Behavioural science is still marketing's secret weapon
50m 53s
The podcast discusses the application of behavioral science in marketing, featuring author Richard Shotton. He explains how insights from psychology, such as the bystander effect, can be directly applied to real-world challenges, like improving blood donation rates by localizing appeals. Shotton emphasizes that many successful brands, often unintentionally, use layered behavioral principles—like decoy pricing to steer choices—which become perceived as common sense over time. He advises marketers to focus on well-established, robust biases (e.g., social proof, scarcity) rather than chasing new trends, as these have endured rigorous academic scrutiny. The conversation also addresses the replication crisis, noting it helps refine reliable insights, unlike much marketing lore which lacks verification. Examples from brands like Netflix and Red Bull illustrate how pricing and contextual cues can effectively influence consumer decisions.
Hello and welcome to the walk podcast. My name is David Tiltman and today we are talking about behavioural science and how it's been applied to marketing. We have author and researcher Richard Shotton in the studio with us to talk about his new book Hacking the Human Mind. This is one of those occasions where you can watch us as well as listen. We've recorded this as a video podcast available on Walks YouTube feed. Now behavioural science has been a topic of enduring fascination for marketers and for obvious reasons if you want to influence consumer behaviour that helps to know some of the ways humans actually behave. But it's not always been easy to find real-world applications of the science or to translate the theory into practice. We're going to be talking with Richard about some of those challenges and we'll be diving into some examples from the book that show how major brands have applied some of the thinking. We'll be talking about brands that have really understood factors like pricing, purchase timing, distinctiveness and even humble wordplay to find success. So Richard, welcome to the walk podcast. Well, thank you for having me. Good to be here. I'm sure many of our listeners or indeed viewers are aware of you, have read some of your work before. But for anyone who isn't, just give us a quick rundown of your background and how you started looking and getting really sort of quite deeply involved in this sort of area of behavioural science. So generally in life, I think these interest areas that you adopt and infuse about, you generally just drift into them. But for me, there was a very, very specific moment when I became interested in behavioural science. So that's all the way back in 2004. Briefs just landed on my desk for a client, the NHS, we were trying to encourage what to give blood. And it just so happened at that stage, I was reading the tipping point, with a mouth, a huge, best-seller book. And right at the back of that book, it's only a paragraph or two, but he talks about this idea called the bystander effect. So essentially, back in the 60s, two American psychologists called Lattin and Dahl, they did loads of psychology experiments showing that if you ask lots of people to come to your aid to help you, you tend to get a diffusion of responsibility, everyone leaves it up to someone else, and your message is ineffective. And I can remember reading that and thinking, gosh, this is exactly the problem we face when we go out and hospitals give blood. We go out as the NHS and say blood stocks are low in England and Wales. And just as Lattin and Dahl suggested, most people ignore the message, most people think, why should I go through the pain, the time, the hassle of donating blood when I know my neighbour and my neighbour's neighbour has been asked. So read that study. And then thought, okay, well, why don't we apply some of the tactics Lattin and Dahl talk about. So I went and spoke to the brilliant planner, Danette D. L. K. W. Charlie Snow, told him about this study and said, why don't we do a little test where rather than saying blood stocks are low in England and Wales, why don't we put out messages saying blood stocks are low in a Baseldon or Burma or wherever it was. Tiny, tiny, crude change based on a very old, well-established behavioural science principle. And lo and behold, two weeks later, get the results back, and there's this 10 or 15% improvement in the responses. And that, to me, was shocking that there was this kind of body of work out there, and bystander effect is just one of hundreds of experiments, that you could take from 50 odd years ago, apply to a pressing problem and then see a positive result. And back in 2004, I was having completely enthused about this field and was just really frustrated at the time, there seemed to be no interest in learning from academics and behavioural scientists. So I've basically spent the last 21 years trying to apply findings from behavioural science, running my own experiments, but always coming back to this point of how do you take a existing insight into human behaviour that has been cataloged or researched by behavioural scientists, and how do you use that to practically solve a challenge. And the great thing for anyone who's thinking about using behavioural science is one, this study is robust, it's based on peer-reviewed experiments. And then secondly, it's as relevant as you can get to up to marketing. And marketing is the business of behaviour change. And why wouldn't you draw on 130 years of experiments into what makes for effective behaviour change? And as you've gone down that route, you've written two books, I think choice factory, illusion of choice, and now the third. So tell us a little bit about how that third book has built on the first two. So third one's different because it's co-authored for a start, written with Michael Aaron Flicker, and then the other big difference is with the choice factory and illusion of choice, they're split into chapters. And for each of those books, the chapter is about a particular