High price preference effect
The high price preference effect is especially noticeable when consumers are buying something complex; the fact that they paid more helps them remain committed to what they bought over the long run, researchers from Washington University in St. Louis and the University of Toronto reported in the Journal of Consumer Research.
The study – “The Effect of Price on Preference Consistency Over Time” – was written by Kelly Kiyeon Lee and Min Zhao.
Many factors play into getting the most bang for one’s buck, the authors explain, from the price of a product to its ease of use, convenience, and how many overall features it has.
Choosing something more expensive based on perceived value has a risk – will the buyer become more remorseful in the long run?
Product user-friendliness and convenience become more important as the date for using it gets nearer.
High price preference linked to number of features
Kiyeon Lee and Zhao wrote:
“We propose that when making an immediate decision between complexity and convenience, consumers believe that products with more features and functions represent higher value, even if the complex product might lead to more confusion over time.”
Imagine you plan to create a photo album in two months’ time. You are seeking out photo-editing software to buy. You have two choices:
- A more costly program with a wide range of image-editing features which are hard to learn.
- A cheaper program with a simple user-interface and straightforward installation, but more limited image-editing features.
You are more likely to focus on all the software’s great features, because the inconvenience of having to go through the learning curve is distant (two months away).
Convenience becomes a priority as time of usage gets nearer
However, as the time for creating the photo album looms nearer, convenience becomes a greater priority and there is a risk you may express remorse in spending more on sophisticated software.
Kiyeon Lee and Zhao carried out four experiments to determine the tradeoff between convenient and sophisticated products. They specifically focused on the effects price might have on the volunteers’ product selection over time.
After looking at the price tag, participants placed a higher value on functionality over user-friendliness, and they tended to prefer feature-rich products in spite of the higher price.
They also found that when consumers are persuaded that more convenience represents greater value, “price and the value-seeking tendency result in a greater preference toward easy-to-use products for the distant future and lead to preference consistency across time as well.”
The researchers concluded:
“Brands offering products with a steep price tag can help consumer satisfaction and decrease buyer’s remorse by helping people stay committed to their chosen products over time.”