Rory Sutherland
Appearances
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Okay, that's fine. And the reason is that people search for property either 900,000 and down or 800,000 and up. And two things happen. One, they're less likely to find you at all because you're further away from their searching point. Secondly, if they do find you, the people who are searching 900 and down are a bit disquieted because they think you're too cheap.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And the people who are searching 800 and up think you're a bit too expensive. So the extent to which what seems like a completely rational filtration process in online searching activity or decision making may be deeply flawed because it doesn't reflect the way in which we make decisions in the real world, which is we recalibrate what we want according to what we find.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Um, in the US, there does seem to have been a sort of widespread dispersion of people to a distance away from their place of work, where it's a flight away, not a train ride away. But it's not, it's absolutely not what I would have predicted. Because if anything...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Oh, the story at the beginning. No, that's just a story about how undoubtedly in all kinds of areas, driven partly by technology, what's urgent crowds out what's important. And it's a joke.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's an old advertising joke told to me by someone who is literally from the Mad Men era, which is you have a copywriter, an art director, and an account man, okay, who are boarding a plane to present work to a client. And they open the overhead locker and somewhat implausibly a genie gets out and says, I've been trapped in that overhead locker for years.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
To thank you all for releasing me, I'll give you each a wish. So you can choose anything you want. And they go to the art director who says, I'd like Picasso's life. I don't mind my life, but I want Picasso's life. The locations, the eye, the artistry, probably the women folk, the romantic life. That's what I really want. And whoosh, the art director disappears. And then
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The genie turns to the copywriter who goes, it's got to be Hemingway, you know. he enumerates a whole load of reasons why he'd like to be able to write and live like Hemingway and whoosh disappears. And then the genie turns to the account man and says, what about your wish? He says, I want those two guys back. I've got an important meeting in two and a half hours. Okay.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And there is that element where, and by the way, we could, we could refer to this in everything from things like the shareholder value movement to business quarterly reporting to the extent to which in advertising the, too much money is spent on short-term performance advertising and too little is spent on long-term brand building. And that's not because it's necessarily more valuable.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's because it delivers measurable results faster. So I'll give you a fundamental problem. The FT wrote a very, very good article specifically about the UK, but I think it applies more widely, which is how did customer service get so bad? Now, the point is,
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I felt like writing an article to the FT saying, well, if you occasionally acknowledged there was something interesting about business other than their quarterly financial forecasts, maybe the problem wouldn't have happened.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you actually discussed marketing occasionally or customer experience or the value of repeat business, if you looked at business from the point of view of what you might call a competition for customers rather than the competition for operational efficiencies and cost cutting, maybe we wouldn't have gone into this total shitstorm. OK, but parking that rant for a moment. What seems obvious?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The US had a very strong culture of presenteeism, of people effectively getting in early, staying late, being absolutely desperate to show their face. And the office occupancy rates are much, much lower in the US and Canada than they are in Europe or the UK. Yeah.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
OK, if you spend some money on acquiring customers, you can see whether it's working very quickly and you can say very confidently we spend X and the value of the acquired customers was Y.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Let's say you want to make a corresponding investment in customer loyalty or customer experience, in other words, ensuring your existing customers have a great experience and so they come back, or dealing with problems very well so that your customers don't leave. Generally, you could perfectly well prove that that was cost-effective.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And indeed, my hunch would be that money spent there would be more cost effective in many cases than money spent on acquisition. However, it might take you five years to prove the efficacy of what you do. Because it's slower. There are businesses which are fast. There are businesses which are slow. There are fast feedback businesses which you learn very quickly.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
An example, by the way, of very fast feedback business is comedy. You have an instant feedback mechanism from the audience, which basically tells you whether or not a joke is any good and whether you've landed it. And so apparently if you go to small comedy clubs, you'll occasionally be surprised because you're sitting there and there are only sort of 20 tables and Chris Rock will come in.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And effectively, it's all a bit weird, but he's trying out his new material for the next run. Before you go to bigger theatres, you try your material out on a small scale. And that's a fast feedback business. Amazon is a pretty fast feedback business, I would argue, because it has a very high degree of frequency of interaction with customers.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Something like banking or insurance is unbelievably slow. I mean, if you're a bank and you piss off a customer, they don't even leave, by the way. They just go inert. It's not like people go, I'm going to close my current account and I'm going to walk off. They just open another current account somewhere else. Your current account, they don't buy anything, any other products from you.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But it's not the same as something like comedy where you know within seconds whether you've landed something or not. And then there are also things which bother me, which is
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There are also things where – I was talking to the guy who founded AO, and they have this lovely little system where when they deliver a washing machine or a dishwasher or whatever, if there are children in the house, because they deliver things themselves, they give the children a little branded bear. OK, now, as he said, perfectly right.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You know, someone in finance is going to say, OK, what's the cost benefit analysis? OK, on that. And his point is, it's impossible. You just have to make a judgment, subjective judgment that the cost of the bear is trivial and the long term effect is likely to be quite high.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The interesting thing with Bezos is he's going to – I mean, this is true of all those people. I mean, you know, also very true of Elon Musk. They have a very unusual, sometimes highly seemingly irrational thinking style. Speaking to someone who is very senior early on at Amazon, everybody except Bezos hated the idea of Amazon Prime. They hated the idea of Prime Video.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
they didn't like the idea of Amazon Web Services. Now, Jeff has an interesting notion, which is what he calls a two-way door. If you talk to people, by the way, at Amazon, it's a very, very interesting... I'm not sure I could cope with it, to be absolutely honest. But it is a very, very interesting culture in terms of its approach to everything from meetings to decision-making.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
What a two-way door is, is something where you can walk through the door, and if you don't like what you see, you can walk back. So a one-way door would be deciding to build a sort of 2 million square foot distribution center north of Memphis, okay? Once you've built that, it's difficult, not impossible, but it's difficult to reverse the decision. Right.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There, you actually depend on a large degree of decision-making rigor and rationality, you know, and you need a really rigorous case. But in other cases, Jeff would say, it's a two-way door. Try it. If it works, whoop-de-doo, that's great. If it doesn't work, we simply stop doing it.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And to be honest, the trial possibly costs less than we would have spent just arguing about it if we were adopting a kind of purist approach. And I think it is important because Why I think this is becoming vitally important is most business is probabilistic, but everybody in business wants to prove and pretend that it's deterministic.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So every spreadsheet is in some ways an act of pretense because it's past information, which you pretend has wonderful predictive value as if it's kind of Laplace's demon, but it really doesn't. Okay, because weird shit happens out of nowhere all the time. And you have this fundamental problem, I think, where I think what distinguishes someone like Jeff is their probabilistic thinkers.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
They just go, well, look, it probably won't work, but if it does, it will be spectacular. And they are in a position where they can take those decisions. In their defense, most people, I think, first of all, most people are promoted within business for their aptitude in solving reductionist deterministic problems. How do you optimize this
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Yeah, absolutely right. Yeah. And actually, by the way, they probably, in most cases in business, you capture remarkably few of the gains from a bold decision, whereas you capture 100% of the blame if it goes wrong. Correct. Yeah. So certain decisions, decisions which are what you might call low chance of success, huge return.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
That's when people leave a business and become an entrepreneur because they realize that there's no point in actually doing those kind of things within a business because if things do well, you get a pat on the back and a bonus. If things go badly, you lose your job.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I'm in a small minority of people who would argue that before you criticize what someone does, you've got to understand what they're trying to do. And they have been completely forthright about the fact they expect to lose all but 15% of their customers. All but 15% of their customers. Exactly, of their customers, by moving to a much more upmarket, expensive car on an electric platform.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Normally, what they did is anathema to anybody who loves what you might call brand maintenance and brand management. But by the way, they didn't change their name. They didn't call the car Zog. They still call it Jaguar. They still, contrary to rumors, have kept the leaping cat motif, etc. But what they've done is...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
a very, very bold kind of, okay, in a sense, it's, look, bet the farm here, okay? Either we do this, we either succeed, in which case, great, or if we fail, to be honest, we were heading for disaster anyway, because you've got to be slightly careful. This is where, you know, okay, when Dylan went electronic, okay, someone shouted Judas.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The crowd in the Manchester Free Trade Hall absolutely hated it. Jaguar purists are going to hate anything By the way, I've had six Jags, by the way, so I'm a loyal Jag enthusiast. I love the brand. And in many ways, I love a lot of the heritage about that brand. But equally, I love red telephone boxes, but I don't think it should be the BT logo.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Okay, I love, you know, what is it, Giles Gilbert Scott's design for red telephone boxes, but I'm also cognizant of the fact that I don't make many calls from payphones anymore.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And I like Burberry Macs, but I'm also cognizant of the fact that because of various things like, you know, central heating and Uber, not many people wear Macintoshes anymore, you know, apart from Americans and flashers, in my experience. I was saying this the other day. Now, there are occasions where...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You might argue that electrification completely reshapes the competitive landscape for any car brand or any car manufacturer. And that what you have to do is a fairly dramatic pivot. I'm going to join you in that.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There are cases, Kid A, for example, where bands produce an album that kind of alienates their existing fan base. Okay. You might argue that for Jaguar, this was a kind of Sergeant Pepper moment. Okay. Where... We've got, you know, fundamentally, we've got to do... Am I right? There was a sort of Pet Sound and Sergeant Pepper interplay going on, which was who was first.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Was that where they were going? Well, the problem with Jaguars, lots of people loved the brand, but the people who loved the brand didn't necessarily buy Jaguars from new in particular. Right. And the new car buyer is a pretty niche audience to begin with. I thought the ad was deeply weird. It wasn't produced by an ad agency, by the way.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It was, as someone said, it was less a branding exercise than a de-branding exercise. You might make the contrary position, which is that it got millions and millions of people all over the world talking about Jaguar, which hadn't happened for years. Now, I'm not one of those people, any publicity is good publicity. That emphatically is not true, okay? However...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It did signal the fact, and by the way, it's not as if Jaguar hasn't done this before, okay, that a big change was afoot and that something remarkable was going to emerge. And the new car, by the way, which we've only just seen this morning, just for people listening. I haven't seen it. What is it? It's highly polarizing. It's an extraordinarily bold design. I personally like it.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It seems to come in two colors, Miami pink and London blue. And the idea of a pink Jaguar is transgressive.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, if you look at it from the mindset of a game theorist, okay, if you're a volume car maker... Electrification is goddamn terrifying. It's Clay Christensen and the innovator's dilemma because you've got this huge sunk cost in both expertise and plant in producing internal combustion engine cars. You have this incredible engineering heritage.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
