Being a leader in today’s world means understanding the way the world works. Intrinsically that means understanding people and how they interact with the world. Business leaders will have to be psychologists in one way or another these days. In this piece were going to look at how humans are attracted to luxury items and how price plays its part in developing the idea of luxury; some might say illusion of luxury.
There are many things that make us humans different from all the other species out there, and being attracted to luxury, being materialistic, is definitely one of them. When it comes to comparison between humans and the closest species to share similar traits, monkeys, we are more likely to show a weakness for extravagance and luxurious tastes.
According to a new study by Yale, Capuchin monkeys are smarter than humans when it comes to getting the most bang for your buck. It seems as if their brains are not wired to think that higher price tags mean better quality. A clever study, it highlights how we as humans have evolved to see the world; important information. If you want to market to a human rather than a monkey.
One way many companies have managed to grow so rapidly is by creating the belief amongst consumers of their higher priced items ultimately being a sign of higher quality. Often products produced in the same factory are repackaged, we priced and sold at 2 or 3 times the price of the same products going under a different brand name. The power of a luxury brand is certainly alluring whether it be for foodstuffs, clothing, watches, cars or anything else that we buy.
In this previous article, we talked about how putting the customer first could lead to dramatic increases in your retention rates. Success in business is about doing this. However, it is also about maximising your profit from every sale you make whilst providing value to your customers. This means ensuring your brand does a job by elevating your products in the consciousness of your customers.
“We know that capuchin monkeys share a number of our own economic biases. Our previous work has shown that monkeys are loss-averse, irrational when it comes to dealing with risk, and even prone to rationalising their own decisions, just like humans,” said Yale University psychologist and study author, Laurie Santos on news.yale.edu. “But this is one of the first domains we’ve tested in which monkeys show more rational behavior than humans do.”
Dean, Print-Print.co.uk business expert, explains that “the quality of the paper that you use in brochures has a massive impact on how people perceive your brand. To a certain extent it is irrational that a consumer would see the thickness of paper as correlating to the luxuriousness, competence or capacity of a company-but they do. It is crucial that you position your company correctly in everything you do in order to maximise your opportunities and profits in a marketplace.”
Dean’s example illustrates a key point. Product perception is intrinsically linked to where that product is coming from. When customers can’t see the manufacturer, then it is the shop, the marketing, and the packaging that creates this perception for the consumer. This is at the root of the dynamics of the capitalist world in which we live.
Back to the monkeys, another factor that may hold the key to figuring out why there is such a difference in choosing different price tags, Laurie Santos and other professionals at Yale believe, could be related to our experience of the marketplace.
“For humans, a higher price tags often signals that other people like a particular good.” Santos noted. “Our richer social experiences with markets might be the very thing that leads us — and not monkeys — astray in this case.”
The lesson from this really is that when we are promoting products. We need to understand the true value of the product to our customers. That is normally measured by the brand image that you have. As a specie. We are hierarchical in our thoughts. We evolved to see the world in different levels. Your job is to put your product at a higher level than your competitors, which will enable you to sell them at a higher price, even if the quality is on a par or only a little bit better.