00:00:00What did you learn from Five Guys?
00:00:01- So Five Guys is the opening chapter,
00:00:06and we talk about something that they did very powerfully,
00:00:10which is when they launched, they were relentless
00:00:13at focusing on just doing burger and chips.
00:00:16So people like McDonald's got seduced by the fact
00:00:18that they could launch fillet of fish and chicken burgers.
00:00:22But Five Guys relentlessly honed down on just doing burgers.
00:00:28Now, some of the benefit of that is a ability
00:00:33just to get better at cooking,
00:00:34better at producing your core product.
00:00:37But psychologists argue there's something else on top of it.
00:00:40So there's an idea called the gold dilution effect.
00:00:43And the first studies were done
00:00:44by Zhang and Fischbach back in 2007.
00:00:47And they did a very simple experiment.
00:00:50Recruit a group of people,
00:00:52randomize them into two subgroups.
00:00:54And the first set of people are told,
00:00:57"If you eat tomatoes, it's very good for your heart health.
00:01:00Here are the reasons."
00:01:02And that group are asked to say whether they think
00:01:04eating tomatoes is worth doing for their heart health.
00:01:07Second group of people, they see exactly the same text,
00:01:12exactly the same reasons and logic and facts
00:01:15about why tomato eating is so good for cardiovascular health.
00:01:19But they are also told,
00:01:20"If you eat tomatoes, it will improve your eye health.
00:01:24It will reduce degenerative diseases."
00:01:26Now, when that second group are asked to say how good
00:01:29eating tomatoes is for heart health,
00:01:33they come back with a 12% lower score.
00:01:36So even though they've seen the same facts,
00:01:39because in this second group
00:01:41there was an additional reason thrown in,
00:01:43it reduced, it diluted the believability
00:01:46in that core reason.
00:01:48So there's a psychological as well as practical benefit
00:01:52about communicating that you do one thing well.
00:01:55People have a rule of thumb in their head
00:01:57that you can't be a jack of all trades.
00:02:01If you are, you'll be a master of none of them.
00:02:03So there's a sacrifice in credibility and believability
00:02:06if you claim to do multiple things.
00:02:09- What does that say about underlying human psychology?
00:02:13Is it that we have a zero sum or a resource limitation
00:02:18on how much we think we should be able to distribute
00:02:23between the traits of a particular offer?
00:02:26- I think a lot of these biases
00:02:30that behavioral scientists identify,
00:02:32that psychologists identify, they're generally true.
00:02:35I mean, all things being equal,
00:02:38you tend to get better at a task
00:02:40if it is the sole focus of your attention.
00:02:43If you spend 40 hours a week being a cyclist,
00:02:45you're gonna be a better cyclist
00:02:46than if I spend 10 hours a week.
00:02:49So people have a sensible rule of thumb in their head,
00:02:52but then the danger is they over apply it
00:02:54in situations where it's not relevant.
00:02:56Like in the situation Zhang set up,
00:02:58people got the same facts about cardiovascular health,
00:03:01but because they threw in this second benefit,
00:03:03it seemed to detract from it.
00:03:05So I think it's often the misapplication
00:03:08of a generally sensible rule of thumb.
00:03:11- Is the rule or the lesson for brands here
00:03:14that you need to win one thing very well
00:03:18and be very cautious about trying to add additional offers
00:03:21and features and potential advantages
00:03:26that people can get by using it?
00:03:28- Yeah, that's a fair summing up.
00:03:30It's essentially the argument that be very, very careful
00:03:33about adding extra reasons to believe
00:03:36because what they will gradually do
00:03:39is undermine believability
00:03:41in the core reason to buy your product.
00:03:44So if you start saying you're all things to all people,
00:03:47over time, gradually, continuously,
00:03:49that original reason to buy gradually disappears.
00:03:54- Reasons to believe is a wonderful way to put it.
00:03:56The believability thing is really interesting.
00:04:00So, you know, selfishly, I've got Nutonic.
00:04:02I've got my productivity drink
00:04:05and I'm shamelessly using yours and Sutherland's insights
00:04:09around behavioral science in an attempt to do this.
00:04:11And it does lots of things,
00:04:13but we could have talked about procrastination.
00:04:16We could have talked about alertness.
00:04:18We could have talked about energy,
00:04:20but we just tried to get one word, which was productivity.
00:04:24And we just went for one single thing.
00:04:26And I think the problem we have with productivity,
00:04:28the problem we're currently facing,
00:04:29we may end up pivoting a little bit,
00:04:31is that we're using fuel your focus and productivity drinks.
00:04:34There's two things that are kind of synonymous with each other.
00:04:37I think the problem is it's two-way morphous as an offering.
00:04:39I don't think that people necessarily want
00:04:41to be focused or productive.
00:04:42I think they want to get their job done with limited effort.
00:04:45So we're trying to think now about what a pivot
00:04:47from a copy perspective would be to talk about the outcome
00:04:51as opposed to the sort of mediator
00:04:55between you and the outcome.
00:04:57Like you don't want focus, you want your work completed.
00:05:01You don't want productivity.
00:05:02You want to be efficient.
00:05:04You want like efficiently to complete the task
00:05:06that's in front of you, so.
00:05:08- Yeah, I think there's two bits there.
00:05:11Firstly, selling the outcome
00:05:12rather than the product makes sense.
00:05:15I think it was Levitt said,
00:05:16now if you've got a drill, don't sell nine inch,
00:05:19I don't know, drill bit, sell nine inch holes.
00:05:22I think there's an argument there.
00:05:23But the other bit that struck me
00:05:26when you're talking about things like productivity and focus
00:05:28is that a lot of experimentation shows
00:05:33that people are pretty bad at remembering abstract data.
00:05:38They're very good at remembering concrete physical things.
00:05:43So the original study was by Ian Begg back in 1972,
00:05:48and he recruits a group of people,
00:05:51reads them 22 word phrases.
00:05:55He doesn't mention it to the participants,
00:05:56but half of these two word phrases
00:05:59are what he calls abstract concepts.
00:06:01So they're intangible ideas like basic truth.
00:06:05Half of the phrases he reads out
00:06:06are what he calls concrete phrases.
00:06:08So they describe physical things like a white horse.
00:06:11So he reads out this list
00:06:13and then later on he asks people what they can remember.
00:06:16And his key finding is people can remember
00:06:18on average 9% of the abstractions,
00:06:21but 36% of the concrete phrases.
00:06:25So you are four times more likely
00:06:27to remember the thing that you can visualize.
00:06:29And Begg's explanation applies just as much to 2026.
00:06:34His argument is vision's the most powerful of our senses.
00:06:37So if you use language we can visualize, it's very sticky.
00:06:40But if you stay in this realm of abstraction,
00:06:43like focus or productivity,
00:06:45people can understand what you're saying,
00:06:47but they'll struggle to remember it
00:06:48a minute or two after you've mentioned it.
00:06:50So there could be something there.
00:06:52- I was gonna say, what would be an equivalent way
00:06:54to visualize increased productivity or focus?
00:06:58- Well, coming up with that on the fly would be very hard.
00:07:01- Freestyle rapping might be a little--
00:07:02- Yeah, yeah, yeah, yeah.
00:07:03This could go disastrously wrong.
00:07:05But maybe concrete, sorry, maybe specific examples
00:07:09of people doing it.
00:07:11Red Bull didn't say Red Bull gives you energy,
00:07:13which is abstract.
00:07:14They said Red Bull gives you wings.
00:07:15That's something you can picture and visualize.
00:07:18Apple didn't say you get a gigabyte of memory
00:07:22when they first launched the iPod.
00:07:24They said 1,000 songs in your pocket.
00:07:27You can picture a pocket,
00:07:28can't picture a gigabyte or a megabyte.
00:07:30So I think what those businesses and copywriters
00:07:34did so successfully is translate that abstract objective
00:07:39into something that people could picture.
00:07:43- Talk to me about Red Bull.
00:07:45Obviously, absolute giga brand.
00:07:48Pretty fascinating, I'm gonna guess,
00:07:51from a consumer behavior standpoint.
00:07:53What have you learned about them?
00:07:55- I think one of the most powerful things they've done,
00:07:58and you may have covered this with Rory Sutherland,
00:08:01was apply this principle of price relativity.
00:08:05So a core concept of behavioral science
00:08:07is when people are weighing up
00:08:09what a product is worth paying for,
00:08:13they don't look at the benefits that product brings
00:08:18and then try and translate that on a universal yardstick.
00:08:21So they don't think to themselves,
00:08:22okay, well, a can of Red Bull will give me
00:08:24one unit of happiness,
00:08:26and I will pay $1 per unit of happiness,
00:08:28whether it's a pair of jeans or a soft drink.
00:08:31People don't do that 'cause it's a complex question.
00:08:34Daniel Kahneman argued when people face complex questions,
00:08:38what they tend to do, even if they don't realize it,
00:08:40is replace the complex question with a simpler alternative.
00:08:44And the simpler alternative is how much did I pay
00:08:47for something similar?
00:08:49So if a new item like Red Bull launches,
00:08:51if it's more than a similar purchase,
00:08:54people think it's bad value.
00:08:55If it's less than a similar purchase,
00:08:57people think it's good value.
00:08:59Now, when you first hear that, it sounds bleeding obvious,
00:09:01but actually, that's a very powerful insight from a marketer
00:09:06because if you accept that value is perceived relatively
00:09:09rather than absolutely, what it leads to is thinking,
00:09:12if I can change my mental comparison set,
00:09:15I can change the willingness of my consumer,
00:09:17the willingness to pay.
00:09:19- Is this the Rolls-Royce thing?
00:09:21- Well, this, I would say, is the Red Bull thing.
00:09:22I mean, it could be the Rolls-Royce.
00:09:24The Rolls-Royce example would be,
00:09:26don't sell them at car shows, sell them at yacht shows
00:09:28or air shows because a Rolls-Royce is cheap
00:09:32compared to a private jet,
00:09:33not cheap compared to a Audi or Mercedes.
00:09:36But think about Red Bull.
00:09:37When they launched, the standard soft drink
00:09:40was about half the price.
00:09:43And the standard soft drink, and I've used the UK numbers,
00:09:47what Coke and Pepsi did was they sold in these squat fat
00:09:50330 mil cylinders.
00:09:54If Red Bull had launched in exactly that same can,
00:09:57it would have been compared to those prices.
00:09:59And people might have paid a five or a 10% premium
00:10:02because they knew it was highly caffeinated,
00:10:03had this extra functionality,
00:10:05but they wouldn't have paid twice as much.
00:10:07But paradoxically, you change the shape of the can,
00:10:10you make it smaller to 250 mils, you make it tall and thin.
00:10:13And essentially you've broken this unhelpful comparison
00:10:17with cheap soft drinks.
00:10:19And if you look around,
00:10:20quite a few businesses have done that.
00:10:24It's a very powerful way of changing willingness to pay.
00:10:27- What are some of the other examples of businesses
00:10:30that have done that?
00:10:32- So Seedlip, are you familiar with that?
00:10:34It's basically a fake gin.
00:10:39So it's a non-alcoholic gin.
00:10:41And what they did though brilliantly,
00:10:43they sold maybe two or three years ago,
00:10:45I think tens of millions to Diageo.
00:10:46This is phrased on the bottle.
00:10:52I think it's a distilled non-alcoholic spirit.
