Why Brands Rely On The Placebo Effect

My mother was the nurse at a sleep-away camp in the Catskills.

So I went for free, which was great.

But I lived with kids who were totally rich. Their parents paid a ton of money for the fees. And so that part was not.

Do you want to know how I learned about branding?

One time a kid in my bunk got a "care" package from home. Like Veruka in "Willy Wonka and the Chocolate Factory" she ripped it open.

She held up a pink sweatshirt with a weird overlapping squiggle on it and the word "Benetton" written on the front.

"Benetton?" I said, pronouncing it with the emphasis on the second syllable, "E."

"What's that?"

"It's BEN-etton," she gasped, laughing. Of course everyone else did too.

Hands stuffed into my pockets, humiliated, I skulked out to challenge myself to yet another game of tetherball.

What is it about brands that makes us feel safe, insulated, protected?

Over the weekend we went to Jamesway (like Wal-Mart) to pick up some stuff.

I said, "Ma, I need a sweatshirt."

She said "You can have any color as long as it's $5."

A sweatshirt is just a layer of warm cloth. But if you put the right logo on it you get to charge more because of the placebo effect.

That is, we think of the brand like real medicine to cure our troubles, but as often as not it's a sugar pill.

Have you ever heard the saying. "Nobody ever got fired for buying IBM?"

I have a feeling that is true.

Purchasers tend to feel more comfortable dealing with names they know and trust.

In fact sometimes we buy things that we could get for free, like water, just because they are branded.

The job of a marketer is to use the brand to provide additional value, whether psychological or material.

At the same time, we should be honest enough to admit that a fair amount of the perception of value has to do with the way we leverage the placebo effect.

To be ethical, we should be more upfront about that, distinguishing between a real value-add and the promotion of magical thinking.

Have a good day everyone, and good luck!