyment. The presence of even a general reminder of money can decrease enjoyment in the experience of the product.
The researchers are arguing that having the price of a product present alters how a consumer sees the product in multiple ways. The presence of price can increase impatience in a consumer, pair that with the price itself being aversive or “painful”, having it present could affect a consumer’s continual enjoyment of the purchase.
So what do we make of this study? It seems that the key point of it all is that having pricing present can affect the enjoyment of the purchase in a negative way for the buyer. But this decrease in “enjoyment” occurs over time. the effect of having price present doesn’t actually emerge immediately. The researchers are arguing that the continual presence of the price over time is like a repeating reminder that the buyer's bank account is going down. Making the buyer less likely to justify buying whatever they are buying. This is important because as we all know, retaining customers is so much more advantageous than finding new ones and you want your paying customers to continue your service.
So how do we use this research to our advantage? Well, I still believe that pricing should be upfront right away, but having a constant reminder of how much my returning clients are spending might not be the best plan. This isn’t saying I’ll keep their purchase price from them, but maybe it’ll be less obvious and in their face. Like... having an automatic subscription.