which, you know, don't get me wrong, I love that stuff. I love steam trains, OK? I love red telephone boxes. I love driving gloves, E-types, you know, girls from Lucy Clayton being taught how to get in and out of an E-type without showing your pants, OK, which apparently was something that finishing schools taught in the 1960s. All of that heritage is wonderful.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But when technology comes in, I mean...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
okay blackberry purists okay this is this is you know this is a kind of rim moment where electrification fundamentally changes what it means to be a great car because probably reliability assuming the software doesn't go wonky is going to be pretty damn good okay now i i recently had a bit of an issue where somebody said electric cars are expensive and i kind of went well
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It kind of depends, doesn't it? Because an electric Skoda will be more expensive currently than a petrol Skoda. But in performance and quietness and driving dynamics and efficiency, the electric Skoda is probably more akin to a petrol Audi than it is to a petrol Skoda.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And the guy I met who's the kind of electric car guru at Wired magazine was asking this very same question, which is, OK, you've got a bunch of engineers. You've got a bunch of, you know, if you think about it, the people who hated Dylan going electronic were folk people. I'd rather like folk music, but it doesn't really exist anymore, does it? Okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, you get the odd little... So he saw the writing on the wall, but got shouted at for having been ahead of the curve. Dylan had seen the writing on the wall and decided, okay. And someone shouts Judas at him. I don't believe you. Play it fucking loud, as he replies. Now, you might argue that Jango has had a bit of a Dylan moment.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
which is, look, the things that made us great at Le Mans or in the age of Mike Hawthorne, fundamentally, what the hell is a car in 2030, 2040, when pretty much any car can deliver all the performance and indeed the quietness that a normal driver would hope for? Okay. And the Wired guy asked the question, is it going to be all about interiors? Is it going to be all about design?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Because, okay, a very simple, tough question for Jaguar Land Rover is we've got Chinese competition. We're never going to kind of undercut them. given labor costs, all the other costs that apply. How on earth do we carve out a niche for ourselves in this new future? Now, for a small car manufacturer and a small volume manufacturer, Jaguar's making about 60,000 a year, okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
They do have one advantage, which is they can completely pivot and start all over again. Whereas a large volume car maker has to manage this incredibly painful transition. Complex supply chain, et cetera, et cetera. I mean, you know, there's a whole German, you know, Wittelstadt, you know, which supplies, you know, fan belts and weird bits. All of that goes. Because, I mean...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
This is one thing, by the way, which I think we ought to say about electric cars, which I think is missed by a lot of people, which is that if you look at a petrol engine, which is, you know, it's a cathedral, it's a magnificent achievement, a really advanced, you know, petrol engine.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
All of those things that move and rattle and bump and filter things and need to be replaced and the gearbox and all that stuff, all of those things exist for only one reason, which is to rotate a shaft to provide forward movement. Okay.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
That reminds me of an agency back in the 1990s who sent their staff on assertiveness training, and they all came back and half of them resigned.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, I'm Team Faraday here because the way an electric motor works is you put electricity in, it rotates, which explains why, with the possible exception of your lawnmower, every single rotating, moving thing in your house uses electricity as the motive power, not petrol. OK, you know, there is a wonderful advertisement, by the way, which was done, I think, for I think it was either Renault.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I think it was the Renault, the first electric Renault, which is equivalent to the Nissan Leaf, where they simply showed someone getting up in the morning and what would have been their electric toothbrush was actually powered by a little gasoline engine.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
They shaved and there was sort of fumes coming out of their razor. That's very good. OK, and it made that very simple point that nearly everything else in your life has gone electric. It was only a matter of time before battery technology, driven actually probably by the mobile phone industry, made this possible for the car.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, by the way, Henry Ford and Edison worked together on an electric car.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Do you notice, by the way, when you go back up north, that northerners have nicer cars than southerners do? Why do you think that is? Their houses are less expensive. Right.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You get this extraordinary phenomenon in London, which really depresses me, which, and I've known people like this, who literally have a 1.2 million pound house and a thousand pound car. Fiat Cinquecento or something. It pains the, I mean, come on, you know, I mean, the car is a much greater thing than the house is looked as a piece of technology. Okay.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You know, are you a car fan or are you one of these weird people who just like young people, Ubers around the place?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You just need it to fit in. Correct.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It is interesting, by the way, because one thing that's disappointed me is I expected to see much, much greater levels of investment in really interesting remote working hardware. And by which I mean really, really good tech at home. There is a project apparently in the works called Google Starline, which is a kind of 3D video conferencing, which there's a team at Google probably still working on.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There's a Ford F350. I think it might be a 450, isn't there, as well?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Yeah, what you're doing there is the old consulting trick of you define the doorman in terms that make him most amenable to automation. So you basically go function of doorman, opening door, replace the doorman with an infrared automatic door mechanism, lay claim to the savings, but an awful lot of consulting activity.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Do you know management consulting firms engage in this thing which is called gainsharing? Now, I cannot believe that anyone in a company would sign up to this agreement because it's appalling, where they effectively say, we will effectively define the costs we have saved you, and we want you to pay us a proportion of the cost savings which we identify.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But as Roger L. Martin says, any idiot can cut costs. The real skill comes in cutting costs without actually losing long-term revenue as a consequence. And so short term cost cutting is dangerously easy. This is where I come back to that point of we're too impatient to be intelligent, that intelligence and wisdom is slow, whereas seeming logic is fast.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You can seemingly logically replace the doorman with a automatic door opening device. What you're failing to notice is the other tacit and subtle human functions, which are dormant, which might be recognition, hailing taxis, also security, okay? You know, basically, you know, you don't want drunkards sleeping in your entrance to your hotel. And simply maintaining the status of the hotel, right?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
That arriving at a hotel, which is notionally a five-star hotel, and kind of, you know, just being met with an automatic door. Even if it's a very fancy automatic door. Americans want a London hotel, okay? If you take American, or for that matter, Asian tourists, they want London to be a bit London-y with a guy in a top hat, okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
A friend of mine booked some friends from Los Angeles in the Hempel Hotel. which was... I don't think it exists anymore. It was in Bayswater. But it was kind of like an LA hotel, which was in London W2. And they were gutted, these Los Angelinos. I mean, they were very cool people, right? But they said, if I come to London, I want horse brasses. I want hunting prints. Yeah. Okay. And so...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There are all these nuances which I think are very, very easy to lose because costs are quantifiable and instantaneous. And opportunity costs, lost opportunities, lost revenue, that's slow and it's generally hard to actually quantify. A lovely story about this, which I wrote about actually in The Spectator, but people won't mind hearing it once more, I hope.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I'm driving along this dual carriageway on the Welsh borders and we wanted to buy some milk and the motorway service station appeared to be closed. All the lights were off. The kind of, you know, the petrol fuel logo was off. The fuel prices were off. It looked, you know, like, as I said, like the Bates Motel. It was completely kind of unlit. My wife said, oh, bugger, it's closed.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
We needed to buy her bloody lacto-free milk because she's convinced she has lactose intolerance. But I said, no, hold on a second. I remember going there on Christmas Day. I'm sure that a place that opens on Christmas Day wouldn't close at 7 o'clock in the evening. Let's just go in anyway.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And sure enough, we find a fully functioning 24-hour store with, I think, you know, might have been a Starbucks or something as well or a Burger King. And we're the only customers. It's hardly surprising we're the only customers because for everybody else on the road, it looks like the place is closed. So I go up to the guy behind the tiller. I'm a marketing person.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I hope so. But, I mean, don't forget you have a problem now in that offices have mostly shrunk their footprint. They still aren't kitted out for the frequency of video calls. In other words, the number of private pods in an office is too few. The number of meeting rooms is probably too many.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You're pissing away revenue here. This is insane. Every 10 minutes, there are three cars driving past going, oh, shit, you're closed. So I go up to the guy behind the tiller. Why are the lights off on the road? He goes, oh, yeah, I think the guy on the last shift forgot to turn them on. There was no urgency. Now, it occurred to me when I left, the lights were still off when I left.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If that guy had nicked a lion bar at two o'clock in the morning and been picked up on CCTV, there would have been a kind of inquiry. He might have lost his job. There would be extreme disciplinary action. Cost of the Lion Bar is about, you know, one pound in lost revenue, okay? The cost of leaving the lights off is probably, certainly in revenue terms... £200 an hour, maybe more.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Maybe £1,000 that night.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Could have been more, okay? But sins of omission are much less... Dogs that don't bark in the night are much, much less easy to identify than sins of commission, and we correspondingly get much less upset by them. And so... What you often end up doing is there are a lot of things like giving a soft toy to someone when you deliver their tumble dryer.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Can you imagine a world, I'd love this world, but I can't really imagine it, where someone goes, what, you mean you deliver things to people with kids and you don't give them some branded merch? Are you serious? What a fucking idiot. The anchoring and set point that we have behind that. If for some reason there was a cost attached to something,
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So opportunity costs, finance people basically pretend opportunities aren't there because they're too nebulous as far as they're concerned to pay any attention to. But then you wonder why companies aren't growing. And the reason is because they're fixated on the efficient performance of what they're already doing and completely uninterested in what they're missing out on.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
