“Behavioural science is the most relevant field out there for a marketer. If you are in marketing, you are in the business of behaviour change.”
Our guest on this episode of The Persuasion Game podcast is Richard Shotton, a behavioural science expert and author of The Choice Factory and Hacking the Human Mind.
Richard shares some of the principles of behavioural science and how they can be used marketing teams to grow their brands.
He has an incredible wealth of knowledge and enough real-world examples to fill a book (or three).
Among them, how Monzo and Aperol use ‘social proof’, how Kraft understood the say-do gap and how ‘making it easy’ can transform a brand’s fortunes.
Hacking the Human Mind:
The Choice Factory & The Illusion of Choice
https://www.astroten.co.uk/the-choice-factory
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Episode transcript:
Richard: If you are in marketing, you are in the business of behaviour change. Now, think of the core challenges. We want to get people to pay a premium from a product. We want to get people to buy a wider range of products. We want people to switch from a competitor brand. Every single question that marketers deal with is the question of behaviour change.
Laura: Hi Adam, how are you?
Adam: I am brilliant actually, had an excellent start to the week.
Laura: Tell me more.
Adam: So, do you remember when we created that list, when we started The Persuasion Game of who our ideal guests would be?
Laura: I do.
Adam: Well, I’ve only gone interviewed one of our ideal guests.
Laura: How very exciting! Tell us more.
Adam: So it’s Richard Shotton, author of Choice Factory and Hacking the Human Mind.
I mean, you could say he’s a persuasion expert.
Laura: Absolutely. A fascinating writer and thinker.
Adam: Yeah, so we had a conversation all about behaviour change and how insight teams, marketing, strategy teams can bring more behavioural thinking into their everyday work.
Laura: Fascinating inspiration. I’m excited to be a listener and not a broadcaster on this one.
Adam: Let’s get into it.
Welcome, Richard!
Richard: Hello. Good to be here.
Adam: So Richard, the last time I saw you was at the Festival of Marketing, giving a brilliant talk, with a Monzo client. And I mean, I collared you at the end of that because I was desperate to get you on the podcast.
When Laura and I started this, a year ago, we had three names that we wanted for The Persuasion Game and you were on that list.
So it’s an absolute pleasure to have you here today.
Richard: Fantastic. Well, I’m very glad to be here. I’m also intrigued about who the other two names were.
Tell me off screen. Yeah.
Adam: Yeah. So just thinking about some of the people that might be listening today, we’ve got marketers, insight people, innovators, brand folk.
From, you know, big legacy brands, big global organisations, marketing through and through; huge budget, spending lots of money on their advertising, on their marketing.
What do you think are the biggest opportunities for them when thinking about behavioural science? What are the biggest opportunities to apply behavioural learnings to what they’re doing?
Richard: Yeah okay so I think one of the biggest is also probably one of the least exciting, which may not be the best one to kick off with, but it’s a really important one.
Interestingly, you’ve had two economists or behavioural scientists who’ve won the Nobel Prize for Economics in the last 25 years. He had Daniel Kahneman in 2002 and then Richard Thaler in 2017.
So, you know, quite different areas of research within behavioural science. But both awarded the Nobel Prize. And interestingly, when both of them being questioned as to what’s the single biggest learning from their research, they say the same thing. They say, make it easy. And they’re not just making a statement of the bleeding obvious.
They’re not just saying, if you make something easier, it happens more. Now it’s true, but everyone knows that. Their argument is identifying, removing very small bits of friction tends to have an unexpectedly large impact. And because it’s unexpectedly large, most organisations are misallocating resources. So most organisations will put too much budget into making their product desirable.
Now, of course that will have an effect, but we tend to overestimate the effect. Most organisations will be putting too little into identifying very small barriers and putting more effort into resolve with them.
Adam: Can you give us an example of some of these very small barriers?
