How To Be An Illogical Bicycle For Advertising Agency Clients

[00:00:00] Stephanie Liu: Did you know that the design of the bicycle today has largely been the norm for over a century? A hundred years, we’ve been riding bikes with two identically sized wheels and chain drive. And since the 1800s, people have enjoyed this affordable mode of transportation. And yet, it wasn’t until decades after the bike was invented that mathematicians and physicists started trying to figure out scientifically, how does the bike actually work?

The early designers didn’t have proof. No data. They just had creative ideas that they tested trialed, failed, tried again, and ultimately succeeded at coming up with something improbable, perhaps even a illogical. If you’ve ever tried to convince a client to try a new marketing campaign, that admittedly sounded a little crazy.

How hard it is to get buy-in for the creative ideas without any data. So what do you do? That’s what we’re covering in today’s episode of Agency Accelerated.

Welcome back to Agency Accelerated, the show for agencies who want to get bigger. So stick with us to learn how you can simplify your growth strategy with practical tips from the marketing pros. So if we haven’t met, I am Stephanie Liu and I’m here in beautiful, sunny San Diego. Those of you watching right now, and I see you, let us know where you’re tuning in from in the comments.

I’d love to see your name pop up and give you a great shoutout and PS, by the way, if you’re watching the replay, comment with #replay. Those who watch it, engage live, we’ll have the amazing opportunity to get their questions answered in real time. As a reminder, we’re live every other Wednesday at 2:00 PM Eastern Time, 11:00 AM Pacific on Facebook, Twitter, YouTube, and of course, LinkedIn. Make sure you head on over to agorapulse.com/calendar and subscribe so you don’t miss any of our episodes and remember, stay until the very end, because you’ll get a chance to get your hands on a creative way to grow and scale your marketing agency. So having said that, shout out to the crew that is here. I am so excited that you are here because we are absolutely going to geek out.

Now, I can’t wait to get into today’s topic simply because of the fact that how much I love psychology, but here’s the thing. While the general consensus in marketing today is to be data-driven in all that we do, there is a problem inherent in the data. It’s all about the past, but what if we’re trying to pitch a prospect or a client on a marketing idea, that’s something that the future, right?

We need to be able to predict consumer behavior that’s often illogical and nonsensical. And so, that’s exactly what our guest today is going to talk to us about. It’s going to be fun. Grab your notebooks. Rory Sutherland is the Vice Chairman of Ogilvy and the founder of the Behavioral Practice, an arm of the globally recognized ad agency that explores the psychology and unseen opportunities in consumer behavior.

Those are often small contextual changes, which can have enormous effects on the decisions people make. For instance, tripling the sales rate of a call center just by adding a few sentences to the script. Put it another way, lots of agencies will talk about bot-owned and earned media. Rory, on the other hand, will look for invented media, discovered media, seeking out those unexpected and inexpensive contextual tweaks that transform the way that people think and act. Hey Rory, welcome to the show.

[00:04:22] Rory Sutherland: Hello, absolute pleasure to be on. I was also fascinated by the conversation about bicycles, by the way. You’re absolutely right. That they invented the bicycle before physicists knew how it worked. And there is still some debate among physicists as to how a bicycle stays up, what is the gyroscopic role in keeping it stable?

And it’s a very interesting thing. It’s rather like that famous thing, which is that the scientists proved that a bumblebee couldn’t fly. Evolution had effectively come to a solution, which is what you might call sequential logic could never reach. The bicycle was a bit weird, actually. It actually had an extraordinary evolutionary leap with a thing called the Rover Safety Bicycle in 19th Century, which was produced by a company I think in Coventry called Rover, which later made cars.

It doesn’t exist anymore, but they became a car company. But their safety bicycle with the two identical size wheels is pretty much identical to the modern bicycle. And yet, the company more or less came up with it. It was one of those things where, you know, how evolution moves both either very slowly or very fast.

This was genuinely a case of a very fast leap forward by making the wheels the same size by having effectively the gearing going to the back wheel. All those things happen at once. I know this by the way, for a very weird reason, which is reading a strange passage on the internet, which actually exists. There’s a book called Woodrow Wilson and Bicycling, and it reveals that Woodrow Wilson was a massive fan of this Rover Safety Bicycle, and actually massively opposed to the car in the early stages of the 20th Century.

He thought that the car was leading to basically socialistic feeling in the United States because people resented rich people driving around so much that it was actually in danger of creating a kind of socialist or Marxist revolution. And of course, Henry Ford then comes along two years later and changes the game.

But the reason I found that out, it’s very weird, which is, there are several members of my family, both my mother’s and father’s family immigrated to the United States and a few relatives have tracked down the genealogy and the four people who’ve managed to trace are a former Miss South Carolina.

Okay. Which is Miss Teen, South Carolina. Actually, I imagine it’s quite a highly contested field. There’s a guy who was a horseback rider in Buffalo Bill’s Wild West. There’s a guy who’s now in prison for abduction and attempted murder and there’s Woodrow Wilson. Okay. So those are the four people we’re related to in the United States.

So if you believed in genetic determinism before, I think you can abandon it now, but I ended up because I was researching this. I ended up reading to be honest for longer than was healthy, a whole screed about Woodrow Wilson and his bicycling adventures. He went back to Scotland, looking for his ancestors, who are my father’s fathers, mothers, and sisters, but never managed to find them cause they moved to Wales in between. So there we narrowly missed having a bicycling visit from Woodrow Wilson in the family.

[00:07:31] Stephanie Liu: All right. So everyone right off the bat, my gosh, we know that we’re going to have a lot of fun. As far as like history quizzes and all the different things.

In fact, we were just talking about this. I would love to know your take on the recent Wordle craze that swept the internet because in alchemy, you equated human behavior to cryptic crosswords, which we also talked about. And here we’ve had countless human beings participating in sharing their crossword, fanaticism.

What do you think that is?

[00:08:01] Rory Sutherland: It’s really interesting. The popularity of Wordle is fascinating because it is a kind of perfect game in a way you mostly succeed. You can, if you want to get really technical about it. And I imagine there are a whole bunch of people who’ve effectively started to do algorithmic Wordle solving, but it’s a game of a beautifully short length.

