Rory Sutherland on why luck beats logic in marketing

(upbeat music) Ladies and gentlemen, welcome back to The Uncensored CMO. Now, one of my favorite ever guests and the most popular guest ever on the podcast is Mr. Rory Sutherland. Rory is a fascinating person, and he always comes at marketing from a surprising and very interesting perspective. So I'm catching up with Rory to find out what is caught his attention in the world of marketing and what all of us can learn from Rory's incredible brain and how he sees the world. This is such a fun episode, and I know there's gonna be so much that you will just love. Here we go. - Very delighted to have you back, Rory. Welcome to show. - Oh, it's a joy to be back. Always a pleasure. And those figures were freaky, weren't they? It was the Scott Galloway podcast, which was number 31 on Spotify. - And it just showed, it was almost lucky accidents. I mean, we had you and Scott in the room for the first time, I believe. - Yeah. - And we interviewed each of you kind of sequentially. And then I had thought, well, it'd be fun to get you debating topics I think you might disagree on. And I thought, well, let's talk Jaguar 'cause that's bound to divide the audience. And his controversial brand is dead thing. And then it was meant to be just for the audience. We decided to pop it out as an extra episode. And then when I got my Spotify unwrapped this year, I absolutely blown away, in fact, I looked at the thing and it said, congratulations on ranking number 31. I'm like, oh no, that's disappointing. I usually do better than that in marketing. And I thought, oh, maybe it's business, wasn't business. And it was overall global Spotify. - So this explains why I basically can't go through a railway station down without a selfie request. It's completely bizarre. It's sort of micro-fame. You know, it's weird. Actually, it's weird, of course, because the whole growth of influencer marketing, which is interesting in itself, which is you can be very, very famous within a particular milieu or area. And then utterly obscure everywhere else. Which is fundamentally, I think, different. I mean, it's just a product of self-selected media consumption, I suppose. But it is very strange. I mean, it's been weird for me as well. - I bet it has. Well, talking of fame, of course. You appeared as the answer to a question in a TV quiz this year, didn't you? So that was only Connect. I was on the Lion wall in the, you know, that one of the two connections, connection wall sequences. And they had four famous rories. Well, it's three fairly famous rories, one pretty obscure rory, who were featured. I was, one of them was Sutherland. The other ones were a footballer, Keneer, and. - I got rid of that. - Delan and the poet and Stuart, I think, the other three. Yeah. - That's amazing. Well, I think the closest I got to that, which might not quite match, but I once appeared on how I got news for you. 23 years ago this week, bizarrely. And. - Was it a photo as well? - Yes, you know, how about you go to YouTube? They used to put four clues up, four images, and you have to guess what you have to reverse into what the story was. Now, this was. Was it not one out? Was it the odd one out round? - Yeah, got it. - Yeah, got it. Now, it was very. It was one of those lessons in timing is everything right, 'cause this is way back in 2002. I'm doing my first brown manager role ever, and I'm on D-Sarono Amaretto. And. - Is that the drink or the biscuits? - The drink. - The drink. - Got it. - Yeah. And if they also make the Amaretto, they're the biscuits, exactly. - They're also made, are they the same company? - Not the same company, not the same company. - Both in Sorano and Amaretto. - But D-Sarono Amaretto. D-Sarono, not Amaretto. And it's famous for smelling of almonds, right? And I came up with this idea that. You know, when you go into like a supermarket, they waft the smell of the bakery. - Yeah. - You know, it's a genius idea, 'cause you're momentarily walking, you just think of bread and you go to the back and you end up spending a lot more than you plan to. - I think there's a pretzel business, which is basically predicated on the fact that you blast the smell of baked pretzels wherever you are. - It's amazing, 'cause of course the foot form is kind of almost guaranteed at that point. - And it's one of the senses that in marketing, we tend to. Well, not for days of scratch and sniff, of course, when you and I were a lad, and we come back and say he does. - Scratch and sniff. - Beats of work, actually, once, yeah, believe it or not. - So inspired by a scratch and sniff by in the day, I thought, wouldn't it be nice to pump the smell of almonds in the London Underground, right? It's pretty, you know, smelly and disgusting. - And you didn't want those station takeovers. - I did, but basically, I picked the four biggest terminals, so I think it's Kings Cross, Paddington, Liverpool Street and Waterloo, and in the terminal, you could not get from one exit to another without being given a miniature bottle of these sorrows. When you went down every single escalator, I bought the entire, in fact, I wrapped each of the escalators entirely from top to bottom. And the piece to resist on. - You didn't eat, or did you dilute it? - Well, you do, you're supposed to drink it neat. - Got it. - Occasionally, you can, I mean, they do, it's just with orange, but I came up with the idea of DeSrono and Coke, which basically tastes like Dr. Peck with alcohol. - Got it, why? - Okay, it was revolutionary for the Braddle, Dr. Ben, it was one of those Friday afternoon things. So here I was pumping the smell of amaretto through the underground. And then this is one where the timing matters. 2002, we're about to go to war with Iraq. And the home office issue public guidance to be vigilant for the threat of a terrorist attack. And the Sun newspaper does this massive headline being public warned to look out for a cyanide attack on the underground, 0.1 in the, in the article is, cyanide smells of almonds. - Oh. (laughing) - Oh my goodness. - Now I was, I, you know, being a junior brown manager at the time, I was busy at a creation. - Is it one of those panic there and then in the place? Or was it just, this was a funny thing because the panic happened based on the story. Not, there was no actual panic. No one actually panicked in the underground, but this story, I had kind of gone to one of these Christmas trade shows and I was kind of, you know, sampling, deserono. And I mean, this is when people used to sort of just pick up phone messages once a day, that was, you know, before smartphones. And I picked up my phone. It wouldn't usually have many messages. And I had like 15 messages. And I'm like, what's this about? Anyway, I'm literally, every journalist for every national newspaper was asking for a comment. I'm like, what's going on? - Oh god. - And basically they'd had to pull the campaign because of fear of panic in the underground as everyone went on their commute and thought they might be a terrorist attack. And the story had gone so far, the national newspaper