That's an interesting observation, which is that we have an automatic default when we want to solve a problem that we add things rather than removing them. There is actually a very good point.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So there's a whole architectural problem to be addressed in terms of how – because if I had a day with mostly video calls, I'd want to do it at home because it's easier to do that. than it is to try and find the right conditions in an office.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I think Nassim made this point when Elon was appointed the director of government efficiency, where he said, quite rightly, you should be the director of government effectiveness, because it's perfectly possible to do things very efficiently, which you shouldn't be doing at all.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that's a Peter Drucker quote, which is, I think, nothing's more wasteful or stupid than to see something done efficiently that shouldn't be done at all. And undoubtedly, I think there are particularly among things which are ostensibly well-intentioned, okay? We never ask the question, would we be better off if we just got rid of this entirely?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so there's a great quote from cybernetics, a guy called Stafford Beers, where the quote is, the purpose of the system is what it does, which is quite a lot of systems, quite a lot of bureaucracy has this ostensible purpose, which is entirely praiseworthy and worthwhile. And so we actually attach much less scrutiny to that kind of thing than we do to something that's actually selfish.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And I think it's returned to a pretty acceptable kind of equilibrium. And by the way, personally, I don't want to see people in the office five days a week because everybody who's engaged in some sort of part of the knowledge economy, 20% to 40% of your working week is going to be stuff where you just need to truckle down, choose your own environment, and get on with it.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, you know, one thing about being a commercial company is people go, what's in it for them? OK, what do they get out of this? I'm suspicious. This is too good to be true. I'm not really comfortable with this. You know, we deploy, quite rightly, you know, high degrees of skepticism towards the private sector because we want to know what they're up to.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, to some extent, if you're working in, for example, something that's altruistic or charitable, we suspend that level of skepticism. We go, oh, so well-intentioned. Isn't it brilliant? Okay. Okay. Oh, they're working for so-and-so. Isn't that great?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, it's nonetheless perfectly possible that the ultimate consequences of that well-intentioned action – first of all, it's possible that the motivation isn't nearly as wholesome as we may like to think. But secondly, it's also possible that just because something is well-intentioned doesn't mean the consequences are necessarily positive or benign.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so, I mean, there is undoubtedly a really interesting question of what should we stop doing? I mean, I'm very interested. One of the reasons I'm very interested in flexible work is it occurs to me that companies looked at in one way are actually very inefficient. I tried to get – I didn't actually get our finance department. I said, forget about the usual method of financial reporting, okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The other point I make is that there are a lot of things where it's very difficult to sell people on the new behavior, but once they've experienced the new behavior, the old behavior seems ridiculous. An example I always gave of that is nobody minded buying CDs when it was the only way you could listen to music. OK, you just accept it. OK, I don't really want to buy a whole album.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
How much does a client have to pay us? In fee income, in order for my younger colleague, and by the way, the fact that they're younger is relevant because they're not kind of vested in the property market as someone my age is. In order for my younger colleague to go out and have a curry.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And what you look at is the client pays us, then there are various overheads and costs, and there's HR and finance, and there's office space, and there's all that other expense. Then finally, the money trickles down to the salary of the person actually doing the work once the kind of landlord has taken their cut and the shareholders have taken their cut and everything else.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Trickles down to my colleague. Then from that incremental amount of money, 40% will probably go in tax. Then, of the remainder, 40%, maybe 50%, will go in housing costs and transportation costs, commuting costs. So it works out that in order to buy my colleague a trip to the Koh-i-Noor, a client has to give us about 250 quid.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, my argument is if you could get rid of all that shit and just do the work on Zoom, okay? In other words, the people – this seems to be an extraordinary extent to which, you know, in large organizations, the people who are creating the value, the people who are doing the real work.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, it's amazing that capitalism functions at all when you look at the extent to which, you know, money goes in and then incidental costs, particularly property – I'm Georgist, okay – particularly, you know, property costs. Chip, chip, chip. Chip away at all of that. And so the actual incentive for the person to perform valuable work and the reward they receive for it has mostly disappeared.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, obviously, some things are slow burn and some things are fast burn.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But generally, it's a pretty good indication. So it's a pretty good indicator, is it?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You do get the sort of Shawshank Redemption phenomenon, don't you?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I did make the joke that voting Labour and having a chancellor who's come from the Bank of England is a bit like going on a Club 1830 holiday and taking your parents along, which it kind of defeats the object of the exercise a bit in that one of the things I think we would like to see as voters, and I'm perfectly happy to give this government a, you know, I think you have to give the people the benefit of a few years before you get pissy about it.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, that is actually, I'd be interested to know who's signing that petition. Is it people on the left who are just disappointed? Is it reform voters? Is it conservatives? I don't know. Who is it who feels most kind of cheated? I mean, you've got to remember that there are an awful lot of people who didn't vote for them, if you consider the size of their majority, okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I just want to buy a track. But, you know, it's just what you do if you buy music. Then you had downloads. Of course, the music industry resisted this furiously, the whole idea of downloading. Even to the point of not making it possible for people to download things legally. And the problem there is once you'd experienced downloads, the CD seemed suddenly ridiculous.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
They've got a massive majority, but the share of the popular vote was fairly small.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Well, it's interesting who's demanding a kind of, you know, run again. Yeah. Some of the things interest me because we kind of, I think a lot of people know that there's fundamental inequity, intergenerational inequity, which is because salaries are taxed very highly and wealth, particularly capital gains from your main property, are barely taxed at all.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that leads to, I think, a kind of absurdity, which is that one piece written about this is it's not actually intergenerational inequality that's the problem.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's going to be intragenerational inequality when people start inheriting houses or not inheriting houses, because you can literally have the situation where you can work incredibly hard for 30 years and reach a position of some eminence in a business or in an institution.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And because your parents happen to live in an area of low house prices or didn't own a house at all, you're still living somewhere crap. Whereas your underlings, you know, whose parents lived in Surbiton or Kensington or whatever it may be, okay, are basically swanning around in palaces going on cruises all the time.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that does strike me as a fundamental flaw that we've created this system where unearned income, which is not really particularly meritocratic, or inherited income, is treated incredibly generously, whereas earned income, I think the top... If I'm right, is it the top... 5% of taxpayers pay 50% or 60% of all income tax. So in America, it may be the same here too. Probably the same here.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, that's, by the way, it's a kind of statistical artifact. You generally, you usually find those power law effects. So it's not quite as weird as it sounds. But nonetheless, that is quite weird when you think about it. Now, one thing I thought was extraordinarily interesting as an idea is, You know that chap who wrote The Trading Game? Gary Stevenson. Gary Stevenson.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
He makes a very valid point, whatever else you think, which is that nearly all economic models use single representative agents to populate the models, which is they assume that the person whom they're trying to optimize for is an average of everybody. And as a consequence, inequality doesn't feature in those models because you're simply dealing with an average.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so if Bill Gates walks into a football stadium, everybody in the football stadium is actually a millionaire suddenly on average. It's simply not a reliable thing to do.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And one of the things that strikes me as genuinely horrific is the extent to which I think the tax system is kind of garantophilic in that, you know, there are huge, huge concessions in terms of pensions that are given out, huge concessions in terms of inherited property, huge concessions in terms of capital gains and existing property.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You also get this utter absurdity, which fascinates me, which is that, um, there are four-bedroom houses which have one or two pensioners knocking around in them. Nothing wrong with that, you might argue, except those pensioners are often skint. OK, now it's a weird kind of way of being a millionaire that you live in a massive house that you don't entirely need.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, if you simply saved a hell of a lot of money and you just like living in a big fuck off house, well, you can argue that's kind of, you know, you're entitled to that. But you literally get people living in these extraordinary houses who are, you know, going to Lidl and worried about the price of lemons. Yeah. Okay. Pretty weird.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And to some extent, we didn't mind commuting in the same way when we just thought this is just a necessary part of getting to the office. It's just work is the place you go to. It's Wednesday. It's Friday. So I go into the office. That's the deal. The time you spend on the train, the time you spent cleaning your teeth and getting up early and doing your ablutions didn't feel like a waste of time.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If someone told you when you were a kid, you're going to be a millionaire one day, but you're going to be really worried about where you buy lemons. You'd think, this is a pretty weird world. I mean, one great idea, Roger L. Martin's idea is that you should, at the moment, you get your first 10,000 or whatever it is of your annual salary is tax-free every year. Roger L. Martin, a Canadian...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
proposed that that should be a lifetime tax allowance.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So the first 250,000 Canadian dollars you earn in your life is tax-free, after which the tax system kicks in. Now, that would be extraordinarily beneficial to younger people who need the money more and who could build up some... Actually, you don't need that much in the way of savings. I mean, one of the interesting things about the benefits to wealth is that there are inflection points.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