It’s a game which involves an initial guess and then constant refinements. I don’t know. And I’m genuinely curious about this. The New York Times has bought it. We genuinely don’t know whether it will be a flash in the pan or whether it will be an enduring hobby. And it’s a very difficult thing to tell.

Because the crossword has enjoyed a surprisingly long time. When you think about it, the crossword is a particularly beautiful form of puzzle because some of the clues are too difficult, probably for you to solve without a few of the letters filled in. And so the brilliant thing with the crossword is that you have this wonderful thing of a few of the clues are easy, and that might give you one or two of the missing matches, from a much more difficult clue.

And so the way in which you fill in a crossword is very interesting. And also the way, which I think is very similar to creative problems, which is you can solve it two ways. You can either use the clue to generate the word. Or, you can work out what the word has to be, and then effectively reverse engineer why the clue actually pertains to that word. I was thinking when you solve problems creatively in a weird way, there are two directions in which you can do it. You can do it, solve it from the top down and you can do it from the bottom up. And sometimes it is this case where you just think of something.

I think all creative people recognize this. You think you have something that’s really interesting, but why and effectively, what you’ve effectively got to do is post rationalize. I’m going to make this part. There’s nothing wrong with post rationalizing. Sometimes, actually, a lot of great science, penicillin was really that strange.

Why are all these bacteria dying? Ooh, look, there’s a bit of fungus. What’s going on there? And if something really interests you, don’t go I don’t know how I got here so therefore my insight is invalid. If you’ve got a well-honed creative instinct, what you do is you learn to notice when one of those insights is had.

And then, what you can do is you go backwards and you effectively say, why might that be interesting? It’s obviously been solved by my subconscious. I’ve solved this in some way, by my subconscious. What has my subconscious managed to attain, which I can’t attain through sequential, rational logic?

And then, it’s the time to build the logical framework if you like to support your idea, but you actually build the supports after you’ve actually reached the summit. It’s really interesting. I find that kind of fascinating. I always get very cross when people say, yeah, that’s post rationalization. Who cares?

I mean, that in some ways is actually what a great creative idea is. It’s a kind of a leap of insight or inspiration, which is then subsequently post-rationalized. There’s a great piece about this, about ideas referring to our communities in the bath, which is the way our committees would write it up in a scientific paper is I realized that to calculate the volume of the crowd, I would need a volume of liquid where the volume of liquid displaced by the crowd would be equal to the volume of the crowd.

So with a suitable man, but he didn’t actually come to the idea that way. He came to the idea by sitting in the bath and noticing that the water float over the sides. And you need a particular mind to actually make the connection between climbing into a bath and measuring the volume of a crown. And probably it’s a pretty well-prepared mind.

So I’m not suggesting everybody can do this, but nonetheless, I’m pretty happy. There’s a guy called Paul Feyerabend. And he wrote a book called Against Method. I do generally subscribe to an anything goes view of making progress in advertising ideas. Okay. I think to be honest, everybody knew in advertising back in the seventies, it wasn’t really a process.

Okay. Sometimes you got lucky. Sometimes you went down a dead end and have to affectively retreat. Sometimes you pull a rabbit out of the hat at the last minute. Sometimes to be honest, probably the account man came up with a headline. And everybody pretended to hate it until they admitted it was quite good, because we’re now sold by the hour and we have to satisfy procurement.

We have to pretend there’s this linear Henry Ford production line process to satisfy procurement that we’re not completely mad, but actually in truth. My view is if you can get to an interesting idea, get there any way you can. Who cares, it’s not like we’re drowning in fantastic world-changing ideas.

So I don’t think we should be too picky about how we arrive at them.

[00:12:48] Stephanie Liu: Yeah.

That is so true. This is so much fun. I just love listening to you and the crossword puzzle and the clues . For me, it was like inductive reasoning, deductive, post-rationalization. I love it.

[00:13:02] Rory Sutherland: Creativity is actually the third one. I can never remember what was the difference between deduction and induction.

But the third one is called abductive inference, which does require a leap of imagination. This was an American philosopher called Charles Sanders Peirce. He was introduced to me by this guy, Roger L. Martin, who’s very good business writer, wrote a very good book called When More Is Not Better.

Martin’s a big fan of Peirce. Peirce was one of these people a bit like Thorstein Veblen who was a complete genius, but his private life was so chaotic. He never quite progressed in academia because he was always involved in some scandal or disgrace or whatever, but he was nonetheless, he said that actually, you can’t get to anything significantly original, simply through induction and deduction.

You have to have kind of hypothesis and then test instinctive hypothesis and then test it. And he makes this point that there’s this attempt I think by some people who think they’re being scientific purists to effectively try and construct imagination, free progress. I think it’s a fundamental philosophical mistake.

You’ll never come up with something significantly new by looking at the data we already have, because as I famously said, all the time, all big data comes from the same place, the past, and there was no data in 1980. I’m still old enough to remember America pre-Starbucks, by the way, just, I think I first went to the US in 93. About two years later, I was in New York and people said, there’s this place where you can get coffee.

Nobody in 1993 was wondering around going, why can’t I spend $4 on a cup of coffee and wander around carrying it in a car? Okay. Before Dyson and there was nobody going, I wish there was a $500, $700 vacuum cleaner. The trouble with vacuum cleaners is they’re just too cheap. Red Bull.

I can remember a time when nearly everybody said mobile phones were stupid idea. Literally. Okay. Okay. It’s impossible for anybody under 40 to remember this, or under 50, perhaps, but I can literally remember when people said, I use a mobile phone on Oxford Street in London in 1989, and people shouted abuse at me from passing cars.

Okay. So this is interesting by the way, because one of the most important things, I don’t think advertising knows, and I think it’s one of the reasons why big companies find it hard to innovate in a way is I’d like to know what, how long Wordle was going for before it tipped into the mainstream, because nearly all new product adoption is this kind of Sigmoid Curve.

It’s very slow, then it’s very fast. And I think there’s a big mistake we make at the moment with advertising is that we tend to justify advertising spend by the rate of growth of sales, but that might mean were advertising too late when social proof and social contagion is already doing a lot of the work of spreading the idea.