Richard: Yeah. Okay. So, there’s a study by David Asch, I think it’s 2012, but you know, within a few years either side. And he’s at the Penn Medical Unit and they are looking at how you can persuade doctors to give out fewer branded antibiotics and increase the amount of, also branded medicines, and give out more generic medicines. So the reason a hospital wants to do that is a branded medicine and a generic one, a pharmacologically identical, but branded ones cost much more.
Adam: Yeah.
Richard: So what they did is they looked at the prescribing behaviour of doctors, and the standard situation was doctors would come into their office, they’d put in various symptoms, and then they would see, once they’d identified what they thought was the illness, they’d be a dropdown menu with all the potential drugs they could prescribe.
And it began with the branded drugs at the top, generics at the bottom. And in that setup, 75% of the drugs prescribed were generic. After monitoring these kind of rates for a good couple of months, they then changed the system. So it’s still a dropdown menu, but now you’ve got the generics at the top, branded ones at the bottom.
So they’ve made it a couple of seconds easier for a doctor to prescribe a generic dose.
Adam: I mean, this is just the same, isn’t it about the opting in for organ donation or opting out.
Richard: Yes. Although that one has a bit of a sting in the tail, so maybe we’ll come back to that one.
Richard: Okay. but in this setting, you go from 75% of drugs being prescribed that are generics.
Adam: Yeah.
Richard: We’re now up to 98%.
Adam: Wow.
Richard: Now, this is amongst an audience who define themselves as being radical, rational, logical decision makers. You know, they’re making life and death decisions. But even then, you know, you add in or you remove a couple of seconds of effort and it has this unexpectedly large impact.
So the argument I think for any CMO would be firstly this reallocation of resources more into friction removal, less into appeal generation. And then secondly, just go through the customer journey. You know, spend a day with your team identifying the most trivial little barriers, and then put more effort into resolving them, and it will have this upside.
Because organ donation, it’s a bit more of a nuanced one there. So you’ll often see it gets kind of retweeted or reposted every so often, is a bit of data which looks at the proportion of a population that signs up for the organ register. You know, that people are saying they’re prepared to let the state take their organs after death.
And you see this very clear division across Europe. Countries that are opt-in, you have to actively say you want to give your organs up, you get a between 5 and 10% enrolment rate. Countries where you have to opt out, you are assumed to want to give your organs unless you actively say you don’t- you’ve got about 95% signups. So at first glance, it looks like an amazing example of the power of a little bit of friction.
Adam: Yeah.
Richard: But the sting in the tail is the sign up rates are not the metric you want. What you want is families to allow the organs to be taken from one of their relatives in that horrible situation when they’ve died in a car crash or whatever. And when you look at that metric, there’s very little difference between countries in Europe because what tends to happen is if it’s a opt out system, you know, no active participation has been required. Families are far more likely to overrule the doctors and say, look, my son, my daughter, my wife, my husband, they never said they wanted their orders to be given up. You’re not taking them. And no western democracy is going to override a parent’s opinion. So there it’s a little trickier because what you actually want is a really active commitment. So, there is an element of what bit of friction to remove is a question that has to be asked.
Adam:Yes. Yes.
Richard: And whether you need some degree of commitment is something that has to be weighed up in each setting.
Adam: What are the other kind of big areas that they can kind of jump into here for results?
Richard: So, easy is an important one. The other big one is often around social proof. So that is the argument that humans are a social animal. We are deeply attuned to how others think and feel. And if you want to encourage purchase of your product or if you want to encourage adoption of a behaviour, what you really need to do is make that behaviour feel like it’s commonplace and then it’ll become more appealing and people are more likely to change.
Now there’s loads of studies in this area. Probably the most famous is Robert Cialdini’s. So that’s this 2008 study. And he works at a hotel chain and he persuades this hotel chain to let him alter the messages that are running in guest rooms, to encourage them to reuse their towels. And I’ll simplify the study slightly just for ease, but there were two main variants in his experiment.
