Perceived Value

The concept of "perceived value" has really been on my mind of late.  A few months ago, my photographer friend Amy lent me a few of her Professional Photographer magazines to browse, and I read an article which really got me thinking.  The featured photog talked about how he started with a reasonable sitting fee of $500 (which I think is high) and was advised to raise the fee to 4 digits.  At first thought, this seemed ludicrous -- no one would hire him -- but he found that by charging $1500 (oh my goodness, I'm in the wrong business), his perceived value was raised.  Clients went into the shoot assuming he was a superstar and treated him with a greater respect than he might get for only $500.  It all struck me as a bit shifty, but then in America, we thrive on a sort of conspicuous consumption -- not just keeping up with the Joneses but bragging about how much we're spending to do so.  Expensive means good.

Ariel and I had experienced something similar about 4 years ago when we went to put our house on the rental market.  Our realtor and our listing agent came to the house and gave it a good look over (which admittedly made me a bit self-conscious since our realtor moves million dollar homes on a weekly basis (or did before the market crashed)) and when we discussed how much rent to charge, Ariel and I offered an amount on the low end of the rent spectrum, thinking that a low amount that still far exceeded our mortgage amount would guarantee renters and no months of an empty house.  The realtor suggested that instead we charge the largest amount that the housing market could handle.  And her reasoning came back to perceived value.  She said that she had found that if you charge a humble amount of rent, the home is less dear to the renters, but that by charging a high but fair amount, the renters actually take better care of the house.  They perceive that you're charging so much because your house is a treasure.  

Recently, the paradox of perceived value has now worked its way into our daily lives.  In our town, we have a little bargain grocery store called Shoppers.  On the edge of the town we have Wegmans.  Shoppers is just a basic grocery store that sometimes runs triple coupons, tends to have the cheapest groceries short of Costco, and has a huge selection of Hispanic food due to its huge immigrant customer base.  Wegmans is the most gloriously wonderful grocery store I've ever encountered with its patisserie, bakery, fish monger, butcher, cheese shop, tea aisle (yes, aisle -- not just a section on the coffee aisle), etc.  But it's high.  It's the place you go for the specialty item on your list, but not for the whole list.  Or so I thought.  Since we've returned to the States, we've dutifully gone to Shoppers for most of our grocery needs.  And every week we've whined about how we can't get out of the store for less than $150.  The meat is processed elsewhere and shipped in, the selection is limited, the produce is sometimes questionable.  But still, even when we're actively limiting our impulse buys and luxury items, we still come away spending too much money.

Last month, Shoppers announced that they were closing the store here in our area.  We fretted and fussed, "What will we do?  Where will we shop?"  Though we have a grocery store on every corner, they are all expensive.  Amy (ah, how things come full circle) said, "Actually, Wegman's has the cheapest milk in the area.  And their regular groceries are not really any more expensive."  And so we gave Wegman's a try for our weekly groceries.  Monday, I went to do my shopping, armed with not just a list, but a massive list of lots of specialty items.  I bought Polish sausage from the butcher, pancetta from the deli, ciabatta from the bakery, 21 types of fresh produce, and all of my normal needs.  When I went to check out, I quaked in fear.  And my tally came in at -- $130.  

How can Wegmans -- posh, amazing, scary-elegant Wegmans -- come in cheaper than cheap old Shoppers?  But it's back to perceived value.  I go into Shoppers thinking I can afford anything in the store, and it's all a good price (because it's Shoppers), so I pop into my cart anything I want.  I nickle-and-dime myself to death.  But then I go to Wegmans, and I'm scared to death of buying a $60 kosher sausage (a tale for another day) or worse, buying a pound of black truffles.  So I put into my cart only want I need, even if what I need is expensive.  I assume when I look at the price of things on the shelf that they are priced for someone in a higher tax-bracket, so I don't buy 7 of them -- even when it's the same price I'd pay at Shoppers -- where I would have bought 7 -- just in case there's a shortage on salad dressing, you know.

Now that I've possibly identified the illusion of Wegmans, can I keep shopping there?  Next week, I'll be going back to Wegmans, this time with just my standard list of standard groceries (no experimental menu next week).  Can I come in under $100?  To maintain my perception of Wegman's value, I'll just keep chanting, "$800 per pound.  $800 per pound."