The Business of Choice: How Human Instinct Influences Everybody's Decisions: How Human Instinct Influences Everyone's Decisions [2 ed.] 1839820713, 9781839820717

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THE BUSINESS OF CHOICE

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THE BUSINESS OF CHOICE How Human Instinct Influences Ever yone’s Decision By Matthew Willcox Revised and Updated Edition

United Kingdom – North America – Japan India – Malaysia – China

Emerald Publishing Limited Howard House, Wagon Lane, Bingley BD16 1WA, UK Copyright © Matthew Willcox, 2020 This second edition of The Business of Choice is published under exclusive licence by Emerald Publishing Limited. This book was previously published by Pearson Education, Inc as The Business of Choice: Marketing to Consumers’ Instincts Reprints and permissions service Contact: [email protected] No part of this book may be reproduced, stored in a retrieval system, transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without either the prior written permission of the publisher or a licence permitting restricted copying issued in the UK by The Copyright Licensing Agency and in the USA by The Copyright Clearance Center. Any opinions expressed in the chapters are those of the authors. Whilst Emerald makes every effort to ensure the quality and accuracy of its content, Emerald makes no representation implied or otherwise, as to the chapters’ suitability and application and disclaims any warranties, express or implied, to their use. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library ISBN: 978-1-83982-071-7 (Print) ISBN: 978-1-83982-070-0 (Online) ISBN: 978-1-83982-072-4 (Epub)

To Patrizia, who using a cognitive process yet to be revealed by science, chose me

Praise for The Business of Choice, 1st edition: ‘The insights that Matthew brings about how we really make choices are interesting and relevant to anyone working in marketing or selling, but are even more astonishing and invaluable to anyone with the curiosity about the human condition.’ Alan Jope, CEO, Unilever ‘Understanding how it is that human beings make choices—the complexity of inputs, the evolutionary success factors, and the cognitive processes— makes for fascinating subject matter. Matthew’s experience in advertising and his understanding of the science of decision making come together here to make for an insightful and incredibly useful tool.’ Jennifer Sey, CMO Global Brands at Levi’s, and one of Forbes’ “World’s Most Influential CMOs 2019” ‘Matthew Willcox bridges the practical and academic worlds of marketing better than anyone I know. In The Business of Choice, he lucidly explains what marketing practitioners can learn from marketing academics—and vice-versa and makes an excellent case for strengthening the ties between the two disciplines. The result is a fascinating and charming read.’ Adam Alter, Associate Professor of Marketing. NYU Stern School of Business, and New York Times best-selling author of Drunk Tank Pink: And Other Unexpected Forces That Shape How We Think, Feel, and Behave and Irresistible: The Rise of Addictive Technology and the Business of Keeping Us Hooked ‘The Business of Choice shines a light on the deep human truths that have drivenbehavior for millions of years. Incorporate these into your marketing, and the chancesare you will be tapping into something truly fundamental for your brand.’ James Hallatt, Senior Vice President, Vemedia Consumer Health Group

Endorsements

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‘The Business of Choice is revolutionary. Informed by psychology and neuroscience, and infused with wit, it challenges the very foundations of rationality on which modern marketing is built and invites us to see people as they are – complex, emotional, irrational, human.’ Kofi Amoo-Gottfried, VP of Marketing, DoorDash ‘The Business of Choice is a brilliant tour of human behaviour that is of interest way beyond marketing. It has helped me as a Physician - with patients and colleagues alike - particularly in my role driving the behaviour change needed for transition to models of digital health.’ Nicholas Peters, Professor of Cardiology at Imperial College and head of DASH (Devices, Apps, Sensors in Health) ‘I found The Business of Choice to be afresh illuminating and entertaining read that helped me reframe how I think about solving my business objectives. As a marketer, the more I understand how and why people make the choices they do, the better chance I have of creating offers or communications that respect people’s natural tendencies and desires. Matthew’s book is insightful, humorous and actionable.’ Rebecca Van Dyck, Chief Marketing Officer, AR/VR at Facebook ‘There are many great reasons to choose this book, all of which you’ll understand better by the time you get to the end of it.’ Mark Barden, Partner, eatbigfish, and author of A Beautiful Constraint ‘How we human beings make decisions is complex and fascinating, and nobody brings that to life quite like Matthew Willcox. His deep knowledge and practical insights are invaluable, not just for marketers, but for anyone in the business of understanding and influencing decisions. And that’s everyone in business.’ Matt Williams, Managing Partner at Brand Federation, Visiting Clinical Professor at William & Mary Raymond A. Mason School of Business

ACKNOWLEDGMENTS First, I would like to thank Kimberlee D’Ardenne. Kim is a neuroscientist who just happens to be a fine writer and editor, who helped me write about complex matters, and made sure that I didn’t misrepresent the science, with both the original edition and this updated one. Really her name should be on the cover as well. I’m grateful to Peter Comber who came up with the subtitle for the revised edition. I’d also like to thank the team at Emerald Publishing, particularly Charlotte Maiorana who suggested that a book like this one might be interesting back in 2014 and supported the idea of a revision five years later. Thank you, Charlotte, for your confidence! This book would have also not been possible were it not for the thousands of people who investigate behavior and delve into the whys and hows of human decision making, so my thanks to all of you. I have had many enlightening conversations with this community, be they éminences grises or students presenting a poster of their research. In particular, I’d like to thank those in academia who have kindly given me time, advice, and encouragement and shown great patience explaining their work to an outsider. So, personal thanks to Sam McClure, Baba Shiv, Ming Hsu, Adam Alter, Vlad Griskevicius, Robert Cialdini, Dan Ariely, Richard Nisbett, David Gal, Carrie Armel, Barry Schwartz, Jonathan Baron, Andrea Weihrauch, Simona Botti, David Faro, Jonathan Zinman, Ben Hilbig, Sam Bond, Ishani Banerji, Christopher Hydock, Maya Shankar, Angela Leung, Chris Chabris, Neil Bendle, Justin Pomerance, Nick Light, David Comerford, Tomasz Zaleskiewicz, Giovanni Burro, Renato Frey, Rachel Rosenberg and Gizem Yalcin. Some of you may not remember helping me, but you did. Friends, practitioners, and colleagues past and present who have inspired or supported me and contributed in some way to this book include Michael Fassnacht, Mark Barden, James Hallatt, Ralph Kugler, Yumi Prentice, Andrew Levy, Nick Peters, David Thomason, John Kenny, Simon White, Kofi AmooGottfried, Dominic Whittles, Mike Guarino, Auro Trini Castelli, Neil Adler,

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Acknowledgments

Ryan Riley, Lucy Farey Jones, Kim Lundgren, Barb Murrer, Elina Halonen, Leigh Caldwell, Elys Roberts, Mike Daniels, John Lowell, Curt Munk, Curt Detweiler, Pam Scott, Di Tompkins, Rebecca Caldwell, Vikki Garrod, Tom O’Keefe, James Coghlan, Jenn Munsie, Cynthia Flowers, Bernadette Miller, Bob Mason, John Eichberger, Brooke Sadowsky Tully, Maria van Lieshout, Tom de Blasis, Yuko Furuichi, Ari Nave, Mimi Cook, Ramona Lyons, Franco Ricchuiti, Emanuela Calderoni, Naomi Sparks Grewal, and Julieta Collart. Thanks to all of you.

CONTENTS List of Figures and Tables

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Preface

xiii PART I  THE BUSINESS, SCIENCE, AND NATURE OF CHOICE

1

The Business of Choice

3

2

The Ever-advancing Science of Choice

15

3

The Natural History of Choice

29

PART II  GETTING PRACTICAL TODAY 4

Shortcuts versus Analysis – Ignoring Is Decisional Bliss

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5

Getting Familiar

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6

Thanks for Sharing (Whether You Meant To or Not)

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7

Now, and the Future – Different Places with Different Rules

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8

Loss and Ownership

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9

Make People Feel Smart, Attractive – or Even Lucky

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10 Make It Easy – For the Mind and the Body

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11 Never Be Above Comparison

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Contents

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12 If Content Is King, Context Is Queen

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13 Same and Different; Nature and Nurture

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14 The Power of Affirmation and Sparking Joy

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PART III   LOOKING FORWARD 15 Think Differently about Market Research

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16 Think Differently about How You Work

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17 Choosing Without Choosing – Artificial Intelligence and Choice

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Conclusion273 Index277

LIST OF FIGURES AND TABLES 7  Fig. 7.1. Feels Good/Does Good/Present/Future Grid. Created by the author.

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8  Fig. 8.1. Percentage of Customers Using a Reusable Bag. Bar chart recreated by the author, based on data from: Homonoff, T. A. (2018). Can small incentives have large effects? The impact of taxes versus bonuses on disposable bag use. American Economic Journal: Economic Policy, 10(4), 177–210.

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 Fig. 8.2. “What Might People Lose.” Selected Output From Workshops Conducted by the Author. Created by the author.

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10  Fig. 10.1. Effective Organ Donation Consent Rates Across Neighboring European Countries. Bar chart recreated by author based on data from: Johnson, E. J., & Goldstein, D. G. (2004, December). Defaults and donation decisions. Transplantation, 78(12), 1713–1716. Retrieved from SSRN: https://ssrn.com/abstract=1323508.

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 Table 10.1. Attention to Ad and Size of Donation. Created by the author.

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 Table 10.2. Attention to Ad, Size of Donation, and Attention While Donating. Created by the author.

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13  Figure 13.1. Universal/Individual and Innate/Absorbed (UIIA) Map. Created by the author.

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PREFACE The decision to revise a book is a bit like the decision to remodel your home. If bringing your home up to date requires a lot of work, then you might think of moving, or rebuilding it completely. If all the home requires is a lick of paint, then you might forgive yourself for leaving it untouched for a few more years. Likewise, if there has been a wholesale change in the area a book covers, then you’ll find yourself abandoning so much of the original that you really should be writing a new book or at least a sequel. And if it is simply a question of updating a few references, then your time might be better spent on other things. I think The Business of Choice is in the “Goldilocks Zone” for a revision.1 The overall premise, many of the ideas (and the research that informed them) are as relevant to marketers and practitioners as they were when the original was written in 2014. That said, in the past five years, a lot has changed. The context in which people make choices has changed – for example, back in 2014 Alexa and Google Assistant didn’t exist. A 2019 Edison Research2 report in conjunction with National Public Radio (NPR) estimates that 60 million Americans over the age of 18 own at least one smart speaker (up from 53 million one year earlier), and that households with smart speakers own an average of 2.6. In December 2017, Edison Research estimates there were 67 million smart speakers in US households. That number two years later is now 157 million. In this revised edition, you will find a chapter that covers how artificial intelligence (AI) can affect people’s choices and behavior, and how practitioners can use it to create individualized and timesensitive programs that can lead to sustained changes in behavior. In the past five years, much new research has been published – some of which sparks new ideas for practical application, and other new studies that build on and add specificity to research that featured in the previous In astrobiology, the Goldilocks Zone refers to the habitable zone around a star where conditions for life are “just right.” 2 Edison Research/National Public Media Winter 2019 Smart Audio Report. 1

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edition. But scientific research isn’t all about building on existing work – it is as important (some would say more important) to see if previous studies still hold water as well as it was believed they did when they were published. Often, they don’t – for reasons that range from an effect being more context sensitive and less generalizable than the original researchers recognized; to errors or a lack of rigor in methodology and analysis; and even, very occasionally, to an unfortunate lack of ethics or honesty on the part of the researchers. We’ll talk about this more later in the chapter, but rest assured we have removed, or added a warning flag to, any research about which the scientific community has expressed concerns. Perhaps the biggest single area of change from 2014 to 2019 is the degree to which insights from behavioral science are being used by practitioners. An emblematic example is the Behavioural Insights Team (BIT). When I was writing the previous version of The Business of Choice, I referenced a government program in the United Kingdom that a group called the BIT had profoundly changed through the application of behavioral insights. At that time, the BIT was an exciting three-year-old experiment, comprised of a small team within the UK Government’s Cabinet Office, that brought behavioral scientists and policymakers together. In February 2014, it was partially privatized, and by the end of 2019 had spawned seven offices, employing more than 200 people. The BIT’s growth (both in size and influence) isn’t a one-off. Governments and nongovernmental organizations (NGOs) around the world have built similar units, often in consultation with the BIT. A 2019 report from the World Bank Group’s Mind Behavior and Development Unit (eMBeD) by Zeina Afif3 profiles the impressive rise of the application of behavioral science in public health and public policy across 10 countries that are leading the charge. Afif quotes Organisation for Economic Co-operation and Development (OECD) data suggesting, that as of November 2018, there are at least 202 public entities around the world applying behavioral insights to their policies. In October 2017, Richard Thaler, an economist whose fingerprints are all over much of the early work in Behavioral Economics was announced as the winner of the Nobel Prize in Economics,4 which followed the 2002 Afif, Z., Islan, W. W., Calvo-Gonzalez, O., & Dalton, A. G. (2018). Behavioral science around the world: Profiles of 10 countries (English). eMBeD brief. Washington, D.C.: World Bank Group. 4 The prize’s formal name is The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel. 3

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award of the same prize to Daniel Kahneman. As well as being a pioneer in experimental work, Thaler has been an untiring force in demonstrating how behavioral insights and the rigor of evidence-based approaches can help lead to positive and sustained changes at a population level. He has also provided a huge service to the field, and the population at large by hunting down and exposing examples where behavioral insights are being used to encourage people to make choices that aren’t in their best interests or to discourage them from taking actions that are. All of this activity and recognition has led to an increased interest in behavioral insights. A decade ago, the only places where findings from behavioral science experiments were really presented and discussed were academic conferences, such as those organized by the Society for Judgment and Decision Making, Society for Consumer Psychology, Psychonomic Society, and European Association for Decision Making. At these conferences, you could count the practitioners like myself on one hand. In 2013, a new society, the Behavioral Science and Policy Association, held their first conference, bridging the gap between academics and policymakers and practitioners. In the same year, Ogilvy Consulting launched Nudgestock, which has a reputation as being the most entertaining event that champions insights from behavioral science and has been growing in popularity every year since. For those more focused on market research, IIEX Behavior, debuted in 2015. Samuel Salzer’s excellent Habit Weekly5 newsletter gives a list of 48 conferences that will happen around the world in 2020 that relate to behavioral design (a term increasingly used to refer to applied behavioral science). As a practitioner, I have also learned a lot since 2014. In the intervening years, I’ve worked on projects, run workshops, and given talks in more than 20 countries. Some areas of insight that I believed had great potential, that might even be game changers, haven’t really delivered, at least as yet. At the same time, there are areas that I have come to believe are even more important than I thought when writing the first edition. One thing that has become even more apparent to me since then is that behavioral insights are not silver bullets that will enable you to unlock the secrets of human behavior and change it at your behest. Dr Robert Cialdini, author of the excellent and justifiably best-selling book Influence – The Psychology of Persuasion, told me about a colleague who had spent 16 years

If you could subscribe to only two online newsletters that cover practical behavioral science, I would recommend Habit Weekly and The Behavioral Scientist. 5

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trying to identify the single most effective persuasive appeal, the golden rule of persuasion, if you will. His conclusion? The golden rule is that there isn’t one. You have to size up every situation from a behavioral perspective and ascertain which tendencies are most active in those circumstances. Every situation is different, and context has a profound effect on how we make choices. A behavioral principle that works in one scenario may fall flat in another scenario that seems, on the surface, to be very similar (as we will see in Chapter 6, “Thanks for Sharing (Whether You Meant to or Not)”). So, it’s best to think of The Business of Choice as a selection of useful starting points to consider, experiment with, and adapt to the unique circumstances of the behavior you are trying to change and the choices you are trying to influence. Finally, as a nonscientist immersing myself in decision science, I learned two lessons about the intersection of science and marketing. The first lesson is that rather than providing certainty, science is about advancing ideas. It is tempting for marketers, from the legendary Claude Hopkins6 onward, to see the potential of science as proof that one approach will work better than another. This way of thinking misses the point of science – rather than thinking about it as validation, think of science as inspiration. Most of the revelations about human choice I refer to in this book come from scientists devising and conducting highly creative experiments that dig deep into human nature. Scientists’ ingenuity in looking at things in different ways, and in creating decision experiments that reveal effects of nonconscious cognitive mechanisms, has led to breakthroughs in understanding how people arrive at their decisions. Science, it turns out, is surprisingly creative, and if anyone can appreciate the effect of creativity to change the game, it should be those of us in marketing and advertising. The second lesson I learned after immersing myself in the science of choice is that science is much more fluid than I had thought. Ideas that seemed immutable 10 or 20 years ago are now up for debate. For example, what scientists know about the function of the amygdala – an important brain area for marketing – has changed greatly in the past two decades. The amygdala is involved in translating what we sense and perceive into emotions, and it plays an important role in recognizing emotions in Claude Hopkins was a creative director at the agency Lord & Thomas; his reputation was such that he commanded a salary of $185,000 in 1907 (which is equivalent to approximately $5 million in 2019). He published Scientific Advertising in 1923, a book that influenced industry giants such as David Ogilvy. 6

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social interactions and facial expressions. Just over 10 years ago, the amygdala was still considered to be absolutely essential for recognizing and experiencing fear. Today, its exact role is much less defined, but it is not essential for fear. The hypothesis of the amygdala being essential for recognizing and experiencing fear was based on studying a rare brain lesion patient called S.M., who has damage specific only to the amygdala. S.M. has abnormal behavioral responses to fear and also abnormal social interactions; additionally, lots of experiments with S.M. showed that she could not identify fearful-looking human faces.7 But the same researchers who first uncovered S.M.’s inability to recognize fearful faces realized something fascinating 10 years after the first experiments: When S.M. viewed faces, she did not look at the eyes. Viewing the eyes is necessary to discriminate emotions from facial expressions, and when specifically instructed to look at the eyes, it turns out that S.M. could indeed recognize fear just like people with intact amygdala regions.8 The function of the amygdala has since been refined to include being an important influence on the visual system. Recognizing fear involves more brain areas than just the amygdala, but one specific role the amygdala may play is in directing our eyes to where we will see signs of fear – such as people’s eyes. I want to make two points here. The first is that we are still learning, especially when it comes to understanding the human brain. To use a cliché, science is not a destination, but a journey. Marketers might do well to remember this cliché when being presented with research (I elaborate on this caution in Chapter 15, “Think Differently about Market Research”). Research based on the “latest from science” probably won’t remain the latest for very long. And, as the amygdala story demonstrates, science self-corrects, so research might not even be considered science for very long. Or, as Christian Jarrett says in his book Great Myths of the Brain: Anyone who spends time researching brain myths soon discovers today’s myths were yesterday’s facts.

Adolphs, R., Tranel, D., Damasio, H., & Damasio, A. (1994). Impaired recognition of emotion in facial expressions following bilateral damage to the human amygdala. Nature, 372, 669–672. 8 Adolphs, R., Gosselin, F., Buchanan, T. W., Tranel, D., Schyns, P., & Damasio, A. (2005). A mechanism for impaired fear recognition after amygdala damage. Nature, 433, 68–72. 7

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In experimental psychology and other disciplines, this self-correcting is increasingly helped along by other scientists attempting to replicate the original research. But experiments don’t always replicate,9 and the reasons why are numerous. The most common reason is simple statistics; the world is noisy. For example, if you sample a group of 20 males and 20 females, sometimes the group of females will be taller than the men, but this result will not hold up with repetition. Another reason why an experiment might not replicate is context (something I cover extensively in Chapter 12, “If Content Is King, Context Is Queen”). Sometimes, as I mentioned earlier, the effects shown in a particular study are exquisitely sensitive to the specific context of the experiment. One example of this is a famous study from Sheena Iyengar and Mark Lepper, published in 2000.10 The researchers presented shoppers at Draeger’s Grocery Store in Menlo Park, California, with different displays at which they could sample a range of Wilkin & Sons jams. One display had 6 different jams, the other had 24, and these displays were rotated hourly. The researchers tracked how many people stopped at each display. All shoppers who stopped at either display were given a $1 coupon off the purchase of any Wilkin & Sons preserve. The finding that made this study so famous was that while the 24-item display had more stopping power with shoppers than the 6-item display (60% stopping for the larger selection; 40% at the smaller selection), only 3% of those who stopped at the larger selection redeemed their coupon to buy jam. In a staggering contrast, 30% of the shoppers who stopped at the smaller display went on to use their coupons to buy jam. While classical economics suggests that more choice is better, we have all experienced choice overload (described in detail in Barry Schwartz’s 2004 book The Paradox of Choice Why More Is Less) at some time or other. Iyengar and Lepper’s study created a mini media storm and the findings were widely reported (I call findings like these plausibly counterintuitive which are the attributes I believe make them news and conversation worthy). Companies

The exact number of experiments that do not replicate is unknown, in large part because it requires publishing a null result. Just as with apps, there is pretty much a journal for everything – and there is one dedicated to null results: The Journal of Articles in Support of the Null Hypothesis (www.jasnh.com). 10 Iyengar, S. S., & Lepper, M. R. (2000). When choice is demotivating: Can one desire too much of a good thing? Journal of Personality and Social Psychology, 79(6), 995–1006. https://doi.org/10.1037/0022-3514.79.6.995. 9

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went about reducing their range of brands and varieties,11 and I know that I advised at least two clients to reduce the options they offered shoppers. However, my advice may not have been as solid as I thought it was at the time. Many attempts have since been made to replicate Iyengar and Lepper’s study, and none, as far as I know, have shown such a dramatic effect. A meta-analysis of experiments reviewing 63 conditions from 50 experiments12 – a number of which attempted to replicate Iyengar and Lepper’s study with goods such as jam, jellybeans, and chocolate – showed a mean effect size across studies as “virtually zero” with “considerable variance between studies.” Personally, I don’t think the meta-analysis shows Iyengar and Lepper’s experiment to be flawed – the issue for me is the conclusion (as much, if not more, by those reading about the research than by the researchers themselves) that the study is widely generalizable beyond the specific conditions of the experiment. There is a huge lesson for practitioners in this. Before Iyengar and Lepper’s experiment was published, the consensus was that offering more choices led to happier choosers. After the plausibly counterintuitive findings of Iyengar and Lepper’s study were published, expert opinion shifted to believing that smaller selections had a more positive effect on choice. The meta-analysis suggests that it is not an either or. In some cases, less is better, and in other cases more is better. This depends on what is being chosen, who is choosing it, their goals at the time, and the conditions under which the choice is being made. Before adding to, or trimming their range of offerings, marketers should consider the effect of all of these things on the choice they want people to make and ideally conduct experiments using different sized choice sets. What they shouldn’t do is assume that a finding from research has external validity, that is that the effects will transfer from the specific context and conditions of the research design, to the decision or behaviors they would like people to make. Another, much less common, reason why experiments might not replicate is scientific fraud. Uri Simonsohn, from the Wharton School of the University of

In 2014, P&G CEO A. G. Laffley ended the company’s decade old practice of giving its shoppers more and more choice with plans to divest or discontinue up to 100 of its brands. Laffley told analysts “There is a lot of evidence in a number of our business categories that the shopper and the consumer really don’t want more assortment and more choice.” 12 Scheibehenne, B., Greifeneder, R., Todd, P. M. (2010, October). Can there ever be too many options? A meta-analytic review of choice overload. Journal of Consumer Research, 37(3), 409–425, https://doi.org/10.1086/651235. 11

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Pennsylvania, has a reputation as a “data vigilante,”13 which he acquired by identifying practices that generate results that seem too good to be true. Simonsohn showed that continuing to collect data only until a sought-after result is confirmed is not good practice. In science, this is called “p-hacking”14 (for collecting data until the desired statistic, or p-value, is reached), but it happens outside of the laboratory, too. It’s human nature and something I discuss in Chapter 14, “The Power of Affirmation,” under the scaffold of the confirmation bias. One of the themes of this book is that marketers don’t embrace the findings of behavioral science and neuroscience as much as they could and should. At the same time, I also urge that marketers be cautious against basing a strategy or an idea on the latest scientific study to be written up yesterday in the popular press – be it a blog or a respected newspaper. The second point I want to make about the fluidity of decision science is somewhat of an understatement: The brain is complex. Neuroscience experiments might single out individual brain areas – and elegantly relate regional responses to a specific behavior – but brain areas work together. Remember that two decades ago, neuroscience was convinced that the amygdala specially processed fear. But today, the amygdala is just one part, albeit an important one, of a fear-processing network. Neuroscience has also provided the evidence to demolish some popular myths about the brain.15 One is the belief that “we only use 10% of our brains,” the premise of the 2014 movie Lucy, starring Scarlett Johansson and Morgan Freeman, and directed by Luc Besson. Neuroimaging shows that this clearly isn’t the case. Another myth is that there are “left brain” people and “right brain” people. Certain functions are reliant on one side of the brain – speech is generally centered in the left hemisphere for right-handed people. But creative

Simonsohn’s investigations have led to scientists resigning from their posts and to a number of papers being retracted. An article by Christopher Shea in the December 2012 edition of The Atlantic covers Simonsohn’s efforts in more detail. 14 A November 2019 article in Wired “We’re All ‘P-Hacking’ Now: An insiders’ term for scientific malpractice has worked its way into pop culture. Is that a good thing?” tells how the term “p-hacking” has featured on TV shows and gets a nod in a recent edition Cards Against Humanity, https://www.wired.com/ story/were-all-p-hacking-now/. 15 Christian Jarrett covers these two examples and more in Great Myths of the Brain. Jarrett is also author of The Rough Guide to Psychology, an excellent introduction to the subject. 13

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or (their supposed opposite) analytical tasks, nor the people who excel in either of these areas are more dependent on one side of the brain than the other. In an interview with LiveScience,16 Dr Jeff Anderson, Director of the fMRI Neurosurgical Mapping Service at the University of Utah, said: It is not the case that the left hemisphere is associated with logic or reasoning more than the right. Also, creativity is no more processed in the right hemisphere than the left. So, we will just have to find some other language to describe our colleagues who seem either more creative or more analytical. I also want to address some of the language and terms that you will come across in this book. The broad academic field from which I have drawn most of the material included in the book is judgment and decision making (JDM). I am aware that the term decision making often leads people to think of planned decisions, of the carefully considered steps that people may go through to make a choice. “To make a decision” does, after all, sound active and rather deliberative. One of the pioneers in JDM, the late Hillel Einhorn, was described as someone who specialized in studying how people reach decisions. Although a subtle distinction, the difference between making and reaching is, to me, a significant one. It suggests the importance of nonconscious factors of which the decisionmaker (or reacher) is unaware. When you read the term decision making in this book, think of people reaching or arriving at their decisions as much as, or more than, deliberatively making them. Research on how humans reach decisions shows that many of the processes leading to decisions are outside the realm of conscious awareness. Sometimes people (including myself until some friendly academics suggested I use an alternative) refer to these processes as being in the “subconscious.” With all respect to Freud and Jung, that word now connotes a mysterious and vaguely sinister approach to studying cognition, like a black box that needs to be “unlocked.” Psychology and neuroscience abandoned the term subconscious in favor of the terms unconscious, nonconscious, and preconscious.17 Wanjek, C. (2013, September 3). Left brain vs. right: It’s a myth, research finds. Retrieved from http://www.livescience.com/39373-left-brain-right-brain-myth.html. 17 Although the people who advise me on such matters tell me that the new favored word among psychologists and neuroscientists for reactions that are not conscious is reflexive. This creates a nice pairing with reflective, a term that can be used for conscious thinking. 16

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Although these three terms can mean different things in spite of often being used interchangeably, I tend to use the last two. The term unconscious makes me think of people who are not just unaware of their cognitive processes, but pretty much unaware of anything. When it comes to how people reach decisions, nonconscious and preconscious seem to describe better what actually happens, so those are the words I use in this book. I would also like to suggest that we in marketing are more careful with our own language, particularly with words that describe people to whom we market. In a March 2013 interview,18 Keith Weed, who was Unilever’s Global Chief Marketing Officer for over a decade, described how the marketing lexicon is problematic: Marketers need to … engage with consumers as people, not as consumers. I think the term “consumers” doesn’t help. Once you start looking at people’s lives, they are not a pair of armpits in search of deodorant or a head of hair in search of hair benefits. They are people with full lives and a lot of challenges in a rapidly changing world. Weed’s concern is the practice of defining people through the lens of consumption in an age when all of us (from governments, companies, to individuals) need to focus on sustainability. This has gained some traction. An excellent 2015 article by Neil Parker, Chief Strategy Officer of Co:Collective gives five good reasons to abandon the word “consumer,” explaining that at his agency they prefer the word “participant.”19 My particular beef with the word consumer is more about how we marketers label the people we want to choose our products. For example, we talk about them as “targets.” In most aspects of life beyond marketing, things don’t turn out so well for actual targets. Another example. I’ve often heard marketers say that a marketing tactic “should drive the consumer to retail.”

Unilever logic. Keith Weed wants Unilever to be the trust mark of sustainable living. Hub Magazine, March/April 2013. 19 Five Reasons to kill the word ‘consumer’ right now, Forbes, December 2015. https://www.forbes.com/sites/onmarketing/2015/12/08/five-reasons-to-kill-theword-consumer-right-now/#58d7e54a41f5. The word “participant” is now used as description for someone taking part in psychology experiments. Ten years ago the less human term “subject” was prevalent. 18

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Unfortunately, the meaning here isn’t literally that the brand will drive the shopper to retail by laying on a car service to pick them up at 10 a.m. on a Saturday to drop them off at the mall (which would be nice), but somehow that the marketing will herd them in droves, like cattle to the abattoir. Not only is this a ridiculous exaggeration of the likely effect of any marketing, but it also disrespects the people whose decisions to buy our products pay our salaries and finance our lifestyles. I will try to use the word target as little as possible in this book, but I have not yet come up with an alternative I am happy with. Any suggestions are very welcome. Instead of consumer, while I like Parker’s suggestion of “participant,” I use another option. In her excellent book The Art of Choosing, Sheena Iyengar (whose jam experiment we covered earlier) frequently refers to people who are making, or have made a choice, as choosers. I like this word for two reasons. First, it reflects and respects the importance of the “consumer” in that purchasing/buying/consuming is their choice. Second, the word chooser aligns with something I believe in deeply and that is also a major theme of this book. Marketing should be about making it intuitive and easy for people to choose your brand, your product, your service, or your cause. To buy a product in the first place is a choice, to use a product is a choice, to continue buying a product and keep using it are further choices. And recommending a product to others (should we be so lucky) is yet another choice. Marketing is more about choice than consumption. While I may sometimes use consumer in this book (it was actually in the subtitle of the previous edition – The Business of Choice: Marketing to Consumers’ Instincts), I use chooser or potential chooser whenever it makes sense. And, of course, eschewing jargon, and just using the word people works pretty well, too. With that, I’d like to thank you for choosing to read The Business of Choice!

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PART I THE BUSINESS, SCIENCE, AND NATURE OF CHOICE

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1 THE BUSINESS OF CHOICE

For a brand or business to be successful, it needs people to choose it, so it is important to understand how people choose. We are all faced throughout our lives with agonizing decisions. Moral choices. Some are on a grand scale. Most of these choices are on lesser points. But! We define ourselves by the choices we have made. We are in fact the sum total of our choices. (Professor Louis Levy) Before you go looking for the “Collected Works of Professor Louis Levy,” I should explain that Levy is a character in Woody Allen’s film Crime and Misdemeanors, and this quote is part of a monologue about human destiny, love, and our choices that draws the movie to a close. It might seem almost insultingly obvious that we are in fact the sum total of our choices, as Levy says. The course of our lives follows the choices we make. If I hadn’t chosen to accept a job with an advertising agency nearly 30 years ago, I wouldn’t have been in San Francisco 20 years later working on a new business pitch for a client that offered its customers a dizzying array of choices. If I hadn’t been working on that pitch, I wouldn’t have interviewed Barry Schwartz, Professor of Social Theory and Social Action at Swarthmore College and author of The Paradox of Choice. He wouldn’t have suggested I attend the Society for Judgment and Decision Making Conference, and I wouldn’t have had the experience outlined in the preface that led to my writing this book. Every day we all make choices and, just as in the 1998 movie Sliding Doors, they take our lives in one direction rather than another. Yet, if our choices define us, as the fictional Professor Levy suggests, if they determine to a large extent whether we will be happy, how comfortable our

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retirement will turn out, and even how healthy we will be, then it is amazing that while we spend huge amounts of time pondering the outcomes of our choices, we spend so little time thinking about how we make the choices we make. (Now don’t feel bad about that – there are very good reasons why we think so little about how we make our choices that we’ll explore in Chapter 4, “Shortcuts Versus Analysis – Ignoring is Decisional Bliss.”) Choices don’t just have a profound effect on individuals’ lives – they also determine whether an organization will be successful. Whenever I do a workshop or keynote, one of the first slides I show is a definition of marketing that I have been using for a decade or more. It reads like this: Marketing is the creation, management, and measurement of programs designed to influence the choices you need people to make to meet your objectives. The point I make is that the success of any organization depends on ensuring people make the choices that can help the organization meet its goals, whether the choices are those of a procurement team in Chicago wrestling with the decision to spend tens of millions on cloud services with Amazon or Microsoft; a shopper in a supermarket in Milan choosing between Lavazza or Illy, or store brand coffee; a young woman in Dar Es Salam choosing to use an intrauterine device to avoid pregnancy so that she can stay in school for a year or two longer; or a commuter in Mexico City deciding whether to make the switch to an Electric Vehicle. The outcomes of these choices, and hundreds of billions like them every day, can edge organizations closer to or further away from their goals and lead companies to post a bullish or a bearish outlook for the next quarter. Every organization is dependent on how people choose, and marketing is simply how organizations influence the choices that will allow them to reach their objectives. Yes, you as a marketer may develop and implement the marketing, but ultimately your fate rests on the choices of others. I describe the role of marketing as being to make those choices easy, natural and rewarding. Businesses only succeed when their products or services are chosen; and marketing is at the sharp end of this – it is the business of choice. Marketers spend a lot of time, effort, and money learning about things that may affect that choice – understanding purchase paths and decision journeys, where their brand sits in culture, how their brand is perceived, or how likely people say they are to purchase it. But I believe most marketers need to be more forensic in their efforts to reveal all of the important aspects that might

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help (or get in the way of) people making the choices that will enable the organization to make its objectives. I call this being decision-centric. Let me explain this idea of being decision-centric a little. Marketers will often talk about being consumer-centric or even consumer-obsessed. But to my mind, the rock in the snowball of a consumer-centric approach needs to be a deep focus on understanding the human factors, the cultural factors, and the system factors that shape the choices that you need people to make. Being decision-centric means starting with what will make those choices easy and natural paths to take, or what may make them paths to avoid, and working out from there. Marketing that comes from insights about your consumer’s life, their cultural values and interests, and what they love, share and sing along to might be considered consumer-centric. But unless you start with the behavior you want people to adopt, and the choices you want people to make, your marketing might not have the effect on those choices that you require. In June 2013, I was attending the Cannes Lions International Festival of Creativity to give a talk with Adam Alter. Adam is an associate professor at New York University (NYU)’s Stern School of Business and one of the nicest and most intelligent people you could hope to meet. Adam’s first book, Drunk Tank Pink: And Other Unexpected Forces That Shape How We Think, Feel, and Behave, had just been published. Our presentation at the conference covered how context affects choices and behavior, and in truth, the talk was about 90% Adam and 10% me. He did a fantastic job, and I was told afterward it was one of the top-rated talks at the conference. But the real stars at the Cannes Lions aren’t the speakers, they are the winners of the eponymous Lions that are awarded for the creative work judged to be best by a jury of advertising and marketing luminaries (in career terms winning a Lion is a big deal,1 and being invited to be a juror is a resumé item in itself). And that year, 2013, there was really only one star – a public service campaign from Australia for Metro Trains Melbourne, designed with the objective of keeping Melbourne citizens from getting hurt in and around Metro train service areas. Described as a “pop-culture phenomenon,” it has a range of animated characters who sing about their absurd and comic deaths (that include “using your private parts as piranha bait” and “dressing up as a moose in hunting season”) with a lilting and catchy song, “Dumb Ways

A July 2017 Wall Street Journal article “Advertising Awards Can Boost More Than Egos” suggests that winning awards such as a Cannes Lion can lead to bonuses of up to 25% of their annual salary for senior creative executive. 1

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to Die.” It became the most awarded campaign in the 60+-year history of the Cannes Lions, winning 5 Grand Prix, 18 Gold Lions, 3 Silver Lions, and 2 Bronze Lions. Campaign Brief reported that “ad legend Lee Clow said, ‘I wish I did Dumb Ways to Die,’ and fellow legend Dan Wieden said, ‘this is the campaign everyone here wishes they did.’” While I’m sure there is little doubt that this loveable short film, which had racked up over 184 million views on YouTube as of December 2019, has contributed to overall human happiness, there are questions about whether it has done as much to “keep Melbourne citizens from getting hurt in and around Metro train service areas.” Beyond the creative awards, Cannes Lions has also introduced a “Creative Effectiveness Lion.” To win a Creative Effectiveness Lion, entrants have to demonstrate how work that has won a creative Lion in previous years achieved (or better, surpassed) its objectives. Despite cleaning up at the 2013 Creative Lions, Dumb Ways to Die was shortlisted, but didn’t win one of the seven Lions2 awarded in 2014 for creative effectiveness. While the social media impact was unquestionably powerful, a number of articles suggest the effect on local, on the ground behavior change was not as marked.3 An article in the Stanford Social Innovation Review from Spring 2017 goes further, suggesting that the nature of the campaign may have an effect on increased suicide attempts by “normalizing death, suicide, and violence as something common, cool, or even charming, but most important, not permanent.”4 The authors also bring up an excellent general point about the importance of practitioners grounding their efforts in academic research: Unfortunately, it is uncommon for practitioners to conduct a review of academic literature as part of the early stages of any effort. The gulf between scholarship that could help practitioners avoid

There was some solace for McCann Melbourne, the agency that created Dumb Ways to Die. Their “Guilt Trip” campaign for Australia’s major regional train operator, V/Line won the 2014 Grand Prix Effectiveness Lion. 3 Dumb Ways to Die – novel – but useless, https://safedesign.wordpress.co m/2013/06/18/dumb-ways-to-die-novel-but-useless/, and Dumb Ways to Die and social media bullshit, Mumbrella, February 11, 2013, https://mumbrella. com.au/dumb-ways-to-die-and-social-media-bullshit-138887, 4 Stop raising awareness already, Ann Christiano and Annie Neimand; Stanford Social innovation Review Spring 2017, https://ssir.org/articles/entry/ stop_raising_awareness_already. 2

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harm, reduce risk, or increase the effectiveness of their efforts and practice is common and wide. Three years later, in October 2016, I was talking at another conference, The Behavioral Marketing Summit in San Francisco. One of the other speakers was Ram Prasad, co-founder of FinalMile, which is a behavioral insights and marketing consultancy based in Mumbai. At the time, with an average of 10 fatalities a day, the largest cause of unnatural death in Mumbai was trains striking humans as they cross railway tracks.5 Trains laden with commuters race through densely populated areas of the city every couple of minutes, and as pedestrian bridges over the rails are few and far between, thousands of people simply walk or run across the tracks. Prasad presented a range of interventions that FinalMile had designed and tested with Central Railways, the zone of Indian Railways that serves areas including Mumbai. FinalMile’s approach started with trying to understand the behavior and decision making of individuals who risked, and unfortunately too often lost their lives as a result of being struck by trains as they crossed railway tracks. One of the things they did to do this was to review footage from cameras that had recorded “near misses.” The team was struck by the apparent surprise on the faces of those who had narrowly avoided death. It was as if they hadn’t even seen the train coming. Digging into this insight led the FinalMile team to the work of Hershfield Leibowitz, who was one of the pioneers in studying visual perception, particularly as it relates to size, distance, and motion. They realized that a key issue (and the reason for the stunned expressions of the rail-crossers immediately after they experienced near misses) was how the brain processes the speed of large, distant, and fast-moving objects. As Prasad writes in his blog: There is a scientific backing to this misjudgment of speed. Our brain underestimates the speed of large objects, including trains. Often, while crossing tracks, even after spotting a train, we tend to attempt to cross because the train appears to be moving slower. The challenge FinalMile faced wasn’t about educating Mumbians that trains are dangerous, or that they moved faster than people think. Nor did Train! How psychological tricks can keep people from being killed on the tracks by Samanth Subramanian, The Boston Globe, May 8, 2011. 5

