Marketing Monday: what vinegar, coffee & ice cream share

The Role of Expectations

Imag­ine this…you walk into a cof­fee shop and you are imme­di­ately offered a free cup of cof­fee if you agree to fill out an eval­u­a­tion form about the cof­fee. Dur­ing the course of the days of col­lect­ing info from cus­tomers the barista makes some changes to the condi­ments avail­able to enhance the cof­fee things such as, cloves, nut­meg, orange peel, and sweet paprika. For a while she puts these condi­ments in fancy metal and glass con­tain­ers set on a brushed metal tray with fancy printed labels and tiny spoons to use to scoop the condi­ments up. Other times she puts them in white Sty­ro­foam cups with uneven edges and labels scrib­bled in marker. Guess what the out come was after serv­ing hun­dreds of cups of cof­fee?  If you guessed the fancy con­tain­ers enticed folks to use the strange addi­tives you’d be wrong since no one chose to add them regard­less of container.

What did hap­pen, was the cof­fee was more highly rated when the weird addi­tions were dis­played in the fan­cysh­mancy con­tain­ers. In case you are won­der­ing this was a study of expec­ta­tions buy researchers from the Har­vard Busi­ness School and Lon­don Busi­ness School and the Sloan School at MIT. It was con­ducted over sev­eral days in which sev­eral hun­dred stu­dents took part anx­ious to get their free coffee.

Fur­ther stud­ies of beer where one glass con­tained Bud  and the other also con­tained Bud but with a dash of Vine­gar added, found that those who were not informed about about the vine­gar actu­ally found that beer bet­ter than the one with­out. In later exper­i­ments, a group was informed ahead of time of the vine­gar lac­ing while another group was told after­wards. We would expect that those told before would rate the beer lower than those told after­wards. Well the exact oppo­site hap­pened, those who were told before rated the laced beer as high as those who didn’t even know the beer was laced. But it gets stranger the exper­i­menters offed the test groups a glass of the unlaced beer along with eye drop­pers and con­tainer of vine­gar. What hap­pened? The groups that were told after they tasted the laced Beer dou­bled those who chose to use vine­gar in their beer. Oh and they were given the recipe for lac­ing and all fol­lowed it to the letter.

What to do…

OK…so what does all this beer and cof­fee have to with artists? Lets try them on and see. Say you are going to show in a gallery and the gallery itself is not a lot to write home about but it is impor­tant to show there. We already know that the gallery envi­ron­ment will have an effect on your sales and you have lit­tle con­trol of how the gallery can be set up to make it enhance and sup­port your work. So you decide to do what you can to spiff it up and you design your brochure and other mate­r­ial that the gallery will use to pro­mote your work in ways that describe its appeal sen­su­ally because your work is sen­sual. You use words like lush, stim­u­lat­ing,  and cheer when you describe how your work will fit into a poten­tial buyer’s envi­ron­ment, you say cer­tain pieces would brighten a  room or change the tone of a room to warm cov­er­ing layer of peace and tran­quil­ity or bois­ter­ous  joy.

What you are doing is work­ing with expec­ta­tions. Instead of describ­ing your work in dull aca­d­e­mic heart numb­ing ways you describe it sen­su­ally. Instead of describ­ing how your posts were fired with a uniquely designed Japan­ese wood  fired kiln and your pots were put into key places in the kiln. You describe how the pots as hav­ing a  nat­ural  calm­ing fin­ish that calls out to be used, or your mugs yearn to hold hot cof­fee or tea pro­vid­ing the per­fect morn­ing experience.

The other thing the cof­fee exper­i­ment shows is how pre­sen­ta­tion can not only sup­port your prices but also enhance the expe­ri­ence of your work to the point that price dis­ap­pears or is greatly reduced as an issue. Buy­ers are more likely to be drawn to your booth, gallery exhibit or web site if the pre­sen­ta­tion of your work reflects the val­ues of your mar­ket and your posi­tion in it. Your pre­sen­ta­tion will help con­firm that they have found a match and hence won’t be as much con­cerned about price as they would be about your stuff’s abil­ity to answer their emo­tional needs. You are help­ing your buy­ers by show­ing them how much your stuff can enhance their lives.