insight from behavioural science, a particular bias. And then I talk about what that bias is, the existing academic evidence, studies I've done to show it works commercially, and then the bulk of the chapter is what you do differently. That's the flaw of the first two. The third one, it's flipped on its head. Each chapter is about a brand, so it could be Starbucks or Hargondas or Meta, little history of that brand, and then two or three behavioural science studies that partially explain some of that business's success. So it starts with the brand and then goes on to how that business used behavioural science. So it tries to be very, very concrete, very practical, starting in the real world. And what I think is interesting, so we're going to explore some of those examples as we go through this podcast, but I just think one of the interesting points about it is that many of these companies, whether intentionally or unintentionally, use multiple different biases. So it's not like, oh, brand X used this bias to do this, it's that there's multiple different things going on at the same time. And I think you've talked about layering of biases, so just explain a little bit about that. So absolutely, so any complex brand will do thousands of things, many of them concurrently. So actually trying to learn from a super successful brand is harder than it looks because not everything they do contributes to the success. Some of the actions will detract from it. So what we did first of all was look at say Amazon, look at all the things it does and then filter those actions through this lens of behavioural science. And we just focus on the two or three actions that Amazon Prime take that are also proven to work in control, peer review conditions. Now each brand, as you say, doesn't just have one technique it uses, they might use one technique or one campaign or they might combine techniques on another campaign. So the point here is there are thousands of these biases. You don't just have to limit yourself to using one of them on any intervention. What you really want to be doing is looking as you say, as layering on one, maybe two biases to get this cumulative effect. So we're going to get into some of these examples in a few moments. But before we do, I want to have a little chat about what you might call the state of behavioural science when it comes to marketing. So I remember good maybe 10, 12 years ago, there was a lot of, there was a real surge in interest in this space and a lot of marketers and agency people really trying to tap into some of this thinking. Now I'm not saying that's vanished, but I think it's fair to say that outside the social, and the two examples you've already given are in that sort of social space, we've not necessarily seen huge numbers of examples. Now maybe things are going on behind the scenes, maybe it's not all finding its way into case studies, but I'm interested in it in understanding first the state of the academic literature, and then secondly, why you think it's so difficult to translate into real world action. So I disagree on that second part about the translation into real world action. Now I think if you look at pretty much any super successful business, there will be a use of behavioural science. All behavioural sciences, if you almost forget the label, it is the study of how to influence people to change their behaviour. How can a brand not use techniques from that field? So you say they might not do it knowingly, they might come to it through a different route, but you've got to be using these principles. What I think happens often though is once a behavioural principle becomes established, it stops being behavioural science being applied and it becomes common sense. So take an example, take Netflix, and in fact we could replace Netflix with one of a thousand e-commerce brands. You go to the website and there is a basic package, there's a premium package and there's a super premium package. That is what behavioural scientists would call extreme subversion, what often gets referred to as the gold locks effect or the centre stage effect, and it's the finding that goes back to 1993, the work of Amos Diversky at Stanford, that if you give people three options, they tend to gravitate towards the middle. So what Diversky did was recruit a group of people and he shows them a basic camera for $169 and a fancy camera for $239 and he asks people which they pick, and you get this exact 50/50 split. Get rid of that group, get to new group of people, they are shown exactly the same two cameras, same price, same benefits, but he also puts out a super premium $469 camera with loads of benefits. So get 21% of people picking that super premium one and not many people want to buy a camera for $469 in 1993. But forget about that, you're then left with that remaining 79% of people and what you get is a split of 22% going for the cheapest 57% going for the now middle camera. Now that is a ratio of let's say almost or let's just say one to three. Remember that first groups or exactly those same two cameras, same benefits, same cost and it was one to one. What Diversky shows here is people pick a product not just based on its inherent attributes, they're also deeply deeply influenced by what something is surrounded by. So you give people three options and they gravitate to the middle because they think to themselves well the cheapest one is going to be poor quality, I'm going to look mean, most expensive one will be over engineered and over priced. Now what Netflix and many other brands are doing is they're giving people three options, they are not trying to sell that super premium offering. What they're doing is adding it there so that it makes the now middle one look better value in comparison. Now that idea is so commonplace amongst digital sales sites that almost people would just think it's common sense. It's obvious. So what a behavioral scientist would say is yeah, absolutely, but it wasn't bloody obvious in 1992 when Diversky experimented on it. And actually what