We don't like offerings that pair something expensive with something cheap
It's the week before Christmas, and you're at Williams-Sonoma, picking out a gift for your food-nut boyfriend. After a meticulous round of research, you've settled on an 8.5-quart Staub Dutch oven, retail price $270. It's pricey, but nothing says "I love you" quite like French-enameled cookware.
Then, in the corner of your eye, you spot the oven mits. They're bright red. They're $10. He could really use a new one, you think.
The big choice: Do you buy the mitts as a stocking stuffer? Or ignore them and head to the cash register?
We think differently about information when we're evaluating it than when we present it.
Believe it or not, there is a right answer.
According to new research from Virginia Tech and the University of Michigan, you'd be better off buying the pot alone. When it comes to gift giving, less is much, much more.
The paper, which will be published in an upcoming issue of the Journal of Consumer Research, found that consumers don't like packages that pair something expensive with something cheap. Think of the Dutch oven and the mitt. Or an iPod that comes with a single free song. To a consumer, the add-ons aren't a nice bonus. Instead, they devalue the entire deal.
Gift givers tend to think just the opposite -- that more is more. Same goes for most people who work with information. For example, think of those cookware infomercials that offer 7 different gizmos to go with your new counter-top convection oven.
WHY LESS REALLY IS MORE
The team reached its findings through a series of seven experiments that touched on everything from deals on gadgets to law enforcement. The research went well beyond consumer choices, and looked at the basic divergences in how we process information in different circumstances.
In one experiment, the team presented distinct sets of subjects with two separate deals for an iPod. One was a package that included the mp3 palyer, a free case, and one free song. The other only included the iPod and the free case. Subjects who were offered the second deal consistently said they'd pay more than those who had been offered the free track, even though their whole package was technically worth less.
In another experiment, subjects said that a $750 fine for littering sounded more severe than a punishment that involved a $750 fine and two hours of community service. Meanwhile, when subjects were asked to step into the shoes of the marketer, or the law maker, they regularly took the more is better approach.
Humans are programmed to think differently when they're evaluating information than when they present it. Evaluators, like the boyfriend unwrapping his gift, tend to think about the whole picture. Instead of looking at all the pieces of a package individually and adding up the value, they tend to average it all out. So a dinky extra song makes an iPod look cheap by association. Presenters, such as marketers, think piecemeal. They look at each item sum up what it's worth. So they're predisposed to toss in the extra song, or the oven mitt.
The trick for a good gift-giver, or good marketer, is to think like the person they're trying to connect with. In one of the experiments, subjects told to think about the big picture when putting together a resume abandoned the more is more approach, and instead focused on a few appealing accomplishments. It worked.
So when you're doing Christmas shopping this year, think like your loved ones. Less is more.
Also in our mostly serious "Santanomics" series: