Revelation: people pay premiums for products with compelling backstories

There was a running joke In tech circles a few years back about the late, great company Digital Equipment Corporation: If they were in the sushi business, they would be marketing it as "cold, wet, dead fish."

Alas, DEC was actually way ahead of its time with its computer systems. But due in large part to its engineering culture, the company could not provide compelling stories for its products. They were given dry names such as "VAX-11/780," with dry, techie specification and description sheets.

The ability to tell a compelling story, in human terms, isn't just marketing happy talk. It actually increases the value of products, and ultimately, the price at which they can be sold. This point was recently raised by Ty Montague in an HBR Blog Network post, in which he urged enterprises to tell a better story around the things they sell. "In a world of abundance, what your product does for your customers is important, but not nearly as important as what your product means to them," he says.

Most successful and high-value products have stories supporting them. Consider the allure around Disney parks and products, which everyone associates with some part of his or her childhood. The story of Mickey Mouse, leading to the vision of Disneyland and DisneyWorld, is well known -- and people eagerly open their wallets to travel to these destinations. Other successful products -- Apple, Ben & Jerry's, Nike -- all have stories behind them, often quirky.

Montague recounts an experiment performed by New York Times Magazine columnist Rob Walker, who purchased a number of items from thrift shops, none exceeding four dollars, such as an old wooden mallet, a lost hotel room key, an old mayonnaise jar, and a plastic banana. He then commissioned some writers to build stories around the objects, and then offered them for sale on eBay. The items sold at 2,700 percent of their original value.

Walker's experiment was an example of how perceived value can dramatically increase what people are willing to pay for something. And the perception of value increases when there is a meaningful story behind the object.

Yes, this is an old concept that may be familiar to anyone who took marketing 101 -- but in a world inundated with products and advertising, much of it tied to tech, a compelling human interest story can make a product stand out in people's minds.

The key takeaway here is don't be afraid to invest time and money in researching and providing a background story to a product's development. Even if the backstory is something quirky, people enjoy the intrigue.

Which brings to mind a memorable scene from Mad Men a couple seasons back, when Don Draper, the flawed great persuader of the fictional Sterling Cooper ad agency, was commissioned to sell a slide projector for Kodak. He decided not to call it the "Wheel," which was Kodak's first choice (at least in the storyline), but the "Carousel" instead, and appeal to a deeper yearning in consumers. As he put it in his presentation:

"Technology is a glittering lure, but there is the rare occasion when the public can be engaged on a level beyond flash...  Switch it on.... This device isn't a spaceship, it's a time machine....  It goes backwards and forwards.... And it takes us to a place where we ache to go again."

This post was originally published on Smartplanet.com