Arguably, the time to advertise is actually when it looks as though your advertising isn’t paying off, because what you’re doing is seeding the first users in that marketplace and speeding up, steepening that curve. It’s an interesting question to me because we see it now, I think with electric cars, which was, it was a very okay with Tesla only for a long time.

Tesla was a super niche product as recently as what, four years ago, five years ago, certainly. Okay. It’s a really nichey product. And now I think, now I don’t know the answer to this question, people are saying what’s the rate of transition to electric cars and I go there’s only one question you need to know. How many people who buy an electric car, go back to an internal combustion engine?

That’s true.

Cause that’s the real question. Is this a sticky technology where nobody wants it? Nobody wants the mobile phone, right? Nobody wants the electric car. The majority of people are going on about range, anxiety and going on about cold weather range and so on. Perfectly fair objections.

But nonetheless, my hunch is that everybody who buys an electric car will find it difficult to go back to a gasoline one. But there’s the tech, there’s the smoothness, the talk, all that kind of stuff. The fact that actually once when you first have an electric car, you are quite anxious, but that anxiety actually dissipates fairly quickly and you become a convert.

But, I that’s the interesting question with Wordle, is it one of those things like Second Life, because it was slightly. When you were old, there is the terrible problem when you’re 56, which is you do go, I’ve seen this shit before and everybody’s talking about. Okay, everyone’s going on and on about the metaverse.

Okay. We had this craze about Second Life and it was for about a month, the most massive thing online. And now, I imagine it’s like one of those Chinese cities where there are massive, great constructions with nobody living there.

Why are we talking about the metaverse when we could be talking about Zoom? Okay. Because the huge explosion and video conferencing strikes me as highly significant in terms of productivity, the nature of work, flexibility of work, all those kinds of things. Okay. We can actually reinvent our business processes.

We can reinvent who we work with. We can bring in external experts much more easily. We can change the way we do business through Zoom. And I said, Ogilvy used to be a handshaking business, and now we’re a broadcasting business. We need to get used to it. But for some reason you can’t talk about Zoom because it makes you look a bit of an oldie.

So everybody’s talking about the metaverse, but how would our conversation now be improved? If we were both weird exaggerated avatars of ourselves and that we have exaggerated and slightly implausible bodily movements, right? And then when it genuinely improve this conversation, if I had a slightly strange robotic head, I’d move my arms in ridiculous ways.

I don’t see how that would make this any better. Really. And so I do worry about that, which is there’s this futurology thing where everybody’s got to talk about something that’s five years out. To be honest, I think we’ve got enough technology where we could reasonably place a moratorium on all technological developments and say, we’re going to spend the next six years working out how to do the best with what we’ve already got.

You know, because, there were technologies like video conferencing, which until the pandemic just sat there in the background, being ludicrous and underused, in my opinion. It’s pretty significant. The fact that you can hold a meeting with people in five continents at a day’s notice with zero travel costs, very low carbon emissions compared to the alternative.

You know, one of the things I’ve been interested in is I said, in the old world, if you have to go into the office, you couldn’t really get an expert in from Amsterdam or New York. But now, I would say look, why don’t we get two people in who know a huge amount about this subject and pay them a thousand dollars just to talk to us?

We couldn’t do that in the real world because it meant effectively that was a day out of their life. If you have to travel to an office to have the conversation. Now the opportunity cost of a one hour Zoom call is pretty trivial. I think this is a much more important technology. I think the only reason people aren’t talking about it is that because it’s 12 years old. It doesn’t make you look clever.

But then, most technologies take about 30 years before they reach real productivity significance. There’s a great paper about electric motors, which is when they use electric motors to replace steam engines. There was virtually no improvement in anything. It was only when they realized you could have a factory with lots of little motors and turn them off and on rather than having one massive steam engine operating the whole thing. That was when you got the 1920s productivity boom. I think a lot of technologies like that, you invent the thing, you go through the hype cycle and then eventually 10, 15, 20 years later, or maybe after a pandemic, people finally learn how to use them.

[00:21:03] Stephanie Liu: I love that there was this one Buzzfeed article. You remember the little Pez candies and that we would unwrap them? And then we individually put in the little candy tablets in there. And then, there was an article that says, you’ve been doing it wrong the entire time. You actually just supposed to take the Pez candy, put it in there, and it will automatically rip off the wrapper for you.

And I was like, I’ve been doing it wrong this entire time.

[00:21:25] Rory Sutherland: That actually fascinates me, those blind spots. Do you know how monkeys actually open a banana? It’s really interesting. They squeeze the pointy end. They don’t snap the stalk. They squeeze the pointy end of the banana between two fingers and it pops open from that.

Monkeys, I think, have more experience doing that than humans do. So it’s very strange how just norms of behavior get established and had also blind spots, as you say. There are certain things where there was some wonderful blind spots, which when you think about it makes perfect sense.

Someone admitted on the internet, albeit anonymously and bear in mind that were about 30 years old, that for 30 years they only cleaned the front of their teeth. Okay. They haven’t cleaned the back of their teeth or the surface of their teeth. They just cleaned the front because every photograph of someone cleaning their teeth, in advertising or marketing shows, that it doesn’t show someone doing that.

And this guy admitted that for 30 years, it had never occurred to him that you actually have to clean the back of your teeth as well as the front. And it is possible to go through life with these really weird, I used to do something I have to admit this is slightly embarrassing, but I’m not frightened of flying.

Never occurred to me to be frightened of flying. And I didn’t really notice until I started flying on business. And if you find business, of course, there a lot of people in business class who don’t want to be flying, but their boss has made them fly or they have to fly business. And I started noticing about 25, 30% of people around me were on takeoff were really scared.

They were holding onto the arm rests and doing things like this. Now, for a few years, I used to download programs from television, from the British equivalent of TiVo, to my laptop, to watch on a plane. Okay. And I’d sit there, but this sort of 15 inch laptop screen sitting back with headphones on flight.

I used to watch air crash investigation. I enjoy air crash investigation. I’m not frightened of flying. So I wasn’t thinking I’m on a plane, but if somebody came to me, the people looking over my shoulder, if they are frightened of flying, seeing like an animation of a 737 plowing into a man to the side. It’s lovely because one of the reasons for diversity, diversity in everything, it isn’t just that it actually gives you complimentary views on the world, which is valuable. It’s particularly valuable in advertising having a diverse group of people. It’s also that it closes down blind spots. That if you get a homogeneous group, this is what to some extent happens with things like the financial crash.

