A well-worn adage advises, “find a job you enjoy doing, and you will never have to work a day in your life.”
New research from the Lehigh University College of Business suggests that finding a job you enjoy doing may be worth charging more.
The study, led by Daniel Zane, associate professor of marketing, examined how both buyers and sellers in peer-to-peer marketplaces such as Etsy, Upwork, Fiverr and other settings were affected by “production enjoyment,” or how much a seller enjoys making a product or providing a service.
Comprising 15 experiments, the study revealed that buyers interpret production enjoyment as a signal of a quality product or service and are willing to pay more for goods and services with high production enjoyment. Yet, sellers who enjoy making their wares generally charge less for them.
“While they might already feel like they are getting some inherent value from doing something they really enjoy for work, sellers shouldn’t allow this to lead them to demand less monetary compensation,” Zane said. “In fact, they might be able to profit most from the products and services they enjoy producing the most.”
Why We Buy
When deciding how much to pay for a product or service, buyers respond to a number of cues to infer quality. In mainstream markets, these signals are dominated by brand power and bolstered by advertising. In smaller markets, including peer-to-peer marketplaces, buyers rely on available cues, such as whether a product is handmade and the amount of effort required to create it.
The study, led by Zane and colleagues at Northwestern University and Tilburg University in the Netherlands, highlights the previously unstudied cue of production enjoyment.
“Buyers interpret production enjoyment as a signal of a high quality product or service. After all, someone who enjoys making jewelry or loves painting probably spends more time and focus on it than someone who does not enjoy their production process,” Zane said. “When buyers learn of this enjoyment, they presume the product/service is high quality and are therefore willing to pay more for it, even compared to other signals of quality, such as efficiency and effort.”
The findings held over a variety of settings explored in the study.
In one field experiment, researchers ran Facebook ads for a consultant offering search engine optimization (SEO) services. Ads mentioning that the consultant enjoyed SEO yielded a 40% higher click-through rate and a 17% lower cost-per-click than an otherwise identical ad that did not mention production enjoyment.
A lab-set experiment using Instagram ads echoed those results, demonstrating that mentioning production enjoyment increased buyers’ perception of quality and willingness to pay.
In another field experiment, people at a large fair on campus were more likely to choose a brownie when the baker signaled they enjoyed baking them compared to a brownie that the baker mentioned was their most popular item.
Several other experiments also demonstrated these phenomena across various contexts. Buyers were more likely to:
- Pay more for drinks at a bar when the bartender signaled they enjoyed making them
- Prefer the dog washing services of a business whose website emphasized production enjoyment.
- Hire potential workers who signaled they enjoyed what they do, across 100 job categories.
In these contexts, production enjoyment was a stronger signal of perceived quality when the product or service also required more skill.
“Signaling production enjoyment works best when the production process requires a lot of skill,” Zane said. “In situations where buyers assume the production process is largely automated or doesn’t require much skill, production enjoyment does not impact buyers nearly as much.”
Buyers were consistently willing to pay a premium—up to 10% more for the same product—when sellers signaled high production enjoyment.
Selling Themselves Short
With such a reliable way to signal quality, one might expect bakers to pepper their menus with mentions of enjoyment and makers to remark just how much they love producing their goods. But they aren’t. An analysis of more than 30,000 seller profiles on Etsy and other peer-to-peer marketplaces found that less than 1% mentioned production enjoyment.
Further, not only are sellers failing to leverage production enjoyment as a signal of quality, but they’re also taking another hit to profits by purposely discounting offerings they enjoy producing.
“It’s fascinating to see that buyers are willing to pay more for a product or service when the seller signals that they enjoy producing it, but that the sellers themselves are actually willing to accept less for these same products or services that they enjoy producing,” Zane said.
In some cases, sellers were willing to accept almost 15% less for the services they really enjoy providing.
To better leverage this cue, Zane said sellers may consider charging a slight premium, rather than discounting, the things they most enjoy producing. They can also mention their production enjoyment in advertising, online profiles and product descriptions.
The Bigger Picture
The study focused on small business and individual sellers, but could the findings translate to bigger business as well?
“In short, we believe they could,” Zane said.
However, for larger companies, the prevalence of other cues, such as pricing and brand power, combined with highly automated production processes, could make signaling production enjoyment less effective.
Still, the study is an important contribution to the field of marketing in elucidating a previously unstudied consumer cue.
“Taken together, these findings are somewhat contradictory: Sellers charge less money for products and services they enjoy producing, even though buyers are willing to pay more for them,” Zane said. “Production enjoyment is a rare cue that actually affects buyers and sellers in opposite directions.”
The article, “Production Enjoyment Asymmetrically Impacts Buyers’ Willingness to Pay and Sellers’ Willingness to Charge,” is published in the Journal of Marketing.
Story by Dan Armstrong