in Italy had gone to print with 1.5 million pounds, poured down the drain as a result of stunt that goes wrong. - Oh my god. - And this was, so basically this happened on the Monday by the, by the Saturday, I was, have I got news for you, main story. And on the Sunday, the Sunday times, printed a quote to the week. And I'm the quote of the week saying clearly, "Security concerns Trump marketing activities." He says, "Brand manager for Amaretto, after pulling the arm and stunt to the underground." - But probably, by the way, you probably sold a ton of product. - Did you? - The best? - Yeah, in De Cirono history for UK sales. Yeah, sales went up 20% that Christmas. By the way, I think there's a really a wider issue for marketing communication here, which is the problem of confected outrage, which is that effectively, journalists know there's no story here, but they also know they can make it into one. It's a bit like the line Cain says, in the citizen Cain, make the headline big enough and I'll make the story big enough. So you can effectively create a story out of a non-event, because it sounds scandalous and you can effectively make someone blame worthy. And the interesting thing about those stories is that probably within the companies, there's this huge paranoia about doing anything brave in communication for fear of confected outrage. But the public themselves kind of know it's confected outrage, okay? So probably the chief executive who's having to field phone calls is regarding this as the worst moment in their working life. But as far as the public is concerned, they know it's basically a load of tabloid nonsense. - Yes. - And so, I'm sorry, I'm beeping. I'll stop that in a second. But there's something there which I which really worries me because the extent to which, as with sort of Sidney Sweeney, et cetera, you're vulnerable to effectively people who, for whatever reason, want to, I don't know, they're either trying to effectively signal through excess sensitivity or they're imagining offence to third parties where none really takes place or whatever it may be. And that does strike me as fundamentally worrying because it will ultimately make advertising boring if advertising people are always navigating these kind of potential pitfalls, even when I had to remind younger staff, my brother who'd spent some time in the US came back to the UK shortly after Robert Maxwell had drowned. And at the time, the sun and the mirror were in a price war. And he gets off of the Piccadilly line and he throw it again to London, you know? And finds himself crying with laughter at a poster opposite, which was, at the time, the price war was, I think, the mirror couldn't cope with the 10-P cover price of the sun and had gone back up to 30-P. Shortly after Maxwell, the proprietor of the mirror had drowned. And the ad simply said, "The daily mirror now costs 30-P. "Don't go overboard to buy it." - No. - Yep, absolutely. Now, in the, I can date this exactly, would have been early '90s. We can date it by the death of Maxwell. That was probably a few months later. It wasn't, you know, weeks later. But that was the kind of bad inage and mischief you could enjoy in advertising back then. And now, I mean, it wouldn't, you know, it effectively, no one, not even the sun, would have the balls to run that. - Yeah. - And nor would it prop, nor would anyone allow you to run it. I mean, bear in mind, the scandal had, I would have just made a point that Maxwell had been fairly widely discredited by that point for stealing the pension funds of mirror journalists and mirror workers. It wasn't as if this had been seen as just an innocent victim of a maritime accident. So, there was a context to it, which made it perhaps a little bit more forgetful, okay. But this is, I mean, you suddenly look back on those things, and you look back on the Timberland ads, for example. You'll remember those, you know. And nobody could even, I mean, they, you know, never mind, never mind running them in the press. A creative person would be frightened of putting them up on the wall. Now, there's a problem there, in a way, because I think, you know, to some extent, creativity is involves when your brain manages to evade its own self-sensorship mechanism. And if we are all consciously and unconsciously self-sensoring with everything we think, say, or do, there's a hidden opportunity cost to all that. Yes, we may cause, you know, minor offence a little less frequently. But what are the ideas which no one would have mentioned? I mean, you know, a lot of great advertising campaigns have kind of emerged out of a joke. The Apple campaign think different. Originally, it was a fairly boring campaign featuring people currently alive who are sort of business, you can imagine the kind of thing, business leaders, you know. It was kind of, you know, fairly minor people who were, I think, featured using the product. And it was some creative guy who goes in and almost takes a piss, because you have this line called think different, I don't know, they might have put Hitler up there. I've got no clue, okay? But eventually someone then puts up, you know, Gandhi and Alfred Hitchcock and so on and so forth. And it becomes one of the immortal campaigns. But sometimes you've got to go through of what I call the foothills of silliness, you know, you've got to go through the valley of silliness to get to the bright sunlit uplands that lie beyond. And if we are in this kind of very, very nervous kind of environment, it has terrible implications for comedy, for all manner of creative arts. And incidentally for advertising as well, I think. I think I'm right in saying that should have gone to spec sabers, was the joke on a set while making a different ad that ended up becoming, you know, they ain't got, oh, we'll mention that again in the next one, eventually. It ended up becoming the whole idea that it's like - Well, by the way, just like actually areas like major scientific progress, the role of luck and serendipity, as opposed to process and intentionality in the greatest advertising campaigns, the duelux dog wandered on to set by mistake. They'd happen to render how they'd happen to take over a house in which to hold a photographic suit, showing the exciting range of duelux colors. And the owner of the house happened to have an old sheep dog. And the photographer had the inspiration just to leave the dog in the shoot. And it's now a brand property worth millions. David Oglevey picked up the man in the Hathaway shirt eye patch on his way to the photographic suit. Simply as a kind of whimsical kind of, you know, it was a sort of spur of the moment kind of, you know, whimsical punt, if you like. And I mean, that has actually quite a big bearing, I think, on our approach to everything from scientific progress, technological advancement and advertising, which is what we're trying to pretend, and I think what science is trying to pretend, is that great scientific advances mostly arrive through intended actions and pre-designed consequences. And simple observation shows that it's actually fat-tailed, that