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the problem lie with people’s knowledge, or about how they consciously calculated risk. The problem was that humans are not naturally good at estimating the speed of large, fast-moving objects (perhaps because large things traveling faster than 30 mph, like trains and trucks, have only been a threat for a tiny slither of human existence, we haven’t evolved that capacity), and that we make that assessment faster than the speed of conscious thought. FinalMile understood that the decision to cross, or not to cross, the track was based on an inaccurate nonconscious perception of speed. Prasad continues: If the problem, fundamentally is at a nonconscious level, the solutions should work at this nonconscious level for it to make a definite and quick impact. The solution should make the brain recalibrate the speed of the train in an “Auto” mode where it doesn’t need to deliberate and expend energy. One of their solutions was to paint ties6 (the large slabs of wood or concrete that support the rails) bright yellow. As Prasad says: As these yellow lines disappear under the train, the brain can instantly get the speed judgement right and take a decision not to cross the tracks. The beauty with this intervention is that it works at a nonconscious level, has an instant impact and is low cost. Most importantly, it is at the point of action. FinalMile and Central Railways also did what is at the heart of evidencebased practice, but that marketers often lack patience for. They ran an experiment with the yellow lines and two other tactics7 at Wadala Road Station on Mumbai’s Harbour Line. An article in The Boston Globe reported8:

In many English-speaking countries, rail ties are known as sleepers. The other tactics were also based on behavioral science insights – the train crews were instructed to blow their horns twice in quick succession as a warning. Research shows this serves as a better prompt for action than one long blast. Close-up photographs of a terrified actor’s face as he is about to be hit were mounted right next to the tracks. Images of fear are often ineffective if they are not experienced in the same moment as the decision you are trying to affect. Located a few paces away from where people would cross the track is most likely a very effective placement. 8 Train! How psychological tricks can keep people from being killed on the tracks by Samanth Subramanian, The Boston Globe, May 8, 2011. 6 7

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In the six months before the experiment went live in December 2009, Wadala had recorded 23 track-crossing deaths, said M. C. Chauhan, a manager with the Central Railway’s Mumbai division. Between January and June 2010, that number had dropped to nine; in the next eight months, up until February 2011, only one death was registered. I want to stress that I am not making a direct comparison between Metro Trains Melbourne’s Dumb Ways to Die and Central Railway’s interventions in Mumbai. The differences in culture and environment between dangerous behavior near railways in Melbourne and Mumbai is immense, and even small differences in these contexts make for different behavioral problems that will most likely need very different behavioral solutions. The point I want to make is about the difference in approach. I think the team who created Dumb Ways to Die took an audience or consumer-centric approach. The agency clearly understood what was meaningful to the audience, and how to engage them. They understood what they wanted to participate in (Dumb Ways to Die spawned thousands of parodies and memes). Their approach was rewarded by hundreds of millions of views and several suitcases of awards, that must have cost the creative team a fortune in excess baggage to take back to Melbourne with them. They clearly created a popculture phenomenon, but there is little strong evidence that their work had a significant impact on rail safety behaviors. However, Ram Prasad and FinalMile took what I call a decision-centric approach. From reviewing security footage to trying to understand how the human brain might be engaged in making the decision to cross railway tracks, and to designing and implementing a solution that aligned with the specific context of this choice, they came up with something unlikely to trouble the jurors at Cannes but far more likely to play role in saving lives. As Ram Prasad concludes, an effective intervention seldom works by simply making people aware of a problem, “… but by helping them take a right decision quickly and easily when it matters.” That might just be a very good definition of a decision-centric approach. From a marketing perspective, taking a decision-centric approach could be important for another reason. Choice has become a bigger and more time-consuming aspect of people’s lives. An excellent 2010 article in The Economist titled “You Choose” quantified just how consuming choice has become:

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[…] the average American supermarket now carries 48,750 items, according to the Food Marketing Institute, more than five times the number in 1975. Britain’s Tesco stocks 91 different shampoos, 93 varieties of toothpaste and 115 of household cleaner. In this environment, spending some time understanding how people choose – not, as Keith Weed says, as “a pair of armpits in search of deodorant or a head of hair in search of hair benefits,” but as humans making thousands of choices everyday – could be one of the best investments a marketer can make. Beyond the sheer number of choices, another thing has made it more difficult for marketers to get their brands chosen. Brands – with a few glorious exceptions – are becoming less powerful. In his 2008 book The Brand Bubble, John Gerzema analyzes data from BAV Consulting’s Brand Asset Valuator, a very robust dataset that covers many hundreds of brands. It shows that people feel that brands in general have become significantly less trusted, liked, and respected, as well as less salient over the 12-year period from 1996 to 2008. While I wouldn’t discourage any marketers from taking measures to increase their brand strength in these areas, I think we should all be concerned that the issue may not be about making brands stronger but might be about choosers using “brand” less as quick and easy shortcuts in their decision making. For years, focusing on just checking the boxes about how a brand delivered emotional and functional benefits, and managing it for consistency, was a guarantee of a reasonable level of success. Blind brand belief may have made marketers complacent and overly reliant on the gravitational pull of our brands to attract people to choose them. But that, clearly, is no longer enough. I think the remedy to the decline that Gerzema notes should not be just to strengthen your brand in the traditional way, but to think of it from a different perspective. Everything I have learned about how people make decisions points to how powerful brands can be. When brands are at their best, they dovetail beautifully with how we make choices. They are in tune with how we store memories and the triggers that lead us to create vivid and lasting ones. They are active at the right times and places to recall those memories as compelling feelings and emotions. They work beautifully with how the mind filters information to enable it to make fast and efficient choices. Brands are the ultimate

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man-made decision shortcuts. At their best, they enable us to make quick, easy choices that feel right. In doing so, brands are perfectly aligned with how our brain’s decision-making systems have evolved; this, I believe is the real power of brands. To make the most of the relationship between brands and our decision-making systems, brands need to become more “brain centric.” In an episode TV series called “Thinking Money,” produced in conjunction with Maryland Public Television, noted Stanford neuroeconomist Baba Shiv (who I think makes the science of decision making and how it relates to marketing more approachable than almost anyone else) was asked why saving money is so difficult, when it clearly makes sense at a rational level. Shiv’s reply was: The rational brain simply rationalizes what the emotional brain has already decided to do. The only long-term solution for this is to make saving more sexy … for the brain. Asking how to make your brand and approach to marketing more “sexy” for the brain is an interesting idea. We all know the saying, “sex sells” (and it does). But making your brand and marketing sexy for the brain may take this concept to a whole new level. This approach requires a different way of thinking. Very often with marketing we think about our user or chooser’s needs from the category, we think about what is compelling about our brand equity, create a cocktail of persuasion and point it at our (I know I said I wouldn’t use this word) target. I call this a “brand in” approach. To be “sexy for the brain” means you need to form an understanding of what the brain wants. What are the things the brain just can’t ignore? What works with how the brain guides the choices we make? How can the stimulus you provide align with the speed and efficiency of the brain? Instead of starting from your brand, this means starting from the brain. I call this a “brain out” approach. In all of the research I’ve read, brilliant people I have spoken with, and practical experience I have accumulated, I have seen plenty of complexity. Complexity is inevitable. Humans are complex beings whose behavior is driven by a brain, that even though inside our heads contains as much scientific mystery as the universe does outside. Despite this complexity, I have reached one simple conclusion. From a cognitive and behavioral perspective, marketing has an impact in four ways:

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• It can create, through emotional associations, long-lasting memories of a brand. These memories are implicit, in that we attribute them to the brand at a nonconscious level. The real power of a brand is the amount of people with whom it has created strong, positive, and implicit memories. • It can act as a trigger to recall those memories. The Apple logo or the Nike swoosh are nothing without our memories of the feelings we have had about those brands – either through experience or the suggestion of marketing and advertising. After those associations are made, they are constantly hovering in the background, ready to color any decision that may involve that brand. • It can provide information so that a product or service’s utility can be assessed as a fit with needs and goals and compared with other options (either before the choice or as post-rationalization afterward). This can bolster the choosers feeling that they are making a good choice and, as Baba Shiv suggested earlier in this chapter, allow them to post-rationalize our choices both to themselves and others (and evangelize their choice to others as well). • It can make choices intuitive, or instinctive, in effect making them “no-brainers.” The first two points relate to memories and come from what we have experienced and thus learned as individuals. This third impact has a different source – it is baked into how our brain works. It is our cognitive inheritance or the hand that human nature has in our choices. In this book, I touch on all four of these potential roles for marketing, but the emphasis is on the fourth. This fourth area is the one where our knowledge has increased most over the last decade, and it is the key to aligning your marketing with how humans naturally choose. If you can do this, there is every chance you will succeed in making your brand a natural choice. The takeaways from this chapter are: • Think about your “consumer” not just as someone choosing products within your category, or as “a pair of armpits in search of deodorant or a head of hair in search of hair benefits.” Think about how the choices they make, whether buying a car, a pair of jeans, or shampoo, emanate from the same decision-making system.

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• Don’t just rely on the magnetic pull of your brand. Understand how to make your brand “sexy for the brain.” Think “brain out” rather than “brand in.” Keep this in mind as you read the remaining chapters of this book. • Consider allocating a percentage of your insights/research budget to understanding the innate behaviors that may be relevant to getting your brand chosen. What stood out for other people in this chapter: • “Marketers beginning not with what their brand wants, but with what the brain wants is a potent new approach to reaching today’s decisionfatigued consumer.” • “It’s clear we need to move beyond marketing insights that look at surface behavior to cognitive insights that drive choice deep within us. This is where the real advantage lies.”

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2 THE EVER-ADVANCING SCIENCE OF CHOICE

We’re getting a lot better at understanding how people make decisions, thanks to advances in Behavioral Science. We are learning more about how people choose and learning it faster than we have ever done before. I am fortunate to be writing this book at a time when we are in the middle of a golden age of decision sciences. In spite of the wealth of knowledge about human behavior and the future potential of the decision sciences to tell us even more about how humans decide, it is important to understand that, like life on earth, science is in flux and continually evolving. Decades ago, the study of the brain was just “neuroscience.” These days we see the emergence of specialized fields like “decision neuroscience,” “cognitive neuroscience,” and “social neuroscience.” The science of decision making is more precise today than it was decades ago because of the natural progression of science (refining your questions and experiments based on previous results) and because of advances in technology – researchers today have access to noninvasive technologies that allow the human brain to be studied in real time as choices are made. But even though we have many answers about how humans behave and make choices, there remain many outstanding questions. This fragmentation of expertise is an indicator of the complexity that science has found in our minds. Neuroscience is doing for our understanding of the brain what the Hubble Telescope and its successors are doing for our understanding of the universe. We are learning more than we have ever known, but at the same time revealing

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how much we have still to learn. Be wary of anyone telling you they have figured out how the brain works or that they have located the “buy button.”1 Three big trends are driving the golden age of decision science, leading to an explosion of learning from behavioral and social sciences. The first is an intellectual revolution which prompted the acceptance that intuitive processes, rather than rational ones, drive human choices. Theories based on the importance of intuition in decision making started to gain traction about two decades ago and inspired entire new research fields, such as behavioral economics and, more recently, neuroeconomics. Behavioral economics is a wonderfully fascinating area, and I say without exaggeration, it should lead to one of the biggest changes to marketing thinking in the history of marketing. But, from a practitioner perspective, I don’t think it is particularly well named. Behavioral economics, as a name, comes from the origin of the field, which was when experimental psychologists studying behavior started investigating economic choices (and indeed, collaborating with enlightened economists). Hence behavioral economics.2 But I think this makes it sound much more about economics and fiscal policy than about human behavior. My layperson’s description of behavioral economics is this: Behavioral economics is an area of psychology that explores how humans behave and make choices by studying the differences between how we should act from a rational, economic perspective

That said, a number of studies using neuroimaging from fMRI scans (more on this technique later) suggest that activity in a part of the brain called the ventral striatum, that is linked to desirability, can in some cases be a predictor of popularity or of sales success. We’ll cover these in more detail in Chapter 15, but lest you can’t wait the studies are Berns, G. S., & Moore, S. E. (2012). A neural predictor of cultural popularity. Journal of Consumer Psychology, 22, 154–160 and Venkatraman, V., Dimoka, A., Pavlou, P. A., Vo, K., Hampton, W., Bollinger, B., …, Winer, R. S. (2015). Predicting advertising success beyond traditional measures: New insights from neurophysiological methods and market response modeling. Journal of Marketing Research, 52(4), 436–452. 2 Readers familiar with advertising agency structures may see a comparison with the origin of the term behavioral economics and origin of the term account planning, the creative strategy discipline which was named from the merging of some skills from account management and some from media planning. Although this reflects the discipline’s origins, it doesn’t intuitively describe it. I feel the same about the term behavioral economics. 1

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and how we really behave. In so doing, it reveals many of the nonconscious processes that drive human decision-making and gives us insights into how human nature affects people’s choices. I’ll use the term behavioral economics in this book, but I will also use related terms like “judgment and decision making” or simply “behavioral science.” By dissing its name, please don’t think I am diminishing the importance of behavioral economics. It should be considered game-changing thinking for marketers. Its gift to marketing, though, has much less to do with economics and much more to do with revealing deep insights into human behavior and, in the process, providing the evidence to displace conscious, rational, or deliberative thinking as the lynchpin for how people make choices. The second trend is one of resource and capacity – a sort of human brainpower version of “Moore’s Law.” Gordon Moore’s observation suggests that the number of transistors on an integrated circuit doubles every two years, which enables a step change increase in computer processing power. We have seen a dramatic increase in the number of minds, and thus brainpower, focused on understanding human behavior and decision making. Behavioral and social sciences have become the hot ticket in leading academic institutions across the world, and an estimate based on the sizes of the leading faculties and academic societies suggests that more than 10,000 professors and graduate students3 are today involved in conceiving, carrying out, and analyzing experiments relating to behavior and decision making. The popularity of behavioral and social science research has led to large, interconnected communities of discussion and collaboration, the output of which is peerreviewed papers (I estimate that five of the leading journals4 and conferences that cover human decision making have yielded 1,500 papers over the last two years that are of at least some interest to practitioners) and, of course, books like this one, jostling for space in the nonfiction section of airport

Estimate based on combined membership of relevant societies and new graduates. In the United States alone, around 4,500 behavioral science degrees were awarded in 2018, according to College Factual. 4 Some examples are Nature, the Journal of Consumer Psychology, the Journal of Consumer Research, Cognition, the Journal of Judgment and Decision Making, and the Journal of Advertising Research. There are many, many more – the SCImago Journal Rank Indicator counts 5,000 active journals in the broad field of social sciences. 3

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bookshelves. Countless blogs on the subjects exist, and scientists like Dan Ariely and Richard Thaler have amassed Twitter followings that approach rock star proportions.5 The third trend is more like the real Moore’s Law, because it is one facilitated by technology. Behavioral and social scientists benefit from the decreasing cost and increasing availability of technology to perform experiments that were inaccessible to decision science greats when they made their landmark contributions – scientists like Daniel Kahneman, Amos Tversky, George Lowenstein, Paul Slovic, Richard Thaler, Paul Glimcher, and Bill Newsome, to name just a few. The field of neuroeconomics, for example, relies on functional magnetic resonance imaging (fMRI) scanners that were not available outside of medical schools until the first decade of this century. Now most leading business schools have MRI scanners in their basements (you will learn more on what these machines have revealed so far and their future potential in Parts II and III). Also, we can see the application of crowdsourcing to behavioral science experiments: Amazon’s Mechanical Turk,6 a service that distributes Human Intelligence Tasks (HITs) to online workers, enabling inexpensive and fast fieldwork for experiments; the use of everyday technology like smartphones and webcams records behavior and choices in natural environments; and the data trail from the Internet and mobile web reveals actual behavior rather than stated preferences and intentions. This third movement also presents the opportunity for huge learning in the social sciences and especially for marketing. The organizers of the Conference on Digital Experimentation (CODE), a conference at MIT that brings the worlds of social science and computer science together, introduced their inaugural event with the statement: “The ability to rapidly deploy microlevel randomized experiments at population scale is, in our view, one of the most

Well maybe not rock star proportions, but they are, on twitter at least as popular as leading beer brands. As of December 2019, Dan Ariely’s twitter account @danariely has 180.1k followers, which is just shy of Budweiser’s (@budweiserusa) 188.1k. Richard Thaler (@R_Thaler) has 159.4k, which surpasses Heineken (@heineken) who have 157.5k. They both have some way to go to catch Selena Gomez (@selenagomez) who has 59.3 million followers. In 2017, Gomez and Thaler co-starred in a cameo explaining synthetic collateralized debt obligations (CDOs) and the hot-hand fallacy in the Oscar-winning film The Big Short. 6 Amazon Mechanical Turk was originally set up as an internal service for Amazon to find duplicates and repeated information among its web pages. 5

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significant innovations in modern social science.” Enabled by the ability to track real behavior in real-life digital environments, this approach allows randomized controlled trials (RCTs)7 to be conducted with a robustness of scale that would have been prohibitively expensive to previous generations of researchers. These massive RCTs can also be implemented with a speed that makes them significantly more useful for marketers than most research conducted to academic standards. Studies that take this approach have the potential to help us understand human nature at a macro level, in a way that avoids something that bedevils nearly all research – whether academic or commercial. Whether study participants are lying in an fMRI scanner; are taking part in a behavioral test and being rewarded with coffee mugs, pens, or course credits; or are in a focus group room answering questions about whether packaging design may lead them to buy a particular brand of yogurt on their next trip to the supermarket, virtually all research has to make methodological compromises that remove it from the real world and therefore from the real behavior and outcomes it seeks to predict. Behavioral researchers refer to this phenomenon as concerns about ecological validity. While real-world RCTs of the type advocated by CODE hold great promise, marketers need to tread a little warily, as potential exists for ethical criticism and negative associations from the public for brands that participate in this kind of research. In June 2014, there was significant backlash when it emerged that two years earlier, data scientists had slanted the newsfeeds to several hundred thousand Facebook users to give them a more negative or more positive bias. The experiment lasted a week, and the aggregate posts of targeted users were analyzed to see whether the emotional balance of a newsfeed affected what they subsequently posted. Because participants were not explicitly told that they were part of this study, and because it appeared that half the sample were being fed information that might have made them less happy, a number of critical articles appeared including one in Slate8 with the headline “Facebook’s Unethical

We will cover RCTs in more detail in Chapter 15, Think Differently About Market Research. 8 Waldman, K. (2014, June 28). Retrieved from http://www.slate.com/articles/ health_and_science/science/2014/06/facebook_unethical_experiment_it_made_ news_feeds_happier_or_sadder_to_manipulate.html. 7

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Experiment.” The subhead continues, “It intentionally manipulated users’ emotions without their knowledge.” If experiments such as these can be designed and conducted in such a way as to avoid creating ethical concerns about privacy or unwilling participation, they hold great potential to reveal more about human nature. We will see in Chapter 6, “Thanks for Sharing (Whether You Meant to or Not),” how such a RCT with tens of thousands of participants has been key in helping increase consent for organ donation. It is a wonderful time for the academics who are at the leading edge of understanding to an ever-greater extent how people make choices. Equally, it should be a wonderful time to be a marketer and to be a pioneer of putting this decision-making knowledge into practice. When I wrote the first edition of this book, I could count the number of marketers, or even of businesses in general who were doing this, on the fingers of one hand. Over the past five years, this has changed dramatically. A couple of years ago, I suggested in an interview with InDecision – Inside Decision-Making Sciences (a blog run by researchers and practitioners in judgment and decision making)9 that the decision sciences revolution was as important to marketers, in terms of how it should change thinking about marketing and brand strategy, as the emergence of the Internet has been in terms of how it has changed the output of marketing. With a few exceptions, marketers have yet to embrace this new take on a fundamental aspect of what it is to be a human, not just a consumer, by considering the what, why, and how of choice. The Business of Choice is about how marketers can embrace what science has revealed about how people choose. It is not a science book, and I don’t believe that marketers need to become scientists. (I’m not sure that scientists becoming businesspeople is a good idea either, but that might be simply a result of seeing too many villains following that course in movies

Indecision Blog. (2013, March). Retrieved from http://indecisionblog.com/ 2013/03/04/in-the-wild-matthew-willcox-draftfcb/. In a subsequent interview on the Indecision Blog, Ogilvy & Mather’s Rory Sutherland, one of the leaders in bringing behavioral science into marketing practice, took this one step further when he said, “I truly believe that ‘The Next Big Thing’ is not a technology at all. Most progress in the developed world in this coming century – economic, social, hedonic – could in fact come from improvements in the social sciences. This is bigger than the Internet.” 9

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like Spider-Man.) The Business of Choice includes practical examples of where good work has already started. I write about some intentional uses of decision science and other areas where marketers and their agencies have intuitively landed on ideas that display a deep understanding of human intuition. The book also highlights research that might make you think differently about how to change behavior, and I would be delighted to hear whether it inspires any ideas that actually do. More than anything else, my aim is to demystify decision science. I want to enable marketers to see this wonderful and fascinating area as compatible with a practical and ethical approach to marketing. It is possible to leverage knowledge from decision science in a way that doesn’t just help brands get chosen but can also create positive brand equity by helping the people who choose them. I have already discussed how the growing understanding about the role of nonconscious aspects of choice has led to a wholesale reappraisal of how people make decisions. In his book The Social Animal, The Hidden Sources of Love, Character and Achievement, David Brooks tells us how John Bargh, the James Rowland Angell Professor of Psychology at Yale, sees the deepening understanding about the influence of nonconscious processes on our behavior as being on a par with some of the greatest paradigm-busting moments in human history: (Bargh) argues that just as Galileo “removed the earth from its privileged position at the center of the universe,” so this intellectual revolution removes the conscious mind from its privileged place at the center of human behavior. Whether history will agree that the demotion of the conscious mind is on a par with Galileo’s discoveries (it’s rather difficult to really know how farreaching a revolution is going to be when you are living through it), there can be little doubt that science has revealed enough to give marketers pause for thought about how the people they are trying to influence make the choices they do. This role of nonconscious processes on our judgments and choices has been popularized and made accessible to the broad public with the publication of Nobel Memorial Prize for Economic Sciences winner Daniel Kahneman’s Thinking, Fast and Slow. To say the book has been successful would be an understatement. It was recognized as one of the best books of 2011

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by the New York Times Book Review; as one of The Economist’s 2011 Books of the Year; and as one of The Wall Street Journal’s Best Nonfiction Books of the Year 2011. Nine years later, in 2020, the paperback edition is still ranked in the top 500 bestsellers on Amazon.com. The book threads together the story of how people make choices through Kahneman’s own pioneering work with his research partner Amos Tversky and that of other notable experimental psychologists. He, Tversky and a handful of other psychologists and economists (most of whose work you will encounter in some way or another in this book) are the founders of the field known as Behavioral Economics, which we discussed earlier. In his book, Kahneman uses the metaphor of System 1 and System 2 to illustrate the roles, power, and limitations of conscious and unconscious thinking in guiding our decisions. His book is an important reference for The Business of Choice. But surprisingly, the sea change this growing understanding about the influence of nonconscious processes has taken its time to impact the practice of marketing (if you were one of the early practitioners to embrace these ideas, let me confer on you the title of exceptional visionary). Although it is true that many aspects of marketing have transformed, this is mainly because of the impact of digital technology and not because of any new understanding about how people make choices. This sluggishness of marketing practice to embrace these ideas is all the more extraordinary when you think about the implications of Bargh’s point beyond its application to science. What he and a legion of credible experts have shown over the last few decades is that our choices and actions are, in the majority of situations, driven more by nonconscious processes than conscious ones. The role of nonconscious brain processes in choice matters to marketers for the very simple reason that the simplest (and best) definition of marketing I have been able to come up with is, “Marketing is the creation, management, and measurement of programs designed to influence the choices you need people to make to meet your objectives.” It seems a statement of the obvious, but marketers need to know as much as they can about how choices are made in order to influence them. I think a number of very good reasons exist for why decision science isn’t having a stronger effect on marketing practices. Some of these reasons are rooted deep in human nature. (We marketers, lest we forget, are as human as anyone else, and a cognitive mechanism called status quo bias that we will talk about in Chapter 8, “Loss and Ownership,” is very likely to have a lot to do with this.)

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One reason is that the science is big, complex, often vague, and frequently contradictory and is lacking a framework that helps translate basic science findings to marketing applications. It also doesn’t help itself with impenetrable terms and jargon. Decision science appears to hide the keys to consumer decision making out of the reach of marketing practitioners in the mysterious black box of the brain’s “subconscious,” and it’s kind of scary in there. We may have Freud to blame for this. Most of us marketers who aren’t versed in modern psychology may still use Freud’s (and Jung’s) ideas and accompanying language when thinking and discussing the mysteries of the nonconscious mind Freud’s explanations suggested the “subconscious” as the seat of emotions and irrationality, almost as a separate persona to the conscious, rational self. Today, psychologists see conscious and nonconscious processes as working hand in hand – even if, as Kahneman says, the (unconscious system) “is the secret author of many of our choices.” A second reason decision science has not had more of an impact on marketing is that translating decision science into marketing practice requires time. Some of what has been learned and leaned on in marketing needs to be unlearned. New approaches need to be experimented with, and this involves risk in addition to time. Shorter tenures of Chief Marketing Officers10 and marketing teams combined with a demand for short-term results mean that the success of a marketing program is these days often measured by proxies that are not necessarily indicators of the actual behavioral shifts required. In most companies, fixing long-term problems or developing fundamentally new approaches isn’t going to help anyone keep their job or get their bonus. But just as the organizations that use digital marketing best are ones that started experimenting with small digital budgets when the Internet was in its infancy (and did similarly with mobile in its early days) progressive marketers might be wise to try out behaviorally based approaches on small projects to introduce new thinking and ideas that science has revealed. In some cases, marketers doggedly hold on to the view shared by rational economists that people make decisions based on expected utility. To some extent, this feeling that choice is rational is almost inevitable, as we as marketers try to rationally untangle how people choose. As Duncan Watts says in Everything Is Obvious: *Once You Know the Answer, The average tenure for chief marketing officers of leading US consumer brand companies decreased to 43 months from 44 months, according to the 2019 CMO tenure study by leadership consulting firm Spencer Stuart. 10

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When we think about how we (humans) think, we reflexively adopt a framework of rational behavior Also, research that asks people what they want and what messages will persuade them to buy may lead them to report being more swayed by rational information than they in fact are. This, in turn, can lead marketers to believe their assumptions about their potential choosers being persuaded by rationality are correct (we’ll cover some solid reasons why such research may be misleading in Chapter 15, “Think Differently about Market Research”). In a world where hard and precise data are promising to bring an unsurpassed level of exactitude to marketing decisions, the thinking and language of social and behavioral sciences can seem squirrely, although that is to ignore that most experiments from these fields are backed by robust and peer-reviewed data before publication. At the opposite end of the spectrum, some marketers (especially in categories that are felt to be more creative, more emotional, or more intuitive) may be concerned that application of knowledge from decision science may lead to an impersonal formula, or “marketing by numbers,” making it a less creative discipline. I believe this is not only avoidable, but that, by and large, what we are learning from science suggests that we put a greater premium on creative thinking in marketing. For an amusing look at what creativity by numbers may look like, try to get hold of a copy of Painting by Numbers: Komar & Melamid’s Scientific Guide to Art.11 These two Russian artists polled thousands of people worldwide on what they wanted or didn’t want in paintings and then used the data from that quantitative research as the basis for a series of paintings that represented The People’s Choice. The ironically intentional bad art (or is it, because of the irony, good art?) is a visual demonstration of taking research literally. Ethics are also a concern. The advertising business incurred the wrath of consumer advocates and regulators in the 1950s in the wake of subliminal advertising experiments (which subsequently turned out to be bogus12). As a result of the furor and an enduring superstition, advertising and marketing From Library Journal “the Russian emigre art collaborators Komar and Melamid began a statistical market research poll to determine America’s ‘most wanted’ and ‘most unwanted’ paintings. Since then, the whimsical project has spread around the world. Polls in the United States, Ukraine, France, Iceland, Turkey, Denmark, Finland, Kenya, and China revealed that people wanted portraits of their families and always ‘blue landscapes.’ After conducting research, the pair painted made-to-order works that meet the wanted (landscape) and unwanted (abstract) criteria.” 12 The story of James Vicary’s fraudulent experiments from the 1950s is covered in Douglas Van Praet’s book Unconscious Branding. 11

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practitioners are concerned about being seen as “hidden persuaders” and manipulators of the unconscious. Ethics should always be front of mind in marketing (and particularly in the much-maligned business of advertising13), and practitioners need to think carefully about whether they are erring from persuasion to deception or from leading the chooser’s cognitive mechanisms to misleading them. As always, just as in the cases of product claims and responsible marketing, the integrity of the individuals and the companies who employ them, be they marketing companies or agencies, will be critical in this. Many behavioral scientists have become appropriately vocal about interventions that use behavioral insights that may lead to choices that are not in the chooser’s best interests. Both the co-authors of Nudge: Improving Decisions About Health, Wealth, and Happiness, Cass Sunstein and Richard Thaler, have decried shady nudges. Sunstein’s paper The Ethics of Nudging14 draws a clear line: All over the world, governments are using nudges as regulatory tools. Is this ethical? Much of the answer depends on whether nudges promote or instead undermine welfare, autonomy, and dignity. Many nudges, and those that deserve support, promote some or all of those ideals, and undermine none of them. Thaler, who with Sunstein popularized the term nudge, has since coined the term sludge to refer to interventions that aren’t leading people to beneficial choices. In a 2018 piece titled “Nudge, Not Sludge,”15 Thaler sees both sludges of commission and sludges of omission. Sludge can take two forms. It can discourage behavior that is in a person’s best interest such as claiming a rebate of tax credit, and it can encourage self-defeating behavior such as investing in a deal that is too good to be true.

Advertising has often been seen as an untrustworthy profession populated by unscrupulous scam artists. One apocryphal story tells of a British adman, who, when asked the question, “What is your view on ethics in advertising” replied, “Ethics? I thought that was a county east of London” (the county to the east of London is, of course, Essex). 14 Sunstein, C. R. (2014, November 20). The Ethics of Nudging. Retrieved from SSRN: https://ssrn.com/abstract=2526341. 15 Thaler, R. H. (August 3, 2018). Nudge, not sludge, Science, 361(6401), 431. doi:10.1126/science.aau9241. 13

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I think it is highly likely that regulatory bodies, and self-regulation through guidelines from associations of marketing and advertising practitioners will result in a number of countries will develop a code of conduct that specifically covers approaches to marketing using insights from behavioral science.16 A related view is that accepting nonconscious processes drive so much of our decision making demeans the human spirit and flies in the face of free will and self-determination. The preceding concerns are all valid in different ways, but I think that they come, by and large, from a misconception of decision-making science and what it reveals. Rather than thinking of nonconscious processes as a capricious driver of irrational behavior or as something that allows us to get suckered into bad decisions, these processes – refined over years of evolution – allow us to make intuitive, quick, effective, and in the majority of cases, successful decisions. Marketers should use this knowledge for the latter, rather than for the former. Marketing that uses a scientific understanding of human nature to either guide people toward a choice that is beneficial for the marketer and the chooser or that makes a trivial choice quick and intuitive, thus saving the chooser time and stress, is to my mind not just ethical marketing, but desirable marketing. The takeaways from this chapter are: • It is now accepted by most experts that most of our choices are nonconscious, or intuitive. Remember that the role of rational thinking is largely for post-rationalization. Focus less how you want people to think and more how you want them to feel. • Find ways to experiment. Set aside a small percentage of your marketing budget to try behavioral approaches.

This has already happened to some extent. The 1906 Kellogg ad that I mention in the next chapter used the principle of scarcity but suggested an artificial shortage, which is now considered illegal in a number of countries. Also, there is an active debate about the uses of nudges, their legality, and to what extent they should be used and disclosed in public policy. See Alemanno, A., & Spina, A. (2014). Nudging legally: On the checks and balances of behavioral regulation. International Journal of Constitutional Law, 12(2), 429–456. 16

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What this chapter made other people think: • “I think marketers have over-indexed on strategies and techniques based on what is visible and more easily measurable, and now we’re starting to grasp how much these invisible, preconscious, and implicit human behavior traits determine every decision we make.” • “The application of science to marketing is more art than science. Determining what will work, and how and when it will work (i.e., what message will elicit which cognitive mechanism) cannot be reduced to a formula and will always require talent and creativity.”

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3 THE NATURAL HISTORY OF CHOICE

The choices humans make today are driven by our evolutionary history or human nature. There’s an opening line I’ve used at a number of technology conferences where I’ve been a speaker; it has never really had the effect I’m going for, but for some reason, I persist in using it – a bit like an uncle who always tells the same joke even though no one ever laughs at it. The line is this: Most of the people talking at this conference are here to tell you about what will happen in the next six months. I’m here to remind you what has happened in the last six million years. While I may need to find a better way of saying it, there is a truth in it. We can only really hope to get close to guessing what will happen in the next six months when we truly understand human nature, which is the product of what has happened in the last six million years. Five to six million years ago is when, according to a range of experts, a hominid brain emerged that can be seen as a direct ancestor to today’s human brain. The foundations of today’s decision-making system were laid in the hominid brain. Five to six million years ago is when the decision-making systems started to develop that we use today to select one toothpaste over another, to choose to order fries with our burger, and whether to put a financial windfall into our savings account or to buy the latest “must have” piece of technology. So just how similar are these foundations to our brain today? A number of years ago as part of background research for a talk I was to give at Adtech London, an interactive marketing and technology conference, I spoke with

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Professor Dean Falk about the evolution of the human brain. She is a biological anthropologist who specializes in paleoanthropology and is famous for providing evidence that a small human-like fossil, found in 2003 on the Indonesian island of Flores (dubbed “Hobbit Man” by the popular press and homo floresiensis by scientists) was not from a deformed modern human but an entirely new species.1 One of the questions I asked Falk was how our brains and decision-making systems have changed, since, say, sometime as long ago as 5 or 10,000 years? The time of the ancient Egyptians or even the birth of civilization? Her answer was, “In terms of human brain evolution, that is essentially today.” This ancient nature of the brain was absorbed into popular culture in the 1970s through Carl Sagan’s book The Dragons of Eden that made Paul Maclean’s triune brain theory famous. Triune means “three in one,” and the theory proposes that we have three separate brain structures that developed during different stages of evolution. The oldest, the so-called reptilian brain, captured the popular imagination as the “lizard brain.” The triune brain theory2 is now largely discredited, but there is certainly some truth in the idea that the most highly conserved parts of our brain – the brain structures whose lineage dates to before the existence of humans – have an evolutionary history of as much as 500 million years. For my purposes in this book, the five- or six million-year mark is relevant. The very primitive parts of the brain are associated with controlling autonomic functions, such as heart rate, breathing, and body temperature. The parts of the brain that regulate how people make the choices that marketers battle to influence evolved much later, with the emergence of our genus, the hominids. A good way to put our modern-day decision making in perspective is to think of the last five or six million years as a 24-hour day. In that 24-hour time frame, our species Homo sapiens would emerge at about 11 p.m., and the existence of Ancient Egypt would last for about a minute, ending around Dean Falk is the Hale G. Smith Professor of Anthropology at Florida State University and author of The Fossil Chronicles: How Two Controversial Discoveries Changed Our View of Human Evolution, a book about the discovery and debate around the homo floresiensis fossils and the Taung Child fossils (discovered nearly a century earlier). An interesting paper that covers her approach and some hypotheses can be found here: Falk, D. (2014, 1 May). Interpreting sulci on hominin endocasts: Old hypotheses and new findings. Frontiers in Human Neuroscience, 8, 134. doi:10.3389/fnhum.2014.00134. 2 MacLean, P. D. (1990). The triune brain in evolution: Role in paleocerebral functions. Springer. 1

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30 seconds before midnight. Columbus would be setting out on his journey to the New World at about 7 seconds to midnight, and World War II would end milliseconds before 11.59.59 p.m. With just under two tenths of a second of the day remaining, we would see the advent of the iPhone; and the 2015 launch of the Apple Watch would mean that it would exist for only the last 7/100 seconds of a second of our “day.”3 Now, this is not to say that our brains are concrete cast replicas of our Stone Age ancestors. Your brain and my brain have a remarkable ability to change in many ways, through a process called plasticity. Brain plasticity is also known as cortical remapping and is the biological mechanism underlying learning and the formation of memories. The brain is especially plastic in youth, but plasticity is not limited to that period of development. Sometimes after adults suffer traumatic brain injuries, they recover cognitive functions. After injury, the brain can sometimes rewire itself, with other brain areas stepping in and performing the functions previously carried out by damaged areas. Plasticity is often studied in animals, but in 2000, researchers at University College London (UCL) demonstrated plasticity in the adult human brain, using licensed London taxi drivers – the ones who drive the famous black cabs.4 The researchers, led by Eleanor Maguire, focused on changes in the size of the hippocampus in taxi drivers. The hippocampus is small, snail-shaped area of the brain that is crucial for memory formation and in particular for spatial memory. (Maguire and her collaborators studied licensed London taxi drivers because of their arduous training, known as “The Knowledge,” in which drivers have to learn 320 routes, 25,000 streets, and 20,000 landmarks in and around central London.) In the age of Uber and machine learning you might expect this human learning to be archaic – though a 2018 C-Net article Move aside Uber, London cabbies have it all mapped out in driver battles5 suggests otherwise. If you play this game based on the 200,000 to 250,000-year history of homo sapiens, Ancient Egypt happens between 11:30 and 11.40 p.m.; Columbus sets sail just after 11.57 p.m.; World War II ends with about 25 seconds of the day to go; and the iPhone and Apple watch exist for the last 4 and 2 seconds of the day, respectively. 4 Maguire, E. A., Gadian, D. G., Johnsrude, I. S., Good, C. D., Ashburner, J., Frackowiak, R. S. J., & Frith, C. D. (2000, April). Navigation-related structural change in the hippocampi of taxi drivers. Proceedings of the National Academy of Sciences of the United States of America, 97, 4398–4403. 5 German, K. (2018, February 8). Move aside Uber, London cabbies have it all mapped out in driver battles. C-Net. Retrieved from https://www.cnet.com/ news/london-taxi-drivers-with-the-knowledge-arent-fazed-by-uber/. 3

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In their study among taxi drivers, the UCL researchers used MRI, to measure the size of the drivers’ hippocampi. Drivers were classified into two groups: those with substantial experience driving around London and a control group of drivers who had not spent as much time navigating the city. The size of the hippocampus varied linearly according to the drivers’ experience; drivers with more experience had larger hippocampal regions. Lest you might think London taxi drivers possess a unique superpower, they aren’t the only ones who have made accommodations for spatial memory. Birds and other animals that cache food, like the chickadees of North America and their Eurasian counterparts tits, or migratory birds have larger hippocampal regions than species that don’t exhibit these behaviors.6 In an interview with the BBC just after the research was published, Maguire said: There seems to be a definite relationship between the navigating they do as a taxi driver and the brain changes. The hippocampus has changed its structure to accommodate their huge amount of navigating experience. The taxi driver study illustrates that our brains can rewire themselves and increase or decrease the size of certain structures depending on our life experiences. You don’t have to recover from injury or be a taxi driver in London to experience brain plasticity. Everyday life (even playing video games) can rewire our brains. Separate studies conducted over a five-year period at the University of Rochester and the University of Toronto show that playing video games can lead to improved visual acuity and attention. Participants in these studies played first-person shooter (FPS) games, which are a visually demanding genre of video games in which you have to seek out and shoot your opponents before they shoot you. They also played puzzle games like Tetris.7,8 Pravosudov, V. V., Kitaysky, A. S., & Omanska, A. (2006). The relationship between migratory behaviour, memory and the hippocampus: an intraspecific comparison. Proceedings of the Royal Society B: Biological Sciences, 273(1601), 2641–2649. 7 Green, C.S., Bavelier, D. (2007) “Action-video-game experience alters the spatial resolution of vision.” Psychol Sci 18:88–94. 8 Wu, S., Cheng, C.K., Feng, J., D’Angelo, L., Alain, C., Spence, I. (2012) “Playing a first-person shooter video game induces neuroplastic change.” / Cogn Neurosci 24: 1286–93. 6

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People who played FPS games showed more improvement at visual tasks than those who played Tetris. Further, measures of the brain’s electrical activity suggested that playing FPS games modified the neural computations underlying how visual attention is allocated, or where and when you decide to look. Recent studies using fMRI, a technique that measures brain activity by mapping changes in blood oxygenation level (we’ll talk more about this method later in this book) give insight into how video gaming engenders brain plasticity. A 2019 study among Chinese players of League of Legends9 looked at the effect of expert players and nonexpert players limiting the amount of time they played on Amplitude of Low-Frequency Fluctuations (ALFF), a measure of signal intensity in the resting brain. The participants were asked to limit their video game time to less than three hours a week for a year.10 Because League of Legends is a highly competitive online multiplayer game, there is a seed system that is used to create the bestmatched competitions. Experts were players who were ranked in the higher levels of this system,11 and they would have had to clock a lot of hours ingame to reach those levels. The research team collected fMRI images at the beginning of the experiment, before the expert and nonexpert players had started limiting their playing time, and after one year of playing games for less than three hours a week. In the first fMRI dataset the experts showed a significantly higher level of ALFF than the nonexperts, perhaps revealing the effect of long-term video gaming experience on brain and cognitive development. A year later, after the “video gaming diet” that only allowed them to play for three hours a week, the fMRI scans showed a reduction of ALFF in the experts. In fact, the intensity of ALFF was reduced to a level similar to the nonexperts. The nonexperts’ ALFF levels had actually remained stable from the first data collection to the second data collection one year later.

