Research: How Sensory Information Influences Price Decisions | HBR Blog Network

by Steve W. Martin  |  11:00 AM July 26, 2013

The conversations salespeople have with prospective customers involve these visual, auditory, and kinesthetic channels. Can different amounts of visual, auditory and kinesthetic information influence the price customers will pay for an item? Recently, a sales linguistics experiment was conducted in order to answer this question. Sales Linguistics is the study of how customers and salespeople use language during the complex decision-making process.

Sensory Information Price Test

Study participants were separated into three groups and six items were presented to them in a classroom setting. All participants were business professionals and university graduates between the age of twenty-four and fifty-seven. The groups were asked to estimate the price of each item and rank whether they had a low, medium, or high level of comfort with the answer they gave.

The first group would be presented only visual information consisting of a picture of the item and a brief description. The second group would be shown the same visual information as the first group, but the description would be read to them with dramatic emphasis and accentuation, creating an auditory connection. The third group would be shown the visual information, read the description in the same manner as for group two, and also be provided the opportunity to hold and inspect the item before making their guess, creating a kinetic bond..

The participants were presented with an eclectic mix of items. In order, they were shown a baseball hit by famous home run hitter Manny Ramirez of the Cleveland Indians, a six inch wooden penguin honoring Admiral Byrd’s expedition to the south pole, a black plastic stapler, a copy of Rudyard Kipling’s second Jungle Book published in 1915, a vintage brass letter opener from Italy, and a 1886 Morgan United States Silver Dollar.

Understanding the Test Results

While the test results provide many different revelations about how people interpret information, two high-level metrics underscore the impact sight, sound, and touch can have when making a decision about price. Below are the average answer comfort scores for each group (with three being the highest score). You’ll notice the scores increase with the addition of more sensory information by approximately 20 percent. The third group who received the highest amount of information from all three sensory channels had the highest sense of comfort with their answers.

Comfort Scores Chart

The next point of comparison is average total overall price, which is calculated by adding the estimated price together for each of the six items. The average total overall price for each group varied greatly with group two (visual and auditory information) being the highest at $325,000. In addition, 29% of group two members estimated all the items cost over $250,000 whereas none did in group three. 

Overall Price

Clearly, the test results show that different amounts of visual, auditory and kinesthetic information influence the perception of the item’s price. The experiment also provides other important lessons for sales and marketing professionals.

Customer Miscommunication

The mind does not treat all information equally. Information is ignored, misinterpreted, and generalized based upon surrounding experiences. For example, study participants misinterpreted that the baseball hit by Manny Ramirez was a home run ball when it was only a foul ball. You should never assume prospective customers have received the message correctly.

Verbal Suggestion Susceptibility

The mind is quite susceptible to verbal suggestions. Group two’s average total price was nearly seven times that of group one and close to twenty times the average of group three. The tone, tempo and demeanor of what you say can have more impact on a prospective customer than the actual words you speak. This is a particularly important point for salespeople who sell primarily over the phone.

E-mail Communication Dependency

Salespeople have increasingly grown to rely on e-mail for their primary method of communication with prospective and existing customers. There is a down side to this dependence since the persuasiveness of verbal suggestions is forfeited. Check your sent box and examine the last twenty e-mails you sent. Where would a phone call or in-person conversation have been better suited?

Avoid Product Evaluations

No salesperson typically wants to slow down the sales cycle by having the customer conduct a lengthy product evaluation. This study provides an entirely new reason why they should be avoided. The results suggest that hands-on familiarity with an item actually lowers the perception of its value. For example, the average price for group three who handled the brass letter opener was $100 while group two’s average was nearly $10,000.

Sales Presentation “Talk Track”

The “talk track” that accompanies sales presentations and product demonstrations plays a critical role in shaping the prospective customer’s perception of value. In this regard, many companies don’t take the time to ensure the fluency of their sales organizations by providing them compelling written scripts and testing them to ensure they are able to delivered persuasively.

it was Rudyard Kipling who said “Words are, of course, the most powerful drug used by mankind.” He was right. Your most important competitive weapon is your mouth and the words you speak. This test proves it’s not only what you say, but also how you say it! 

More blog posts by Steve W. Martin
More on: Sales

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