First house deposit. Well, actually, having £5,000 you can call on in a crisis is a really, really big difference. It fundamentally changes what people can do. Very interesting thing. When I first went to America, I was, I think I was 29, roughly. And I remember thinking, I'm glad I never came here when I was skint.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's a terrible country in which not to have $10,000 sitting there. Correct. You know... You know, one bad thing goes wrong and suddenly, you know, you're in Leavenworth doing a nine stretch.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so, you know, so there are these inflection points where you can take people, you know, one of them I always think is that when you start earning a bit above median income, you notice that actually it's quite nice because things are priced for people who are a bit poorer than you, you know. Televisions, for example, flat screen TVs. Let's be honest, okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Let's imagine that flat-screen TVs cost five grand, okay? We both would have bought one by now, but we don't have to pay five grand because they're priced for sale to people who earn a lot less than we do. And so, you know, I think there are these interesting inflection points in earnings. Now, what's really interesting, by the way, and this fascinates me, is the extent to which pre-2020...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The only real point of negotiation with your employer was how much they paid you. Because it was assumed that you worked a five-day week. It was assumed that you came into an office or some other place of work for five days and that you had hours and you had a place. Those were non-variables. And the only variable was your salary.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, to what extent will people start to practice lifestyle arbitrage, which is to say, well, I could work for Goldman Sachs in London for 200 and something, whatever, but actually 120,000 in Lisbon, okay, and a pretty good broadband connection.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Spending in... The number of people who might simply... I mean, by the way, that applies within the UK.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You know the sad thing, actually? My daughter went to Newcastle University, adores the city, quite rightly. I've been up there. It's fantastic. You know that better than I do. It's a glorious place which gets the balance... I think it gets a lot of things absolutely right in terms of the kind of yin and yang of a city. You know, it's manageable in size, but it's not boring, remotely boring.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Okay. Because it was just what you had to do. The second you've experienced the alternative, which is get out of bed, put a cardigan over your pajamas and click join meeting, all of that kind of palaver suddenly seems twice as painful. And I've got one of those fantastic Quooker taps that produces boiling water on demand. And It was difficult to persuade my wife to get one.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It has beautiful architecture, but it also has utility and it's got a coast. Okay. My daughter actually said, the tragedy is, in a way, I didn't really want to move to London, which is bloody expensive. If I could have persuaded six of my university friends to stay in Newcastle. Yeah. We all would have said. Tragedy of the commons.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's the tragedy of the commons, which is that you're forced to go along with this kind of majority consensus.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Get it in. Okay. And I always thought this is why Brits like living in LA, which is that secretly everybody over the age of 35 wants to live in suburbia. Okay. Correct. But in London, it's just not cool. Okay. I mean, if I took my younger colleagues, I couldn't get them to move to Bromley if I put a gun to their head.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Secretly, I suspect they want a little bit of, you know, a bit of lawn and a bit of a place to park a car. Yes.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
In LA, it's totally cool to live in a suburban house, isn't it?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It was also built after the invention of the car. So the distance from the center matters a lot less. By the way, it should have. I don't normally criticize the US, but You should create high-speed rail to someone like San Antonio, shouldn't you? You could link a couple of places.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Which is interesting because you saw in the property crash of 2008, you saw very dramatic property crashes in Vegas, Phoenix, Austin. And the reason is they're unusual in that they're not on a lake and they're not on a coast. And so they can expand in four directions. Which I know that sounds, San Francisco can't.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you're on a kind of peninsula. How does that impact the price? Because simply there's four times as much land, actually more than that, because area expands at the square of distance. Yes, yes. So you've only got to go a mile from the, a mile further out. Mm-hmm. And you get, you know, what is it? The square of the distance. A fuck ton more land. Okay. So there isn't really much scarcity.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Combine that with the fact that they were designed for the car. So you, I mean, I love Phoenix. It's fantastic because they actually synchronize all the, they probably do this in Austin. They synchronize the traffic lights. So when you drive in at night, you can ride the green wave. Have you done this?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I thought that was... There's something called riding the green wave, where if you obey the speed limit, you can basically keep going through... That's only if you hit the first green, though.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But once you have one of those things, waiting for a kettle to boil feels somehow weirdly Victorian.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so technology often works that way, that actually, interesting with electric cars, for example, the latest data seems to suggest that although there's a huge amount of resistance to electric cars, the people who make the move generally don't go back. Once you've actually – once you've kind of gone over that first initial hurdle of adoption, you don't revert.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Because they can capture power using money rather than using rights. And the super rich... I mean, if you look at Dubai, which has done a fantastic job of effectively saying,
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
um we're just going to make this place unbelievably attractive for wealthy people to live here in terms of low taxes okay uh very low crime rate okay uh you have um uh cheap labor which rich people really love you know most of us are you know uh you know in other words you get lots of people doing stuff for you so the service industries are fantastic
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And to be honest, very rich people aren't that bothered about being able to vote because they only get one vote, which is the same as the teacher down the street. Why would I want something I can't have more of than somebody else? So it doesn't surprise me, by the way, that actually very rich people are often quite drawn to authoritarian spaces because they don't suffer the downside, okay?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But they gain, in some respects, they can profit from the upsides.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, a lot of people have, I mean, I had an interesting conversation, okay, which is that where people spend wealth is increasingly, I think, slightly undesirably, okay, being detached from where people earn it. Now, I grew up in the Welsh Valleys. My Scottish ancestors moved down to South Wales because it was the Dubai of the late 19th century, without coal money. It was actually booming.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, my great-grandfather, I think, moved down to Edinburgh, intending to join from a croft, intending to join the police force, and was told...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
don't bother here south wales is where you need to go to make money but the people including the coal owners lived somewhere within they didn't live in the next to the mine but they lived somewhere within the proximity of that thing i remember my grandmother who's not remotely left wing okay quite the opposite standing on cardiff station looking around and by the way cardiff was a lot grimmer than back then this was in the 70s than it is now it's rather nice now lovely
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And saying, just think of the money that's been made here and spent in more exotic places. I always remember that. It was a strangely kind of socialistic sentiment from a pretty right-wing grandmother. And what you see, and I remember having this conversation with people who are responsible for Invest in Kent.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And I said, to be honest, it doesn't really matter whether you attract businesses to Kent. If you can get people who earn money in London to come and live in Kent, and their families all spend their money here, okay? That's good enough.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so when you have this detachment of where people make money and where people spend it, one thing the Portuguese are doing, they're proposing lower tax rates for people under 30. They're proposing these nomad visas. Lisbon, very cool, very attractive city. Likewise, Porto, you know, attracts people who like kite surfing and other excitement.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So, I mean, we don't seem... Now, the other thing you can do is just make the place one hell of an entertaining place. Now, I've always argued. I can't get anybody to disagree with this. I don't think pubs, cafes, and restaurants should pay rates or taxes because they're actually a social space.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
When you spend money – this is interesting, which is that economics holds it as kind of – this is my Gary Steeves. Yeah, yeah, yeah. Which is as well as these kind of single representative agent models which don't understand inequality. You know, by the way, really bad inequality is bad for everybody. It's bad for the very rich.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You want people, the ideal place in which you live is one in which you're surrounded by a few people who are richer than you and quite a few people who are a bit poorer than you, but not so poor.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's not just a havoc. You want actually social spaces to be roughly commensurate with where you are.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And if you live in a place where you have 10 rich people, okay, and everybody else is massively poor, the 10 rich people got nowhere to go to eat.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
By men or women or both?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
What's their explanation for that?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So the effort you have to make in terms of Botox and... All the rest of it. There's a very interesting theory about that, which is why Why Neiman Marcus? There's an academic paper, Why Neiman Marcus Started in Texas, Not in Boston. And there are two explanations. Where you get more males than females, the luxury goods thing is important, but also where you get a high degree of anonymity.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So, in other words, you had a lot of people moving in who can effectively reinvent themselves as high-status individuals. Okay. Now, just to give an example, luxury goods only work really when you have an audience of strangers. Okay. Okay. Had I gone into the pub in Monmouth, where I grew up, which is a market town, with sunglasses with Moschino written across them, okay, on inch-high letters…
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I would have been the subject of complete ridicule. Everybody knew where I lived, what I did, what my parents did, what I earned, et cetera. And this would have been regarded as an utterly ridiculous thing to do.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But if I go to Miami, I don't know, that probably, I didn't, you know, um, So you're undoubtedly right in that a lot of these kind of display and signaling behaviors are contextually determined by the setting.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There's a strange hemline index as well, isn't there? Which is that in the 20s, you had very thin androgynous women with short skirts. Yeah. Then when you have a depression, the whole thing slightly changes.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Quite often, early technology is probably driven by status seeking rather than utility. So if you think about early adopters of cars, which were unreliable and expensive, The motivation was either novelty or showing off rather than utility. Apple Vision Pro as the 2024 example. Apple Vision Pro would be exactly the point.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
This is fascinating because undoubtedly, I mean, by the way, I think, by the way, I'm a huge enthusiast for evolutionary psychology, but sometimes I think it jumps the shark a little bit in terms of, I think these things are contributory, but I don't think what sometimes happens in evolutionary psychology is that this is believed to be the only game in town.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So, for example, that data on women having affairs on one of your earlier guests, which which seem to validate one hypothesis rather than another. And there is indeed a valid evolutionary explanation for what they claim that the data shows. But I would argue there were also five other possible explanations for that phenomenon.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Not least, more attractive men are likely to be out there playing the field more simply because their opportunities are greater. And therefore, the fact that women tended to have affairs with people more attractive but not necessarily richer than the people with whom they're in a long-term relationship with could be explained by multiple reasons.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I didn't think you need to do that because actually what he did was – fairly consistent with what he'd done before. He had probably... Elon was a little bit of a clever... Signal boost. Signal boost. I think what you really have to analyze is the Democrats as a marketing entity and how spectacularly bad they are in that...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You end up – the problem with living in a very tight urban bubble – I did a talk with Rick Rubin for the Christmas edition of The Spectator. He's great. Absolutely glorious man. And he made the interesting point that he had a kind of interestingly bipolar childhood and that he spent weeks on Long Island, which was effectively a blue-collar existence.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And then he spent his weekends in Manhattan with an aunt who was a kind of creative services director for Estee Lauder, was taken to concerts, you know, the usual cultural events, books, poetry, etc.,
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And the interesting observation, he said, is there was a downside to that, which is that the cultural life in New York was entirely driven and hence constrained by what other people thought of your tastes. Whereas people on Long Island, the blue-collar culture, basically you like things because you like things. It's similar to...