00:10:56It sells in the spirits aisle of Tesco's and Sainsbury's,
00:10:59but the kind of non-alcoholic end.
00:11:01The imagery on the front is like, you know,
00:11:04beautiful drawings, looks like a craft gin.
00:11:07And it sells for about 20 pounds a bottle.
00:11:10Now, what people think is, well, you know,
00:11:13a fancy craft gin sells for about 30 pounds a bottle.
00:11:16This stuff hasn't got any alcohol in it.
00:11:17I'm not prepared to pay as much, but you know,
00:11:1920 pounds is a bit expensive, but it's 10 pounds less.
00:11:22If that seems reasonable, I'll buy it.
00:11:24Now, think about an alternative universe
00:11:27where that brand was launched as a cordial,
00:11:30which is what it basically is.
00:11:31If it was launched in DayGlow colors,
00:11:34next to the Ribena, next to the Robinson Squash.
00:11:37People might be prepared to pay, I don't know,
00:11:39double what you pay for Ribena and other fruit cordials,
00:11:43but they wouldn't pay five times or six times as much.
00:11:46Even if this stuff tasted like the nature of the gods,
00:11:48people wouldn't pay that kind of premium.
00:11:51So it's about where you set your benchmark.
00:11:54Now, people will adjust from that comparative benchmark,
00:11:58but the general finding is people don't adjust
00:12:01as far as they should.
00:12:02So you throw out this super expensive benchmark
00:12:05through design or comparison set,
00:12:07and then as a business, you reap the benefits.
00:12:10- You know what's an interesting example of this?
00:12:13In the UK, there are co-investor in Nutonic,
00:12:17which is what makes me think about it, grenade bars.
00:12:19Familiar with them and their story?
00:12:21- I'm familiar with the brand, but not the story.
00:12:24So I know the kind of protein bars and-
00:12:26- Correct, what are you looking at for the next one?
00:12:28Look at the numbers, look at the price difference
00:12:29between them and a chocolate bar.
00:12:31They outsell Cadbury's on the forecourt
00:12:36and they've got pride of place.
00:12:38Well, why?
00:12:39It's because they're probably more than double the price,
00:12:42maybe triple, maybe quadruple the price.
00:12:45And it's because they moved themselves out of the category
00:12:48of, look at you, there you go, writing it down.
00:12:51- Sorry, I thought I'd sneak that in.
00:12:52- No, no, no, get it down, get it down.
00:12:55Alan Barrett, who's the founder of grenade
00:12:58and Nutonic investor is just, it was such a genius insight
00:13:02that there was an upper bound of how much people
00:13:03were prepared to play for a chocolate bar.
00:13:06But when it's, oh, it's protein, this is good for me.
00:13:09It's a better for you treat.
00:13:10It still tastes sort of comparable,
00:13:13but I have way less guilt and it's got all of this
00:13:16added advantage of it hitting my protein target for the day.
00:13:19And yeah, they now are more expensive and do higher volume.
00:13:24- Now there's a double benefit there,
00:13:28which is people have another rule of thumb in their head,
00:13:32which is price equals quality.
00:13:34So high price is a badge of quality.
00:13:37There's a study from Baba Shib who's at Stanford.
00:13:40It's a really nice, slightly kind of duplicitous study
00:13:43with a bit of subterfuge.
00:13:44He gets a group of people.
00:13:46He serves them five different bottles of wine.
00:13:49And each of these wines has a very prominent price label,
00:13:53but the twist in the experiment is there are only
00:13:55four different liquids.
00:13:57So one of the wines is repeated.
00:13:59So people get to sample each of the wines,
00:14:01they have a tiny little sip from each of the bottles
00:14:03and they will drink say a Cabernet Sauvignon,
00:14:06thinking it comes out of a $5 bottle
00:14:08and they'll rate it as kind of mediocre.
00:14:10Few minutes later, they're drinking exactly the same wine,
00:14:14but it comes out of this fancy wine bottle.
00:14:17It's got this big $45 price label.
00:14:19And when people rate it,
00:14:20not only do the qualitative adjectives get a lot better,
00:14:24when they come to the quantitative scoring,
00:14:26people give it a 70%, seven zero, 70% higher score.
00:14:31So according to Shiv, people to a degree, not completely,
00:14:35but to a degree, they experience
00:14:37what they expect to experience.
00:14:39And one of the best guides to think it's going to be great
00:14:44is what a brand's charging.
00:14:46'Cause we have a rule and a thumb in our head,
00:14:48which says, look, if a brand is brilliant,
00:14:52it's created an amazing product,
00:14:54surely they're going to maximize their profit.
00:14:55Surely it's going to be at a high price.
00:14:58Now, only someone who has a bit of a mediocre product
00:15:00would sell it at a cheap price.
00:15:03So the actual high price also then will support
00:15:09the grenade bar perceptions of quality.
00:15:12And those perceptions will translate into actual experience.
00:15:15- Interestingly around that,
00:15:16we are currently the most expensive energy drink
00:15:19category product available on the Morrison's local meal deal.
00:15:24So if you get a Sainsbury's or a Morrison's local meal deal,
00:15:29and this is going to be fascinating to see what happens.
00:15:31So I think we're launching in Sainsbury.
00:15:34I probably shouldn't say this, fuck it, whatever.
00:15:35I've said it now.
00:15:36Well, I think we're launching in Sainsbury's
00:15:37at some point within the next month or so.
00:15:40And on the meal deal,
00:15:41I don't think people in America have meal deals.
00:15:44This is a big problem in America.
00:15:47It is absolute sacrilege.
00:15:48America sucks at sandwiches.
00:15:51America absolutely sucks at sandwiches.
00:15:54What I want is a high quality brown bread,
00:15:58slice of brown bread, two of them cut into triangles.
00:16:03Want them cut diagonally.
00:16:04And I want them filled with some salads and some chicken
00:16:07and a bit of mayonnaise.
00:16:08And I cannot buy that in America.
00:16:10I can go to Subway or I can go to like Mikey's subs
00:16:14or whatever, but I can't get that.
00:16:16Anyway, in the UK, this is kind of everybody's lunch
00:16:20in one form or another.
00:16:21It's probably quite on brand for what Americans think
00:16:23about British people too.
00:16:24They put a lot of sandwiches.
00:16:26You can get a sandwich, some sort of main,
00:16:28some sort of side thing and a drink.
00:16:30And it's usually five, between four and five pounds,
00:16:32something like that.
00:16:33Now you're able by bundling these together
00:16:35with a bottle of water and a saurine and something else,
00:16:39you're able to get a discount.
00:16:40What we are, because of how high we've priced ourselves,
00:16:43but because we still sit in the premium meal deal category,
00:16:47what we're gonna be fascinated to see is whether or not
00:16:49people think I want to maximize my buying utility.
00:16:54Oh, I got an even bigger discount
00:16:56'cause I got that really expensive productivity drink
00:16:59with all of the additional stuff in.
00:17:01And I got that as a part of the meal deal.
00:17:04And I'm gonna be really interested to see
00:17:05if that grenade effect is gonna happen to us too.
00:17:09- Yeah, I think that'd be fascinating.
00:17:11I think there's maybe two bits going on.
00:17:14You've got this sense of getting a bigger discount,
00:17:18but I wonder if there's another part which is,
00:17:21it won't damage perceptions of quality
00:17:25because maybe it's seen as gaming the system
00:17:28and getting a little, you know,
00:17:30you've kind of caught safety.
00:17:31- They haven't even noticed this.
00:17:32- Yeah, and I think that hopefully will maybe protect you
00:17:35from some of that degradation of perception otherwise.
00:17:39- A quick aside, do you remember learning
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00:18:51All right, talk to me about the genius of Guinness.
00:18:53I've been blown away by what's happened
00:18:56to Guinness over the last five years.
00:18:58It's fucking spectacular.
00:19:00- Yeah, and some of that power of Guinness
00:19:04has been phenomenal, you know, product creation.
00:19:08The Zero products, Guinness Zero is phenomenal.
00:19:11It's, I think, probably the only alcoholic beer
00:19:13which tastes anything like its parent brand.
00:19:16So there's some amazing product development going on.
00:19:19But in the book, Michael Aron and I talk about
00:19:21a very specific campaign.
00:19:23So we talk about this idea of good things
00:19:26come to those who wait.
00:19:28And to me, that is an amazing example
00:19:31of what's known as the pratfall effect.
00:19:34So the pratfall effect is the argument
00:19:36that if you admit a flaw, if you open about a weakness,
00:19:40you become more appealing.
00:19:42So the initial experiment was done all the way back in 1966
00:19:46by Elliot Aronson at Harvard.
00:19:48Simple study, recruits a colleague from his university,
00:19:52gets that colleague to take part in a quiz.
00:19:55He's given, Aronson has given the contestant all the answers.
00:19:58So the guy does amazingly well,
00:19:59gets 92% of the questions right,
00:20:01wins the quiz by miles, looks like an absolute genius.
00:20:05But then as the quiz is coming to a close,
00:20:07he makes what someone in the 1960s
00:20:09might have called a pratfall.
00:20:10He spills a cup of coffee down himself.
00:20:13Now Aronson has recorded all of this,
00:20:17and he takes the recording and plays it to listeners.
00:20:19But sometimes he plays out the full version to listeners,
00:20:25so they get the spillage and the great performance.
00:20:28Other times he edits out the spillage.
00:20:30What Aronson finds when he questions everyone
00:20:34as to how appealing the contestant is,
00:20:36is this slightly counterintuitive result.
00:20:40He finds that there is a greater preference
00:20:43amongst the group who heard the spillage
00:20:45compared to the group who just heard
00:20:47the amazing quiz performance.
00:20:49And it's not a small difference.
00:20:51The people that heard the spillage and the great performance,
00:20:53they rate the contestant 45% better than the people
00:20:56who just heard the amazing quiz performance.
00:21:00So he calls this the pratfall effect,
00:21:01essentially this idea that people or products,
00:21:04and there are some nuances here,
00:21:05but people or products that exhibit a flaw
00:21:08become more appealing.
00:21:10And I think that's at the very heart of this Guinness line.
00:21:13Good things come to those who wait.
00:21:15You don't try and sweep under the carpet.
00:21:18You don't try and airbrush out
00:21:20the irritation of the delay of Guinness.
00:21:22What you do instead is lean into it
00:21:25because people assume if it has taken a lot of time to make,
00:21:30it must be higher quality.
00:21:32I think that's at the heart of
00:21:34probably the best ever Guinness campaign.
00:21:36- It seems like there's two things going on.
00:21:37One is identifying the flaw.
00:21:41The second is kind of an IKEA effect craft.
00:21:46It's taking a while to make thing.
00:21:49So if it wasn't for that, I mean, I guess you could,
00:21:52I've heard rumors that websites like Skyscanner,
00:21:56they could load all of their results immediately.
00:21:58The reason that they have the loading bar is to do the,
00:22:02look at how hard we are searching for you.
00:22:04We are getting you the best deals possible.
00:22:07It is taking so much time, bing, there it's done.
00:22:09- Yeah, well, I don't know whether Skyscanner
00:22:12artificially slowed things down,
00:22:14but there are definitely experiments that show if they did,
00:22:18it would increase people's sense of
00:22:20the results being comprehensive.
00:22:22So, Ryan Bewell at Harvard Business School
00:22:26ran a study into this,
00:22:27and he randomizes people into two groups.
