Having your cake and eating it too.

By Aaron Reid
January 6, 2011
In our recent paper on Hot State Decision-Making we discussed the perfect storm of providing consumers with immediate visceral delight while simultaneously providing emotional benefits relevant to long-term goals. This formula provides both short-term and long term benefit thereby maximizing pleasure and minimizing pain for your customer base. A recent article by Khan & Dhar (2010) in the Journal of Marketing Research shows an innovative method of delivering this perfect storm for your customers through careful framing of the discount on your bundled offerings (a bundle is an offer of a second item with the purchase of first item; usually a discount is offered when purchased together – think Amazon’s “better together” discounts). Khan & Dhar show across five experiments that in decisions on product bundles where one item is more hedonically charged than another, framing the discount for a bundled purchase as a discount on the more hedonic item rather than an overall discount increases purchase likelihood of the bundle. The more hedonic item is the one the consumer considers more for pleasure, play or fun versus being more utilitarian. In some cases the effect was as strong as moving the bundle purchase percentage from 62% when offered as a discount on the entire purchase to 82% when framed as a discount on the more hedonic item. These results are striking!
This finding has profound marketing implications for bundled product offerings. Moving the needle as much as twenty percent on bundle purchases by simply offering the same discount as a reduction in price on the more hedonic product in your bundled offerings could have big impact on your business unit’s bottom line with relatively little effort. This behavioral economics effect could be implemented in many different ways.
First, if you currently have bundled product offerings, simply measure (or go with your gut if you’re a risk taker) which of the items in your bundle consumers feel have the greatest value in terms of pleasure, use your same overall discount as a discount off the most hedonically charged item instead and watch your bundle sales increase. Second, investigate which of your products might be better paired together by matching a hedonic item with a more utilitarian item, and offer a bundled discount with the discount coming off the more pleasure based item. Third, explore new innovation for hedonic products that you could offer within your product suite that would allow you to bundle those innovations with your more utilitarian offerings in order to boost sales.
The fourth implementation of this behavioral science principle is founded in the beauty of why this framing works in the first place. Hedonic bundle framing works because it reduces guilt in the consumer. By receiving a discount specifically on the item that is more pleasurable the guilt the consumer feels related to that item is reduced thereby circumventing a significant decision obstacle. So consider a situation where your product suite is largely pleasure based and it is difficult to separate which products have the greatest pleasure advantage over one another. Using messaging to emphasize the indulgent characteristics of one product over its paired product in a bundle, and offering a discount off the emphasized product can have the effect of relieving guilt and increasing purchase tendency of the bundle. The same products are offered, the same amount of savings is offered to the consumer, and yet you’ve both heightened the anticipated pleasure of consumption and simultaneously reduced potential feelings guilt.
These findings allow consumers to have their cake and eat it too. Hedonic bundle framing provides short-term visceral delight while simultaneously reducing consumer post-decision regret.
We’re available at your pleasure for testing these principles within your own product suite…and if you buy two two tests from us we’ll even offer you a discount off the test you find most pleasurable. 😉
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Aaron Reid

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Founder & CEO, Sentient Decision Science, Inc.


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