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And Rob's point that, what is it, that middle class food, posh people food looks better than it tastes and working class food tastes better than it looks. OK, that's, you know, and the constraints on you, on your opinions, on your tastes, on what you could enjoy. Because you had to defer, your primary concern was, what does this say about me to other people within my group?
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, in a blue-collar environment, you can like what you like. There are certain musical forms which tend to be gospel, I was mentioning this, country, where... Nobody really cares. There's no particular kudos to be gained from liking country or liking gospel.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I would argue that, yeah, you want to be the one person in your street who has that thing. And actually, those early adopters do, in a weird way, pay a price. But there's an argument, by the way, which is that this also happens in nature, which is the argument that birds, dinosaurs conceivably, evolved plumage and wings for sexual display purposes, not as a mode of transportation. Right.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And therefore, you're free basically to exercise honest subjective taste without having to pretend to like things that you don't in order to fit into a particular milieu. And there is a problem when the Democrats become I've got a skin in this. I've got a dog in this fight. Actually, Woodrow Wilson was like my third cousin twice removed, weirdly. Everybody's got a racist in the family.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
My misfortune is that my racist was the President of the United States. But his mum was born in England to Scottish parents. But... The Democrats fundamentally, I think, are in this bizarre hall of mirrors where effectively their own opinions and thoughts have now become subordinated to a kind of artificial worldview. where you have to buy the entire album, as it were.
Modern Wisdom
#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There's a Times journalist who talks about this, which is sort of album politics. In other words, it's not just that you have left-wing opinions. You have to buy into every single opinion that is believed to be from the left. And you have to buy the whole package deal. And consequently, you end up with this very, very strange idea group of people thinking their norm.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And it's very similar to, you know, the phenomenon that Gillian Tett spotted. I don't know if you've read The Silo Effect. Have you had Gillian on the show? No. Very, very interesting because she's an FT journalist, but principally her training was as an anthropologist and ending up as a business journalist. She brought her anthropological skill set and eye to what was going on in business.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And by happy coincidence, in a sense, she ended up looking at what was effectively the securitization of mortgages, that whole business, before the events of the big short, before the crash. And she immediately spotted that you had this group of people in a particular habitus or mindset who were incapable of understanding the world outside their own particular reference points.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And just an amusing detail about that, which I thought was just... Hold on a second. I remember thinking. Okay. So there was a Trump event at... That huge New York hall, what the hell is it called? Madison Square Gardens, okay? Where there was a comedian, I think he's a Texan comedian if I'm right. Tony Hinchcliffe. And he told a little joke about Puerto Rico, okay?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Which is, we won't repeat it here. And the immediate assumption, because in their worldview, all Latinos identify as Latinx and have a massive sense of solidarity towards all other Latinos, because that's their peculiar worldview, was that by countenancing this joke, Trump had lost the entire Latino vote.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I was sitting there going, okay, that's a bit like saying that if the guy had told an anti-French joke, he would have lost the European vote. Okay. The idea that Latinos are so kind of homogeneous as an ethnic group that they identify, you know. They'll band together with the Puerto Ricans. Yeah. I mean, Cubans thought that joke was hysterically funny.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, you watch Narcos, right? I mean, you know, the Colombian-Mexican tension is enormous. I mean... Yes, there are points of shared commonality, but you also have this thing between... Actually, precisely because the countries are quite similar, you get this kind of narcissism of small differences. And I always remember looking at that and thinking, he's lost the entire Latino vote.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And I was going, you clearly have a view of a community, which is one which is based on probably some Marxist ideology about race, which... is in complete denial about nationality or nationhood. And it just struck me as really interesting that you could misread that so badly.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And fundamentally, the way they go about appointing people, the way the whole thing appears to be kind of a coronation, it's It's very sad because, you know, this should be, you know, this could be a, you know, really wonderful, you know, there are lots of aspects. I mean, yeah, by European standards, I'd lean politically right. Okay. You know, I'll be honest about that by Euro standards.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So in other words, they did this thing as it was a peacock's tail, but it was on the sides rather than on the back. Okay. And you could display your feathers as a proof of your health and magnificence. And then, so this effectively evolved as a status signaling mechanism. And then... was parlayed into a mode of transportation because the wings became big enough to enable them to be used.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But there are aspects to the US which strike me as ridiculously right-wing. Okay. Not least the appalling vacation allowance. Right. Yes.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Which is, that's a humanitarian crisis.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Two weeks paid vacation. But also it's weirder than that because unless you're getting married and going on honeymoon, taking a whole week at a time is looked at as pretty dubious. Now, I don't know about you. It's not a holiday if you know which day of the week it is, in my definition. Okay. If you actually, if you're conscious of the day of the week, you're not properly on holiday.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Look at maternity leave as well. That strikes me again as absolutely extraordinary. It's fucking barbaric. And yet, it's a wonderful case of status quo bias, by the way, because if you think I have never, you know, I pop to spectator parties and I have a drink with Nigel Farage once or twice.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I've never met anybody in the UK so right wing that they believe that we'd be better off with fewer days of vacation. Roll back. Let's roll back this for another 2% of GDP if we just roll back vacation time. Genuinely, I've never.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The other weird American instance I had was that I met somebody who said they would happily pay $60,000 to a tax attorney. Or tax advisor to avoid paying $40,000 in tax. They said this to me in absolute seriousness. Now, that is literally, you resent your tax dollars to such an extent that you would actually happily pay $60,000. Well, you kind of say.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Of actually almost harming themselves in order simply to spite.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And you're much more likely to be more productive if you have some degree of discretion over where and when you work for those tasks that you perform on your own. But there is this value of what you might call serendipity, coaching, for example, co-creation, collaboration, which I think still requires some degree of co-location.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The... It's a thought experiment, which one of the things I think we're lacking in is that I would argue, yes, that my joke suggestion was that people who pay higher rate tax should be allowed to drive in the bus lanes. Okay. Now, just to be clear about this, I didn't mean that entirely seriously. I didn't mean that it should be enacted.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It was purely a thought experiment based on the observation that rich people are pretty happy paying for things if a small amount... So when you are poor... a large part of your disposable income is spent on what you might reasonably call utility.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So you might argue that that's true of things, you know, I mean, I've always wondered about technologies like the typewriter where I can't really see, okay, there's an advantage in legibility over handwriting. But for a period of about 40 or 50 years, people would write a note. This is how it worked in business. I'm not making this up, OK?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
As you get richer, both attractively and unattractively, as I said, what you might call relative status, in other words, the relative quality of something, matters more than its absolute value. And so if you look at car manufacturers, the top of the range X probably costs 25% more to manufacture than the bottom of the range X, but the sticker price might be doubled.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that's simply because the people buying from the top of the range are more interested in status and more interested in leather seats and heads-up display and adaptive cruise control. They're more interested in what you might call things you can show off about or things which are just novel. Whereas the poorer person is buying the car as a mode of transportation.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's closer to the economic idea of utility. And consequently, it struck me that government should play the same trick that car manufacturers do, which is to say, yes, you pay a lot more tax, but in return, you get certain privileges. You get certain advantages. Now, By the way, the evidence that something of the kind, which is that if it was simply reframed with a thank you,
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So there's an experiment from Singapore, which I think was adopted in the UK by a housing association which had trouble getting people to pay their rent on time. And one of the most – they tried a variety of behavioral economic interventions. But one of the most successful was simply every time you paid your rent on time, you got a text saying thank you.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that massively reduced the incidence of late payment subsequently. It's one of those weird things. And that's a total just – it's a tiny little reframing, which is you did a good thing. We're grateful to you. We noticed. Yeah. Whereas I don't feel when I pay whatever vast amount I pay to the exchequer, if they just said kind of we noticed, thank you for doing the right thing.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
By the way, just to be clear on this, I do do the right thing because my wife does my finances. She's a vicar in the Church of England, which is like having the shittest accountant in the world. in terms of tax. Roy, when you attended that conference, they gave you a free pen. I really think you ought to declare this. I actually declared all the capital gains on my bloody Bitcoin.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, what kind of pissed me off about that is had it been a house, of course, I wouldn't have had to pay a bloody thing. No capital gains. But the interesting thing there is that
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
i mean there was a guy who's the expert on this guy at berkeley called george acoff who was a left-wing guy who pointed out that the right to some extent enjoyed some unfair advantages simply because of linguistics so the phrase tax relief for example suggests that tax is a burden from which you have to be relieved it's not paying your civic duties towards the maintenance of uh collective goods.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And, you know, as a Brit, okay, as I said, a right of center Brit, I can't help noticing when I go to LA, to be absolutely honest, I'm not sure I wouldn't rather have a slightly worse car and better roads. OK, because, you know, there is a correct ratio of expenditure of money which is spent at the individual level and money that's spent at the collective level.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And by the way, one of the reasons I half jokingly suggest that pubs, cafes and restaurants should be given a big tax break. I genuinely mean that is because I think they're a social good. If you go to the pub, okay, you are maintaining a pub that I can go to the following day. And it actually benefits the whole community.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
In the 70s in Ogilvy, there was a typing pool, which was a lot of people who you would hand them a handwritten note and they'd type it up so that you could then send it on to your client. And then typically there was always a mistake. So you then had to send it back and have it typed. There were no word processors then. So the whole thing had to start all over again from scratch.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And you might argue that the rich people who go to the pub and buy the fancy spirits or the high margin drinks are actually subsidizing the lower margin drinks for people with less money.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So in other words, there is an ecosystem within that kind of thing, which is mutually beneficial.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
They're lucky too. Yes, of course.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
He's very honest about that.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Probably Romans who'd take him up on that, I think.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The military, for example, or whatever.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You had something a little bit similar in New Mexico. There was a guy called Gary Johnson, I think I'm right, aren't I, saying he was the governor of New Mexico, who was kind of libertarian. And it was kind of Ron Swanson-ish. I don't know if you know Parks and Recreation, but you had a libertarian doing a government job.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And he believed, quite interestingly, he said, basically, I dislike all forms of government expenditure except roads and education. He believed those things genuinely had to be collectively spent. They were collective goods. And I think his phrase is, if you want economic growth, you need a four-lane highway.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so he was almost a case in point where, in other words, he very, very narrowly decided what the focus of government within New Mexico should be. And was, by all accounts, actually, he was a presidential candidate for the Libertarian Party back 12 years ago or something. But he was a pretty good governor. Have you been to New Mexico? It's the neighboring state. No, I haven't. It's glorious.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Go there. It's utterly fantastic. The Santa Fe Opera. Give that a go. By the way, I'm trying to start a little tradition that the guests on podcasts get to advertise something as well. Whatever you would like. It always strikes me as very unfair. The Santa Fe Opera. The Santa Fe Opera is my...
