"STANFORD, California (Reuters) - The more wine costs, the more people enjoy it, regardless of how it tastes, a study by California researchers has found.
Researchers at the Stanford Graduate School of Business and the California Institute of Technology found that because people expect wines that cost more to be of higher quality, they trick themselves into believing the wines provide a more pleasurable experience than less expensive ones.
Their study, published on Monday in the Proceedings of the National Academy of Sciences, says that expectations of quality trigger activity in the medial orbitofrontal cortex, the part of the brain that registers pleasure. This happens even though the part of our brain that interprets taste is not affected.
Do ya' think there might be some lesson in this, related to the way we price our services?
I've always thought that when we provide architectural services at cut-rate prices, all we're really doing is inducing the client to be dismissive of our work. "Hey ... how good can this guy be when he's willing to work for so little?"
many people who will spend $$$ on expensive things have that money because they pay their employees shit. As architects, we are employees to our clients
I heard an npr interview with the researcher in charge of this study, and what he actually said they found is that pleasure-receptors in the brain become more active when subjects are told that the wine has a high price, not when they actually taste it. To me, this means that the subjects were only anticipating that the expensive wine would taste better, not that it actually did taste better to them. A fine point, maybe, but an important distinction nonetheless. I wouldn't imagine that the subjects had much experience with or knowledge of wine, either, and wouldn't know a good wine if it slapped them in the face.
I do agree with your point regarding pricing our services, though. Especially since architectural services are hard to put a price tag on, I often feel like we could just as easily get twice the fee for the same work. I heard another story in the same vein on npr the other day (yes, I listen to a lot of npr) about fashion knock-offs. Apparently designs are routinely knocked off by someone else and sold at a fraction of the price without the label, but are often the same fabric, same design, and sometimes even sewn by the same seamstresses. Same thing with generic drugs. I think it tends to be more about the label than we're comfortable admitting.
I think this is parallel to expectations and the pseudo-affect. Here's an example that I know everyone has experienced. You want to see a movie everyone has seen. They all say it sucked. Your expectations of the movie will automatically decrease. So, when you see the movie, you will say "it wasnt' that bad" or maybe even, "it was decent/pretty good." It also works vice-versa.
It's actually kind of fun if you secretly experiment with your peers telling them the complete opposite of what you really felt about the movie and seeing how they respond to it, assuming that everyone else tells them the same thing.
my brother was a fashion design student at SCAD (Savanah College of Art and Design: he has since graduated). Anyways, Marc Jacobs opened a store in Savanah and many of his classmates worked here. While they were getting their merchandise in, a bunch of clothing arrived in the store with another companies tag in it. Marc Jacobs had a bunch of the fashion students rip out the tags and sew Marc Jacobs tags into the clothing
For those who have studied the marketing research available (and, with respect, I recognize that's not likely to include many participants here) there's a strongly supported aspect to marketing theory that suggests when consumers make "blind purchases" -- i.e. purchases of things like diamonds, where the average person cannot easily tell one diamond from another -- the consumer relies on the price of individual items to signal their quality.
in my mind, this sort of thinking easily carries over into the world of architectural design, where the client frequently has little prior experience with what we do, has no clue at all about how we do what we do, and has little frame of reference to guide judgements about the quality of our work or what it should cost.
as one marketing writer put it: "Offering reduced prices can be attractive to customers but can pose a huge problem for the service provider. Since it is difficult for customers to evaluate a service before it is rendered, consumers frequently use price as a surrogate for quality. Thus it is likely that consumers will equate low or discounted prices with poor quality."
The wine research above confirms this idea once again.
THE LESSON: if you want your client to respect you, and what you deliver, find a way to raise your fees. Of course, you still have to deliver...but, that goes without saying.
Higher prices creates an expectation of quality. It also ensures that when you buy a $400 Gucci T-Shirt that there will not be too many others that have the same shirt.
Its been my experience that this goes with services too. I price services competitively, but I have also learned that you charge what you are worth. I don't low ball things and I let clients go that nit pick about silly amounts - they'll just continue to do this with all aspects of a project.
Work hard, do well and charge what you are worth. The only incentive to keep doing better (besides just being an anal perfectionist!) is that you get better compensation and better projects.
Talented designers are a commodity that can translate into a better experience for the end user/client.
Good design should be appreciated just as much as a good bottle of wine.
