Behavioral Science, Marketing, and Persuasion with Rory Sutherland on Infinite Loops with Jim O’Shaughnessy

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Key Takeaways

  • Two make-or-break marketing questions
    • 1. How good is your product?
    • 2. How well are you selling it?
  • Minority rule is where a small boycotting minority can change the consumption patterns of a much larger group by simply refusing to consume something
  • If you want support, ask for advice – when you ask for an opinion, you turn on a person’s critic mode
  • “The worst mistake you can make in a social setting is to appear not to understand the implicit rules of the game, like dress codes” – Rory Sutherland
  • People use the ambiguity around a rule set to exclude other people 
  • If you have subtle normative rules, it’s a nasty way of practicing exclusion
  • “The objective of nearly all of woke speech is more or less compatible with anybody’s aspiration to be a civilized and decent human being. To be honest, a decent, reputable human being is generally a pretty woke human being.”- Rory Sutherland
  • People stop making intelligent decisions about risks when they allow the regulatory rules to take the place of judgment – their reasoning: if it’s regulatorily approved, the blame will fall somewhere else

Intro

Rory Sutherland, (@rorysutherland1) is the vice-chairman of the Ogilvy group, author of Alchemy and the audiobook Hacking the Unconscious.

Marketing Mindset

  • Two critical marketing questions:
    • 1. How good is your product?
    • 2. How well are you selling it?
  • If you don’t get a tick on both of those, you’re going to fail
  • Create artificial scarcity and magnify the economic effects because part of the sale is a narrative: “Normally this is a really expensive thing, but because we need to clear our stock, you get an expensive thing for a low price”

In-Group vs. Out-Group

  • If you feel you are part of a smaller group or a subset of people, the atmosphere, and level of politeness among those people will be higher
  • Even when randomly put into an in-group, a person is likely to give preference to those people even if they have no idea who they are
  • Minority rule is where a small boycotting minority can change the consumption patterns of a much larger group by simply refusing to consume something

Seven Magic Words

  • If you want support, ask for advice. By asking for an opinion, you turn on a person’s critic mode
  • “I wonder if you can help me?” – the seven magic words to getting what you want because it suggests to the other person that they’re free to say no, but they’re highly incentivized
  • Tiny distinctions between words, like opinion, versus advice, versus help, make a difference

The Hazard of Hidden Rules

  • If you want to get people fired up, violate the game rules, because people naturally understand game rules
  • “The worst mistake you can make in a social setting is to appear not to understand the implicit rules of the game, like dress codes” – Rory Sutherland
  • Normative rules are explicit – someone from an out-group can understand the rule, like a school uniform
  • If you have subtle normative rules or hidden rules, it’s a nasty way of effectively practicing exclusion and it makes it difficult to break into that group
    • i.e:  when everybody can wear their own clothes, often just a few kids understand the nuances of sneakers or hoodies or whether Abercrombie & Fitch is fashionable or social death
  •  People use the ambiguity around a rule set to exclude other people
  • “My view is that the job of democracy, every now and then, is a large group of people get to kick against an elite. If democracy, never does anything you don’t like, there’s probably something a bit wrong with it.” – Rory Sutherland

Models and Behavioral Science

  • “I see institutional behavior containing a lot of stupidity, which people think of as intelligence and because, the job in any large institution is to make every decision you make, not necessarily a good decision in terms of its consequences, but a good decision in terms of the ease of which you can defend it.” – Rory Sutherland
  • The number of interesting ideas that get through sequential logic is a small subset of the potential good ideas – if you demand sense-making as a precondition, you’re limiting the solution space
  • All problem solving in government is, legislation first, economic incentive second, persuasion third
  • “I think we’re prisoners of our models. Our models start off being useful and end up replacing reality” – Rory Sutherland
  • Companies are forced to share the same model for purposes of mutual comprehension and comparative performance year-to-year
  • Chasing targets is easy, changing targets is hard

Speech

  • Ancient Greek democracy had two concepts:
    • Freedom of speech
    • Equality of speech
  • There was very little equality of speech 20 or 30 years ago
  • Attempts to curb free speech tend to have unintended consequences
  • But the problem with social media is that the main focus is, how do I get attention?
  • “The objective of nearly all of woke speech is more or less compatible with anybody’s aspiration to be a civilized and decent human being. To be honest, a decent, reputable human being is generally a pretty woke human being.”- Rory Sutherland
  • If the vocabulary becomes heavily policed by one particular group to a point where it becomes alienating or incomprehensible to everybody outside that group, peer group solidarity and identity is achieved but at a price
  • Separate the intention of something from the means that are being adopted to promote it

The Canadian System

  • Canadians developed a banking code in Canada around 1882 where the banking code must be revised every 10 years
  • If you have the same banking code for too long, people will game the system
  • People stop making intelligent decisions about risks when they allow the regulatory rules to take the place of judgment – their reasoning: if it’s regulatorily approved the blame will fall somewhere else

What We’ve Learned from the Pandemic

  • “There are unanticipated positives that emerge from being forced to do things that we never wanted to do. And I think that has implications for human decision-making, which is, at a very crude level, as an individual consumer there are lots of things where we don’t know what they’re like until we’ve tried them.” – Rory Sutherland
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Notes By EWerbitsky

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