It’s amazing what context does for our judgments of the value of something. As humans, we like to process information by placing it into categories. This helps us to make order of the world and is often one of the fundamental factors behind our occasionally amazing ability to make great snap decisions, as well as our habit of falling victim to stereotypes and judging books by their covers, so to speak.
This phenomenon plays out everyday and is nothing new, except when drastic situations illuminate the power of it in our daily lives. The Washington Post did a fascinating experiment, in which a world-class violinist named Joshua Bell performed as a street musician in a Washington DC metro station. Bell played his $3.5 million violin, built in 1713, for 43 minutes in the morning during rush hour, as 1,097 people passed by. As you can see in the video, no one really took notice, and he only made approximately $30. Perhaps all of these people had more important things to do, and were running off to spend our tax dollars instead of listening to beautiful music. Or, maybe without the concert hall, tuxedo, and fanfare, we rarely know something is great unless all the packaging is there to affirm it.
This reminds me of my recent conversation with Barbara Carey in which she discussed pricing a product based upon it’s perceived value, and the importance of packaging in raising the awareness of that perceived value of your product. We’ve all seen it out there–products which seem to be the exact same as their cheaper, generic counterparts, but are packaged in much more attractive packaging and sell for a 30%-50%, or more, mark-up. Perhaps I could dress in a tuxedo and play Stairway to Heaven on my guitar in a concert hall that charges $200 a head? Who’s with me?
I believe brands are built on solid product (hence me abandoning my aforementioned "Stairway" plan). But at the point of purchase, people probably won’t think your product is great, unless your packaging provides the tuxedo, concert hall, and fanfare that your target market is looking for. Think about the stores you shop in, that skin cream you bought, or any number of sports cars on the market which possess the same engines as your family sedan. All are geared to indicate to you the value that the company selling the item wants you to believe you are getting–to give you an experience by creating the context. Whether a given company or product delivers on that, that is another story.
Major companies test their packaging routinely, and often find that sales increase substantially when they hit upon the right combination for their target market. You can’t just put lipstick on the pig, and put poor, low end products in high end packaging. This will only erode your customers’ confidence. But, if you’re product is geared to provide something great in value to a particular market, you need to provide all the context that will turn their heads and get them to focus in on what is truly amazing about your product.