Are you on the fence about a big purchase? Maybe a vacation, a new camera, or a night out at a fancy restaurant? If you relax for about ten minutes, chances are that splurge will suddenly seem more affordable-even though the actual price hasn't budged.
That may sound unlikely, but research from three universities shows that customers are willing to pay more for an item, or for an experience, when they're relaxed. Would-be buyers who are in a neutral emotional state, or even a bit stressed, are consistently willing to pay less. Relaxing before a big purchase may not be good for your wallet, but the research goes a long way toward explaining why, in some cultures, it's almost impossible to make a purchase of any size without first sharing a cup of tea with the merchant.
Relaxation and your Wallet
Michel T. Pham, of Columbia Business School, Iris W. Hung of the Business School of the National University of Singapore, and Gerald J. Gorn, of the School of Business at the University of Hong Kong, conducted a series of experiments to determine how one's degree of relaxation is connected to the willingness to pay a range of prices for various products.
The experiments, involving 670 students, were structured similarly. In each case, one group of students watched a relaxing video or listened to relaxing music while the other group watched a video or listened to music that had no effect on how relaxed they were. In one experiment, the students were asked how much each of ten products was worth. In another, they were asked how much they would be willing to pay for a particular camera on eBay. In a third experiment, some subjects were encouraged to think more generally before considering a purchase, while others were prepared to look at details instead.
- Given a list of 10 products, the group of relaxed students said the products were worth more than the non-relaxed ones did.
- Relaxed students were willing to pay about 11% more than the others when asked to focus on a single product. Asked to imagine they were bidding on a camera on eBay, the relaxed students thought the camera was worth about $2,550 (Prices are in Hong Kong dollars). The others pegged it at an average of $2,293. When the researchers repeated the experiment, the relaxed students were willing to pay $2,419, while the less-relaxed ones said they'd pay $2,174.
- Focusing on details brings down the price. Before naming a price for the camera, some students were asked to complete sentences such as "An example of a type of pasta is..." which was supposed to encourage them to think concretely. The other group answered questions designed to encourage them to think abstractly, such as, "Macaroni is a type of...." Those students who were not relaxed, and who were primed to pay attention to details, said the camera was worth $2,099-very close to the eBay price of $2,030.
In the examples with the camera, the subjects who were willing to pay more were more likely to consider factors such as the camera's ability to help them preserve memories, while those who were comparatively tightfisted were more focused on shutter speeds, megapixels, and other more concrete features.
What type of shopper are you? Do you pore over features and details, or focus more on the big picture?
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Kimberly Weisul is a freelance writer, editor, and consultant. Follow her at www.twitter.com/weisul