How much product information your consumers want?
One of the most quoted sayings about online stores is "Give all information your customers need". Sounds good at the first sight, but the problem is the definition of "need". Do you - or your advisor - know what your consumer need? That's easily solved by giving all information you have about your products.
However, the problem is that customers belong to different groups and they all don't need all information you have. In plain English, you can strangle them with too much data.
Now, what information you must have? The price and the short description are obvious answers but the problem arises when selling is not going well. In that situation many sellers will try to expand the product description, write an essay about it and give links to each and every review in the known universe. Unfortunately that's wrong.
There are two facts you must think about. The first is the consumer group. Like in the real life, offline world, you should different types of conversation for different group of customers. Theatre fans speak their own "language", businessmen have their own set of words and behavioural patterns, and sports fans are something completely different.
So, you must learn how they communicate and adapt your message accordingly. A short example: "YO! Check this out! This products is cool, man!" - this message belongs to Facebook. "Our products cuts your engineering costs, minimizes errors and accelerates the development phase." - that belongs to LinkedIn.
OK, with that in mind, let's peek into consumers' minds to see what they want. We'll use a research from the Brown University but stay with us, we won't use boring scientific language. (With due respect to all scientist, we deeply admire them.)
Steven Sloman, professor of cognitive, linguistic, and psychological sciences at Brown University conducted a study and got some very interesting results. His study finds that people can differ widely on the level of detail makes them feel they understand something. But there's more: The very same explanations that some subjects required before they would pay top dollar seemed to drive down what others were willing to pay.
Understandable, you'd like to know how to figure out which customers belong to which group. The study shows that all consumers want to understand how a product works before it will gain their trust.
However, they belong to two distinct groups: "Explanation fiends" are more motivated the more the product was explained. "Explanation foes" are confident in their understanding when the explanation was superficial but deeper detail eroded that understanding and their willingness to pay for the product.
To put it even more simple: The devil is in details. Consumers differ sharply on the level of detail that makes them feel informed.
Scientist first measured every subject with Cognitive Reflection Test (CRT) which predicted whether the subject would be an explanation fiend or foe. Then, the second experiment assessed what level of detail would motivate online volunteers to pay for a premium product with a special feature, compared to a less expensive generic competitor without that feature. The level of explanatory detail for the premium feature varied.
After few more experiments it became clear that foes of explanation dropped their prices from $8 to less than $6 after their thinking about product was shattered by detailed product information. Explanation fiends raised what they were willing to pay to about $8.50 from less than $6 after being asked to explain the products.
So, the conclusion is very simple but powerful: It's of utmost importance to know your audience if you want to set the right price. Start with the essential information, listen to your customers and don't give the encyclopaedia if they don't ask for it. ■