Okay. You got a group of people all from the same background, who all thinking exactly the same way. And what that does is it leaves them completely blind to things outside their kind of framework or model of the universe. And one of the most important things I think is that comedians do it wonderfully.

It’s just noticing things, the great talent I think with advertising is just curiosity and observation, which is you look at things with a slight, just that tiny bit of detachment, which means that you see things that everybody else just didn’t notice because they were always there.

And it does require you to look at life a little bit through the eyes of a slight alien or a recent arrival to Planet Earth. I suppose you’ve doing anthropology on your own people. You have the mindset of an anthropologist and when you detach it, the paver of conventional Western wealthy people is really quite strange if you write it in anthropological language. I mean our obsession, I think our obsession with higher education and the fact, you probably, your listeners will have heard Scott Galloway and various people talk about this where higher education has actually become a branch of the luxury goods industry, where it’s a deliberately scarcified commodity that’s insanely expensive that effectively awards you with credentials to then apply for remunerative employment. This guy called Brian Kaplan, who’s saying that effectively, the Ivy league universities have become like a kind of Louie Vitton, it’s effectively a Veblen good.

I think that ability to see things just obliquely. The things that are not necessarily what they’re ostensibly for. Things are not necessarily doing the function that we ostensibly think they do. I think is really important. Cleaning teeth by the way is a great example of that, which is if you ask people why they clean their teeth, they can talk about cavities.

As they talk about enamel, dental health, avoiding plaque, avoiding tartar, all those things. Okay. If you look at when people clean their teeth, logically, they should clean their teeth after a meal, but they don’t. They clean first thing in the morning. And before you go out in the evening, and what you realize is people are cleaning their teeth for the confidence of fresh breath, far more than they offer long-term dental health.

And, if you think about it, 98% of the world’s toothpaste is flavored with mint. The mint doesn’t contribute to dental health, it just makes your mouth feel fresh. And it gives you the confident feeling that your breath probably isn’t rank. I think there’s the official reason we do things and then there’s the deepest, psychological reason.

That’s why it’s like a cryptic crossword, because you have the surface meaning of the clue. And then you have what the clue is really telling you. And I think there’s nearly, always something going on beneath the surface, which you have to uncover in that kind of marketing crossword game everybody’s claiming. I was joking about this where I said, if you do a new business pitch. Everybody thinks that what the client is thinking is I hope this is a really good campaign, which will sell a lot of my product. Okay. Now the truth is they would say, that’s what they’re thinking too, that they’re thinking, how am I going to show this to my boss?

And will it make me look stupid? Okay. And so, understanding that there’s always a kind of under current going on. And by the way, I think advertising and marketing gets this wrong because we spend all our time adding positives, when we should probably get a better return sometimes from removing negatives.

What is it that makes people feel uneasy about doing something different? I was at one of the magical brand properties of Coke is that you can ask for a Coke anywhere on Earth without looking weird. Okay, so you go to a beach shack in Jamaica, you can go to a Michelin star restaurant in Paris, and you can ask for a Coke or Diet, or actually in Paris, you ask for Coke Light for some reason.

Okay. And you can ask for a Coke and they’re expected to provide it. If they haven’t got it, it’s their fault. It’s actually an obligation for any establishment to provide, but that’s not true of Dr. Pepper, isn’t it? Except in Texas and New Mexico. Okay. But you know, I can’t go to a Paris restaurant. If I went to a Michelin star restaurant and asked for Dr. Pepper cause it would be.

No, not only would they not have it, they treat me as an idiot for asking that.

[00:28:36] Stephanie Liu: I’ve had that experience before

[00:28:40] Rory Sutherland: Are you a Dr. Pepper drinker?

[00:28:42] Stephanie Liu: No, I’m from California. And I remember I went to New York. I was invited out to brunch and I was going to have an omelet. I remember asking the waiter, if I could have salsa to go with my omelet. Next thing I know the waiter comes back with this fizzing water.

And I’m like, what is this?

And everyone looked at me like you’re not from New York. And I was like, no, I’m from California, where I eat tacos.

[00:29:17] Rory Sutherland: Actually, I’m going to really have scandalize half your listeners here. The food in California is now better than the food in New York. Isn’t it?

[00:29:25] Stephanie Liu: Oh, goodness. I wouldn’t even go. I don’t know. It’s been a while since I’ve in New York, to be very honest with you.

[00:29:31] Rory Sutherland: I’ve been repeatedly amazed actually at the California food and wine scene. And the other thing that’s extraordinary is the American beer scene, where, the US has gone from one of the worst countries in the world to drink beer to probably the best in the space of about 10 years.

The whole innovation in food and drink is really interesting because again, none of it comes from this asking people what they want. It’s all kind of weird fanatics, persevering with some sort of dream. No one would have predicted that the hoppy IPA. Okay. Albeit a bit colder than we drink it in the UK.

Okay. But that’s exactly like Monty Python. I met John Keys and they said straight up, they said, okay, we’re going to try and export this humor, but let’s forget about the United States completely. There’s no way this is going to play in the US. Okay. You know, they didn’t even bother to go. And of course, there was one Dallas PBS station that picked it up and started showing it.

It went down massively in Dallas. So there was some heroic guy running, some sort of PBS local station, and then it took off there and took off everywhere else. But I think there’s a vital point here, which is so much about markets is actually probabilistic. Okay. I think this is the great mistake with highly targeted media.

The large part of media should be, we don’t know who our customers are, so we’ve got to try and find out by making a lot of noise. Okay. Because you generally can’t define customers with the needs, demographics other than past customers, which is a bit binary. Okay. You can’t define them with some needs demographic thing.

When you look at real world data, it’s never that neat, really. And I think what happens, I think this is a fundamental way in which we get the world wrong. In the event, one possible version of the future played out between 2018 and 2020. Okay. And because we find it very easy to post-rationalize and provide post-hoc explanations for why the world went the way it did.