00:22:29Some people use a Skyscanner-style site,
00:22:33and they are given their results immediately.
00:22:35Other people, the site is slowed down,
00:22:38and on the results page,
00:22:40rather than the results popping up immediately,
00:22:42there's a little bar that appears that goes round and round,
00:22:45saying, "Searching Alitalia, searching United,
00:22:48"searching British Airways."
00:22:50And that group have to wait a couple of extra seconds,
00:22:54and that group rate their results,
00:22:56as I don't know, it's something like 10 or 15%,
00:22:58more comprehensive than the first result, first group.
00:23:02There's essentially a rule of thumb in our head,
00:23:05often called the kind of labor illusion.
00:23:07The more effort we think someone else has gone
00:23:10to create a product,
00:23:12the higher quality we think that product will be,
00:23:14even when people are getting exactly the same beer
00:23:18or exactly the same vacuum cleaner.
00:23:20If people know about the stories of effort behind it,
00:23:23it changes their perceptions.
00:23:26- I remember a short from some seminar
00:23:30that was given by an advertising guy.
00:23:32Maybe it was a designer or something like that,
00:23:33and he's sort of talking to a room, and he says,
00:23:36"How much would you pay for me to design the logo
00:23:38"for your company?"
00:23:39And the guy gives a number, and he says,
00:23:40"What if I could do this in 60 minutes?"
00:23:42And the guy said, "I'll give you less."
00:23:45Says, "Well, hang on a second.
00:23:46"Does that mean that you would pay me more
00:23:47"if it took me longer?"
00:23:48And he just explains this effort illusion thing perfectly.
00:23:53- Yeah, it's, I mean, in the book,
00:23:57the brand that I think really leans
00:24:00into this illusion of effort is Dyson.
00:24:03So across all their communications,
00:24:07PR, advertising, the website,
00:24:11even the very first line of James Dyson's autobiography,
00:24:14they keep on referencing this number.
00:24:17Now, James Dyson says, "I went four years.
00:24:19"I went through 5,127 prototypes
00:24:22"before I created the bagless vacuum."
00:24:24Now, logically, or at least from a very narrow-minded
00:24:28logical perspective, how many prototypes he went through
00:24:31is irrelevant.
00:24:32What people should care about is the beautiful design
00:24:36or the quality of how well it sucks up dirt.
00:24:39But what behavioral scientists have shown
00:24:40is again and again, if you show people the same product,
00:24:44sometimes you tell people the amount of prototypes
00:24:46or the amount of effort that went into it,
00:24:47sometimes you don't, you get these wildly different scores,
00:24:51wildly different perceptions of premiumness.
00:24:54So absolutely, emphasizing effort
00:24:57creates a perception of quality.
00:24:59- What is the advent of AI doing
00:25:02to the advertising landscape in that case?
00:25:04Because what we're doing here is basically
00:25:07undercutting the illusion of effort.
00:25:09- Yeah, absolutely.
00:25:10So there is a Dutch psychologist called Coby Millet,
00:25:14VU Amsterdam, and he was interested in that back in 2023,
00:25:19runs a simple experiment.
00:25:22He shows people products.
00:25:25So sometimes one of the products was a poster of a skull.
00:25:29And sometimes he labels it as hand-drawn,
00:25:33sometimes he labels it as created by an AI-powered robot.
00:25:38And people are asked about the artistic merit of the poster,
00:25:43the creativity of the poster, and crucially,
00:25:45purchased intent.
00:25:46Now for every single metric, he sees the same pattern.
00:25:50People who saw the hand-drawn label,
00:25:54they rate that poster better than the group
00:25:56who saw the AI-powered label.
00:25:59And the scale is quite surprising.
00:26:02Now when it comes to purchasing intent,
00:26:04there is a 61% difference.
00:26:05Now Millet's explanation for this is the illusion of effort.
00:26:11He says, "People's personal experience of Claude or CHAP-GPT
00:26:16"is that they will spit out an answer in a few seconds.
00:26:20"So therefore we think it's low effort."
00:26:23So if we tell people our product has been created by AI,
00:26:27all things being equal, that product will be rated worse
00:26:30than if people were told that it was hand-drawn
00:26:34or made through human effort.
00:26:36So you've gotta be really careful as a business
00:26:39when you're bringing AI into your products.
00:26:42Now I'd be a luddite to suggest don't do that,
00:26:45but what you have to do is be aware of the illusion of effort
00:26:50and therefore shift the conversation.
00:26:52Shift the conversation away from how quickly
00:26:54the product was delivered to how much effort you put in
00:26:57to setting up the protocols and processes
00:26:59to get this AI system set up in the first place.
00:27:02- I think this is one of the reasons
00:27:05that people have an ick around AI music.
00:27:08There's a lot of that at the moment.
00:27:09Spotify has a bunch of charts that are being dominated
00:27:14by AI bands and an interesting realization I had.
00:27:19So the illusion of effort idea that you were talking about,
00:27:23everybody knows, everyone that's ever tried to sing
00:27:27or pick up a new instrument realizes just how difficult
00:27:30and inaccessible it is.
00:27:32That I think gives music a kind of protected class
00:27:37that people, it's inaccessible to most people.
00:27:39I can't read music.
00:27:40I don't understand how it works.
00:27:42I know what I like, but I can't recreate it.
00:27:44If you gave me any of the instruments,
00:27:45including the one that I was born with
00:27:47that's at the front of my face,
00:27:48I wouldn't be able to make the sounds of the songs
00:27:50that I like.
00:27:51And that I think makes it feel particularly egregious
00:27:55for someone to jump over it.
00:27:57I wonder whether there's an equivalent
00:27:58where it comes to art as well.
00:28:01If somebody is drawing something.
00:28:03I'm not particularly good at drawing,
00:28:05but I can get an AI to do it.
00:28:06But the fact that I've skipped the queue of something
00:28:09that used to be a reliably costly signal
00:28:12of competence and effort,
00:28:15the fact that I've circumvented that
00:28:17feels sort of additionally unfair.
00:28:20- I mean, that might well be true.
00:28:24I mean, what the experiments are very clear on
00:28:27is if you look at these metrics for, you know,
00:28:31how much you're prepared to pay
00:28:32or how good quality you think the item is,
00:28:35if people see exactly the same products,
00:28:37you change this labeling and you get a different score.
00:28:41And it does extend beyond music.
00:28:44So you've got Millet's work with, you know, art.
00:28:48I did something with Michael Aaron Flicker
00:28:51just showing people a fake new brand.
00:28:53We didn't say it was a fake new brand,
00:28:54but we showed them these pictures of a brand
00:28:56called Black Sheep Vodka.
00:28:58And sometimes we said, look,
00:28:59the designer went through 143 iterations.
00:29:02Other times, we just showed them the picture of the bottle.
00:29:07The people that saw that story of effort,
00:29:10they thought the bottle design was more beautiful,
00:29:13significantly more beautiful,
00:29:14than the people that didn't hear that story of effort.
00:29:18So it certainly seems to extend beyond
00:29:20what we might think of as art into commercial design,
00:29:24all the way through to estate agent services
00:29:27have been shown to have a similar effect.
00:29:30- On the Guinness thing, what do you make of splitting the G?
00:29:35Have you seen this?
00:29:38- I have my, I went to the Guinness storehouse,
00:29:41the giant brewery tour you can do in Dublin.
00:29:45I went with my son, I think it was last summer,
00:29:48and that's, or maybe summer before,
00:29:49that's when I was introduced to this.
00:29:51He was trying to show me how to do it.
00:29:53I mean, it's adding a bit of fun to the experience.
00:29:57I think Guinness themselves try not to promote it
00:30:00'cause it's probably a little bit dubious
00:30:02in terms of kind of safe drinking,
00:30:03but I think it's an organic thing
00:30:05that gets the brand talked about,
00:30:07adds a bit of excitement and uncertainty.
00:30:10- I'm fascinated by these things that are bottom up,
00:30:14almost anti-marketing campaigns.
00:30:16I think that it's kind of like a perpetual motion machine
00:30:21for a brand.
00:30:23I think white monster energy has the equivalent
00:30:27at the moment as well.
00:30:27It's almost a meta meme.
00:30:29It's Americana.
00:30:30It's WWF from the '90s.
00:30:33It's Creed and New Metal.
00:30:35It's heavy hits in the NFL.
00:30:38It's Linkin Park and Transformers, the early movies.
00:30:42It's all of these things.
00:30:43And at no point, as far as I can see,
00:30:47has Monster Energy pushed this white monster thing
00:30:51in the same way as splitting the G from Guinness.
00:30:54Just, they did not place the word Guinness
00:30:59on the side of that pint glass at the point
00:31:02that would be two-ish mouthfuls,
00:31:05two and a half mouthfuls deep.
00:31:06Hard enough to make it hard,
00:31:07not so hard that you have to drink it.
00:31:09It's just the way it's done.
00:31:10And then this now has been pushed out so much.
00:31:13I don't know whether you saw the stories
00:31:14from last summer in the UK.
00:31:16Some pubs made people buy two or three drinks
00:31:20before they could buy a Guinness.
00:31:23You weren't allowed to because they had Guinness shortages.
00:31:27They had such a Guinness shortage
00:31:29they had to fucking titrate the supply to customers.
00:31:34- Yeah, so two things there.
00:31:36The first, I wonder if there's an element of,
00:31:38you know that supposed, I think it's Arnold Palmer,
00:31:40the golfer's phrase, you know,
00:31:41the harder I practice, the luckier I get.
00:31:45I wonder if there's something akin to that
00:31:47in the world of brands.
00:31:49In the bigger you get,
00:31:53the more enjoyable people find your kind of communications,
00:31:57the warmth out of the brand.
00:31:59I think the more likely
00:32:00these spontaneous ideas are gonna spring up.
00:32:03Now more people, more chance of drinking comes up with the idea
00:32:06and also I think if there's warmth towards the brand,
00:32:08they're more likely to do it.
00:32:10So I think that, you know,
00:32:11you might have this kind of Matthew effect of,
00:32:14to the best brands you get the best organic ideas.
00:32:17But that second point you mentioned
00:32:19is around the shortage.
00:32:21Now I'm not claiming in any way
00:32:22that Guinness actually did this.
00:32:24But I think if I was a brand,
00:32:25I would certainly be tempted occasionally
00:32:27to spread rumors of a shortage.
00:32:30- Supply validation. - The most powerful ideas
00:32:32in behavioral science, the one that,
00:32:34when psychologists try and do comparative ranking
00:32:37of some of these biases,
00:32:39the one that comes out towards the top again and again
00:32:41is scarcity.
00:32:43You know, we want what we can't have.
00:32:45There's this amazing G.K. Chesterton phrase where he says,
00:32:48"The way to love anything is to realize it might be lost."
00:32:53And I think you get these stories in the press about
00:32:56they're gonna be a shortage.
00:32:57And then it will drive even greater demand
00:33:00because that fear of missing out,
00:33:03that fear of,
00:33:04or that belief that lots of other people want this thing,
00:33:07you know, it powers the desire for it.
00:33:11- Before we continue,
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00:33:14but historically, non-alcoholic brews taste like ass.
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00:34:09Speaking of another pretty interesting brand,
00:34:11Red Bull, Guinness, Liquid Death,
00:34:13pretty disruptive, I think, for a water company.
00:34:16I know they're now moving into a lot of other products.
