March 13, 2012

How much would you pay for Two-Buck Chuck?

We usually view our preferences as the end result of clear decisions that we made on our own; I bought that brand of soap because I have found it clearly works better than the other options. The truth, though, is that countless outside factors affect every choice we make or opinion we hold, whether we realize it or not. It has been shown repeatedly in experiments that most people are quick to conform to the majority view in any group setting, even if it means going against what your own senses tell you.

As consumers, the factors that sway us one way or the other can be more subtle, but no less powerful. In 2001, a study looked at a group of people distinguished for their taste and refined opinions: 54 students majoring in wine making and wine tasting. Each was given two glasses of red wine to critique, one poured from a $90 bottle, the other from a $5 bottle. All the students went into great detail describing the vast superiority of the expensive glass, not a single one of them noticing a slightly important detail: both glasses were actually the $5 wine.

The test was run again, only this time with an even bigger difference: both glasses were cheap white wine, with one dyed to look red. And, shockingly, not a single wine expert picked up on this fundamental difference in their tastings. They saw a red wine in the glass, their mouths expected to taste a red and, sure enough, they described a red wine in their critiques. None of this is to say there are no differences between wines (though I am more of a beer guy, myself); the lesson to take away is that any differences can be easily overwhelmed by the power of expectations. Our minds immediately latch on to what we are told about the product before we even experience it – it’s nearly impossible to walk into any situation truly “open-minded.”

If you are a producer or seller, this can be both frightening and encouraging. Frightening in that even if you have a product twice as good as your competitor, you could still end up with fewer customers if the other guys can establish an image of quality with the public. The good news, though, is that with the help of people who are professionals at making businesses look good (hint hint), you can be the one to gain that edge in customer expectations. That’s the best situation of all: being the best in your field and having customers who believe you’re the best. Maintain that and you might actually be able to afford that $90 wine.