Are we so irrational towards value?

A few days back I was booking myself tickets for return to Chennai. As always I opened makemytrip.com and looked up options. Amongst the suitable options were three: Jetlite, SpiceJet, Kingfisher. All three almost offering almost the same rates! No not really – there was one exception!
 
Kingfisher had a figure 2000/- next to the price! While I wondered and looked up more closely if I had missed a large discount – I was startled at the offer. The message said that if the flight was cancelled, they would give back 2000/- in addition to the cost of the ticket. It was supposed to be an assurance that the flight would take-off and the 2000/- was their way of luring the passengers .The alternative to this was a paltry Rs 100/- off on SpiceJet’s flight.

My immediate reaction was to reach for the bigger value offer (!!!) Kingfisher – as my mind was weighing what my eyes were seeing: Rs 2000 Vs Rs 100. But then rationality did take over. What would it mean to book on Kingfisher? It meant I will benefit additionally if the flight does not take-off, but I pay the full price for it to take-off. But why will I not want the flight to take-off? My very essence of booking the ticket is with the belief that the flight will take-off on time and land safely.

So I booked SpiceJet, received the Rs 100/ rupees discount on the ticket and also watched the Kingfisher flight take-off with some people losing 2000/- notionally!
 
Isn’t this similar to so many attractive ‘cash back’ schemes – return the product if you are not happy – we will pay you the money back. Is that a rational argument to make someone buy? Why would I invest money to buy a product with the feeling that if it fails I will be financially compensated / rewarded? Except in some special cases where an absolutely new product whose use / need is not realized (that too as a test case) such schemes will help and sound rational. But in most other cases – it makes no meaning! Either we have lost our perception of value or the companies have started truly compromising on values to lure customers.

As consumers what do we look for – performance guarantee or failure compensation promises?
 
Are we so irrational towards value or are we being taken for a ride?

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6 thoughts on “Are we so irrational towards value?

  1. I am not sure if customers get attracted by the failure compensation.It is more of a lure to give a comfort feeling and stop customers from walking past with apprehension. In this particular case it seems to be a bit of damage control giving surety to the passengers of the compensation they would receive if the airline doesn’t take off on time.It seems to be more related to the recent problem Kingfisher had faced with too many flights cancellations.

    1. Used it as an example of a topic that is important but grossly misunderstood by customer – “value”. I have often heard people saying they compare value and then make purchases, but some simple reviews of past buying will indicate how little we understand the term “value”. Again a subject accepted as understood too early!

  2. There are a number of things in which we are predictably irrational. This irrationality is what is used by marketers to promote their products. In fact, I did read a book titled ‘predictably irrational’ where some common place irrationality is dealt in detail

    1. Thanks for sharing the title of that wonderful book! I have also read “Predictably Irrational” and i think it is a wonderful exposition to ourselves on how irrational we unconsciously choose to be and how smart marketers utilize those moments of weakness.

  3. Thought-provoking! I hope articles like these change the mindset of Indian customers. And this would push Marketers to come up with smarter offers.
    As you rightly pointed, it’s just the number that lures people. Rationality loses the battle. And for a fact, this article has inspired me to ensure I do nor repeat the above.
    Good read!

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