the process is every now and then you get spectacularly lucky. And the skill lies in spotting when you've got lucky and doubling down on your luck. It's a bit like poker or something. Shit, I've got an extraordinary good hand. I really need to play this really well. It's not like chess at all. It's like poker effectively. And there's a great book, and the title is fantastic, by David Cleveley, who's a Cambridge sort of entrepreneur and investor. And it's called Serendipity. It doesn't happen by chance. And the point he's making, and the point that Nassim Talib makes a lot, is that you can't avoid luck. You can't plan luck, but you can plan to increase your surface area exposure to upside good fortune. And one of my complaints is that when you turn something into a process or an algorithm, and you regularize it, and you make it formulaic, the hidden cost you pay is that you're no longer exposed to these lucky accidents. Now, I would argue that the problem marketing has. I don't need to think this, because Nassim Talib, who's the world's leading expert on fat-tailed distributions, said to me, marketing is fat-tailed, by which he means that a small number of freak successes almost outweigh an importance, what you might call the day job. And your job, as a marketer, is to try and hit on that utterly magical thing. I think we saw one this Christmas with, if you can't find the words, find the gift, which, to me, is just copyrighting gold. I hope they keep it for the next 10 years. It says something in. Monos syllables, by the way, the entire sentence consists of monos syllables. Yes, that's right. Yes, yes, yes, yes. So what if you can't find the words, find the. And nine monos syllables convey something that economists have been wrestling with about why it is that people give presents as gifts rather than say vouchers or money. And it just answers that question in nine syllables. And the problem we have is that marketing, and I blame media agencies for this partly, I blame finance for it, I blame procurement for it, are trying to turn this into a for-disk production line where every car is equally valuable and where the value created is kind of proportionate and linear. And they're using wrong maths in the same way that, for example, fat-tailed businesses would include pharmaceutical research, Hollywood movie industry, music industry publishing, where in all of those cases, it's not really. Well, it's worth doing, but it's only really worth doing because every now and then you have a blockbuster breakout success. You can't totally predict them. I remember a year in which there was some sort of $500 million film made, which nobody watched, and instead everybody went to see March of the Penguin. Do you remember that? Yeah, yeah. I went, see, do you could do it? And I got a gig, this is weird, because someone's made a blockbuster. It must drive people into Hollywood insane when that happens. But you're doing this partly just to do it, because it's worth doing it on of itself, and it's not a total waste of time and so on and so forth. But the real reason you're doing marketing is because every now and then you have what you might call a 10X. Jeffries says, in baseball, the most you can score is four in a single hit. But in business, you can hit a thousand. And a large part of the value of marketing I think comes in those moments where you hit a thousand. Again, as I said, it's not a process you can engineer in advance. The problem is, is that marketers don't get to claim the full credit when that happens. So we're held accountable for every single unit. It's also true of agencies at a micro level. If you come up with a sensational idea as an agency, it buys you six months forgiveness. That's it. The following year, it's some bloke in supply chain management who's basically claiming the credit for the increase in profits. And so it's true of an agency. I mean, I mentioned the fact that the Coke idea, Ogleville, Australia, you know, share a Coke with, putting people's names on Coke, 10 year idea, gift that keeps on giving, running 110 countries. Ogleville, Australia made about $350,000 for that. Wow. They did the maths and so you come up with a billion dollar idea. I don't think Coke would deny that. And you get to buy a very small flat in a shit part of Sydney. Okay. It's not really commensurate because you're held responsible for every penny you spend. But then when you hit pay dirt or hit the mother load, you only get 10% of the upside credit and then only for six months. Because the next financial quarter or the next financial year, everything is reset to zero. That's a bit of a sin. One of the mistakes we make in things marketers is we think that finance people are good at maths. They're not good at maths. They just do addition, subtraction, multiplication, and division. This is infantile maths. Now, the maths you need to understand something like marketing, a probabilistic, non-dynamic, non-equilibrium, duh, duh, duh. And yet we're being judged by people who are holding us to this incredibly narrow world where every quantum of effort has to be matched to a quantum of incremental revenue. Otherwise, you're not allowed to exist. You made a wonderful point at lunch, actually, which is you've mostly done jobs for three years. Yes. And you suddenly realized when you did a job for six years, that the payback only arrives in year four. There are enormous, there are enormous number of things where effectively, I mean, for example, the first Heineken ad wasn't actually very good. That wouldn't have moved the needle at all, I suspect. It was something to do with the policeman standing on a block of ice. I remember watching as a child. I couldn't really understand it. What it led to, however, was worth billions. And so a lot of these things are, you know, fame, for example, is a compounding asset. It doesn't grow linearly at all. And if we are held to this artificial time horizon of the quarter and the annual report, then you can't really do proper marketing in that. I tell you, if there's one concept I wish every market would understand, it's literally compound interest. Because the moment you realize that, being in a role for two or three years makes zero sense. It's like your pension. The first few years you have a pension, you're why the fuck do I bother? It's gone down in value. And then you get to, you know, I'm 60 now. And I have to admit, and I don't understand, you know, Braggado, show man. But you kind of get, where the fuck did all this money come from? Right? Because I don't remember putting away this money. And of course, you didn't. It's compounded over time. Yeah. I wouldn't come back to you on the luck point as well, because I don't know if you read Great By Choice by Jim Collins. But he studies, I think, 500 different companies, I think, in this study. And he tried to answer the question, were the successful companies just lucky? And he actually broke down all the different businesses. And he actually categorized them in terms of, did they have good luck or bad luck over time? And what he worked out is, successful companies