most brands do is not the most recent cutting edge research. So since Diversky did that study what 30 odd years ago, there's loads of studies about sweating out small marginal gains. So for example, there's a study from Sutley and Lichtenstein at Colorado University where they do say called the order of effective anchoring. And what they say is it's not just the presence of a super priced item that helps Elmore. What they say is it also matters about the order in which you see these items and their argument is it's the first thing that is most effective at changing willingness to pay. So go back to the Netflix example. Most people read left to right. What Netflix do is go good, better, best, cheap, middle, expensive. What Sutley and Lichtenstein say is that's the wrong way around. What you want to do is get people seeing the most expensive one first. And that will increase willingness to pay. They're focusing on that sort of, oh my god, that's the full fat version. Oh, few. There's a cheaper one. Yeah. And then today it will vary by context. But in the Sutley and Lichtenstein studied under bar, changing the order that the beers were laid out on the menu, going from most expensive first rather than cheapest first, it increased willingness to pay by 4%. And that's not going to radically change some business. But you've got to lay out your prices in one order. Why don't you do it in the way that maximises his impact? So a kind of long-winded way of saying, you know, we often ignore the behavioral science principles that are used very, very regularly because they have moved into this kind of world of common sense. It doesn't stop them being a behavioral science principle. So let's talk a little bit about what's going on in that academic world. We, a couple years ago, we had the death of Daniel Karnerman, who most people is probably that the name most people would associate with this sort of field. Who are the sort of people doing really interesting work at the moment? So I mean, I think if you look at that kind of level of impact, the person that's taken on that mantle is probably Richard Thaler. So I can't even won the Nobel Prize in 2002, died last year at the age of 90, Richard Thaler won the Nobel Prize in 2017. So I think if you're looking at that completely, a kind of upper echelon of people who have made huge differences, it would be Thaler and the like. In terms of the type of thing that's interesting, I think that there's two ways of looking at that. The first is there are interesting areas of research, like how some of these experiments and biases, how their impact varies by type of person. I think that's a massively interesting area of exploration. But the other way of looking at that is to push back on the premise of the question, which is that people should be fixated on what's new. I think Marxers are fascinated by the latest new thing. And it's part of our characters. I think people who are lovers of interesting new things get attracted to the industry. But the danger with that is we tend to ignore the longer, more established insights, which I think will tend to have the biggest effect. So really, what you should be basing your plan around is not the intellectually exciting latest discovery. It's which of these insights is going to have the biggest impact in the business. And it's often the older ones that have the large impact, partly because they're more like to be robust. If a new findings discovered in 2025, if it was published last week, there's only been a week for other academics to try and pick holes in that right idea. If you look at a principle like distinctiveness, you go back to the work of Headwig von Restorff in 1933, social proof goes back to a similar era, because they've been around for 90 years. They are very robust, because if they are still standing, still believed 90 years later, that has been 90 years of opportunity for academics to pick holes and disprove them. And secondly, the stuff that was discovered early on in modern psychology and model behaviour of science, often where people worked was in the areas that had the biggest impact. So they're more easier to uncover. And often if you look at studies which try and rank the relative impact of these ideas, it's often the classic ones, the most well-known ones that come out top, social proof, scarcity. So many ways, I'd say to marketers, almost forget about the recent stuff, go back and look at the real fundamentals and make sure they are being applied to their maximum usage. And just on that point about academics being able to pick holes in new theory, there was a whole thing in psychology a decade ago, the replication crisis, where the classic studies where people couldn't recreate them in modern conditions. Did any of that affect any of the sort of working behavioural science? What's your take from that sort of crisis? So the replication crisis, if people haven't heard of it, it's the idea that academics would go back and look at other studies, rerun them and see if they could find the results. And the crisis part is that many studies didn't show the same results. Now psychology, I don't know, saying like 50% of papers replicate, it's about the same as economics, it's about the same as oncology, you know, the study of cancer. Now move away from marketing onto something like oncology and think how you would want someone to interpret that data. Let's say a patient discovers they've got cancer, what would be an insane reaction on their part is to think some oncology papers don't replicate, I'm therefore going to ignore the entire canon of Western medicine and I'm going to cure this problem with coffee enemers or homeopathy. That would be insanity. What they should do is think okay, some oncology papers don't replicate, I want to make bloody sure that the doctor who is setting up my treatment program knows which ones replicate and they focus all their efforts in those areas. That is exactly the same with behavioral science, the more studies that get disproved, the better, because what it leaves behind