We’re all familiar with the placebo effect and how our minds perceive an effect from a sugar pill but did you know that the price of that sugar pill also plays a role in its perceived effectiveness? A study showed that participants who were told that their pain pill cost $2.50 reported a much greater reduction in pain than those who were told that the pill cost just $.10. After all, a more expensive pill has to be more effective, right? Obviously, both pills were just placebos made out of sugar, but the participants didn’t know that.
The same is true for wine. When sophisticated wine drinkers were given bottles of expensive brands which had been filled with cheap wine, they reported that the wine was exquisite and reported that the same cheap wine, when poured from its cheap bottle was horrible. Their minds had been made up based on the bottles and the quality of the brands, not the taste of the wine itself.
This goes to show that people actually can have a more enjoyable experience when engaging with high-end brands, because they’re expecting the experience to be great. So beware, if you discount, whether you’re a website design company or a fancy jewelry store, you just might be setting yourself up to have disappointed customers too.