Okay. We imagine it’s equivalently easy to predict the future by extrapolating forwards in the same way. And the truth of matter is as 2020 showed us fairly, I think fairly explicitly, you’re just one bat way from, a totally different icon. I think we always have this view that we look back in history and we effectively tease out all the strands and we make it look fairly deterministic and we make it look fairly sequential and we go, okay, so this is how the world works, we say, looking back. So I can now deploy in mirror image. I can now deploy exactly the same talents to predict the future. And the truth of the matter is, you really can’t. In Wordle, who predicted that?

[00:32:23] Stephanie Liu: That’s true. PS, by the way, I’m giggling cause I don’t know if you see this very, but Cheryl Thomas is in the audience and she’s saying I’m cackling.

And then we also have Gabe Lily. Stephanie, what is that pink book behind you? Great placement. Now I’m curious. This is actually a really great transition because really let’s talk about the book for a moment. Yeah. Gabe.

[00:32:48] Rory Sutherland: It’s called Alchemy and it’s on sale now on Amazon and many other bookshops.

And it’s about this point that we’re in denial about the fact. Even marketers are in denial about the fact that value is actually psychologically determined and that you can make something valuable. You can make something more enjoyable, more appreciated. You can charge a greater price for it, not by changing the thing itself objectively, but by changing the way it’s described, the name it has, the competitive framing you place it in, the context you describe it in, and that value is actually a product of human perception and human perception isn’t objective. And so, it’s a complete mistake. And I think even marketers do this, we’ve we bought this kind of neoliberal economic idea that value is created in the factory. And the only thing you can do to create value is to make a product better or to reduce the price.

That’s the only way you can make it better for a consumer. You can actually create value out of nowhere by giving the thing a new name. You can describe it in a new way. You can price it differently. You can charge for it differently, even though the economics and the objective reality remain completely unchecked.

The addition of psychological components to the communication context effectively, that changes what we perceive then. When we perceive something differently, our emotion, the meaning changes. When the meaning changes, our emotional response changes and when our emotional response changes, our behavior changes.

And that actually means that it isn’t just objective reality behavior. Okay. And attempts to model that using AI or machine learning are doomed because between the objective reality and the behavior, there’s the black box of human perception and emotional reaction, which is susceptible.

Red bull. Okay. Terrible drink. Tastes awful. Cost a fortune comes in a tiny can, but you promote it as medicinal or psychoactive, and suddenly those very things that were a downside become a virtue. High-end goods, scarcity, high prices are sometimes actually a really clever marketing ploy. In conventional economics, this will be a nonsense because the thing has a given utility and putting the price up effectively reduces its appeal.

No, that isn’t necessarily true. Champagne would be a good example. Their main function is to signal generosity, hospitality, or to market special occasion. And so, cheap champagne, in a sense, there’s a bit of a mistake because it’s not doing its job or that I’m sure the Peleton, I think the Peleton was actually became much more popular when they put the price up significantly.

What we buy is what something means. We don’t buy what something is. And therefore, the meaning of something is a function of how it’s described, how it’s framed, how it’s promoted and presented. Every bit, as much as what it actually is. I think it’s incredibly important. I’ll give you a lovely example of this,

we had a debate on Twitter yesterday, which is how differently would people drive if car speedometers didn’t say miles per hour, they said minutes per 10 miles? Okay. So you reverse it. You reverse time and effectively instead of speed being distance over time, you make it effectively time for a given distance.

The objective of those things are completely identical. You know, we’d accelerate less or more. A classic example of this is in miles per gallon, which is how we in Britain and you in the United States describe the fuel economy. In continental Europe, they call it liters per hundred kilometers.

And the argument various environmentalist have made is that liters per a hundred kilometers is a much better measure of fuel economy because we tend to think that going from 50 miles per gallon to 60 is a really big deal, cause that’s 10. That’s 10 more. But actually it’s only a 20% improvement in fuel economy.

Whereas going from 12 miles to gap to the gallon to 20, which is only eight. Okay. That’s actually a monumental, it’s a 66% improvement in fuel economy. Okay. So what’s interesting is that even when you aren’t giving literally scientific information in a form, which is they’re absolutely identical, one could be derived absolutely straight away from the other.

The way we’ll respond to that format is driven by how it’s presented. It’s not driven by what it is. I’ve found that just really interesting, because it basically says that we can’t. There were early experiments with this in behavioral economics. Know, that if you ask people to make a medical decision and you said 5% of the patients will die, you got a different outcome to when you said 95% of the patients will survive.

And so, we don’t even respond to information in a context freeway. It’s a really basic information. So this idea that marketing is a kind of added extra is nonsensical. The idea that it’s a kind of magic fairy dust you add on top of the real value, which is created in the factory. That’s wrong.

That actually everything is effectively appraised through the lens of human perception. And so, you’re doing marketing, whether you like it or not effectively. It isn’t objective reality, plus a bit of glitz. Okay. Effectively, everything will be appraised according to how it’s presented. Even if you think you’re not doing marketing at all.

I find it really interesting. I also like it. Particularly because you’ve got a small agency audience, I really liked the behavioral science angle cause it’s scalable. But the thing that slightly annoyed me about big agency life, it was if you’ve got $10 million to spend, we can come and help you out.

But otherwise, we’re not really interested. And actually you can apply creativity and insight just as valuable, more valuable perhaps with smaller businesses than you can with large ones.

[00:38:55] Stephanie Liu: Oh, yes. I find that when you work with smaller businesses, they’re more open to experimenting and testing things.

Whereas, bigger agencies, like you said earlier, it’s, data-driven. You have to prove it and all these things and ROI. With smaller clients, smaller budgets sometimes. Yeah. Try it and come back and tell me how it works out.

[00:39:20] Rory Sutherland: So there are a few things which I love talking about, which is cafe marketing.

And one of the arguments I make is even if it’s raining, put your chairs out on the pavement, on the sidewalk, in front of the cafe. Okay. And the reason is the chairs aren’t really furniture. They’re an advertisement, because from 200 yards away, if you see chairs out on the sidewalk, there’s a cafe there and, know, it’s open.