is a pure, a more rigorous, more robust, core hub, yeah, no, but whatever, yes, yes, the act of disproving things is bloody brilliant, where the problem comes is what, there's this kind of like zombie studies, disproved ages ago and yet people still keep on quoting them. The problem isn't that studies get debunked, the problem is if people keep on using debunked studies. So just make sure that whatever principle you are using is one of that remaining 50% not the froth for me, the rubbish. The only thing I would say is I always find it a strange question from marketers about the replication crisis, because the reason marketing doesn't have an replication crisis isn't because everything that marketers say is true, it's because no one bothers replicating anything. We think of all these kind of studies that we repeat again and again, often coming from companies that have a vested interest to sell a particular medium. When is that methodology open up to public scrutiny and when are they rerun? The good thing with behavioral science is we know the studies that debunked with marketing, we have no bloody idea which one's true and which one's on. Interesting, thank you. Let's talk about some of the actual examples from the book thing. I want to dive into a few of the different areas. The first one I'm going to pick is the one around Red Bull. Not familiar with Red Bull, the caffeine infused soft drink. This is being broadcast from Antarctica. You never know. We hate to have a global audience here at work. Now, the specific thing I want to talk about Red Bull that comes through very strongly in the book is how they thought about pricing. Price is clearly a hugely interesting issue for marketers. At the moment, we've seen lots of interest in the relationship between brand strength and pricing and those sorts of things, but this was a slightly different approach to pricing. I wonder if you can just explain the different biases that are going on within your Red Bull example and how they relate to pricing it. This insight was very much inspired by Rory Sullivan who's a brilliant behavioral scientist and one of the ideas that he's talked about before that I've picked up on is this idea of price relativity. It's essentially the argument that when people are trying to work out what is a fair price to pay for pricing? What is a fair price to pay for this microphone? What people don't do is think how many units of happiness is the microphone going to generate and then they refer to their textbook in their head which says, well, normally we are happy paying one pound per unit. Happiness, microphone will give us 200 units, therefore it's worth 200 pounds. People don't do that because it's a ludicrously complex calculation. And the other thing they don't do, of course, is work out the cost of all the raw materials and go, oh, this must have cost about 20 pounds to produce. Yes, therefore I'll give them a nice 15 percent margin and it will be so on and so forth. So what people are constantly doing is replacing these complex questions with simpler ones. And the simple way of working out what is a fair price to pay for this microphone is to think, what have I paid for other microphones? So let's say standard microphone is 50 pounds. This one has extra features. It has a particularly fluffy boom thingy and a nice coloured wire because it's a little bit nicer. I'm going to pay a little bit more. I'm going to pay 55 pounds. That's how people work things out in the real world. Now that might sound completely speculative, but I've done a few studies to test this. So one of them, and this might be a bit British, but I think people still understand it was looking at how much people are prepared to pay for tea. Very important. Very important topic in Britain. So the numbers will be directly right. Showed people a box of Tesco tea. It's a basic super market owned label, five or label tea, £1 and PG tips, kind of mid-market. And I said to people, how good value is the PG tips? So they got the price, the weight and then these two brands. Let's say 40% of people said PG tips is good value. Get rid of that group of people. Completely fresh group of people. That's the key bit. They are shown exactly the same cardboard tub of PG tips, exactly the same price of £2, but the comparison set is now twinings for £3.49. Market, fancy and non-tea drink. Yes, very good point. Now the proportion of people who think PG tips is good value, goes up to about 60%. Now the interesting thing here is people are seeing exactly the same product, exactly the same price, whether they think it's good or bad value depends on what it's compared to. That's the underlying point. The underlying point is prices are viewed relatively, not absolutely. Now if a marketer believes that, then suddenly they have so many opportunities, because the mental comparison set for your product is not fixed, you can adjust it, and Red Bull is an absolutely classic example of shifting cleverly your mental comparison set. So go back to when Red Bull launch. What I think 99.9% of brands would have done is launch a soft drink in a 330 meal, squat can, that every other soft drink was in. Standard. Standard. Now if they had done that, the argument from this principle of price relativity would have been the comparisons for Red Bull would have been the price of Pepsi and Coke. And if you remember Red Bull wanted, let's say a pound whether they launched a kind of Coke cost about £30. The argument would have been no one would have paid that because it would have felt astronomically expensive compared to Coke. People might have said, "Okay, well this Red Bull stuff, it gives me energy, it's more functional, maybe it's worth paying more than £30, I might pay £35, I might pay £40." It would have been compared to this benchmark of Coke's price. But what they did is counterintuitively, they shrink the can to now a 250 milliliter can, and it is extended so it's a tall thing can, it looks. It looks different. Suddenly, people's comparison set is no longer tethered to tango and