Interesting Results
When a Bad Deal is a Good Deal
Previous research has shown that consumers tend to be repelled when a company gives one group of customers a better deal than they are getting. New research1 suggests that there is an exception to this however. Through a series of experiments, researchers established that when the group getting the better deal are perceived as experts (e.g., a free item with purchase that is likely to be valued by experts but not by non experts) and it’s costly for sellers to get those experts to inspect their products, other people tend to view it as a signal of high quality and therefore are attracted to the product even if the deal they get is not as good for them as for the experts.
1 Lo, Alison K. C., John Lynch Jr., and Richard Staelin (2007), “How to Attract Customers by Giving Them the Short End of the Stick”, Journal of Marketing Research, 44(1), 128-141.