Diankun, G., Yutong, Y., Xianyang, G., Yurui, P., Weiyi, M., & Dezhong, Y. (2019). A reduction in video gaming time produced a decrease in brain activity. Frontiers in Human Neuroscience, 13, 134. 10 Parents who feel their offspring are spending too much time playing video games may be interested in contacting the researchers to understand how they managed to get the study participants to stick to these limits! 11 For those familiar with the workings of LOL, the expert participants were all at least Gold I. The highest ranked were at Diamond I. 9

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Brain plasticity isn’t a one-way street. It both gives and takes away. Another study12 reveals that – depending on how you play them – video games can lead to what might be regarded as plasticity with positive consequences or to plasticity with negative ones. In a 2017 study, participants were given a video game task to assess whether they used “response learning” or “spatial learning” approaches. The response learning approach is based on the expectation of reward and creates bigger responses in the brain’s reward system, and especially in a structure called the caudate nucleus. The spatial learning approach, similar to that which the London taxi drivers exhibited in Eleanor Maguire’s study, engages and stimulates the hippocampus. After analyzing which learning style participants used, the researchers at Université de Montréal had them play different genres of video games for 90 hours. Some games were FPS games, which while requiring a level of spatial cunning and strategy, are very often won or lost by speed of response (and as we mentioned earlier, visual acuity). Others were three-dimensional (3D) platform games that require spatial and object memory.13 After playing the video games for 90 hours, brain scans showed that response learners exhibited some atrophy in the gray matter – which is made up of neuron cell bodies – of the hippocampus. But after playing 90 hours of 3D platform games, all participants showed an increase in hippocampal gray matter. Not surprisingly, a number of companies have seen potential to turn brain plasticity into a money-spinner, developing video games that claim cognitive benefits. Compelling though the proposition sounds (and the marketing from these companies has made it sound particularly compelling), it hasn’t turned out to be the slam dunk the VCs who backed these companies might have hoped. The (scientific) jury is still out, with some studies finding a positive effect, and others showing no effect.14 The legal jury, though, is in. In January 2016, the Federal Trade Commission announced

West, G. L., Konishi, K. Diarra, M. Benady-Chorney, J. Drisdelle, B. L., Dahmani, L., ..., Bohbot, V. D. (2017). Impact of video games on plasticity of the hippocampus. Molecular Psychiatry, 23, 1566–1574. 13 The FPS games played included Call of Duty, Killzone and Borderlands 2; the 3D platformers were from the Super Mario series. 14 Simons, D. J., Boot, W. R., Charness, N., Gathercole, S. E., Chabris, C. F., Hambrick, D. Z., & Stine-Morrow,E. A. L. Do ‘brain-training’ programs work? (2016, October). Psychological Science in the Public Interest, 17(3), 103–186. doi:10.1177/1529100616661983. 12

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they had fined Lumosity,15 one of the largest developers and marketers of “brain games” $2 million for “preying on consumers’ fears.” This fine was in addition to a $50 million penalty for harming consumers – a fine that was suspended because the company could not afford to pay it. The fines arose because Lumosity’s marketing was adjudged to have targeted aging people, and their fear of cognitive decline and senility. A question I often hear is whether the human brain and how we make decisions is evolving because of technology such as video games and smartphones. There is an important distinction to be made here. Brain changes at an individual level shouldn’t be confused with an evolutionary reengineering of our innate decision-making systems. A good analogy for what happens when our brains undergo plastic changes as a result of certain experiences is our physique – we can develop brawn by lifting heavy weights. Athletes can make quite remarkable changes to their bodies and their performance by shifting mass from one area to another through reducing fat levels and building muscle or the sharpening of their reflexes, respectively. (However, my inability to shift mass from my midriff might be a strike against any theory of body plasticity ….) In spite of these changes to an athlete’s body, the critical life-supporting functions of the body (e.g., like circulation, respiration, and digestion) work in pretty much the same way today as they did in Falk’s “essentially today” of ancient Egypt and even for many tens of thousands of years before that. The same is true of the cognitive systems that drive our decision making. These decision-making systems really are like the life-supporting functions of our bodies. Fully opposable thumbs evolved because they gave us the capability to successfully perform tasks that emerged as critical to our survival and success as a species, such as making and using tools; thumbs still determine how we hold and use things today. There is little difference between how I gripped the handle of a hammer that I used to beat down some loose nails on our shingled siding last weekend and how my ancestor Homo Erectus might have grasped a tool a million or so years ago. Likewise, our cognitive systems evolved to help us make choices that were equally critical to our survival. These cognitive functions comprise the mental toolbox that determines how we make choices today. I give these cognitive functions a thumbs-up; they’ve served us pretty well.

Lumosity fined millions for making false claims about brain health benefits. The Guardian, January 6, 2016. 15

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While we are on the subject of thumbs and plasticity, there is some evidence that, at an individual level, frequent (and recent) use of touch screen smartphones enhances the brain’s response to our fingertips touching something. A 2014 study16 measured the potential or the electrical activity between parts of the cerebral cortex associated with stimulation of the tactile receptors on fingertips among touch screen smartphone users and nonusers (people who owned older technology phones). When the thumb, index, and middle finger were touched mechanically, the researchers measured an enhanced cortical potential in the touch screen smartphone users versus those using flip phones and the like. There are a couple of important points to be made here. What the touch screen study, the video game studies, and the taxi driver research I’ve referenced in this chapter show is that our individual brains adapt to handle different or new tasks and activities. There is not much evidence of the lasting effects of these adaptations if the activity they accommodate is neglected. As many of us will know, muscle mass and strength can be built by frequent weight training. But if you are too busy to get to the gym for a couple of weeks, you may find yourself struggling on your third set of repetitions in a way that you didn’t when you were working out frequently. Another point is that these individual adaptations should in no way be confused with brain evolution. The children of the taxi drivers who have developed bigger hippocampi, the video gamers who have enhanced their visual acuity, and the smartphone users whose fingertip use has led to greater cortical activity will not biologically inherit their parents’ adaptations. Giraffes don’t have long necks because their forebears stretched their necks reaching for leaves on trees.17 Giraffes have long necks because those in the population that had slightly longer necks could reach an additional source of leaves, survived, and reproduced in disproportionate numbers to those without this characteristic. If at this point you are thinking, “I didn’t buy this book to read about why giraffes have long necks,” I first want to reassure you that we are nearly done with giraffes, and second, I want to thank you for your patience. Just as a giraffe’s neck defines how a giraffe lives day to day, so do the decision-making systems we have inherited from a long line of successful ancestors define how we go about our lives every day. Although understanding how our brains Gindrat, A.-D., Chytiris, M., Balerna, M., Rouiller, E. M., & Ghosh, A. (2014). Use-dependent cortical processing from fingertips in touchscreen phone users. Current Biology, 25(1), 109–116. 17 This is how an early evolutionary theorist, Jean Baptiste Lamarck, explained giraffes’ long necks through the Theory of Inheritance of Acquired Characteristics. 16

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and behaviors change through technology or what is happening in culture is helpful to marketers, it overlooks the elephant in the room (I won’t get into the story of the evolution of the elephant’s elongated proboscis, though it is, of course, similar to that of the giraffe’s neck). It is as important – or, I would say, more important – to understand the underlying aspects of behavior that allow for these individual adaptions. Understanding human nature is critical to influencing and guiding people’s choices.

CONGRATULATIONS FOR BEING PART OF OUR SUCCESSFUL TEAM! You know those new employee orientation manuals that tell you how great the company you have just joined is? Well, if there were one for the human race, it might remind you that you are part of the most successful animal species in the history of life on this planet. That this success isn’t just a flash in the pan and has been sustained since we became the dominant hominid around 60,000 years ago, which is, even in the slow pulse of natural history, a significant amount of time. That competitively we are atop a pile of tens of thousands of vertebrate species that we share the planet with today. And that this is just a fraction of the total number of species we have shared the planet with – but that are no longer with us – that either fell victim to our dominance, or to hostile conditions that we, somehow, survived. Humans succeeded where beasts that were bigger, faster, or stronger failed. We reign over creatures that can fly thousands of miles in migration, can create millions of offspring versus our handful, that can see us, smell us, or hear us hundreds, and in some cases thousands of yards, before we are aware of them. If species survival were a competitive sport, we humans would be celebrating as if we had won the World Cup, the World Series, the Super Bowl, and swept every gold medal at the summer and winter Olympics. If we had a management off-site, after the mutual back-slapping and individually contemplating what we are going to do with our bonuses, then we might start to think about the best practices that got us so far to work out how to continue our success and face the challenges that are inevitably ahead of any winners. Over the long journey that has brought us to where we humans are now, I sometimes wonder what we might identify as our success factors. Opposable thumbs come up a lot, as do large brains and the very human trait of curiosity. But the most significant, in my view, is the array of intuitions or instincts that drive our choices.

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Understanding the ingrained tendencies that have allowed us to survive and thrive isn’t only important to us as individuals and as a species. It is also important for businesses and, in particular, brands. Brands succeed when they are aligned to human nature and innate behaviors. The factors that have made humans successful are mirrored in all successful brands, and the more successful, and more sustained that success, the more evident these factors are. Some brands do it unwittingly. Some do it wittingly. Later in this book, I’ll discuss how Apple doesn’t just provide an intuitive user experience (UX) but also makes its brand and products intuitively easy to choose. I’ll also discuss how one of Coke’s most significant marketing programs used innate behaviors to make the beverage universally appealing and how another approach used innate behaviors to make each can of Coke feel deeply personal. So, what factors have driven human success? Ultimately, it comes down to one brutally simple concept. Over the long haul as a species, our ancestors made more good decisions than bad decisions. This idea applies in most cases to individuals as well; in general, we each make more good choices than bad during our lives. Thanks to my ancestors’ smart choices I was able to write this book, and thanks to your ancestors’ smart choices, you are now reading it. (And hopefully you are not still considering whether that is a smart decision.) The “long haul” is very long. As I’ve already discussed, the evolutionary roots of the most primitive parts of our brain go back eons. Survival, and thus success, is about making the right instinctive choices. Understanding the unconscious motivations that drive decisions, described by Douglas Kenrick and Vladas Griskevicius in their book The Rational Animal as our seven evolutionary goals, is critical for any brand’s success. Evolutionary psychologists like Kenrick and Griskevicius describe natural selection as a gradual process by which biological traits – just like the giraffe’s neck – become more or less common in a population depending on their contribution to a species’ survival. You could argue that one of the most significant contributors to humans surviving, and thriving, has been the cognitive mechanisms that underpin our choices. For humans, these mechanisms are often shortcuts. Decision making is computationally taxing in terms of cognitive load. So, the brain has developed ways to reach choices in an efficient manner and in a very short time. These cognitive shortcuts are the basis of human intuition (your and my gut reactions) and include special rules called heuristics, which I discuss in the next chapter. These biases developed to help us make choices that gave us an advantage during

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our life on the savannah. They may not always do the same in the quantifiable, immediately gratifying, distance-collapsed digital world of present day. The human brain is very good at filtering information and only processes a portion of incoming sensory information. As I discuss in Part II of this book, an apt description of the human brain is an “ignoring machine.” Cognitive mechanisms underlying our choices are no different than sensory processes; the brain sifts through information, only using a fraction of what is seen, heard, felt, or smelled to reach a decision. Some mechanisms underlying choice are labeled cognitive biases because, in the modern world, they often lead to seemingly irrational decisions. Although construing cognitive biases as human shortcomings, as “bugs in the system” or as design flaws is very common, Kenrick and Griskevicius choose to see them in a positive light, as design features. Over the course of our natural history, these design features have served humans well, leading us to intuitively filter or, as German psychologist and champion of heuristics, Gerd Gigerenzer says, ignore most incoming information and be most affected by the information that is important to human success. As well as making these shortcuts drive our decisions so quickly that they are difficult – and often impossible – to override, evolution has another way of enforcing its sway. We feel pain, anxiety, and discomfort when decisions don’t feel right. We feel pleasure and excitement or peace when they do feel right. Understanding how to construct your marketing so that it can allow people to reach effortless decisions that leave them feeling good can provide a significant competitive edge to businesses. It will improve the chances of your brand being favored by the processes we have inherited through natural selection and therefore increase the likelihood of its being naturally selected by the people you want to choose it.

HUMAN NATURE (SOMETIMES) COMES NATURALLY TO MARKETERS It’s very clear that many marketers, creatives, and planners in advertising agencies have an intuitive feel for how instinctual, nonconscious processes affect decision making. Many good examples from the archives of advertising exist that use behavioral principles and would make you think that the practitioners’ intuitive grasp of human nature has been ahead of the scientists’ understanding at times. In 1906, W. K. Kellogg ran one of his first ads, for Sanitas corn flakes. The ad informed readers of the Ladies Home Journal that an adequate quantity of

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Sanitas corn flakes could not be produced and they should ask their grocers to act now to ensure an adequate supply. This ad relies on scarcity, a principle that Robert Cialdini believes to be one of the most instinctual levers of influence. British Airway’s 1989 blockbuster ad “Faces,” created by Saatchi & Saatchi and directed by Hugh Hudson, used the bandwagon effect exquisitely, by artfully giving a sense of the hundreds of thousands of people who flew British Airways, making it, at the time as their tagline reinforced, The World’s Favorite Airline. The “Mac vs. PC” commercials (where a cool and hip Justin Long as a Mac converses with a dweeby-looking John Hodgman as a PC) used our innate reliance on using points of reference to make decisions, in a very cultured way. If you look closely enough at any great piece of advertising or marketing, you can probably find a behavioral principle from decision science lurking inside it. The best creative directors – though they may deny it – have more than a touch of the behavioral scientist about them. The takeaways from this chapter are: • The brain that guides our decisions today has its roots in the brains of hominids that lived five or six million years ago. Human nature has a very long history and isn’t changing anytime soon! • Our decision-making systems have helped humans make the choices that have let us survive and thrive as a species. When thinking about how to get your brand chosen, remember to align it to human nature, and how humans have evolved to choose. • The best marketing and advertising have hooks that appeal to human nature. Think about this and try to identify them when you see ads you like. How are you incorporating an understanding of human nature in your own marketing? How this chapter made other people feel: • “As marketers we are so wrapped up in the minutiae of the day-to- day competitive bustle that we rarely get our heads up enough to think about the deep human truths that have driven behavior not just over years and generations, but for millions of years. Get that right for your brand and the chances are you will be tapping into something truly fundamental.” • “Now I can say, despite what many might think, I am the result of a long line of good decisions!”

PART II GETTING PRACTICAL TODAY

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4 SHORTCUTS VERSUS ANALYSIS – IGNORING IS DECISIONAL BLISS

In his book, Gut Feelings: The Intelligence of the Unconscious, Gerd Gigerenzer, who is the director of Berlin’s Max Planck Institute for Human Development, writes about how ignoring information has been a highly efficient and quick decision-making strategy for humans, be it conscious or nonconscious. It seems as if the human brain is as much an efficient “ignoring machine” as it is a noticing one. What the brain does is less about deciding where to allocate our attention, but instead is more about working out what won’t be ignored. Let me give you a personal example showing how the brain can help by ignoring information. I am an atrociously bad golfer – possibly because I only play about once every five years,1 though I suspect my ineptness is rooted in something more than just playing frequency. Normally when I play, I’m in a foursome with three people who play more frequently than I do and are much better golfers than me. After the first couple of holes (following slices from the tee, shots from the fairway that have less desire to become airborne than an aviophobe, and putts that go further beyond the hole than the entire distance of many of the shots that preceded them), the advice starts coming in. There is an illustration that appears on many golfing sites that captures this scene perfectly. It shows a golfer addressing a ball on a tee. He is poised to swing and is completely surrounded by a hundred or more pieces of advice as to how he should execute his shot. (I think I’ve heard all of them.) The advice includes gems like the following: My game won’t have improved any over the last five years. Since the first edition of this book was published in 2014, I haven’t played once. 1

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• Grip the club as though it were a baby bird. • Count to three at the top of your swing. • Left heel down for control. • Flex your knees. • Shift your weight from right foot to left foot. • One-piece takeaway. • Cock your wrists. • Breathe out as you swing down. • Finish with your chest facing the target. With just a touch of irony, the last piece of advice says, “Have fun!” The real point, made in a caption at the bottom of the illustration is that the golfer has to factor all of this advice in “1.5 seconds of thought,” or the amount of time it takes for the brain to plan the movement and for the body to actually swing the golf club. All this wealth of advice does is make me shank, slice, or hook the ball or whiff and miss it completely. Trying to deliberately execute my golf swing (which is a very complex movement2) while factoring in the new information about how to improve my technique is at odds with how humans go about their daily business. Yet, if I focus on just one thing (that one thing that seems to work best for me is to keep my gaze rooted on where the ball is on the ground and to resist the temptation to look up at where I think the ball may be heading as I swing through it) and ignore everything else, I play something that at least starts to resemble golf. Although we often like to think of our brains as super computers,3 calculating and recalculating the trigonometry of angles or the calculus of velocity (or even simple probabilities), human brains don’t actually work like that. Much to our second-grade teacher’s chagrin, rather than doing long division,

It’s a complex movement for humans, using at least six muscle groups. My awkward efforts are particularly complex in terms of biomechanics. 3 Christian Jarrett’s Great Myths of the Brain goes into the pros and cons of this frequently used analogy. Although there are some similarities (both receive information, process it, respond with outputs; both store information in two ways – as short-term/quick retrieval and long-term/slower retrieval memory), brains and computers work in quite different ways. 2

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the brain takes shortcuts, by zeroing in on one piece of information and ignoring pretty much everything else. In his book On Second Thought: Outsmarting your Mind’s Hard-Wired Habits, Wray Herbert writes about the brain’s shortcuts: Our lives are composed of millions of choices, ranging from trivial to life changing and momentous. Luckily, our brains have evolved a number of mental shortcuts, biases, and tricks that allow us to quickly negotiate this endless array of decisions. We don’t want to rationally deliberate every choice we make, and thanks to these cognitive rules of thumb, we don’t need to. Behavioral psychologists call these shortcuts heuristics. This term can be a little confusing to people involved in website and other digital design as it is also used by UX designers to mean the broad rules of thumb that interface design should follow.4 A great example of a heuristic, and one that Gigerenzer uses frequently, is how we intercept an object that is flying through the air (such as a fly ball in baseball). It was long thought that the brain calculated all the variables (spin, air resistance, wind, and velocity, to name a few) and then iteratively and rapidly solved complex equations in the manner of a supercomputer. Gigerenzer writes in Gut Feelings about how what we actually do couldn’t be further away from solving complex calculations. Research that tracked athletes’ gazes when they attempted to catch fly balls showed that they followed a very simple process,5 which Gigerenzer calls the “gaze heuristic”: When a ball comes in high, the player fixates the ball and starts running. The heuristic is to adjust the running speed so that the angle of gaze remains constant – that is, the angle between the eye and the ball. The player can ignore all the information necessary to compute the trajectory, such as the ball’s initial velocity, distance, and angle, and just focus on one piece of information, the angle of gaze. “10 Usability Heuristics for User Interface Design” were developed by Jakob Nielsen and Rolf Molich in the 1990s. Nielsen (often called “the guru of web page usability”) describes them as follows: “The 10 most general principles for interaction design … they are called ‘heuristics’ because they are more in the nature of rules of thumb than specific usability guidelines.” 5 McBeath, M. K., Shaffer, D. M., & Kaiser, M. K. (1995, April). How baseball outfielders determine where to run to catch fly balls. Science, 268(5210), 569–573. 4

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By paying attention to only one variable, the player will end up where the ball comes down without computing the exact spot. The gaze heuristic is a good example of how people’s behavior6 and decisions aren’t driven by a rational analysis of facts. There’s a very good reason for this, which is that for most of human history, by the time we had reached a decision based on rational analysis the opportunity would have eluded us or the threat would have killed us. The shortcuts we use are not just quick, but they are also very efficient in terms of cognitive load. And efficiency is important, because while our brain is just 2% of our body mass, it requires about 20% of our resting energy consumption (for chimpanzees this number is around 9%, for rats around 5%). A brain that used less efficient processes (such as detailed analysis) and that could still guide our decisions as quickly would both increase our requirements for oxygen and calories and would require a bigger housing. The latter point would be particularly problematic, because of the difficulty babies with larger skulls would have passing through their mother’s narrow bi-pedal pelvis. That human babies are altricial, or born relatively helpless, is likely an evolutionary solution to the trade-off7 between the evolutionary value of our already big brains and of walking upright. The natural tendency to avoid using resource-costly deliberative thinking as our default process is captured nicely by Daniel Kahneman: Thinking is to humans as swimming is to cats. They can do it, but they prefer not to. Humans survived and evolved by making quick decisions, which worked out well for us more often than they didn’t. By making good and efficient choices, our ancestors lived long enough to reproduce, and we inherited their innate decision-making capacities.

It’s also used by raptors such as falcons to zero in on their prey and, according to research by McBeath and Shaffer, by dogs to catch Frisbees. 7 Another trade-off is the evolution of “soft spots” and sutures in the skulls of baby hominids, allowing for the skull to expand after passing through the constraint of the birth canal and thus accommodating the rapid growth of the infant’s brain after birth. This feature – which comes at the cost of some vulnerability – is found in humans and was found in other hominids, but it is not found in our closest living relatives, the apes. Expandable and delicate has worked for our evolutionary development; fixed and robust has worked for theirs. 6

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In order to make these quick decisions, we developed efficient cognitive processes, like the gaze heuristic, and these processes operate at the speed of neurons firing. Just as we jump when startled, these neural processes kick in before we can consciously consider action. It is not that these processes are sinisterly “subconscious,” but more that they are “preconscious,” because their job is to operate at a speed quicker than the speed of energy-consuming conscious thought. We seldom realize we are using them, and when asked directly we often post-rationalize our decisions. If you ever feel indecisive (and who doesn’t?), it is probably because these shortcuts are being subverted in some way. When a decision feels good, it is because these shortcuts are giving it their instant approval, making the decision as smooth as a gear change on a welltuned and lubricated bicycle. When this happens, the decision seems “intuitively right” and we make it more quickly and feel better about it. In addition to heuristics, there are around 100 processes and shortcuts known as cognitive biases, which we touched on in the last chapter. Most of these have been discovered by behavioral scientists during the last 50 years.8 The difference between a heuristic and cognitive bias is subtle. Heuristics are rules of thumb we instinctively follow; heuristics require us to ignore many factors and base our decision on one key factor. Cognitive biases happen when focusing on one factor leads to seemingly irrational decisions. My personal (and nonscientific) way of thinking about cognitive biases is that they are basically heuristics that lead us to sometimes fall short of what, from a rational perspective, appears to be the optimal choice in the modern world. I often use a physical analogy to talk about heuristics and cognitive biases. We have all seen the evidence of the human habit of taking shortcuts. In every park on the planet, you will find a trail worn by people walking, cutting the corner between two paved paths. We make and take shortcuts like these to save time (in most cases a few seconds) and energy (if the shortcut

This discovery is ongoing. At the 2019 Society of Judgement and Decision Making (SJDM) conference, the Hilel Einhorn Award for the best paper by a young investigator was won by Joshua Lewis, for research that described Prospective Outcome Bias, a hitherto unidentified cognitive bias (Lewis, J., & Simmons, J. P. (2019, December 30). Prospective outcome bias: Incurring (unnecessary) costs to achieve outcomes that are already likely. Journal of Experimental Psychology: General. Advance online publication. http://dx.doi. org/10.1037/xge0000686). 8

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saves us 10 yards, that means we’ve saved the calorific equivalent of 1/10 of an M&M9), even without the help of Pythagoras to tell us that the foot-worn hypotenuse is shorter than the sum of the length of the other two sides. Using cognitive shortcuts is as much part of human nature as using physical ones. That the hypotenuse is shorter is a rule of thumb we follow intuitively, rather than mentally calculating the distance saved every time. A number of years ago a picture of a truck that had collided with a railway bridge in Mamaroneck, New York, was being widely shared online. This is a common occurrence – one bridge alone, the infamous “Can-opener Bridge” near Durham, North Carolina, has claimed the scalps of 152 trucks between 2008 and the end of 2019, as inattentive drivers take a shortcut to save a little time.10 But what made this particular picture go viral was the slogan the trucking company, Shaffer Trucking, had chosen to emblazon on their vehicles. On the back, there is a line that says, “Our Most Valuable Resource Sits 63 ft Ahead” – perhaps funny enough to merit posting, given that the valuable resource in question had just caused the company thousands of dollars’ worth of damage. But the line that prompted the posts, reposts and re-reposts was on the side, in three-foot high letters reading “On the Road to Success There Are No Shortcuts.” In my mind, what compels people to take the shortcut, like the well-trodden path in the park, is akin to a heuristic. In the case of this poor driver though, everything would have been fine – he would have saved some time and some fuel – if the bridge hadn’t been there. For the purpose of my story, let’s assume the bridge is new. This change to the environment leads a heuristic that has a history of working to result in a less-than optimal outcome. Similarly, our cognitive toolbox with its Stone Age origins often struggles with changes

According to Linda Rankin, assistant dean of the Idaho State University Division of Health Sciences, every 100 yards walked translates to approximately 1 M&M in terms of calories. 10 There are a number of real cognitive errors, beyond simple inattention and distraction that may lead to these collisions. One that I find interesting is the vertical–horizontal illusion. This is the tendency for people to overestimate the length of a vertical line relative to a horizontal line of the same length. So, we perceive a tower that is 300 ft high to be a greater length than a 300-foot-long fence. Some evolutionary psychologists speculate that this tendency exists to warn us of the danger of heights and remind us of the greater effort it will take us to travel the same distance vertically as it does horizontally. 9

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that happen faster than the pace of evolution. And then, the shortcuts we use become cognitive biases that can have negative consequences. Some cognitive biases sound like they were named in the throes of a drinking game – the Texas sharpshooter fallacy is one of these. It describes the human tendency to focus on a small subset of a larger pool of data and see patterns that wouldn’t appear if you considered the larger set as a whole. The Texas sharpshooter fallacy gets its name from a joke about a rifleman in Texas who has been firing shot after shot at his barn, and then circles the area where the most holes are, declaring that the target. Jodi Beggs, an instructor and teaching fellow at Harvard University, is one of the leading lights in the field of economics humor and runs a company called Economists Do It with Models. In an amusing chapter in the book Homer Economicus: The Simpsons and Economics, she details how the bad decisions the characters in The Simpsons make week after week can be attributed to cognitive biases.11 Not surprisingly, Homer Simpson is the star in this respect, but we see Marge, Bart, Lisa, Millhouse, and even Mr. Burns falling foul of their instincts. While the names of some cognitive biases are very modern (e.g., the IKEA effect12 is a bias that leads us to put a disproportionately high value on things we have invested effort in making), all of these brain mechanisms have their basis in evolution. Like anything that evolution has bestowed on us, some biases remain critical, whereas others seem to have less relevance to modern life. If you were designing “human 2.0” for the twenty-first century and beyond, you might choose to drop features that seem to have lost their practical purpose (like toenails, wisdom teeth, or male nipples). And you might want to do some housekeeping on our inventory of cognitive mechanisms while you were at it. However, artifacts or not, these brain processes drive our choices, big and small. As marketers we should think of heuristics and cognitive biases not as some profound philosophy or complex psychology, but simply as insights into human nature. They are the bedrock upon which humans intuitively make choices.

Beggs, J. N. (2014). Homer Economicus or Homer Sapiens? Behavioral economics in The Simpsons. In J. Hall (Ed.), Homer Economicus: The Simpsons and Economics (Chapter 15). Stanford, CA: Stanford University Press. 12 Norton, M. I., Mochon, D., & Ariely, D. (2012). The IKEA effect: When labor leads to love. Journal of Consumer Psychology, 22(3), 453–460. 11

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Of the hundred or so heuristics and biases, some are highly relevant to marketers, others less so. Some seem to overlap and blur. Others seem very specific to very specialized areas. Part II of this book addresses what I think are the most important heuristics and biases for business. I package them in ways that relate less to their scientific descriptions and relationships and more to how they can be applied to the practical business of marketing: the business of how people choose. The takeaways from this chapter are: • Think less about being noticed and more about not being ignored. What might you be able to communicate that from an instinctual perspective is difficult to ignore? • The bedrock of human decision making is cognitive shortcuts called heuristics and cognitive biases. The more you understand these, the more you will understand how people reach the choices they make. • Our brain has developed these cognitive shortcuts to help us make very quick decisions that don’t use much energy. That’s why we love “no brainers.” If you can make choosing your brand a “no brainer,” you are ahead of the game. What other people thought when they read this chapter: • “In the consumer-packaged goods world, we often spend years crafting the most compelling, logical reasons our product is tastier, healthier, better than the three other brands on the shelf, assuming our consumer carefully considers all twenty items in their cart. In this chapter, we’re reminded of the real task – make the decision to choose us easy, instinctual” • “Reading this made me remember that in marketing (and perhaps in most cases where humans are involved), ‘feeling right’ beats ‘being right.’”

5 GETTING FAMILIAR

Familiarity breeds content.1 Few marketers would argue that a brand being familiar wasn’t a good thing. And they’d be right. While it is not the only requirement for a brand to be chosen, feeling familiar – being recognized, being top of mind or being salient – is critical for success. Being top of mind correlates directly with brand share; we know this from years of tracking studies. Generally, the brands that people know best are the ones that people feel perform better in all the attributes important in their category – they are more trusted and are felt to be more reliable, to work better, and to be a better value. While it’s accepted that familiarity is a good thing, it’s worth asking why. Robert Zajonc, a giant in the field of social psychology, would explain this from the perspective of human evolution by saying, “If it is familiar, it has not eaten you … yet.” As our pre-historic ancestors navigated the hazardous savannah, the animals that they were lucky enough to encounter more than once were less dangerous. The ones they encountered over and over, by definition, were those most unlikely to cause them harm. Familiarity was a proxy for safety, and today, this proxy remains with us as an intuition. “Familiarity breeds contempt” as an expression warning against complacency and disrespect has a history that goes back to Chaucer’s Tale of Melibee (c. 1386). I can’t take credit for “Familiarity breeds content” – the variation on the old saying was used as a headline by Sweet Afton cigarettes in Ireland in the 1960s and 1970s, and maybe before that. It stuck in my mind as a child and resurfaced many decades later as I was writing this chapter. 1

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Zajonc’s research shows that familiarity communicates safety and other generally good things. His most famous work is a series of experiments that demonstrated what became known as “The Mere-Exposure Effect.” In one of his best-known studies, Zajonc exposed individuals who were unfamiliar with Mandarin to written Chinese characters.2 People were shown some characters 5 times, some 10 times, and some 25 times. Participants were told all the Chinese characters were adjectives and at the conclusion of the experiment were asked to guess whether a character had a positive or negative meaning. Even though the characters were meaningless to the participants, people consistently felt that the characters seen most represented good things. The key finding of Zajonc’s landmark 1968 research and similar studies (hundreds of papers report research showing this effect) is that the more frequently people are exposed to something, the more positive their associations of it are. When something feels familiar, we feel good about it. A recent neuroimaging study from Stanford University and Arizona State University3 gives some clues as to why this might be. The study discovered the brain’s reward system plays a role in the mere exposure effect. In the 10-day study, 27 participants drank a “novel fluid” that was either a carrot- or celery-based vegetable juice. At the beginning and end of the experiment, on days 1 and 10, the participants rated their preferences for the novel fluid and underwent brain scanning. As time progressed, people preferred the vegetable juices more. And activation of the ventral tegmental area – a small region in the brainstem where dopamine neurons are located – tracked how much people preferred the drinks. The ventral tegmental area communicates with many other brain areas, and the strength of these connections in individual participants predicted how much their preferences for the drinks changed over the 10 days. This study is also important because it shows brain activation can be used to track preference changes in individual people. Another study by Zajonc some decades after his original study reveals a further and interesting layer to the mere exposure effect.4 In this experiment, Zajonc, R. B. (1968). Attitudinal effects of mere exposure. Journal of Personality and Social Psychology, 9, 1–27. 3 Ballard, I. C., Hennigan, K., & McClure, S. M. (2017). Mere exposure: Preference change for novel drinks reflected in human ventral tegmental area. Journal of Cognitive Neuroscience, 29(5), 793–804. 4 Monahan, J. L., Murphy, S. T., & Zajonc, R. B. (2000). Subliminal mere exposure: Specific, general, and diffuse effects. Psychological Science, 11, 462–466. 2

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one group of participants was given one exposure to 25 different written Mandarin characters. A second group was only shown five characters, but each character appeared five times. The group who had multiple exposures to the symbols reported experiencing better moods than those who had limited exposures to each character. This squares well with the finding in the “novel fluid” study – often activation of the reward system doesn’t just make us feel good about the experience, but it makes us feel good in general. The association between familiarity and mood is interesting for brands and marketers. Familiarity with something doesn’t just make us feel more positive about that particular thing in comparison to something else; it makes us also feel better about ourselves. This may provide some explanation about why brands are so powerful – they are familiar, and familiar things make us feel good. We spend a lot of time being concerned about how people feel about our brands, whereas the real power of a brand may be in how it makes people feel. And there’s more. Familiarity and recognition don’t just create positive perceptions and warm and fuzzy feelings. They are the foundation for two of our most powerful and frequently used heuristics, which have a profound influence on our choices. (Remember that heuristics are the cognitive shortcuts I wrote about in the previous chapter.) The two heuristics are the availability heuristic5 and the recognition heuristic,6 and the scientists behind them (Kahneman and Gigerenzer, respectively) are also the faces of a debate about how heuristics manifest in the brain. As a practitioner, I am in the wonderful position of not needing to take a side in this academic debate, and it is an active one.7 My role is simply to shine a spotlight on how the heuristics relate to human nature, how they influence choice, and how understanding them can be useful to marketers. Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. Science, 185, 1124–1131. 6 Goldstein, D. G., & Gigerenzer, G. (2002). Models of ecological rationality: The recognition heuristic. Psychological Review, 109, 75–90. 7 The origins of this debate date back to the testy salvos between the Gigerenzer camp and Kahneman and Tversky in the 1990s. For a forensic and even-handed review of these exchanges check out the April 1, 2019 post “Gigerenzer versus Kahneman and Tversky: The 1996 face-off” on Jason Collins excellent blog (jasoncollins.blog). In his 2016 book about the partnership between Kahneman and Tversky The Undoing Project: A Friendship That Changed Our Minds, Michael Lewis is less even-handed, coming down squarely on the side of Kahneman and Tversky. 5

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The availability heuristic is driven by what comes to mind most easily and is thought to be an unconscious process, unable to be controlled. The recognition heuristic is a deliberatively applied rule; you choose the familiar, what you recognize. By focusing our cognitive effort on these criteria and ignoring other information, the pre-conscious aspects of our brain processes are able to make remarkably accurate assessments of quite complex choices before our deliberative brain systems even get out of bed. Whatever comes to mind most quickly and with the least effort drives a lot of our decision making. Another way of thinking about the recognition heuristic is as a shortcut our brain takes by focusing only on information that is most easily available from our memories; everything else is filtered. This convenient focus on the already familiar is one of the reasons why brand leaders are so difficult to topple. The recognition heuristic is a powerful force that makes us plump for what is most familiar and enables us to ignore other options – most of the time. Using the recognition heuristic allows us to make incredibly quick and intuitive choices that are often as accurate as those arrived at after detailed and rational analyses. Recognition is a good way of quickly working out the “best” option in many cases. It is certainly a good rule of thumb to use to predict success in sporting competitions. In Gut Feelings: The Intelligence of the Unconscious, Gigerenzer references a study from Germany where both amateur tennis players (people who played tennis at a local club) and nonexperts (people whose interest in tennis was similar to that of the general population) were asked which names they recognized of the 112 of the players who started the Wimbledon Men’s single tournament in 2003.8 This turned out to be a remarkably accurate measure for who would win – players whose names were more recognized by the amateurs beat those less recognized in 72% of the matches; players more recognized by the nonexperts beat less recognized names 66% of the time. The recognition scores of these two groups turned out to be as good a predictor of who would win as using the formula that the individual ranked most highly by the Association of Tennis Professionals (ATP) would win. Using two relevant rankings, this approach predicted the winner 66% (ATP Entry Ranking) and 68% (ATP Champions Race) of the time.

Serwe, S., & Frings, C. (2006). Who will win Wimbledon? The recognition heuristic in predicting sports events. Journal of Behavioral Decision Making, 19, 321–332. 8

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Recognition may also have an interesting effect in the selection of luxury goods. In his best-selling book Spent: Sex, Evolution, and Consumer Behavior, evolutionary psychologist Geoffrey Miller writes: […] all ads effectively have two audiences: potential product buyers, and potential product viewers who will credit the product owners with various desirable traits. The more expensive and exclusive the product, the more the latter will outnumber the former. Miller’s insightful point is that those who buy luxury goods are buying them more because other people recognize and understand these goods as valuable, than because of any innate qualities of the product. A number of evolutionary psychologists, including Miller, suggest that luxury goods are markers of sexual selection. The beautiful and rare objects that we prize are really signs to others that they should prize us. But that relies on those others being familiar with these “markers.” Thus, luxury brands will often be visible not just to potential purchasers, but to the wider public, as a large part of their raison d’être is to infer status on their aficionados and advocates. Rolex has a level of broad prominence via its celebrity ads and significant presence at golf and tennis tournaments, such as the US Open and Wimbledon, which exceeds its potential user base. Aston Martin’s long-term relationship with the James Bond franchise is all about making the brand recognized by people who will never own one, clearly establishing that those who do buy one know they will be sending a strong impression to other people. But there is a twist … Human behavior is full of what seem like contradictions and paradoxes. Behavioral economists often talk about humans, and even individuals, as being inconsistent. It’s not just that what we say is different from what we do but that some of our cognitive mechanisms seem to be at odds with each other. I’m often reminded of a comic strip called The Numskulls9 that I enjoyed as a kid. The strip featured a team of

The great thing about writing a book is what you learn while writing it. I had completely forgotten The Numskulls and was delighted to discover that they still exist, published in the comic book The Beano. The 2015 Pixar movie Inside Out uses a similar construct, with the personifications of a child’s emotions – joy, sadness, anger, fear, disgust, voiced by Amy Poehler, Phyllis Smith, Lewis Black, Bill Hader, and Mindy Kaling, respectively. 9

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large-headed, thin-limbed homunculi who lived in the head of a central human character known (to them, and us) as “Our Man.” Each “section” of the head – Ears, Nose, Mouth, Eyes, Brain – was controlled and maintained by an individual numskull, with the various “departments” communicating through an intercom system.10 The “Brain” was the numskull-in-chief and he managed the differing goals and personalities of the individual numskulls to ensure “Our Man” could navigate his way around the challenges of day-to-day life. It was a full-time job. Our cognitive mechanisms and innate behaviors seem a little like these numskulls. They are all trying to help their man or woman (us) get to the same place (efficient and effective decisions that feel good), but their methods sometimes seem to clash. One good example is the contradictory force of the primacy effect (the tendency to weigh initial events more than subsequent events) and that of the recency effect (the tendency to weigh recent events more than earlier events). To me, these apparent contradictions are nothing more than reinforcement of a point I made earlier, which is there are no golden rules for applying decision science to marketing and business. Everything depends on context, and while we don’t understand the whole story of how context prompts one cognitive mechanism or another, a key to applying behavioral principles to marketing is to accept that these apparent contradictions exist. I sometimes explain the apparent contradictions in the following way. Think of how, if you are searching for a small object such as a screw in a dark garage, you might use a flashlight as you peer around, eyes as wide open as they can be. Suddenly, the door opens, and the garage is now flooded with sunlight, making you shield your eyes and squint to continue your search. In the first case you are trying to maximize the effect of the light source; in the second you are trying to minimize it. These opposite “strategies” are in service of the same objective – finding the screw – but they kick in depending on the context. Cognitive mechanisms likely work in the same way. We’ll come across a number of these paradoxes as we go through the instinctual aspects of human behavior. One such paradox is that while we are intuitively drawn to familiarity, we are also intuitively drawn to surprise and novelty. This human trait is why creativity has always been, and will always be, a critical component of marketing. If marketing success could be achieved

“Of Free Will and Suggestion Boxes” by the late John George Byrne.

