Imagine entering your favorite store, and a very friendly salesperson approaches you and treats you to a coffee or some cookies. You think, wow, that's a very warm welcome.
But maybe it's more than just politeness. Perhaps it's even a consciously chosen tactic. We will find out today.
Okay, a charming salesperson offers you some sweets.
You eat those pieces of chocolate or cookies, and what happens now?
What does a little sugar do to you?
Those sweets raise the glucose levels in your body.
And now it depends on whether you are hungry or not. If you are hungry, visceral influences are at play. People care very much about food and pretty little about everything else.
If you are not hungry, your serotonin output might be more important. Glucose increases the serotonin level in your blood. Serotonin is one of these hormones that make you less depressed, happier, and very relaxed.
How does it affect your price perception?
If visceral influences are at play when you are hungry, your willingness to pay for food is high, and your willingness to pay for non-food items is low because food is at the center of your attention.
Non-food items are nothing you care about. However, if you put in glucose and your hunger disappears, your willingness to pay for food drops, but your willingness to pay increases for all other items, like non-food items.
Similar is true for your serotonin output. If the serotonin levels in your blood increase, you are less depressed, happier, and more relaxed. And this state of mood makes you perceive prices as fairer and makes you willing to pay a higher amount for the very same items.
In sum, particularly for non-food items, higher glucose levels via chocolate cookies or any other sweets raise your willingness to pay.
Okay, you enjoyed a piece of chocolate or cookie. Now you are offered a free coffee.
What does the coffee do to you?
Coffee raises your arousal. Coffee – or, more precisely, caffeine – is a stimulant. A higher caffeine level increases your arousal, and this arousal raises your impulsivity.
So, you are more prone to impulse purchases, for example. And various studies linked a higher level of impulsivity to buying more units and spending more money.
To check this train of thought, researchers set up a coffee booth in a major retail chain in France, offering decaffeinated or caffeinated espresso to customers. They flipped the timing when either was served to randomize this experiment.
What did they find out about caffeine?
Customers who got the decaffeinated espresso for free bought, on average, 1.45 units and spent about 15 Euros.
But when customers got a caffeinated espresso, they would buy, on average, 2.16 units and spend a little more than 27 Euros.
If you invite customers to a caffeinated espresso, they would buy roughly 50% more units and spend 85% more in revenue.
What did we learn?
You see, a little bit more sugar or caffeine in the blood of your customers has some very neat implications.
And, of course, it's always nice to be treated, but it also has some exciting side effects from a business perspective.
References
Orquin, J. L., & Kurzban, R. (2016). A meta-analysis of blood glucose effects on human decision making. Psychological Bulletin, 142(5), 546-567.
Eberhardt, T., Fojcik, T., & Hubert, M. (2010). The sweet side of sugar–the influence of raised insulin levels on price fairness and willingness to pay. Advances in Consumer Research, 788-790.
Biswas, D., Hartmann, P., Eisend, M., Szocs, C., Jochims, B., Apaolaza, V., ... & Borges, A. (2022). Caffeine’s Effects on Consumer Spending. Journal of Marketing, forthcoming.