00:34:18How, what's your perspective on Liquid Death?
00:34:22- So, I mean, I think it's a fantastic marketing case study
00:34:26because if there is one factor that captures attention,
00:34:33it's behaving distinctively.
00:34:36So the original studies into this
00:34:38were done all the way back in 1933 by a German psychologist
00:34:42called Hedwig von Restorff.
00:34:44It was the University of Berlin.
00:34:46And what she basically did, I mean, with a bit of changing,
00:34:49she'd kind of give people lists of words.
00:34:53So I might write down, let's say 10 words, give them to you.
00:34:56Nine of them would be items of furniture.
00:34:59One of them would be an animal.
00:35:01And then I would take those lists away,
00:35:05ask you what you could remember.
00:35:07And overwhelmingly, people were much more likely
00:35:09to remember the distinctive animal
00:35:12rather than the kind of nine bits of furniture.
00:35:17So her argument was we are hardwired
00:35:20to notice what's distinctive.
00:35:22Now, that is a very, very well-known finding.
00:35:26It's been repeated over the last kind of 90-odd years.
00:35:29But if you think about an awful lot of advertising,
00:35:34brands end up aping the behavior of their competitors.
00:35:39You know, you look at watch ads.
00:35:42They all follow the same formula.
00:35:43Or car ads, you know, in Britain it's always a kind of,
00:35:46seems to be a kind of Central European dusty mountainous scene
00:35:49with them going round the corner.
00:35:52Again and again, these norms of behavior spring up.
00:35:56And when it comes to water, there were some traditions
00:36:02that every brand like Perrier or all the others
00:36:06seemed to adhere to, which is you've got to have clear glass
00:36:10so people can see the purity of products.
00:36:12You've got to have shots of nature.
00:36:14You've got to have alpine scenes and yoga moms.
00:36:19And I think what Liquid Death did so brilliantly
00:36:22is realize all this stuff is just there for tradition's sake.
00:36:25You don't need to communicate in that way.
00:36:28And actually, if we take the polar opposite approach
00:36:31and we behave like a craft beer or an energy drink
00:36:34and have these outrageously gory ads
00:36:36and, you know, kind of out there humor,
00:36:39that will stand out, it'll get attention.
00:36:43And frankly, if you don't have attention,
00:36:44everything else you do in marks and communication
00:36:46is academic.
00:36:48So I think that relentless pursuit of being distinctive
00:36:52and then crucially being distinctive in a consistent way.
00:36:57They didn't have one ad that was out there
00:36:59in a certain direction and then a completely different one
00:37:02the next time.
00:37:03They all had this theme of kind of behaving
00:37:05like a heavy metal band or a craft beer brand.
00:37:08So they had this recognizable way of breaking conventions.
00:37:13I think that is at the heart of their American success.
00:37:16- How important's humor?
00:37:17- Humor, yeah, absolutely.
00:37:20So Mike Cesario, the founder of Liquid Death,
00:37:26he talks about the fact that he found it strange
00:37:30that the beers and crisps and candies,
00:37:35they had all the fun when it came to advertising
00:37:39and the healthy virtuous goods
00:37:42were all a bit hair shirtist in their communication.
00:37:45So they have definitely doubled down
00:37:49on being funny and humorous.
00:37:50And again, you know, it's a great way of attracting attention.
00:37:56The etymology of advert is the Latin,
00:38:01I think, for turn towards.
00:38:02And what do people turn towards?
00:38:03They turn towards things that bring them pleasure
00:38:06and happiness.
00:38:07They turn away from dry, dusty information.
00:38:10So to get attention, one of the best things you can do
00:38:13is amuse people.
00:38:14- What about Haagen-Dazs?
00:38:16That's a brand that I kind of forgot about in the US
00:38:20because I don't think that distro is as big,
00:38:24quite as big over here.
00:38:25Ben and Jerry's and there's sort of three buckets
00:38:30of ice cream.
00:38:32There's very sort of experimental stuff.
00:38:36The Ben and Jerry's would go into that.
00:38:38There's healthy craft, better for you,
00:38:42Amy's ice cream type stuff.
00:38:44And then there's the high protein,
00:38:48good for you, lower calorie.
00:38:52So Haagen-Dazs, I forget about,
00:38:53but I know that they're a monster of a brand.
00:38:55- Yeah, so the origin story of Haagen-Dazs
00:39:00is, I think, fascinating.
00:39:02And it is a little bit dubious.
00:39:03I'm not saying I would recommend exactly what they do
00:39:07to other people, but they were set up in the Bronx
00:39:12in the 1940s, maybe the very early '50s.
00:39:15And they were set up by a Jewish couple
00:39:17who had emigrated from, I think, Ukraine and Russia.
00:39:23And they had moved to New York,
00:39:26kind of gone into the family ice cream business,
00:39:29and they decided they wanted to launch
00:39:31this premium sophisticated ice cream.
00:39:34They wanted to get a charger,
00:39:35a lot more for it than the competitors.
00:39:37And they thought, well,
00:39:40how do we create this image of sophistication?
00:39:42Well, why don't we essentially position this brand
00:39:47as being Danish?
00:39:50Now there's nothing at all Danish about Haagen-Dazs.
00:39:52It was created in the Bronx.
00:39:54The couple had never, ever been to Denmark.
00:39:57I think they chose it
00:39:59because Denmark had a particularly strong reputation
00:40:04that it had, the populace during Second World War
00:40:08had done an awful lot to help Jews escape from the Nazis.
00:40:13So there was a lot of admiration, I think,
00:40:16for Denmark in particular.
00:40:18But basically they wanted a kind of European country
00:40:21that felt a bit sophisticated.
00:40:23So even though they hadn't been to Denmark,
00:40:24they start generating names
00:40:27and they come up with Haagen-Dazs.
00:40:29And if you go to a Dane, they'd be like, this isn't Danish.
00:40:32This is, we don't have, I think, umlauts over the A.
00:40:36We don't have ZS in our name.
00:40:38It doesn't even make sense as a Danish thing.
00:40:41But to American ear in the 1940s, it sounded Danish.
00:40:44And then the couple doubled down
00:40:46by putting a little map of Denmark on the tub.
00:40:50And what's so clever about this, albeit morally dubious,
00:40:55we can maybe talk about that,
00:40:56is people taste what they expect to taste.
00:41:00And if you wrap up a product
00:41:01in this aura of sophisticated provenance,
00:41:05people assume it tastes better
00:41:07and then they go out and look for confirming evidence.
00:41:10So exactly the same ice cream tasted that little better,
00:41:13a little bit better to an American palate
00:41:15because it had this set of associations of Danishness.
00:41:20Why do you think, go ahead.
00:41:23- Oh, and I was gonna say, the moral from this,
00:41:25I'm aware of what is quite charming
00:41:28when it's a mum and dad brand is one thing.
00:41:31When it's a multi-million dollar brand,
00:41:32it's a little bit less charming.
00:41:34But I think the lesson is what we experience
00:41:38isn't just due to the physical product.
00:41:40It's not due to just the milk and the fats and the sugars.
00:41:44It's also what we think we're gonna taste.
00:41:47So the color of the packaging, the weight of it,
00:41:50the story behind it, the provenance.
00:41:52You know, all these things are just as important
00:41:54and you as a marketer need to create
00:41:56those positive perceptions to give your product
00:41:58the best chance of success.
00:42:01- What do you think it is about the Danes
00:42:02that suggest that they're good at ice cream?
00:42:04- I think it's the fact that it was a far away country
00:42:09that Europe rightly or wrongly
00:42:12probably had this aura of sophistication.
00:42:14It's where luxury brands came from.
00:42:15It's where, you know, Renaissance figures came from.
00:42:18I think it was a sense of Europe
00:42:20having some of these values
00:42:21and then doubling down on Denmark
00:42:23because for a Jewish couple,
00:42:27their history of fighting against antisemitism
00:42:31was something that would have appealed.
00:42:33I think that was the case of why Denmark in particular.
00:42:36It's more a personal story to them.
00:42:38- What about the pumpkin spice latte?
00:42:40I know that we're into spring now, but the Starbucks.
00:42:44- Autumn, yeah, four or whatever it's called.
00:42:46- Yeah, yeah, yeah.
00:42:47- We're into spring shortly,
00:42:51so the pumpkin spice latte is very long gone.
00:42:54Yeah, what did you learn about Starbucks?
00:42:56- I think the point there is the time-specific nature
00:43:02of the pumpkin spice latte.
00:43:05So, you know, we've talked already about this idea
00:43:07of scarcity, that we want what we can't have.
00:43:10The brilliant thing about pumpkin spice latte
00:43:13is they launch this product, they have huge success.
00:43:17What 99% of businesses would have done is think,
00:43:19"Wow, we've got this cash machine of a brand.
00:43:22"Let's just run it all year round
00:43:24"and let's maximize our profits."
00:43:26And if a business had done that,
00:43:28it would have been super successful for a year or two,
00:43:33but probably over time, they would have lost
00:43:36the very kind of magic at the heart of that variant.
00:43:40So there's an idea called habituation,
00:43:44which is the idea that over time,
00:43:47we become a bit desensitized to enjoyment.
00:43:51So there's a study from Leif Nelson at NYU,
00:43:56which demonstrates this quite powerfully.
00:43:59He lets people experience a massage chair,
00:44:04and it's a very pleasurable massage chair.
00:44:06And some people just sit in the chair for three minutes,
00:44:09three minutes straight,
00:44:11and then they rate how much they enjoyed it out of nine,
00:44:14and the average rate is 6.05.
00:44:16Other people, there's a one minute,
00:44:2120 seconds session in the chair.
00:44:23They then turn the chair off for 20 seconds,
00:44:26and then there's another one minute,
00:44:2820 seconds with the chair going.
00:44:30So last for three minutes,
00:44:33but there's no massaging going on for 20 of those seconds.
00:44:37Now, logically, you'd expect, well,
00:44:40surely this group will enjoy the experience less.
00:44:43They had less time with the enjoyable aspect.
00:44:47But actually, you see something quite different.
00:44:49The rating actually goes amongst this group
00:44:51to 7.05 out of nine.
00:44:53So from 6.05 to 7.05, you get a 17% improvement.
00:44:57What Nelson argues is a curse of human nature
00:45:03is that when we experience something pleasurable, over time,
00:45:07the enjoyment level wanes
00:45:10because we stop comparing it to not having it.
00:45:13We compare it to the last time of using the service.
00:45:18So over time, we habituate.
00:45:20We get used to these pleasant things.
00:45:23So I think with something that's very powerfully flavored
00:45:27like the pumpkin spice latte,
00:45:28something's a little bit strange,
00:45:30they'd sold it all year by the sixth pumpkin spice latte,
00:45:34but some of them took it somewhere.
00:45:36You'd be sick of the bloody stuff.
00:45:38But by stopping it before that happens,
00:45:40removing it from sale,
00:45:42what you allow is this appreciation, anticipation,
00:45:45and desire to grow back again.
00:45:47So I think they turned something that would have lasted
00:45:50for a couple of years if it'd been permanently on sale
00:45:52into something that's been going for about 20 years.
00:45:54- Wow.
00:45:55Yeah, the LTO, the limited time offer,
00:45:58the sort of drop model, as it's known.
00:46:01It's how Supreme, the clothing company, do their things.
00:46:05It's how a lot of clothing companies, independent and big,
00:46:08build up, build up, build up.