So sometimes he puts a door hanger up in the rooms saying, please reuse your towels, it’s good for the environment. Other times he said in the door hanger in different rooms, most guests in this room reuse their towels, please reuse your towels. So the first variant stresses the environmental benefit. The second is what would be called tailored social proof. And what he finds is that 35% of people reuse their towels when environment’s mentioned. 49% of people reuse their towels when tailored social proof is mentioned.
And shielding his argument is essentially that if you want to change behaviour, it’s often far more effective to stress what others are doing rather than just giving people a long list of rational reasons to comply.
So your job as a marketer is to make sure whatever it is you want to encourage, you’ve got to make that appear popular, especially amongst like-minded people. And that I would say along with ease are probably the two most well-known, but also most powerful of these principles.
Adam: Have you got any, I mean, you must do, right?
Any good examples then of the social proof in practice?
Richard: Yeah, absolutely. So there’s this lovely Ford ad from the late eighties when Ford Escort was the world’s bestselling car. So they used to run these amazing ads and they would be like big posters or magazine ads and on the ad they would print out every single make and bottle of competitor car.
And then over the top they said, if your car’s on this list, Ford Escort outsells it. Now it’s a lovely example because it’s exactly the same principle of social proof, but by applying it with a dash of wit, a little a modicum of flare, you just make it that much more effective. So I think that’s what I would…You’ve got this kind of basic application of social proof, stating popularity, and there ideally you do it with a bit of a charm.
But then you move into all these other areas that I think are even more interesting, which are how you imply popularity. So there’s a lovely study from Peterson, which I think loads of brands could apply, in which he gets, I think it’s 1,117 people. They all go through an e-commerce journey. I’m trying to pick my words precisely. One of the items people are trying to buy isn’t there, and sometimes it’s labeled out of stock, sometimes it’s labeled, sold out. And when Peterson questions everyone as to their level of irritation with the website, he sees a clear pattern.
People are about 15% more irritated if the product is labeled out of stock. And his argument revolves around social proof. He says, if you say you are sold out, it’s a subtle but powerful indication that this was a popular product and therefore it becomes more desirable. But if you say out of stock, well, you’re just drawing attention to the fact that you’ve cocked up your supply chain.
Adam: Mm-hmm. I think when we get, when you get into the social proof argument. And especially with some of the examples you’ve got in your book and you’ve got the Monzo hot coral card, with all the sea of black and gray and navy blue cards that existed in wallets.
When you see one hot coral card, it really sort of stands out and then people start to notice them and really think a lot more people have Monzo than maybe actually do comparatively.
Richard: Yeah, because the point here is our perceptions of the popularity of a brand, they’re not based on the consumer pouring over a Mintel market research report.
Adam: Yeah.
Richard:A consumer will come to a vague understanding of popularity by generally saying to themselves, how regularly do I see examples of this product being used? Monzo’s bright hot coral was only so effective because everyone else was essentially interchangeable.
There’s a long standing idea called the Von Restorff effect, which is essentially, we are hardwired to notice what’s distinctive.
So what you could do as a brand, I think, is think about as you say, all the touch points that customers deal with and maybe you wanna be looking at, well what are the ones that have mass reach? What are the ones that would be reasonably cheap for us to play with? And then from the psychological perspective, think where is it that all of our competitors are behaving in a very, very similar way?
Adam: Yeah.
Richard: Once you see competitors doing that, then you’ve got this opportunity to generate noticeability, because you can say, well if we behave distinctively, that’s one of the surefire ways to be noticed.
Adam: I think one of the biggest challenges we see, especially, we are in insight strategy consultancy, and when, and depending on the category, there’s often a big challenge with the say-do gap.
Richard: Yeah.
Adam: So consumers saying one thing, doing another. So in, for example, health or the way people save for investment, save for retirement, or the way that they do things for the environment. They’ll say one thing, but kinda do another. How can behavioural science either help us understand this or overcome this or, what can behavioural science help us with here?
