The Type Of Authenticity People Rate Higher Vs. The Type They Pay More For

Authenticity is a buzzword for a reason. We, as consumers, respond to products and services we feel are real, genuine, and/or true. If businesses see an advantage, they’re going to try to use it – and now it seems like everything is claiming authenticity. Intuitively, we know that’s not the case, but what is really going on here?


HBR shared an article titled “The Kind of Authenticity Customers Will Pay For,” explaining two types of authenticity illustrated by two iconic New York pizzerias. Consider which of these apply to our own businesses:


DiFara’s pizza has made traditional thin crust pizza using the same recipe since Domenico DeMarco emigrated from Italy to Brooklyn in 1964. DiFara’s is authentic because it is categorically part of the genre that is “New York-style pizza.” 


Blue Hill at Stone Barns (Greenwich Village) uses farm-to-table ingredients and embodies “sustainability.” Blue Hill is authentic because they and their customers share a mutual belief in what matters. Their authenticity is expressed in the form of a shared value system


By measuring brands on two scales – one for how specific of a social category is represented, and another for the brand’s expression of core beliefs – the authors found a difference in between how a brand would be rated and how much of a premium a brand could charge.  In their words: 


Authenticity that conveys fitting within a category might lead to higher social evaluations like star ratings but not an increase in consumers’ willingness to pay more. Meanwhile, authenticity that conveys adhering to one’s core beliefs might persuade consumers to pay more for those products but not necessarily rate them any higher.


What does that mean for us? First, we need to understand our category. Shoulder to shoulder, we will be measured by reputation and want to boost authenticity wherever possible. DiFara’s can have the best reviews and reputation, but they still have to price competitively. Likewise, we should know what ways we might signal how we are better than our peer group. 


We also need to understand any shared values we have with our clients. These extend beyond our peer group, and in some cases may lower our perception with potential clients who do not share our values. We have to be comfortable with being different to engage in this type of authenticity. Blue Hill makes a statement by sourcing their menu locally. Some people won’t get the fuss, but the ones that do will pay a premium to eat there.


Last but not least, authenticity can’t be faked. Brands may claim it, but both better and different are validated by the customers. Take the time to read the HBR post. For an audio perspective specific to finance (and h/t for where I came across this), listen to Josh Brown discussing it here. For more on niche marketing and why different beats better, see this post. Clients want real, genuine, and true. We can give it to them. 


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