are no luckier than unsuccessful ones. What made the difference is-- How they respond? Exactly. He's entirely. So good luck about that. How do you have the opportunistic mentality? Completely. How are you aware of that? I hope someone can find it for me, if people are completely mundane task, which was counting the number of times the word "the" appeared in the new section of a newspaper over two pages, or something of that kind. You weren't supposed to count the use of the word "the" advertisements, but there happened to be some advertisements alongside these news articles. And then, of course, the whole exercise was completely bogus, exercise. What they measured was the extent to which people could recall and remember and noticed the advertisements alongside the main day job of counting the word "the" in editorial or whatever. And I'm pretty sure they actually found that the people who noticed the advertisements-- in other words, the people who are not so focused on the boring task at hand as not to be keeping an eye out for opportunity elsewhere-- the people who noticed the advertisements and the accompanying material were actually more successful people. And so yeah, so there's basically this business where I think a lot of bureaucracy has this hidden cost, which is it kills off opportunism, or what you might-- I suppose-- yeah, I mean, the same talent we call it. What you do is you increase your surface area exposure to positive upside optionality. In other words, the more you effectively expose yourself to the possibilities of accidental good fortune. And then, of course, you have this asymmetry, as Nassim would say, which is that when an opportunity comes along, you don't have to take it. You're not obliged. It's not an obligation. It's an opportunity. And you can then pick and choose from the lucky things that happen and decide which of them you act on, and which of them you effectively ignore. OK, going back to the accountancy as well, you kindly put me in touch with Will Ghidara, and had him on the show recently. One of them favorite things he did is he's 95/5 rule. Did you come across this? Yeah, absolutely brilliant. He's yeah. He is, isn't it, like, you know, spend 95% like your life matters on it and be ruthless in efficiency. But then spend 5% irresponsibly on something so indulgent, so spectacular that people end up talking about it. And by the way, I think in customer service, I think in marketing in general, it's not a bad policy. Marketing, of course, within the organization would probably-- it's probably 50% of your marketing budget, or 30% of your marketing budget, should be spent on amaze. And so it's the Explore exploit trade-off. But his wonderful subtitle to his book is "The Amazing Power of Giving People More Than They Expect." And I would argue that the magic of everything-- you could take everything from the double tree cookie, which, of course, is an unexpected treat when you arrive at a hotel. And you could take it to the AO Teddy Bear. Those acts of discretionary generosity seem to be unbelievably communicative, precisely because you weren't expecting them, and you weren't entitled to them. And they seem to possess a signalling power, which is way above. I mean, one of the things I think a few of us were talking about yesterday is that banks don't give you anything anymore. You used to get a checkbook cover. You used to get bits of stuff. Now, I'm sure that's basically that is usually driven by procurement and justified by environmentalism. That's usually-- marketing his job is to pretend that the actions of procurement are actually done in the interest of environmental sustainability. As in, when you get to the gold level on BA, they no longer give you luggage tags to help the environment. And you kind of go, mate, you're an airline athlete. I don't think you're going to make an appreciable difference to your carbon footprint by cutting back on luggage tags. And these things are actually problematic because those things are so disproportionately important. If you think about it, politeness is generally achieved-- likability, actually-- is generally achieved by displays of discretionary effort or discretionary generosity. What's the classic phrase you really didn't have to? And it's because you didn't have to that it's meaningful. If you did have to, it wouldn't-- obviously a hotel I stay and has to provide me with a room and a television and a toilet and everything else. But I'm unlikely to write home about those things. Whereas they give me a cookie when I check in. I last stayed in a double treat. Jeez, it must have been 20 years ago. I can remember two things about it, three, actually. I can remember that it was in Chicago. I remember being surprised by the cookies and thinking, what's this hokey American book bullshit? Actually, then being surprised that they were warm because there's an oven underneath the checking desk and then going up to my room and eating one and discovering they were absolutely delicious. I can still-- I can't remember anything about the hotel, the room, the television, any of those details. I can't remember anything about the service. I can't remember anything about the food, nothing. But the cookie sticks precisely because-- I mean, there is a kind of brain theory about this, which is that most of what we perceive as a prediction and the things that we use our eyes, ears, noses and other senses for is to correct for prediction error. In other words, we disproportionately attach attention to the unexpected. And the Wilgadars, one of his stories, was taking over an ice cream stand of our right in the middle of a museum in the US, or an art gallery. And yet incredibly extravagant spoon, isn't it? That made zero sense. It was-- So the ice cream was all pretty good. But he allowed his accountants to choose the ice cream supplier and the pots and everything else. But he absolutely went out on a limb for these Italian-made spoons. And what he noticed was that if he ever mentioned that ice cream stall anywhere to anybody who ever been there, they all took about the spoons. And in the same way, there's a gym, I know, where they were quite rude, which is-- it was a mid-priced gym, to almost to a low-priced gym. But they always had-- I don't know-- you're probably a gym guy, and you have all those ungluents and strange liquids. They always had keels. Back in the day, when keels was less well-known, but seen as very, very premium. And a few people asked them, they said, well, you're competitively priced, Jim, why do you do this? And it's very simple. Every time we research our users, every single person mentions the keels. And so I mean, I think that one of the problems you have is that those very, very potent things are the first thing that procurement or finance try and kill off. Because they go, it's not in our service level agreement. There's no record of anybody complaining about a hotel because it doesn't give you biscuits when you check in. So why on earth are we engaging in this discretionary expense? Because finance people have a kind of fantasy world, which is just