Finally, all this stuff about expec­ta­tions has been tested using fMRIs where you can actu­ally watch the parts of the brain light up under cer­tain con­di­tions. To under­stand the rea­son behind soft drink pref­er­ences neu­ro­sci­en­tists used fMRIs and found that taste had lit­tle or noth­ing to do with pref­er­ence, instead choices were based on brain activ­ity asso­ci­ated with a par­tic­u­lar brand. What does this tell us as work­ing artists? It reit­er­ates the impor­tance of our brand image to those who expe­ri­ence our work, the more that expe­ri­ence is pos­i­tive the more we, our brand, is cho­sen over oth­ers in many cases in spite of price.

The Price of Free

Do you remem­ber that time you were walk­ing through Tar­get and you saw the sign adver­tis­ing three six-packs of a generic pop for the price of two, pop you never really cared for? But despite your his­tory of not lik­ing that par­tic­u­lar brand you were sud­denly  over come with a feel­ing that you had, absolutely had to load up on as much of that pop as you could, as if Armaged­don was on its way.

Or, what about the time you stood in line for hours to get a free ice cream cone from Ben & Jerry’s? And unbe­knownst to you a block away you could have got­ten 2 scoops for about a dol­lar with­out stand­ing in line.

We’ve all done this, there is some­thing about free or the per­cep­tion of free that kicks our basic sur­vival instinct into motion. Why is that? One of the rea­sons offered is that there is no risk, when we buy some­thing, even at a dis­count there is always a risk that it won’t work, or meet the needs we thought it would. Free stuff elim­i­nates that risk. We humans are intrin­si­cally afraid of loss…but free elim­i­nates that loss, if it doesn’t work, we can always toss it out the win­dow with­out guilt.

Free, blinds us so much that we lose our abil­ity to rea­son, fre­quently the choice between two prod­ucts, one offed as free with no fea­tures and the other not but includ­ing some free ele­ments will lead us to chose the free option with­out notic­ing that if we were to add the ele­ments that were excluded from the free option the over­all price would exceed the cost of the full price item that includes all the options the free one didn’t.

Like­wise we might choose one car over another because it came with free oil changes, or that HD TV that comes with free three months of satel­lite TV. If we were to price out the real cost of an oil change the sav­ings would be minus­cule over the cost of the car. We con­ve­niently ignore the fact that the free satel­lite TV expires in three months and is setup to auto­mat­i­cally renew…at very high monthly price.

As I’ve men­tioned ear­lier the con­cept of free applies to time as well, we con­ve­niently con­sider our time as free and neglect to include that fac­tor when we cal­cu­late our costs of doing busi­ness. So when we under­take a DIY project in our busi­ness that takes us more time and sweat than an expert would take we are loos­ing money because we could be pro­duc­ing income gen­er­at­ing stuff.

What to do?

We can use our pric­ing strate­gies to include a free ele­ment, it can be deliv­ery, it can be a free fit­ting for cus­tom made work, it can be a set of pots that include a free pot that com­pletes the set. Of course I’m not sug­gest­ing you give your stuff away what I am sug­gest­ing is that free can be used to attract crowds will­ing to fall all over them­selves to take advan­tage of your deal.

Again, as in all the other approaches to pric­ing, there is a fine line between dirt bag and nice. As an artist your pri­mary role is to sell enough of your stuff to keep you in your stu­dio and to have a warm place to sleep. The fine line is once again know­ing what your mar­ket wants, your posi­tion in it and help­ing them see you so that you can be the one who sat­is­fies their needs. Being a dirt bag may work for used car sales­men but doing so as an artist would likely lead to you need­ing to find some­thing else to do.

graph­ics cour­tesy of iStock and Daylife

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Tagged as: art, Ben & Jerry, Business, Marketing, MIT Sloan School of Management, Sloan School