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by simply making your brand familiar, the only strategy we need to follow would be to pile our money into the most prominent media vehicles and let the power of familiarity do the rest. A couple of years ago, I was part of a team reviewing the best of Levi’s television advertising over the last 30 years, with Levi Strauss & Co.’s Global Chief Marketing Officer, Jen Sey. It is a great body of work, created by some of the world’s most awarded agencies, when each was at the height of their creative powers. As we paused to take a break from the brilliance (watching a reel of the best of Levi’s advertising is probably the closest aficionados of advertising can get to experiencing the Stendhal syndrome11), Sey said, “You know, the funny thing is that when these commercials really work, the stories are almost clichés. Almost clichés … but they’re not!” There’s something deeply true about what Sey said. The power of successful advertising is in using familiarity to draw us in, yet the ad somehow gives us a new perspective. Jonathan Harries, who was advertising agency FCB’s Global Chief Creative Officer for many years sees, calls this principle “familiarity with a twist” and believes that it is a common feature of the best work created by the industry. The validity of Harries’ idea of “familiarity with a twist” is supported by research detailed in a paper published by Stewart Shapiro and Jesper Nielsen in the Journal of Consumer Research in 2013.12 The paper opens with a terse statement – or understatement – of a fact that I have battled against my entire career: “Consumers often lack the motivation to process advertisements.” Having got that one out of the way, Shapiro and Nielsen develop an interesting line of thought that flies in the face of normal marketing practice. A typical approach of marketers and the agencies that advise them is to run advertisements that are as near identical as possible. Ads should only be replaced with new executions when the original ads are deemed to have

“Stendhal syndrome, hyperkulturemia, or Florence syndrome is a psychosomatic illness that causes rapid heartbeat, dizziness, fainting, confusion, and even hallucinations when an individual is exposed to art, usually when the art is particularly beautiful or a large amount of art is in a single place” (Wikipedia). These symptoms were frequently reported by tourists visiting Florence in the mid-nineteenth century, but today, there is some skepticism as to whether this phenomenon really exists. 12 Shapiro, S. A., & Nielsen, J. H. (2013). What the blind eye sees: Incidental change detection as a source of perceptual fluency. Journal of Consumer Research, 39, 1202–1218. 11

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reached a level of “wear out” (a phrase coined by copy testing companies) or when there is something newer to say. From what I have been telling you (and you have hopefully had the motivation to process) in this chapter, this would seem to make sense. The more someone sees something, the better, right? And if that is the case, surely seeing it in exactly the same way each time will be better still … but Shapiro and Nielsen’s experiments showed the exact opposite. Participants were shown a range of ads, with small changes made to each ad during repeated exposures. The changes were simple, inconsequential adjustments such as moving the logo or product description in a print ad from one corner to the opposite corner. They were also shown other ads where nothing changed position over repeated viewings. In one experiment, for ads where the logo had moved around, participants responded more quickly in an implicit test of how easy the logos were to process and reported that they found those logos more eye-catching and attractive than the ones that had remained in the same positions. In another experiment, ads where the logos and other components moved around led to a greater preference for the products in those ads versus the products featured in ads where everything stayed in the same location. Respondents were not consciously aware of the change of position of logos or descriptions in either experiment. Conventional marketing wisdom says that disruption is a good thing. It is tempting to think that effective disruption comes from something unusual, something unfamiliar, and that it is the insertion of the unfamiliar that attracts people’s attention. But something intimately familiar, like your name, can attract your attention just as well as the unexpected. A famous phenomenon from cognitive neuroscience called the “cocktail party effect” shows that the deeply familiar and relevant can be a great way of getting people’s attention. When we hear multiple streams of sound, such as many conversations at a crowded and noisy party, we are nonetheless easily able to carry on a coherent conversation. We do so by selectively attending to the auditory stream (in this case, spoken words) relevant to the conversation we’re having and seemingly ignoring all other auditory information. Even though we are not actively paying attention to the other auditory information, we are not truly ignoring it, either. Experiments testing the cocktail party effect (or “dichotic listening” in technical terms) show amazing findings. For example, the same word could be repeated over and over (like 50 times!) in the ignored ear, and we would not notice it. Maybe we could report whether the voice was male or female. But if our name were said just once in the unattended ear, we immediately hear it. Just like

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if, in the middle of our cocktail party conversation, we hear our name said across the room, we immediately stop talking and look for who called us. Though the tendency in marketing is to think, “let’s be disruptive to get people’s attention, and then maintain their attention with what is familiar and relevant,” it may actually be that the reverse is what really works. Familiarity gets our attention, but the disruption of what is unexpected maintains our attention. Imagine in our cocktail party experiment that if in one scenario my unattended ear heard the words “Your pants are on fire!” followed by “Matthew Willcox,” but in another scenario my unattended ear heard “Matthew Willcox” and then “Your pants are on fire!” The second case would lead me to pay more attention to my burning britches. Over the last 15 years, I’ve had the opportunity to work with a number of video game companies, with SEGA at the time when its DreamCast platform was at the height of its powers; on the Lara Croft Tomb Raider franchise (in one interesting exercise, we got a psychoanalyst to delve deep in to Lara’s personality); with Electronic Arts; and more recently with Nordeus, a mobile gaming company who are developers and publishers of Top Eleven Football Manager. Video game designers understand the idea of familiarity drawing people in but needing something more challenging and surprising to keep them engaged. They often describe the best video games as “easy to play; difficult to master.” There is some evidence that the power of surprise may go beyond capturing our undivided attention. Many of us have felt the delight of the unexpected upgrade when checking in for a flight or a hotel. That delight, it seems, doesn’t just come from feeling special and privileged. It turns out that our brain views surprises as valuable information that is useful for making good decisions. Our presence on the planet comes down to our ancestors generally making pretty good decisions, and when it came to the important ones – the ones which were a matter of life or death – they made more good decisions than they made bad ones. But what is a “good” decision? It can be defined many ways, of course: Economists would say a good decision is a rational one, while neuroscientists and psychologists would say it maximizes reward – in all its forms. The brain treats novelty, or surprising information, like a special kind of reward.13 Something new entices us to investigate it; we feel an urge to explore a new environment. Kakade, S., & Dayan, P. (2002). Dopamine: Generalization and bonuses. Neural Networks, 15, 549–559. 13

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While we all have our “go to” brands or products – be they beer, deodorant, or even varieties of fruit – we will still, from time to time, slip the shackles of habit and try something different. For our evolutionary brain, exploring novelty helped us avoid bad outcomes, and sometimes led us to better ones, and we continue that behavior today. We love the familiar and its consistent rewards; we exploit what we know. But we are intuitively drawn to explore other options that are potentially rewarding. Experiments looking at how pigeons and rodents balance exploiting and exploring resulted in the development of the matching law.14 If an animal is navigating a maze and turning right at the corner results in a reward 80% of the time whereas turning left results in a reward 20% of the time, you might expect the animal to favor the 80% option 100% of the time. After all, turning right will be the fruitful option four times as often as turning left, so why not turn right every time? But what actually happens is animals turn right roughly 80% of the time and left 20% of the time. Choices are made in proportion to how often each pays out a reward. Matching behavior has been observed in many kinds of animals – including humans.15 An evolutionary explanation for the matching law might be that we seek out variety, even when there is no immediate need to do so, because dependency on one source of anything is a bad survival strategy in general. For marketers, this explanation supports Byron Sharp’s point of view in How Brands Grow: What Marketers Don’t Know16 that loyalty is more of a marketer’s dream than a consumer’s reality. Sharp discusses data from the United

Herrnstein, R. J. (1974). Formal properties of the matching law. Journal of the Experimental Analysis of Behavior, 21, 159–164. 15 Matching Law is evident in shot selection among basketball players. Vollmer, T. R., & Bourret, J. (2000). An application of the matching law to evaluate the allocation of two- and three-point shots by college basketball players. Journal of Applied Behavior Analysis, 33(2), 137–150. 16 Published in 2010, How Brands Grow by Professor Byron Sharp, director of the Ehrenberg-Bass Institute for Marketing Science at the University of South Australia, became one of the most talked about marketing books of recent years. In the book, Sharp debunks many conventional wisdoms of marketing. One that he dismantles is the belief that a brand’s strength and growth can come from the fraction of its purchasers that are the most loyal. He demonstrates that for brands to grow, they must focus on attracting new users. 14

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Kingdom that shows that 72% of Coke drinkers also on occasion buy Pepsi, and he suggests that loyalty is a function of market share. Brand loyalty may be a pipe dream. As Marc Bergevin, a famed professional ice hockey player who is now general manager of the Montreal Canadiens said when asked about one of his players remaining loyal to the franchise for the 2018 season “If you want loyalty, buy a dog.” Complete loyalty to a resource amounts to dependence. Eschewing of dependence has motivated us, and our ancestors before us to persistently explore the unfamiliar, despite the strong pull of the familiar that I wrote about earlier in this chapter. We may have inherited their mental shortcuts that prompt us to sample variety because to be dependent on one source is another kind of shortcut, but one that leads to extinction. Variety is a factor in many of our choices, but it is a particularly marked feature of our food choices. In one of the best books to bring the perspective of evolutionary psychology to consumer behavior, The Consuming Instinct: What Juicy Burgers, Ferraris, Pornography, and Gift Giving Reveal about Human Nature, Gad Saad17 points to a number of studies that show that when offered variety in foods, we consume more (including a study where the variety had nothing to do with the taste or nutritional value of the food – researchers found that increasing the variety of colors in different batches of M&Ms increased the amount that people consumed). Saad adds two further suggestions as to why we have such a desire for variety when it comes to food choices: […] the evolution of variety seeking in food foraging is linked to two distinct mechanisms: (1) maximizing the likelihood of obtaining the necessary amount of varied nutrients and (2) minimizing the likelihood of ingesting too great an amount of toxin from a singular food source. Just as gravitating toward the comfort of the familiar is instinctual, so at times, is seeking variety and new experiences. Brands that successfully pull off this paradox of “familiarity with a twist” can build deep connections with the public. Google’s “Doodles” operate within the constraints of spelling the word Google and fitting on the top of Saad is Concordia University Research Chair in Evolutionary Behavioral Sciences and Darwinian Consumption. 17

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a browser page – a familiar name and placement – yet because they are fresh and unexpected, delight us.18 One campaign that took something familiar and kept giving it repeated twists was the “Oreo Daily Twist,” a 2012 campaign to celebrate Oreo’s 100th birthday. Rather than going down the route of nostalgia, the advertising showed Oreo, one of America’s most familiar brands giving a whimsical commentary on the news story of the day. Every day for a hundred days, the iconic Oreo was used as a canvas to capture a different news story or event relevant to that day. One day the Oreo had a rainbow of fillings to celebrate gay pride; another day it was an open Oreo showing track marks across a red cream filling in recognition of the Mars Rover’s landing on the red planet; and on another, the Oreo had the jagged bite marks of a shark to mark Discovery Channel’s Shark Week. Another example from the world of sugary snacks: for their holiday selection for 2014, Dunkin’ Donuts launched new and different drinks including snickerdoodle and sugar-cookie lattes. John Costello, then president of global marketing and innovation, said of his customers and this approach: Our guests love tradition along with new. I would describe our holiday strategy as familiar with a twist. Traditional enough and new enough. Safe enough and adventurous enough. Familiarity with a twist isn’t just a marketing gimmick – it’s a formula that has given humans the security to embrace new resources, new experiences, and new ideas for hundreds of thousands of years. The takeaways from this chapter are: • We feel more positive about things simply because they are familiar. Keeping your brands in the public eye isn’t just about awareness – it also drives liking.

The first Google Doodle dates back to 1998 when Larry Page and Sergey Brin placed a stick figure behind one of the “o”s in the logo to let people know they were attending Burning Man. As of December 2019, over 4,000 doodles have been created for Google homepages around the world. 18

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• Familiarity also drives our choices: Through simply recognizing something or having it come to mind quickly makes us more likely to choose that option. • We have an instinct for exploration and surprise. Surprises are like a special kind of reward – our brain treats them as if they are the keys to future good decisions. Balancing the familiar with surprises is the perfect blend for good marketing. Be relevant and unexpected, or familiar with a twist. Some thoughts from other people as they read this chapter: • “I was left with this thought … It’s the twist that reminds you of why the familiar matters so much.” • “Too often behavioral economics is seen as a tactical tool for marketers, but this chapter lays out how it is fundamental to understanding how and why great brand campaigns work.”

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6 THANKS FOR SHARING (WHETHER YOU MEANT TO OR NOT)

People’s best indicator of what to do comes from the signals they receive from others. The signals we receive from others have a profound effect on our choices, even if we are unaware of it, or if we are, often prefer not to admit to it. Basing our choices on what others have done is a good decision-making shortcut and has served humans well. This behavioral strategy is one that transcends the evolution of the human brain. It is one practiced up and down the animal kingdom. This shortcut goes beyond human nature to, well, nature. If you have ever tried to approach a flock of shore birds, you will probably have the following experience. When you take the first couple of paces toward the birds, one or two wary individuals take flight while the rest stay put. As you get a bit closer, a few more take off. Seconds later, the whole flock bursts into flight. What has triggered the behavior of the majority of the birds isn’t a direct reaction to you, the threat. It is a reaction to the behavior of the other birds, which has been processed as a signal of danger. With nearly all animals, including humans, the behavior of others is the best indication of whether something constitutes a threat or an opportunity. In a reverse of the threat scenario, I’m sure you have unwillingly attracted a large number of pigeons or gulls while having a sandwich on a park bench. It starts with one or two pigeons, but within minutes you are mobbed. The first birds were attracted directly by the food, and the presence of those few birds signaled opportunity and attracted many others. The impulse of nature is to follow the market.

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OTHER PEOPLE’S FACES Like other animals, we humans are constantly tuned into the behavior of others. Of all the cues out there, the behavior of other humans is our most powerful guide as to how we should behave. These signals and cues often are much more subtle than a large and obvious physical movement, such as a bird taking flight. Fleeting and slight movements of facial muscles reveal to us what others are feeling and consequently how we should behave. In a must-watch 1987 acting master class with Michael Caine on BBC Television, Caine talks about the importance of facial expressions in film acting. While stage acting is much more about physical gestures and using variations in the voice to convey what the character is feeling, film records every subtle facial movement and imparts this information to the viewer. A slightly raised eyebrow, a momentary tightening of the lips conveys emotion in ways that dialog just can’t. Film makes extraordinary – even implausible – things seem real, from monsters stomping through Manhattan to asteroids careening toward the earth. But rather than these jaw-dropping illusions, I often wonder if film’s enduring appeal is its ability to record and transmit subtle and simple movements of facial muscles in so faithful a way that the viewer can decode them instantly as a meaningful facial expression, saturated with emotional meaning. The power of nonverbal cues is something we forget too easily in advertising and marketing. Albert Mehrabian, an expert in nonverbal communication, conducted experiments1 from which he concluded that our liking of someone was driven 55% by face and body language, 38% by tone of voice, and 7% by the actual words they use. While the resulting “93% nonverbal” is often misquoted and disputed, it is likely that in many circumstances things other than the actual words uttered are really important to how the communication is received. In marketing and advertising, we tend to focus on words, often leaving facial expression as an afterthought for the director on set, but for viewers, those expressions can mean much more than words. For the clients and their advertising agencies the nonverbal aspects of film advertising can mean gold, in terms of sales and in terms of awards at shows like Cannes. One of the most loved American commercials of the last decade is “The Force” or “Mini Darth” spot for Volkswagen. The commercial shows a young

The “7%–38%–55%” rule is based on two studies reported in the 1967 papers “Decoding of Inconsistent Communications” and “Inference of Attitudes from Nonverbal Communication in Two Channels.” 1

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boy who, while dressed as Darth Vader, tries to exert “the force” on inanimate objects around the house. Each time his efforts fail, and he becomes more frustrated. Then, he uses his “powers” on his parents’ VW Passat, which his father has just parked in the driveway. To his delight (and surprise), the engine suddenly roars to life. We cut back to the father in the kitchen with his wife and see that he has pressed the car’s remote auto start function on the key fob. There is no dialog in the commercial, but we understand entirely what is going on from a fraction of a second sequence where the father raises his eyebrow conspiratorially to his wife. Sands Research, an applied neuroscience company, published an analysis of the neurophysiological response to every ad that appears in each Superbowl from 2008 to 2013. VW and Deutsch’s “The Force” ran in the 2011 game was one of the highest scoring Superbowl spots on Sands Research Neuro Engagement Score (NES). In his book Unconscious Branding: How Neuroscience Can Empower (and Inspire) Marketing, Douglas van Praet2 gives many valid reasons why the commercial was so engaging and emotionally appealing, but personally, I wouldn’t underestimate the effect of that tiny, momentary but perfectly timed gesture of the raised eyebrow. A study that looked at facial emotion expression in charity ­advertisements3 adds some further depth to the how facial expressions of people in ads affect us. Beyond telegraphically communicating an unspoken narrative, the facial expressions we see can lead to a transference of feeling called emotional contagion. Sad faces made participants feel sadder, but they also led them to donate more – when shown an ad featuring a sad face, they donated an average of $2.49, while for one with a happy face they gave $1.37 and for one with a neutral face, $1.38. The expressions on other people’s faces affect our judgment of how physically close those people are to us. A study from South Korea4 found that at close distances (two meters or less) we underestimate the distances that other people’s faces are from us. And this effect of feeling people are closer than they are is more pronounced when the faces display safe or threatening

Van Praet knows the commercial and its background inside out. He was the lead strategic planner on the Volkswagen account at advertising agency Deutsch LA at the time. 3 Small, D.A., Verrochi, N.M. (2009) “The Face of Need: Facial Emotion Expression on Charity Advertisements.” Journal of Marketing Research December. 4 Kim N-G and Son H (2015) How Facial Expressions of Emotion Affect Distance Perception. Front. Psychol. 6:1825. doi: 10.3389/fpsyg.2015.01825 2

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expressions, as opposed to neutral ones. So, when someone is in your face, they might not be quite as much in your face as you think. Facial expressions have been well studied over the last 30 years, with research showing that the human brain is a specialized face detector and that face processing is closely linked to the generation of emotions. Neuroscience work identified an area of the brain, the fusiform face area (or the FFA), which responds selectively to faces in general4 and also showed that the brain can identify a face very quickly, in less than 200 milliseconds.5 Using fMRI, researchers at Dartmouth College have found reproducible patterns of brain activity corresponding to different facial expressions. They found that activity in the amygdala, a brain area intricately involved in emotional responses, reliably differentiated between many facial expressions (when, if you remember from the preface, you look at the eyes). Responses to fearful and angry expressions are particularly pronounced in the healthy amygdala. The amygdala can even tell an angry from fearful face when you’re only presented with just the whites of the eyes! Strong evidence also exists that facial expressions are innate, rather than learned. Neuroscientist David Matsumoto teaches in two diverse fields: He is a professor at San Francisco State University, where his research revolves around expertise in facial expressions, nonverbal behavior, and microexpressions, but he is also a seventh-degree black belt in judo and the owner and head instructor of the East Bay Judo Institute in El Cerrito, California. Matsumoto combined both of his interests in a fascinating study6 that compared sighted judo athletes at the 2004 Athens Olympic Games and blind judo athletes at the 2004 Athens Paralympic Games. Both competitions took place in the same venue, the latter being held a month later than the former, and in both cases, the athletes (or judokas) were observed during medal matches. Athletes in both tournaments were photographed at the same three points – immediately at the end of the bout, when receiving their medal, and when Kanwisher, N. (2010). Functional specificity in the human brain: A window into the functional architecture of the mind. Proceedings of the National Academy of Sciences of the United States of America, 107(25), 11163–11170. 5 Ito, T. A., Thompson, E., & Cacioppo, J. T. (2004). Tracking the timecourse of social perception: The effects of racial cues on event-related brain potentials. Personality and Social Psychology Bulletin, 30(10), 1267–1280. 6 Matsumoto, D., & Willingham, B. (2008). Spontaneous facial expressions of emotion of congenitally and noncongenitally blind individuals. Journal of Personality and Social Psychology, 96(1), 1–10. 4

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posing on the podium with the other medal winners. In this study, Matsumoto studied facial expressions of athletes with three different levels of sightedness: sighted, noncongenitally blind, and congenitally blind. (In the Paralympics, unsighted athletes are identified as to whether they are congenitally or noncongenitally blind.) Matsumoto and Willingham found negligible differences between the athlete’s facial expressions whether they were sighted or not. Nor was there a difference between the expressions of those who were blind from birth from those who had become blind later in life, strongly suggesting that facial expressions are innate. One of the most remarkable findings of this study was that the judokas who had been blind from birth didn’t just spontaneously exhibit “Duchenne Smiles” (the almost unfakeable smile of true joy that uses not just muscles from around the mouth but around the eyes as well) when they won gold, but they also showed the socially polite “Pan Am” smile (named for the smile-flashing flight attendants of the now defunct airline) if they had fallen short and won silver. Not only are the facial expressions that convey raw emotion innate, it seems likely that the ones that act as more sophisticated social signals may be as well. While a facial expression is a signal to us of how another person is feeling, which in turn is a signal of how we should act, what people are looking at is very direct indicator of what we should be looking at. From a young age, we are drawn to look at what others appear to be gazing at – research in an area called Joint Attention shows that an adult can bring objects to an infant’s attention by looking at those objects.7 Eyetracking studies show that we keep this tendency in adulthood. One experiment used an advertisement that had an image of a model’s face (and hair) with a shampoo bottle in the foreground. In one version, the model looked straight ahead at the camera. In another, she looked out of the corner of her eyes at the shampoo bottle. For the first version, the “heat map” of where people viewing the ad had fixated their gaze showed the “hotspots” around the headline and the model’s face. For the second version, where the model was looking at the bottle, the hotspots were on the headline, on the model’s eyes, and on the shampoo bottle.

Moore, C., & Dunham, P. (1995). Joint attention: Its origins and role in development. Hillsdale, NJ: Laurence Erlbaum Associates. 7

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In a similar experiment, James Breeze, an Australian usability testing and UX specialist, tested two ads, both with a baby next to a pile of diapers. In the first, the baby was facing the camera, while in the second, we see the baby in profile, gazing upward and to the side, so it appears that he is looking at the headline of the ad. For the first ad, the only real eye-tracking hotspot was the baby’s face. For the second, the eye-tracking hotspots were the headline the baby is gazing at, and quite remarkably, the body copy under the headline.

OTHER PEOPLE’S BEHAVIOR Social norms, which are expectations of appropriate behavior, and social biases such as the bandwagon effect, which is the behavioral impact of what others are doing, can underpin existing behaviors and provide keys to unlocking behavioral change. A number of practical experiments examining energy behavior illustrate the bandwagon effect. One such experiment compared the effect of information about how your energy consumption compared to your neighbors’ consumption (this kind of information is known as a descriptive social norm) with the effect of an indication that your energy consumption was considered acceptable or unacceptable (known as an injunctive social norm).8 The study used simple, yet effective symbols to show what was acceptable or not: a smiling face  for approval and a frowning face  for disapproval. Descriptive social norms decreased energy consumption in those homes with above-average rates but increased consumption in those homes with belowaverage rates. However, when injunctive social norms (the smiling or frowning faces) were combined with descriptive norms, those homes with below-average energy consumption did not increase their energy usage. Another study examining how the bandwagon effect modulated water usage showed that the bandwagon effect can be transient.9 Behavioral changes wane as time passes, and the regression to previous behaviors is most pronounced in the outliers, corresponding to the homes using the most resources. Schultz, P. W., Nolan, J. M., Cialdini, R. B., Goldstein, N. J., & Griskevicius, V. (2007). The constructive, destructive, and reconstructive power of social norms. Psychological Science, 18, 29. 9 Ferraro, P. J., & Price, M. K. (2013). Using nonpecuniary strategies to influence behavior: Evidence from a large-scale field experiment. The Review of Economics and Statistics, 95, 64–73. 8

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The scientists who developed the energy consumption study have also provided additional insights into human nature by examining what people staying in hotels do with their towels after using them. (It’s a wonderful thing that mundane activities often reveal so much about what underlies our choices.) Hotels, motels, and other lodgings use a lot of water in the United States – the Environmental Protection Agency estimates they account for around 15% of the total water used by commercial and institutional facilities.10 That figure works out to about 2.5% of the water withdrawals from the US public water system – a heavy toll on the water system and also on the finances of hotel operators. Laundry, at 17%, is the second biggest source of hotel water usage. Not surprisingly, hotels have focused on water usage as an area of potential savings, which is why, in nearly every hotel bathroom, you see some kind of sign displaying a message that asks you to use your towels more than once. Invariably, the focus of these messages is the impact that the water and fuel used in laundering hotel linens has on the planet. The messages that implore you to “do your part to help” rely on personal empowerment as the motivation to get guests to leave towels on the rack rather than the bathroom floor. By and large, personal empowerment is an effective approach, with the majority of people choosing to reuse their towels at least once during their stay. But research suggests there may be a more effective message than personal empowerment. Instead of appealing to hotel guests in the name of them helping the environment and saving the planet (what could, rationally, be more worthy of action, especially given the suggested action of placing the towels back on the rail neither costs the guests money or very much effort), the researchers tested messages telling them what other guests had done, which is an example of a descriptive social norm. In one experiment, a card that carried a standard appeal to environmental consciousness was randomly placed in half the hotel rooms used in the experiment. The standard environmental message served as the experimental control. Another message, placed in the remaining hotel rooms, told guests that the majority of guests in the hotel had reused towels at least once during their stay. One of the researchers leading the study, Noah Goldstein, reported on his Psychology Today blog:

Howard, B. C. (2014). Hotels save energy with a push to save water. National Geographic Magazine, December 24. 10

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guests who learned that the majority of their fellow guests had reused their towels were 26% more likely than those who saw the basic environmental protection message to recycle their towels. In a second experiment, the researchers went one step further. This time the message informed guests that the majority of guests who had stayed in this very same room had chosen to reuse their towels at least once during their stay. This small change in wording led to a 33% increase in guests reusing their towels compared to the control message that focused on concern for the environment. This hotel towel study is considered a classic in the social sciences – a number of similar studies have been run11 since the original in 2008. Some show a weak effect, others find that messages with social norms increase towel reuse by 75%; a Bayesian analysis12 suggests that overall, there is a significant effect from messages using social norms. This study is relevant to marketers in many ways. Two things are worth noting. The first is how powerful social proof can be and that the effect of social proof increases the closer people feel to the targeted behavior. (This is true even if this closeness is pretty circumstantial.) The second is a personal observation. In all the hotel rooms that I have stayed in since I became aware of this study in 2009 (and the number of hotel rooms easily exceeds 100, from independent hotels to all the big chains, across Europe, North and South America, and Asia), I have not seen one message urging me to reuse my towels for any reason other than saving the environment. I’ve seen cards and hangers with pictures of polar bears in the Arctic, of parrots in the Amazonian rainforest, but never one that relates to the behavior of our own species. Social proof has been affecting human behavior since human behavior has existed. For hundreds of thousands of years, we have observed what others do, and as language developed, we asked others what was good and what was bad. The social networks (I mean social networks in the original sense) that we used to do this were by necessity small and physically close to us. Reese, G., Loew, K., & Steffgen, G. (2014). A towel less: Social norms enhance pro-environmental behavior in hotels. The Journal of Social Psychology, 154(2), 97–100; and Bohner, G., & Schlüter, L. E. (2014). A room with a viewpoint revisited: Descriptive norms and hotel guests’ towel reuse behavior. PloS One, 9(8), e104086. 12 Bayesian evidence synthesis can reconcile seemingly inconsistent results: The case of hotel towel reuse. Psychological Science, 27(7), 1043–1046. 11

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Sure, they grew over the centuries, but that growth pales into insignificance compared to an explosion that started in the late 1990s. This is when online reviews started popping up, and the first review sites were launched. Online reviews have become a hugely important source of information for choosers. In their 2014 book Absolute Value: What Really Influences Customers in the Age of Nearly Perfect Information, Itamar Simonson and Emanuel Rosen suggest that our purchase decisions are influenced by three sources of information – our Prior preferences and experiences (P); Other people and information (O); and Marketers (M). The authors call this the Influence Mix, and they sensibly urge marketers to consider when and where each of these may be dominant in the brand’s category. They drily suggest that the opinions of others might not be as important when purchasing kitchen towel as they might be when buying a car or subscribing to a cell phone service, but they note that overall, the importance of information from others has become the most significant source in many categories. And this increase in the importance of other has been driven by the emergence and increasing ubiquity of online reviews. Various surveys suggest that 80%–90% of people in the United States are using online reviews regularly, with 80% or so of people trusting online reviews as a source,13 despite a wave of news stories revealing that many – in some categories the majority of reviews – are less than authentic.14 One review site, Yelp, reports that it has carried 200 million reviews between its launch in 2004 and September 2019, with a year over year growth in number of reviews of +17%.15 Now, the “priors” of others runs into quintillions of data points, that we can access in seconds, and thanks to shortcuts like star ratings and number of reviews, can process in seconds as well. Not only do we rely on reviews as a quick and easy decision

Just a few are Bright Local 2019 Local Consumer Review Survey n = 1,090 US-based shoppers, November 2019; Pew Research Center Online Shopping and E-Commerce Nov–Dec 2015 n = 4,787; Spiegel Research Center, Northwestern University Evidence of the Power of Online Reviews to Shape Customer Behavior. 14 An April 2018 Washington Post story “How merchants use Facebook to flood Amazon with fake reviews” used ReviewMeta to analyze the first 10 products that came up on amazon.com in four popular categories (Bluetooth headphones, weight-loss pills, Bluetooth speakers, and testosterone boosters). ReviewMeta’s analysis suggests that over 50% of reviews in these categories are “questionable.” 15 Yelp Newsroom Fast Facts, https://www.yelp-press.com/company/fast-facts/ default.aspx. 13

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tool, Simonson suggests that the ease with which we can get information from others, and make comparisons between products, may mean we rely less on some specific cognitive shortcuts. Through research in the 1980s and 1990s, Simonson demonstrated the compromise effect,16 which is people’s tendency to prefer the middle option in a range of choices. In a famous experiment,17 participants in one condition were asked to choose between a Minolta camera that cost $170, and one with higher specifications that cost $240. Both achieved a 50% share of choice. However, when participants in a second condition were asked to choose between the $170 camera, the $240 camera, and a third, with even higher specification that cost $470, the share of choice for the $170 camera dropped to 27%, while for the $240 camera increased to 52% (I know you can do the math yourself, but I’ll make it easy for you – the share of choice for the expensive $470 camera was 21%). One explanation for this preference for the middle option is that it is an easier and safer choice. In the absence of easy ways to compare the options, and the opinions of others, our decision-making instinct is to take the seemingly less risky choice in the middle. Where the story gets interesting though is that Simonson started to question whether the findings of his earlier research might hold up in the age of abundant and easily accessible information. In 2012, Simonson and researcher Taly Reich ran a new study, which was an update of the original Minolta study. Part of the update was to use cameras from the Canon PowerShot range instead of Minolta (Minolta had left the camera business in 2006). The first experiment in the new study pretty much replicated that from 20 years earlier in terms of research design, and the results followed suit. In a further update, another two groups of participants saw a page with all the PowerShot cameras, with their options, different prices, and customer reviews – what they would normally see if shopping for cameras on Amazon.com. One group was then asked to assume that they had narrowed their choice down to two cameras – the other was asked to assume they had narrowed it down to three – the two cameras from the first group and a more highly specified third camera. You might expect the compromise effect to kick in, and that the group who had the more expensive camera in their choice set to favor the middle option.

Simonson, I. (1989, September). Choice based on reasons: The case of attraction and compromise effects. Journal of Consumer Research, 16(2), 158–174. 17 Simonson, I., & Tversky, A. (1992). Choice in context: Tradeoff contrast and extremeness aversion. Journal of Marketing Research, 29(3), 281–295. 16

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But this didn’t happen18 – with more information to compare, and critically, with reviews to guide the choosers, the compromise effect disappeared. Reviews make it easier to get cues from others – and easily processed signals like star ratings and number of reviewers make us feel whether we should click or scroll, or tap or swipe. There is a temptation to see social proof as a tool that has most application for mass marketers, but it should also be embraced by those selling luxury and even exclusive products and brands. Laguna Pearl is one of the leading online pearl retailers in the United States. Visit their tasteful website and you will find, prominent midst the elegant images of pearls and women wearing them, a call out of “most popular products” and quotes from customers, and information from Trustpilot telling you that (as of January 2020) Laguna Pearl has an average of  across 892 reviews. According to Trustpilot,19 within 30 days of implementing this program, Laguna Pearl saw “a 38% increase in click-through rates to their site and a 9.5% decrease in cart abandonment” and that with “those that clickedthrough, 5% went on to purchase at some point in the next 30 days – clearing the 3.3% benchmark for eCommerce sessions with completed transactions.” The Wine Society, a prestigious, invitation-only wine club (founded in London in 1874, it is the world’s oldest) manages the conflict between exclusivity and popularity through a section on its website dedicated to its “best-selling” wines that provides helpful reassurance in a complex category where choices can be quite subjective. Even “norming” a private social behavior, like parents talking to their children about sex,20 can increase the frequency of that behavior. One study

It is more normal for academics who have discovered a psychological effect to focus on defending their findings. Simonson is an exception in that rather than trying to bolster the pervasiveness of the compromise effect, he has done the opposite. I think that is pretty admirable. 19 Mustin, W. (2019, December). How luxury brands can use social proof to ignite high value conversions. Trustpilot. Retrieved from https://business.trustpilot. com/reviews/build-trusted-brand/how-luxury-brands-can-use-social-proof-toignite-high-ticket-conversions. 20 DuRant, R. H., Wolfson, M., LaFrance, B., Balkrishnan, R., & Altman, D. (2006). An evaluation of a mass media campaign to encourage parents of adolescents to talk to their children about sex. Journal of Adolescent Health, 38, 298.el–298.e9. 18

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utilized public service announcements touting the message “Talk to your kids about sex. Everyone else is.” The messages were displayed on billboards and also ran on television and radio. Exposure to the messages predicted whether parents had already talked with their children about sex and if they planned to in the future. This study used social norms to alter individual communication, specifically one-on-one conversations between a parent and child. To affect behavioral change, social norms need to be used in ways that can be related to the behavior of many. Social media provides ways of scaling up individualized communication, both in terms of customizing messages (remember how “stayed in this room” worked better than “stayed in this hotel”?) and in terms of people posting their behaviors to their social network. Popularity is important (in most cases). Showing or inferring that many people are doing what you want them to do has been proven to alter a wide array of behaviors, like reusing hotel bathroom towels to selecting airlines. This shortcut, based on an intuitive response to what we observe others doing, worked as well for our ancestors as it does for us today. If many of our ancestors were drinking from a watering hole, then it was reasonable to conclude that it was a relatively safe option. Our ancestors’ experience became our instinct. But caution needs to be used in applying the bandwagon effect – it generally works when the situation motivates people to seek safety and risk avoidance but not when they are motivated to stand out, as we will discuss in Chapter 12, “If Content Is King, Context Is Queen.” One of the most powerful forms of persuasion is telling people what other people, in particular those like them, are already doing. Even a simple statement like, “Most people of your age/in your area are doing this,” or “More and more people are doing this” is effective. Robert Cialdini explained the power of this type of persuasion like this to me: One fundamental way we can decide what to do when we are uncertain is to look around us, at what those like us are doing. I saw an article in a journal from China that showed that if a restaurant manager puts on the menu “These are our most popular items” those items immediately become 17%-20% more popular. You don’t have to spend any money on it, you don’t have to convince people – you just point to something that is inherently there in the situation, that usually drives people. And this can be enough to drive a 17%-20% uptick immediately.

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This menu effect is driven by one of Cialdini’s maxims, which is that our intuitions “tell us that a behavior is more correct to the degree that we see other people doing it.” As the examples show, you can use social proof for more than just increasing sales. Think about other behaviors you want to change that could help your business. The hotel towel study used social proof to increase the percentage of hotel guests who put their towels back on the rack, by leaving a card in the room telling them that this is what most guests did, and encouraging this behavior could help a hotel increase their margins and meet environmental goals. The e-commerce arm of a company we work with found that rates of returns, while still small, were increasing for no clear reason. Our hypothesis was that brands like Zappos had made returning a social norm, and recommended a test where a small thank-you slip would be placed in the box that told the customer that most of our customers are happy with the goods first time (but also making clear that they could return them unconditionally if they weren’t happy). Marketers can unwittingly fall foul of social proof. Sometimes we are tempted to try to shame people into doing what they are not doing. “Surely showing that they are not being rational will shake them from their irrationality or laziness” we seem to think. Unfortunately, this can do worse than having no effect – it can lead to people doing the exact opposite of what you would like them to do, normally by reinforcing what they are doing or what they aren’t doing.21 Some years ago, I got a mailer sent to my home in San Francisco saying something like Only 12% of homes in California have earthquake insurance. But there is a 60% chance that your house will be affected by an earthquake in the next 20 years. This message22 makes me feel that, in not having earthquake insurance, I am in the majority. And despite the clearly stated risk of an earthquake, if the norm is not to have insurance, that makes me feel it is OK – and even safe – for me not to have it. (There’s another bias at work here as well – the Cialdini, R. B. (2003). Crafting normative messages to protect the environment. Current Directions in Psychological Science, 12, 105–109. 22 The California Earthquake Authority has since been receiving better advice from a behavioral perspective (and it hasn’t been from me). The headline on their website now reads “An Earthquake Could Happen Today,” a message that could overcome some cognitive biases. 21

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optimism bias. We have an innate tendency to think bad things are less likely to happen to us than others … perhaps the houses on my block will get destroyed, but mine will miraculously remain unscathed.) One of our clients in the financial services sector realized their business could benefit from encouraging people to make financial plans, and wanted to make the point, through a marketing program, that only 17% of people in their market had financial plans. Consumers had even told them in qualitative research that this fact was a motivating kick in the pants. Our advice was that the last thing they should do was to make not having a plan a social norm as this would make not having a plan seem like a good plan for consumers. We recommended that instead they focused their messages on how easy it is to take the first step toward creating a plan. In 2016, I was working as a behavioral insights consultant on a Human Centered Design project led by the Curious Company for the NGO Population Services International (PSI). The project’s aim was to design interventions to help reduce unintended pregnancies among teenagers in Tanzania. In rural Tanzania (and in many other sub-Saharan countries in Africa23), an all-too-common way of dealing with an unintended pregnancy is through an unsafe abortion, carried out by people lacking the necessary skills, in an environment that is most likely unhygienic. Unsafe abortions are a direct cause of many deaths, problems with future pregnancies, and damage that causes infertility. A representative of the Tanzanian health ministry was attending the workshop and presented plans for announcements that highlighted the high number of young Tanzanian women who were having unsafe abortions. Our recommendation was that this could backfire, because pointing out the number that many people are doing something, even if that thing is risky, can make it seem safe, or as Cialdini says, even make it seem “correct.” The messaging was revised and changed its focus from how many young women were having unsafe abortions to how many would suffer complications and might die. Social proof works because it appears that many people are doing something. But there is another effect where the example of one, rather than hundreds, thousands or millions will have a significantly greater effect on our behavior.

