Written by Angela Megasko, President & CEO of Market Viewpoint, LLC
One of Market Viewpoint’s clients owns a bakery shop in a major east coast city. It is a coveted assignment for our mystery shoppers.
After all, who wouldn’t want to have ‘to go to work’ and purchase a cream topped cupcake or a chocolate covered donut with sprinkles?
But it wasn’t the reaction to the baked goods that our client was interested in. Hands down, they had the creation of delicious baked and frosted products under control.
What was more important to our client was to understand their customer’s experience. What would it take for this multi-generation owned store, located along a major walking traffic route in a subway/train terminal, to have their ideal customer stop in – and make a purchase – every day or several times a week?
Placement of coffee urns, check out convenience, screens displaying goods and service from the staff were all part of the evaluation process.
What was surprising were the answers where the shopper was asked what could be done to improve the customer experience. Mystery shoppers consistently indicated that posted prices would make the decision-making and purchase process easier and quicker.
When do you reveal the pricing on your products?
The Research Reveals
Researchers at Harvard Business School and Stanford University’s Graduate School of Business asked the same question.
“We were interested in whether considering the price first changed how people thought about the decision process, and whether it changed the way the brain coded the value of a product,” said Uma R. Karmarkar, a neuroscientist and assistant professor in the Marketing unit at Harvard Business School, who conducted the research with Baba Shiv, a marketing professor and neuroeconomics expert at Stanford University’s Graduate School of Business, and Brian Knutson, an associate professor of psychology and neuroscience at Stanford.
Their study, Cost Conscious? The Neural and Behavioral Impact of Price Primacy on Decision Making, published in the AMA’s Journal of Marketing Research found that price primacy (viewing the price first) had consumers focus on the product’s value and worth for the price, versus attractiveness or desirability when viewing the product without pricing.
Depending on the product, prices did not necessarily have to be revealed immediately, but once they were revealed in the decision-making process, it provided the consumer a measure of worth for the product.
Read more about the details of the study here.
So, Did They Sell More Cupcakes?
After reading the comments in the mystery shopping reports, our client made his pricing very visible to the consumer.
A follow-up study revealed the mystery shoppers noticed the changes. Several reported that it was easier to make a buying decision, especially in the middle of a harried commute. And, in fact, knowing the prices would likely make them consider a purchase on their way home. Dessert for the family!
The client noticed an increase in sales and the number of customers served.
Without a bit of research into his customer’s experience, he never would have known that a simple fix could make such a difference.
What changes have you made based on market research, mystery shops or focus groups that have had a positive effect on your customer’s experience? Please share with us below.