Imagine you are a cosmetic chemist. You are getting reports that your company’s shampoo isn’t foaming enough. How do you improve the foaming properties of a shampoo? Well you can look at the surfactant levels, or maybe change the type of foam booster you are using. In fact there are quite a few things that might affect the foam level that can be changed to make it work a bit better. But there is one rather surprising one. Make it smell nicer.
How does that work?
Well it is a strange thing when you first encounter it, but after a while it becomes commonplace. If people like the smell of a product they will generally rate everything else about it more highly. So if you put the same product into a trial with two different fragrances, people will report that the foaming is better in the one they prefer the smell of.
This well known and even has a name – it’s called the Halo Effect. It isn’t just fragrance. People will rate a branded product more highly than the exact same product in a plain package. And really bizarrely it doesn’t even have to be a well known brand. A fictitious brand will do better than an unbranded one too.
The Halo Effect is really pervasive but rarely noticed. One fascinating example is the natural product sector. If you can make a product appear natural then the halo effect will make people think not just that it is safer, but that it is also better. And it doesn’t take much to acquire this halo. Put a fraction of a percent of a plant extract, preferably a plant with a nice sounding name, and you are good to go. This is such a pervasive practice that ingredients added for this purpose have their own name – we call them tip ins.
Incidentally if any makers of natural products out there are getting worried that I might be putting them out of business divulging this sort of thing, I wouldn’t worry. The Halo Effect works at a level well below our conscious minds. As a culture we have got a deep seated belief that natural is good, and it is that deep seated belief on which we act. I had an excellent and unexpected demonstration of this once. I had prepared some samples of the same product with and without a natural extract. The samples were given to an in-house panel labeled with which was which. As expected, the sample with the extract was preferred. As an added twist, I had actually left the extract out altogether. This was all predictable. What surprised me happened next. I left the samples from the trial in the lab for people to help themselves to. Everyone knew exactly what I had done and that the only difference between the bottles was the writing on the label. And yet, the samples that had inaccurate claims on were picked up in preference, even by people who were in on the deception.
The manufacturers of natural products are well aware of how the Halo Effect works, but they are hardly the only people who use it. It is a lynch pin of brand management for most consumer goods. Selling a product o specific technical specifications is strictly for geeky products like computers. Generally you just want to get a sort of general feeling of goodness about your product. If you can do that, the Halo Effect will do the rest.
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Surely it is companies that aren’t in the natural sector who benefit most from a halo effect of announcing a single botanical ingredient on their label?
Ed, how would you measure the effect in order to come to this conclusion? Or are you saying that big brands sell more anyway?
The small company may make a greater profit proportionately on the back of botanic claims. Its entire profit may be based on the halo effect.
I don’t think there is a moral issue here, if that is what you are suggesting. I apologise if I misunderstood.
Apology accepted!
I didn’t mention anything about big vs small companies, profit proportions or indeed anything to do with morality.
You are right Ed. Companies that just put in say an essence of herbal origin, not to mention any names, will get a big benefit from very little effort. But I think if you take a lot more trouble you will get a much stronger effect. You want to look like you are really walking the walk.
And this is exactly why all the new perfumes smell more or less the same..because by whacking in a dose of vanilla you ensure crowd-pleaser and higher sales because it is a scent we all associate with good things. It’s really to the detriment of innovative fragrance but ultimately, what do I care? If people like vanilla fragrance it’s up to them..
From a business standpoint, you want to formulate the least expensive product you can which still produces an effect that consumers like. There is no point in putting $100 worth of a material into a formula if consumers can’t tell a difference between $0.01 worth of the material.
If you can throw a drop of an ingredient into a formulation then make a package that screams natural & consumers can’t tell a difference, isn’t that what you should do?
I recall GSK put the minimum amount of Vitamin C into their Ribena….until they got found out.
http://www.guardian.co.uk/world/2007/mar/27/schoolsworldwide.foodanddrink
You can throw a drop of an ingredient into a formulation, then make up the balance with natural branding and marketing – and you may well fool most of the people for most of the time – I may sound a bit naive here, but I think you’d have a better reputation and better products if you didn’t do that!
That’s a fascinating story you have found there Ed. They would have had a much tougher job doing the same for a herbal extract of course, because there wouldn’t be a specific chemical to analyse for. And given that nobody ever claims that the tip ins are doing anything, you wouldn’t actually be failing to deliver anything. And as Perry points out, the consumer can’t tell the difference. In principle they might with Ribena, if say they were relying on it to cure scurvy.
And BBB’s point about innovation is well made too. Branding and clever marketing often do have the effect of stifling genuine improvements in the products. This is definitely what the effect of the rise of the natural sector overall has been, albeit that there have been some good natural products.