In 2008, The World Health Organization estimates there were 36 unsafe abortions per 1,000 women of reproductive age in Eastern Africa. World Health Organization (WHO). (2011). Unsafe abortion: Global and regional estimates of the incidence of unsafe abortion and associated mortality in 2008 (6th ed.). Geneva: WHO. 23

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In July 2015, American dentist Walter Palmer killed a 13-year-old male lion, known as Cecil, having reportedly paid $50,000 to guides to help him do so. Cecil was the leader of a pride in Hwange National Park, and a favorite of tourists on safari. His activity and location were being tracked, as part of a long-term study, via a GPS collar by the Wildlife Conservation Research Unit at the University of Oxford. Cecil was killed just outside the confines of the park, possibly lured from the protected area by the hunters. The incident prompted an outcry and outpouring on social media, and according to Google trends, “Cecil” even outstripped “Kardashian” and “Obama” as search terms for five days. Jimmy Kimmel got choked up about it on “Jimmy Kimmel Live!” Kimmel’s appeal alone raised $150,000 in donations in less than 24 hours for the Wildlife Conservation Research Unit. Kimmel and celebrities like Ricky Gervais poured scorn on Palmer, and millions unleashed their anger through social media. The hunter became the hunted, with some calling for Palmer’s head (in a nonmetaphorical sense), and many others demanding he be prosecuted. As a result, he deserted his Minnesota dental practice, and when he surfaced some weeks later in Florida, he had employed the services of armed guards. An online petition on change.org led US airlines to change their policy on shipping big game killed by trophy hunters.24 Yet, unfortunately, Cecil’s fate is not as exceptional as the social and traditional media storm it created. Hundreds of thousands, if not millions, of animals that are considered endangered are killed illegally every year. According to USAID, an estimated number of 122,000 African elephants were slaughtered between 2010 and 2012 for their ivory, and in 2014 more than 1,200 rhinos were poached for their horns in South Africa alone. Yet seldom do any of these killings make it to the social media feeds of the population at large or get anywhere near the front page of the newspapers or the lead stories on the evening news. What was different about Cecil? While a number of factors made a difference, two stand out for me. The first is a phenomenon called the “Identifiable Victim Effect.” When I interviewed Dan Ariely a number of years ago, he talked about how this works

Major US airlines end trophy hunter shipments after Cecil outcry. Reuters, August 4, 2015. 24

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The identifiable victim effect is the idea that you care about one little kid much more than you care about a million kids. The caring doesn’t go up in relation to the number of victims … it actually goes down. This is the one thing Mother Theresa and Joseph Stalin agreed on. Stalin said, “One death is a tragedy. A billion is a statistic.” Mother Theresa said, “If I look at the masses, I will never act. If I look at the one, I will.” Cecil literally had the markings of an identifiable victim – his black mane was a marking that made him unique and identifiable. But probably more important is that he had been given a name – the most simple and recordable identifier we humans use every day. Names allow us to not just to attach an identity to someone but to easily spread that identity. Alex Genevsky, an assistant professor of marketing at Rotterdam School of Management, Erasmus University, who has explored the Identifiable Victim Effect at a behavioral and neural level,25 gave me the example of the affection that swelled among New Yorkers for the Red-tailed Hawk that took up residence on Fifth Avenue and was dubbed Pale Male.26 An identifiable victim creates deep empathy and, as Ariely suggests, drives people to act. But what happens when the perpetrator is also identifiable? Carnegie Mellon’s George Loewenstein (a very influential thinker in judgment and decision-making studies) and Wharton’s Deborah Small have done a lot of research on the identifiable victim effect. And they have also looked at how people react to an identifiable perpetrator. Their research27 suggests that when people have the opportunity to fine perpetrators – even if it involves some cost to themselves – they will be more punitive to an identifiable perpetrator than they will to an equally guilty non-identifiable one. Outed by data trails and the crowdsourcing effect of social media, Palmer moved from an anonymous trophy hunter to a dentist with a name, addresses, and a face that was plastered all over the internet, the press, and TV. Genevsky, A., Västfjäll, D., Slovic, P., & Knutson, B. (2013, 23 October). Neural underpinnings of the identifiable victim effect: Affect shifts preferences for giving. Journal of Neuroscience, 33(43), 17188–17196. doi:10.1523/ JNEUROSCI.2348-13.2013. 26 The story of Pale Male and the debate as to whether he was still alive in 2019 can be found here: https://www.audubon.org/news/pale-male-legend-he-still-alive. 27 Small, D. A., & Loewenstein, G. (2005). The devil you know: The effects of identifiability on punishment. Journal of Behavioral Decision Making, 18, 311–318. 25

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A lion killed illegally by a hunter or poacher doesn’t get much interest. But give the lion a name and the killer an identity and it makes us instinctively feel sadder for the victim and strengthens our desire to punish the villain. Unfairness also drives us to want to punish those we believe to have acted unfairly; when we feel that something is unfair, we have a gut reaction. In the lab, unfairness is studied using the ultimatum game, which typically consists of two players. The first player makes a monetary offer to the second player, such as splitting $10 into $3 for the second player and keeping $7. If the offer is accepted, both players get money; if it is rejected, neither player gets any money. The anterior insula is one of several brain areas that responds to unfairness.28,29 The insula is a complex brain area, to say the least, and the anterior region of the insula is associated with arousal and with negative emotions like anger and disgust, pain, and distress. Knowing that something is unfair lingers with us until we resolve it. This phenomenon is called inequity aversion, a term coined by Ernst Fehr (whose surname, appropriately, is pronounced “fair”) and Klaus Schmidt – and the term means pretty much what it says it is. A sense of inequity pushes us to action. That feeling of anger and disgust, often disproportionate to the infraction from a rational perspective, is so unsettling, and so nagging, that it does a very rare thing. It overcomes our procrastination and inertia and makes us do something. Just a few years ago, hundreds of thousands of people in the United States switched banks. Switching banks might not seem like a big deal, but it is something any marketer with a background in retail finance will tell you people only do a few times in their lives and only then because of a major life event like relocating or marriage. But in 2011, major banks, like Bank of America, introduced a $5 monthly debit card fee, and people felt the banks were gouging an unfair level of profit, so they switched in droves. A 2011 survey from research company Javelin suggests that people moving their account out of a large bank showed, “nearly a three-time

Sanfey, A. G., Rilling, J. K., Aronson, J. A., Nystrom, L. E., & Cohen, J. D. (2003). The neural basis of economic decision-making in the ultimatum game. Science, 300, 1755–1758. 29 Corradi-Dell’Acqua, C., Civai, C., Rumiati, R. I., & Fink, G. R. (2013). Disentangling self- and fairness-related neural mechanisms involved in the ultimatum game: An fMRI study. SCAN, 8, 424–431. 28

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increase over the amount of people who took their funds out of large banks for highly similar reasons during the previous 90-day period.”30 Also, in the third quarter of 2011, Netflix encountered a similar problem – 600,000 subscribers canceled their subscriptions to this much-loved brand over a three-month period – because the company separated the streaming plan and doubled the monthly rate for DVD rentals (for those of you who have forgotten, or if so young, never knew, Netflix started out as a throughthe-mail DVD rental service). Customers thought the change was unfair. There is no doubt that social media amplified the response to unfairness in both the bank and Netflix examples. The powerful effect of what others are doing can be a double-edged sword, with the potential to cut your competitors off at the knees and to slice deeply into your own profits. Social proof can be very powerful, but don’t assume that it is the most powerful tool in every case. Robert Cialdini talks about how agents of influence need to be like detectives. Just as in most whodunits where the first suspect you encounter in the story is seldom the culprit, the first behavioral principle that comes to mind isn’t necessarily the one that will yield greatest influence. Like a good detective, you need to keep investigating. A good example of this comes from the work of a group that has done more to bring learnings from behavioral science out of the lab and into the real world than anyone else. In 2010, the Cabinet Office of the UK government set up a group called the Behavioural Insights Team (abbreviated to BIT, it also became known as the Nudge Unit), with the mandate of using behavioral economics in public policy, particularly to influence positive behavior in areas related to the environment, philanthropy, health, and well-being. If you are a UK resident and you want to donate your organs, you should join the Organ Donation Register, as this quickly provides confirmation of your wish after your death, increasing the chances of your organs helping a living person in need. In the United Kingdom, you have to explicitly opt in to give consent for organ donation (more on this in Chapter 10, “Make It Easy – For the Mind and the Body”), and while 9 out of 10 people in the United Kingdom support the idea of organ donation, fewer than 1 in 3 have joined the National Health Service (NHS) Organ Donation Register. One of the main routes to joining is a prompt on the Driver and Vehicle Licensing Agency (DVLA) website where people apply for driving licenses and renew their vehicle tax. “‘Bank Transfer Day,’ What Really Just Happened?” (2012). Javelin Strategy and Research Blog, January 26. 30

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The BIT ran a randomized control trial31 (as introduced in Chapter 2, “The Ever-Advancing Science of Choice”) where tens of thousands of visitors to the DVLA website each saw one of eight variants of a prompt to encourage them to register for organ donation as they went about their business of license applying or vehicle tax renewing. The first variant was the control. It simply asked people to join the NHS Organ Donor Register. The second, third, and fourth variants used a classic social proof appeal: “Every day thousands of people who see this page decide to register.” The second variant just had this as text, the third accompanied it with a photograph of 20 or so people to underscore the point, and the fourth variant placed the organ donation logo next to the message. The fifth variant used loss: “Three people die every day because there are not enough organ donors.” We will examine the power of messages that use loss as a frame in Chapter 8, “Loss and Ownership.” The sixth used a positive frame: “You could save or transform up to 9 lives as an organ donor.” The seventh used the approach of reciprocity (one of Robert Cialdini’s six rules of influence): “If you needed an organ transplant, would you have one? If so, please help others.” The eighth highlighted the dissonance between intentions (most people support organ donation) and action (most people don’t register as donors), an approach that has been successful in areas like exercise, sexual health, and smoking cessation. An article in the UK newspaper The Independent32 suggested that the BIT team had expected the social proof approach to pull best (I would have certainly bet on that outcome, given everything I’ve learned about social proofs power to change behavior, and I suspect there were three variants using that mechanism because the BIT researchers felt the same). But the results pointed to another approach. Two variants fared significantly better than the control, and neither of them used social proof – in fact, the social proof variant with photograph performed worse than the control. The second most successful was the loss frame (“Three people die every day …”), but the clear winner was the reciprocity message (“If you needed an organ transplant …”). According to the BIT, The full report can be downloaded here: https://www.gov.uk/government/ uploads/system/uploads/attachment_data/file/267100/Applying_Behavioural_ Insights_to_Organ_Donation.pdf. 32 Wright, O. (2013). How organ donation is getting nudge in the right direction: trial could pave way for 100,000 extra donors each year. The Independent, December 24. 31

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The most successful prompt (reciprocity frame) significantly increased sign up rates. The results show that it is likely to lead to around 100,000 additional registrations in a year. Social proof and social norms are incredibly powerful; but just like any other behavioral lever, you can’t assume that they are going to work in every situation. With human beings, nothing is a foregone conclusion. The takeaways from this chapter are: • Social proof is extremely powerful and one of the most intuitive of cognitive mechanisms. One simple way to use it is to let people feel your popularity by showing the number of customers or subscribers you have. • Beware of unintentionally creating messages that suggest that many people are doing the thing you don’t want them to do or aren’t doing the thing you want them to. These can backfire! • The signals that we get from others through facial expressions might be very subtle, but they score a direct hit in the gut and the heart. As discussed in this chapter, they are innate and are processed very quickly. They are also easy to get wrong. (The animated movie, The Polar Express, is a good example of getting facial expressions wrong – a review on CNN.com noted how, despite the brilliant technology, the movie seemed “creepy” because they technology couldn’t capture the emotions expressed by the mouth and the eyes. Even the special effects team of the 2019 movie The Irishman, with the latest technology and a budget of $159  million struggled to maintain natural facial expressions of their aging cast as they digitally de-aged them. If you are making a commercial or video where you need actors to convey emotions, make sure you are working with a director and acting talent who can capture subtle facial expressions. Unfortunately, the ones who really can aren’t always the cheapest. What others shared about this chapter: • “I’ve always tended to think when I do what others are doing, it’s a sign of weakness. It’s good to know that, in fact, I’m following an efficient, effective, and smart strategy!” • “I’ve just finished making some instructional videos. We spent ages in pre-production talking about casting, wardrobe and lighting- even where the actor was going to be moving. But we didn’t talk about what we wanted his facial expressions to communicate once!”

7 NOW, AND THE FUTURE – DIFFERENT PLACES WITH DIFFERENT RULES

How the future, sequence, and the most recent thing that people have experienced drive how they choose and how they feel. Put yourself in the shoes of one of your forebears some 20,000 years ago (and there really is a pretty good chance they would have been wearing shoes, as anthropologists estimate footwear use started about 40,000 years ago1). Your ancestor is around 20 years old, but he and his mate have not yet managed to rear a child beyond infancy. He and other males from his clan are out hunting for life-sustaining protein; they are committed followers of the Paleo diet, of course. Hunting is a routine but risky activity, and he must have his wits about him. If he makes the right choices, he avoids danger and gets the food that will allow him and his mate to survive. If he makes the wrong choices, he either gets killed or injured, or he doesn’t get food. His survival and your existence are on the line. While following the still-fresh trail of a caribou, he hears a rustle ahead in the six-foot high grass. He freezes. He feels the tingle of blood rushing to his forehead. His objective of tracking down the caribou is interrupted. All his attention is focused on that noise in the grass. The most important thing for him at that moment is to work out if the source of the noise is a threat or not. Is it his next meal or something that wants to make him their next meal? Because you exist and are reading this book, we know he made the right

Trinkaus, E. (2005). Anatomical evidence for the antiquity of human footwear use. Journal of Archaeological Science, 32, 1515–1526. 1

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choice – whether that was to chase with abandon, or to abandon the chase. Being distracted from his task and intuitively letting an interruption grab his attention paid off, for him and tens of thousands of years later, for you. Which is why, 20,000 years later, when you are having a heart-to-heart with your wife or husband, or a discussion with your boss about your career, or driving down the freeway, you respond the way you do when you feel your smartphone vibrate, or, hear a ding announcing a new text or e-mail. The message is more likely to be an e-mail from the HR department about the roll-out of a new expense reporting policy in two months’ time, or a text from the sandwich shop near your office letting you know their special of the week (you got an extra stamp on your loyalty card when you signed up for the text alerts, and have kept meaning to unsubscribe for the last six months) than anything as important as what you are doing. Nonetheless, you feel a compulsion to momentarily divert your gaze from your spouse’s eyes, from your boss’ steely stare, or from the road ahead to your phone and find out that … it’s not important. You really shouldn’t have done that – especially if you were driving. News, or the possibility of news, is irresistible to us. Especially if it is what copy testing companies rather redundantly refer to as “new news.” In terms of how we process things, the latest very often is the greatest. Not only are we distracted by and attracted to the latest piece of information, we are more likely to remember it, we will place undue importance on it, and the last part of an experience can not only transform our memories of the entire experience but also change our future behavior as a result. Let’s consider memory. A wide range of psychology studies, going back as far as Hermann Ebbinghaus’ work from 1885 to more recent studies2 demonstrate the serial position effect. The serial position effect explains how, when asked to recall words from a list, people are most likely to remember words from the end of the list (the recency bias), pretty likely to remember words from the beginning (the primacy bias), and least likely to recall words from the middle of the list. One explanation for the serial position effect is that we pay more attention to the first few words and there is enough time for them to be filed in our long-term memory, and the last words go into our cognitively less-demanding short-term memory. The middle words straddle

Brodie, D. A., & Murdock, B. B. (1977). Effect of presentation time on nominal and functional serial-position curves of free recall. Journal of Verbal Learning and Verbal Behavior, 16, 185–200. 2

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both memory systems and are not encoded well in either system. Getting caught in the middle isn’t the best path to saliency or success.3 The conventional wisdom of the benefits of being the first or last company in a pitch or a brand having the first or last slot in a commercial break makes sense. For cognitively demanding tasks, you may be better off going first; for things that require lower involvement, being last may be the way to come out on top. When I worked in Thailand, I had a client whose media strategy was always to buy – often at inflated costs – the billboard that would be seen immediately before his key competitor’s billboards. Because passively viewing a billboard is cognitively easy and therefore the recency effect is at play, being the last billboard rather than the first may have been a better bet. If I had known then what I know now, I would have made the case for my client to do exactly the opposite of his favored approach, perhaps making his advertising work harder, and cost less into the bargain. Beyond simply being favored in memory recall, the latest information has, like a young cuckoo in a songbird’s nest, other tricks up its sleeve to supplant the previous inhabitants. One trick that is talked about a lot in the field of behavioral finance is the recency bias. The recency bias leads both amateur and professional investors to place greater importance on more recent information than on potentially more significant, but older, information. This bias is a major reason investors and business decision-makers will make knee-jerk reactions based on the latest developments rather than on what they have witnessed more consistently over a longer period. As Jason Zweig writes in his book Your Money and Your Brain, “It is human tendency to estimate probabilities not on the basis of long-term experience but rather on a handful of the latest outcomes.” What happens last can color an entire experience, whether that is the climax of the final movement of a symphony, the gripping ending of a movie, a sales presentation, or even an invasive medical procedure. For example, today, thanks to the widespread use of the sedative Propofol, screening colonoscopies are no longer the painful and uncomfortable procedures that, in 1994, made them the perfect setting for a famous ­experiment4 by Daniel Kahneman, Donald Redelmeier, and Joel Katz. Crano, W. D. (1977). Primacy versus recency in retention of information and opinion change. The Journal of Social Psychology, 101, 87–96. 4 Redelmeier, D. A., Katz, J., & Kahneman, D. (2003). Memories of colonoscopy: A randomized trial. Pain, 104(1–2), 187–194. 3

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Kahneman and his two collaborators, both of whom are medical doctors with specific interests in health policy, screening procedures, and anesthesia, recruited 682 people who were scheduling a colonoscopy. During the actual procedure, every participant was asked to do three things: • Rate the pain level every 60 seconds during the procedure on a scale of 1–10. • Rate the level of overall discomfort for the colonoscopy after its completion. • Compare it to one of eight unpleasant experiences, such as “an average visit to the dentist” or “two days in bed with the flu.” A colonoscopy requires a gastroenterologist to move a scope through the entire colon. These scope movements consist of a lot of wiggling, probing, and pulling, and the gastroenterologist tries to perform the operation with the least amount of discomfort possible to the patient. At the end of the procedure, the scope is normally removed immediately. Half of the participants in this study had a colonoscopy using standard procedures at the time. The procedure was modified ever so slightly for the remaining participants. After all the wiggling and movement of the scope had stopped, the scope was left in place just inside the entrance to the rectum for a couple of minutes. This colonoscopy change resulted – critically – “in final moments that were less painful,” according to the researchers. What difference did this small change make to the participants? Both groups indicated nearly identical levels of pain during the colonoscopy using the 10-point scale. But when it came to rating how they felt about the overall procedure, the group who had experienced the gentler ending rated the overall experience as being 10% less painful. The gentler ending also affected future behavior. An analysis of the participants’ patient information over subsequent years showed that those who had been administered the modified procedure were also about 10% more likely to have returned for their next checkup. For marketers, there is a clear implication from this study: Whatever you do, finish strong. How you bid people farewell as they leave your plane or hotel could well be more important than how you welcomed them. With e-­commerce, the experience will often terminate abruptly with a confirmation page, rather than something that will stoke your anticipation for what you will be receiving in a couple days’ time. In our struggle to win the transaction, to get the sale, we forget about engineering an experience that is emotionally satisfying for the customer. The legendary car salesman had it right

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when he said, “When I’m selling someone a new car, I’m already selling them the next car they are going to buy from me in five years’ time.” Some ability to plan for the future, such as having the foresight to store food for times when it may be in short supply, does provide an evolutionary advantage. But letting the future weigh too much on our decisions could have disastrous consequences for our ability to navigate the present. Tali Sharot, a neuroscientist at University College London and author of the book The Optimism Bias, suggests a compelling reason why humans may have developed the cognitive bias for which her book is named. The so-called optimism bias is much picked-over by those keen to point out human irrationality. It leads people, seemingly foolishly, to overestimate good outcomes or underestimate bad ones in terms of how those outcomes will affect them personally. Yet, at the same time, people give more accurate predictions about how outcomes will affect others. The emergence of the optimism bias in human development may have a critical role in allowing us to conceive of the future without being paralyzed by contemplating its gloomy inevitability. Sharot writes in her book: […] an ability to imagine the future had to develop side by side with positive biases. The knowledge of death had to emerge at the same time as its irrational denial … It is this coupling – ­conscious prospection and optimism – that underlies the extraordinary achievements of the human species. In short, planning for the future is fine as long we don’t let its consequences weigh on us too much. Our cognitive mechanisms have evolved a few other tricks, beyond the optimism bias, to ensure contemplating the future and the decision uncertainty that might bring doesn’t inhibit us from making the quick decisions we need to make now that will help us get beyond today. Many of these cognitive mechanisms and biases are inconvenient for marketers whose products and services do not have an obvious or compelling payout in the present but that have value to people who might choose them at some stage in their future. Future value is a tricky thing to sell, as demonstrated by one of the fundamental principles of behavioral economics: temporal or hyperbolic discounting. (The word hyperbolic refers to the shape of the curve showing how the subjective value of something decreases as you move away from the present into the future.) Classic research on hyperbolic discounting can be demonstrated through people’s intuitive desire to opt for a smaller reward now

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instead of a bigger one in the future. I’ve used this phenomenon numerous times at conferences. First, I wave a $50 bill in the air and then a $100 bill. I ask the audience to choose whether they would rather have the $50 bill now or $100 in a year. Unscientific though my experiment may be, the show of hands typically illustrates a preference for the immediate reward among about three quarters of the audience. This result is broadly in line with behavioral experiments looking at people’s propensity to choose a smaller reward immediately rather than a larger one in the future. Things get interesting when the time frame is shifted. What if, instead of offering $50 now and $100 in a year, you offer $50 in a month’s time and $100 in one year and one month’s time? This change leads to an almost complete behavioral reversal, with the majority saying they would rather take the $100 than the $50, even though the length of time between the two offers remained an unchanged 12 months. Another way that our judgments about the future are affected is by how we interpret, or construe, things differently depending on the time horizon. Construal level theory (CLT) explains the impact of a sense of distance on our choice, whether that is physical, temporal, or social distance. I think of CLT as being like the famous Saul Steinberg New Yorker cover from 1976 – View of the World from 9th Avenue, were we see the concrete foreground (Manhattan’s 9th Avenue) in detail, but once our view takes us across the Hudson River, we see Jersey, the Mid West, the West Coast, the Pacific Ocean, and finally China, Japan, and Russia, each in turn vaguer and less defined. CLT classifies thinking into abstract or concrete based on “psychological distance” from a reference point, which in terms of time is the present-day self. In research that looked at how time changes people’s preferences, participants who were asked to describe themselves one week in the future preferred to open a new banking account at a bank superior on instrumental attributes (e.g., “low transaction fees” and “good interest rates on credit cards”), whereas participants who described themselves 10 years in the future preferred to open a new banking account at a bank superior on identity attributes (e.g., “customers are treated with respect and dignity” and “customer complaints are considered very seriously”).5

Kivetz, Y., & Tyler, T. R. (2007). Tomorrow I’ll be me: The effect of time perspective on the activation of idealistic versus pragmatic selves. Organizational Behavior and Human Decision Processes, 102(2), 193–211. 5

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The further something is from the present-day self, the more abstract the accompanying thought processes are, while immediate events are thought of in more concrete terms. Consider planning a wedding. When the happy couple selects the date a year or so in the future, their focus is pleasantly on the time of year that would offer the kind of ambience they want for their perfect day. (Perhaps an outdoor evening wedding, in late summer?) As the day approaches, their focus shifts to more concrete and detailed (and not so pleasant) aspects of thinking, like keeping within budget and devising harmonious seating charts. I’m sure you have agreed to an onerous task several months out, only to curse your stupidity for doing so as the day nears. Dan Ariely has a “hack” for the tendency to discount unpleasant aspects when agreeing to do things in the future. He suggests that if someone asks you to give a talk, write an article, or make some other commitment for a date that is a long way off, think about whether you would say yes if that commitment were in four weeks’ time. When we contemplate our future self, he or she is a model of virtue, easily able to overcome the short-term temptation our present self falls victim to. Our good intentions are often “sized” for our future self, not for our fallible present self. CLT also, unfortunately, applies to debt. When you borrow money, you are in a very concrete level of construal, while the repayment date is so abstract and so far in the future as to seem like it will never come. In an example from “Homer Economicus or Homer Sapiens? Behavioral Economics in The Simpsons” Jodi Beggs points to a situation where the future becoming today causes Homer pain. In the episode “No Loan Again, Naturally,” Homer complains to his mortgage broker, Gil Gunderson: When you gave me that money, you said I wouldn’t have to repay it until the future. This isn’t the future, it’s the lousy stinking now. According to both CLT and hyperbolic discounting, it’s not just Homer Simpson’s thinking about the future that is opaque – it’s true for all of us. What hope is there for marketers who are selling retirement savings, longterm healthcare, or any product that requires handing cash over now for a benefit in the future? An ingenious neuroeconomics and behavioral economics experiments by psychologist Hal Hershfield, who is an Associate Professor of Marketing at UCLA’s Anderson School of Management, suggest a very interesting way to fight human nature … by using human nature.

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While he was in graduate school at Stanford University, Hershfield examined how people’s perception of self-related to temporal discounting. In one landmark experiment, Hershfield and colleagues used fMRI to measure brain activity when people were thinking about themselves and other people in the present and the future.6 Strikingly, when people were thinking about themselves in the future, their brain responses were indistinguishable from when they were thinking about other people. The difference in brain response between present and future self also correlated with measures of temporal discounting. In the example of receiving a $50 bill today or $100 in one year, people with brain responses to their future self that looked more like brain responses to other people were more likely to choose the $50 instead of the $100. The implication of this study is that our brain treats our future self like someone else, a stranger maybe, which can make activities with future benefits, like saving for retirement, sticking to an exercise program or eating healthily, quite challenging. In a follow-up study, Hershfield and colleagues showed the brain could be effectively tricked into treating our future self like our present self. The researchers took each participant’s headshot and, using computer software, age-progressed their face to approximately 70 years old. Participants “interacted” with their future selves using virtual reality technology before completing a temporal discounting task. Interacting with the age-progressed picture resulted in participants shifting their temporal discounting behavior, choosing larger sums of money available in the future over smaller rewards available immediately.7 Hershfield and colleagues showed that effectively conceptualizing the future can facilitate saving. Merrill Edge an investment firm that is part of Bank of America “borrowed” this technique for a program called Face Retirement, that ran between 2012 and 2016. I tried it out a number of times over that period. After visiting the website, I was invited to “meet the future me” by using the camera on my computer to take a photo of myself and then to enter my age and gender. A couple of seconds after clicking on a box that said “begin ageing,” a digitally aged version of my

Hershfield, H. E., Wimmer, G. E., & Knutson, B. (2009). Saving for the future self: Neural measures of future self-continuity predict temporal discounting. SCAN, 4, 85–92. 7 Hershfield, H. E., Goldstein, D. G., Sharpe, W. F., Fox, J., Yeykelis, L., Carstensen, L. L., & Bailenson, J. N. (2011). Increasing saving behavior through age-progressed renderings of the future self. Marketing Research, 48, S23–S37. 6

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photo appeared, along with some facts about what everyday goods will cost in 2030, with the line “That’s not a stranger you are saving for, it’s future you.” In his book Save More Tomorrow (you’ll find out more about the program after which the book is named a little later in this chapter), another professor at UCLA’s Anderson School, Shlomo Benartzi, calls approaches like these Behavioral Time Machines. The good news is that creating and using a Behavioral Time Machine doesn’t require a retrofitted DeLorean, a Tardis or even facial aging software. Workshop participants often seem disappointed when I tell them we will be using a Behavioral Time Machine, and then explain that we will be doing this through prospective exercises that will help them get away from the perspective of today, and allow them to imagine their future selves and future outcomes. As well as than the high-tech approach of his earlier experiments, Hal Hershfield has collaborated on studies with researchers in the United States, the Netherlands, and Mexico using low-tech prospective exercises. One such study in Mexico looked at how to tackle the low level of voluntary contributions to retirement accounts – even though 40.5 million Mexicans are retirement account holders, less than 0.5% of them make at least one contribution per year.8 In a 2017 experiment, which was part of a wide-ranging behavioral project to design ways to increase these contributions, 8,000 retirement account holders who had not signed up for automatic savings were assigned to participate in three different conditions. One was a control, which simply told them the benefits of automatic contributions; another was a “Mad Libs” style exercise where the participants imagined a vivid story of their future; and a third condition prompted them to think about how their past decisions had affected their lives and how decisions now might affect their future. Of those who experienced the control interaction, 0.11% went on to enroll in automatic savings. Thinking about past decisions led 1.36% of participants to enroll, while imagining their future lives led to 2.2% signing up. Another study9 looked at the effect of participants writing a letter to either their “near future self” (3 months away) or their “far future self” (20 years

Fertig, A., Fishbane, A., & Lefkowitz, J. (2018, November). Using behavioral science to increase retirement savings in Mexico. New York, NY: Ideas42. 9 Rutchick, A. M., Slepian, M. L., Reyes, M. O., Pleskus, L. N., & Hershfield, H. E. (2018). Future self-continuity is associated with improved health and increases exercise behavior. Journal of Experimental Psychology: Applied, 24(1), 72–80. 8

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away) on how much exercise they reported taking over the 10-day period after writing the letter. On average, those who wrote to their “near future self” reported taking 9.26 minutes per day, while those who wrote to “far future self” increased on this by 40%, with an estimated 12.92 minutes exercise per day. One advertiser who brilliantly executed the idea of bringing future and current self closer together (though perhaps without knowing the scientific thinking behind it) is Medifast, a weight-loss company based in Owings Mills, Maryland. With its agency, Solve, it cleverly filmed people who were overweight as if they were talking to their future, slimmer self about how it feels to be overweight. Then, several months later, they filmed the same (now slimmer) person listening empathetically and encouraging their former self and telling them how great it feels now that they have succeeded in losing weight. The best of the campaign, “Kimberley” feels absolutely authentic, and emotionally touching, as old Kimberley says to her new, slim self “seeing myself this way – now I know it’s possible.” Perhaps the authenticity isn’t surprising. Kimberley Vandlen, the Kimberley in the commercial, said in a New York Times interview,10 that when she saw the footage of her old self: I broke down in tears, because I remember “that” girl, and I remember how badly she was feeling and not wanting to get up from the couch or play with my daughter because my knees would ache, or ankles would ache. Many health-related issues are affected by the innate tendency of humans to be swayed more by a smaller reward or consequence in the present than by a larger one in the future, particularly those relating to heart health. In April 2019, I collaborated with Professor Nicholas Peters,11 an eminent cardiologist and digital health pioneer on an article for the World Economic Forum’s Future of Health and Healthcare website.

Newman, A. A. (2012). Poignant endorsements in weight-loss campaign. New York Times, December 19. 11 Professor Peters is Professor of Cardiology and Head of Cardiac Electrophysiology, Imperial College London, and Consultant Cardiologist at Imperial College Healthcare NHS Trust. He also acts as Clinical Advisor to Google Fit & Health @Google – London. 10

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The areas of human nature we touched upon were hedonic utility (the pleasurable reward that comes from an action or choice) and hyperbolic discounting (the preference for a smaller reward sooner rather than a larger reward later). The combination of the two is a potent cocktail for unhealthy behaviors. In general, humans are intuitively drawn more to actions that give them pleasure now, than those that offer functional benefits in the long term – even if they know the long-term gain would have greater value. This has been exacerbated by health communication – whether dispensed by individual healthcare providers, governments, or even pharmaceutical companies, has traditionally preferred narratives that seem persuasive from a rational, long-term perspective: “If you quit smoking now you might not lose a leg in 30 years’ time” or “if you consume less sugar you won’t become overweight and diabetic.” Focusing on important outcomes in the future – essentially asking people to give up something pleasurable or start doing something they find difficult now, for the gain of a longer, healthier life – sounds like the right thing to do, and it sometimes works – even though it is not well-aligned with human nature. But the question that Professor Peters and I asked was this: are there more efficient and effective ways to encourage healthier lifestyles using strategies based on more immediate benefits that are both rewarding and pleasurable? Examples of this exist already. Do we really brush our teeth every morning in order to avoid losing them in 20 years’ time? While for most of us it has become a habit, if for some reason we haven’t brushed our teeth, the thing that nags at us until we do it isn’t the threat of cavities or gingivitis but feeling the build-up of plaque on our teeth and gums. A century ago, when brushing teeth hadn’t yet become a mainstream behavior, Pepsodent sold their toothpaste by encouraging people to run their tongue over their teeth to feel the film of plaque. Their focus wasn’t long-term oral health, or even the avoidance of future pain. It was about something much less dramatic, but something that could be felt in the moment. I use this example in workshops and presentations, and I swear that every time I do, I see someone in the front of the room nonconsciously running their tongue over their teeth. My dentist in San Francisco, Dr Robert Ho, is the best dentist I have ever had (in a personal example of the power of reviews we discussed in ­Chapter  6, I chose him because of his  rating on Yelp from 100+ reviewers). As well as knowing a lot about teeth (he is a professor of restorative and preventative dentistry at the University of California, San Francisco), he knows about human nature. His advice is that after you eat something, be

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it a meal or a snack, to take a swig of water and swish it around your mouth for 15 seconds. Sure, ideally you’d find a bathroom and brush your teeth a little later, but what I like about Dr Ho’s suggestion is that it is easy, and you can normally do it straight away. An easy, immediate action has more chance of being executed than a more difficult delayed one. As someone once said to me “Two seconds and two steps is all it takes to forget to do something.” When designing strategies for better population health, focus on the long term “does good” and on the immediate “feels good” are not separate and mutually exclusive, and the ideal would be models that provide immediate rewards for healthier actions that have benefits in the future – making those actions easy, pleasurable or even delightful. The grid (Fig. 7.1) illustrates this. Traditionally, conversations about health have focused on the bottom-left quadrant, about doing good in the long term. But in most cases, efforts to change health behaviors are more likely to succeed if the interventions are designed with the top-right quadrant in mind.

Fig. 7.1:  Feels Good/Does Good/Present/Future Grid.

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The good news is that this is happening more and more. Until now, traditional models of care delivery in the old, analog world had no tools to help deliver – and therefore no reason to even consider – whether “feel good” experiences can be delivered at the right time to shape behavior. The timing is, of course, critical. A pat on the back from your cardiologist at your six months post-heart attack checkup for keeping your cholesterol levels down is welcome and pleasurable. But it is so disjunct from the actual behaviors (exercise, healthy diet, taking your statins) that got you there, that this dopaminergic moment may do little to reinforce those behaviors. Technology – particularly mobile devices and wearables – can make these reinforcements timely. Timely in terms of getting the reward with the right temporal proximity and also timely in terms of prompting the behavior at the optimal time for better health outcomes – thereby setting up a behaviorreward virtuous circle. Examples of this include widely available and adopted apps as well as smartphone and peripheral sensors to prompt and reward activity, sleep and nutrition. An area of particular interest to Professor Peters is that it is often more difficult to change the behavior of those at most risk. In our piece, he talked of how timely hedonic interventions could help improve uptake of beneficial actions by those who will benefit most from them: The reward component of many existing use cases has tended to be simply information feedback to the user, more “do good” than “feel good” – and therefore open to the criticism of being adopted least by those who need to change their behavior the most. But there are recent encouraging examples of successful hedonic virtuous circles of the sort that could become embedded in the fabric of healthcare. Discovery Health, an international health insurance company, have been subsidizing gym memberships, and recently reported on more than 400,000 of their insured patients across three countries who received Apple Watches at minimal cost which they could keep if their step count – also monitored centrally – achieved specified thresholds. The result of the reinforcement and reward was a 30% increase activity, importantly even greater (50%) in those patients at highest risk. Much behavior (let alone behavior change) is easily postponed for a variety of practical and emotional reasons. In general, people will readily agree to change in the future, or for their future self, but in reality, do little or

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nothing in the present. Recognize something of yourself in this? Rest assured – it’s not just you, it’s all of us. It’s called human nature. Hyperbolic and temporal discounting experiments demonstrated that the future is worth less than the present, but this doesn’t mean that people cannot be encouraged to make decisions in the present that benefit their future selves. Behavioral economists Richard Thaler and Shlomo Benartzi developed an ingenious program called “Save More Tomorrow” (remember the book mentioned earlier in this chapter – I said we’d get back to it eventually) that made saving for retirement nearly effortless. Whenever participants received a pay raise, a percentage of the increase goes directly into their 401k retirement fund every month. Called auto-escalation, this manner of saving for retirement requires no additional effort from participants. Save More Tomorrow is a brilliant program; it nudges different tendencies at all the right times. As well as using auto-escalation (making the intensifying of the program effortless to the saver), it weaves in different construal levels, first to get agreement to save in advance, when it is a worthy idea rather than a pragmatic choice. But its design ensures concrete contributions to the program, making them less resistible by putting the “pain” of saving money in the future, which negates temporal discounting effects. The coup de grâce is that Save More Tomorrow takes loss aversion out of the equation by taking a percentage of your raise, before it hits your checking account and becomes money you can think about spending. By not taking money from that you could mentally spend, it makes the savings deduction not feel like a loss. According to Thaler, Save More Tomorrow has worked well and has the potential to work even better. In its first implementation, the Save More Tomorrow program helped boost the average participant’s 401k savings rate from 3.5% to 13.6% in just 3.5 years. A group who received standard financial advice moved from 4.4% to 8.8% over the same period. In 2004, Thaler suggested that, with wide-scale adoption, Save More Tomorrow had the potential to increase US savings by $125 billion. According to Shlomo Benartzi’s website,12 as of January 2020, over 15 million Americans are effortlessly setting aside money for retirement thanks to the Save More Tomorrow program.

http://www.shlomobenartzi.com/save-more-tomorrow.

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The takeaways from this chapter are: • CLT means we think about the future in an entirely different way to the present. To get someone to agree to do something, give the outcome a distant horizon. To get someone to do something, give it near horizon. BUT – remember that to get someone to do something, that something needs to be framed in a way that addresses a short-term objective. • Finish strong – don’t forget that the end defines the experience. • Hyperbolic or temporal discounting means we value a reward in the future less than we would value if we could have it now. Our preference is for smaller-sooner rather than larger-later. • When we think about doing things for ourselves in the future it’s almost as though we are thinking of someone else. One way of encouraging an action that has benefits in the future rather than now is to close the gap between current and future self. • Optimism bias means we think bad things are less likely to happen to us than to others. Messages of fear and doom, while eliciting an emotional response, may not change behavior. It’s almost like we think “Wow! That’s scary, but it’s going to happen to someone else, not me.” • The more people feel they can delay a decision, the less likely they are to make it. Giving people reasons to act now with time-sensitive messages and offers drives their decision making and helps prevent them from reviewing other options. What others learned from this chapter: • “[…] as a realtor I have transactions that are long and complicated with good moments and terrible. The finish strong idea is probably the most easily teachable marketing technique to retain repeat business.” • “This explains why I come back from holiday having bought clothes I’ll never wear again. The problem is that the present-self and future-self are strangers to each other with different needs and even different tastes in clothes ….”