optimized around minimalist efficiency. And as a result, they completely failed to understand human anthropology. Is it the main eye? Cain's quote, they know the cost of everything and the value of nothing. Oscar Wilde. Oscar Wilde. Yeah, yeah, yeah. And of course, there were these weird things. It's very similar, actually. I was talking to Will about this, to the idea of Kano or Kano theory, the Japanese theory that all products have three attributes. So there are table stakes, which effectively, things where, if you fail there, you're not even in the game. So that would be, for example, if you made a cassette deck and it constantly jammed, or the sound quality was appalling, you're out of the game. Then you have performance attributes, which are generally they scale linearly and then tail off, which is sound quality, battery life, volume, build quality, that kind of stuff. But then you have this third category of things. Now, Berra Mankene was at the University of Tokyo, worked a lot with the Japanese consumer electronics industry. He called them deliters, or whatever the Japanese for deliters is. And that would be, to those of our age, the eject mechanism. In other words, you put a ludicrously disproportionate amount of effort into a gorgeous eject mechanism because, although it has no real bearing on the functional attribute of the product itself, it disproportionately accounts for the person's affection for it. I argue there's this concept called reverse benchmarking. I was influenced in this by Roger Martin piece called benchmarking is for losers. He argues that when you benchmark, you actually put a normal-- he's very popular with people like McKinsey, because you can do a really laborious benchmarking exercise. But you end up effectively competing on the expected. You become more and more enlightened to your competitors. You lose differentiation and distinctiveness. And he's absolutely right about this. My argument is you do reverse benchmarking, which is what Wilga Dara did, which is you find out what your competitors are doing badly. And you basically double down on that. So he had the beer sommelier at a Michelin star restaurant. No one was expecting that. And I argue that that's what Steve Jobs did at Apple. I think that's probably what Dyson did, to an extent. You take the things that all your competitors aren't doing well. And you just do them brilliantly so that it gains so much attention and so much saliency that everything else you do provided its satisfactory to good, almost becomes completely secondary. And there are prays of what it is you do. I mean, I had a moment that the Angel Hotel dynamic of any very simple thing. It's a hotel in a Welsh market town. Check in, what's the latest I can have breakfast? And you're expecting the answer, aren't you? Nine or since it's Saturday, it's 9.30. It's going 11. But basically, there's latest you like. And so it's those things which actually go, thank the fuck for that. I don't have that usual bit of-- but I think it'd be very interesting for hotels and lots of service industries. I mean, actually, that's what Bucky's did with restaurants. Gas station restrooms were terrible. Everybody thought they were basically pretty ghastly. What they did is they didn't just have relatively clean restrooms. They made the things palatial. And it's kind of the badge of pride of the whole. In fact, the entire business was basically built on that single act of differentiation. I almost wrote a book called "Toylets of the World" on a theory that you can judge any destination by the quality of the toilet. And you could literally have a toilet rating. So I've always checked. The philosopher has written a piece on this. Because he thinks you can tell a lot about the Germans from the inspection platform. Yeah, yeah. And I met the CEO of a big pub chain. And he said, when he did a pub visit, he would go unannounced. And the first thing you'd do is go to toilets. And he said, I could judge the kitchen on the quality of the toilet, on how clean the toilet was. So it's basically a fantastic heuristic. And interestingly, rush the hair dressing chain. They spend 20 to 30,000 on their toilets, even though most people who get their hair cut don't use a toilet. And the argument is it's what you might call a delighter moment, because you're expecting the toilet to be dismal utilitarian, effectively a staff toilet, with a mop leaning against the wall and a bucket, and a few cleaning products stored in a pile. And instead you go in, it's kind of marble and gold. And it's one of those moments, which is-- And I think-- no, no, no. Actually, you also notice attention to design and things. I always notice that in countries which have a really strong design aesthetic, if you go to Scandinavia, there is always a hook on the back of the door. For you to hang your jacket, or if you're-- I don't go into the women's toilets, generally. But I imagine you want to hang a bag, because you don't want to put an expensive bag on a toilet floor. So there's a-- there's a map west in Cambridge Wells, which did the most brilliant thing. I only noticed it because I was there with my wife, really. But next to the cash machine, the indoor cash machine, they had a little handbag shelf. Now, when you think about it, retrieving a cash card, which we do less and less often because of contact with phone payment, retrieving a-- you know, is slightly painful and awkward. But if you have a-- it wasn't a tiny little shelf. It probably cost them 100 quid to install a thing. But you immediately notice it, because it's fundamentally a kind of empathy demonstrator. And actually, I suppose what it is, it's actually-- what it is really is-- it's emblematic of your customer focus. It is. It says, we're not a psychopathic business run exclusively for the shareholders. We actually spend some time trying to understand life from a consumer's point of view, not from an investor's point of view. Because businesses, I think we've created-- the shareholder value movement-- has created businesses which are almost examples of institutional autism. In other words, I'm not suggesting that the people within individuals within the organization are autistic. I'm suggesting that the way they interact and the way in which things are siloed and the way in which things are measured and the way in which things have to be quantified means that the behavior of the business is effectively socially inept in a way, or socially lacking in understanding of another person's perspective in some peculiar way. There are some times where it works in reverse. And you gave this example earlier of Gales, where actually inefficiency in how you deliver your service is sometimes a built-in feature. So I think they realize that if other passes by-- because bear in mind, they have enormous windows. It wouldn't work if you didn't have the enormous windows. They see a queue, and they infer that there's something highly desirable. And some part of the queue in Gales is, to be honest, created in that they make you order your coffee right at the end. And then you have to stand around