This is absolutely true. And the thing is, even if people are aware of the halo effect (as demonstrated by the bottles test) they don’t care.
I wrote a response on a blog post about a Micellar cleanser. I explained how micelles work and that you can create your own with a drop of shampoo (or washing up liquid) and a drop of humectant in water – it’s a natural chemical phenomenon; you don’t need rocket science to reproduce the formula.
I also explained that the ingredients in said beauty cleanser were mainly detergents and that without rinsing the product off, you were leaving small amounts of detergent with grime on your face.
And that finally, the product was 99% distilled water. At £20. You can buy a litre of distilled water for less than £1.
Nobody was interested. Everyone wanted to buy the recommendation despite its cost and inconvenience for travel (500ml bottle). They were happy to fork out £20 for 500ml of distilled water “enriched” with 1% detergent, cucumber extract, sugar and disodium EDTA.
These same people claim NEVER to put water on their skin as it dries it out… go figure…
The majority of people don’t care. Like children, they want the fairy story, even though they know it isn’t true; childhood wouldn’t be the same without it.
Fairy dust, the halo effect… it’s what customers want. And companies are simply giving their customers exactly what they ask for.
Ignorance is bliss – i.e. to ignore the facts is bliss!
Now, where’s my washing up liquid?
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Anyone remember the time before Starbucks? When Maxwell House was the biggest coffee brand on the planet.
They wanted to keep their coffee cheap – because that’s what customers told them they wanted, and was the best way to maintain profits.
Incrementally, over a period of years, they swapped high quality Arabica beans for cheap but bitter Robusta beans.
They did lots of testing – and their customers couldn’t tell the difference when they tweaked the formula each year.
But one day the Maxwell House product was so disgustingly bitter that only seasoned coffee drinkers would buy it – younger people preferred alternatives.
Then Starbucks came along and gave people a good reason to pay extra for a premium coffee product – and that’s worked out rather well!
I’m paraphrasing a blog post – so for those of you interested in some more detail:
http://www.wiredtocare.com/?p=429
What’s the lesson for personal care formulators and manufacturers?
You are correct Perry et al, you can “throw a drop of an ingredient into a formulation then make a package that screams natural & consumers can’t tell the difference”.
But just because you can get away with it, doesn’t make it a persuasive argument for using the cheapest possible ingredients or the lowest possible concentrations of ingredients.
One day a Starbucks of the personal care industry may come along with a sophisticated high quality product that customers will pay a bit more for and make yours look like….well, cheap instant coffee in comparison.
“But just because you can get away with it, doesn’t make it a persuasive argument for using the cheapest possible ingredients or the lowest possible concentrations of ingredients.”
Ed, I don’t think anyone is making it a persuasive argument. Simply pointing out the facts as they stand.
And ‘getting away with it’ would suggest that the consumer is being misled which, with the wealth of information out there, is not always the case.
The blog on which I posted is by a fairly well informed young woman with some 50,000 plus followers. The product on which she commented is new, ‘natural’ and recently introduced into the UK. And despite the wealth of information out there, access to ingredients and informative (I would like to think!) posts like mine, educated, literate and savvy young women were still choosing to pay £20 for half a bottle of water!!
People want the fairy story and they will choose a better marketed product over a better content product.
Fair enough, we could argue that companies were ‘getting away with it’ if consumers made this choice on the basis of lies and false advertising, which is coming under more and more scrutiny. But when they make a well informed choice to buy such a product, then who is anyone to judge them or the companies that profit off the halo effect?
I for one, manufacture ‘sophisticated, high quality’ skin care in all it’s 100% unadulterated, concentrated glory. But I know that’s only 10% of the story. The 90% marketing is what people will buy from me.
Hi MC,
Yes – the argument was made by Perry in his reply above. Whether it was persuasive or not is a bit more subjective!
I hear your frustration about better marketed products outselling your better products.
Perhaps there is scope to improve your marketing? This isn’t a zero sum game though – the better marketed products don’t get 100% of all sales.
I’m afraid it is the nature of the beauty industry that so many brands over promise and under deliver, particularly in areas such as anti-ageing.
I don’t think this halo effect of listing a couple of botanicals on a label will necessarily hurt companies that make natural products, especially if there are only trace amounts used.
I wasn’t sure what to make of your comments about customers being like children and preferring fairly tales. I found it rather bitter for my taste – if nothing else, you should be careful of making these types of presumptions, and then basing your marketing on it.
No frustration, bitterness or presumptions, Ed. Just an understanding of human behaviour and marketing of products to accommodate.
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