Pepsi. Now it's free run. It's kind of created a category of its own. Exactly, exactly. The own category. So now it can introduce a price and not be held back by the behaviour of others. And if you think about that, it's actually a remarkably commonplace thing, lots of brands have done, that they break the comparison set and then they change willingness to pay. I think that of all the things Red Bull did was the bit of genius that gave them the head start, that gave them these massive profit margins, that then allow them to send people up into the sky, that then allow them to write these amazing straplines they've done. You mentioned sending people up into the sky, and you talk about costly signalling in the book as well as another thing that Red Bull have lent in to. So just explain that. So costly signalling, it's an idea that actually originates from biology rather than psychology. And the original academic was in Israeli called Amatsah Harvick. And he was inspired by something Charles Darwin wrote. Charles Darwin was puzzled by the length of the peacock's tail. So essentially Darwin was perplexed, he thinks like why does a peacock have a long tail? Because the long tail makes it easier to be caught by a predator. Therefore, surely over time evolution should have bred peacock so they lose this this tail and have a nice small stubby one that means they can still fly very quickly. And Zahalvi thought about this problem. And he begins to get to the idea that the value of the peacock's tail is that it is a genuine costly signal to pee hens that the peacock has superior genes, that the peacock is fast, it's clever, it's agile, that it can evade the predators even though it has its tail. Exactly. But the point is it's an unfakable signal. The point is that it's not the peacock going out and saying I'm agile, I'm clever, I'm fast. Any peacock could say that, assuming peacocks could talk, but any peacock could try and claim that, but it would mean nothing because a weak peacock claim a fast peacock could claim it. Only though a genuinely genetically fit peacock could have this longest composite tail and still get to mating age. So Zahalvi talks about this in biology and then a certain group of academics. So it was John Kay who's an Oxford and interestingly Evan Davis on the BBC who wrote many brilliant paper before he went into the BBC. They start applying this idea to advertising. They start saying maybe advertising is like a peacock's tail. It's not enough just for someone to say their predators amazing because both good and bad actors would say that. What you need to do is identify an expensive costly signal that acts as a screening mechanism. Only someone with genuine face in their product would spend extravagantly on advertising because the person with the crap products, the charlatan, they would know, well expensive advertising only pays off in the long term and an extravagant thing like sending someone up to the moon, well I might get some to trim a product once, but if it's a shotty product they're not going to come back, they're not going to have positive word of mouth. You would only do those type of advertising behaviors. If you knew your product was so good it would generate positive word of mouth, so good that people would return to it again and again. So the wonderful thing is there is this argument that even in the ear of procurement there are really solid benefits to extravagance and excess spend because it gives this unfakable signal that you actually believe in the long term brilliance of your brand. Sticking in pricing, you did some work with another brand in the Blinds Portfolio or QC pricing and you look there at some other sort of more every day. I think like charm pricing for example and that's been like a staple of retail and marketing for years, that something is $299 rather than $3 or £3. Why is that such a enduring piece of wisdom? So there's two arguments. So firstly charm pricing is the idea that people treat £1.99 fundamentally different from two pounds. So even though there's only a penny difference which would be half a percent difference in price, if you drop down below that threshold you'll get more than half percent increase in in in sales. There's some work done with supermarkets that suggests that one penny drop could all be saved by 10 to 15%. Now why it happens is disputed. So there's two separate arguments. There's one argument which is called the left-hand digit bias. So if you're in a supermarket and you're busy and you're distracted you see something for £1.99. The argument is you don't really think of it as £1.99. You just encode it simply in mind as one something. If you see saying for £2 or £2.15 or £2.99 you just see it as two something. So cost in people's mind doesn't go up in this kind of regular manner. There are these steps in terms of perceived pain of a price. So what you really want to do is be just below as a brand those threshold costs. That's the left-hand digit bias argument. Some people argue it's more than that. It's the argument that over time people have fused the idea of being on sale, being in a bargain basement type retailer with 99 pets because that's kind of a place that uses it. Determining which of those two is key. I think it's quite hard. But what we see again and again is even though the first retailers did this in the 19th century it still has an effect today. Uber. Uber's a brilliant behaviour science case study. They had a big behaviour science upon. It was led by a very prestigious psychologist or behaviour scientist called John List. One of the things that he did, I think he's at the University of Chicago now, but before he left he did a test with surge pricing. What he showed was three things. He had three sets. So you and I could be standing at a road. We are both waiting for a taxi, waiting for an Uber and you're served a surge price at 2x, double normal price. I'm served the same ride but at 1.9x. What he showed was just as John pricing suggest I would be far, far more likely to take the point 9x than 2x. No, it's