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8 LOSS AND OWNERSHIP

How people’s non-conscious desire to avoid loss affects their choices in many, many ways. Sometime in the 1890s, T.R. Russell of Liverpool made a gold pocket watch. According to an inscription on the movement, Russell was a watchmaker for the Admiralty and the Queen. The watch has a beautiful, clean face and an assertive tick. It is about 1½ inches in diameter and weighs a hefty 4¾ ounces. I know this because I weighed it on my kitchen scales a couple of months ago, before entrusting it to a safe deposit box. I inherited the pocket watch from a great uncle I hardly knew. He was a laborer who had immigrated to England from County Donegal in Ireland in the 1920s. My great uncle worked hard for many years in dusty factories, earning little, spending less, and suffering from asbestosis later in life. No one in our family has any idea how he acquired the watch. It’s romantic to think that he won it in a table game in Liverpool after getting off of the boat from Ireland, or cunningly stole it from some dandy. But by all accounts, Great Uncle Carey was as clean-living and honest as the day is long, and it’s likely the acquisition of the watch involved considerable hard work and financial sacrifice. Given that he lived a frugal life and never had anything in the way of luxuries, there must have been times when he thought of selling or pawning the watch. But he didn’t. Whatever it had taken him to acquire the watch made it important for him to keep it. As he neared the end of his life, he gave the pocket watch to my aunt, telling her that he wanted it to stay in the family. She gave it to me. Today, we live in an age of instant and easy acquisition, from Amazon OneClick to the potential of 3D printing. But just two generations ago, during

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Great Uncle Carey’s life, most of you have relatives like him who struggled to acquire things that they then kept and passed on to the next generation. If you go back just a few generations more, to the middle of the eighteenth century, your relatives (and we all, of course, have relatives that lived then, however often we forget we had forebears) would have been staggered by how easily we can get new stuff in the present day. In their time, before the Industrial Revolution, people and not machines made goods, including necessities like clothing. Artisan crafted goods weren’t a chic choice; they were the only option. Because sewing machines wouldn’t be invented for another hundred years or so, clothing was made entirely by hand, from spinning the thread to hand-stitching the final products. Possessions came as a result of significant effort, in terms of labor and time. After you had acquired something, you would have been wise to try very hard to hang on to it and to value it highly – perhaps even more highly than others might offer to pay you for it. Let’s go back further, say 10,000 years, to your ancestors who populated the earth at the dawn of civilization. They would have had virtually nothing in terms of surplus. To them, losing anything would have likely been devastating. For all but a tiny percentage of human existence, the best strategy for surviving and thriving has been to focus on keeping what you already have before considering gains. You might be thinking, “But that’s ancient history. Things have changed.” You might point to the fact that we can’t wait to ditch our old iPhones, or that that we live in a disposable society (we seem to love razors, diapers, and product packaging that are all meant to be discarded after little use) because of the unnecessary amount of material we throw away. But remember what anthropologist Dean Falk of “Hobbit Man” fame said about 6,000 years ago being essentially today? Our ancestors’ behavior still lives on in us, because while we seem to jettison a lot of stuff, consider the things we don’t throw away that we could. When my wife and I first arrived in the United States 20 years ago and were looking for somewhere to live, we were amazed by the abundance of storage space in every apartment we saw. And this was in San Francisco, one of the more space-constrained cities in the country. Compared to what we were used to from decades of living in European and Asian cities, what we found in the United States was storage heaven. In spite of all the in-home storage spaces in this country, the American need for personal storage extends beyond the boundaries of the home. On the edges of nearly every town in America, you will find self-storage facilities. According to the Self-Storage Association, the

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trade organization for this growing industry, there are 52,500 facilities across the United States, which is more locations than Starbucks and McDonalds combined (I didn’t believe that either, but I checked, and both Starbucks and McDonalds have around 15,000 locations each in the United States). In 2018, the self-storage market in the United States was worth about $38 billion. Wall Street analysts have described the industry as “recession proof.” With this growth of physical storage and the well-documented growth of data storage, you could say that today we live in a “Storage Society.” Global data storage grew by a factor of 10 between 2007 and 2017 (in 2017, there was enough storage to allow every human on the planet nearly 400 GB). This need for storage – particularly secure storage – exists for deeply natural reasons and not just for humans but for squirrels, ants, and woodpeckers as well. Avoiding loss and keeping what we have is instinctual; it’s a feeling that drives many aspects of our behavior. By understanding our aversion to losing what we have acquired, you start to see reason in seemingly strange decisions: from those of sports coaches and umpires,1 investors, medical doctors, shoppers, and even your own choices. The cognitive mechanisms behind loss aversion and a number of other biases are encapsulated in prospect theory, an idea that emerged from the pioneering work in behavioral economics of academics including psychologists Daniel Kahneman and Amos Tversky and economist Richard Thaler. Prospect theory won Kahneman a Nobel Memorial Prize for Economic Science in 2002. (His collaborator Tversky had died in 1996, and Nobels are not awarded posthumously.) James Montier, an influential economist, rates the impact of Kahneman and Tversky’s seminal work very highly: “Prospect theory has probably done more to bring psychology into the heart of economic analysis than any other approach.” The intersection of psychology and economics is Grand Central Station for marketers, and I think prospect theory is something that we should always have in the back of our minds. (A range of executive tchotchkes with the motto “Prospect theory is always at work in your customers’ minds” will shortly be available from the author’s website.2)

For fans of American sports, Scorecasting by Tobias J. Moskowitz and L. Jon Wertheim shows the effect of cognitive biases on players, managers, and umpires through analysis of sports data. They give a number of examples that relate to loss aversion and status quo bias. 2 Not really. 1

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So, what is it? Prospect theory provides a descriptive account of people’s decision-making behaviors by considering how gains and losses affected choices. Kahneman and Tversky showed that when making a decision, people weigh the final outcome as less important than potential gains or losses, in contrast to rational economic models of choice. The theory provides rationales for several cognitive biases, such as loss aversion, the endowment effect and its close relative, status quo bias, and the omission bias. In this chapter, I aim to explain how these biases affect how people make choices. The first phenomenon, loss aversion, is one of the first and most famous biases Kahneman and Tversky studied. Rationally, we should feel pretty much the same about gaining $100 as we would about losing $100, but their experiments showed we don’t. In many experiments, losing an amount appears to have twice the psychological impact of gaining the same amount. Sparky Anderson, the baseball coach, was scientifically on the money when he said, “Losing feels twice as bad as winning feels good.” In Scorecasting, Tobias J. Moskowitz and L. Jon Wertheim reference an interview in the New York Times, where Tiger Woods confessed to the psychological effect of loss aversion: Anytime you make big par putts, I think it is more important to make those than birdie putts. You don’t want to ever drop a shot. The psychological difference between dropping a shot and making a birdie, I just think it’s bigger to make a par putt. Of course, the consequences of dropping that shot could be very costly. Finishing second in the US Open in 2019 would have earned you $1,350,000, whereas the winner’s prize was $2,250,000. In prize money alone, a dropped shot could mean a loss of $900,000. But it’s not just big prizes that make us averse to loss and consequently affect our behavior. The difference between losing or gaining a mere 5¢ can also have a pretty dramatic effect on us. A fascinating study by Tatiana Homonoff3 shows how such small incentives can make a big difference. Homonoff observed grocery shoppers’ behavior and bag use in several different stores in and around the Washington, D.C., area. She timed her study

Homonoff, T. A. (2018). Can small incentives have large effects? The impact of taxes versus bonuses on disposable bag use. American Economic Journal: Economic Policy, 10(4), 177–210. 3

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to occur before and after a law came into effect that introduced a 5¢ tax for disposable bags in Maryland’s Montgomery County, which is adjacent to Washington, D.C. Homonoff collected shopper data for two months before and two months after the law was implemented. She compared shoppers’ bag use in Montgomery County before and after the law came into effect with bag use in Washington, D.C., where a tax had been in place for two years, and with bag use in Virginia, where no tax was in place. A number of stores in Homonoff’s study offered a 5¢ bonus for shoppers who brought reusable bags to the store, and some of these stores were located in areas subject to the tax, and some in the areas where there was no tax. After observing 16,000 shoppers and their bagging behavior, what did Homonoff find? Only 13.1% of shoppers in stores that did not offer a bonus and were not subject to a tax used a reusable bag. In her study, Homonoff called this no tax, no bonus scenario the “no incentive” condition. The shoppers in stores offering a 5¢ bonus (gain) were just a little bit more likely to use reusable bags – 15.4% did so. But, no less than 44.2% of the shoppers who shopped in stores with a 5¢ tax (loss) used a reusable bag. Second, the shoppers who shopped in shops where there was a 5¢ bonus were just a little bit more likely to use reusable bags – at 15.4%. In stores offering a “carrot and a stick” incentive scheme – a 5¢ tax for a disposable bag and a 5¢ bonus for using a reusable one – 47.8% of the shoppers used reusable bags, a modest increase from the stores that only had a 5¢ tax (Fig. 8.1). Fig. 8.1:  Percentage of Customers Using a Reusable Bag.

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In this study,4 the loss frame seems to have had a much stronger effect than the gain frame. In fact, Homonoff estimates that the loss aversion coefficient is around 5, meaning that it would take a bonus (gain) of 25¢ to have the same behavioral effect as the 5¢ tax (loss). One of the reasons for the large effect may be that, with disposable bags, the introduction of a tax means that you are now paying for something that was previously free (unlike, say a soda tax, which just makes the amount you were paying a little higher). Loss aversion affects more than financial losses. I remember vividly feeling the effects of its impact a number of years ago. We had just bought a chili pepper red and white MINI Cooper to replace our previous car – a chili pepper red and white MINI Cooper we’d bought six years earlier. Our original MINI was factory ordered (and thus full-priced) and had two accessory packages, which meant it was pretty well equipped. We bought its replacement off the lot – it came with one package and some other accessories and was discounted by $2,500. The new car had a number of cool things the previous one didn’t, including a way better sound system, heated front seats, heated mirrors, better head lights, six gears rather than five – and was brand new. For all of these additional features, there was one thing that the original had that its replacement didn’t – a rain-sensing windshield that meant that the wipers turned on automatically after a few drops of rain hit the windshield. In a rant about this innovation, James May, one of the original co-presenters of BBC TV’s global phenomenon Top Gear (and more recently, Amazon’s Grand Tour) described rain-sensing windshields as: […] a prime example of the sort of technology for which no one was clamouring and which has not advanced our happiness one jot since some under-employed electronics nerd dreamt it up. A couple of days after getting the car, I was happily driving along, and it started to rain. Having been flummoxed for a couple of seconds that the windshield wipers didn’t turn on, I turned them on myself, an action that, in itself, was neither cognitively or physically taxing. But in my gut, I felt rather A few years after Homonoff’s study, the city of Chicago repealed a flawed ban on plastic bags and in 2017 introduced a 7¢ tax on all disposable bags. This move had a behavioral effect of the same magnitude as that reported by Homonoff in her Washington DC area study. http://www.ideas42.org/wpcontent/uploads/2017/04/Bag-tax-results-memo-PUBLIC.FINAL_.pdf. 4

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put out. Despite May’s damning assessment of auto-sensing windshields, and the fact that our new car had a host of goodies our old one didn’t, at a visceral level I started to feel bad about our choice. I questioned the entire car. Should we have bought it off the lot – was it really the car we wanted? Should we have just kept the other one for a few more years? Had we made a terrible mistake? It took me a few minutes to realize that I was experiencing loss aversion because I no longer had auto-sensing windshield wipers. By locating the source of this feeling as the effect of a cognitive bias, I was able to get over it and enjoy the snuggly comfort of those heated front seats. Our innate aversion to loss can also explain why we hold onto objects, like that nonfunctioning first-generation iPhone taking up space in your desk drawer. That is, until Marie Kondo, author of The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing, host of ­ ­Tidying Up with Marie Kondo and the first person to have achieved global superstardom by folding socks and underwear, came into our lives. This is how she describes the epiphany that sparked the KonMari method. I was obsessed with what I could throw away. One day, I had a kind of nervous breakdown and fainted. I was unconscious for two hours. When I came to, I heard a mysterious voice, like some god of tidying telling me to look at my things more closely. And I realized my mistake: I was only looking for things to throw out.5 Kondo’s moment of insight is instructive to anyone seeking to change behavior. By reframing tidying-up from being about “things I want to throw out” to being about “things I want to keep,” Kondo neatly (or perhaps, tidily) allows us to sidestep the natural tendency to construe discarding something as a loss and removes a barrier to the behavior change necessary to declutter our lives. Later in this book, we’ll uncover other ways how her approach suppresses stubborn innate tendencies. Our aversion to loss doesn’t just lead us to hang on to things but also to stick with service plans. A friend at a brand consultancy told me of one of his clients who has a subscription model – customers sign up and get one service interaction a month. The services roll over if unused, but if a customer cancels their service, they lose all these unused appointments. This is very clever. Logically, if you need service so seldom that you have accumulated a stock of From an interview with Parry, R. L. (2014). Marie Kondo is the maiden of mess. The Australian, April 19. 5

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unused service interactions, you might question whether you need the subscription in the first place. But if canceling the subscription means that you will lose these interactions you have stocked up as credits, your intuitions will make the cancelation a very uncomfortable decision. Not surprisingly, the company in question has a very high retention rate. A natural inference of our compunction to avoid loss is that we overvalue things we already own. This overvaluation is demonstrated by another phenomenon related to prospect theory, called the endowment effect. Economist Richard Thaler coined the term endowment effect to describe how people assign higher value to items they feel they own compared to identical items they do not own. In a now famous experiment, Thaler and collaborators demonstrated the endowment effect using Cornell University students and coffee mugs.6 The students were given coffee mugs from the university bookstore and others received nothing. Students who weren’t given a mug were asked what they would be willing to pay for such a mug; students who received one were asked how much money they required in order to part company with their mug. The striking finding from this experiment is that the amount of money students said they would accept to sell their mug transpired to be around twice the amount of money students without mugs were prepared to pay for a mug. The endowment effect has also been illustrated through an experiment conducted at Duke University.7 Basketball tickets are highly sought after at Duke, and when demand exceeds supply, student tickets are given out via lottery. Ziv Carmon and Dan Ariely asked students who won tickets through the lottery what price they would sell them for and also asked students who did not win tickets how much they would pay for them. The difference in prices was staggering: Lottery winners wanted $2,400, while the ticketless wanted to pay $170! One of my favorite examples of the endowment effect (and perhaps of loss aversion) is research by Jane Risen and Thomas Gilovich that demonstrates people’s reluctance to swap a lottery ticket that they have acquired.8

Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1991). Anomalies: The endowment effect, loss aversion, and status quo bias. The Journal of Economic Perspectives, 5(1, Winter), 193–206. 7 Carmon, Z., & Ariely, D. (2000). Focusing on the forgone: How value can appear so different to buyers and sellers. Journal of Consumer Research, 27, 360–370. 8 Risen, J. L., & Gilovich, T. (2007). Another look at why people are reluctant to exchange lottery tickets. Journal of Personality and Social Psychology, 93(1), 12–22. 6

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In one study, the researchers found that 46% of the participants agreed with the statement, “making the trade would make my old number more likely to win,” whereas only 4% agreed that “making the trade would make my old number less likely to win.” Ownership of an object makes us value it differently – not just financially, but emotionally. When Thaler was the victim of theft and had some expensive wines stolen, he told The Economist that he was, now confronted with precisely one of my own experiments: these are bottles I wasn’t planning to sell and now I’m going to get a cheque from an insurance company and most of these bottles I will not buy. I’m a good enough economist to know there’s a bit of an inconsistency there. The endowment effect is clearly powerful, and it can be activated in different ways. Language can help. In e-commerce, labeling the cart/basket “your cart,” or maybe better “my cart,” could make shoppers value what is in it a little more and thus reduce cart abandonment. In physical retail, having people touch, hold, or try on items seems to have an effect. A client who used to work for one of the world’s largest clothes retailers told me that if they could get people to try an item on in the dressing room, it would result in a purchase 50% of the time. For the men’s clothing brand that she now works with, that number is 70%. Research by Joann Peck from the University of Wisconsin and Suzanne Shu from the University of California Los Angeles shows that just getting people to touch a product elevates their valuation of it, improves their feelings toward it, and increases their sense of ownership of it.9 Another recent study shows that more involved physical interactions (ones reminiscent of stroking or hugging) can create a stronger emotional connection to a p ­ roduct.10 And a study from researchers at Boston College suggests that shopping online using a touch screen device creates greater feelings of ownership than when using a keyboard and mouse.11 The suggestion is that simply touching the image

Peck, J., & Shu, S. B. (2009). The effect of mere touch on perceived ownership. Journal of Consumer Research, 36(3), 434–447. 10 Hadi, R., & Valenzuela, A. (2014). A meaningful embrace: Contingent effects of embodied cues of affection. Journal of Consumer Psychology, 24(4), 520–532. 11 Brasel, S. A., & Gips, J. (2014). Tablets, touchscreens, and touchpads: How varying touch interfaces trigger psychological ownership and endowment. Journal of Consumer Psychology, 24, 226–233. 9

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of a product with your finger has a similar effect to touching the product itself. The research showed the effect was even more noticeable for what the researchers called “products high in haptic importance,” meaning items that you might want to touch and feel before purchase. Earlier in this book, I mentioned Jodi Beggs’ analysis of how cognitive biases affected Homer Simpson’s decision making. In The Simpsons episode “Little Big Mom,” Homer shows his susceptibility to the endowment effect, which Beggs describes: [The endowment effect] can lead to irrational behavior, such as when Homer frantically ran down the street to catch the Goodwill truck after Marge donated some old items from the attic: “That was scary – we came this close to losing our spare Christmas tree stand.” It’s pretty unlikely that Homer would have expended the same level of effort to obtain a spare Christmas tree stand that he didn’t already own. Loss aversion applies beyond just economic losses and gains; it is seen as one of the main reasons why moving people away from the status quo is difficult. Our preference not to move away from the status quo is, predictably enough, called the status quo bias. This bias was demonstrated in another behavioral experiment involving coffee mugs. Students in one group were given a choice between a mug and a bar of Swiss chocolate. In a second group, students were given a coffee mug but were given the opportunity to exchange their mug for a chocolate bar a little later. A third group of students was given the chocolate bar and later allowed to exchange it for the mug. Of those students in the choice condition (the first group), 56% chose the mug and 44% chose the chocolate bar. While this shows some preference for the mug, it is still a pretty even choice between the two options. You might expect that, when given the chance, around half of those originally given the mug would have traded it for the chocolate bar, and half of those given the chocolate bar would want to trade it for the mug. But this isn’t what happened. Just 11% of those given a mug wanted to trade it for a chocolate bar, and only 10% of those given a chocolate bar decided to trade it for a mug. A number of years ago, a leading healthcare agency invited me and Talya Miron-Shatz, a behavioral scientist and the founding director of the Center

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for Medical Decision Making at Ono Academic College, to participate in a strategic and tactical ideation workshop for a large pharmaceutical company. The workshop incorporated key principles of decision making. Having made a breakthrough a decade earlier with a drug that had revolutionized treatment of a serious illness, the pharmaceutical company had launched a drug that promised faster results to a wider range of people afflicted by the same disease. Yet despite this, physicians were extremely reticent to prescribe the new drug and continued to prescribe the old one. After reviewing the focus groups and other research that the client had carried out, our conclusion was that the physicians had become “endowed” with the old drug (it had, after all, enabled them to give a lot of patients good news over the years), and what we needed to overcome was status quo bias, which led the physician to favor their existing choice over any new option. Our advice to the client was that while it may be tempting to market the new, superior drug through its differences, and ask physicians to change their choice, we should instead focus on how this was a similar choice to their original decision to choose and prescribe the older drug. The doctors’ reluctance to move from the safety of an existing, even if suboptimal choice, is classic status quo bias, which relates all the way back to Kahneman and Tversky’s prospect theory. Dr Miron-Shatz, who is also CEO of CureMyWay, and who constantly works with the healthcare industry and with physician choices, describes it this way: Physicians are human. So, it shouldn’t be a surprise that in many cases, they are as influenced, or as biased, as the next person. I have studies showing that when receiving too much information, physician choices become less than optimal. In another study we show that gynecologists’ recommendations for amniocentesis reduce dramatically when they hear the woman has become pregnant through IVF treatments. This makes them think of the procedure risk, which is really there all the time, though not necessarily a main consideration for them, until confronted with a “precious pregnancy.” Miron-Shatz believes that, just like with other humans, cognitive biases like the status quo bias drive doctors’ decisions more than they realize. She says: Few doctors will say things like “if I prescribe anything other than the prevailing drug, patients and colleagues may raise their eyebrows, so why should I?” Or “I prefer to play it safe and do what

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everyone else is doing.” Or even “this drug is not great, but I’m used to it and know what to expect. This sense of certainty is important to me, and it also helps me reassure the patient. I realize that the new drug offers more hope, but I’m less familiar with it, and there’s less of a sense of certainty, so I really hesitate to prescribe it.” Just with any behavior you are trying to change or influence, this can only be done if you know the underlying reason for the behavior. Otherwise, you can show the physicians really good data till the cows come home and still not convince them, because you haven’t targeted their biases and emotional preferences. John Gourville, a Harvard University professor and author of an excellent paper “The Curse of Innovation,”12 would probably agree with Miron-Shatz. He points out that when marketers try to engineer the behavioral change necessary to get people to try new products, we typically tell people what they might gain, or we emphasize how our product is different and innovative. But we fail to consider and address what people may lose by changing their existing behavior. His paper very elegantly explains the effect of loss aversion on the development of innovations from the perspective of both the people who develop them and the people who may choose them. Gourville’s paper is a must read for anyone in marketing, and a must, must read for anyone involved in innovation. Starting with the often-stated high failure rates of new products failing (estimates vary from 40% to 90% across categories), Gourville has a unique take on why such an alarmingly high number of products fail. Typically, most innovation focuses on what people will gain from it. Developers become obsessed with how the new product is different from what has gone before it. But many differences driven by innovation require users to change their current behavior, which means giving up an existing behavior and the perceived benefits that go with that. The innovation may be “better” but what might be given up leads to an intuitive feeling of loss and resistance to the new product, as the physicians we described a couple of paragraphs ago experienced. Understanding what you are asking people to change, and particularly what you are asking them

Gourville, J. (2005, September). The curse of innovation: A theory of why innovative new products fail in the marketplace. Harvard Business School Working Paper No. 06-014. 12

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to give up by adopting an innovation and thus moving from their status quo, is a critical but often unasked question. Gourville suggests that after a substantial investment of time, money, and effort in the innovation, the developers tend to see the status quo as their new product. Thus, they are often overoptimistic of success and fail to consider a key point – rather than being focused only on the advantages their product offers, they should also think about how their innovative product is compatible with existing behaviors and choices. One brand that took heed of this was Kraft Macaroni and Cheese. A childhood food icon for many North Americans,13 Kraft Macaroni and Cheese has been around since 1937, and gained a foothold in times of scarcity (the end of the Great Depression as it was inexpensive, and through World War II as protein was difficult to obtain). Fast forward 75 years, to when Kraft Foods embarked on a program to eliminate artificial additives from its products, they decided to remove the artificial flavors, preservatives, and dyes from Kraft Macaroni and Cheese. Remarkably, and a testament to Kraft’s food scientists and innovation team, the product looked identical and tasted the same as the artificially flavored, colored, and preserved original. They’d overcome the barriers of visual appeal and taste, but one very significant barrier remained – human nature. While Kraft might have wanted to sing from the rooftops that their Macaroni and Cheese had a new recipe without artificial additives (which sounds, on the surface of things a very positive advertising claim), they knew from qualitative research that any change to this traditional and beloved comfort food had to be handled with care. In their submission for the 4As (American Association of Advertising Agencies) Jay Chiat Strategic Excellence Awards, Kraft’s advertising agency Crispin Porter + Bogusky (CP+B) described the challenge thus: […] underneath the positive response (to the removal of artificial additives), there was an undercurrent of something else: Fear. The very same people who applauded the change also expressed doubts: “What will it taste like?” “Will my kids still want to eat it?”14

Kraft Macaroni and Cheese is even more popular in Canada than it is in the United States, with Canadians eating about half as much again per capita than the Americans south of their border. 14 WARC members can download the submission here: https://www.warc. com/content/paywall/article/jaychiat/kraft-mac-and-cheese-the-worldslargest-blind-taste-test/109137. 13

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The CP+B team, to my mind, correctly called out loss aversion as a critical factor: Loss aversion meant that people who should have been excited to learn that Kraft had eliminated artificial ingredients were focused more on what they might be giving up. They said they were in favor of improving the recipe, but their visceral reactions told a different story: Don’t mess with my Kraft Mac & Cheese. Kraft and CP+B came up with a unique solution. They introduced the new product in December 2015 but didn’t advertise the ingredient change in any way, for three months. They didn’t flash “New Recipe!” or “Now Healthier!” on the box, but they did make one change to the packaging. The ingredients panel on the side of the box was updated with the new ingredient list. Kraft simply let the public keep eating the Mac & Cheese they loved without overtly signaling the changes to the ingredients. Rather than telling them the taste hadn’t changed (which would have raised the notion of the taste changing in their consciousness15), they left people to come to their own conclusions. And over the three-month period of what Kraft dubbed the World’s Largest Blind Taste Test, during which 50 million boxes of the new recipe were sold, less than 40 people contacted Kraft through social and consumer hotlines reporting a change in taste. In March 2016, Kraft broke the silence and revealed the recipe change in TV, print, and social, with headlines like “We’d invite you to try it, but you already have.” What Kraft and CP+B did brilliantly was that they allowed the new recipe, rather than the old recipe to become the status quo. When they announced the changes, they simply made the status quo an even better choice, rather than making it seem they were changing the status quo. By all accounts, the campaign was very successful, generating large amounts of earned media (including Stephen Colbert theming his Late Show monologue around the campaign) and most importantly creating “an impressive uptick in sales, reversing previous declines.” There is a temptation to see loss aversion as simply a marketing tactic to frame an offer as a potential loss rather than a gain (e.g., instead of saying “save $20 a month by switching to our cellular plan,” say “you’re losing $20 a month by not switching to our cellular plan”). I think this undersells the As per George Lakoff, saying “Don’t think of an elephant” is a sure way of getting people to think about elephants. 15

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Fig. 8.2:  “What Might People Lose.” Selected Output From Workshops Conducted By the Author.

impact of loss aversion in behavior change. More than understanding how a loss may compel people to act, it is perhaps more important to understand how the prospect of a loss may compel them not to embrace the behaviors or make the choices that you would like them to make. This is exactly what Kraft and CP+B did, and something I dig into in my workshops. With every project, I ask the participants to consider every possible thing that someone might lose by adopting whatever behavior the organization requires people to embrace. The cumulative list now runs to well over a hundred words or phrases – Fig. 8.2 contains a representative sample: Whether you require people to start doing something, to stop doing something, or to keep doing something, it’s always worth considering how the prospect of loss might be lurking in the background. A roadblock to getting college students who have chosen to attend a college in another state to register as voters may be a reticence to register outside of their home state, as they feel by doing so they are losing an aspect of their identity. Switching from iOS to Android or vice versa isn’t just a time suck, you feel less confident and may lose a sense of mastery (I know – I switched from one system to the other and switched back four miserable months later). For a pharmaceutical company that made a drug that eased the symptoms of patients in the final phase of an illness, we found that physicians weren’t prescribing the drug because they were loath to diagnose patients as being in that final phase.

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Diagnosing them as such, and prescribing the drug meant a loss of denial, both for physician and the patient. It is critical to think about how loss may be affecting the choices that you want people to make. Mitigating those losses will most likely not be the entire solution, but it is very often an important part of removing inertia. Mitigating is the key word here. To make the sense of loss less severe, it’s worth considering making the change you require feel like a partial change rather than a complete one. The idea of a partial change, or not having to give it all up can help people eat less meat and embrace more plant-based foods. The label “flexitarian” (eating mainly plant-based foods but still eating some meat or fish) is becoming more popular, with one poll (by a company called One Poll) reporting that 31% of Americans identifying as flexitarian in 2019. The idea of being flexitarian is an appealing one as it doesn’t require completely giving up meat. Perhaps as significant, it is a smaller shift in terms of identity rather than identifying as fully vegetarian or vegan. In a 2014 paper, Amos Schurr and Ilana Ritov16 suggest that the effects of loss aversion and the endowment effect can be reduced when a partial exchange is offered. The endowment effect is measured by the difference between what the seller is willing to accept (WTA) and the buyer is willing to pay (WTP). When participants were given one pen and then asked how much they would need to be paid to give it up a big difference, and thus a robust endowment effect was observed. The difference between WTA and WTP was nearly as strong when participants were given three pens and asked how much it would take for them to part with all three. However, when they were given two and asked to give up one, or even given three pens and asked to give up two, the difference between what they were willing to accept, and what buyers were willing to pay reduced significantly, suggesting scenarios where the endowment effect may be strong, and others where it may be weaker or may even disappear. In the coming years, we will see more and more studies that look at how well “canonic” principles fit with more nuanced choice scenarios. I think this is a wonderful thing for practitioners, as it will open up new ways to think about changing behavior. Exceptions to rules are good news for creative thinkers. Loss aversion has acquired an almost “rule” like status among those who study decision making, and to a large extent by practitioners who use Schurr, A., & Ritov, I. (2014). The effect of giving it all up on valuation: A new look at the endowment effect. Management Science, 60(3), 628–637. 16

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principles from behavioral economics in their practical work. In 2011, Daniel Kahneman wrote: The concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics. And while my view is that loss, in some way, affects many behaviors, practitioners shouldn’t assume that prospect of a loss will always have greater effect on behavior than a similarly sized gain. The study from Schurr and Ritov shows the endowment effect (often closely associated with loss aversion) can be reduced, even nearly neutralized when it involves giving up some rather than giving up all. Context and individual differences (for example, levels of hormones such as cortisol and norepinephrine and formative life experiences) can all have an effect on moderating loss aversion. David Gal and Derek Rucker created something of a stir in the circles of behavioral economics, when they published an article in the Journal of Consumer Psychology in March 2018 titled “The Loss of Loss Aversion: Will It Loom Larger Than Its Gain?”17 The main ideas in the article challenged a sometimes-blind acceptance of loss aversion as an explanation for behaviors that fly in the face of rational decision making. For example, Gal and Rucker argue that loss aversion is not required to explain status quo bias, and that inertia may often be down to the absence of a psychological motive. While the loss specific to the valuation of goods may not be the driver, I would suggest another loss can contribute to inaction, which is the expenditure of mental or physical effort. That said, Gal and Rucker’s summary of their paper points to an important readjustment. Our main conclusion is that the weight of the evidence does not support a general tendency for losses to be more psychologically impactful than gains (i.e., loss aversion). Rather, our review suggests the need for a more contextualized perspective whereby losses sometimes loom larger than gains, sometimes losses and gains have similar psychological impact, and sometimes gains loom larger than losses. Though written as part of an academic debate, this paragraph is highly relevant for practitioners. Perhaps even more than academics studying behavior in the lab, practitioners have to take what Gal and Rucker call a Gal, D., & Rucker, D. D. (2018). The loss of loss aversion: Will it loom larger than its gain? Journal of Consumer Psychology, 28, 497–516. doi:10.1002/jcpy.1047. 17

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“contextualized perspective.” In the lab, you can control context. In the real world, context is often beyond your control, and as we’ll discuss in Chapter 12, “If Content Is King, Context Is Queen,” context can change pretty much anything.

SCARCITY We’ve all felt FOMO – or “fear of missing out.” The Urban Dictionary gives the following as an example: Billy’s fomo grew stronger when all of his friends had tickets to the upcoming show! Against all good reasoning, he went to the venue anyway without tickets! People’s fear of missing out is probably most present when people feel that something may be scarce. “Whatever is rare, uncommon or dwindling in availability – this idea of scarcity – confers value on objects, or even relationships,” Robert Cialdini said. On the telephone, people are less likely to remain on hold if they are told, “someone will be available soon” rather than if they are told that “all agents are busy.” The first scenario suggests the service is inefficient; the second makes people wait for hard-to-come-by, or scarce, service. One of Robert Cialdini’s “six rules of influence” is the scarcity principle, according to which people assign more value to opportunities when they are less available. Scarcity, or sense of rarity of some sort, should be implicit in every luxury brand’s narrative. Cues of scarcity can come from descriptions of precious materials or from manufacturing processes that clearly can’t keep up with demand (“handmade by a dying breed of artisans in ateliers in the Pyrenees”). Or even blatant marketing approaches such as “limited editions” or time-limited offers where we might know rationally that the scarcity is artificial, but our instincts get the better of us. Ferrari’s famous approach of making one car less than anticipated demand is a brilliant application of the scarcity principle. Digital environments provide great opportunities to communicate scarcity in real time. If you book flights online, you have probably noticed more and more airlines informing you that there are “only two seats remaining at this price.” This is very likely an effective tactic, prompting choosers to be decisive in favor of that airline. But airlines are proof that you have to handle scarcity carefully. In the past, they have come

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under criticism for using the scarcity created by the high demand of peak time traveling periods to ramp up prices. This can lead to inequity aversion, which as we saw in Chapter 5, “Getting Familiar,” can lead to people walking away from a brand. The premium spirits market is reliant on products with built-in appeals to scarcity. An “18 Year Old” whiskey is, by definition, a limited supply – should demand have skyrocketed in 2020, you can’t turn the clock back to 2002 and make another batch. Nor after a tepid first quarter could you cut production for the rest of the year. For distilleries, it is close to impossible to forecast demand, as so much can change in 18 years (back in 2002, those distillery forecasting executives may have been using the click wheel to find songs in the 5-GB memory of their first-generation iPods to take their minds off the task). Not surprisingly, sometimes distilleries get it wrong – even on less-aged whiskies like Maker’s Mark and Knob Creek.18 Both brands were caught out by higher-than-anticipated demand. Knob Creek is aged nine years (significantly more than the legally required minimum of two-year aging for bourbons) and their volume forecasts for 2009, which determined their production in 2000, were way below what demand turned out to be. (Personally, I put this down to the launch of the TV series Mad Men in 2007 and the lead character, Don Draper’s affection for the bourbon-based cocktail, the Old Fashioned, but the growth of export markets was probably a more important factor.) In 2007, the team at Maker’s Mark planned production for their six-year aged brand. But come 2013, like Knob Creek four years earlier, Maker’s Mark didn’t have enough inventory to meet drinkers’ demand. (I’ll continue with my Mad Men ­hypothesis – 2007 was the year the first season started – by 2013 it was a global phenomenon, and a tastemaker for anyone likely to be drinking premium spirits.) Each brand took a very different approach to deal with its respective shortage. The typical reaction of most marketers to having no product to sell would be to reel in marketing and advertising spend to an absolute minimum. In 2009, Knob Creek did the opposite – running a campaign to celebrate their supply shortage. Ads showing the last drops being poured from an empty bottle ran with a headline saying, “Thanks for nothing.” The brand’s most loyal drinkers were given T-shirts that said, “I survived the At the time both brands were owned by Beam, Inc. They are now part of Beam Suntory: Maker’s Mark is in their “Global Icon Brand” group, while Knob Creek is a “Rising Star” brand. 18

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drought of 2009” and a letter that thanked them for creating the “‘situation’ here at the distillery” which had led then to running out of Knob Creek. The well-crafted letter went on to reassure them that normal service would return soon without any compromise to quality: Keep in mind that our next batch will be fully matured and ready to go this November (we’d bottle it now to boost supply, but then it wouldn’t be aged a full 9 years, and it wouldn’t really be Knob Creek). The letter closed with a final nod to scarcity to stoke anticipation for the new batch. Now, hang in there and cherish every drop of Knob Creek like it’s the last, because, well, it could be. Until November anyway. While not having access to sales figures, my guess would be that this approach helped Knob Creek become an even stronger brand when the drought ended, and supply and demand were realigned. Maker’s Mark took another route. Realizing that it wouldn’t have enough spirit to meet demand, it came up with a strategy to help it boost supply by 6%. Bill Samuels Jr., the son of the brand’s founder, announced on February 11, 2013, that they would dilute the spirit from 45% alcohol (90 proof) to 42% alcohol (84 proof). They insisted that drinkers wouldn’t notice the change, as “even Maker’s Mark’s professional taste testers couldn’t tell the difference.” One week later, after considerable outcry from their customers, Samuels announced that they were reversing the decision. He noted in a letter that was posted online: The unanticipated dramatic growth rate of Maker’s Mark is a good problem to have, and we appreciate some of you telling us you’d even put up with occasional shortages. Even for the brand’s loyal drinkers, waiting was a preferable option to dilution. This apparent discrepancy – preferring to not have something instead of having a lesser version – reveals another interesting aspect of scarcity. We talked about our desire for “now” earlier, and we’ll see later how we find it difficult to muster the self-control to put off consuming things immediately, even when there are benefits in the delay. When a product is in limited supply and

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people accept that they have to wait, the result can have a surprising emotional upside. Anticipation is a powerful force. While the anticipation of bad things is often more stressful and painful than the event itself, the anticipation of something positive often has a greater emotional effect how we feel about the experience itself. Researchers from the Netherlands looked at this phenomenon by measuring the happiness of a sample of “vacation-takers” and compared them with a control group of people who were not taking a vacation over the period of the research.19 The broad finding was that the vacationers appeared no happier than the nonvacationers, but they were happier during the period where they anticipated the vacation. Jeroen Nawijn, who led the research, said in an interview with the New York Times20: The practical lesson for an individual is that you derive most of your happiness from anticipating the holiday trip … What you can do is try to increase that by taking more trips per year. If you have a twoweek holiday you can split it up and have two one-week holidays. You could try to increase the anticipation effect by talking about it more and maybe discussing it online. While not every product experience is as much fun to anticipate as a vacation, there are a couple of interesting takeaway points for marketers here. As Nawijn suggests, anticipation is increased by discussion, so encouraging potential choosers to discuss what they will do with your product could be a way to increase emotional engagement. Another point is that breaking an experience down comes with emotional benefits. Two 1-week vacations will yield more overall happiness than one 2-week trip. How can marketers make one block experience of your product a number of smaller or shorter ones? I think of scarcity almost as a super food in the world of influence strategies. It does many different things. It makes a product seem superior, because

Nawijn, J., Marchand, M. A., Veenhoven, R., & Vingerhoets, A. J. (2010). Vacationers happier, but most not happier after a holiday. Applied Research in Quality of Life, 5(1), 35–47. 20 Parker-Pope, T. (2010). How vacations affect your happiness. New York Times, February 18. 19

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it suggests demand outstrips supply. It has implied social proof – because we figure that if something is scarce, demand must have been high. For example, the opening line of the Knob Creek ad I mentioned earlier reads “You see, because we have so many loyal customers out there, demand for Knob Creek Bourbon has finally outstripped supply.” Scarcity has the power to get people to think about future consumption and experience it in a positive and emotional way, and by appealing to our fear of missing out, scarcity drives action. The effect of scarcity is a rare thing in itself. The takeaways from this chapter are: • Prospect theory is a key building block of behavioral economics, and while we shouldn’t take it as an immutable law, loss in its many forms can be found as force behind many different choices people make. • The endowment effect leads people to attribute greater value to what we feel we own. Creating feelings of ownership may be helpful to practitioners in some scenarios. Equally, feelings of ownership of something may prevent people from being open to alternatives. • Status quo bias means that we have a preference for the current state of affairs. • Appeals to scarcity are very powerful. Scarcity leverages fear of missing out (triggering loss aversion) and suggests the object or service is high quality and demanded (creating implicit social proof). It can also stall instant gratification and make people wait for something, allowing for the emotional benefits of anticipation. What other people gained from this chapter: • “The notion that your superior innovation should resist standing apart from the category leader is so counterintuitive, it hurts … and likely doesn’t get implemented very often. Overcoming the pain and trying out this neat little piece of jiu-jitsu could prove very productive.” • “In my first working weeks I was taught that the most powerful marketing tool of all is sampling. What I didn’t know then was how the endowment effect ascribes greater value to something that people own.” (Author’s note: While the endowment effect and the sense of ownership it ascribes is one of the things that makes sampling effective, another is likely to be the very powerful evolutionary drive of reciprocity.)