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And the question you've got to ask there is, was that simply because you weren't a serious business unless you sent typewritten communication? Signaling. In other words, you couldn't, as a solicitor's firm or as a Unilever or whatever, you couldn't send handwritten notes because it simply looked unprofessional. So everything had to be typed.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I was on Jamie Lang's podcast and started, I think I was plugging a Italian-Jamaican cafe in Westrom. Probably giving it a greater level of indiscriminate fame.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I've got a new one for you. Hit me. Only relevant for Brits, really, although also possibly relevant for expat Indians in the United States. The frozen paratha.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I bought this from Ocado. I thought, why the hell has this frozen paratha got 170 votes and is, like, literally five stars on Ocado? What's Ocado? Oh, my goodness, you don't know. You see, there are lots of things in the UK. So it's grocery delivery, home grocery delivery, very innovative bunch of people who started, you know, effectively robotic picking. So it's a very, very high-tech mode of...
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Grocery delivery. They used to have a partnership with Waitrose. They've now got a partnership with Marks & Spencer. Okay. It's actually probably better than anything you've got in the US, actually. By the way, in Britain, we never really celebrate. So I would include Octopus Energy and Ocado.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
as you know and perhaps say um wise okay we occasionally do these things incredibly well and in the united states you'd be fated for doing this whereas in britain you're just treated with kind of mild suspicion okay um And there is, I think there is that British problem, which is there is an acceptable social ceiling to the amount of wealth you have. Yes.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
That Americans have observed, even in what you would think of as pretty cutthroat businesses like investment banking, that once they've got a flat in London, you know, a former rectory in the Cotswolds, you know, a wife called Polly, you know, a Labrador, two children at private school arranged over in an Argyle.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
okay basically that's it you've hit your ceiling and anything more would be slightly dubious you know there is that kind of weird kind of class based ceiling to you know it's quite difficult to create a Dyson in the UK okay but
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But what's interesting in Ocado is the frozen paratha is it was invented in what I call Cinnamon Valley, which is this area around Wembley in London, which is where an enormous amount of innovation in Indian food preparation goes on, which is one of the great I think one of the great reasons I still live in the UK is the quality of Indian food surpasses very difficult to find in America.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I imagine Austin, you must have a large enough expat community that it's started to raise its game.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Okay. We'll go looking.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Maybe someone can comment below. Someone can comment. But the frozen paratha is a remarkable thing. It just sits in the freezer. You can have an onion one. You can have an aloo paratha. There's a garlic one. But basically, you take it out of the freezer where it's basically a completely long life, bang it in a pan with a little bit of oil. About one and a half minutes either side, turn it over.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You've had the kind of paratha which is literally, you know, if you went to a three-star Michelin Indian restaurant, you would not be disappointed by the paratha. I mean, what the hell is sourdough? What's this sourdough thing? It's fine, right? Sourdough has a place in my bread repertoire. But the extent to which it's come to dominate artisan bread, rather like IPA dominated artisan bread.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, there may have been something to do with carbon paper and copying, which had some particular role, which made typing desirable. But it's an interesting question because no one could really consider that typing added to productivity. Quite the opposite. It meant that every communication producing anything was painful. The only benefit it may have had is it kept the volume of communication low.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
These things, these kind of, these winner-take-all effects in a globalized economy are actually problematic because they're like the gray squirrel. You know, they eliminate the indigenous alternative.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Yeah, yeah. It is a problem. You know, I mean, and likewise, you know, the discussion of AI relative to discussion of the importance of
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
zoom and remote working strikes me as off whack that actually over a longer time horizon um the importance of being able to have a conversation with anybody instantaneously on any continent in a group or individually strikes me as you know it's not far from teleportation And yet nobody's really talking about it. Nobody's developing hardware for it.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
there's a great passage. It's only a small passage in John Kay's book, The Corporation in the 21st Century, which is his attack, largely, the whole book is an attack on the idea of the shareholder value movement. That the fundamental point is that the point of a corporation is not solely to generate shareholder value, but also the fact that the pursuit of a single metric is
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
is much less creative and much more likely to lead to value destruction, including for the shareholders, than the pursuit of multiple objectives, the triangulation of multiple objectives, which is looking after your employees, looking after your shareholders, looking after your customers, and looking after the wider society. Okay?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So a multidimensional objective from a company will probably lead to a greater variety of behaviors and a greater level of creativity than a single-minded kind of reductionist objective like short-term shareholder value maximization.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And one of Kay's points, which he makes, is that if you look at the companies that have been kicking around in the Fortune 500 or the FTSE or whatever for a long, long time, It's Nestle, it's Unilever, it's Procter & Gamble, it's Reckitt, okay? It's companies which have a large marketing function which keeps them rooted in the real but changing world of what customers really want, okay?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And keeps them alert to effectively exploring new forms of value exchange which are ever-changing with technology, taste, fashion, etc., And those companies, interestingly, seem to have a much greater level of survival than companies that effectively develop some proxy measure of success other than the marketplace and seek to pursue that. Now, pursuing success in the marketplace is more difficult.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's more painful. It involves you to deal in things that are highly probabilistic rather than deterministic. It's messy. But ultimately, in terms of resilience, it seems to keep companies on their game. in a way that businesses that are basically focused on what you might call internal benchmarking metrics can find themselves actually massively detached. Could you give an example? Well, okay.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Because it was so effortful. Whereas email, the cost of actually sending an email to 100 people is far too low.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you pursue, yeah, I mean, if you pursue efficiency at the delivery of something, okay, you can end up very efficiently making something that people no longer want or where you're completely depositioned because effectively what you're making. So in some cases, for example, the rules of the game change.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Okay, so there will be a period where, for example, well, I'll give you a perfect example of this, okay? Which is an example I love to give. Which is, when I was a kid, okay, there were a few rich kids at school who'd been to Schiphol Airport. And they'd come back and go, it's incredible. Like, there's shops and everything you can buy.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I bought a Walkman for, like, so many guilders before the Euro. Okay. Oh, it's amazing. And we went there and we did this. And then... Then it was Changi Airport in Singapore. Oh, it's amazing. I bought this. They've got this. They've got a fountain. They've got that and the other, you see. And then eventually it moved to Dubai. The crown moved to Dubai. You've kind of blinged up airports, okay?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that all goes on. And then one day, people come back and they go, if you go to London City Airport, it's brilliant. There are hardly any shops. You get on the plane in about five minutes. And you suddenly realize that everybody has been optimizing for turning an airport into a bloody shopping center. And then London City Airport comes along, completely the opposite. Yep. Okay.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
and just changes the rules of the game. So, I mean, the hotel industry is interesting. I mean, okay, I think I'm allowed a plug for this. I'm a weird fan. Have you stayed in a moxie hotel ever? Yeah, yeah, yeah. A few times. What's your take? Because I think it's quite clear. I think it's a kind of mental hack, which is actually quite smart, which is everything is really basic. It's good.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Good TV, good Wi-Fi, comfortable room, but not very big. No room service, no laundry, as far as I can remember, okay? You wouldn't want to stay there for two weeks. But two things, pretty good location. And secondly, the ground floor is basically a bit like a WeWork in that you can just hang out there, meet people. There's actually a meeting room.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Even after you've checked out, you can spend three hours doing your email at the Moxie without feeling like a weirdo. Whereas if you do that at a conventional hotel, once you've checked out, you feel they want you to piss off.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You need Uber Sleeps to go alongside Uber Eats.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Actually, it's an interesting idea because you would also have a market. If you had Uber Sleeps, you can have a service provider
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
which if you basically missed the last train and ended up crashing at a hotel, it would deliver sort of a shirt in your size for the following day and toothpaste and a toothbrush and all the things you didn't think to pack because you weren't aware you were going to be staying at a hotel.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There's meditation areas, there's gyms, there's napping, rent-by-the-hour napping rooms, which I imagine are used for all manner of... Fundamentally, by the way, I mean, the built environment in every respect has not caught up with technology. And it's actually, I think it's a total failure. It's largely probably because you can't measure. But I always think, okay...
