
August 11, 2019
Richard Shotton: Some Very Important Effects In Advertising – Modern Wisdom
Watch the interview here
Key Takeaways (Psychological Effects)
- The Pratfall Effect – a psychological phenomenon that says that competent people appear more likable and attractive when they make a mistake
- If a company admits a flaw, they show the world that they’re honest and gain trusts from sonsumers
- The IKEA Effect – The more effort you put into something, the more you appreciate it`
- Travel websites take 3-5 seconds to ‘compare prices’ but in reality, they can do so in less than a second
- The further people move away from cash, the less price-sensitive they become
- Casinos separate people from their cash by giving them poker chips
- Banks separate people from their cash by giving them a plastic card
- Amazon does this by allowing one-click ordering
- Psychological tricks used by clubs and bars:
- They don’t let people in right away – instead, they create a long line so the place looks busy and high in demand
- They label VIP areas for people who are willing to spend tons of money – this demonstrates social proof of wealth to others
- Nine-enders: People whose age ends in 9 are particularly likely to make big lifestyle changes (19, 29, 39, etc)
- Dunning-Kruger Effect: A cognitive bias in which people mistakenly assess their cognitive ability as greater than it is
- Experts usually think they are less knowledgeable/skilled in an area than most people while novices tend to believe they are more knowledgeable/skilled in an area
Intro
- Host – Chris Williamson (@Chriswillx)
- Richard Shotton (@rshotton) is an author, consultant, conference speaker, and trainer
- His work focuses on applying findings from psychology and behavioral science to marketing.
Books Mentioned
- The Choice Factory: 25
behavioural biases that influence what we buy by Richard Shotton - Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life Hardcover by Rory Sutherland
Richard’s Company Astroten
- Richard runs Astroten, a consultancy that applies findings from behavioral science to marketing
- The company name comes from a psychological experiment where a doctor asked nurses to give patients a fatal dosage of the drug Astrogen
- Although the nurses in the control group said they wouldn’t give patients a fatal dosage if the doctor told them to, in reality, 21 out of 22 nurses followed the doctor’s orders to overdose the patients
- The moral of the story? – People place authority over instinct
- Although the nurses in the control group said they wouldn’t give patients a fatal dosage if the doctor told them to, in reality, 21 out of 22 nurses followed the doctor’s orders to overdose the patients
- The company name comes from a psychological experiment where a doctor asked nurses to give patients a fatal dosage of the drug Astrogen
Psychological Effects
- Richard accidentally misspelled his company’s name (it should be Astrogen), but says people who make little mistakes are actually more likable
- This is called the Pratfall Effect: a psychological phenomenon that states competent people appear more likable and attractive when they make a mistake
- Many of the greatest advertisements used the Pratfall Effect:
- Volkswagen: Ugly is only skin-deep
- Avis: We are #2 so we try harder
- Stella: Reassuringly expensive
- If everyone else is bragging, you’re much more likely to be noticed if you’re doing the opposite
- If a company admits a flaw, they show the world they’re honest and gain trust from consumers
- Flaws and strengths are often two sides of the same coin
- Stella may admit they’re expensive, but they do so on purpose because they know consumers associate expensive with higher quality
- Flaws and strengths are often two sides of the same coin
- If a company admits a flaw, they show the world they’re honest and gain trust from consumers
- If everyone else is bragging, you’re much more likely to be noticed if you’re doing the opposite
- The IKEA Effect – The more effort you put into something, the more you appreciate it
- When Tim Hortons launched their cake mix, sales didn’t take off as they expected because it seemed to easy to make a cake
- So the company added an extra step – crack an egg and add it to the mix
- Even though this made the cooking process more difficult, sales actually increased
- So the company added an extra step – crack an egg and add it to the mix
- Similarly, travel websites take 3-5 seconds to ‘compare prices’ but in reality, they can do so in less than a second
- This makes consumers believe that they’re getting the best deal because the website is putting in more effort into the comparison feature
- When Tim Hortons launched their cake mix, sales didn’t take off as they expected because it seemed to easy to make a cake
- People like knowing how much time they have to wait
- Uber tells riders how long they have to wait until their car arrives
- Disney puts up signs that tell people how long they have to wait in line for a roller coaster ride
- The further people move away from cash, the less price-sensitive they become
- Casinos separate people from their cash by giving them poker chips
- Banks separate people from their cash by giving them a plastic card
- Amazon does this by allowing one-click ordering
- Psychological tricks used by clubs and bars:
- They don’t let people in right away – instead, they create a long line so the place looks busy and high in demand
- They label VIP areas for people who are willing to spend tons of money – this demonstrates social proof of wealth to others
More Psychological Effects
- Price Relatively – People’s conception of value is not an absolute trait, it’s a relative one
- The amount someone is willing to pay depends on the comparison price
- You can change a person’s willingness to pay by several magnitudes if you can get the person to compare your product to an expensive one that makes your item look like a better deal
- The amount someone is willing to pay depends on the comparison price
- Nine-enders: People whose age ends in 9 are particularly likely to make big lifestyle changes (19, 29, 39, etc.)
- Why? – Before people enter into a new decade of their life, they reflect, and if they are unhappy they decide to make a major change
- First-time marathon runners are 40% more likely to run a marathon when their age ends with 9
- Men are 18% more likely to join AshelyMadison.com when their age ends with 9
- Suicide rates go up when a person’s age ends with 9
- Why? – Before people enter into a new decade of their life, they reflect, and if they are unhappy they decide to make a major change
- Dunning-Kruger Effect: A cognitive bias in which people mistakenly assess their cognitive ability as greater than it is
- Experts usually think they are less knowledgeable/skilled in an area than most people while novices tend to believe they are more knowledgeable/skilled in a certain domain
Additional Notes
- If you’re a company that’s going to admit a flaw in an advertisement, pick a flaw that’s actually a strength
- Stella doesn’t mind if people think their beer is expensive because they know high prices are associated with high quality
- People become less price-sensitive when the menu doesn’t have dollar signs on it
- $16.95 seems expensive, 16.95 seems less so
- In one study, when a store played French music, 77% of wine sales were French
- When the store played German music, 73% of wine sales were German
- Only 2% of people admitted that the music affected their decision-making
- A staggering 98% of people denied flat out that the music had any effect on them when it clearly did
- The takeaway? – You can’t always trust customer feedback or focus groups (look at what people do, not what they say)
- When the store played German music, 73% of wine sales were German
- It’s easier to change the size of your product than it is to reduce the price