Richard: So people don’t have full introspective insight into their own motivations? So if you put them on the spot in a focus group or in a survey, people might give you some answers that are useful, but they will be overwhelmed by answers that send you as a marker off in the wrong direction.
If you are putting surveys and focus groups together, just think about, well, how can we try and set up the study in a way that doesn’t rely on direct claims? So maybe you could use a technique like monadic testing.
So, monadic testing is, say you’ve got a promotional offer and let’s say it’s you charge 365 pounds a year for a subscription film service.
Well, you might have heard about an idea called the Pennies a Day Effect, which is from John Gourville, which argues that people are very fixated on the headline amount. They underweight the importance of the unit of time. So his argument would be, don’t say 365 pounds a year. Say 365 pounds a year, that’s the same as one pound a day.
Now, if you did a standard market research technique and show people those two offers side by side and ask them which they thought was the better value, the audience would just get angry with you. They’d say they’re exactly the bloody same, I’m not an idiot. What are you talking about?
But if you used a monadic test, you would randomise your audience into two groups. One group would see the 365 pounds a year message. One group would see 365 pounds a year, that’s the same as one pound a day. And then when you ask those two groups separately independently about how good value they thought the offers were, you’d see wildly different answers.
So even with a very traditional mechanic like a survey, a little bit of effort can try and make it more realistic and more representative. And monadic testing- it’s such a simple technique but it’s underused currently in the industry.
Adam: Yeah. I think there’s a really interesting section of your book, the example you give of Kraft actually using say-do gaps or the understanding of say-do gaps, in a counterintuitive way, didn’t they when relaunching their product?
Richard: Yeah. It’s a really nice example. So it’s Kraft Mac and Cheese, which is an astronomically large brand in North America. And the original formulation was full of kind of nasty chemicals or full of artificial chemicals, maybe we should say. And a lot of their research had shown that people were unhappy with artificial colourings. They wanted something more natural. So people were telling them they wanted improvements. But what the marketing team also realised was that unfortunately, consumers have this association between healthy foods and poor tasting foods. So people want to eat healthily, but there’s a little bit of their mind that when they’re told a food is healthy, they assume it tastes worse.
Now, that’s not speculation. There’s an American psychologist called Raghunathan, who’s at McCombs Business School. And back in about 2006 recruits a group of Americans and he serves them a buffet of Indian food, so that’s food they’re not that familiar with, and he asks people to rate the quality of all the different items.
The naans, the pakoras, the papadums. Most of the data he doesn’t really care about. It’s just a smokescreen. The bit of data he cares about is people’s ratings of the mango lassie. And with the mango lassi, before people tried it, he gave them one of two statements. Some people said, I’ll try the mango lassi- it’s an Indian health drink. Other people, he said, try the mango lassi- it’s an unhealthy Indian drink.
And what he finds is the people that think the product’s unhealthy, even though they’re all being served the same thing, the people that think they’re drinking unhealthy products, they rate it 55% better than the people who think it’s a health product.
Because Americans and I think Brits as well – there is this association of unhealthiness and tastiness. Kraft had this issue. They’re going to get rid of the artificial colourings. They’re going to replace them with natural ones, but they know that if they tell people they’re doing it, people will think they’ve mucked up the formulation and they’ll complain.
So what they do is they change the formulation. Of course, they have to change the ingredients label on the side of the package, but no one reads that. What they don’t do is emblazon the packaging with any mention or they don’t run any ads about changing the formulation. Then three months later, they do this amazingly funny series of ads in which they essentially talk about the fact they’ve done the world’s largest blind taste test.
You lot have been trying this food. We’ve changed it. None of you noticed. It’s a brilliant way I think, of taking an academic finding and then using that insight to power a very effective campaign.
Adam: I think that’s really, really interesting, especially when you consider how many brands are reformulating for various reasons. Yeah, it’s a great one to keep in the back of your head.