annoying, but it's at a point 9 above the end. Exactly. You would expect standard pricing would suggest well. It is cheaper. You should get more demand. But it was out of kill to the scale of the reduction. But the really interesting bit was they had a third group, so some poor guy over here, where he is served a surge price at 2.1x, the most expensive of all. Now, he was slightly less likely to take you than me, but he would be more likely to take the ride than you. He got the surge price to ex. Exactly. So the argument there is not between charm prices any longer. It's between a round price, and what's known as a precise price, 2.1x. Because a round price sounds arbitrary, whereas an ex price feels like it's calculated through some mechanism that makes it fair. Exactly. Because of the distrust of any commercial organisation, if something feels like it's arbitrary, people assume it has arbitrarily landed on something that is beneficial to the brand rather than the consumer. So you've got this lovely set of experiments that suggest that if anyone is ever selling a product for £10 or £100 or a pound, this arbitrary round number, they have a wonderful opportunity not only to increase margin, but also to increase demand by just edging it up slightly. So if you're a consultant, never sell your wares at £1,000, sell them at £1,053.50. The precision will mean that your price feels, and that's the important thing, it feels like it's better value. Okay, so sticking with, I guess, I mean in elusive possible sense pricing, another example from the book is Clarner, which is the buy now pay later finance company. You talk about purchase timing as being a bias. I mean, it kind of sounds obvious, but just talks us a little bit about why this is powerful. So there's two very related ideas behind Clarner. One's this idea of the present bias, sometimes known as present preference bias, sometimes known as hyperbolic discounting, and it's the argument that people are very concerned about pleasurable pain in the immediate now or in the immediate future. They are much less concerned about pleasurable pain in the distant future. Now every economist would recognise that there should be this decline in value of future goods. The point from behavioural science is it's much steeper than I suppose maths or classical economics would argue. So what Clarner do so cleverly is they push a lot of the pain of payment into the future. So if you go to a website and you're told, you know, there's a £60 jumper, but you only have to pay £20 today and £40 in the future. People will treat that completely differently than if they have to pay £60 here and now. So part of their appeal is this present bias. But the second thing they do, which I think probably has even wider application, is why would call temporary framing or what you could call the pennies a day effect. And it's the argument that people fixate too much on the headline cash amount, not the number of times they have to pay it. So think of that jumper example. People treat 3 lots of 20 very differently from one year to 60. Yeah. So I did a study probably 10 years ago into this idea and it was for car rental. So I changed the number slightly just for these are my maths. But what we did was show people a picture of a car and we gave them a description of the car and some people were told cost £65 a year to rent. Some were told £30 a month, some £7 a week, some £1 a day. So everyone sees the same product but they're given the price in a slightly different format. Now if you annualised those amounts, £1 a day is the same as £3.65 a year. So when we asked people how good value they thought the car was, you should see roughly similar answers. But that is not what happened. People who saw the annual price 11% thought it was good value. People who saw the daily price 51% thought it was good value. So you get this massive 4-5-fold change in a valuation of item even though the absolute cost stays the same. And what seems to be happening is people fixate on that headline number, they don't put enough emphasis on the unit of time. So it's like people think 3 times 12 is different from 12 times. So if you want to sell a product that is comprised of many different units or is sold over time, what you really want to do is break that price down to the smallest possible time unit. You know, don't sell your broadband on it being £30 a month, tell people it's £7 a week. Don't sell your beer saying it's £24 for a 24 pack. So it's £24, that's the same as £1 a cat. We see this with things like the way subscriptions, you know, I was just listening to a podcast the other day and they were trying to get me to join their club and it was like, oh, just for the cost of a point, every week, oh, that sounds reasonable. But it's the same principle, I guess. Exactly. Because I think that's what's happening. If you hear it's £7 a week, think well, that's about a point of lager and a fancy central pub. If you think it's £3.65 a year, you think, oh my god, that's a fancy weekend of life. What we're very good, I think, is turning the headline cost into a concrete item. What we're very bad at is multiplying it up enough times to make it realistic. So you see, absolutely, it's such a simple tactic that yes, it's applied to some degree. But there's lots of opportunity to apply it far more. A couple more examples. I want to run through the look at slightly different areas. So the next one is liquid death. I'm sure many of our listeners know that liquid death, very sort of buzzy brand over the last few years started out in canned water and very sort of well-known for its sort of very distinctive advertising style, completely different to anything else in the category. You talk about two specific effects with relation to liquid death. You call them the Van Restorff effect and the Red Sneakers effect. Just, just talk to us about those. So the Van Restorff effect is a very, very old idea. So the initial research was done back in 1933 by Headwig Van Restorff at the University of Berlin. And what she