The More Things Change…

Common sense would suggest the following: if you take two objects and differentiate one from the other, then, by definition, they will appear to be more different than they were before, not more similar. Common sense, of course, also once suggested that the sun orbited earth.

March 4, 2014

A fascinating series of experiments out of the Yale Center for Customer Insights found that our perceptions of similarity are more complicated than common sense—and decades-old academic modeling—suggests. Their study design was simple: test subjects were split into two basic groups. In one group, they were given a choice between two comparable goods with identical prices—two types of tea, for instance, or cereal. Another group received the same choice, but the items were assigned marginally different prices. Counter-intuitively, the group that chose from differently priced goods also ranked them as more similar to each other on a scale of 1–9 than did the group assessing the same items with identical prices. In the authors’ words, “Introducing a small difference in an otherwise identical attribute can increase the perceived similarity.”

At work appears to be a basic mechanism by which small differences attract attention, thus raising once-invisible attributes as a point of comparison. When people judge similarities between European countries, for example, the fact that they are in Europe will likely be ignored unless the choice also includes non-European countries. Similarly, in the case of price, when the amount is identical across objects then price may not register as a comparable attribute; small differences in price make it salient.

This insight bears interesting implications for the act of deciding, a task that has been proven easier across similar (and therefore substitutable) objects. In one iteration of this experiment, participants were given money and the opportunity to buy one of two kinds of chewing gum; the gums were either the same, or marginally different, prices. People more readily made a purchase in the case of small price differences, while they deferred their choice in the case of identical pricing. In fact, introducing only a 3 percent price difference nearly doubled decisions to purchase gum rather than defer the purchase.

By focusing on price as the only variable manipulated, these results are narrowly delineated to quantitative differences and pose interesting questions about qualitative similarities. Would comparable effects emerge if color, or shape, were slightly altered? The researchers also limited the available choices to six or fewer goods, and recognize that a vast diversity of goods, all priced differently, could counteract the results above, generating a kind of paralysis by complexity.

But regardless, the central findings capture an interesting conundrum for marketing professionals: if you want consumers to make, not defer, a decision—if you want them to spring for that packet of gum— making prices slightly different rather than the same will actually make products seem more similar…and therefore easier for consumers to make a choice!