I think one of the biggest opportunities for behavioural science, especially at a boardroom level or where it starts to get interesting to the boardroom, is in pricing?
Richard: Oh yes. Yeah.
Adam:And what are the other applications? What are the other applications of behavioural science that you think the boardroom should be interested in?
Richard: So one of the big things that a lot of companies are thinking about is how do we get the most out of AI. And already, even though AI has not been around that long, there are already loads of different studies on the topic. So one of the ones I absolutely love is by Fabrizio De Laqua, who’s at Harvard Business School.
And in 2022, he recruits 181 recruitment consultants, and he shows them nearly 8,000 CVs across the 181. And what the consultants have to do is identify who has the necessary mathematical skills for a job. So there’s an objective answer to this question. Randomises the consultants into three groups.
One third of the people have no AI help. One third of the consultants have what is kind of bad AI, essentially a reasonably useful AI system. And then the last third of people have kind of good AI, which is maybe a cutting edge AI solution. He looks then at the success rate of these consultants and to begin with the so far, so obvious, you see the worst performing group is the consultants that don’t have any AI help. They do the worst of all.
But the next best performance, the middle group is actually the people with the best AI, the top performers are the ones with the bad AI and. De Laqua’s explanation for this sums up really well with the title of the paper. So the title of the paper is Falling Asleep at the Wheel.
And he argues that you’ve got this tipping point often with systems, which is when they go beyond being quite good to very good, often the user of the system feels like there’s no role for them. So when you have this, I’m creating these kind of poor phrases, but when people had this good AI and it was coming up with very sensible answers, people just thought, well, I’ll just cut and paste whatever AI is telling me.
Adam: Yeah, yeah.
Richard: Whereas the people that had an AI system that was noticeably flawed. Used those results, but there was still space then they knew that they had to bring their experience and professionalism to bear. So the argument here is you’ve got to, if you want to maximise the impact of AI, is firstly, don’t think of AI in isolation.
It’s not the objective quality of the tool that matters. It’s how well the tool interacts with your staff.
Adam: Yeah.
Richard: So I think that’s the first thing. And then secondly, the real opportunity is you’ve got to make sure that your staff know that whatever way they’re using AI, they still have to bring their professionalism, their expertise, and their insight to bear.
Adam: Absolutely.
Richard: Because if you don’t, you have this falling asleep at the wheel problem.
Adam: I think the like algorithmication of our choices and the things that we see, a brand’s ability to reach its consumers and customers, you know, with the algorithms as the gatekeeper. What effect do you think that’s having on the ability of behavioural science principles or how do we solve that problem through the kind lens of behavioural science, do you think?
Richard: Well, I think there’s a Jeremy Bullmore essay on this. And I think, you know, it’s such a shame he’s not here any longer because I’d have loved to get his view specifically on AI. But I remember him talking about just vaguely or general technological change, and he uses this analogy of saying, marketing’s like a hundred metre race.
You know, it’s a hundred metres in the Olympics, it doesn’t matter what your time is, what matters is you beat your competitors. The person that gets the gold is the fastest person. It’s all about comparative speed, not absolute speed. You’ve got to outperform your competition. And once you start thinking like that, I think the answer comes obvious, which is AI alone can do nothing.
It’s just gonna raise the tide as it were. You need to get an advantage over everyone else. And I think the advantage comes from the overlap of behavioural science and AI.
Adam: So, Richard, this has been fascinating. I mean, I can see the huge advantage in people that are using some of these approaches.
I think that there’s definitely more that can be done. I think that, our clients, the listeners to this podcast, I’m sure they’re thinking about their roles right now, thinking, oh, there’s probably some opportunities for trying out some of this stuff. If you were in their shoes, you know, if you were starting out as an insight person or brand person tomorrow, where would you start with all of this?