does, she did, was, and I bossized the study slightly, but basically she gave people a list of information. So you might see a list of ten items, nine of which would be animals, one of which would be an item of furniture. She'd take that list away, ask you what you could remember, and you would be disproportionately likely to remember the furniture rather than the animals. Her argument is we're hardwired to notice what's distinctive. Now, that is a fundamental of attention and noticeability. And even though the original study was done in 1933, I've done lots of studies that show it still stands to date. So what brand should do is think to themselves, what are the category conventions that are widely adhered to? So in cars, it might be, well, visual aesthetics, it's often. - It's all the whitey-rope. - Whitey-rope, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah, yeah. Perfume, it might be kind of bizarre surrealism. Uh, bottled water, it might be alpine scenes, healthy men and women, and a see-through glass that you can see the purity of the product. What you want to then do is once you've identified those conventions is think which ones need to be there, which one should be adhere to and leave them well alone, and then think which are the just there as meaningless pieces of tradition. And what liquidated so well is identify that an awful lot of the supposedly necessary ways of behaving the water category, alpine scenes, running babbling brooks, beautiful greenery, yoga mums, all these things didn't need to be there. It was just a lack of imagination on the existing brand's part. They behaved in a completely radically different way. And even, you know, if you look at their ads, you know, randomly stick liquid, death into Google, look at YouTube, look at one of their ads, it will be, you know, heavy metal aesthetic, gross carnage and humor, it's completely different. And it is one of the most surefire techniques for generating attention. And so, let's sneak us into this, isn't it similar? It's similar. And it's the idea that not only does breaking convention gain attention, it also makes you higher status. Now, the initial work done by Francesca Gino wasn't debunked per se, but she was involved in a scandal. She got fired by Harvard. I think she might be suing Harvard for that, but Harvard decided she had faked some of her results. Now, the faking was not on the red sneaker paper, but it did cast a bit of dirt about it. So, back when I wrote Illusion of Choice, I worked with Duncan Willits and Sumram Call, where we reran the study that she did with a slight different twist, and we showed it was a genuine vibe. It didn't have the biggest of increases, but yes, if you broke a convention, people assumed you were high status. So, interesting in that luxury, isn't it, because so many luxury brands obey the same codes, and they're supposed to be conveying premium status. So, I'm just thinking of the current burberry work, which is completely not of a luxury aesthetic, does break a lot of category conventions, but it does seem like luxury brands often scare to it. I mean, this is now going back to Gino's work, and again, this paper wasn't debunked. It was their other stuff, but some of the work was done with luxury staff in Milan. So, people work in Chanel or Gucci, and what she looked at was their response to people that turned up to the shop who addressed really scruffly, and the reaction of people in those stores was to treat the scruffy people as if they were millionaires, because what a lot of them said is, many, many people are very, very scared of walking into a Chanel store. They'll be nervous, they'll get dressed up for it. If you're walking in jogging bottoms and a stretch you are probably so wealthy, you don't give a shit about what Chanel think, because you're so secure in your status in a capitalist world. So, she actually did some of that initial work with luxury brands. So, I think it can certainly work in that area. If you pick the right categories to take a break, and you do it knowingly. Yeah, interesting. Okay, last example is Pringles, the crisp or chip brand, depending on where you are. I know you use what is called the Keats Euristic here. I just want to focus on that bit, because I think there's something really interesting here that brings us back into the world of classic advertising. So, talk to us about that. So, Keats Euristic, named off the poet, it was first experimented on the 1990s by Matthew Maglone, and I think it's Jessica, Topic Bash. I might have got that name wrong. What they do is they recruit a group of people, and they give them fake proverbs. And the difference is, you might see a list which has the phrase, woes unite foes, that's the rhyming version, and I might see it as woes unite enemies. So, let's imagine we see this ten proverbs, nine are the same, but you see woes unite foes, I see woes unite enemies. We are then tasked with rating how believable, how credible are the insights of those proverbs. And what they find is there is a significant difference. So, for a memory, I think it's about 17 or 20 percent increase in believability if the phrase is rhyme. The argument from the psychologists is people are conflating two things. They're conflating the ease of processing. You know, rhyme just kind of flows over us very smoothly. They're conflating ease of processing with truth. Interestingly, the participants don't know that's what's happening. When people are questioned about why they believe the proverbs, they are directly asked, you know, this one woes unite foes, it rhymes. You think that made you believe it more. Of all the participants in the study, every single participant, bar one, said the rhyme had nothing to do with it. I was just influenced by the inherent meaning of that. So, people don't realise what's influencing them. Now, that, I think, is fascinating for a number of reasons. Firstly, because getting believability isn't absolutely caught ask of a brand, yet fewer than ever adds rhyme. But then, secondly, I always love that