Who would pay $4 for a cup of coffee? You'd think the answer would be nobody. But the truth is, more than 10 million people pay that for Starbucks coffee drinks every day.
Branding is a powerful tool. It creates value around a product by changing our perception of what it is. As Elon Musk, the man behind PayPal, Tesla Motors and SpaceX, once summed it up, “Perception will match reality over time.”
So can we actually change people’s perception of our products and services? To answer this question, I contacted Dan Ariely, a world expert on consumer behavior. Ariely is a professor of psychology and behavioral economics at Duke University and the author of two New York Times bestselling books, Predictably Irrational and The Upside of Irrationality. His answers provide us with three insights that every business owner should remember about how to successfully brand our businesses.
1. We Always Get What We Expect
The first step in building any great brand is creating a background story that tells people who you are and what you do. Often, we see these stories as placeholders that simply create an atmosphere, but that's hardly the case. According to Ariely, the simple notion that your coffee beans were organically grown in the mountains of Indonesia can change how people will experience the coffee you produce from those beans.
“Expectations are important because they have a way to fulfill themselves,” Ariely says, “Think about the experience of drinking coffee. Part of it is the actual smell and the sensation on your tongue, but the other part is what you expect it feels like to drink regular coffee versus what you expect it feels like to drink coffee that was picked in the mountains of Indonesia.”
2. Attention Leads to Delight
Our second insight is that your customers have to pay attention in order to be delighted, but attention isn't something people simply give out. For people to experience, rather than just consume, your products, you have to make them slow down and pay attention to the details.
“Language gets us to focus and pay attention to a product,” Ariely explains. “Wine experts, for example, tell you about complexity, acidity and tannins to make you slow your pace and pay attention to the taste. Other examples include a chocolate brand that went as far as giving instructions [about] how chocolate should be eaten. They told their clients to put the chocolate in their mouth, wait for two seconds, then take a bite and wait again while letting the smells and tastes mix in their mouth. This is an example of a background story that can even give you rules of how to eat something and enhance the attention you were giving it. I’m 47, and I’ve been eating chocolate for almost 47 years. I thought I knew how to eat chocolate, but it turned out I didn’t.”
3. Our Expectations Can Create a Placebo Effect
The third lesson is probably the most astonishing, and it is that branding changes more than whether we perceive the smell of AXE deodorant to be more manly or whether it affects the amount of attention we give it. Good branding can potentially change the actual smell and effect of your deodorant. This effect occurs when our expectations are strong enough to create a physiological change in our body.
“The best example for placebo is painkillers, of course,” Ariely says. “The idea is that if you expect to experience less pain, your body, in anticipation of that, secretes a substance that can actually make things less painful. Your body thinks some painkiller is coming, and in preparation for that, it actually changes its physiology.
“What’s important for placebo to occur is figuring out what kind of things can anticipation change,” Ariely clarifies. “The obvious thing is our immune system, but a true placebo effect occurs any time an expectation changes the physiology.”
Going back to our Starbucks example, we can easily identify all the ingredients of a good background story. The client’s expectations start the minute he sets foot in the store. Canvas-coated coffee bags that seem to have been imported directly from South America’s coffee plantations, alongside the European coffee brewing equipment that's featured in the prep areas, create expectations for something different. The rich descriptions attached to each type of coffee bean allow us to focus on their taste.
So does Starbuck’s $4 coffee actually taste better? The truth is, Starbucks never sold $4 coffee, because they always call it “caffe.”
Yali Saar is the CEO of Tailor Brands, a Brooklyn-based branding agency that specializes in small-business brand design.
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