Cialdini's principle of Authoroty and Price Pain
Could Cialdini’s principle of authority be used to soften the perceived feeling of price pain? Neuroscience helps to find out!
Psychologist Dr. Robert Cialdini describes different tactics to improve the persuasiveness of communication. Cialdini’s principle of authority can considered useful to influence persuasiveness of websites. This principle increases the value of a product, but how does authority influences this value perception of a consumer?
Another principle of Cialdini – Social proof – is known to have a lot of influence on consumers’ purchase behavior.
This principle explains that seeing many people use a certain product or service, encourages us to take these products and services into consideration. An example, websites often use this principle by displaying ratings and ‘Most sold’ labels. This concerns equal communication: ratings are generated by other consumers.
On the other hand, a difference in knowledge is expected for authority communications. A professional who promotes the product, or a more objective review website which evaluates products and labels them with labels such as ‘Good choice’ or ‘Best tested’.
Advertising research at Unravel Research shows that commercials starring an authoritarian figure score more positively on average, compared to commercials with just a regular consumer.
The increase of value perception of a product can thus increase sales. Though, the question remains; does the product become more interesting because of the extra value attributed, or does it also influence the experience of the price?
Does spending money hurts?
The fact that spending money can truly hurts a little bit, originates from a brain scan which showed an activation of the pain area when people are spending money. Which proves that spending money can indeed hurt!
Is a low price really better?
At Unravel Research we measure price perception in the brain, instead of asking the consumer directly. We often see that expressed opinions do not match consumer’s real thoughts. Regarding research on pricing, this can be considered an even more sensitive research subject: consumers always consider cheap products – if explicitly asked – always as better.
What the brain is telling us about pricing
However, consumer’s brains often show us something different. An underpriced product will unconsciously be considered as less valuable. A consumer will make a price-quality trade-off and accordingly assumes that when something is considered too cheap, it will also be of low quality. As the Dutch saying states: Buying cheap is expensive.
Implicit price experience in a consumer’s brain can be measured!
It is therefore of great importance to measure unconscious consumer experience. Neuro research can be used to reveal the unconscious price perception. Using EEG metrics, we measure the consumer’s reaction to the price of a product.
The brain’s perception of price is being measured – among others – by the reaction which is referred to as N400. This is the reaction which fluctuates with the congruence of two concepts. For example, within a sentence but also the fit of the price with a product. The greater the measured reaction the less likely it is that the price fits the product.
Does the authority-label influence the implicit price congruence?
To measure the effect of a product sticker reflecting an authoritarian’s opinion, we showed respondents different products in our research lab. Some products with and some without such a label. We also varied the prices of the products during the trials. Thereafter, we asked respondents to express their explicit rating of the price: is it good, is it too expensive or too cheap?
Brain data showed that products with an authoritarian label scored on average 10% higher on the price-fit ratio compared to products presented without such a label. When products with such a label were presented, the congruence between product and price was higher, independently of the actual price. As a result, more consumers will evaluate the price as acceptable.
On the other hand, the subjective price ratings did not reflect a difference between the conditions. This showed us that on an explicit level, an authoritarian label will not have any effect on the consumer compared to products which do not have such a label.
‘It should be good then’
This statement is exactly reflects what we often see. People think they are not influenced by
social proof, but unconsciously this is what often happens. A label which communicates the high value of a product, can soften the price pain experienced. This can be considered similar to the equivalent social proof influencing principle. Once again, Cialdini has been proven to be right!
Therefore, using product labels which reflect a professional’s positive opinion on the product, can be considered very valuable.
Curious what effects your product labels or prices have on your consumer’s price experience? Using our pricing research, we can find out the effectiveness of your communication to your consumers. Besides, this method allows us to determine the optimal price for your product. Using neuro research, we gain knowledge on how consumers will on average respond on the product price. This will provide you with more certainty around your pricing to – in a reasoned way - introduce price changes.
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