study because when I first read about it, I thought, okay, believability is important, but if you are going to ask me why rhyme is so good, I wouldn't have even thought of believability. I have just gone to memory. So, I've done it twice now, first of the non-representative audience, and then for hacking human mind with a representative one. So, John Paulston, Nikki Morley and I, recruit the group of people, showed them the proverbs that were used in that Maglone study, and then some people would see rhyme, some not, ask people what they could remember a later date, and we saw people were much, much more likely. I think it was about three times more likely to remember the rhyming phrase than the non-rhyming phrase. So, I love it because when every people come across these studies, they can often think, okay, well, the study doesn't show exactly what I won, or it's in a wildly different category, or it's done a hundred years ago. If you ever think that, don't think these studies are things that you either accept or dismiss. The third option is, rerun the study yourself, all the information's in the public domain. Next time you have a survey going out with a bit of clever jiggery pokery, you can test many of these findings, see if they work for the challenges that you're facing. That's really interesting. And just to close the circle, I guess, the link to Pringles, is once you can't stop. I just think it's fascinating because, as exactly you say, there's been this push to get people to think more about jingles, about those sorts of things, "Oh, this sort of lost art." It is about memory, but actually there might be something more going on there than just memory. It might be about, as you say, believability. It's really interesting. It's a lovely area where there are two benefits. In many ways, the things that children's writers or advertise the 1950s, things that they have done for eons to boost memorability, based on make up. Instinctively based on cut feeling. You can then put them into test conditions and see they genuinely affects believability of memory. Joanna Stanley and I, maybe two years ago, we rerun the test, but using illiterating phrases, versus non-illiterating ones. We saw not the same magnitude as with rhyme, but a statistically significant increase in both believability and memorability for their illiterating phrases. It's a lot of the stuff that copyright is of known for years, that sometimes decision-makers in businesses will overrule many of those things that copyright are suggesting that they're well-procured. I've rooted in, rooted in, a few minutes ago. Richard, fascinating. Thank you so much. Where can people get the book? Anywhere books are sold. Amazon will still be interesting. Price framing. Amazon, a big fan of a charm price. Of course, expect it to be $13.99 or $12.99. Thank you, Richard, and thank you all for watching or, indeed, listening. That's all we've got time for today. If you like what you heard or indeed, so then do follow the what podcast on your podcasting platform of choice. Until next time, thanks for listening.
Podcast Summary
Key Points:
Behavioral science applies psychological principles to influence consumer behavior, with proven techniques like the bystander effect and price relativity offering practical marketing benefits.
Successful brands often layer multiple behavioral biases (e.g., decoy pricing, social proof) unconsciously, with established, robust principles like distinctiveness and scarcity being more impactful than newer findings.
The replication crisis in psychology strengthens the field by filtering out weak studies, leaving a reliable core of insights that marketers should prioritize over untested trends.
Summary:
The podcast discusses the application of behavioral science in marketing, featuring author Richard Shotton. He explains how insights from psychology, such as the bystander effect, can be directly applied to real-world challenges, like improving blood donation rates by localizing appeals. Shotton emphasizes that many successful brands, often unintentionally, use layered behavioral principles—like decoy pricing to steer choices—which become perceived as common sense over time.
, social proof, scarcity) rather than chasing new trends, as these have endured rigorous academic scrutiny. The conversation also addresses the replication crisis, noting it helps refine reliable insights, unlike much marketing lore which lacks verification. Examples from brands like Netflix and Red Bull illustrate how pricing and contextual cues can effectively influence consumer decisions.
FAQs
The book explores how major brands have successfully applied behavioral science principles to marketing, with each chapter focusing on a specific brand and the behavioral studies that explain its success.
He became interested in 2004 while working on an NHS campaign to encourage blood donation, after applying the 'bystander effect' from psychology to improve response rates by 10-15%.
The bystander effect is a psychological phenomenon where people are less likely to help when others are present, due to diffusion of responsibility. In marketing, targeting messages to specific, smaller groups (like a local area) can increase engagement by making individuals feel more directly responsible.
Behavioral science provides proven principles, such as the 'decoy effect' or 'extremeness aversion', which explain why offering three pricing tiers (e.g., basic, premium, super-premium) can steer customers toward the middle option, a tactic commonly used by brands like Netflix.
It is the tendency for people to avoid extreme options and gravitate toward a middle choice when presented with three tiers. Adding a high-priced 'decoy' makes the mid-tier option appear more reasonable and increases its selection.
Marketers should focus on well-established, robust principles that have been replicated over time, like social proof or scarcity, rather than newer, less-tested findings, to ensure reliable and effective applications.
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