In vino veritas
"You’d think we enjoy something based on its intrinsic qualities. Food should taste good because we like the way its molecules tickle our tongues. But it’s much more complicated than that.
"For example, one study has shown that knowing the ingredients and name brand of a beer can increase the drinker’s pleasure. What’s going on in our brains that allow that to happen?
"Researchers at the California Institute of Technology recently investigated our neural response to these non-intrinsic stimuli. Twenty subjects tasted what they thought were five different wines. They were given the price for each. But in reality, there were only three wines. Two were offered twice, once at an alleged low price and once at a much higher price.And the subjects consistently said they enjoyed what they thought were expensive wines more.
"A functional MRI showed that there was no change in activity in the taste centers of the brain when the subjects drank what they thought were costlier wines. But the MRI also revealed increased activity in the brain’s pleasure centers. So somehow our brains combine both the actual taste and what we expect about the taste – in this case that it’ll be better because it’s pricier. In vino veritas!"
Indeed, in wine there is truth. The more it costs, the more people want it, and now there's scientific proof of that.
Each morning, I read The New York Times,and on page two, in the upper-left-hand corner, there is always an advertisement for Chanel products. It's usually an ad for a strappy little lady shoe that looks like it would do a nice job of snapping an ankle. Some days, it's jewelry with a crazy price, but today, as usual,it's a shoe. This one looks like a doily with a stiletto heel and carries a price tag of $1,195.
I wonder who would pay that kind of money for a pair of shoes, but Chanel runs an ad like that one seven days a week, so someone must be buying. Hey, The New York Times doesn't give away ad space.
Years ago, I was at an ASHRAE convention in Chicago and I was sitting in the lobby of a fancy hotel near the lake. There was a huge display ofliquor bottles behind the bar, and I saw for the first time, Johnnie Walker Blue. It was up there with the Red, the Black, the Gold, and the Green.
I asked the bartender about the Blue and he smiled at me. Now this was an Irish leprechaun of a bartender, so you're going to have to fill in the lilting brogue as I tell you how this went.
"What's with the Blue Label?" I asked, pointing to the shelf.
"Ah, the Blue!" he says, turning around. "The Blue is very dear, sir. Very dear. Forty dollars a shot!"
"Are you kidding?" I said. "Who would pay that? What the heck does it taste like?"
"Would you like to try some?" he said.
"Not at forty bucks a pop," I said. "Have you tried it?"
"Well,sir, I have to admit that once as I was pouring the Blue for a customer, a wee bit of it spilled into me own glass, so yes, I have tried it."
"Was it worth forty bucks?" I asked.
"Ah, that would be up to you, sir." And he gave me the most wonderful wink.
But there it was up on the shelf, next to the other colors, last in line.The big kid. And I suppose that those who drink the Blue Label sip and smile and know that they can afford it. And that makes it worth it to them. It's how they perceive themselves, and how they perceive the product. Perception buys loyalty.
I travel a lot and I get to see many places of business. In Rhode Island, right on I-95, just south of Providence, is Viessmann's U.S. headquarters. Their building looks very European, and for good reason. Every Viessmann distribution center, no matter where it is in the world, is a clone of all the others. When I visited there recently I felt like I was back in the building I once visited in Germany. I perceived quality in both places,and while I was still in the parking lot.
Viessmann has a round, glass showroom that faces the interstate. They display their boilers in that showroom. One of the Viessmann guys told me that peoplewill often stop by, thinking that Viessmann sells high-end exercise equipment instead of boilers. That's how the products appear as youdrive by at 70 miles per hour. High-end quality, even at that speed.
Viessmannis a company that understands perception. Their buildings are as uniform as Big Macs, and their products are as expensive as New York City steaks. There's a perceived quality to what they make and what they do and people respond. Not everyone, of course, but enough to make them one of the largest boiler manufacturers in the world. They get it.
What makes people prefer wine that costs more? A perception of quality,delivered through marketing. The quality has to be there to sell it again and again, but it's perception that first establishes the pricepoint.
I visited the Lochinvar facility near Nashville,Tennessee and was impressed by the way they choose to show themselves to the world. Their building sits on a rise, just beyond a small pond with a fountain that they had built. I was traveling with my buddy, Hot Rod, and he immediately dubbed the pond, "Loch Invar." I liked that.
Lochinva is known for their engineering and their innovation, and their building reflects this. You can sense the thought that their architect put into every detail. The place exuded a sense of quiet confidence and pride.
Just off their atrium lobby, they have the best-equipped training center I have seen in this industry. It made me feel that these folks were very smart, and very well prepared. That's how I saw it, and perception is everything. I felt comfortable with them.
I tell you about Viessmann and Lochinvar and the way they approach business because these companies impress me with the way they show themselves tothe world. I could also tell you about the showrooms of wholesalers that I've visited over the years. Some of these places made me smile;others make my eyes go wide in total appreciation for the sheer artistry of the places; and still others make me wonder about whether anyone was paying attention.
What good is a showroom if employees are allowed to pile crap on top of all the displays? What message does that send to potential customers? How can you get you rprice if people think you're a slob?
I visited a manufacturers' rep's office the other day. I walked into their lobby and there were piles of stuff on the floor, on the chairs, everywhere.It was like walking through a blender filled with chaos. I wondered what the manufacturers they represented would say if they paid a surprise visit. What would be their perception of how these folks do business? Maybe this is why reps work on 30-day contracts.
What kind of a car do you drive? What did the dealer's showroom look like on the day that you went shopping for that car? Was it filthy? Did you look at their service area? Was it grimy? Were people shouting and cursing? Was the salesperson a slob?
If the place had been nasty, would that have affected your perception of the value of the car? Would you have felt justified in paying the price?
In vino veritas. In wine there is truth, and the same goes for the way we show our businesses to the world.
Perception is everything.