Close Close

Practice Management > Building Your Business

The placebo effect for advisors

Your article was successfully shared with the contacts you provided.

Psychological placebos are powerful marketing tools for service-based businesses, such as financial advisory firms. Perceptions just may turn out to be true. The stories we tell ourselves and the ones others tell about us (whether true or not) can have remarkable results. Physically and mentally, we change based on what we believe to be true.

A recent article in Harvard Business Review, “Just Thinking You Slept Poorly Can Hurt Your Performance,” discusses the results of a study on the quality of sleeping. However, this wasn’t actually a study about sleeping. Instead, subjects underwent brain scans, and some were told that they had gotten a below-average percentage of REM sleep the night before. Subsequently, when given an auditory math test, these randomly selected subjects underperformed.

The researchers, however, did not actually know which subjects had gotten a poor night’s sleep, because brainwaves do not reflect REM. But when they told subjects that they had slept poorly, the effects were dramatic because of what the subjects believed.

Another study found that subjects who drank milkshakes and were told they had consumed 620 calories (rather than the actual 140) produced more gut peptides than subjects not given his misinformation. The level of stomach acid in these subjects actually changed—even though most people don’t even know they have gut peptides! What these subjects believed affected them in ways they were not even aware of.

So how do others perceive you and your business? What do they say about you? What another believes can affect your interaction before you’ve even met. What people say about you can change others’ beliefs and impact you in ways more important than you think.

The stories we tell about our businesses (and personal lives, for that matter) and the stories others tell about us affect our reality. What are your stories?

Sign up for The Lead and get a new tip in your inbox every day! More tips:

Maribeth Kuzmeski is the founder of Red Zone Marketing, LLC, which consults to Fortune 500 firms on strategic marketing planning and business growth. For more information, go to


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.