9 MAKE PEOPLE FEEL SMART, ATTRACTIVE – OR EVEN LUCKY

How people feel at the time of a choice can change the choice they make, how they make it and how they feel about it afterwards. Years ago, a copywriter I worked with told me that he was continually surprised by how even the most intelligent people were susceptible to flattery. I was doubly flattered when he then proceeded to flatter me. Behavioral science backs up my colleague’s observation. Even a disembodied voice is capable of effective flattery. A computer voice was used to flatter participants while they completed a quiz, and the flattering comments led people to not only perform better at the quiz but also to report more positive emotions, more positive evaluations of the interaction, and more positive regard for the computer – and all of this happened even though people knew that the flattery from the computer was purely random!1 As Robert Cialdini said, “We are phenomenal suckers for flattery.” Flattery might not just make us feel better about ourselves but also the person (or entity) who flatters us. It may influence our decisions as well. As the computer flattery study showed, flattery influences us even when we know it is insincere. Another behavioral science research study, tellingly titled “Insincere Flattery Actually Works: A Dual Attitudes Perspective,”2

Fogg, B. J., & Nass, C. (1997). Silicon sycophants: The effects of computers that flatter. International Journal of Human Computer Studies, 46(5), 551–561. 2 Chan, E., & Sengupta, J. (2010). Insincere flattery actually works: A dual attitudes perspective. Journal of Marketing Research, 47, 122–133. 1

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demonstrates the effect of flattery in a way that also tells us something about the lasting power of information we acquire nonconsciously. Participants were exposed to an advertisement from a fictitious fashion retailer that flattered their style and fashion sense. When given time to think about the complimentary advertisement, respondents discounted the flattery. The advertisement was impersonal, so how could the flattery be sincere as it wasn’t a comment on their personal sense of style? And wasn’t there clearly an ulterior motive? The store was just trying to get them to part with their cash. But the researchers looked beyond these considered reactions in two ways. First, they asked themselves: What would happen if the participants didn’t have the time to think about the message (which is, of course, the normal state of affairs when people are exposed to advertising)? Second, they asked, “What would happen after the passage of some time?” What the researchers found was that the flattery that had been rationally discounted at an explicit level still had a powerful effect. One group of respondents (the explicit state) were given as much time as they needed to indicate how they felt about the store while another group (the implicit state) were required to respond quickly, within five seconds. This technique, measuring response speed to assess the strength of agreement or disagreement with a statement, is a form of implicit association; we’ll discuss this technique in more detail in Chapter 15, “Think Differently about Market Research.” Associations made about the store were stronger and more positive by people in the implicit state compared to people in the explicit state, who had more time to consider the ad and their feelings. The researchers repeated the experiment but added a twist. As a way of saying thank you, participants were offered a coupon from either the store that had served them up the flattering message or from a competing store that didn’t deploy flattery in its approach. One group of participants made their choice immediately while the other group was contacted three days later to indicate their choice. In both cases, participants preferred the choice from the store that had flattered them. This may have been because of the flattery but equally could be because of the effect of familiarity (everyone had been exposed to the flattering store earlier in the experiment) that I discussed earlier, in Chapter 5, “Getting Familiar.” But what is really interesting is that after the three days

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elapsed, the number choosing the coupon from the flattering store increased from 64% to 80%. One possible explanation is that the rational moderating of the flattery (“they’re just trying to get me to part with my cash”) doesn’t last as long as the nonconscious appeal of the flattery itself. When people feel attractive, it affects their behavior and choices. In a paper titled “Of the Bold and the Beautiful,”3 researchers report on six studies where they primed some participants in ways designed to make them feel attractive. In each experiment, there was also a control group that had not been conditioned in this way. In one experiment, the participants were given the option of a safe choice for a vacation (everything average, nothing exceptional) and a vacation spot that had exceptionally positive aspects but also included some negative ones. Those primed to feel more attractive were more likely to choose the more extreme option. In other experiments, those primed to feel attractive were more likely to move away from a default choice in a mundane area of public policy (suggesting they were more open to shifting from the status quo); more likely to be optimistic about their future; and more likely to be unrealistic about the date by which they would complete a homework task. When people feel attractive, it seems they make bolder and more extreme choices, suggesting that marketers could use this tactic for a wider range of applications than fashion or skincare. Allowing people to feel smart, or to feel they have mastery in an area relevant to the choice they are making, can also have an effect on choices. Similar to when people feel attractive, feeling smart, competent, or like an expert can lead them to make quicker and bolder decisions. Increasing people’s confidence makes them act more quickly and feel better about their choice. Confidence can be increased with simple mechanics like quizzes that let people feel they know more about the product category than they thought they did. Psychologists call this feeling self-efficacy. It is the condition we attain when we have confidence in ourselves to achieve a specific goal. It is very

“Of the Bold and the Beautiful: How Feeling Beautiful Leads to More Extreme Choices” Margaret Gorlin, Yale School of Management; Zixi Jiang, Guanghua School of Management; Jing Xu, Guanghua School of Management; Ravi Dhar, Yale School of Management. 3

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much evidence based – we reach a state of self-efficacy when we realize, or it is revealed to us, that we have what it takes to get us to the next level. Unlike self-esteem, which is more a general sense of feeling good about ourselves, self-efficacy relates to our performance as it relates to specific skills and processes. In recent years, things that improve self-efficacy, such as praise or reinforcement of actions or process, have been seen to have a more positive effect with both children and athletes than praising the individual. Saying, “You really stuck at that math problem” as opposed to, “You are really good at math” leads to people valuing the process rather than overvaluing their innate gifts. For marketing, helping someone increase their self-efficacy in a particular area is a win-win for both the marketer and the chooser. One benefit is that if people feel confident in a process, they are more likely to put the effort in to complete it. Another is that when people have been primed to have a sense of their self-efficacy in an area where they will make more daring choices, they are often more decisive and more likely to make decisions that overcome inertia or go against the default or status quo.4 Albert Bandura, one of modern psychology’s giants, puts self-efficacy at the heart of his social cognitive theory. He explains that: People avoid activities and situations they believe exceed their coping capabilities. But they readily undertake challenging activities and select situations they judge themselves capable of handling.5 Making the decision to choose your product or service a task that choosers “judge themselves capable of handling” could be a very powerful precursor to choice itself, especially for complex decisions. There is a specific form of self-efficacy that relates to this, which is not surprisingly called decisionmaking self-efficacy (DMSE). In categories where there is even a hint of complexity in the decision process, enhancing DMSE should be an objective for marketers. When choosers have higher levels of DMSE, they feel more confident in their choices and are more inclined to put effort into evaluating more

Krueger, N., & Dickson, P. (1994). how believing in ourselves increases risk taking: Perceived self-efficacy and opportunity recognition. Decision Sciences, 25(3), 385–400. 5 Bandura, A. (1993). Perceived self-efficacy in cognitive development and functioning. Educational Psychologist, 28(2), 117–148. 4

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information and a wider range of choices. In a study,6 titled “Choosing with Confidence: Self-efficacy and Preferences for Choice,” the researchers gave participants the task of choosing a photo printer (this choice was selected by the researchers as a pilot study showed that the people were somewhat familiar with photo printers, but unlikely to own one). The participants provide answers to questions they were told would indicate their ability to make a good choice and were then either given feedback saying the decision would be easy for them (high DMSE condition), that it would be difficult for them (low DMSE condition) or were given no feedback (control). Those who were in the low DMSE condition reviewed less options and had less of an appetite for information. In a classroom demonstration, Charisse Nixon, an associate professor at Penn State gave students three words to rearrange – a classic anagram problem. The students weren’t told there were two lists, but the students on the right-hand side of the class received WHIRL, SLAPSTICK, and CINERAMA, while on the left-hand side, the students received TAB, LEMON, and CINERAMA. The “trick” in the exercise is that the words WHIRL and SLAPSTICK are actually not solvable. Try as you might, you won’t find any different words in them. Whereas TAB and LEMON solve easily as BAT and MELON. The interesting thing is that the students who been given the easy puzzles as the first two words on their list found it relatively easy to rearrange the third word CINEMARA as AMERICAN. Whereas the students who had struggled and failed with the impossible words were much less likely to find another word in CINEMARA. Nixon uses this exercise to demonstrate learned helplessness, but it is also a great demonstration of the power of self-efficacy. As practitioners, we need to consider how we help choosers approach the choices we would like them to make with a high level of DMSE. So how might we go about doing that? One approach is to borrow from both the research on photo printers and Charisse Nixon’s anagram exercise. Asking choosers to answer questions that are easy to answer about their knowledge of the category could help build their decision confidence. For example, “which uses the most data:

Reed, A. E., Mikels, J. A., & Löckenhoff, C. E. (2012). Choosing with confidence: Self-efficacy and preferences for choice. Judgment and Decision Making, 7(2), 173–180. 6

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audio or video?” could be a good question to build DMSE for choosers who are selecting a mobile data plan. Providing experiences that allow people to see that they are acquiring knowledge, discernment, and savoir faire can lead them to be more decisive and to make bolder choices with confidence, which in turn increases their appreciation of the goods they have chosen. Nespresso is a case in point. It provides a coded system of names and colors that may appear complex at first but is learned quickly by users, making them feel more expert in the system and about coffee in general – even though the action of making a Nespresso requires nothing more than inserting a capsule and pressing a button. High-performance car brands know the value of improving drivers’ self-efficacy. Audi, BMW, and Mercedes AMG have all developed driving academies. During a day-long courses at racetracks around the United States and other countries, “civilian” drivers are taught how to drive high-performance vehicles. By increasing these drivers’ confidence in handling these machines, I would be pretty certain the experience increases the likelihood of their buying high-performance cars in the future. Simply knowing that information is available can also help boost c­ hoosers’ confidence. Recent work from David Faro at the London Business School suggests that the availability of tools improves performance through creating greater perceived self-efficacy, even if those tools are not used: […] merely having a task-relevant product available for consumption (without actually consuming it) can improve performance. Participants with access to coffee during a reaction-speed task performed better than participants without access to coffee. Participants with access to a dictionary solved more word puzzles than those without access to a dictionary. We propose that having the product available enhances consumers’ perceived self-efficacy to cope with a situation or a task. In line with this account, task difficulty and feedback on a preceding task moderate the effect, and a measure of self-efficacy mediates it.7 Faro, D., Heller, M., & Irmak, C. (2011). Merely accessible: Products may be effective without actual consumption. In D. W. Dahl, G. V. Johar, & S. M. J. van Osselaer (Eds.), NA – Advances in consumer research (Vol. 38). Duluth, MN: Association for Consumer Research. 7

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This increased self-efficacy by merely having information available may have important implications on how marketing materials, particularly in the area of product information, are evaluated. Often, marketers consider information effective only if it is shown that consumers have used it. But it is quite possible that materials and information may be at their most influential when they are merely available, rather than used. While simply executing a data dump is not an advised approach, the issue for marketers may not be volume of information they provide as much as being smart about how they connect and curate it. As Edward Tufte, the celebrated authority on information design and data visualization, is reputed to have suggested, the problem isn’t so much information overload as organizational underload. Feeling lucky can also help. A number of studies8 by Lysann Damisch and colleagues from the University of Cologne showed that cues of good luck could both improve performance and increase perceived self-efficacy. In one experiment, the researchers simply said the German equivalent of “I’m keeping my fingers crossed for you”9 to some participants before they engaged in a game that required dexterity. In another experiment, some participants were asked to putt with a golf ball they were told was lucky, while others were told they were using an ordinary golf ball. In both experiments, participants who received cues of good luck performed significantly better than those who didn’t. One thing that is as powerful as feeling smart is feeling that you have outsmarted the system. According to a global quantitative study,10 I was involved in a number of years ago, the most positive aspect of marketing information was that it made people feel smarter about their choices. The second most positive benefit was that “it helped them beat the system,” which was particularly true in Brazil, India, and China.

Damisch, L., Stoberock, B., & Mussweiler, T. (2010). Keep your fingers crossed! Psychological Science, 21, 1014–1020. doi:10.1177/0956797610372631. 9 The German phrase is “Ich drücke Dir den Daumen,” meaning “I press my thumbs for you.” 10 “New Realities – Consumer Decision Making in Today’s New Information World” is proprietary research from Interpublic Group that polls attitudes about information sources among several thousand consumers across the world’s seven most important economies. 8

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After our succession of Mini Cooper purchases detailed earlier in this book, in 2017, my wife and I took out a lease on a BMW i3. We’re very happy with our choice, but there is one real moment that stands out for me in driving this satisfaction. A short time after we got the car, I was heading along the 101 down to San Francisco from Sonoma County in horrible traffic. I remembered, that even though I was the sole occupant of the car, because it is an electric vehicle (EV) I was allowed to use the (nearly empty) carpool or “high-occupancy vehicle” lane. I’m a little ashamed to say that I thoroughly enjoyed breezing past the countless cars (I think I stopped counting them after 200) stuck in a logjam. I think my delight wasn’t just about avoiding the frustration and lost time of being stuck in traffic but was also about how my smart choice (and in my mind it had become my smart choice, rather than a decision I had taken together with my wife) had given me one up on the poor souls in the other three lanes. I realized the full power of what I had experienced about a year later. I was talking at an event where Jonah Berger, a professor at Wharton and author of two excellent books Contagious: Why Things Catch On and Invisible Influence: The Hidden Factors That Shape Behavior was also a speaker. Berger talked about how our choices are communication to others. Our choices communicate because they are visible – they are like badges of our values and accomplishments. But they also communicate because we tell people about them. And we tell people about them not so much because we want to help others make good choices but because we want people to think we are discerning and smart. I don’t think I have ever talked more about a choice of car than I have about our choice of a BMW i3. At their best, our choices help us feel smart and by (sometimes not so subtle) signaling suggest to others that we are smart. And beating or “using” the system – in my case with the BMW i3 getting a federal or state rebate, and access to the carpool lane while driving alone – makes us feel we are smarter than the average Joe. Research shows when we feel we have beaten the system we feel greater affinity to the brands or products we have done this with. And what feels better than being the smart guy passing the snarledup traffic in the carpool lane even though it’s only you in the car? Actually, there is something that feels better than doing that … telling people about it afterward. And that of course is also good news for marketers. Feeling they have beaten or outsmarted the system is emotionally rewarding for people – even if it takes a little deceit to do so.

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Now, don’t judge me on this statement, but I will go as far as to say that lying, while not morally desirable, is entirely natural. In 2011, at South By Southwest (a music, film, and interactive conference and festival held in Austin, Texas, every year), I attended a talk by Genevieve Bell, who was then the Director of User Experience at Intel Labs. Bell, who is also well known as an anthropologist, was profound, witty, and touchingly human on the subject “Our Devices: How Smart is too Smart?” One of her key points was that for technology to be completely natural, it had to become smart enough to intuitively keep our secrets and to tell lies for us. Not big, whopping lies, just the little lies that lubricate relationships or ease social awkwardness. Or on occasion, the lies that get us something we want, that strictly speaking, we may not be entitled to. Ever wondered why those friends and family offers (they work really well by the way) get passed around with such glee by people who are neither friends nor family of employees of the company? Research from Christina I. Anthony and Elizabeth Cowley11 of the University of Sydney may cast some light on why those offers work. Their findings suggest that there could be benefits in turning a blind eye to, or even encouraging, consumers to be a little “economical with the truth.”12 According to Anthony and Cowley, by the time the average person is 60, they will have told 43,800 lies. Their research looked at what happened when people had to be loose with the truth in order to get a product or service they wanted, but that strictly speaking, they weren’t entitled to – a bit like those “family and friends” offer. In one lab experiment, participants were given the opportunity to misrepresent their product usage details during an interaction with a service provider so that they qualified for a small incentive. If denied, they tended to be less happy, but when they succeeded in qualifying for something, that strictly speaking, they weren’t entitled to,

Anthony, C. I., & Cowley, E. (2012). The labor of lies: How lying for material rewards polarizes consumers’ outcome satisfaction. Journal of Consumer Research, 39(3), 478–492. 12 A phrase famously used by then UK Cabinet Secretary, Sir Robert Armstrong, during the 1986 Australian “Spycatcher” trial, in defense of a statement he had given. “It contains a misleading impression, not a lie. It was being economical with the truth.” 11

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they were significantly happier than the consumers who were entitled to it. The psychologist and economist George Loewenstein sees a benefit for brands in the halo of this happiness and commented The silver lining for the retailers is that if they are lied to, maybe the consumer is getting away with something they shouldn’t but at least they get the benefit of goodwill from the consumer. Beyond the creation of goodwill, I think there may be something informative for marketers in this research, and it relates to the value of surprise that we discussed in Chapter 5, “Getting Familiar.” Marketers frequently give discounts or give away free promotional items, but more often these are things to which their customers may feel that they are entitled. Prefacing these offers with phrases like, “As a valued customer …” may make the marketer feel that they are getting more “credit” for the offer, but letting customers feel they are getting the reward because of their smarts, good fortune or even, heaven forbid, their willingness to be a little loose with the truth, may lead to greater satisfaction. That a company has bestowed something on them can make a customer feel good, but if customers think they got that reward due to something innate, because of something special about them, it makes them feel even better. The takeaways from this chapter are: • Even though people discount flattery at a rational level, it works at an implicit level. • Having confidence in one’s ability to complete tasks or achieve goals is called self-efficacy. Marketing can really help people reach this state, which can be emotionally and functionally beneficial for the end user or chooser. In the past, brands tried to position themselves as the experts. From the perspective of helping people make confident choices, focus more on helping them feel expert. • If you can make people feel confident in their ability to make a decision they will make it more quickly and more boldly. Quizzes and games can really help with this. Asking them a question (like “which uses the most data, video or audio?”) could create a sense of decision-making selfefficacy in choosing a complex product or service.

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• Don’t always “grant” your chooser’s benefits and offers. Sometimes you can benefit more by letting them feel that they have acquired them through their own smarts or even just good fortune. What this chapter made other extremely intelligent people think: • “I won’t be the only one to read this and wonder whether we should spend less time figuring out how to declare that our brand is a winner, and a lot more making sure it’s the customer that feels victorious.” • “[…] this explains the popularity of the ‘hack’ that has dominated social media in the past few years. The ‘hack’ is the social celebration of the consumer having outsmarted the corporate system in a way that fits their life even better than intended. (They ‘got away with more’ out of the product than anyone intended.)”

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10 MAKE IT EASY – FOR THE MIND AND THE BODY

Humans’ innate tendency to save physical and mental energy can work for you. Years ago, I found myself playing soccer with a pig-tailed macaque (a medium-sized monkey) on the Thai island of Phuket. I was working for an advertising agency in Bangkok at the time, and we were shooting a TV commercial for one of our clients, whose marketing program included encouraging Thai kids to play sports and attend sports camps. The commercial’s story was about a young boy from the rural south of Thailand who practiced his soccer shooting skills while his pet monkey played goalkeeper. The pig-tailed macaque has been trained and used in the south of Thailand for centuries to harvest coconuts. The monkeys leap around in the coconut palms and bite the coconuts off at the stalk. Because the monkeys then throw the coconuts down to the humans below (who pile the coconuts into trucks for transport), the use of the monkey catching and throwing a soccer ball made sense to the Thai audience. In the commercial, the monkey’s athleticism and reflexes made him a difficult opponent to score against unless the boy managed to shoot low into the corner of the goal. The commercial ends with the boy scoring the winning goal at a tournament in a big city by employing the same tactics against a human goalkeeper. At one of the many breaks in the shooting of the commercial (and, if you have ever attended a shoot, you will know it is a slow-moving and tedious process filled with many such breaks), I asked the monkey’s trainer if I could try and score a goal against the monkey. 135

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The macaque was a very good goalkeeper – his razor-sharp reactions and acrobatic leaps made him almost unbeatable. Any shot within a yard or so to either side of him he didn’t just stop, but, diving at the last second, would catch the ball cleanly and then roll it back to me (or at least in my general direction). I noticed after a while that any shot that was even just a little more than a yard away from him beat him every time, but not because he was making a futile effort for the sake of appearances, as we see professional (human) goalkeepers doing all the time when attempting to save penalties.1 The monkey simply ignored anything more than a yard away, to the point that it seemed as if a ball flying just beyond his reach didn’t even exist. The ball was only of interest when he knew it was catchable, hence the lastminute dives. As soon as it became apparent the catch was easy, he didn’t miss an opportunity to act. If the catch was difficult, even just a little difficult, the instinct to act never kicked in. It seemed as binary as that. From an evolutionary perspective, this binary scenario makes a lot of sense. Effort uses calories (energy), and most animals seem to have an intuitive sense as to when effort exceeds the reward. Think back to Chapter 6, “Thanks for Sharing (Whether You Meant to or Not),” and the gulls who were eyeing the sandwich you were enjoying on a park bench. They would noisily squabble over a large crust you might have thrown them. But if you were to chuck them a small crumb, it would be a different story. An individual bird may deign to eat it, if the crumb lands very close it. But a similarsized crumb thrown four or five feet from a bird would be ignored. We, being animals, are in this respect just the same as the gulls and the pig-tailed macaque. One of the simplest and most accurate ways of predicting whether we pursue one behavior, or another is to work out which one, from a cognitive and physical perspective, is the easiest. That’s the one we’ll choose. Our ancestors from the Victorian era (a mere five generations ago) might chide us for committing the cardinal sin of sloth for following the path of least resistance. However, from an evolutionary perspective, sloth is simply

A study shows when soccer goalkeepers face a penalty, they are likely to pick a side before the ball is kicked and dive left or right as an extravagant display of effort, even though the probability distribution of kick direction means their best strategy would be to stay in the center of the goal. Bar-Eli, M., Azar, O. H., Ritov, I., Keidar-Levin, Y., & Schein, G. (2005). Action bias among elite soccer goalkeepers: The case of penalty kicks. Journal of Economic Psychology, 28(2007), 606–621. 1

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common sense. Like other animals (including sloths), we are masters of instantly estimating the metabolic cost of an action. For any marketer intent on creating a movement or starting a trend, Duncan Watts’ book Everything Is Obvious* (*Once You Know the Answer) is well worth reading. By studying huge data sets (Watts is a data scientist and a social scientist), Watts pours cold water on the theory that getting a few influencers to do something will trigger a bigger movement in the mainstream population. This theory, popularized by Malcolm Gladwell in The Tipping Point, would be wonderfully convenient for marketers (and lucrative for influencers) if it worked with any degree of frequency. Watts’ point is that it is very often the less obvious factors, or ones lying deeper in the weeds, that make movements happen. These factors are often difficult to predict (unless you know the answer of course). In his book, Watts writes about a question he asked Columbia University undergraduates: Why might the rate of people consenting to donate their organs in one European country be as low as 12% and in another as high as 99.9%?2 This question had students coming up with all manner of explanations: Was such a difference caused by religious reasons? Or were the countries very different politically? Or culturally? When Watts then revealed that these countries were neighbors, with a common language, cultural similarities, and a lot of shared history, explaining the difference became even more difficult. Why might organ donation consent in Austria be a near perfect 99.8%, while the Germans could only muster a measly 12%? It turns out that this difference is not only observable between Austria and Germany. The question could also be asked about fellow Scandinavian countries, Denmark (4.25% consent rate) and Sweden (85.9% consent rate), and the adjacent low countries, the Netherlands (27.5% consent rate) and Belgium (98% consent rate). What differentiates these countries is not political or cultural. Rather, it is a simple administrative procedure on a form. The three countries with the lowest rates in Fig. 10.1 all required people to consent to organ donation (that is, they had to check a “yes” box).2 The There could be political and cultural factors underlying the choice to offer “yes” or “no” as a default. I was discussing this research with a German colleague, Julian Lambertin, who is also fascinated by social and behavioral sciences. His hypothesis was that authorities using “yes” as a default would still be politically unacceptable in Germany as it may be seen to echo the Nazi regime’s subversion of free will. The use of “opt outs” has drawn criticism as it can make important choices mindless. Fortunately, a “free choice” or “active choice” option where you are asked to check either a “yes” box or a “no” box still works significantly better than a single “yes” to opt in box. 2

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Fig. 10.1:  Effective Organ Donation Consent Rates Across Neighboring European Countries.

three countries with the highest rates all required that people opt out of organ donation. An important caveat is that while the opt out lead to higher consent rates, this didn’t necessarily translate into more organ donations. We cover this in more detail in this footnote.3 But back to actually influencing the choice to give consent. The physical effort of changing or not changing the check box is negligible. But the mental effort of making the choice to go against the default means that people naturally gravitate toward the easy choice – the default. This, of course, is

While the opt-out approach can lead to significantly more people joining the register, there is evidence that in most countries or states, this doesn’t translate to a substantial increase in organs donated. In most jurisdictions, the ultimate decision remains with the family of the deceased. Dr Magda Osman, lead author of a study that looked at how families of deceased might react, reports “We show it’s harder to judge the underlying wishes of the deceased if they were on an opt-out and mandatory donation register. Why? Because making a free choice indicates what your preference is. If you don’t actively choose and you are listed as a donor on the register, then it isn’t clear if you really wanted to donate your organs. This matters because if in the event of death your relatives have to decide what to do, they may veto the organ donation if they can’t tell for sure what your underlying wishes were.” Many jurisdictions have moved to prompted, free or active choice. 3

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“powered” by that incredible force that drives inaction – the status quo bias that we covered a couple of chapters earlier. Although there seems little doubt that the main agent at work is the default, I think another force, social proof, may also play a part. If something is a default, the implicit message is that this is what most people normally do, and as we discussed earlier, social proof doesn’t need definitive statistics to do its work. Often a vague hint suffices. Another example of the use of defaults comes from a country I have visited many times, Zimbabwe. This country has been devastated by HIV and AIDS, with prevalence of the infection at nearly 13% of the adult population in 2018.4 A study conducted in antenatal care clinics5 in Chitungwiza, a socioeconomically disadvantaged community 25 km south of Harare, looked at how defaults affected the percentage of pregnant women who visited the clinics for antenatal care and took part in HIV testing. The standard procedure in these clinics was for the HIV test to be an “­opt-in” (meaning patients had to say they wanted it). In June 2005, that procedure was changed to be “opt-out,” with patients having the right of refusal. The researchers measured how the rates of testing changed during the first six months after the opt-out program began from June to November 2005. They compared the testing rates from this period to a six-month period when women had to opt in for the test. When the women had agreed to opt in to the test, 67% agreed to be and were tested for HIV; when women had to opt out, that figure rose to 99.9%. According to a senior health worker in Zimbabwe I spoke to, the optout approach has become the general procedure, despite there not being an official policy in place. Making something easy has two dimensions: making it physically easy (the earlier example about the impact of the physical act of checking a box may seem a little farfetched) and making it mentally easy. The latter is called cognitive fluency by behavioral scientists. However, before we get into the nitty gritty of cognitive fluency, let’s talk about the effects of making things physically easy. https://www.unaids.org/en/regionscountries/countries/zimbabwe. Chandisarewa, W., Stranix-Chibanda, L., Chirapa, E., Miller, A., Simoyi, M., Mahomva, A., …, Shetty, A. K. (2007). Routine offer of antenatal HIV testing (‘opt-out’ approach) to prevent mother-to-child transmission of HIV in urban Zimbabwe. Bulletin of the World Health Organization, 85(11), 843–850. 4 5

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In a study6 from 1976, researchers observed whether people took ice cream from a cabinet in a cafeteria. When the ice-cream cabinet was left open, people were significantly more likely to take an ice cream than when the cabinet was closed. A range of experiments7 by Paul Rozin and other researchers at the University of Pennsylvania looked at the effect of ease or difficulty of accessibility on food choices at a buffet. Their conclusion: Making a food slightly more difficult to reach (by varying its proximity by about 10 inches) or changing the serving utensil (spoon or tongs) modestly but reliably reduces intake, in the range of 8–16%. The requirement of a small amount of effort can make big differences to our choices. In an interview with Eric Barker on Barking Up the Wrong Tree, Dan Ariely describes another example of how effort works in practice: Here’s an experiment that Google did recently. The M&Ms in their New York office used to be in baskets. So instead they put them in bowls with lids. The lid doesn’t require a lot of effort to lift but it reduced the number of M&Ms consumed in their New York office by 3 million a month. One example where “easy” is really important is for the people who have chosen your product or service to sort out any issues they may have with it. In The Effortless Experience: Conquering the New Battleground for Customer Loyalty, Matthew Dixon, Nick Toman, and Rick DeLisi discuss how customer dissatisfaction correlates with the amount of effort the customer has to put into getting the problem resolved. In fact, they define the role of customer service as mitigating disloyalty by reducing customer effort. The Effortless Experience gives examples of other ways companies can make doing business easier. Old Navy, for example, has made a number of aspects of the shopping experience easier, especially for moms shopping with kids. They’ve lowered the height of the racks so that moms can see where

Levitz, L. (1976). The susceptibility of human feeding behavior to external controls. In G. A. Bray (Ed.), Obesity in Perspective (pp. 53–60). Washington, DC: U.S. Government Printing Office (DHEW Publication No. NIH 75–708). 7 Rozin, P., Scott, S., Dingley, M., Urbanek, J. K., Jiang, H., & Kaltenbach, M. (2011). Nudge to nobesity I: Minor changes in accessibility decrease food intake. Judgment and Decision Making, 6(4), 323–332. 6

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their kids are, and they reconfigured the merchandise and displays around an oval track with dressing rooms in the middle, so shoppers don’t have to ask where they are or seek them out. Old Navy stores have “quick change” areas for trying on items like jackets and sweaters that don’t require potential choosers stripping down to their underwear. Best of all, they’ve put stickers above the three hooks in the changing rooms. They started out with three different stickers – one said, “Love It,” the next “Like It” and the third “Not For Me,” but sometime around 2015 changed the middle “Like It” sticker to a “Love It” one as well. I think, by reducing the ambiguity of the middle (and thus reducing our aversion to ambiguity) Old Navy has made a strong idea even stronger. For the cost of three stickers per changing room, they are leveraging a number of strong behavioral forces. First, the labeled hooks make sorting what I like from what I don’t like cognitively and physically easier. Second, having two hooks with the label “Love It” implies social proof. People love the clothes so much they need two hooks to put them on. Third, and perhaps most powerful, I suspect that once something gets put on that “Love It” hook it triggers the endowment effect. (Remember the endowment effect is the force that makes us value things we feel ownership over and is discussed in Chapter 8, “Loss and Ownership.”) By simply putting an item on the hook labeled “Love It,” you have pretty much decided to buy it. I think that the Old Navy Hooks are a great example of finding and addressing channel factors. This term describes small things that can make a big difference in facilitating a choice. If you think about why you might buy one item of clothing over another, you could go to emotionally rich and subjective areas like self-expression and image management. Yet the small thing that drove the decision to actually purchase it might have been the presence of a simple hook that performed the function of clarifying your choice and making the next step simple and apparent. Back in 2015, I was on vacation in Budapest, Hungary, and stopped in a small supermarket and saw something I’d never seen before. The shopping carts (or trolleys if you prefer) were all fitted with magnifying glasses. The magnifier is fixed on the left-hand side of the cart’s handle. I think this is a genius idea – let me tell you why. First, the obvious – it makes it easier to read the small print (which seems to be getting smaller with every passing day) so shoppers can actually make some informed choices based on ingredients. I would also suggest that it might make it more likely for shoppers to reach for a product on a shelf, and to pick it up, knowing they can read the ingredients.

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Remember the endowment effect? When people touch or pick something up, they are more likely put a higher value on it, and potentially more likely to buy it. Finally, given that 90% of shoppers (and most other humans) are right-handed, they’ll most likely pick up the product with their right hand, and sweep it across their cart to examine the fine print through the magnifying glass located on the left-hand side of the handle. At this point, all things being good with the ingredients, it is much easier to simply drop it in the cart than to reach back and return it to the shelf. Making things easy can save more than your sight. It can save lives. According to 2017 World Health Organization report,8 diarrheal disease is the second leading cause of death in children under five years old and is responsible for killing around 525,000 children every year. A significant proportion of diarrheal disease can be prevented through safe drinking water and adequate sanitation and hygiene. Innovations for Poverty Action (IPA), a research and policy nonprofit that discovers and promotes effective solutions to global poverty problems, worked with a team of behavioral scientists and practitioners to encourage people in rural Kenya to add dilute chlorine to their drinking water. Adding dilute chlorine not only disinfects water but also provides ongoing protection from recontamination for over 24 hours. However, getting people to do this consistently had proven to be a stubborn problem. IPA and their team looked at a number of approaches, but one they designed and tested was a point-of-collection chlorine dispenser system that provided a free supply of chlorine at local water sources. This proved to be very successful, for a number of reasons. One is that it makes adding chlorine easy. “Piggybacking” the addition of dilute chlorine onto the primary action of collecting water and having a salient dispense at source made it easier to remember to add the chlorine (remember the phrase “two seconds and two steps is all it takes to forget to do something” from earlier in the book). The dispenser’s public location also helped. People could see other people using it, creating social proof. Equally, not using it became a visible omission that might lead to a negative judgment from others. The dispensers proved to be not just effective in changing behavior, but also remarkably cost-effective, providing chlorinated water for just US$1 per person per year.

https://www.who.int/en/news-room/fact-sheets/detail/diarrhoeal-disease.

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A classic study at Yale University9 demonstrated the importance of helping people map next steps. Using tetanus inoculation as their experimental model, Leventhal, Singer, and Jones found that merely instilling fear of tetanus in Yale University undergraduates was not enough to encourage them to get vaccinated. When the students were given a specific plan of action, such as a campus map with the student health center circled, they were more likely to be vaccinated for tetanus. Research also suggests that having people map out how they will go about doing something or doing it in ways that work for them further increases their chances of doing it.10 We used this approach for a strategy proposed to the Californian Public Utilities Commission for a program to prompt greater energy efficiency among Californian homeowners. Social marketing teams (these were largely volunteers who would go door to door in key neighborhoods, encouraging homeowners to take measures to save energy) went with a list of potential actions and then helped homeowners choose the action(s) that they felt they could achieve. The social marketing team would then ask the homeowner how they might carry out this action and then would give them additional advice on how to do it. Just making a process easier can have a dramatic effect on behavior. An excolleague of mine Anirban Chaudhuri, who is now an associate professor at India’s Great Lakes Institute of Management, told me of this powerful example: (Up until 2014) only about 35.5% of households in India actively maintained bank accounts. Efforts for financial inclusions of the Bottom of the Pyramid (as the largest, but poorest socio-economic group in India is known) in the past didn’t yield very much in the way of results until the launch of Pradhan Mantri Jan Dhan Yojana (Prime Minister People Money Scheme) on August 28, 2014. That day alone saw 15 million new savings bank accounts opened, mostly by blue collared workers and their socioeconomic equivalent. One of the most compelling reasons for this overwhelming response was the simplified account opening form that had just a few easy details Leventhal, H., Singer, R., & Jones, S. (1965). Effects of fear and specificity of recommendation upon attitudes and behavior. Journal of Personality and Social Psychology, 2(1), 20–29. 10 Leutzinger, H. (2005). Why & how people change health behaviors. Omaha, NE: Health Improvement Solutions. 9

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and relaxed documentary requirement for proof of address, which is often a challenge for migrant workers. In five months (from when the scheme launched up until early January 2015) about 106 million of these savings bank accounts has been opened. By June 2018, 318 million accounts had been opened. Ease isn’t just a physical or process thing. All of us (and it really is all of us) who have put off a mentally challenging task know the lengths we go to in avoiding the effort involved. Thinking competes with resources that we might use for other (often more immediately rewarding) things. While your laptop’s battery might drain more quickly while playing a movie than running a word processing program on which you are writing a document, your brain is more likely to drain quicker writing the document than watching the video. In Thinking, Fast and Slow, Daniel Kahneman writes about how, if you were taking a relaxed walk with a friend and you were to ask them to solve a complex math problem, they would probably stop in their tracks. A study from Stanford University found that how a question was phrased could make it easier or harder to answer.11 Researchers asked a series of hyperbolic discounting (Chapter 7, “Now, and the Future – Different Places with Different Rules) questions to participants while they underwent fMRI scanning. Participants answered questions in a “hidden zero” format (“Would you like $10 today or $15 next week?”) or “explicit zero” format (“Would you like $10 today and $0 next week or $0 today and $15 next week?”) The explicit zero format reduced discounting; people preferred the $15 next week over money today. Importantly, the explicit zero format also reduced the amount of work the brain had to do to answer the question. Processing information, be it a complex math problem while walking or answering a hyperbolic discounting question while in an MRI scanner, requires energy. Scientists refer to this mental effort as cognitive load. The term cognitive load connotes something heavy, so it’s perhaps not surprising that we favor decisions that require us to make less mental effort. Minimizing cognitive load is part of the power of the cognitive biases and heuristics

Magen, E., Kim, B., Dweck, C., Gross, J. J., & McClure, S. M. (2014). Behavioral and neural correlates of increased self-control in the absence of increased willpower. Proceedings of the National Academy of Sciences of the United States of America, 111, 9786–9791. 11

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that we have been discussing – that they are shortcuts means they help us avoid excessive mental effort. Our love of ease goes deeper than just the use of these mechanisms; a lively area of behavioral research suggests that as well as biases making decisions easy, we have a bias for the easy option. Decision science calls this area of research cognitive fluency. An article on the subject in the Boston Globe describes it in this appropriately simple way: Cognitive fluency is simply a measure of how easy it is to think about something, and it turns out that people prefer things that are easy to think about to those that are hard.12 Adam Alter, an associate professor at NYU’s Stern School of Business (we’ve met him earlier in this book) and Danny Oppenheimer, a professor of psychology at Carnegie Mellon University in Department of Social and Decision Sciences, are two of the world’s experts in the field cognitive fluency. They’ve investigated the effects of cognitive fluency (and its opposite effect, cognitive disfluency) on things as diverse as stock prices, physical distance, and career prospects in the legal profession. Fluency effects lead us to favor the easier-to-process option. Often, we choose the choice that is easy to evaluate, rather than the one that offers the greatest benefits. So, in most cases, marketers should look to make every aspect of their marketing both before and after people buy their products as easy as possible. In The Effortless Experience: Conquering the New Battleground for Customer Loyalty, authors Dixon, Toman, and DeLisi put forward the idea of companies evaluating how easy it is for their customers to do business with them and resolve problems with a metric they call the Customer Effort Score. I think this approach should be extended to evaluating marketing. A question we should always consider is “how can I make the path to choosing my brand take less cognitive and physical effort”? Fluency, or cognitive ease, can make the decision to choose your brand a no-brainer. The importance of “easy” in marketing isn’t just about taking complexity out of the chooser’s journey. It is absolutely central to what makes brands powerful. People’s preferred brands give their choosers a great gift. They make choice easier. Bennett, D. (2010). Easy = True – How ‘cognitive fluency’ shapes what we believe, how we invest, and who will become a supermodel. Boston Globe, January 31. 12

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A 2005 neuroimaging study13 in Germany used fMRI to test how the presence of a favorite brand affected consumer decisions. The 22 participants had to decide which of two beverage options they would buy. While the MRI scanner measured changes in their brain activity, the participants made 100 choices between two brands of beverages. Unbeknownst to the participants, the researchers had selected one beverage brand to be the “target brand,” and during select times of the experiment, that brand was included in 80% of the choice pairs. This experimental design allowed the researchers to examine brain activity specifically related to decisions involving the target brand. Two weeks after the imaging experiment, the participants ranked their preferences for the beverage brands, and 8 of the 22 participants ranked the target brand as their “first choice brand.” When deciding between pairs that included their first-choice brand, the patterns of brain activity in these 8 people looked different than the remaining 14 participants. The ventromedial prefrontal cortex, a brain area that integrates emotion and reward processing, had increased activity when the first-choice brand was part of the decision. But it wasn’t just the ventromedial prefrontal cortex that differed across the two participant groups. Brain areas involved in memory and reasoning processes – like dorsolateral prefrontal cortex – were not as active when the first-choice brand was part of the decision. This reduction in activity has been interpreted to suggest the choice was more automatic or easier. Fittingly, this effect has been nicknamed “cortical relief.” This specific pattern of brain activity – increased activation in ventromedial prefrontal cortex and reduced activation in dorsolateral prefrontal cortex – has also been proposed to be a neurological correlate of the winner-take-all effect in branding. This fits nicely with how i describe brands, which is that, at their best, they make choice easy, natural, and rewarding. I also saw some indication of marketing helping the brain work less in research in the United Kingdom that I worked on with consumer neuroscience firm MindLab a number of years ago. The research was designed to examine how ads in different digital formats affected donations to charity. We asked participants to split £50 between one of three charities as we

Deppe, M., Schwindt, W., Kugel, H., Plassmann, H., & Kenning, P. (2005). ­ onlinear responses within the medial prefrontal cortex reveal when specific N implicit information influences economic decision making. Journal of Neuroimaging, 15, 171–182. 13

