Over the years, the correlation between price and quality has been deeply ingrained in our consumer psychology. We often gauge the quality of a product or service based on its price. This judgement call, though commonplace, isn’t wrong per se, but the important question is – for how long does price pay?
The latest smartphone model, best cut of steak, most expensive perfume, or designer label clothes, all these symbolize what is colloquially known as a ‘premium’. Research studies have consistently shown that price plays a major role in determining perceived value or quality. But does a higher price tag guarantee continued satisfaction? Let’s delve into the nexus of price and sustainability of satisfaction.
The first caveat when associating price to long-term value is the frequency of product usage. Higher priced items often come with higher expectations. For example, a high-end laptop that doesn’t perform significantly better than a comparatively cheaper model may fall short of the expectations commensurate with its price. Consequently, even though the premium laptop might initially bring a sense of satisfaction and status, over time, as the user realizes the performance is not proportionate to the price paid, it’s almost certain that their satisfaction will wane.
Next, the phenomenon of diminishing returns is a factor contributing to the transient nature of satisfaction derived from pricey items. This stems from the idea that once certain basic needs are fulfilled, additional consumption contributes less to satisfaction. For instance, the upgrade from a budget smartphone to a mid-range one can be markedly significant, but the jump from a mid-range to a high-end model could potentially offer marginal enhancements.
Furthermore, we live in an evolving society with trends and technology advancing at an unprecedented pace. Today’s prized possessions can quickly become tomorrow’s obsolete goods. Costly objects often have little room for upgrades, meaning their life span, and thus the value we perceive, is limited by the pace of innovation. Buying less costly but more replaceable items might end up providing better long-term value as they are easier to replace when newer, more advanced versions are introduced.
In addition, price as a measure of quality often overlooks critical elements such as product design, durability or customer service. These features directly affect the longevity of customer satisfaction, although they may not directly correlate to the price of a product or service. Therefore, these factors should be consciously considered when evaluating whether the price will offer long-term value.
Lastly, there’s the ‘hedonic adaptation’, a psychological phenomenon where humans quickly return to a relatively stable level