Because if it wasn’t open, they would’ve put the chairs away. Okay. So it’s always understanding that ostensibly, your chairs in a terrace in front of a cafe might be to provide seating. And so you go nobody putting these out, it’s pouring with rain, but actually your chairs are really doing the job of advertising the fact that there’s an open restaurant or cafe from a distance of 400 yards or to fast moving traffic or whatever else,

[00:40:07] Stephanie Liu: There’s an agency right now, that’s managing a cafe and they just heard that tidbit. They’re like, I am going to present this in my next meeting.

[00:40:17] Rory Sutherland: I’ll give you a lovely one, which is that I said something about this, about the chair tables and chairs. And somebody came to me and said, we know you’re right. I said, how? You literally tested it, you put chairs out, you measured the footfall. They said, no, we did the opposite. What do you mean? We didn’t own the cafe.

We were working in the cafe and we always wanted to knock off quite early. Okay. So what we really hated was when someone came in to the cafe 10 minutes before closing time that we have to serve a coffee, they might’ve wanted a second coffee. So we couldn’t start cleaning the espresso machine. Okay. And they’d be sitting around and now we couldn’t clean up the cafe.

We couldn’t, effectively, we were going to go home at 5 30, rather than five o’clock. It would delay us getting home. So they said, we discovered a really interesting trick, he said. All you have to do when the cafe was empty, let’s say, 15 minutes from our closing time. If you put one chair upside down on top of another chair, nobody ever came in.

It was just a signal that basically we’re closing now. So forget about it. Interestingly, your boss couldn’t really bollock you for this because you could say, oh, and I needed to sweep the floor, but it was an unconscious signal. Basically, don’t come into our cafe. That’s it. All you have to do is take one of the outdoor chairs, put it upside down on top of another chair, or put a chair upside down on a table.

That was it. No more customers for the day.

[00:41:36] Stephanie Liu: That’s what I need to do at home and be like, okay, the kitchen is closed. The snacks, the pantries, that’s it. We are done.

[00:41:47] Rory Sutherland: So much of this is we operate to such an except through inference just by, unconscious interpretation of signals. You can unconsciously give away completely the wrong signal. I’ve always said, the worst thing you can do in a shop is allow people in. And then when they try and buy something, say, sorry, we’re closed.

The best thing you can do is lock the door of the shop, wait for someone to come along and try the door. And when they do open, make a big shove, unlocking the shop and saying I was actually closing, but why did you come in? And the reason is that regardless of the closing time of the shop and all that stuff, the first is interpreted as an insult.

I bet if I look more important, they were more attractive. If I was a Hollywood megastar, you would have told me this thing, but you’re just being awkward because it’s little old me. And the second one where you actually open a door for someone deliberately is viewed as a massive compliment.

We don’t interpret this. We don’t interpret this to do with opening hours, nothing to do with that. It’s all to do with interpersonal emotional response. By the way, any small business that I’ve got a really simple idea. I’m absolutely convinced. I’ve never got anybody to test it. That if you have a call center, and you offer the chance of a callback to people who are waiting online.

So you just say, press one, and we’ll call you back in the next 30 minutes. Okay. My hunch is, you’ll find it much easier to cross sell those people much easier to satisfy their complaints. Because when a company calls us, it’s flattering. We feel like a customer. When we’re made to hold on a phone call, we feel like a supplicant.

We’re like, I am begging you for some of my attention. And it fundamentally, I think perverts the customer-seller relationship when you make someone wait to buy. And so, I’m always intrigued. Okay. Let’s look at other service businesses. One of the cleverest things, which they were too slow to instigate these McDonald’s terminals, where you order on-screen.

Okay. I think there’s a really big psychological thing going on there with the screens in McDonald’s, which is the waiting to order is five times as annoying as waiting for your food to be prepared because we see the weights between inputting our order on the screen and getting the burger as that’s them working for me, adding quality to the production of my burger.

When it’s being made to queue, before you can tell someone what you want is just five times as annoying per minute. Although the duration is the same, it’s a different kind of time. It’s like waiting for Uber. Waiting for an Uber is much more painless because you’ve got the map. I always give this example because a logical person would say, we need to increase the speed at which taxis turn up.

So we’re going to have a predictive algorithm, which means that taxis are hovering around in areas where we expect high demand. Now, Uber actually cracked that problem psychologically, by just going, if you can see where your taxi is, you’re not that bothered. You go, look, it’s stuck at those traffic lights.

I’ll have another pint. It’s not a problem. Whereas, if you don’t know where your taxi is, you’re in a state of tenterhooks for the same period.

There’s lots of this in Alchemy. Basically, how you can check, how you can give people the same thing, but make them think about it completely.

[00:45:00] Stephanie Liu: Yes. And so Gabe and Cheryl who are tuning it, I’m telling you, you need to go ahead and check it out. As a marketing agency, when we have the responsibility in creating a new campaign for a client, how do you recommend that most creative directors approach the challenge and not depend too much on logic?

Like what’s your approach? What do you do?

[00:45:22] Rory Sutherland: Yeah, it’s really interesting. I think, to be honest, I use behavioral sciences as a gateway drug to creativity. Which is, there’s always the danger that there’s all good graded work involves some sort of leap. Okay. There probably are a few exceptions where you can just use absolutely clear inductive logic, but usually there has to be something.

Some sort of effectively, an imaginative leap of some kind, I guess you’ve got an inductive inference. Okay. If you are, if you’re being scientific about it, and it’s very difficult for someone in a very deterministic business. By the way, we’ve got to remember this. Okay. When I started in advertising, two thirds of ad spend was packaged goods.

It was P&G. It was Unilever. It was records. Those are marketing companies. The chief executives worked in marketing. Marketing is a major part of the board composition, et cetera. That’s now below 25% and what’s taken up the Slack tends to be finance companies, tech companies, cable providers, broadband providers, mobile phone network operators.

It’s people from a kind of engineering and finance background who are much more reductionist and deterministic about their approach to things. Okay. You know, beer marketers were always hyper-indulgent because they recognize the product was consumed for fun. And that, there weren’t really any metrics you could stop talking about.

They accepted the fact that beer advertising was a form of entertainment. It was to some extent, a kind of form of entertainment that was complimentary to the product. But now, increasingly because we have a client base from business categories, which are much, much more kind of engineering-focused or economics-focused, and they tend to see that slight randomness of the leap as being indulgent.