00:46:09It's there, and then it's gone.
00:46:11- Yeah.
00:46:12And actually, you can actually spot this
00:46:16if you look hard enough in products
00:46:21where it's not immediately apparent.
00:46:23So one brilliant example is, do you remember Wordle?
00:46:27- Yes. - So that game,
00:46:29I think you had, was it six goes to guess a five-letter word?
00:46:34In a hugely popular,
00:46:36Josh Wordle, the designer, sold it for New York Times,
00:46:39I think for about $10 million.
00:46:40Now, at the height,
00:46:43you had hundreds of millions of people playing this game,
00:46:45or tens of millions of people playing it.
00:46:47But what's interesting is,
00:46:49even though usage spiked during COVID,
00:46:51this product had been around for ages.
00:46:55But when Josh Wordle first created it,
00:46:58the difference was you could do your Wordle game,
00:47:02and as soon as you finished, you could do another,
00:47:03and then you could do another,
00:47:04and then you could do another.
00:47:06And when it was set up like that,
00:47:08barely anyone played it yet.
00:47:09It was like dozens of people playing it a day.
00:47:12But then during COVID,
00:47:14Wordle becomes slightly obsessed
00:47:16with the New York Times crossword.
00:47:18And he wonders to himself, do I love the crossword?
00:47:21Because once I finish the cryptic crossword,
00:47:23I have to wait till tomorrow to get the next one.
00:47:25Now, and it builds this sense of anticipation.
00:47:29So he changes the programming of Wordle
00:47:32so that now you do one, you finish it,
00:47:35you can't do another.
00:47:36There are no more around.
00:47:37You have to wait till the next one's released
00:47:39in 24 hours time.
00:47:40And he attributes the success
00:47:43to kind of baking in this scarcity,
00:47:45baking into this limited time offer,
00:47:47into the very heart of the product.
00:47:50- We'll get back to talking in just one second,
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00:48:52One thing that I think about
00:48:56when it comes to modern marketing influences,
00:48:59the world of influencer marketing,
00:49:01what do you think people are getting wrong with that?
00:49:03What are the areas that that goes well
00:49:05and what are the areas that that fails
00:49:07from a behavioral science standpoint?
00:49:09- I think when it goes well,
00:49:12there is an idea called the messenger effect.
00:49:16So the original study was done back in 1953
00:49:18by Hovland and Weiss.
00:49:20They were at Yale at the time.
00:49:21It's quite a nice study.
00:49:22They stopped people in the street
00:49:24and they asked them a topical matter of the day,
00:49:27like can the US build a nuclear power submarine
00:49:30in the next 12 months?
00:49:32People say yes or no.
00:49:33And then once the psychologists have got the answer,
00:49:36they invite those people back to their lab
00:49:39in four days time.
00:49:41And when the participants arrive at the lab,
00:49:44on a table, there is a A4 sheet of paper
00:49:47and there is a very tightly argued bit of prose
00:49:52about why the participant is completely wrong.
00:49:55So if I said yes, a submarine can be built,
00:49:57very powerful argument about why it's just not practical.
00:50:00Once people have read this argument,
00:50:03they have to say whether they've changed their opinion.
00:50:06Most people don't, but the twist in the experiment
00:50:11is sometimes the argument is attributed to a credible source.
00:50:15So in the case of the submarine,
00:50:16it was Oppenheimer the physicist,
00:50:18sometimes the argument was attributed
00:50:20to a low credibility source,
00:50:22so Pravda, the Russian newspaper.
00:50:24And what the psychologists found is that
00:50:27if the argument was attributed to a low credibility source,
00:50:307% changed their mind, high credibility source,
00:50:3323% changed their mind.
00:50:35So even though everyone gets exactly
00:50:37the same logical argument, the same facts,
00:50:39the same figures, the same persuasive power of argument,
00:50:45you get this three and a half fold difference
00:50:47in influence dependent on who it came from.
00:50:50So their argument was who says something
00:50:54can be as important as what's said.
00:50:56Now that study was done what, 73 years ago?
00:51:00But yeah, but it's been repeated again and again,
00:51:03I'm just going back to the original one
00:51:04'cause I think it's the clearest, it's the simplest.
00:51:07But since they've done that,
00:51:09what people have started to look at is well,
00:51:11what makes for an effective messenger?
00:51:14And many different variables,
00:51:16three of the big ones are the messenger is neutral.
00:51:20So if I tell you amazing, my book's amazing,
00:51:23you might be skeptical.
00:51:25Even if I got my brother or my wife to tell you that,
00:51:28it's still even that tiny extra bit of neutrality
00:51:32will boost believability a bit.
00:51:33So neutrality is important.
00:51:35Credibility is important
00:51:36and that's why Oppenheimer was so powerful.
00:51:38But then the third bit that's really interesting
00:51:40is relatability.
00:51:42Now I might be influenced by what my neighbor tells me
00:51:44about the best sports drink or the best supplements,
00:51:47even though my neighbor doesn't know anything
00:51:49particularly in that area.
00:51:50But the fact that I relate to them,
00:51:51the fact that they're similar to me,
00:51:53it makes them more powerful.
00:51:55So I think the argument with influence would be
00:51:58you could get the neutrality,
00:52:00but ideally if you can get credibility
00:52:02and relatability as well,
00:52:04then you're on to someone
00:52:05that can change the behavior of others.
00:52:08- I was seeing some stories about experts
00:52:11expecting deeper creator partnerships,
00:52:14sort of these mega creators they're called.
00:52:16So it's fewer long-term brand deals
00:52:19and they extend into roles like co-branded product lines
00:52:22or internal leadership titles.
00:52:23So I'm not sure if you saw this,
00:52:24Virgin Voyages named J-Lo as its chief entertainment officer.
00:52:29- Okay.
00:52:29- So they've framed her as the co-architect
00:52:32of the sort of onboard experience
00:52:33rather than just a face in ads.
00:52:35Ridge Wallet just got Marques Brownlee, MKBHD.
00:52:39He's a big tech YouTuber.
00:52:41He's the chief creative partner.
00:52:42And then SoFi just appointed your Rich BFF person,
00:52:47Vivian Tu, as the chief of financial empowerment.
00:52:52So they're trying to give us sort of
00:52:53an internal sounding role that legitimizes her
00:52:57as a financial educator inside of the company.
00:53:01I think we saw this with maybe to a lesser extent,
00:53:04Ryan Reynolds with Mint Mobile,
00:53:05but certainly Ryan Reynolds with the football team.
00:53:08Somebody, smaller numbers of roles
00:53:12that are with higher value individuals
00:53:14with a more legitimate sounding position.
00:53:18- Yeah, so once you start talking about the order of a J-Lo,
00:53:23I think you start moving into kind of other behavioral biases.
00:53:27There's an idea called costly signaling.
00:53:31So the original work on this was done by biologists
00:53:36rather than behavioral scientists.
00:53:38But it's essentially the believability of communications
00:53:43is in proportion to the expense of that communications.
00:53:47So if there is a brand that gets a celebrity like J-Lo,
00:53:52the general person on the street
00:53:55won't know whether J-Lo costs,
00:53:56and I don't know whether she costs 100 million or 50 million,
00:53:58but I know she's very, very expensive.
00:54:01And that sends a credible signal
00:54:04about how much the brand believes in their offering.
00:54:09The argument being extravagant advertising
00:54:12works in the long term.
00:54:14If I hire J-Lo to advertise my terrible soft drink,
00:54:20I might get people to try it once,
00:54:23but they're not gonna recommend it to their friends.
00:54:24They're not gonna come back.
00:54:25I'm gonna go bust.
00:54:26But if I have a brilliant soft drink
00:54:28and I get J-Lo to be the face of it,
00:54:30well, then it works out for me
00:54:31because I know that people will try it, recommend it,
00:54:35and it will go on and on and on like that.
00:54:38So the fact that extravagant spend
00:54:41is an effective screening mechanism,
00:54:44only people who genuinely believe in their brand would do it
00:54:48because if you thought your brand was awful,
00:54:50adopting that largess would make you bust.
00:54:54That's, I think, what makes it
00:54:56a credible and powerful and persuasive signal.
00:55:01- What about KFC?
00:55:02We talked about five guys.
00:55:04What have you learned from KFC?
00:55:06- So KFC, there's a few different things there.
00:55:08There's, I think the power of a secret is quite interesting.
00:55:13But the other one that they did that I really loved
00:55:17was a bit more tactical,
00:55:19but it's kind of one of the themes
00:55:20that we've come back to again and again,
00:55:22which is this power of scarcity.
00:55:26So they did a slightly different approach
00:55:28to the examples we've discussed so far.
00:55:31And there was a wonderful Australian campaign.
00:55:35I think it was back in, first in 2016,
00:55:38where they would promote $1 chips.
00:55:42So you get these big large fries at $1.
00:55:44Very, very good deal.
00:55:45And when they did it for the first few years,
00:55:48hidden in the tiny little T's and C's
00:55:51at the bottom of the ads was the fact
00:55:53that you could only get four bags of chips per person.
00:55:57What the marketing team did was put that front and center
00:56:02of the messaging.
00:56:04So they tested loads of different behavioral science biases
00:56:07that could boost sales.
00:56:08The one that works best was saying big layers on the posters,
00:56:12maximum number of these bags of chips you can buy,
00:56:14bags of fries, four per person.
00:56:16And what it did was provide a very credible signal
00:56:22that either these chips are gonna be so enticing,
00:56:27they're worried about selling out,
00:56:29or that it's such a powerful and good value deal
00:56:33that they're actually losing money on it.
00:56:35Now that's not speculation.
00:56:39Michael Aaron and I did a very simple test.
00:56:43We told people about Sierra Nevada Palau
00:56:48being sold in America, 12 bottles of beer for $18.99.
00:56:54And I think 14% of people thought it was good value.
00:56:58And then other occasions we told people,
00:57:03Sierra Nevada Palau, 12 pack of beer
00:57:05being sold for $18.99 in the supermarket,
00:57:08maximum number of cases you can buy is six.
00:57:11And the proportion of people
00:57:12who thought it was good value went up to 22%.
00:57:14So you get this I think 57, 59% improvement.
00:57:18People worked a rule of thumb
00:57:22that if a business is not letting you take
00:57:25as much of a product as you want, it must be a good deal.
00:57:29It's either so good it's gonna sell out or so good
00:57:31it's actually hurting the bottom line.
00:57:33So that to me was a wonderfully simple tactic
00:57:37that far more people could apply.
00:57:39- So funny because KFC's fries are actually the worst
00:57:45as everybody knows.
00:57:46- I have heard people say this.
00:57:48- Yeah, they're the worst of all of the fries.
00:57:50So I would not have leaned on the fries.
00:57:52I suppose what's interesting
00:57:53about doing it with the fries as well
00:57:55is that that is something which Burger King has fries
00:58:01and McDonald's has fries as well.
00:58:03You didn't pick something that only you make.
00:58:08If you picked the signature Zinger burger,
00:58:13well, no one else can make that.
00:58:16So doing the scarcity on something
00:58:19which isn't a non-computable good
00:58:22would probably change the framing of it
00:58:25versus these you can get elsewhere, but not like this.
00:58:30- Yeah, I think it was a reasonably good deal,
00:58:36but there's, whenever something's on offer
00:58:39there's always a bit of suspicion as well.
00:58:41Have they cut corners?
