First, what is a just noticeable difference? Sullivan and Thompson write:
"Psychologists define it as the amount of change in something it would take for us to notice the change. The just-noticeable difference has its own law: It takes a specific percentage of change in the intensity of the stimulus for someone to notice, and that percentage is constant for a given stimulus. It's the word percentage that's important here. For example, if you stared at a pile of four rocks, walked away for a while, and then came back and saw that there were five rocks, you would likely notice the difference. That's a one-rock change, but it's a 25 percent increase in the number of rocks. Now let's do that mental exercise with a bigger pile. What if someone added a rock to a pile of a hundred rocks? You're unlikely to notice the difference as that's only a 1 percent increase--well below the just-noticeable difference."
Given this, let's explore one of the consumer products industry's sneakiest tricks: the stealth price hike. This is a when a company slightly reduces the size or weight of a product while maintaining the price. It's long been a staple technique of food and packaged goods companies--a technique that helps explains certain oddities in the grocery store: like why a 16 ounce can of beans is actually 14.5 ounces, and why cereal comes in weirdly light 11.8 ounce boxes and so on.
Okay: if you were a consumer products company, and you wanted to sneak a stealth price hike onto consumers, how would you do it? Here's how: You'd figure out what the Just Noticeable Difference was, and reduce the size just a little bit less than that.
And in order to be an alert and empowered consumer, someone who is mindful and aware of possible games being played around you, you will want your JND to be as small as possible, so you'll be attuned to stealthy pricing tactics like this. You'll be able to notice them and punish the company instantly by practicing brand disloyalty and switching to a competing product.
Here's another example: Imagine you are a consumer products company offering a "jumbo" size or "bonus" size product. You want to grab consumers' attention and make sure they perceive it to be a tangibly good deal. What would be the proper incremental size change? It would need to be slightly above the just noticeable difference. But not any more than that! Otherwise you'd be giving away incremental product at no incremental profit.
Give the frog a thermometer
It's bad enough that others use the JND concept against us, but it's far worse when we use it against ourselves. It's how we discover one day--to our horror--that we've somehow gained 20 pounds, or that we've gradually accumulated a big pile of consumer debt. These are the results of years of gradual, incremental activity, all of which happened below our just noticeable difference. To borrow the metaphor from Sullivan and Thompson: we had a 100 rock rockpile and we added a non-noticeable rock to it over and over again. We never really noticed, until "suddenly" the rockpile had a thousand rocks on it.
Which brings us to a useful tool we can use to protect ourselves from being fooled by JNDs: that tool is to establish clear, objective milestones and metrics.
Vegans and vegetarians please skip this paragraph: Everyone knows the story of the frog and a pot of boiling water: if you put a frog into a pot of already-boiling water, he'll jump right out. But if you put a frog into a pot of cool water and slowly, gradually, heat it up, he'll never notice. Those incremental changes are below his JND! He'll sit there and eventually boil to death.
So, give the frog a thermometer. Make it so you have a concrete and measurable way to catch these JNDs while they happen, and before they get out of control. A few examples:
* Periodically weigh yourself or track your BMI, and document any changes.
* Keep a training log where you measure yourself against basic fitness metrics.
* Maintain a price book for consumer products prices.
In terms of financial goals (saving for retirement, saving for a child's education, etc.), your "frog thermometer" would be to document specific, concrete financial milestones in advance (by year end 2018 I want to have $10,000 in my child's college fund, by year end 2019, $17,000, and so on), and then track your progress against these milestones. This approach can work for debt reduction and weight loss too.
Conclusion
The more meta you can be about JNDs, the better. Try to be mindful of where JNDs are likely to be used--and more importantly, be mindful of where they might be hiding, unperceived. Give yourself a frog thermometer and you won't be fooled again, by yourself or by others.
For Further Reading
The Plateau Effect by Bob Sullivan and Hugh Thompson
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