Richard: The first thing to do is recognise that behavioural science is the most relevant field out there for a marketer. I mean, you touched on at the beginning. If you are in marketing, you are in the business of behaviour change. You know, think of the core challenges. We want to get people to pay a premium from a product. We want to get people to buy a wider range of products. We want people to switch from a competitor brand. You know, every single question that marketers deal with is the question of behaviour change.
And once you accept that, the question then becomes, well, why wouldn’t you draw on 130 years of experiments into what makes for the most effective behaviour change?
So if, if I was an insight professional or marketer, I would be throwing myself into this behavioural science field because it gives you, you know, an unfair advantage over all your competitors.
Adam: Which are the secrets from your book have you used in marketing your book?
Richard: Oh, oh, great question. So, I think that the underlying principle behind the book is about concreteness.
Adam: Yeah.
Richard: That the first two books I wrote, Choice Faction and Illusion of Choice. Each chapter is about a payable science principle. So there’ll be a chapter on social proof, a chapter on the practical effect, and I’ll talk about the broad idea, some of the academic studies behind that idea, studies I’ve run to prove it works commercially. And then some of the practical implications.
So it was very much about the bias and then the implications with the latest book, Hacking the Human Mind, every chapter is about a brand or a campaign. And then the co-author and I, we identify what principles that that brand has used. And I think starting from a physical, you know, concrete brand that people are familiar with, makes it much easier to understand and therefore easy to apply.
So that’s the core principle at the heart of the book.
Adam: Brilliant.
Well, look, it’s been an absolute pleasure to have you today, Richard. Thanks for joining us.
Richard: It’s been fantastic. Thank you very much for having me.
Laura: Well, Adam, how was that?
Adam: Well, I mean, as you can see from the video, I was absolutely delighted to speak to Richard. I mean the insights that he shares- it’s so clear that there are so many things that behavioural insights can teach us about marketing.
I mean the first one for me is when you think about how painful some customer experiences are, especially, you know, with online products or kind of online journeys. And I think that’s just such a huge win to be had in kind of going through those with a fine tooth comb and working out like which are the bits that we can kind of make a lot better? And I think, you know, people respond really well to that as Richard pointed out. I mean, what do you think?
Laura: Yeah, I love that because it is a kind of timeless thing to talk about customer journeys and how to ease pain points, but that is also changing so much. You know, especially with more and more online, more and more AI and actually really being analytical about a very timeless issue, but in a very timely way. It feels like a perfect moment to reappraise.
On a similar note, I felt like the talk about distinctiveness and differentiation was really interesting. As we’ve spoken about before on the pod, we’ve seen a lot of challenges for legacy brands sort of becoming a bit same same.
Adam: Yeah yeah.
Laura: And struggling to cut through. So I felt that there were some really nice nuggets there, to make people just think differently and push and challenge themselves, to drive their distinctiveness.
Adam: Yeah, I mean, I guess what we’re saying is the two big takeouts. You know, get your customer journey spot on and stand out to people. I mean, it’s just marketing 101, isn’t it really?
Laura: With still lots to learn along the way.
Adam: Yeah, absolutely.
Laura: Well, thanks so much and we’ll look forward to the next one.
Adam: Thank you.
Laura: We hope you enjoyed this episode as much as we did. If you did, we think you’ll really enjoy Stephen White of Diageo talking about brand transformation.
What kind of principles do you have in mind for how you take on those kind of transformations?
Stephen: I was always fond of sticky points of view and what I mean by that is, having an outcome in mind that you’re trying to shape to potentially a solution to that outcome, but inviting others to build it with you. And the reason I talk about sticky is if you just go with the wind, then people don’t believe that you believe in it.
Whereas if you’ve got a confident point of view around where it is you’re trying to shape, but you invite others in to participate and shape that with you, and then you move with them, but at the right pace, then actually it feels like you’re owning the journey together and you kind of co-opt them into solving and it becomes part of their story.
