New research from the University of Chicago Booth School of Business finds that frequent payments can also make consumers\u00a0feel better<\/em>\u00a0about the benefits they are receiving from their purchase<\/strong>.<\/p>\n In the study, “Periodic Pricing and Perceived Contract Benefits,” forthcoming in the\u00a0Journal of Consumer Research,<\/em>\u00a0Chicago Booth Associate Professor Daniel Bartels and University of Rhode Island’s Stephen Atlas find that the payment frequency of a contract affects how consumers imagine the benefits they would receive over time. In sum, periodic prices — dividing the purchase price into daily payments instead of one yearly payment — can increase perceived benefits.<\/p>\n “More frequent payments can help people appreciate recurring pleasures and increase the likelihood of purchasing,” the study said.<\/p>\n The researchers also find evidence that consumers respond positively to per-day pricing even for costly goods<\/strong>, such as automobiles and meal delivery subscription services. The finding contrasts longstanding views that marketers should never subdivide an expensive product into a collection of payments.<\/p>\n To examine how periodic pricing influences purchase decisions, the researchers conducted nine experiments. The studies asked participants to consider either a daily cost or a yearly cost of items including charitable donations, newspaper subscriptions, music streaming services, car leases, and meal deliveries.<\/p>\n In one study, participants were given a scenario in which they could lease a luxury car for the periodic price of $20 a day or the aggregate price of $7,250 a year. The participants were not only more likely to agree to the lease when presented with the periodic price, but they also reported greater perceived benefits.<\/p>\n In another study, the researchers found periodic pricing produced a 77 percent increase in sales for a meal delivery service.<\/p>\n “Our framework and results suggest that periodic pricing can help people appreciate the benefits they accrue from a purchase,” the researchers said in the paper. “So, under the right conditions, marketers can encourage purchase with periodic pricing<\/strong>, even for significant sums of money.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" From the University of Chicago Booth School of Business press release: Merchants and charities alike understand that advertising their product for “just pennies a day” is an effective way to… Read more »<\/a><\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[526,95,60],"tags":[20,96,364,363,12,156],"_links":{"self":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts\/25542"}],"collection":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/comments?post=25542"}],"version-history":[{"count":2,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts\/25542\/revisions"}],"predecessor-version":[{"id":25557,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/posts\/25542\/revisions\/25557"}],"wp:attachment":[{"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/media?parent=25542"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/categories?post=25542"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/therapytoronto.ca\/news\/wp-json\/wp\/v2\/tags?post=25542"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"http:\/\/therapytoronto.ca\/news\/wp-content\/uploads\/2017\/03\/ComputerUser-300x200.jpg\")
Merchants and charities alike understand that advertising their product for “just pennies a day” is an effective way to convince consumers to make a purchase<\/strong>.<\/p>\n