The Price Placebo
We all know what a placebo is. We’ve all heard a story about an ‘amazing breakthrough drug’ that turned out to be some kind of sugar pill. For the most part, we associate placebos with the treatment of patients, sneaky parents (maybe that’s just me), mind-body medicine and those very sciencey-sounding ‘clinical trials’.
Amazingly, placebos (pills with zero active pharmaceutical ingredients) often produce comparative, if not superior, results to the actual drugs they’re being tested against. Well, to be more accurate, it’s the individual’s belief in the fake drug (not the placebo itself) which produces the therapeutic benefits. In other words, some people heal themselves (or improve their condition) without even knowing or understanding it.
Q. What’s the cheapest and most powerful drug in the world?
The Belief Drug
Harness some of that unconditional belief to the amazing potential that lurks within your cells and almost anything can happen. Literally. Inexplicable healing has happened far too many times for the possibility of self-healing to be dismissed or ignored. Even for this scientist.
The Price Placebo
But placebos don’t only exist in the realm of the physical and medical. No, they exist everywhere. Even in that part of our world where we spend our hard-earned money. And the money we haven’t earned, for that matter. Put simply, the ‘Price Placebo’ is a term referring to people’s willingness to over-pay for services and products based on their personal beliefs, perceptions and expectations of those items on their shopping list.
Some really cool research out of Cal-Tec demonstrated that the person who pays a hundred dollars for a twenty dollar bottle of wine (while believing it to be a hundred-dollar bottle) will enjoy his wine considerably more than if he had paid the correct price. Incredibly, his belief and expectation (that he is consuming an expensive wine) actually produces a more significant pleasure response (with accompanying biochemical changes) in his brain compared with the same person consuming the same wine believing it to be a twenty dollar product. In other words, both his mind and body have bought into the illusion (the Price Placebo) and subsequently created their own reality. The cheap wine magically became expensive.
People will happily pay thirty dollars for a bottle of extremely well-marketed shampoo when a comparable product with identical ingredients in a far-less-sexy container (with zero brand recognition in the market place), can be purchased for a third of the price. More amazing is the revelation that, even when people are made aware of the much cheaper option with the same ingredients (the same product wearing a different dress), many people will still buy the more expensive product because their existing belief in (and emotional attachment to) the brand will over-ride information, logic and evidence (the Price Placebo in action).
Marketers tell stories and in many cases, you and I buy the story, not the product.
Also interesting to note that many shampoos claim to make your hair healthier and give it more life when it is, in fact, dead. Yep, that’s right; the stuff you see on top of your scalp is dead protein (by definition). So, short of a miracle, “giving your hair more life” is biologically impossible. It might get shinier and smell better but it ain’t gonna get healthier because dead things don’t get healthy! But don’t let the facts get in the way of some clever marketing and a great story.
And that, my friends, is how companies sell you and I, stuff we don’t need, at prices we shouldn’t pay.
Now, where did I put my Rolex?