00:58:43Is there some kind of trade off for this low price?
00:58:45- They're trying to counter signal the discount.
00:58:47- Yes, yes, yes.
00:58:51I think, and what differentiates it
00:58:54from just saying limited time offer or exclusive,
00:58:59is it's not just staying in this realm of statement and claim.
00:59:04It's not just in this realm of talk being cheap.
00:59:08It's actually a physical restriction.
00:59:10You go to the counter,
00:59:11they will not serve you more than four.
00:59:13Now, I think it's this action rather than claim
00:59:16that distinguishes it
00:59:17from the kind of more common use of scarcity.
00:59:21- I can't believe that Klarna and these companies,
00:59:24I thought, what are they called?
00:59:27Micro pay later companies?
00:59:29- Buy now, pay later.
00:59:30- Buy now, pay later things.
00:59:32And there was this joke
00:59:35that you could get your Chipotle order on Klarna.
00:59:39So you could get your burrito,
00:59:41buy it today and pay for it tomorrow.
00:59:45But just the same as the prediction markets,
00:59:48these things seem to be here to stay.
00:59:51So what's your perspective on the buy now, pay later industry?
00:59:56- So there's a long standing idea
01:00:00called the pen is a day effect.
01:00:02So the original study was John Goreville at Harvard
01:00:05and he did it with charities on a time.
01:00:08So essentially, he found out
01:00:10were people willing to donate to a charity?
01:00:13And sometimes the request was $365 a year.
01:00:18Other times it was a dollar a day for a year.
01:00:21And what he found is even though
01:00:22the sums works out to be the same,
01:00:24people were much like more likely to donate
01:00:27if you phrased it as a dollar a day.
01:00:29Now, what seems to be happening
01:00:32is people give different weights
01:00:36to two sides of the equation.
01:00:38You know, the dollars that are being discussed
01:00:41looms large in people's mind.
01:00:43The unit of time doesn't seem to be
01:00:46given the weight it should be.
01:00:47So it's a bit like people think three times seven
01:00:49is different from seven times three.
01:00:51So if you've got a time-based product,
01:00:54the more you can break
01:00:57or the more that you can discuss that product
01:01:00in the smallest unit of time,
01:01:02the better it works out for you.
01:01:03Now, exactly the same thing happens with physical items.
01:01:09So I mentioned that Sierra Nevada parallel study
01:01:12Michael and I did.
01:01:14And we did another version of it.
01:01:16So key factor, if you say to people,
01:01:18a 12-pack of Sierra Nevada costs $18.99,
01:01:21you get 14% thinking it's good value.
01:01:25If you say to people, this is a different group,
01:01:29costs $18.99 for a 12-pack,
01:01:31that's the same as $1.58 a bottle.
01:01:34The proportion jumps, I think, to 29 or 30%
01:01:37thinking it's a good deal.
01:01:39So you break down a physical item into smaller subunits
01:01:44and you create a perception it's better value.
01:01:48So one of the things Kleiner offers is,
01:01:50now I go to a website, I wanna buy a jumper for $60.
01:01:54I don't pay $60 in one go, I pay three lots of 20.
01:01:58People treat three lots of 20 completely different
01:02:02from one hit of 60
01:02:03because they're focusing too much on the 20.
01:02:07They're not doing the multiplying as much as they should.
01:02:10So brands put that on their website,
01:02:13retail's put Kleiner or competitor on the website,
01:02:16they end up selling more.
01:02:17So there is a strong reason for businesses
01:02:22to start handing over a bit of commission to Kleiner.
01:02:25- I'm interested in the difference
01:02:27between framing things as negatives versus positives.
01:02:31And it seems like the direction that you come into this from
01:02:36can be pretty important.
01:02:38- Yeah, so there's an idea called loss aversion.
01:02:42The original studies were done by Kahneman and Tversky
01:02:45in the '70s, but they're a little bit bizarre
01:02:47and just got a bit confusing.
01:02:51I think the much better study was done in 1988
01:02:53by Elliot Aronson at Harvard.
01:02:55So what he does is go to homeowners, 404 homeowners,
01:02:58he has a nice big sample, knocks on the door,
01:03:01tries to sell them loft insulation.
01:03:03Sometimes he says, "Buy my loft insulation
01:03:06and you'll save 75 cents a day."
01:03:10So a psychologist would say, "This is the gain frame.
01:03:12You're emphasizing what you benefit as a consumer
01:03:14by taking out loft insulation."
01:03:16But other homeowners, he gives them the same mathematical sum.
01:03:19He says, "Look, take out the loft insulation
01:03:21because if you don't, you'll be wasting 75 cents a day."
01:03:26Even though it's the same amount of money,
01:03:28by emphasizing people could be losing out on that,
01:03:31they could be wasting that money,
01:03:33he got a 50 or 60% higher response rate.
01:03:37So absolutely, there is an argument
01:03:40that the mathematically equivalent loss affects us more
01:03:44than someone getting that gain.
01:03:48The way I'd put it is if you and I
01:03:51go our separate ways today,
01:03:53you realize you have lost $5,
01:03:57I find that $5,
01:04:00your unhappiness will be larger than my happiness.
01:04:04- So it would be if I knew that you'd found my $5.
01:04:06- Yeah, yeah, yeah, yeah.
01:04:07Oh, don't worry, I wouldn't be telling you.
01:04:08I'd be keeping that secret, yeah, yeah.
01:04:11You just see me in a slightly fancier t-shirt
01:04:13next time we talk.
01:04:14- It makes me think about the anti-smoking ads
01:04:19because it's not saying if you stop smoking,
01:04:22you will live four years longer.
01:04:24It's if you keep smoking, you will die four years sooner.
01:04:27- Yes, the only caveat there is when it comes,
01:04:32the great thing, behavioral science and psychology,
01:04:37it's not like maths where people are particles
01:04:41and exactly the same occurrences happen.
01:04:45I think there's a bit of a complexity
01:04:47when it comes to humans and context is hugely important.
01:04:51When it comes to going from a loss to engendering fear,
01:04:56then I think you've got to be quite careful.
01:05:01- Why?
01:05:02- There's an argument from people like George Lowenstein.
01:05:07He calls it the ostrich effect
01:05:08and it's essentially the argument that
01:05:11if you make people feel ashamed or scared or too worried,
01:05:15rather than resolve the underlying issue,
01:05:18what they tend to do is behave like the metaphorical ostrich.
01:05:21They just start ignoring the ads.
01:05:22They stick their head in the sands.
01:05:24Now, his study was already done about 20 years ago
01:05:28when he was at Carnegie Mellon
01:05:30and he's given anonymized data from Vanguard in America,
01:05:35so this massive fund provider.
01:05:38And he can see how often users
01:05:40are checking their stock portfolios.
01:05:43He then plots that against the movement
01:05:47in the American stock market.
01:05:49And what he finds is as the stock market goes up,
01:05:53people check their wealth reasonably regularly.
01:05:57When the stock market declines, people stop checking.
01:06:01It's not a small effect.
01:06:02I think it's for every 1% drop in the stock market,
01:06:06people check their portfolios 5% to 6% less regularly.
01:06:10And his argument is,
01:06:12from a narrow-minded logical perspective, that's irrational.
01:06:16The information about our wealth is equally valid,
01:06:18whether it's good news or bad news.
01:06:20But he says people have a rule of thumb,
01:06:22is if something causes them pleasure, they do it more.
01:06:25If something causes them immediate pain,
01:06:28they turn away from it.
01:06:30So the danger with smoking ads or anti-smoking ads
01:06:34that scare people is that often,
01:06:36unless the change you're asking is really easy,
01:06:40you can cause people either to avoid
01:06:43paying any attention to the messaging
01:06:45or going through these kind of mental gymnastics
01:06:47to explain to themselves why that messaging
01:06:49doesn't affect them.
01:06:50- Yeah, I mean, it makes complete sense
01:06:55that people wouldn't want to hear something
01:06:56that they really wouldn't want to hear.
01:06:58- Yeah, yeah.
01:06:59And it's this, I think, problem
01:07:02with long versus short-term thinking.
01:07:05It's absolutely in our long-term interest
01:07:07to listen to things that are gonna keep us living longer.
01:07:12But in the immediate moment, it makes us feel unpleasant.
01:07:15And then too often, we prioritize our immediate feelings
01:07:19rather than what works for us over the medium or long-term.
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01:08:16That's rpstrength.com/modernwisdom
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01:08:21I remember, I can't remember if it was you or Rory
01:08:24that taught me about when people needed
01:08:27to increase their contributions to their pension
01:08:30rather than the money being taken out of their current pay,
01:08:37when they got a pay increase, a portion of the new pay
01:08:42was put toward that and people were more prepared
01:08:46to do the investing if it worked in that sort of a way.
01:08:50- Yes, so this was an American scheme.
01:08:52I think it was Shlomo Bernazzi that came up with the idea.
01:08:55And it was called Give More Tomorrow.
01:08:58And it's exactly as you say.
01:08:59If you ask someone to put more money
01:09:02into their pension today, what they focus on is
01:09:06the loss of that money.
01:09:08And they're remarkably resistant to doing it.
01:09:10They think, well, I can't afford to go on that extra holiday
01:09:13or buy a car.
01:09:15So what they started to do instead was say to people,
01:09:18look, don't put any more money into pension today.
01:09:20But when you get your pay rise in nine months time,
01:09:23are you okay if we automatically set up a system
01:09:26where we'll just take 10% of that, 20% of that
01:09:29and put it into your pension?
01:09:31And because the conversation was about money
01:09:35being taken away long in the future,
01:09:38it felt attenuated to people.
01:09:40There's an idea called present bias,
01:09:42which is essentially people give too much weight
01:09:45to what's gonna happen now in the near future.
01:09:48And we massively underweight pleasure or pain
01:09:51in the distant future.
01:09:53So often that's a big problem for pensions
01:09:55or insurance or savings.
01:09:57But Bernazzi's clever design meant that he used human nature
01:10:03to encourage this very desirable behavior.
01:10:06- Is there a way that fast food companies
01:10:09would use this on the inverse?
01:10:10They sort of don't think about the tomorrow,
01:10:12do you think about the today?
01:10:14- Yes, yes, absolutely.
01:10:17What might be one of my favorite experiments ever,
01:10:20I don't think they've ever chatted about this one.
01:10:21It's a 1998 study from Daniel Reed,
01:10:25who at the Times at university leads,
01:10:26I think he's at Warwick now.
01:10:27And he does this brilliant study
01:10:29where he goes round a Danish office
01:10:32and he offers people a choice.
01:10:34So you can either have an apple or a chocolate bar,
01:10:38they're completely free, but you only get to pick one.
01:10:41The first half of people, it's a very straight set up.
01:10:44He just says, pick which of these one snacks you want,
01:10:48take it now, eat it now.
01:10:50And 82% go for chocolate bar, 18% go apple.
01:10:54Next time he does this experiment, he twists it slightly.
01:11:00And he says to people, you can have a chocolate bar or an apple
01:11:03you pick now, but I will bring this snack
01:11:06to you in a week's time.
01:11:07And suddenly the apple becomes a lot more popular.
01:11:10It's not quite beating the chocolate bar.
01:11:13I think it's 51% chocolate bar, 49% apple.
01:11:16But considering there was a massive skew
01:11:18towards the chocolate bar in the previous version,
01:11:21this is a big change.