waiting for it, which creates a kind of buffer in the system. That means A, people spend longer staring at the bread. And there may be some interesting finding that unless you've been looking at expensive sourdough for 40 seconds or more, you're less likely to buy. But it also creates the impression that this is a desired product, and I better get there fast before it all goes. Worth queuing for is a fairly common heuristic, well-known in sort of Spanish nightclubs, because you couldn't play this trick so well locally, because people will get wise to it. But if you're running a nightclub in Benadorm, you basically artificially hold people outside. And they queue for ages to get in. And then when you finally let them pass the velvet rope, they just go to the places half empty. And the entire thing is a kind of scam. This is true. They're like, when you're on holiday and you look at restaurants, there'll be a restaurant that's absolutely packed and one that's completely empty. And rather than going to one that's empty, you make the assumption, which would be a nice experience. There's an interesting theory there, which is that in some cases, that may emerge completely arbitrarily. So that both restaurants are empty. You come to $6 o'clock in the evening. And two or three people turn up. And they happen just to go to the restaurants and the ride. And then you could literally have a kind of snowballing effect, where of people who come along who are undecided, who have no prior preference, three people will go to the restaurant on the right to everyone who goes to the restaurant on the left. And it could be completely arbitrary. So you might argue, and now I have heard that Guinness pay people early on in the day, not necessarily in the UK, but in certain countries. Guinness is very interesting, because if you see somebody else drinking Guinness, you're inordinately more likely to order a Guinness yourself. And I have heard the rumor that they employ people to stand around very prominently near the entrance around about opening time, very visibly drinking Guinness, on the grounds that then the knock-on effect-- effectively, you create a flywheel effect. Then after the first hour, maybe that person can go somewhere else. We go home, whatever they do. But there's this initial kind of decisive moment where effectively, everything that follows on from there is a product of whether customers 3, 7, and 9 order a Guinness or whether they don't. And I mean, large parts of business success, I think, are often down to weirdly quite arbitrary-- what you might call feedback loops of this kind, I think. I'm sure there are brands which have succeeded simply. There's a company with which I do some work, and I've found the very interesting called Herdify. And their whole approach is to look geographically at product sales so that you up-weight your advertising activity in places where there's already momentum. And it's obviously particularly applicable to anything which is visibly consumed. If you look at something like solar panel adoption famously, once one person in your street has solar panels, everybody else becomes sort of 20% to 30% more likely to get them. And you can arguably use Herdify data in two completely opposite ways. You could say there are areas where we've completely failed to take off and we need to get some seed corn in there and just establish a little bit of normality, a little bit of visibility to this. And you can equally do it where we'll hold on. We've reached this sort of threshold here. And actually, one extra marketing push will effectively take us into the steepest part of the curve a bit earlier. And you can use it also negatively in, which is, look, actually, for the moment we've got a limited budget. There's no point in bothering in these 20 places. Electric car adoption, you'd probably see, would be pretty uneven geographically, for example. And some of that would just be these network effects. I think Red Bull did that famously when they launched. They went around nightclub. They focused on nightclubs. And then they actually paid people to crush cans and leave them on the pavement just outside nightclubs. And they're overflowing bins. - Yeah, yeah. - Yeah, yeah, yeah. - I don't understand your logic. - Of course, we draw inferences to the behavior of other people, completely rational things to do. They are hacking that a bit, it's a bit naughty. But equally, you could look at it another way and say, in the consumer adoption of important new technologies. Let's take a technology which we all agree is quite important and useful, the washing machine or whatever it may be. You do get this sigmide curve, which is, people find it difficult to do something they haven't done before. And they find it difficult to do something that nobody else around them is doing. Unless you're one of those people who's just willfully perverse or eccentric. Most people, to stent their default mode in life is do what I've done before, do what everybody else does. And it's not a bad heuristic for avoiding catastrophe, certainly. And you can see why we've evolved that instinct. But it does mean that the adoption of new behaviors is painfully slow at first. Which leads me to wonder, actually, what proportion of great ideas were abandoned too soon? Google Glass, we're an example, okay. Google Glass, we're an example where I think, because it requires quite a lot of behavioral change and it's visible and you've got to wear it on your head. I'm the sort of, to be honest, I'm the sort of awkward, cranky fucker who just go and do it anyway. And also, we both have a superpower in that we're Welsh, so we don't really care what other people think. This is just what the Anglo-Sex and invading forces think of us as of no concern of us. But Welsh people are a bit, I would argue, Welsh people are a bit less self-conscious, actually, about things like that. But nonetheless, it's going to be painful to do. And I would argue that a product like Google Glass, really you have to realistically plan for a five year, a five year wait before it makes it into the, I mean, mobile phones for crying out loud were, we all assume that they arrived instantaneously 'cause we're looking at history backwards and concentrating in. No, no, no, no, no, there were years and years between the mobile phone becoming available, then affordable, then it reached a ceiling and then they introduced pay as you go. 