Okay. It’s a kind of self-indulgence. You’re cheating here because, I can’t work out your thinking, so you’ve clearly just come up with this at random. And what you can do is you can use behavioral science because nearly all really great advertising end lines, just add an egg, all those things going back 50 years, reassuring the expensive with a name like Smucker’s, we have to make good jam, et cetera. Nearly all of them can be explained as why they’re clever using the language and tools of behavioral science.

And there’s probably an actually an academic name for them. So the great thing is you can, by explaining the fact that our job is to appeal to the system one, rather than system 2, you can, particularly, if you call it behavioral economics, behavioral economics, to be honest is a rebranding of psychology, but the simple fact was that government never took. You can’t go to the president of the United States and say, I’ve got a guy here to talk to you about psychology. Okay. The president of the United States can’t have a council of psychological advisors as he has a council of economic advisors. But if you call it behavioral economics, you get into places where you previously weren’t admitted.

And Daniel Kahneman, who won the Nobel Prize for Economics for all is always really pissed off about this. Why do we have to call ourselves behavioral economics before anybody took us seriously? I think there is in behavioral science, two things. I think one, by asking much broader questions about how you define the problem in the first place, you expand the possible solution space for creativity.

If you define a behavioral objective and then ask what might the interventions be that would trigger this behavior. You end up with a very large potential area to explore creatively. And that’s good because expanding the potential perpetrators. I talked to a guy in the States and it was all about how do we get people to install more than one smoke detector.

Fire departments would send people round and they’d give away free smoke detectors, typically in kind of low-income areas. And the people would always take one, but they’d only take one. And the fire guy would say really you need three. Okay. You need three. One in the child’s bedroom, one in the hallway, one of the kitchen, perhaps.

Okay. Or they sit down, I’m just having one. We never knew why that was. And I still don’t know why it was. And then eventually, I said, I know what the answer is. You turn up with six. Okay. How do you say, normally I’d install five in an apartment this size, but here, I think you can make, do with three, okay.

Six smoke detectors. They may bargain you down to four or three, but they’re certainly not going to bargain you down to one. Okay. Cause if you guys turned that with six smoke detectors, say 911 is ridiculous. He’s going to meet you halfway. That’s the Cinderella Effect and he’s the person in the tenant’s going to go.

How about three? Yeah. Okay. Fine. And they were always turning up a three, which meant they had nowhere to go, but down. And so, I always got that insight from comedy. Why don’t we turn up with a hundred of them and start sticking them on every wall and then get them to remove the smoke detectors they didn’t want.

And you’d probably end up with four or five, but I found it really interesting because you expand the solution base. And then when you’ve come up with a creative leap, you can then reverse engineer how you got there in a way that they find satisfying.

[00:50:34] Stephanie Liu: I love that.

[00:50:35] Rory Sutherland: In other words, the psychological insight that drives this is such and such.

We had a wonderful thing with KFC in Australia. They give away, they call them chips. As we do in Britain, you call them fries. They give away chips for a dollar. Australian dollar. Okay. And the most successful way to sell these was weirdly the headline, which came from legal copy, maximum four per customer.

Now, when you think about it, this is a completely counter-intuitive thing to do, isn’t it? Okay. We’re trying to sell these dollar fries for a dollar. And what you’re doing is you’re actually emphasizing the fact that you’ve can’t buy too many of them. Why on earth would that work there?

Fortunately in behavioral science, there’s a whole thing called you know, scarcity bias, which is we want things that we can’t have, or that our perceived value of something is heightened. If we think that thing is in limited supply. Okay. And now, if it’s maximum four per customer, I feel I’m missing out if I only have one.

Now, the vital thing about behavioral science is quite often, these insights are a bit counter-intuitive because I put it, the opposite of a good idea is often another good idea. This isn’t like Physics where the opposite of a fact is a false. Neil Spore always said this, the opposite of a fact is a falsehood, but the opposite of a big concept is of a big idea is possibly another big idea.

And quite often, the thing you propose doing in behavioral science is quite counter-intuitive. It seems to the economic mindset, it seems completely irrational. And so, you need to have this body of work that says actually, this is how we’ve evolved to respond to information.

[00:52:23] Stephanie Liu: Yeah. Fascinating. Gabriel’s in the comments and saying, Rory is dropping some amazing knowledge and wisdom. And so, for those of you that are just tuning in throughout this conversation, we’ve been talking about the importance of creative illogical ideas and how to present them to agency clients. Now, Rory, John Cleese.

He suggested that we use our tortoise mind, the slow cooking part of our subconscious to come up with creative ideas, where else you might recommend the agencies come up with illogical solutions to today’s marketing challenges?

[00:52:58] Rory Sutherland: I put it very simply. If there were a logical answer to many of the world’s problems, we already would have found it.

Okay. There’s no shortage of logical people, economists who are allowed to run riot on solving these problems. And yet there’s still problems, which suggests one of two things. Either they’re impossible to solve or the solution will be surprisingly unexpected or. In a weird way, I’ve been fascinated by the adopters.

I said the adoption of video conferencing, which I think is potentially quite important for the environment. I don’t understand why the government can tax people to pay for roads, but can’t tax people to pay for Zoom because surely the best journey is one that you don’t make.

I said, there’s a perfectly good case for the department for transport in the UK to pay $80 million, a hundred million dollars a month to Zoom to give everybody in Britain Zoom access. Okay. And I said, yeah, a hundred million dollars only pays for about eight miles of interstate.

Now, surely the best thing the Ministry for Transport can do to improve the experience of our trains and roads is to have fewer people on those trains and roads making journeys that they don’t want to make. It’s rather like the phrase in car manufacturing, car design. The best part is no part because no part can’t go wrong.

You try and strip out complexity wherever you can. It always strikes me as very interesting that when you go to a Department of Transport, a government department or center, that actually you should be investing in technology. That means people don’t have to commute because now, the quality of those people who do have to commute will enjoy a much better, much pleasant journey because you’ve taken a certain number of people off the train, or maybe people like me as I quite often do. If I do go into the office, I don’t go in at nine o’clock anymore. I don’t even try to get in at nine o’clock anymore. I go in and kind of 10:30, 11:00. I do a bit of, I do a Zoom call in the morning, do a bit of email, traveling when the trains are empty. So, the ability it’s always very interesting that I think there’s a really important missed exercise and a lot of problem solving, which is creatively defining the problem and creatively opening up the space for a solution, which is, it doesn’t necessarily mean more trains, more roads, more cars. One solution is to stagger the time at which people make a journey, for example. That will have exactly the same effect at vastly lower costs.