01:11:23And the argument from Reed is that when we are picking
01:11:27for immediate consumption, we're very much driven by
01:11:31what we want to do, what's in art, what's gonna be tasty,
01:11:34what's our kind of base desire.
01:11:36But if we're picking for our future self,
01:11:39well, suddenly we are much more influenced
01:11:41by what we think we should do.
01:11:42And you take that experiment and then you think about,
01:11:48well, how would you behave if you're a low alcohol beer
01:11:52or a healthy food versus fast food.
01:11:57And if you want people to do the right thing,
01:12:00they don't try and influence them
01:12:01when they're sitting down at a restaurant just about to eat
01:12:04because they're gonna be driven by their appetite.
01:12:09What you wanna do is reach them maybe
01:12:11when they're doing their online shop.
01:12:13Now that you're on tesco.com and you're ordering your food
01:12:15that's gonna arrive in a week, then this is the chance
01:12:18to get them buying the low fat meats or the vegetables
01:12:21or the low alcohol lager.
01:12:23This changing in time perspective
01:12:26definitely changes how we behave.
01:12:28- I would love to see what the straight up impact
01:12:31of online shopping has done to the kind of baskets
01:12:34that people select from the same supermarket
01:12:37by simply not walking around, by not getting it immediately,
01:12:40by having this delay.
01:12:41- Yeah, and I think that experiment would suggest
01:12:45this ordering of healthy food.
01:12:48I think the other one, the biggest principle
01:12:50for in behavioral science is people do what's easy.
01:12:52So I wonder if you get a much narrower range of foods
01:12:57people buy week to week.
01:12:59'Cause once you've set up your basket,
01:13:01it's so easy just to repeat it.
01:13:03- It's almost like a membership.
01:13:05There's a cost associated with picking something new
01:13:09whereas there's a cost when you're going
01:13:11around the supermarket, there's a cost associated
01:13:13with picking something old or something new
01:13:15'cause you're already walking.
01:13:16- Yeah, and it's a brilliant example of people
01:13:21aren't just influenced by the end product.
01:13:23They're interested in how the choices are structured,
01:13:27what time the food's gonna be delivered,
01:13:29what's easy to spot, what's visible.
01:13:32These things that should be peripheral have a big impact.
01:13:36- I guess as well, this is also why bananas
01:13:40and pecans aren't put on the cashier shelves
01:13:45right at the very end just as you're going out
01:13:47because it's, oh yeah, I'm really gonna just treat myself
01:13:51to that banana that's not the way that we think.
01:13:54- Yeah, there is an argument called moral licensing
01:13:59that if we feel we've done something virtuous,
01:14:02we then overcompensate.
01:14:05So there's some quite scary studies done by,
01:14:10I'm not 100% sure how to pronounce his name.
01:14:11I think it's Chiu, it's kind of C-H-I-O-U.
01:14:15I think he might be from Taiwan
01:14:17and he recruited a group of smokers, that's key,
01:14:21and then he gives everyone sugar pills.
01:14:25That's right, he gives everyone sugar pills
01:14:26but some of them are told it's a course of vitamins.
01:14:29Some are told they are sugar pills.
01:14:31Then he invites them,
01:14:34after doing this two-week course of supplements,
01:14:37he invites them into his lab
01:14:39and they fill out this very long, boring form
01:14:42and they have to write down all the things
01:14:44they did over the two weeks.
01:14:46And they claim that the people
01:14:49who think they've taken the vitamins,
01:14:50they note down they've done more binge drinking,
01:14:54more smoking, less exercise.
01:14:57So it kind of suggests this moral licensing point
01:15:00because they think they've had the vitamins
01:15:02they overcompensate elsewhere.
01:15:04But that's still claim data.
01:15:06The clever bit is what Chiu does is monitor people
01:15:11as they're filling in these very boring surveys.
01:15:13And he just records whether or not the smokers
01:15:17light up a fag while they are filling in the survey.
01:15:20And the smokers who think they took the vitamins,
01:15:22they are 50% more likely to light up
01:15:24than the smokers who didn't.
01:15:26So that to me is the powerful bit of the study.
01:15:29Not just listening to claims,
01:15:30but looking at actual behavior.
01:15:32And that's quite a powerful overview of this idea
01:15:34that if we think we behave virtuously,
01:15:37we overcompensate elsewhere.
01:15:39Now with a supermarket, think about the design.
01:15:41What do you see as soon as you get into the supermarket?
01:15:45You got all your fresh fruit and veg.
01:15:47Now from a practical perspective,
01:15:48it's the very worst place to have it
01:15:50'cause it's at the bottom of your trolley now
01:15:53and you're gonna put all your heavy items on top.
01:15:54But what it does is allow people to feel they're virtuous
01:15:59and then they overcompensate with the crisps and the beer
01:16:01and the snacks later on.
01:16:04So I think you're right that placing those treat items
01:16:07right at the end, which I think has been banned actually
01:16:09in Britain, I think is a use of one of these biases.
01:16:14Maybe not for people's best interests though.
01:16:18- So it's been banned to put fast food--
01:16:20- So I thought though, I'm expecting it.
01:16:23I thought I'd heard either a discussion of that happening
01:16:26that you couldn't have the little bars now
01:16:28by the checkouts full of high fat, high salt,
01:16:33high sugar items.
01:16:33I think that's-- - In an attempt
01:16:34to try and make people healthier?
01:16:36- Yeah, yeah, a tiny little nudge.
01:16:39- Wow, isn't it interesting 'cause there's no way,
01:16:41if you were to put granola bars or fruits or whatever,
01:16:46your total market cap for that,
01:16:50total sales for that organization is going to go down.
01:16:53You're simply going to be able to convert people
01:16:54less effectively with that type.
01:16:56So I understand what you're doing
01:16:59and sometimes interventions are needed
01:17:02in order to be able to sort of help people
01:17:04make the right choices and stuff.
01:17:06But this is a, that's a big hammer blow to the supermarkets.
01:17:11It's a big hammer blow.
01:17:14We've already found the way to make this work.
01:17:16We found the most effective, we split tested.
01:17:18Do you not think we'd be putting apples out there
01:17:20if we couldn't get people to sell more apples
01:17:22than we could to do the chocolate bars?
01:17:24- I mean, the only thing I would say,
01:17:26so I'm realizing now, I've kind of straight,
01:17:30I think that's what happened.
01:17:31We should probably check as well.
01:17:34But you certainly could use a lot of the principles
01:17:37we've been discussing to sell more apples.
01:17:40What I find fascinating is the tactics
01:17:43that are currently used are almost the complete opposite
01:17:46of what the experimental data suggests should be done.
01:17:50So there's an amazing study by Bradley Turmwald
01:17:53in a cafeteria over six or seven weeks,
01:17:56and he randomizes the labels on the vegetables.
01:17:59So sometimes he will try and push the health benefit.
01:18:02So you might see something like carrots
01:18:05in low calorie citrus glaze.
01:18:07And I think something like 150 units
01:18:10of the vegetable are sold each day.
01:18:13Other days, same recipe, same vegetable,
01:18:17but he emphasizes the indulgent benefits.
01:18:19That's something like sizzling citrus, tangy carrot.
01:18:24And what he finds there is sales go up
01:18:26to about 230 units a day.
01:18:28It's a 41% increase.
01:18:31So his argument is just because something is healthier,
01:18:35it doesn't mean the message you should lead with
01:18:37is its healthiness.
01:18:38That I think is a massive problem
01:18:43with a lot of communications for virtuous goods.
01:18:46People keep on banging about the health benefits
01:18:48and the ethics behind these things.
01:18:52But actually, if you want to actually change behavior,
01:18:55the better thing to do certainly with food
01:18:56is to focus on--
01:18:58- Make it sound indulgent.
01:18:59Well, this is what--
01:18:59- It takes it indulgent and tasty.
01:19:00- Make it sound enjoyable.
01:19:01- This is what grenade bars did.
01:19:03Grenade bars didn't,
01:19:04I don't know what they did
01:19:06when they first, first, first launched,
01:19:08but certainly now looking at them at no point
01:19:10are they saying better for you bar.
01:19:12That's communicated through the macronutrients.
01:19:14That's the fact that it's got protein in.
01:19:17I guess the sort of broader brand messaging
01:19:19contributes to that.
01:19:20What they're saying is this is a collaboration
01:19:22with creme egg or this is a collaboration
01:19:25with Oreo or Jaffa cake or whatever.
01:19:27And they're exclusively competing
01:19:31on the luxury and the indulgence.
01:19:33- Yeah, and you go from,
01:19:36you go into things like beers with low levels of alcohol.
01:19:41What they tend to do is talk about being non-alcoholic beers.
01:19:43They are emphasizing the absence of the fun bit.
01:19:46Where they're emphasizing the deprivation.
01:19:50There's a few examples where they've lent into the appeal.
01:19:55It didn't succeed,
01:19:56I think that was because of the formulation,
01:19:58not the branding.
01:19:59But I loved it when Budweiser did prohibition brew.
01:20:02It made it sound like kind of exciting and fun and glamorous.
01:20:06There's a beer in Britain called Infinite Session,
01:20:08emphasizing how you can stay in the pub with your mates
01:20:11longer with this 0% lager.
01:20:13So I think moving away from a kind of hair shirt,
01:20:17it's advertising for healthy foods and less damaging drinks.
01:20:22That's something we've got to be thinking about more.
01:20:25- On the other side of the equation,
01:20:26what about Pringles?
01:20:27- What's so good about them?
01:20:31The Pringles, the genius of Pringles was their line.
01:20:34Once you pop, you can't stop.
01:20:37And it's one of the most bizarre studies
01:20:40in behavioral science.
01:20:42It's about this idea called the Keats heuristic.
01:20:45I think there's some kind of Keats line where he says,
01:20:50"Truth is beauty and beauty is truth."
01:20:51Something like that.
01:20:53He's saying that we mistake beauty for truthfulness.
01:20:57So there's two academics in the '90s
01:20:59called McGlone and Toffig-Bash,
01:21:02and they create some fake proverbs.
01:21:05And for every proverb, they create two versions.
01:21:08So the non-rhyming version might be, "Woes unite enemies."
01:21:13The rhyming version would be, "Woes unite foes."
01:21:16Now, you get, say,
01:21:18if we were both taking part in this experiment,
01:21:20you might read, "Woes unite foes,"
01:21:21and you're asked to rate how believable this statement is.
01:21:25I would see, "Woes unite enemies,"
01:21:27and I rate how believable I think the phrase is.
01:21:31Now, we've both received essentially the same information.
01:21:34All that's changed is the packaging.
01:21:36You get this nice rhyme.
01:21:38I get this non-rhyming version.
01:21:40What happens is that the people who hear the rhyming version,
01:21:45they rate the believability of the statement 17% higher
01:21:49than the people that hear the non-rhyming version.
01:21:52People are conflating ease of processing with truthfulness.
01:21:56Now, the interesting bit is if you then go back
01:21:59to all the participants and you say to them,
01:22:02"Why did you think this statement was believable?
01:22:04"Did the rhyme or absence of rhyme influence you?"
01:22:09Every single participant bar one denied
01:22:12that the kind of form, the rhyme,
01:22:15the ease of processing affected them.
01:22:16They all said, "No, no, I was making a judgment
01:22:17"based on the inherent information."
