by: Roger Dooley

Hot on the heels of learning that more expensive wine tastes better, we find that more expensive placebos are more effective at controlling pain:

The investigators had 82 men and women rate the pain
caused by electric shocks applied to their wrist, before and after
taking a pill. Half the participants had read that the pill, described
as a newly approved prescription pain reliever, was regularly priced at
$2.50 per dose. The other half read that it had been discounted to 10
cents. In fact, both were dummy pills.

The pills had a strong
placebo effect in both groups. But 85 percent of those using the
expensive pills reported significant pain relief, compared with 61
percent on the cheaper pills. [From the New York Times - More Expensive Placebos Bring More Relief.]

Considering
that pain is a sort of mind-body construct, the idea that a person's
expectations about a drug could affect perceived pain is perhaps not a
great surprise (certainly not to Neuromarketing readers).
Makers of brand name prescription and over the counter drugs will cheer
this finding, though it's likely that a few have already spotted this
phenomonon already. I'd guess the only reason we haven't seen ads
showing that "Bayer aspirin reduces pain 25% better than generic
aspirin" is that the FDA might take a dim view of such claims.

As
interesting as the improved performance of high-priced placebos is, I
think that most press coverage of this story will miss the really
exciting points:

1. Placebos at ALL price levels work.
Nobody should doubt the effect that expectations can have on an
individual's experience - even the cheap placebos reduced pain in more
than 60% of the subjects, and the minimal act of increasing the
apparent price boosted the percent to 85%. I'd guess a bit more staging
- say, having a research scientist (or an actor in a lab coat) provide
a complex explanation of why the "new drug" works so well, and the
amazing lab results that were obtained in its initial trials - would
push the percentage even higher.

2. It's about expectations, not just price.
In this experiment, price is the variable used to set the subject's
expectations. As I suggest above, there are a variety of ways to set
the expectation. What if the pills had arrived ostentatiously in a
locked Halliburton case and were individually packaged in a
hermetically sealed tube? The article continues,

Previous
studies have shown that pill size and color also affect people's
perceptions of effectiveness. In one, people rated black and red
capsules as "strongest" and white ones as "weakest." Other information
like the country where the drugs were manufactured can also affect
perceptions.

"It's all about expectations," said the lead
researcher, Dan Ariely, a behavioral economist at Duke and the author
of a new book, "Predictably Irrational: The Hidden Forces That Shape
Our Decisions" (HarperCollins). His co-authors on the report were
Rebecca Waber, Baba Shiv and Ziv Carmon.

Marketing's Key Role

All
of this shows the critical role of marketing not just in helping sell a
product, but in optimizing the customer experience with it. A great
product that for some reason seems a bit dubious to the customer will
probably end up being less satisfactory than if the customer had higher
expectations for it. (The product, of course, can't contradict those
expectations in a major way.) In short, companies that don't
ensure that their marketing sets attainable but positive expectations
for their product will have less satisfied customers.

Original Post: http://www.neurosciencemarketing.com/blog/articles/placebos-price-and-marketing.htm

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