Value in Sales: Perception Is Reality

Context controls how consumers perceive your product and its value.
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To get people buying, you need to convince them that they are getting something valuable for their money. When you’re selling, you should recall the old maxim that perception is reality. Even decades of laboratory science show that this arcane and unreal principle is what actually drives people’s sense of value.

A surprising fact: few people can reliably tell a high-quality product from a low-quality replacement. Whatever we would like to tell ourselves, it’s true. More dramatically, nobody can really tell good from great without a hint or two. It's actually very difficult! The wine industry has storied experts who taste fine wines for a living and their struggles in controlled experiments provides a good example of just how difficult it is. These experiments show that context is very important, that context shapes your perception of whether something should be high-quality, and this perception determines the reality of quality for you.

You can spend almost any amount of money you like on a bottle of wine, and the wine growing regions of France are famed in particular for their quality - and their great cost. Thus, the result of a famous 1976 taste testing experiment was quite surprising. This experiment, conducted by the Francophile wine merchant and Englishman Steven Spurrier, presented 11 famous wine experts with blind taste tests of a variety of cabernets. The verdict? Contrary to the universal expectations of the time, the top cabernet came from Stag’s Leap Wine Cellars in Napa Valley. This experiment was repeated several times in the following years, repeatedly showing the experts couldn’t detect the superiority (or even the uniqueness) of the storied French wines.

If not even the experts can tell the difference, then how are top vineyards able to charge so much for their wines? The answer is that reputation, and the subtle cues that go with it, matter a great deal. In another famous taste testing experiment, wines were rebottled in two groups. One group was bottled in the fashion of a high-class French vintage, the other in the fashion of a cheap table wine. Sommeliers (French for wine-stewards) were presented with both groups for review, and they were of course kept ignorant of the deception. The result? The sommeliers preferred the wine in the classier bottles. They had been fooled by contextual cues that suggested quality, and were not actual able to recognize quality itself.

The word “sommelier” is an example of such a quality cue. Who sounds more credible as an expert on fine French wines, a wine-steward or a sommelier? The word “sommelier” brings a connotation of sophistication and French authenticity that the familiar English “wine-steward ” does not. I would forgive you if you enjoyed the flavor of the sommelier’s recommendation over the wine-steward’s, even if the recommended bottles were in fact the same wine.

Quality is of course important. However, it is just as important that you present your product in a context that suggests quality. If you can control the context of your sale to communicate value, you can set your own price to the same degree, and if you master this principle abundant sales revenue is right around the corner.

Get on Twitter and tell me (@MuellerAC) how you suggest quality to your customers.

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