It is possible for cost transparency to backfire but only when a company reveals it is ing unfair with customers Buell says. It was shocking to us how heavy hand we had to . John puts it another way Cost transparency doesn t fall apart until we say Hey guys we re ripping you off. Meanwhile In The Real World The researchers took the academic experiments into the real world by examining customers interacting with an online retailer.
In anticipation of the holiday season
The retailer introduc a leather wallet on its website that came in five colors. In an effort to promote sales after the holiday the retailer includ an infographic graphic on each product pages that present the cost of leather . construction . duties . and transportation . as well Qatar Email List as the total cost of . to produce the product. But the retailer made a fortuitous error including the costs infographic for only three of the colors—burgundy black and gray. “COMPANIES MAY TRULY STAND TO NEFIT FROM ING MORE OPEN” This discrepancy was overlook for a five week period creating a natural experiment that compar how customers react to the three wallets that outlin costs versus the two—bone and tan colors—that did not.
The researchers found that the introduction
Of the cost transparency infographic increas daily unit sales on a per color basis by percent. Not All Costs Are have varying levels of tolerance for different cost variables. Shoppers seem to appreciate the cost of raw materials such as cotton but certain expenses like the cost of China Phone Number transportation seem like a waste of money to people John says—even though it is inde a very real cost for the company. Yet even if the costs don t seem allocat in an ideal way from the customer s point of view the customer still applauds the company s willingness to share its production expenses.