01:22:20So it's one of these great examples of tiny little changes
01:22:24about the fluency, the ease on our ear.
01:22:29Tiny little changes have a big effect,
01:22:30but people are really low to admit
01:22:33that's what influenced them.
01:22:35- Isn't this what happens with split-brain patients
01:22:39and where they'd stroke the hand of one side,
01:22:43"Why did you get up to go and do this thing?"
01:22:45And then they confabulate some sort of an idea.
01:22:47I'm aware that it's different in terms of the mechanism,
01:22:49but the point being people are usually pretty good
01:22:54at coming up with a logical explanation
01:22:57for why they did the thing,
01:22:58even if they were manipulated to do the thing,
01:23:00because the sort of required discomfort
01:23:05at the admission of deception or self-deception
01:23:08is pretty costly socially.
01:23:10- Yeah, so I'm not overly familiar with those studies.
01:23:14I know they're kind of headline results,
01:23:16but I think you're absolutely right
01:23:18that they will be set up in such a way
01:23:21that the experimenter knows what generated the answer,
01:23:25but the patient will just come up with this plausible,
01:23:29much more rational sounding reason
01:23:31to maintain kind of a sense of face
01:23:33and being a sensible person.
01:23:35And that's absolutely true
01:23:38with a whole swathe of behavioral science studies.
01:23:40A key theme of behavioral science
01:23:43is that if you ask people
01:23:46why they bought a particular protein bar
01:23:48or a pair of trainers,
01:23:51the problem is they'll give you loads of answers,
01:23:55but most of them are just plausible post-rationalizations.
01:23:58They're not a reflection of what actually motivated them.
01:24:01So there's this amazing psychologist called Timothy Wilson
01:24:03at the University of Virginia,
01:24:05and he has a brilliant book called "Strangers to Ourselves."
01:24:08And essentially, the whole book is a series of studies
01:24:10showing that people don't know their own motivations.
01:24:12So one of the worst things businesses can do,
01:24:15and it accounts for an awful lot of poor communications,
01:24:18is ask people what they want
01:24:20and then take those answers at face value.
01:24:22- And people don't know what they want.
01:24:24What's that line from Henry Ford?
01:24:26If I'd asked the customer what they wanted,
01:24:28I'd have given them a faster horse.
01:24:29- Yeah, yeah, yeah, yeah.
01:24:30Or slightly more modern one than one.
01:24:331960s, there's a David Ogilvy line
01:24:35who was this kind of amazing ad guy.
01:24:37And he said, "Consumers don't think how they feel.
01:24:40They don't say what they think,
01:24:41and they don't do what they say."
01:24:43So I think the best entrepreneurs,
01:24:46the best ad people have known this for a long while.
01:24:49But the problem is the average advertiser
01:24:51finds it easy to run a survey,
01:24:54and then it sends them off in the wrong direction.
01:24:57- Why do you get interested in Ignaz Samuelweis?
01:25:00'Cause I studied him for a talk
01:25:02that I gave a little while ago,
01:25:04and I thought he was fascinating,
01:25:05but I didn't immediately see the correlation
01:25:09between your world and...
01:25:11- Yeah, so- - Samuelweis.
01:25:13- I was, while Claire and I were looking at
01:25:17kind of ways to end the book,
01:25:21and I came across this story of Samuelweis.
01:25:26And so if people haven't heard of it, 1840s,
01:25:29he is a doctor in Vienna,
01:25:32kind of reasonably recently trained in the 1840s.
01:25:36And he's shocked when he arrives at the hospital
01:25:40at the proportion of women who die in childbirth.
01:25:44Now it's astronomical, you know, some of the wards,
01:25:47you would probably be better playing Russian roulette.
01:25:49You've got 10, 15% of people dying in labor.
01:25:53Spends an awful lot of time trying to work out why this is.
01:26:00And one of his findings is that the wards
01:26:04that are run by midwives
01:26:07tend to have a much better survival rate
01:26:09than the wards that are run by doctors.
01:26:12And one of the things that the doctors do differently
01:26:14from nurses is that they will do autopsies.
01:26:17So they will come straight from cutting up a body
01:26:20to then deliver a baby.
01:26:23And Samuelweis wonders if they are bringing
01:26:26what he calls cadaverous particles to the mom-to-be.
01:26:31So he starts getting doctors to wash their hands in chlorine.
01:26:38Now they've got to scrub them, in his words,
01:26:39till the stench of kind of putrid decay has gone.
01:26:43They have to scrub their hands clean
01:26:44and then they can help with labor.
01:26:48And the death rate plummets.
01:26:50It goes from 10, 12% to 3%.
01:26:53So this is, in Samuelweis' eyes, phenomenal.
01:26:56Surely everyone is going to adopt this behavior.
01:27:01But to his absolute horror,
01:27:03lots of doctors don't jump at the opportunity
01:27:07to save more of their patients.
01:27:08They are amazingly resistant
01:27:11to accepting this new technology.
01:27:15And essentially, it drives Samuelweis basically mad.
01:27:19- He dies in an asylum, right?
01:27:20- He does.
01:27:21His wife, I think, probably for a good many reasons,
01:27:24tricks him, says they're going out on a day's escapade.
01:27:28She takes him to the asylum.
01:27:31And when he's being put in the asylum,
01:27:32this is the horror of it all,
01:27:34he, unsurprisingly, doesn't want to go.
01:27:36There is a struggle, there is a fight,
01:27:38and he gets injured, he gets cut.
01:27:40And he dies of a sepsis
01:27:42that his research had been showing how to--
01:27:45- No way, I didn't know that.
01:27:47Holy Jesus. - Absolutely horrible story
01:27:49on so many reasons.
01:27:50But it became famous as not just,
01:27:54it's probably the most extreme example.
01:27:56But again and again, there are all sorts of discoveries
01:28:01that people, even though they have this amazing impact,
01:28:06existing practitioners won't accept.
01:28:10So essentially, the Samuelweis reflex is the argument
01:28:12that there's a tendency to ignore new ideas
01:28:16if they challenge existing ones.
01:28:19Put yourself in the shoes of a doctor
01:28:22who Samuelweis is telling.
01:28:24Now, for the last 10, 20 years,
01:28:26you've been killing lots of your patients
01:28:28by bringing disease to them.
01:28:29It's hellishly hard to accept that.
01:28:32So we kind of thought this was a brilliant place
01:28:35to end the book because what we want to say to marketers
01:28:40was all these principles
01:28:43aren't just about influencing consumers.
01:28:48You need to use the very principles
01:28:51that successfully persuade consumers.
01:28:52You need to use those principles
01:28:54when you are trying to sell your ideas internally.
01:28:57Don't just think you have a great idea,
01:29:00everyone's gonna rush to accept it.
01:29:01All these principles are discussed
01:29:03like scarcity or social proof.
01:29:05You can use them when you are trying
01:29:07to persuade people within your own organization.
01:29:10So it felt like a very good way
01:29:11of bringing the book to a close.
01:29:13- Yeah, conceptual inertia is a term
01:29:18that I learned a few years ago from this guy
01:29:20who researches the historical progress of ideas.
01:29:24So this is exactly what he's looking at.
01:29:26And he was looking at heliocentric model
01:29:29of the universe, for instance.
01:29:31So cool story on that.
01:29:35A hundred years before Galileo proclaims his insight,
01:29:40you have Copernicus, full century before.
01:29:44But his great work, which is called Da Revolutionibus,
01:29:47he kind of sort of squeaks it out basically on his deathbed.
01:29:51He's had this realization for most of his life,
01:29:53but he doesn't do it because he's afraid of the church.
01:29:56He's afraid of retribution.
01:29:57He sort of leaks this thing out.
01:29:58A full century later, they still haven't caught up.
01:30:01So Galileo sees the same thing
01:30:04and he proclaims it from the rooftops.
01:30:07He's forced to recant under threat of torture,
01:30:10spends the rest of his life under house arrest.
01:30:13He's completely castigated.
01:30:15And the Cassandra complex, as it's known,
01:30:18is justified, the fact that Copernicus didn't proclaim it,
01:30:23is justified by the treatment of a guy a full century later
01:30:27who did the exact same thing.
01:30:29So if you were to point a finger at Copernicus
01:30:31and call him a coward,
01:30:32he could point the finger at Galileo and say,
01:30:34oh, was I just prescient?
01:30:35- Yeah, it's a worryingly regular occurrence.
01:30:41And the only thing I would say
01:30:44with the Copernicus-Galileo story
01:30:46is there could be a danger, or my semivoice one,
01:30:49of thinking, oh, you know, this happened 500 years ago
01:30:53or 200 years ago.
01:30:54We are more sophisticated now.
01:30:56Surely we are better now.
01:30:58But there's recent-ish examples.
01:31:01I think it was Barry Marshall in Australia,
01:31:05like a very junior doctor
01:31:06at this kind of not very prestigious university.
01:31:11He works out that ulcers are not caused by stress.
01:31:15They are caused by a bacteria.
01:31:18I think it might be H. pylori or something like that.
01:31:22No one will listen to him.
01:31:23Because surely if a massive discovery like this
01:31:26was gonna take place, it'd be at Harvard or Oxford.
01:31:28So what Marshall does is the most dramatic demonstration
01:31:33he can to prove his theory.
01:31:34He drinks loads of this bacteria,
01:31:37then gets an ulcer almost immediately,
01:31:40and then he cures himself by taking antibiotics.
01:31:44And it took that kind of theater,
01:31:47putting his own life on the line,
01:31:48to persuade people this was a--
01:31:50- Well, that is putting your something
01:31:51where your mouth is, I suppose.
01:31:53- Yes, yes.
01:31:54- Richard Shorten, ladies and gentlemen.
01:31:56Richard, you're amazing, mate.
01:31:58I think you're fantastic.
01:31:59Have you got, are you blogging?
01:32:01Have you got a substack?
01:32:02- I've now kind of moved mainly to LinkedIn.
01:32:06So what I'll try and do is post,
01:32:08not about family or awards or that stuff.
01:32:12It'll always be about the application of behavioral science.
01:32:14- Have you considered,
01:32:15have you considered some sort of newsletter-y type thing
01:32:19like a substack?
01:32:20- So newsletter, I have done.
01:32:22And I kind of quite reasonably regularly tell people
01:32:25where they can get that.
01:32:26So on my company website, Astro10.co.uk,
01:32:31you can sign up for a newsletter,
01:32:33and then every fortnight we'll send people a digest,
01:32:36a brief digest of an experiment,
01:32:39an example of people using it,
01:32:40and then the implications.
01:32:42- Unreal, and new book.
01:32:44- A new book, yeah.
01:32:45So co-authored with Michael Aaron and Flickr.
01:32:47It's called "Hacking the Human Mind."
01:32:4917 brands, each chapter's about a brand.
01:32:52And then we look at two, maybe three,
01:32:55behavioral science principles that brand has used
01:32:57to power its success.
01:32:59- You're great, dude.
01:33:01You're great. - Oh, thanks, Chris.
01:33:02- I look forward to whatever you do next.
01:33:05And let me know when you come over to Austin,
01:33:07'cause I need to hang out.
01:33:08- I will do, I will do.
01:33:09- Appreciate you. - Thank you very much.
01:33:10- Congratulations, you made it to the end of an episode.
01:33:14Your brain has not been completely destroyed
01:33:15by the internet just yet.
01:33:17Here's another one that you should watch.
01:33:20Go on.