Since 1962, double blind testing with placebos has been the norm for medications wishing to pass muster from the US Federal Drug Administration (FDA). However, over the years the placebo effect has been more pronounced with fewer drugs passing clinical trials. To be sure, unusually high responses to placebos have been blamed on ineffective compounds, but there might be other causes at work.

A Wired Magazine titled, “Placebos Are Getting More Effective. Drugmakers Desperate to Know Why” cites some of the challenges facing Big Pharma. Over the years, drug makers have diligently worked to uncover why–for some patients–the act of taking a placebo works as good (or sometimes better) than a promising compound. In fact, according to the article, researchers are discovering, “the body’s response to certain types of medications is in constant flux, affected by expectations of treatment, conditioning, beliefs and social cues.”

For example, for some patients the simple act of watching another person gain relief from a medication sets “expectations” that the medication will indeed provide relief. And since consumers have been bombarded with billions of dollars in drug advertising over the years, Big Pharma has also increased expectations that simply taking a pill will solve a patient’s ills. In addition, a kind and empathetic doctor can also boost the placebo effect.

To help remove the noise from the above variables, drug makers have taken to testing medications in countries across the globe. However clinical researchers are discovering that even this isn’t a perfect solution as doctors are “paid to fill up trial rosters quickly which may motivate them to recruit patients with milder forms of an illness.”

Part of the challenge for drug makers is defining the illness in question. The Wired article notes that many new drugs today target “higher cortical centers that generate beliefs and expectations, interpret social cues and anticipate rewards.” Defining “depression” in a patient is often difficult enough, but then try and see if that same definition holds for patients in different countries and communities! It’s tough stuff.

In a sign that the white surrender flag has been waved, drug makers have now all but acknowledged the benefits of placebos. What they’re looking for now is, “the best placebo response plus the best drug response.”

A key lesson from this article is that the human brain is very powerful and scientists don’t quite yet understand exactly how it works. Why or how does the human body improve its condition from the simple act of taking a medication (placebo or not)? Why do patients improve their conditions of depression when a doctor–knowingly–prescribes them a dose of medication that’s too low to be effective?

Another interesting discussion avenue is how customer expectations can be defined and created. For example, the Wired article mentions that drug makers have long known that simply coloring pills can help create expectations of efficacy. Yellow pills may create “doses of sunshine”; red pills let patients know they have potency, and green pills help reduce anxiety. Pills stamped with a brand name also offer a patient assurance and comfort.

Helping our companies understand, create and manage customer expectations is where the marketing function can add significant business value. But as Stan Lee of Marvel Comics fame reminds us, “With great power comes great responsibility!” Marketers must be willing to resist the urge to manipulate customer expectations in an unethical and immoral manner–especially if our products and services are no better than a comparable “do nothing” placebo.

Questions:

• In recent tests, durable warhorse drugs like Prozac have been beat by placebos. If you worked for Big Pharma, how might you suggest that your company “test out” consumer expectations–to see if your drugs actually worked?
• It would be difficult to argue that consumer expectations haven’t increased over the past ten to twenty years. What is a good strategy to manage expectations …. keep them low and over deliver?
• Does experimentation with control groups have a place in your marketing function? If so, how? What are you learning?

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If you do not have an active experimentation and testing program in your company then you are leaving so much money on the table that it is not even funny.
It is not too extreme to say: If you are not doing testing then pack your bags now and go home because there is no way you can win.

You are a lovely Marketer and all you want is the coveted Marketer of the Year award. Yet your website conversion rate is stuck at 2%, no matter how hard you try. Its not your fault. There are three forces that are working against you:

1. Your website is being used for purposes it has not been created for. And you don’t even know. Few website owners / Marketers / Analysts understand all of the reasons why people come to their websites (Visitor Primary Purpose).

   If you don’t know why they are there, how will you know how to create a great customer experience?

2. A monolith does not come to your site, segments do. If I unpack that statement what I mean is that even if 100% of the traffic on your site is there to buy (right now), it still is formed of many different types of customers who need to be communicated to in a unique manner (calls to action, content, promotions, and yes even buttons).
3. HiPPO’s rule the world when it comes to creating customer experiences. And that’s a bad thing. No matter what you think the optimal customer experience should be on the website it is quite likely that you walk into a meeting room, or office, and regardless of your competence the HiPPO decides what goes on the site.

   HiPPO stands for: the Highest Paid Person’s Opinion. HiPPO’s are your bosses, their bosses, your creative directors etc etc.

In the past you did not have too many options to counter the HiPPO’s and get your ideas to the site or why people comes to your site and what problems they have. Now you can run a simple three question golden survey and find out Visitor Primary Purpose.

You can also let ideas democracy flourish in your company: Captain Experimentation to the rescue!

In its simplest form experimentation and testing is showing two or three or fifty pieces of creative / content / promotions etc to a website visitor. After a statistically significant amount of time let the results of the test help you decide what your customers like / react positively to.

In the last 18 months or so your ability to test has dramatically improved, thanks to evolution of technology, new vendors and integrated reporting.

You can get going with your own website’s capability to do A/B/C testing (if you have a decent website platform then you are set).

Take a page on your site, tell your web server to split traffic to three different version, with your web analytics tool measure success. That’s all it takes to get your idea validated!

The cool babe of the month is Multivariate Testing. It is the ability of simply partitioning up various parts of the page and putting different pieces of content in each partition to see which combination of element works.

Here is your default page (and who on this earth does not need, nay deserve , a hundred roses?):

To test all you do is log into your multivariate testing tool, upload all your wonderful ideas, and turn the experiment. You can pump in different images into the main 100 flowers image above. You can put in customer testimonials in the white space on to top right. You can even take your boss’s wonderful idea of adding Buy Now buttons under each product.

The tool takes care of rending the pages to your website visitors and runs the experiment for you (with the only IT involvement for your company being addition of a few lines of javascript code – you the Marketer is finally in control baby!!). Each visitor to your website sees a unique page:

Now here comes the sweetest part. Analytics are included, you just sit back and wait for the green bars to indicate 95% confidence!

The tool tells you which one works for your customers optimally, and by how much. You don’t have to guess.

Convinced?

Here’s one last thing.

You can start doing multivariate testing tomorrow using the 100% free Google Website Optimizer tool. All you need is a Google AdWords account (you don’t even need to spend money on AdWords!!). You can get the code, implement, upload and start testing in a couple hours.

Once you get really good at this you can get a paid tool where you might get lots more features (initially you might not need them but later perhaps you will).

If you don’t want to go down the free route get one of the nice paid tools, Offermatica, Optimost, SiteSpect etc.

To help you choose the right tool for you (and know the kind of effort involved in your company and the impact it will have on your customers) here is a handy selection matrix:

Ms. / Mr. Super Marketer the shackles are now off! Good luck and God speed!!