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So it's not really to do with productivity, but there are people, I mean, someone in my company I won't name was driven practically insane by the fact that the Netflix CEO revealed that there was a spike in Netflix viewing between 12 and 1 in many countries. Lunchtime. Now, first of all, it's lunchtime. Okay. You know.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There's nowhere at a station in a concourse. They've got all these walls around the edges which are underused. Now, just put a shelf there for people to put a laptop on, okay? There are trains with no tables, which drives me practically insane because apparently it's worth spending $120 billion.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
to reduce the time spent on a train between London and Manchester, but actually putting a table on a train so the person can work for an hour rather than basically sitting there like a Tyrannosaurus Rex trying to type on their knees. That's considered apparently an unworthy expense compared to time-saving on the actual journey itself.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And offices will need to actually fundamentally adapt to the fact that patterns of work are different. and that you probably need fewer meeting rooms and you need more pods. But also, the open plan office was insufficiently variegated. So if you take people who are non-neurotypical, for example, you know, I mean, my argument is that to some extent, the perfect office is not an open plan space.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's 50% library, 50% pub. In other words, half of it should be hyper-social and a bit noisy for people. I actually like working in cafes. I like background noise, even if I don't know anybody present. Equally, I'm conscious of the fact there are people who can't work unless they have complete silence.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
To introverts, an open plan office is probably very tiring.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Yeah. Yeah. I mean, you know, we... We have some weird sort of mysterious lavatories on the ground floor, which I notice the occupancy rate is surprisingly high, given that they're not signposted.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And I strongly suspect people are using them as a kind of escape pod.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Yeah. Yeah. And I... The other thing I think is interesting is if you really want to bond people, one interesting thing is to reduce the amount of money you spend on rent. But I think you have to correspondingly ring fence a bit of that saving and spend it on what you might call staff jollies.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, I don't mean total self-indulgence, but I mean away days where maybe we should take some office space by the sea somewhere like Margate, Folkestone, Brighton. Okay. Just because actually, if you want to bond people, I don't think an office is a particularly good place for bonding. I think if you take people on a trip together, you find people bond very, very tightly.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's accepted that people have a break if they want to chill out by having a sandwich in front of Netflix rather than wandering around to Pratt. It doesn't bother me personally. But also, I would argue that a lot of people would be much more productive in work if they started work early, took a three-hour break in the middle of the day, and then worked later.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, famously, you'll love this story from advertising. The Coke Hilltop ad, I'd like to teach the world to sing. It was conceived at, I think, Dublin Airport because there was a massive flight delay. And effectively, there's a quote from Bob Dylan in Brownsville Girl where he said, isn't it funny how people who've suffered together have more in common than those who are most content?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And these people had basically all been together, you know, and they were stuck at Dublin Airport overnight. And he noticed that effectively people were all going to the Coke machine. And because of the shared adversity, they were all bonding in ways that they never would have done had the flight been on time.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It only lasted, I think it was, it interested me from an anthropological perspective, because there's a theory that the reason young men get drunk and do stupid things is to find out who your mates are. In other words, the person who at the first sign of a police siren hoofs it around the corner is not your mate.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so it's a kind of loyalty testing thing, just as to some extent, you know, rude banter. is a kind of proof of... Stress testing. It's a stress test of a friendship. If we weren't really good friends, I couldn't say this to you. Therefore, the fact that I'm saying this to you is proof of our friendship.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
One of the Brexit dividends should have been that we got rid of that because it was an absolutely stupid piece of legislation. Which adds... By the way, it's also counterproductive because every now and then I go onto my Google Chrome and I get rid of, effectively, all the cookies.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Which means that for the next two weeks, it's even worse than usual in that every goddamn page I go to, I have to effectively give permission or deny it to see whatever this thing was. That was a classic case of what I think is sometimes called, you know, the...
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, commuting makes that impossible to do, but I would argue that your energy levels would be much better managed if you did take a break in the middle of the day with the additional bonus that you'd actually get a bit of sunlight. Yeah.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
That was Athens, yeah. I think you could come into Athens with an odd-numbered number plate or an even-numbered number plate to reduce traffic. And so everybody lined up at the Greek equivalent of the DMV when they were handing out car license plates. And basically they said, I really need an even number because my other car is an odd number. And so they'd all shuffle into order effectively.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
In the queue. And no, I mean, if you think about it, there were extraordinarily intelligent. If you'd given the job to some nudge theorists rather than to lawyers, you could have come up with a very simple solution, which I would have thought would be fairly amicable to everybody, which is you can set your browser to delete cookies more than X weeks old.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that would be – you might mandate that that's an automatic option that's made available to you. But the problem I have is that I like to purge all these things. I never quite know what clearing your cash actually means, but I like to do it regularly because it feels cathartic.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But I like to clear cookies every now and then because it occurs to me there's probably an unwholesome buildup of the things. But then every time I purge the damn things – It makes my browsing experience painfully bad. We could have got rid of that within weeks of 2060 if we wished to. I have no idea why nobody's done it.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If we acknowledge the fact that the bad thing about government isn't really that money spent through the government is necessarily bad because there are things that probably are better paid for collectively rather than individually, defense being an obvious example, okay? Right? I don't think it makes sense for everybody to employ a private army.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you're a Scandi, okay, in the winter, you go to work in the dark, you come home in the dark. So effectively, your exposure to natural light is Saturday and Sunday for three or four hours. So that doesn't bother me, the fact that people are actually choosing.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You know, it's pretty logical that we should actually pool our resources in the provision of defense. And by the way, I would also argue that the ratio of those things probably changes. You know, there are periods where technologically we'd be better off spending money on collective goods, and there are periods where we're better off spending more money on individual goods.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And, you know, there's a ratio of the two. But you made the point that, first of all, if you allowed very high taxpayers some degree of control over where their tax was spent, that's the first thing. Interestingly, good luck with that, because it's called hypothecation.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Dan Ariely is a friend of mine, behavioral scientist, believes that you could get people paying tax much more happily if it were hypothecated. But the Treasury absolutely hate the idea because it removes from them the finance person's privilege of shoveling money around at their whim. So they absolutely hate... It also creates a level of accountability.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's interesting, actually, because in the UK, for whatever reason, There are exceptions. If you go to tech companies, there's tumbleweed. You know, companies which are very strongly kind of tech engineering driven still seem to be very empty. What I know best is the ad industry. And actually, they're generally a fairly gregarious bunch.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I'll tell you a clever case of hypothecation, by the way, was John Maynard Keynes. I think he had, it might have been a million pounds to spend. He was the bursar of King's College, Cambridge. And he had two things that were calls on his finances.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There was the Arts Theatre in Cambridge, which was run and still is, and owned, I think, by King's College, Cambridge, for whatever historical reason, and King's College Chapel, which is a famous, you know, glorious medieval building. And Keynes immediately gave a million pounds to the arts theater, and nothing to the chapels. And his argument was very simple.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
He said, raising money for the chapel is a piece of piss, okay? I can get Americans to give money for this world-famous chapel, whereas raising money for the arts theater is going to be damn near impossible. So with the money I've got at my disposal, I'll give it to the things that can't raise money at the expense of things that can. The treasury absolutely hate hypothecation.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I also think that, for example, fundamentally, I mean, I've got an interesting idea, which I'll share with you, which I think is actually a usable idea, which is what I call charitable yield management. OK, let me explain. There are lots of things where you want to allocate resources according to willingness to pay. So I'll give you an example. I'm at Athens Airport.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you look at writers, you know, the people who are professional writers, journalists, novelists, they're very different, by the way, but all of them have sort of conditions under which they can and can't write. And they vary. Some people demand complete silence. Some people go to a cafe because they want some background noise.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
There's a massive queue for passport control. There are people in front of me in the queue. I'm paranoid. I turn up at airports like three hours early. I'm totally paranoid like that. Other people, these people had left it a bit late. Their flight was leaving in 40 minutes. The queue was about 20 minutes long. I was pretty sympathetic.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, what you could do is you could simply have, in the end, someone spotted them and let them through. It was quite intelligent. But you could have a system where you pay 20 quid, you jump the queue. Most people find that repugnant, but also they see that as the airport effectively profiting from their own incompetence.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Okay, which is you're probably deliberately creating a long queue so you can maximize revenue from queue jumping. If you had certain things where you paid but the money went to charity… That is an interesting thing because it still identifies willingness to pay. In other words, you're clearly desperate to catch your flight. It removes the incentive for fuckery.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And also the resentment of the people doing it because, yeah, they may be richer than you, but at least they're doing a good thing. So that could apply to parking. In every car park, there should be five station car parks. There should be five spaces where it's £25 to Oxfam on top of the parking charge to park there.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