"you get what you pay for", even if some of it is just psychological games (which is worth something too)
Higher prices boost pleasure
Researchers at the Stanford Graduate School of Business and the California Institute of Technology found that because people expect wines that cost more to be of higher quality, they trick themselves into believing the wines provide a more pleasurable experience than less expensive ones.
Their study, published on Monday in the Proceedings of the National Academy of Sciences, says that expectations of quality trigger activity in the medial orbitofrontal cortex, the part of the brain that registers pleasure. This happens even though the part of our brain that interprets taste is not affected.
See Higher wine prices boost drinking pleasure for the full article
Do ya' think there might be some lesson in this, related to the way we price our services?
I've always thought that when we provide architectural services at cut-rate prices, all we're really doing is inducing the client to be dismissive of our work. "Hey ... how good can this guy be when he's willing to work for so little?"
quizzical
many people who will spend $$$ on expensive things have that money because they pay their employees shit. As architects, we are employees to our clients
I heard an npr interview with the researcher in charge of this study, and what he actually said they found is that pleasure-receptors in the brain become more active when subjects are told that the wine has a high price, not when they actually taste it. To me, this means that the subjects were only anticipating that the expensive wine would taste better, not that it actually did taste better to them. A fine point, maybe, but an important distinction nonetheless. I wouldn't imagine that the subjects had much experience with or knowledge of wine, either, and wouldn't know a good wine if it slapped them in the face.
I do agree with your point regarding pricing our services, though. Especially since architectural services are hard to put a price tag on, I often feel like we could just as easily get twice the fee for the same work. I heard another story in the same vein on npr the other day (yes, I listen to a lot of npr) about fashion knock-offs. Apparently designs are routinely knocked off by someone else and sold at a fraction of the price without the label, but are often the same fabric, same design, and sometimes even sewn by the same seamstresses. Same thing with generic drugs. I think it tends to be more about the label than we're comfortable admitting.
I think this is parallel to expectations and the pseudo-affect. Here's an example that I know everyone has experienced. You want to see a movie everyone has seen. They all say it sucked. Your expectations of the movie will automatically decrease. So, when you see the movie, you will say "it wasnt' that bad" or maybe even, "it was decent/pretty good." It also works vice-versa.
It's actually kind of fun if you secretly experiment with your peers telling them the complete opposite of what you really felt about the movie and seeing how they respond to it, assuming that everyone else tells them the same thing.
pvbeeber
about the fashion thing....
my brother was a fashion design student at SCAD (Savanah College of Art and Design: he has since graduated). Anyways, Marc Jacobs opened a store in Savanah and many of his classmates worked here. While they were getting their merchandise in, a bunch of clothing arrived in the store with another companies tag in it. Marc Jacobs had a bunch of the fashion students rip out the tags and sew Marc Jacobs tags into the clothing
For those who have studied the marketing research available (and, with respect, I recognize that's not likely to include many participants here) there's a strongly supported aspect to marketing theory that suggests when consumers make "blind purchases" -- i.e. purchases of things like diamonds, where the average person cannot easily tell one diamond from another -- the consumer relies on the price of individual items to signal their quality.
in my mind, this sort of thinking easily carries over into the world of architectural design, where the client frequently has little prior experience with what we do, has no clue at all about how we do what we do, and has little frame of reference to guide judgements about the quality of our work or what it should cost.
as one marketing writer put it: "Offering reduced prices can be attractive to customers but can pose a huge problem for the service provider. Since it is difficult for customers to evaluate a service before it is rendered, consumers frequently use price as a surrogate for quality. Thus it is likely that consumers will equate low or discounted prices with poor quality."
The wine research above confirms this idea once again.
THE LESSON: if you want your client to respect you, and what you deliver, find a way to raise your fees. Of course, you still have to deliver...but, that goes without saying.
Higher prices creates an expectation of quality. It also ensures that when you buy a $400 Gucci T-Shirt that there will not be too many others that have the same shirt.
Its been my experience that this goes with services too. I price services competitively, but I have also learned that you charge what you are worth. I don't low ball things and I let clients go that nit pick about silly amounts - they'll just continue to do this with all aspects of a project.
Work hard, do well and charge what you are worth. The only incentive to keep doing better (besides just being an anal perfectionist!) is that you get better compensation and better projects.
Talented designers are a commodity that can translate into a better experience for the end user/client.
Good design should be appreciated just as much as a good bottle of wine.
"you get what you pay for", even if some of it is just psychological games (which is worth something too)
keywords: perceived-value pricing and pscyhological pricing.
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