Wednesday, November 3, 2010

ZERO?!

Why is “zero” such a hot-button word?
The word "zero" changes things. There is a psychological trigger associated with the word. In the Chris Anderson chapter on free, an experiment was conducted with selling chocolate. When first selling chocolate the higher quality Swiss chocolate sold at fifteen cents and the Hershey's kiss at only one cent. The Swiss chocolate sold better, because of the better quality of candy. When each price was reduced by one cent, making the Hershey's kiss free, it was taken at a higher rate.
Zero is less of a quantitative value and more of a psychological effect that must be taken in context. Does the fact that something is free effect the quality of the item? Does the fact that something is free now but it used cost money matter? What real difference is there between a free bagel and free ketchup? Do people value items that were free the same as items they pay for? All of these questions are related to the actual cost of an item but are more related to the psychology of the decisions that we make as customers.
As Chris Anderson spoke in the beginning of the chapter, things that used to be sold but are then given away at zero cost tend to fail, but things that have never cost money tend to be extremely successful, as seen with the Village Voice and The Onion. The quality of the Village Voice, seemed to diminish because the price diminished. The Onion which has always been free, and makes its money from advertisements, is an extremely successful satirical news source. People's perception of free affects their decisions when it comes down to the idea of zero.
Zero means that there is no real decision to be made. Regardless of whether the item that is free is needed it can be obtained at no toll. If the item goes unused, so be it. The consumer also loses the right to complain if the item is not exactly what they wanted. This is where the expression, "you get what you pay for," comes into play. If an item costs money the consumer clearly wants to own the product and will purchase the exact item that they desire. If the item is free the consumer may or may not want or need the product, or it may not fulfill the exact need of the consumer.
Zero is a hot-button word and it changes consumers' perceptions about products. The word zero can create success or failure for a product. It allows people to make decisions more easily and can cause people to get something they do not need or is not what they really wanted.

1 comment:

  1. This is an important concept because the "prices" we pay in today's society is often changing... and our society tends to value information we pay for, but it isn't always better.

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