'Cause bear in mind, until they introduced pay as you go, there was a sort of 30, 40% holdout of the population who weren't prepared to get a mobile phone contract. Yeah. They then got a pay as you go phone, put it in the car, love compartment, and then discovered they were using it all the time. And in fact, many of them ended up spending more on pay as you go than they would have paid if they'd been on a contract. But they just didn't like the, they were commitment fobs. And so the mobile phone, you know, television in the US was weirdly slow, slightly faster in the UK 'cause the BBC kind of got it up to, you know, speed, you know, in other words, you already had the programming as it were. But TV adoption in the US, from the, well, it's 50s I guess. If you actually look at it, really, really long period where it's, it's almost being adopted in the air fryer. Now, you know, another example. Now, here's an interesting thing. So, I think there are various things marketers need to teach the rest of the business world that we know and they don't. And one of them is, you know, multi-channel that actually the same person at different times will buy you in one channel and won't buy you in another or vice versa. And therefore, you know, that business of physical availability is, is crucial. What I think the finance people in a business do is, they go, let's try and force all our customers to use the cheapest to serve channel, which is I'm totally in favor of those screens where you order at McDonald's. I'm not in favor of getting rid of the person behind the counter because they're different. You know, they're, they're contextually different. You know, there are times, also, is it really a restaurant? If there isn't someone standing there looking at the tables. You know, what, what are you? Are you a candidate? Well, it's weird, okay? Oh, you know, I'm, I'm totally in favor of ticket machines at railway stations. I'm not in favor of closing down the ticket office because sometimes you don't know what ticket you need. And so, I think that fact that that's one marketing lesson. The other marketing lesson I think everyone needs to learn is this business of the best diffusion curve, which is that adoption of, so I used to think that the bigger the idea you had the less marketing it needed because obviously if it's a really big idea, it'll just sell itself. Then I realized it's the opposite that the bigger the idea you have, the more behavioral change it requires, the more unusual it makes you seem by adopting it. And therefore, the more marketing it needs, because people need the psychological reassurance to get over all those initial hurdles. Now, a perfect example of that, you know, penny post. One of the most fantastic business ideas in the last 200 years, 1840 Roland Hill, who suddenly works out, it's a mathematical insight in a way that whereas there had been single flat rate post-all same day, or next day services, or same day services in London. He worked out that with the coming of the railways, you could get so many letters on a trunk route between, say, London and Edinburgh. That distance had become distance price per letter, per mile, had almost gone to zero, 'cause if you watch the film Night Mail with the Orden poem, I think they're quarter a million letters on that train. So it's a sort of 400 mile journey, but actually, if you think about it, you know, the price per letter per mile is as close to zero as you can imagine, 'cause they're quarter a million of the buggers. And he worked out, hold on, you can take this same day principle which exists within London, you can extend it to the whole country, it then extended to the whole of the British Empire, that never made money, except Australia and New Zealand. You had to pay extra for those, but India, you know, Canada, all of those are, you know, the whole of Africa, you had a penny post. And the interesting thing for us, like it lost money for the first few years, because people weren't in the hat, they didn't know anybody 200 miles away, and they weren't in the habit of writing to people 200 miles because it would have cost a fortune. And so you had to wait three, four, five years before it hit break even, for the behavior to catch up with the importance of the idea. And I think people think that good ideas are self-evident and therefore will be adopted immediately and they go and look at the initial, I was hearing about a thing on a podcast, which is Cisco had invented a video conferencing for your TV. And the, no, I'm just trying to think who it was. Was it Gary Hamel on a, and how the truth of the matter is, okay? The idea was it didn't succeed very quickly in the first year. Well, first of all, you've got to wait for somebody else to do it, right? Okay, so it's not, it's not an obvious sort of, "Hey, I'll just buy that," and I'm all sad. But actually what they needed to do was to maintain that product line, let it grow incrementally and, you know, and what hopes, you know, slightly exponentially or geometrically at least. - And wait for COVID. - Exactly, they need to see COVID. - You see, but just in case that's the case. - Part of, part of that. A very large part of life is staying in the game long enough to get lucky, 100%. And if you're demanding instant returns, you know, demanding a particular rate of growth and a very predictable rate of growth in line with city estimations. What you're doing there is you're destroying a completely different form of success, which is you hover around for ages and then something happens, you know. More people start traveling, you know, if you look at, you know, things like American Express. You know, I mean, for example, you know, the whole penny post was dependent on the railways, to some extent, you know, things happen, which suddenly change the whole game for everybody. And you get lucky. And this is one of the most interesting sentences, which suddenly, I realize why a lot of businesses are being destroyed by excessive quantification and measurement and also by excessive kind of internal regulation. An internal process, what you might call process consistency. So this guy, mathematician called a brilliant guy called Stephen Wolfram. And I'm in this meeting with him. I've never met him before, but I would completely idolize the guy as, you know, recognized maths genius. And he said this thing, which is really, really sounds quite banal, but you suddenly realize it's critical. He said, the reason evolution works in nature is because it actually has quite a loose fitness function. It basically says, if you can stay alive long enough to reproduce, and you can find an ecological niche of whatever kind in which you can meet those two criteria, then it doesn't matter whether you're a patch of moss or you're a shark, you get to stay in the game. And he argues that if you have a really narrow, narrowly, tightly defined fitness function, you don't get any of the biodiversity, the variation, the overall economic growth and just the overall variety that you get when you have loose fitness functions. And I would argue that you should give marketing a loose fitness function. In other words, you should say, you need to do that, you know, we need, and actually business objectives should be loose. So if you've got a core centre, you should say, actually, as Greg does at Octopus, right? They're basically measured on customer satisfaction. They're rewarded on the number of people they look after, and how well those people feel looked after. That's it. They don't have loads of core centre time, average core length, weight time, del-del-del-del-del-del. Those are total impositioners by tragic nerds. And because those people impose all those stupid rules, all the innovation, variety, happenstance, lucky accidents, lucky