The reason being that someone who is absolutely desperate to park will always be able to find a space. Whereas someone who's got 40 minutes to spare can drive off somewhere else.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You're maximizing exactly that, the area under the curve, without creating resentment. You can apply that to street parking. One parking space in 10. And it's easy to do with Ringo or pay-by-phone. What do you use in Austin? What's the parking app in Austin?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Oh, you tap your... You've got that. So... With those apps, it's really, really easy.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you're in one of those charity spaces, you have a different code, and you just put in a different number, and 20 quid goes to Oxfam on top of your cost of parking, which means that the parking spaces go to the people who most desperately need them without anybody feeling rooked, and charities make a lot of money.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, that strikes me as quite an interesting... You could apply that to road pricing as well, by the way, interestingly.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Well... If people felt that a component of... Let's say you had a high-speed lane. If there's a traffic jam on the M25, you can pay 20 quid to use the... It's equivalent to the multi-occupancy lane you get in the US. Okay? There's a premium lane which lets you jump the queue a bit. Okay? Now... I would use that if I were going to Heathrow, probably. If I've got a plane to catch.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If I haven't got a plane to catch, I went. Now, the great thing is what would create a lot of resentment is if people just saw a load of Bentleys and, you know, flash cars jumping the queue. It creates fundamental resentment. But actually, if you made the thing charitable, it would be less repugnant. And you would still be allocating the roads to the people who were most in need of the road.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But what these people clearly know is that they can optimize their productivity by controlling the conditions in which they write. And it strikes me as pretty plausible that's true for other forms of knowledge work. where some people can't work if there's any background noise or chatter. Other people can't work in complete silence because it spooks them out.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, road pricing is going to be very interesting from a psychological perspective because one of the things they did with Euless, which is in London, which is that if you had an older diesel vehicle, you had to pay, was it £20 to come into the Euless zone, which was pretty extensive. It wasn't like the congestion zone, which is just the middle of London.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It was pretty much right to the edges of London. There were Euless cameras everywhere. And what was unfair about that was not only that we can debate the whole legitimacy of the charge, but let's say I had an older diesel vehicle. I live in Sevenoaks, which is just outside the Ula zone. To be honest, I drive into the Ula zone six times a year, maybe eight.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I could just about swallow the current charge. If you travel in every day, So 100 people paying the EULA's charge once don't really care, whereas one person paying it 100 times, it's practically bankrupting them. And the fact that there was no recognition of that.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
So if you were a nurse who lived outside London or indeed inside London and because of shift work needed to drive to work and because you hadn't got much money, you had an older diesel car. the fact that there was no equivalent of Amazon Prime, which is, okay, pay once, pay for a year, okay, was fundamentally unfair.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that, again, is down to Gary Stevenson's observation, actually, that if you optimize for the average, you don't distinguish between one person paying something 100 times and 100 people paying something once. I always notice when you drive down the French motorway, which is called the Autoroute des Anglais from Calais down towards, I think this one is towards A10 or something it's called.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
You know, it helps to have people in the same place at the same time for all kinds of reasons. However, what's weird is that the level of absenteeism, if you want, I don't want to call it that, but you know what I mean, okay, is much, much higher in the US and Canada than it is in the UK. Was sick leave?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Can't remember the exact number. And he always noticed that for the first sort of 50 miles, basically all the cars are English. There's a bloody road. And he goes, you know, don't the local French want to use their auto route? And then he realized, of course, if you're English, you drive to France once a year. You pay the French motorway tolls.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you drive a long way down to the south of France, it's going to come to a few hundred euros. But that's a lot less than you'd pay for a hire car if you flew. And it's just something you just suck it up if you want to drive down to the south of France. If you're French and you've got a stretch of motorway of 20 miles and it costs you €5 a goddamn day, that's €1,000 a year.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
It's a completely different equation. And so one of the things we need to understand much better is to economists, price is a number, but to consumers, price is a feeling. And fundamentally, economists have this weird idea of money that it kind of, I mean, one of the most important topics, I think, in economics is how to spend it.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I mean, Scott Galloway did quite an interesting piece on this just a few days ago, which is, in other words, it's not just about investment. It's not just about wealth optimization. The level of skill with which you translate available money into meaningful experiences, into happiness, well-being, flourishing, whatever you want to call it. I mean, that's a skill in itself.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And there are undoubtedly people who do it very, very badly. By the way, not only people who are extravagant, but actually people who are too stingy. So there's a wonderful piece of research by George Loewenstein, which looks at the fact that we all acknowledge in economics that there are people who spend too much. In other words, they get into debt. They're extravagant. They live for the moment.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
They're probably, you know, they kind of have short time horizons and optimize for the moment to a point where they neglect their long-term wealth.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
I've known writers who, if there's someone operating an electric drill seven houses down, they're incapable of producing anything. There are other people who are spectacularly disciplined. Now, it does strike me that you will make people more productive if you allow them some degree of autonomy to control the environment in which they produce their work.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But George Loewenstein also made the point that correspondingly, you would expect there to be people who are not spendthrifts, he called them skinflints, who actually find the act of spending money so painful. Just the act of parting with money is something, the very transaction itself is so painful, they spend far too little. And I think he did a kind of survey on this.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And roughly speaking, about 40% to 50% of the population get it roughly right. And then you have a chunk of people at one end. Actually, skin flints outnumber spendthrifts, if I remember his data. So there is, I mean, one of his points is that he's a very big believer in buying experiences rather than stuff.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And that's one of the reasons I think Americans, by the way, should have more vacation time because Americans have quite a large non-working population, but it's all people at the beginning of life and at the end of life. And the Americans massively over-index in terms of leisure or lack of economic participation in terms of students and in terms of retirees.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But they're massively too busy in the middle of life. And one of the things I would argue is that if Americans spent more money on experiences, leisure travel, et cetera, which tend to be quite labor intensive, rather than, say, buying more goods, which is what you do when you have very little spare time, would the actual American economy benefit?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
In other words, it's better off having people working in a New Orleans cafe than it is importing a Chinese device that, you know, I don't know, robotically cleans your cappuccino machine or something. Whatever it is that people are buying. Now, having said that, you've got to be very careful about dividing what is a good and what is an experience.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Because if you buy a guitar and then spend a lot of time playing the guitar... It's both. It's both. So it's very dangerous to say, oh, no, no, it's just goods are solid things, experiences are intangible, because there's a combination of both.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Always a pleasure. It's a delight. I just feel, to be honest, I just feel I'm a crap version of Eric Weinstein. Don't get me wrong. Eric, every time I watch him, I feel inadequate. I just feel like this rubbish version of Eric.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
He wears these incredibly plutocratic white shirts. I'm just intrigued.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
By the way, his theory, which is ingenious, that Jeffrey Epstein was basically an intelligence ploy that couldn't survive into the Internet age. That was one of those eye-opening moments where you go, surely not. Because if you think about it, OK, for a government, for a state actor, operating a billionaire looks expensive, right? But compared to an aircraft carrier, it's a rounding out.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Now, I'm not suggesting that's five days a week, but I'm suggesting it seems to be implausible that giving people some degree of autonomy won't have benefits. But the interesting thing is, if you look at business, we've imposed loads of things on people, open plan offices, email, Slack, Teams, et cetera. without any real investigation of the effect it has on productivity.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But we don't really care because the staff don't really enjoy that, so we don't have to worry about it. But the second you have an experiment where the workforce seem to welcome it, suddenly everybody, oh my God, they've gone to Sainsbury's on Thursday lunchtime. Well, they're going to have to go to Sainsbury's at some time anyway, okay?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Yes, okay, they're doing it during daylight when the store's quiet. Well, if they're working at nine till 10, which they can do because they don't have to get up at seven o'clock in the morning, who cares, okay?
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Oh, that's simply a question which is, I think it's a wider question. So, I mean, email, which I mentioned earlier, is an interesting case in point in that it was assumed that there could be no finer form of communication other than immediate and free. And we automatically assume that faster is better. And one of the questions I raised, which I still think is a serious question, by the
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Do we need slow Tinder? Do we need slow right move? Let me explain just what I mean by this, which is that in most processes of search, if you look at consumers, what they do is they refine their preferences according to what they find out there. So they go into the property market, the dating market, the holiday market, and they They have a set list of preferences to begin with.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
If you talk to any real estate agent, most people who deal with a human real estate agent end up buying or renting a property which meets remarkably few, if any, of their initial criteria. That's probably true of the people people marry as well, I would guess. If you ask someone, effectively...
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
to write down put it put it very simply we think we know what we want but we don't is probably the simplest way in which and the way we discover what we want is by a kind of exploratory process of discovery where we explore the market and what's available and what they cost and what we experience when having a look at a particular house or person then refines our preferences and
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Well, some of it's probably geographical in the simple sense that there are people who've moved. In other words, it's difficult in the UK to move so far away from the office that you can't come in for one or two days of the week. You have to choose an island somewhere or go to Scotland, I guess.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
And so this, what you might call the right move approach to decision-making, which is define what you like, we give it to you, you buy one of those, okay, looks to us as if it's a perfectly sensible and efficient way of choosing a house. But actually, we don't see what we don't see.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
Talking to someone this morning, I better not give away who they are, who discovered that Rightmove, there are areas of London which are holes. In other words, they don't fall into any predefined area on Rightmove. And property prices in those areas are disproportionately low. Because you can't search for any property that's in that area. Now, it might be if you're looking for a much bigger area.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
But in other words, they're not in Kensington.
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#904 - Rory Sutherland - The Secret Weapons Of Marketing Psychology
In other words, they're these weird little islands of undefined location where you can actually find disproportionately cheap property because Rightmove is kind of blind to their existence. Wow. You also have the problem, which is you can't sell a property, apparently, now for £850,000. Right. Your estate agent or anybody else will tell you, no, no, you've got to make it, say, 810 or 890.