Last week, Marketing Daily published a story about point at which price will trigger a change in consumer adoption. The research behind the story came from professors at The Wharton School (at the U of Pennsylvania) and Columbia University. (Click here to see the MD article.)
Implications: For years now, I’ve been using the term psychological entry fee to describe the underlying cost a consumer must pay—beyond price—in making a purchase decision. I might visit a fast food joint not because it is a great dining experience, but because it is familiar (I know it won’t be great, but it won’t be a catastrophe, either). I might switch gasoline brands without a thought… but changing healthcare providers can be a time-consuming task requiring some research homework. The entry fee for buying fast food or gasoline is quite low. The anxiety caused by picking an unfamiliar restaurant or choosing a healthcare provider might be considerably higher.
It seems to me that these researchers have offered empirical evidence of this anecdotal thinking. Everyone has their price, whether that be expressed as a dollar value, level of service, quantity, quality or comfort zone. What is your consumer willing to pay… and in what denomination?
Mike Anderson
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