discoveries, all the tacit skills, all the entrepreneurial urges of the people within that core centre unit get completely suppressed. If you give them a loose fitness function, which is make people really happy and as many of them as you possibly can, right? Then what you're unleashing is an enormous amount, not only human ingenuity, and also intuitive judgement, which is valuable in itself. You're also allowing people to get lucky, which isn't it weird, I've just come up with this funny phrase, and people who used to be pissed off, well, I used to say this, and people were always pissed off, and now I say this slightly different thing, and people aren't pissed off. And actually, then you can build a kind of intern. And then ideally, what you do is you'd have frequent contact between the different groups, where they'd share their best discoveries. And that's an evolutionary model of how a good call centre should work. You ride for the spectator, and I discovered something today, which I hadn't appreciated before, but the spectator is the longest running weekly publication. Is it 10,000? It was during COVID, actually, because I remember I was actually on a bedroom floor reading these photocopies of 10,000. So it would have been about 2021 or 2020, I think they were found in 1828, I think I've got that right. And it's the oldest continuously published magazine in the English language. They sometimes can claim in the world, but I think there might be something weirdly older, like in South America or something. And if you've got advertising, is that had advertising in it? Yeah, so it's had advertising in the ghetto, I'm pretty sure. And so they asked me to review 10,000 issues worth, I'm getting on for 200 years worth of spectator advertising. And it was fascinating, because it's still really interesting. Most of the content from 1850, or where they're having huge arguments about the corn laws or the great reform bill, all of that stuff, which we regard as important use, in effect, seems totally irrelevant and ridiculous in the light of 150 years later. But the advertising is still fresh. And it's something you realize, of course, that base human, what you might call all the noise around human activity. The kind of thing that journalists, regardless, high-minded, wonderful, tremendous journalism, is actually that's the chip paper. Whereas the advertising, because it's focused on, essentially, eternal psychological truths that aren't going to change, every single advertisement is kind of interesting. And you understand exactly what it's doing. And it's really quite fresh and charming and pleasant to look at. And you see, by the way, also, you see these recurring devices. You know, there are certain sort of narratives or certain strategies that work pretty well in 1850 and work pretty well today. So I only got a cross-section, obviously, the whole section of the magazine would have required a-- I was going to say that, that would have kept you for the last five years. I got a cross-section of interesting ads sent to me on an enormous A3 photocopies, as I remember. But I also think it's true that, in a weird kind of way, tabloid journalism is much better. So in other words, there's information we really want, and there's information we like to pretend to care about. And actually, advertising is quite eternal, because it does deal with the eternal human needs, the varieties that need to be admired, the need to take care of your children, the need to do-- those things are all eternal motivations. Whereas the other stuff is largely people showing off that they care about stuff. That's brilliant. Oh, Roy, that's amazing. Listen, thank you so much, as always, complete blast. And I think, if anyone watching, you've got a matching suit to this, I might be invisible, by the way. Yeah, if you want to check this out on YouTube, go check it out, because, Roy and I have been the most relaxed laid-back position. We have, ever to do an interview. But listen, mate, thank you very much. Absolutely, Joy, pleasure. Any time. Delighted. I don't think we'll batch the last wound in terms of Spotify. Well, I'm going to say, I would have to set a new target this year. Top 30 in Spotify. But there are some really important questions about this, which is the marketing people are justifying themselves according to metrics laid down by finance, which is like fighting a jewel where your opponent gets to choose the weapon. And that doesn't matter if it's the right maths. It isn't the right maths. But the worst thing we've done-- and this is how I reverse engineered the fact that I got famous, if you like, OK? What I suddenly realized is I had to talk to a load of people about what we did, who weren't in advertising or marketing. And I realized, you can't just show them 20 ads, because if it's a procurement conference or compliance conference or whatever, these people are never going to get to make an ad. So it's largely relevant to them. And so of necessity, not really intentionally, this is what I mean, that most of success isn't intentional. Right? To say, of necessity, I stopped talking about what we did and started talking about how we think. And I suddenly realized, now, realize this even moment I wrote the book, that how we think has an audience and a market that's 150 times larger than the market for what we do. And we've all made a mistake, because marketing people have defined themselves as marketing with a capital M, which is a business function, which is then associated with marcoms and maybe with pricing and a little-- maybe staging a conference or exhibition. It's kind of associated with things people do. But capital M marketing is only about 5% of small M marketing, which is the understanding of business from a customer's point of view attached to the creative possibilities that emerge when you adopt that new viewpoint. That's it, OK? In other words, marketing with a small M is actually a branch of phenomenology, which is around human perception and, effectively, what we perceive and how we feel in response to it. And that stuff, OK? Now, the market for understanding in that and the opportunities for improving the world through small M marketing, which isn't a function-- it isn't defined by what it does. It's defined by how it thinks. That's an enormous market. And instead, we've all focused on what we do. But what we do is a fraction of the value of how we think. 100%. Well, that's a brilliant, brilliant place to end. Rory, thank you. That's a pleasure. Delighted. That was really happy. Thank you. Thank you very much for listening or watching Uncensored CMO. I hope you enjoyed that. If you did, please do hit the subscribe button. Wherever you get your podcast, if you're watching, hit subscribe there as well. I'd also love to get a review. Reviews make a big difference on other people discovering the show. So please do leave a review wherever you get your podcast. If you want to contact me, you can do. I'm over on X at Uncensored CMO or in LinkedIn. Well, I'm under my own name, John Evans. Thanks for listening and watching. I'll see you next time.