And so, I think there is a complete lack of, there’s talent for what you might call reframing a problem, which is quite a lot of fairly good thinkers have said. Einstein famously said, if you gave me two days to solve a problem, I’d spent 47 and a half hours defining the problem at half an hour, solving it or something like that.

And I think there is something where in an institutional setting, there’s a very low risk of getting into trouble if you tackle a problem in a boringly logical way. It may not be very effective, but it looks like you’re trying. Okay. Because that’s our official problem. I am fighting against the problem. And therefore, I’m clearly making a large effort to try to eliminate this problem.

Now, the fact that you’re not solving the problem and you could solve the problem much more easily by doing something slightly oblique or unexpected. That is true, but it’s much riskier for your career because it’s not a good way. Some, I think political movements do this, which is, I want you to solve the problem, not signal that you care about it.

And then not necessarily the same thing, to signal the fact that you’re really upset by something it’s not the same as actually saying, how do we actually stop this happening?

[00:56:43] Stephanie Liu: I love that signaling versus solving.

[00:56:46] Rory Sutherland: I think that’s a huge danger in both government and large businesses. It’s not a problem in family owned businesses.

It’s not a problem in owner-managed businesses because those people, essentially, their interests are very well aligned with the interest of the company because they are the company. John Maynard Keynes said worldly wisdom teaches that it is often better for the reputation to fail, conventionally than to succeed unconventionally.

Okay. I think there’s this element where people who want to be seen to be trying and want to signal commitment often actually engage in fairly ineffective activities, fairly uncreative activities as a result because your career will never be harmed by trying hard and failing in many ways.

Whereas, if it’s your own business, totally different equation,

Sheryl is in the comments. I’m so happy that you’re here. She’s saying, Rory, I feel like I have found an intellectual soulmate. Could be a generational thing. She’s about to turn 50.

Yeah. Get used to this. There’ll be some really strange things when you turn 50. You’ll want to go and go on holiday to places you’ve been before. Okay. All that sort of stuff will start happening. Don’t worry. It’s great.

[00:58:09] Stephanie Liu: So, then having said that, Rory, this has been an amazing interview. Thank you so much. I don’t think I’ve ever smiled this much. I have pages and pages of notes.

I was backstage with the producer. I was like, that was so good. I’m like, let’s just let him go. But Rory. Honestly, can you tell folks where to connect with you and learn more? I’m sure. Cheryl is just like, where do I find him?

[00:58:29] Rory Sutherland: Yeah, very simply any after sales service questions. Twitter, I’m @RorySutherland, all one word. On LinkedIn, I’m Rory Sutherland at Ogilvy. Let me go. My Twitter feeds up there already. I’m also on LinkedIn. Obviously you can buy my book or I need to plug that. I’ve also written a more recent book co-written with Pete Dyson on the behavioral science of transport, which is the whole idea, which is the transport is dominated by engineers who measure things they can quantify.

And yet passengers don’t really care about those things, to the extent that engineers think they should. It’s that whole thing that actually knowing where your taxi is actually more important than how quickly it turns up. That kind of thing. It’s a classic case. I think transport because it’s dominated by an engineering mindset, which has kind of reductionist and deterministic. And actually, that mindset sits very badly.

It finds itself really discomforted by psychological solutions. The really famous story about this, which is similar to the Uber map, which is a firm I think somewhere in the Midwest where the elevators were really slow and they were going to go into Otis and basically spend half a million dollars, speeding up the elevators, replacing the cables, beefing up the winding gear,, strengthening the lift shaft at great expense.

And a guy just said no, don’t bother. I said, try this put floor to ceiling mirrors between the lift, the elevator doors on every floor. And he said, what they’re really saying is the reason they’re frustrated is not because the lift is slow it’s because they get bored waiting for the lift. And if you give them an opportunity to look at something, themselves, while they waiting for the lift, they’ll be much, much happier.

And sure enough, at a tiny fraction of the engineering solution, they put in the psychological solution, which was the mirrors and all the complaints dried up. I have no idea where that happens. So don’t ask me for chapter, but it’s a very, it’s a very famous story in the kind of animals of creative problem solving.

Spotify did it similarly, which is they were briefed to reduce as far as possible the lag before a song started after you clicked on it. And they reported back and said, we’ve got it down to 125 milliseconds or something like that. 129 milliseconds. So I’m saying, can you do better than that? And they said, yeah why didn’t you do better?

They said, there’s no point because the human brain can’t really detect the difference between that and instantaneous. So, there’s no point in producing a screen at a higher resolution than the eye can actually determine. And as a result, what they’ve done is they’ve designed their solution around human perception rather than trying to optimize an SI unit, which is what engineers do.

[01:01:17] Stephanie Liu: I love this. Sheryl, you’re probably geeking out as much as I do. And so it was Gabe and honestly, friends. That’s all that we have for today. I know it was so good, wasn’t it? I was like, Rory, I could listen to you all day, every day. I’m going to stalk you on Twitter. Yes. I really want to see that debate too, that you were talking about earlier.

So everyone in our next episode, we’ll be talking to Kevin Lau from Adobe about the customer experience. Yeah, I know. And then right after, we’ll have David Fisher to help agencies better leverage LinkedIn for sales, that’s going to be super important. And then our very own Head of Agency Business for Agorapulse, Teresa Anderson is going to be joining the show as well.

So remember to leave our podcast a review on Apple or Spotify, we were just talking about Spotify and let us know what you think. We would love to hear from you. And so Rory, again, thank you so much for your time. This has been an absolute blessing. I’m still laughing at the elevator example.

Cause it was like, I knew there was a reason why they did that. All right, friends, I’ll see you and accelerating into the next show. Thank you so much.

[01:02:30] Rory Sutherland: Thank you very much, indeed. What a pleasure.

[01:02:33] Stephanie Liu: You’re the best. Hang tight. Hang tight, Rory.

Good.