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Table 10.1:  Attention to Ad and Size of Donation. Attention to Ad

Size of Donation

Ad A

Low

Low

Ad B

High

High

Ad C

Low

Medium

Ad D

High

Medium

showed ads in different formats on a computer screen; participants could adjust their allocation after seeing each ad. There were four kinds of ads14: A: A simple banner ad from the charity. B: A social media message using social proof. C: A social media message using affinity. D: A social media message using celebrity. We tracked the amount of each charitable donation associated with each kind of ad while collecting an electroencephalogram from each participant. Electroencephalography (which is called EEG for short and is discussed further in Chapter 15, “Think Differently about Market Research”) records the brain’s electrical activity in the brain through electrodes placed directly on the scalp. This technique can robustly measure attention and emotional arousal levels. Our study with MindLab measured the relative amount of attention participants paid each kind of ad. When we looked at the effect of attention, this is what we saw (Table 10.1): Ad B created the best behavioral effect and also got the most cognitive attention from the participants. Ad D got similar levels of attention but a lower level of donation. While we deemed there was too much “noise”15 in our experimental setup to address the original objective of the study, to draw useful conclusions

For Ad C, the affinity message appeared to come from someone in the participant’s social network; for Ad D the message came from a celebrity that the participant followed or would consider following. This information had been obtained in a disguised interview with participants a week before fieldwork. 15 We felt that the social proof aspect of Ad B gave it an inherent advantage over the other ads. 14

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Table 10.2:  Attention to Ad, Size of Donation, and Attention While D ­ onating. Attention to Ad

Size of Donation

Attention While Donating

Ad A

Low

Low

High

Ad B

High

High

Low

Ad C

Low

Medium

Low

Ad D

High

Medium

High

about which ad formats worked best for capturing attention, we did get an interesting, albeit unexpected, insight about cognitive effort. To measure attention to each ad format shown, continuously collecting EEG measurements while the participants decided how to allocate their £50 was necessary. These data – that we had not originally planned to analyze – revealed how the cognitive effort required for performing the task of allocation differed across the different ad formats. When we looked at cognitive effort, what we saw was this (Table 10.2): Just focusing on the two ads that received the highest amount of attention according to the EEG signal (Ads B and D), we saw that Ad B did better in terms of persuading participants to allocate money to the charity it advocated. Even though Ad B was more persuasive, it actually required people to think less while donating than Ad D did. There is an interesting implication here: Marketing may be successful when it repays the chooser’s investment of attention by making the task of choosing cognitively easier.16 Ad D made people want to work hard when they saw it, achieved an average behavioral result, and required people to work harder at the moment of decision. Ad B made people want to work hard when they saw it and achieved the greatest behavioral effect, but the choice was relatively effortless. With Ad D it was as if we made people put effort in training on a weights machine when the decision task was a running race. The effort put into the exercise didn’t really make the decision easier. With Ad B we had people putting the same amount of effort into training on the treadmill, and effort spent training did make the task easier. Ad D was engaging, but it didn’t engage people in a way that made the decision easier. A related effect was observed in the fMRI study on temporal discounting from Stanford referenced earlier in this chapter. 16

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As we’ve implied many times earlier in this book, humans are cognitive misers and are parsimonious with their attention. A long time ago someone said to me “you have a dollar of attention, so spend it wisely.” To me this statement works both ways – potential choosers should spend their attention wisely, and marketers should make sure they use the limited attention they can get from people wisely. I think engagement that facilitates decision making for people is a great investment – dollars of attention spent well all round. Perhaps this is what we saw happening with the charity ad in our study that required cognitive attention but repaid it by reducing cognitive load at the time of the decision. Attention that simply “burns” cognitive effort without being designed to help achieve specific behavioral objectives isn’t just an unwise way to spend dollars of attention. It’s probably not the best use of marketing dollars either. While making things easy and simple is a good rule of thumb in the psychology of consumer decision making, in luxury categories the rules are different. There is a reversal of this effect for luxury products. According to Adam Alter, people associate more complexity with luxury products and so disfluency, or cognitive difficulty, makes luxury products more appealing. The study Making Products Feel Special: When Metacognitive Difficulty Enhances Evaluation,17 by the appropriately disfluently named Anastasiya Pocheptsova and others, demonstrates that disfluency makes high-end goods seem more special. Laphroaig Malt Whisky, Louis Vuitton, and Häagen-Dazs, for example, all have names that require people who don’t speak Scots Gaelic, French or fake scandinavian respectively to think about how they pronounce them, at least for the first time. Ornate labels that make type more difficult to read, such as Chivas Regal, or typefaces that are less legible, such as Neiman Marcus, similarly create the need for effort on the part of consumers. All of these things take a bit more effort, creating cognitive disfluency. Unlike most brands that bend over backward to show they understand us, luxury brands require that we put in the effort to understand them, to become savoir faire on how to use them correctly, to know why their provenance is

Pocheptsova, A., Labroo, A. A., & Dhar, R. (2010). Making products feel special: When metacognitive difficulty enhances evaluation. Journal of Marketing Research, 47(6), 1059–1069. 17

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important and how their story makes them special. We put more resources into acquiring them, whether that is loads of money, queuing around the block for a Hermes scarf, or the five-year waiting list for a bespoke Ferrari. From a cognitive perspective, living in the lap of luxury isn’t as easy as it is cracked up to be. The takeaways from this chapter are: • Where possible, make the outcome you want the default. Some observers pin a large amount of Google’s success to a deal early in its history that made it the default search engine on the AOL browser. • The authors of The Effortless Experience suggest a Customer Effort Score to measure ease of customer interaction. How can you make your marketing take less effort and make it easier to act upon? How can you make choice easier? Review the steps to choice. How would you score the ease of each step? What is your Ease of Choice Score? • Engagement can be powerful, but make sure that the effort you are asking of people in engagement makes the behavior or choice you want easier for users and choosers. • While everyday brands should do everything to make their marketing and brand experience as fluent or cognitively easy as possible, part of luxury brands’ cachet rests in being cognitively disfluent. Ideas that this chapter prompted in others: • “(Marketers) wanting engagement is common, knowing why we want engagement less so. What have we really achieved by getting a few thousand people to share a selfie on Instagram? Instead we should be thinking about how engagement can make things easier for consumers.” • “This is why I shop at the corner store. It costs twice as much as Trader Joe’s, but it is twice as close. Thank goodness they don’t leave the ice cream cabinet open ….”

11 NEVER BE ABOVE COMPARISON

People use comparisons as an intuitive form of navigation – we are “addicted to comparisons.” Sweden’s Stockholm is a city awash with museums. One of the world’s finest museums – the impressive Vasa Museet – houses the preserved wreck of the Vasa, a 226-foot warship that sank less than a mile into her maiden voyage in 1628. The building itself is difficult to miss once you are in its vicinity – a stunning piece of modern architecture topped by a large copper roof with three stylized masts that represent the actual height of the ship. But one museum you might easily overlook, as I certainly would have if I hadn’t taken cover at the front door to avoid a summer downpour, is the much less dramatic Royal Coin Cabinet. Tucked away in a courtyard near the Royal Palace, the Royal Coin Cabinet is also known as the National Museum of the Economy. In it, you will find examples of Europe’s first paper money and what is generally believed to be one of the world’s first coins. Both the paper money and oldest coin, it turns out, have a relatively recent history. Printed bills were the brainchild of Johan Palmstruch, general manager of the precursor to Sweden’s national bank. Paper money was introduced in 1661 as an alternative to Sweden’s cumbersome coins. The coins that paper money replaced were essentially plates of copper, many weighing around 10 lbs. The largest coin, with a value of 10 daler (or thaler, which of course is also the last name of one of the pioneers of Behavioral Economics, who appropriately happens to be an economist), weighed more than 40 lbs. Not surprisingly, Palmstruch’s innovation was one that John Gourville, whose paper The Curse of Innovation we referenced earlier in this book) would

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classify as a “home run” (big innovation; little behavior change required). The success of paper money prompted him to print more money than he should have, and he was sentenced to death for irresponsible bookkeeping. Although pardoned, Palmstruch died a couple of years later in 1671. While Palmstruch’s bills were not the first financial currency ever, paper money’s history is not that much older. Before the invention of printing, handwritten paper notes were used in parts of China, starting around 600 ce. For the first coins (an example of which the National Museum of the Economy proudly displays), you only have to go back a further thousand years, to 610 bce and the Lydians of Asia Minor. The Lydians forged (in the metalwork sense) coins from electrum, an alloy made principally from gold and silver. If, as anthropologist Dean Falk suggests, another 6,000 years or so before the Lydians created their coins is “essentially today” in terms of human brain development, then money is a relatively “new thing” to humankind. Economists describe money as a way of defining value. Like money, the other systems we use to define something’s weight, height, length, or volume are also “relatively new.” The earliest known standardized measurement system comes from the Indus Valley in the third millennium bce. While there is little doubt that other less formal systems would have been in place before this time, for most of our existence human judgment relied less on measuring and more on comparing. This, of course, is a cognitive load saver. It takes less mental energy to model a new object or situation on something similar that we have already experienced, than to create a whole new model. It’s much easier to describe a zebra as “looks a bit like a mule, with black and white stripes” than it is to start from scratch, and build the description of the zebra from the hooves up. As a neuroscientist once said to me, “when the brain encounters something new, it doesn’t ask ‘what is it?’. It asks, ‘what is it like I already know?’” Itimar Simonson and Emanuel Rosen describe our dependence on comparisons in Absolute Value: What Really Influences Customers in the Age of (Nearly) Perfect Information: That’s just the way we are: absolute-value challenged, cognitive misers who are addicted to comparisons. We can’t look at a dishwasher and determine its value or how well it will clean the dishes. But place two dishwashers in front of us, and we will instantly start comparing their features and prices.

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Comparisons are a critical part of how we navigate the options before us. Actually, it might be more accurate to say that the points of reference enabling comparisons are the things that are critical. And sometimes, comparisons and the reference points they rely on can be far more critical to their customers than businesses realize. JCPenney found this out the hard way. In February 2012, Bloomberg reported that JCPenney had its “lowest sales in decades.” In the all-important fourth quarter, its net loss plunged from $87 million for the previous year to $552 million; its annual revenue was $13 billion, which, according to Bloomberg, was “the lowest since 1987.” What went wrong? What did JCP do to engineer a loss like this in one year? Before I answer these questions, let’s review a little JCP history. In November 2011, JCP hired Ron Johnson as its CEO. Johnson was recruited to make the JCP brand an emotional destination rather than just an economic one and to transform the store to a specialty department store rather than just a chain. In his previous job, Johnson was the executive largely responsible for the success of Apple’s retail stores. The Apple store redefined the retail experience and achieved what are among the highest sales per square foot in the history of retail. What better place for a tired, frumpy retailer to seek a new leader than Apple? However, many commentators subsequently suggested this “Apple envy” and “failed imitation” was likely at the root of JCP’s problem. In an article in the New Republic,1 Johnson even went on record saying that his new JCP “retail interface” would lead to an experience “just like Apple.” Criticism of Johnson and JCPenney abounded in light of the company’s poor performance. Critics suggested that the desire to radically transform the JCP brand led the company to ignore its existing customers, leaving them behind. But in my view, the problem wasn’t just that JCP ignored its existing customers with the changes it rolled out after Johnson’s hire. It did something far more damaging – it ignored human nature. So, what led JCPenney to do this? With the best intentions, JCPenney tried to make its pricing more transparent to its customers. A January 2012 Wall Street Journal article titled

DePillis, L. (2014). A bite from the Apple Store. What JCPenney’s failed imitation says about retail – and identity. New Republic, March 4. 1

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“Merchandise Pricing Changes by JCPenney Could Be Radical” detailed how JCP was reducing complexity in its pricing. Price tags would start to feature round dollar amounts, so an item that would have been priced at $19.99 would now be priced at $20. Discount pricing would be abolished. Items would not be displayed at a higher price and then be reduced after the statutory period, but they would go on the floor at the “discounted” price. Thus, price tags would no longer mention the higher price at which the goods had been sold. Behavioral economists call this higher price a “reference price.” These and other changes intended to make pricing transparent were packaged as “Fair and Square Everyday Pricing.” Anybody reasonably well versed in understanding decision sciences, behavioral economics, or an area called cognitive pricing would have doubted that Fair and Square Everyday Pricing would work (even if it was – as is most likely the case – endorsed in focus groups or quantitative studies among customers and prospective customers). While all of these pricing initiatives make sense at a rational level, that’s just not how we humans make choices, whether those humans be you, me, longtime JCPenney shoppers, or anybody else on the planet. People will often agree with rational approaches when asked their opinions on them through market research, but don’t follow rational approaches when actually making decisions. Who would disagree when asked if they wanted more transparent pricing, or low prices all the time, or that the one cent between a $20 and $19.99 price ticket isn’t a big deal? When we think about it – which is what most research asks us to do – we would agree with the principles of the Fair and Square pricing program because we tend to think we will behave rationally, even though we won’t. In these cases, traditional market research based on surveys or focus groups doesn’t really help, because it simply asks people their reasons for doing something rather than revealing their motivations for doing it. Daniel Kahneman writes about how these preconscious motivations dictate our choices but remain hidden from us in his book Thinking, Fast and Slow, when he says “… the intuitive system is more influential than your experience tells you, and is the secret author of many of the choices and judgments you make.” Given we all overestimate our own rationality, it’s not surprising that executives will too often choose a marketing approach that appeals to consumers’ logic or stated preferences over one that appeals to the intuitive mechanisms that have driven human decision making for hundreds of thousands, if not millions, of years.

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Some commentators on the failure of JCPenney’s “Fair and Square Everyday Pricing” suggested the program flopped because consumers like complexity in pricing. While finding examples from behavioral economics supporting this idea is possible, this conclusion misses the point. It is not that people like complex prices; we like easy decisions that “feel right.” It is ironic, but some things that may seem complex from a rational perspective can make our decision making easier at an intuitive level and also make us feel better about our choices. JCPenney’s mistake was that in creating a pricing approach that seemed simple from a rational perspective, it erased cues that enabled easy and intuitive decision making. JCPenney unwittingly suppressed its shoppers’ abilities to allow cognitive shortcuts to guide their choices. The absence of reference prices may have been one of the most significant factors in the failure of JCP’s Fair and Square pricing program. Comparisons help us make choices quickly and intuitively. Everything is relative, especially when it comes to us reaching decisions. We are more comfortable letting our intuitions guide us when we have a reference point to act as a compass to help us navigate our choices. This intuitive reliance on reference points can lead us to make wildly differing estimates of an object’s height, of a person’s age, or of something’s value.2 It can make us see something we might normally consider expensive as a bargain, and lead us to change our choices when presented with a selection of products or offers. In behavioral economics, this phenomenon is known as anchoring. Countless experiments have demonstrated the effects of anchoring, but one that describes its essence simply is mentioned in Thinking, Fast and Slow. Visitors to the San Francisco Exploratorium (a museum that’s not really a museum and was described by the New York Times as “the most important science museum to have opened since the mid-20th century”) were asked to estimate the height of the tallest redwood tree. But first they were either asked, “Is the height of the tallest redwood tree more or less than 1,200 feet?” or “Is the height of the tallest redwood tree more or less than 180 feet?” These heights acted as the high and low anchor, respectively. They also had a dramatic effect on the estimates people made – those presented with the anchor of 1,200 feet estimated the tallest redwood tree would be 844 feet Kahneman discusses all of these scenarios and more in the chapter Anchors in Thinking, Fast and Slow. 2

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in height, while those presented with the anchor of 180 feet estimated the tallest redwood to be 282 feet. Remarkably, an anchor doesn’t even have to be relevant to the decision at hand to have an effect. Behavioral economists Dan Ariely, George Loewenstein, and Drazen Prelec conducted a now classic experiment3 demonstrating anchoring by using an arbitrary number. Students were shown a range of goods (that included computer accessories, books, and bottles of wine) and were then asked if they would pay a dollar sum equal to the last two digits of their Social Security number for each object. When people were asked to bid on these goods, those individuals whose last two digits were in the highest quintile (i.e., 80–99) bid an average of $56 for one item (a cordless keyboard), whereas those who had a Social Security number where the last two digits were between 01 and 20 bid an average of $16 for the same item. A similar pattern was observed for bids across all the items. The last two digits of participants’ Social Security numbers was clearly an arbitrary anchor, yet it still had a sizeable effect on what they were prepared to bid. Such is the power of reference points, even irrelevant ones. There are many things in life – maybe most things in life – that you can’t control. But one thing you can control, at least to some extent, is the frame of reference that people use to assess your brand or business. However, this is a blind spot for many marketers, and rather than influencing the frame of reference they default to letting choosers set their own. Even the name of your product, brand, or business can act as an anchor. Experiments by Clayton Critcher and Tom Gilovich4 found that people who saw two versions of a picture of a footballer estimated that he was more likely to sack a quarterback in his next game when the picture showed him wearing the number 94 on his shirt, than when he was wearing the number 54; that when given information about a new smartphone, the group told that it would be called the P97 estimated that a higher percentage of its sales would come from Europe, than a group who was told that it would be called the P17; and that when shown an ad for a restaurant, the group who were told the name of the

Ariely, D., Loewenstein, G., & Prelec, D. (2003). Coherent arbitrariness: Stable demand curves without stable preferences. Quarterly Journal of Economics, 118(1), 73–106. 4 Critcher, C. R., & Gilovich, T. (2008). Incidental environmental anchors. Journal of Behavioral Decision Making, 21, 241–251. doi:10.1002/bdm.586. 3

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restaurant was Studio 97 were prepared to pay a third more for a meal there than the group who were told the name of the restaurant was Studio 17. Anchoring can be beguilingly persuasive, even outside of academic laboratories. A number of years ago, I was in Hamburg, Germany, for a meeting. As I walked back to my hotel in the Neustadt area, I found myself window shopping at high-end jewelers. Although, as you know, I inherited a fine gold pocket watch, I’ve never bought a really expensive watch. Let’s say my WTP (willing to pay) for a watch is what I paid recently for an Apple Watch – around $400. The display I was looking at was of IWC watches, and one of the models on display was priced at the equivalent of $20,000 – more expensive by a factor of 50 than the maximum you might expect me to pay for a watch. There were watches that were $14,000, and some around $12,000. At the bottom of the display was a very simple IWC watch with a beautiful clean face, priced at $4,000 … $4,000! Now that is still 10 times more expensive than any watch I have bought or intend to buy, but in the moment the price tag seemed very reasonable – almost a bargain! Suddenly I found myself thinking about buying something very expensive that, 30 seconds earlier, I hadn’t even desired. My anchor had shifted from $400 to $20,000. A $4,000 watch next to $400 watch is outrageously expensive. But, next to an $18,000 watch, the $4,000 one seems like a steal. The jeweler’s insight, whether intentional or not, had been to mix the watches up a bit. Common sense suggests that the person in the market for an $18,000 watch isn’t the same person as someone in the market for a $4,000 watch. The jeweler could have decided that people shop in price bands (which shoppers would probably tell you they do) and decided to put all the $15,000–$20,000 watches – across all the brands they carried – in one group; the $10,000–$15,000 in another group; and so on. By not putting all the very expensive ones together, they had allowed for the very powerful effect of anchoring. The only thing that prevented some serious damage to my credit card balance was that the jeweler was closed. By the time I walked past the store the next day, I was no longer in a buying mood. Time allowed me to deliberate about buying the watch, and my reference point had moved to what my wife would say if I returned home with a $4,000 watch. A short while after my visit to Hamburg, I was explaining the principle of anchoring at a decision-making workshop in London. One of the attendees, who had worked in marketing at a famous high-end UK retailer, came

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up to me after my talk and told me a story that shows another powerful effect of anchoring. This particular retailer sold luxury hampers every holiday season – essentially wicker laundry baskets filled with luxury goods, and the retailer had a tradition that any hampers that weren’t sold at the end of the holiday season were broken down and they were auctioned off to the staff, with the proceeds going to charity. The hampers on offer were a premium hamper that retailed for £250 and a super-premium hamper that sold for £500. Normally a couple of dozen hampers remained unsold, making a nice bonus of goodies for the staff. The marketing team came up with a cunning plan – they would create a supersuper-premium hamper that was bigger and had some even more high-end goods than the super-premium one and price it at £1,000. Their thinking was that no one would buy the most expensive hampers (they only made up a couple of them) and that they would be able to add some even more luxurious goods to the auction. Unfortunately, the plan backfired. The presence of even just a small number of £1,000 hampers had an anchoring effect on the £500 one, and as a consequence they sold every single super-premium hamper (it seems likely that people traded up from the entry level £250 version). To rub salt in the wound, they also sold one of the £1,000 hampers as well. This is an example of how an anchor doesn’t just change the perception of something’s value but also can change the nature of choice within a selection. This effect has been demonstrated in numerous experiments.5 In Thinking, Fast and Slow, Kahneman sees anchoring working as a suggestion or prime and as a form of decision adjustment. He feels (and his late collaborator, Tversky felt) that anchors lead to insufficient adjustments. Take the example of the Redwood trees – the mean estimate for the high anchor condition was, at 844 feet, still way above an accurate estimate for the tallest redwood tree (the tallest is called Hyperion, and is just over 380 feet), but it was still an adjustment of the high anchor figure of 1,200 feet. It was just an insufficient one. My adjustment of what I might have paid for a watch was 80% lower than the high anchor of $20,000, but my wife would certainly have considered that an insufficient adjustment.

Some examples are Dan Ariely’s Economist experiment, covered in “The importance of irrelevant alternatives,” The Economist, May 22, 2009, and Amos Tversky and Itamar Simonson’s Minolta camera experiment (“Context-Dependent Preferences,” Management Science, October 1993) that we covered in Chapter 6. 5

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Kahneman also talks about how the power of anchoring may be in what psychologists call associative coherence. What this means is that it gives you a reference point that makes it easier to connect to different sets of associations and attributes. In a study by German psychologists Thomas Mussweiler and Fritz Strack,6 participants were either asked whether the annual mean temperature in Germany was higher or lower than 5° C/40° Fahrenheit, or whether it was higher or lower than 20° Celsius/68° Fahrenheit. When they were given the low number as an anchor, they were quicker at identifying “winter words” (like ski, cold, and frost) from a jumbled list that contained winter words, summer words, neutral words, and made-up words. When they were given the high anchor, they were quicker at identifying summer words (like beach, warm, and swim) from the same list. I think comparisons and reference points work at a broad and emotional level for brands in a similar way. Even when brands use comparisons with the intention of communicating, they are different and better, through associative coherence they take a little bit of the world of the brand they are comparing themselves to. Anchors can be helpful or unhelpful. A helpful anchor will make the choice you require people to make easy and natural. But given the human addiction to comparisons that Itimar Simonson talks about, people find and use the anchors they find lying around indiscriminately. Very often these “default” anchors aren’t helpful to the chooser, and they are frequently a problem for marketers. In my workshops, I use an exercise where participants list any frames of references that might affect the choice in some way or another. If your choosers were to describe the choice you wanted them to embrace, what would be an intuitive comparison they would make? Just as VC pitches a couple of years ago invariably included the comparison “it’s the Uber of ____,”7 how could you describe what you are offering, only by comparing it to other experiences, behaviors, choices, or products? Describe it as the “_____ of ______.” What comparisons might make the choice easier? And what comparisons might make it more difficult? Mussweiler, T., & Strack, F. (2000, June). The use of category and exemplar knowledge in the solution of anchoring tasks. Journal of Personality and Social Psychology, 78(6), 1038–1052. 7 There is an “uber of …” pretty much everything from flower delivery, to food, laundry, etc. A 2018 episode of Entrepreneur Elevator Pitch featured the pitch for a connected smart diaper described as providing “Real-time health monitoring for babies and elderlies,” perhaps inevitably described as the “Uber of Poopers.” 6

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Marketers sometimes create their own unhelpful anchors. I saw a billboard for water conservation from at Los Angeles International airport that did just this. The headline read “Water isn’t angry about your 20-minute shower, just disappointed.” The subhead then read “Keep your showers to 5 minutes or less to save 5,500 gallons a year.” The problem here, of course, is that the billboard is setting up a high anchor, when the desired goal is to decrease usage. If you suggest people are taking 20-minute showers, 15-minute ones – even though they are three times longer than the shower length you want people to embrace – doesn’t seem so bad. Apple effectively encouraged comparison with Microsoft with the “Mac vs. PC” campaign I referred to earlier in the book. By making Windows its frame of reference, Apple didn’t just say Macs were better than PCs. It did something that was probably more important for Apple’s growth at the time. It made Apple seem more similar to PCs than people thought. Of course, Mac was good at all of those creative kinds of things that seemed uniquely Apple, but now a Mac seemed as good or better than Windows at all of the things that Microsoft does well. The unhelpful anchor here for Apple was the very association (and the associative coherence) with creativity that had got them so far. Microsoft’s associations with productivity and more routine tasks provided a more helpful anchor. Shortly afterward, Apple had the same weapon used against it very effectively by Samsung, who used the iPhone as a point of reference for its Galaxy in its “The Next Big Thing Is Here” campaign. “The Cadillac of ______” or “The Rolls Royce of ______” are timeless examples of gilt by association (apologies). Hillquist made “the Cadillac of all trim saws,” Rock-Ola “the Cadillac of phonographs.” Men’s Journal called the Stromer ST2 “The Rolls-Royce of electric bikes that could revolutionize urban transport,” and in 2019 luxury cruise line Seabourn announced plans to launch “the Rolls Royce of personal submarines.” Contrary to conventional marketing thinking, comparing doesn’t dilute who you are – in terms of our nonconscious thinking, comparison makes choices clearer. While brand gurus talk about putting a stake in the ground, behavioral scientists might suggest that lassoing an existing stake is a better approach. As John Kenny, Chief Strategy Officer of FCB Chicago says, “Better beats best.” His point, which may sound counterintuitive from a traditional marketing perspective, is that from a “decision ease” perspective, being comparable to something is preferable to being above and beyond comparison.

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JCPenney’s errors went beyond taking away reference prices and thus putting its goods beyond comparison. By rounding prices up, and by doing away with the pennies, JCPenney made its products feel more expensive. Leigh Caldwell is an expert on cognitive pricing and founder and partner of The Irrational Agency. In his book The Psychology of Price, Caldwell writes about how being just below the dollar mark (e.g., $19.99) means the consumer unconsciously puts your product in the “below $20 band,” whereas a price tag of $20 puts you above that band. There is evidence that using “bands” is a shortcut people use a lot. Even Johnson’s previous employer Apple uses this approach, although admittedly with bigger currency units. Every MacBook, iPad, or iPhone is priced at one dollar below the nearest hundred. The $999 12.9-inch iPad Pro is in the $900 band, or maybe the “less than $1,000 band,” but the addition of a single dollar to the price would have moved it up to the $1,000+ band. The mechanism of how this pricing mechanism works is interesting. Ben Ambridge, a senior lecturer in psychology at the University of Liverpool and author of the book Psy-Q, points to three reasons something priced at $9.99 seems intuitively cheaper than $10.00 (and the reasons go beyond the obvious fact that shouldn’t be overlooked, which is that $9.99 actually is cheaper). The first may be the recall of a stored memory – we have learned to associate prices ending in 0.99 with items that are on offer, so when we see $5.99 or $9.99, it triggers that memory. A second elaborates on Caldwell’s explanation, relates to anchoring, and is based on how we read the numbers 9.99. We read from left to right, and the theory is that reading in this direction “anchors” us on the “9.” We see $9.99 as being “around $9,” whereas $10.00 would be “around $10.” Ambridge’s third reason for how intuition influences pricing programs deals with sound symbolism: Studies with made-up words show that certain sounds (such as those in “bouba,” “malooma”) are associated with large (and round) shapes, while others (for example “kiki,” “taketi”) are associated with small (and angular) shapes. Why? The former force us to open our mouths wide, and are found in words such as large, huge and enormous. The latter involve stretching our lips to make a tiny gap, and are found in words such as little, tiny, mini, petite, itsy-bitsy and

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teeny-weenie. So, when you hear, for example, “one ninety-nine,” you are hearing these “tiny” sounds.8 As the extent of JCPenney’s lost sales became public, Johnson made a public mea culpa: Experience is making mistakes and learning from them, and I’ve learned a lot … We worked really hard and tried many things to help the customer understand that she could shop any time on her terms. But we learned, she prefers a sale. At times, she loves a coupon. And always, she needs a reference price. In his statement, Johnson showed that he had learned the importance of working with the way humans are wired to make choices rather than trying to change human nature, however compelling the logic to do so may be. But the damage was already done, and Johnson paid with his job. In April 2013, just 16 months after being hired, Johnson was fired as CEO of JCPenney, his first public failure following his extraordinary success with Apple and Target. If JCPenney’s attempt to elevate its brand led to failure, Dos Equis beer can claim it did just the opposite. Dos Equis was an unexceptional midmarket imported beer from Mexico until it launched “The Most Interesting Man in the World” advertising campaign which ran from 2006 to 2018. Like all good advertising, it works for many reasons. Brilliant scriptwriting (every commercial has a gem of a line in it – whether it be, “He once had an awkward moment. Just to see how it feels,” or “His organ donation card also lists his beard,” or, my personal favorite, “His mother has a tattoo that reads son.”) Then there is the disassociation yet cohesion between what is being seen and being said (this may cause a bit of disfluency, which you learned in Chapter 10, “Make It Easy – For the Mind and the Body,” is something that makes

What we do with our mouth may affect our choices in other ways. One study suggests that advertising copy that is alliterative leads us to subvocalize the message, increasing our chances of considering the advertised product. Davis, D., Bagchi, R., & Block, L. G. (2016). Alliteration alters: Phonetic overlap in promotional messages influences evaluations and choice. Journal of Retailing, 92(1), 1–12. https://doi.org/10.1016/j.jretai.2015.06.002. 8

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us pay attention). For 10 years, with the hitherto unknown Jonathan Goldsmith as the Most Interesting Man in the World, the series had one of the best pieces of casting you will ever see (remember we talked about the importance of facial expressions – Goldsmith’s eyes fairly twinkle and his hint of a smile exudes mischief and wry confidence). Goldsmith’s character comes across as a Latin James Bond9 of the Sean Connery era. His innings came to an end in 2016, after a contract dispute with his agents, and the commercials that followed, with his replacement, French actor Augustin Legrand, proved to be considerably less interesting.10 But back to those earlier commercials. As well as using great writing, acting and directing, I also think they recruited a powerful behavioral mechanism. The character and the setting seem to conjure up the sense of a classic cocktail occasion rather than beer drinking, along with the brilliant line that features in every commercial – “I don’t always drink beer, but when I do, I prefer Dos Equis.” The hero is telling he’s not really a beer guy, and if you were to happen on him in a bar you feel like you’d probably find him sipping an Old Fashioned or a Manhattan. By implicitly making its frame of reference expensive, sophisticated cocktails, Dos Equis has succeeded in re-anchoring the brand. Because of the quick, almost heuristic-like power of origin, our natural comparison set for Dos Equis would most likely be Mexican beers such as Sol or Corona. As a category, Mexican imported beers were down 1.3% from 2008 to 2009. Now, thanks to the most interesting man in the world, we might consider Dos Equis more in the context of cocktails like an Old Fashioned or a Manhattan. And given what we know about bourbon sales over that period, from our discussion about scarcity in Chapter 8, “Loss and Ownership,” that was a smart move. Dos Equis moved from an unhelpful anchor (the at-the-time stagnant Mexican beer category) – to a helpful one (the world of mixology and cocktails). For the decade when Goldsmith played the hero, the campaign was wildly successful. In 2009, they moved from the 11th placed imported beer brand The chief creative officer of Havas New York, the agency that conceived the campaign described the character as “James Bond meets Ernest Hemingway.” In an instant you can visualize the character! Another example of the power of comparisons. 10 Goodman, C. (2017). The most interesting man in the world is no longer interesting. Target Marketing Magazine, May. 9

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to the 8th placed.11 Other reports show that Dos Equis “led the beer industry, shipping 116.6% more barrels in 2013 compared to 2008.”12 Implicitly changing the frame of reference from beer to a suave, cocktail like occasion was a smart and lateral move. But comparisons that are outrageously cheeky can also be effective. Back to the wisdom of, John Kenny, who told us “better beats best” in this chapter. He also says: Comparisons are good, but comparisons that are out of your league are better. A tongue-in-cheek ad from the 1980s for the tiny-engined (0.61) Citroen 2CV compared it favorably with the supercars of the day. The ad claimed that traveling at its top speed of 71.5 miles per hour the 2CV could easily overtake a Ferrari Mondial traveling at 65 miles per hour; that it had the same number of wheels (four) as the Rolls-Royce Silver Spirit that cost 20 times more; and that it had more luggage space than a Porsche. A few decades on, MINI forced a mischievous comparison with Porsche, by challenging it to a race at Road Atlanta road course,13 effectively suggesting MINI’s performance was closer to a Porsche than the options suggested by a CNN review of MINI alternatives around the same time14 that included the Kia Soul, the Nissan Cube, and the Ford Fiesta. Porsche didn’t accept the challenge. This would have been exactly my advice to the company, as even if the Porsche had comprehensively outraced the MINI, by accepting the challenge, Porsche would only have been perpetuating a comparison that was not in its interest. The takeaways from this chapter are: • Anchoring is the tendency to attach or “anchor” our thoughts to a reference point, even if it is not directly relevant. Understanding this concept

Alexander, R. (2010). Dos Equis most – interesting? Brandchannel, March 31. Frohlich, T. C. (2014). America’s fastest-growing beer brands. USA Today, December, quoting Beer Marketer’s Insights. 13 https://www.autoblog.com/2010/06/10/followup-porsche-turns-down-minichallenge-at-road-atlanta-w-v/. 14 6 alternatives to the Mini Cooper – The Mini’s great, but these days there are lots of cars that can give you coolness with a small size and price. CNN Money, July 2010. 11 12

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is key to pricing strategies. While anchoring may make our choices seem sometimes irrational, the mechanism also helps us make very quick and efficient decisions rather than calculations that involve a lot of cognitive effort. • Comparisons provide the anchors that are key to how we navigate choice. When no points of comparison exist, choice becomes difficult and frustrating. Choosers are more reliant on comparisons than they think they are. • Comparisons can be a quick way to position your brand. They help people intuitively work where you fit on the map. People will often have a default place for you – giving them a fresh and imaginative point of reference can help you bust out of that default. Thoughts from other people took who read this chapter: • “A good chunk of my job is facilitating negotiations. Recognizing that points of reference intuitively drive decisions is enormously useful in determining how to make a proposal that will feel good to the other side and engender optimism that the negotiation will be fruitful.” • “Anyone who has ever been involved in a naming project knows how difficult it is. Perhaps if we spent more time thinking about mouth feel and less time thinking about names that ‘make sense,’ there would be many more good brand names in the world.”

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12 IF CONTENT IS KING, CONTEXT IS QUEEN

Marketers focus so much on message that we frequently underestimate the dramatic effect of context. Marketers have long known the importance of context for their messages, but few harness the full power context has to offer. Consider online shopping. Recently, I was browsing for digital cameras. The review site I looked at didn’t just show customer reviews for different cameras but also carried ads for a photo storing service and links to camera manufacturers and photography retailers. This kind of advertising is known as contextual targeting, an approach that uses the reasonable assumption that a place where someone researches cameras is a good context to put ads related to cameras or things they might do with cameras. Later, I visited a UK sports site to read about any developments in the last few hours preceding the January “transfer window.” (The transfer window is the period when soccer players can move from one club to another, and which, like an eBay auction, often saves its twists and turns for the very end. This one, though, was particularly uneventful). The sports site displayed an ad for a photography retailer and one for a car rental company. Both of these ads are examples of behavioral targeting. Rather than just matching content, the behavioral targeting approach uses information gleaned from previous behavior, such as visited websites, online searches, clicked-on content, or purchases. I was served up the ad for the camera retailer, because I’d been browsing for cameras earlier in the day, and the ad from Hertz because I had been making travel arrangements a few days earlier.

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Yet another approach to place messages in a relevant context is known as semantic targeting. This is a more subtle form of contextual targeting that uses data mining and sentiment analysis to identify the mood or point of view that a web page may project. Advertising messages that are in tune with that mood and point of view are then placed automatically on the web page. All three targeting examples defined in the online shopping example are based on the idea that messages do not live in isolation; advertisements can work harder when aligned with the context of the situation in which they live. The notion that “it is not just the message” is not new. In his 1964 book Understanding Media: The Extensions of Man, Marshall McLuhan coined the phrase “the medium is the message.” (Perhaps, apocryphally, this phrase was the original title of a book he wrote a few years later. The story goes that a typesetter’s error on the proof had misspelled the title as The Medium Is the Massage.1 Rather than being annoyed by the mistake, McLuhan’s response was “Leave it alone! It’s great, and right on target!”) Despite the pervasiveness of McLuhan’s sound bite, and notwithstanding the approaches I’ve just described, the people who pay for, design, and place messages habitually underestimate potential power of the environment surrounding their message. Time and place matter. That isn’t to say that marketers don’t pay attention to the “where” and “when” associated with their messages; they pay great attention to both. A lot of thought goes into finding a good time and place to reach the people they want to influence, rather than understanding how the medium that transports the message can affect choice. The broader context enveloping the message can determine how the message affects people’s response and ultimately their decisions. In some ways, it seems that marketing has never been more focused on context. Consider the Internet example with which we opened this chapter. The Internet gives marketers the ability to both track individual behavior and send personalized messages, at the times when those messages seem to be most appropriate for influencing the decision process. While this kind of advertising is a step forward in terms of efficiency, it does little more than scratch the surface in terms of how context can affect and influence choice. In this chapter, I will discuss four different areas of context that dramatically affect the choices people make. I will show that even though it is often

McLuhan, M., & Fiore, Q. (1967). The medium is the massage: An inventory of effects. Harmondsworth: Penguin. 1

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said that “content is king,” context, as in chess, is the more powerful and potentially game-winning queen.

CONTEXT ACTIVATES EVOLUTIONARY GOALS I first came across the work of Vladas Griskevicius (co-author with Douglas Kenrick of The Rational Animal) some years ago. I was interviewing Robert Cialdini, who, as we saw in Chapter 5, “Getting Familiar,” has led to some of the most interesting experimental work in areas that affect decision making, including the effects of social proof (a book like this would be much less interesting if it couldn’t draw on the work of Cialdini and his collaborators). One of my questions to Cialdini was something that must be in the back of many marketers’ minds when they hear about the power of social proof. We’re told how the behavior of others drives people to imitate that behavior. Or how, as Cialdini said, “Our intuitions tell us that a given behavior is more correct to the degree that we see other people doing it.” So, how can a brand encourage someone to make a choice that makes that individual stand out from the crowd? Do Apple’s exhortations to “Think Different,” or Levi’s appeals to individuality and self-expression fly in the face of the effectiveness of social proof? Would those brands be better off saying “Think the Same” or encouraging people to celebrate homogeneity? As an answer to my question, Cialdini pointed me toward Griskevicius’ work, specifically a paper titled “Fear and Loving in Las Vegas.”2 Griskevicius reports an experiment in which people were shown two different ads for various attractions (one of which was the city of Las Vegas, hence the name of the paper). One version of the ad emphasized the popularity of the attraction, as in “visited by over a million people each year.” The other version of the ad positioned the attraction as unique, so that someone visiting might feel they were standing out from the crowd rather than following it. Conventional thinking in marketing would say that the ad suggesting you do what a million others were doing would strike a chord with people whose personality favored blending in, who might be happier making safe choices.

Griskevicius, V., Goldstein, N. J., Mortensen, C. R., Sundie, J. M., Cialdini, R. B., & Kenrick, D. T. (2009). Fear and loving in Las Vegas: Evolution, emotion, and persuasion. Journal of Marketing Research, 48, 384–395. 2

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The same line of thinking would also say that the ad suggesting you take the road less traveled would resonate with people who have a more independent mindset, those who want to take a little risk and do things without needing a seal of approval. Typical marketing thinking would be that people’s choices would be consistent to their personality or mindset. There was one more important element to Griskevicius et al.’s study. Prior to viewing the ads, participants were shown a short clip from one of the two movies. One movie clip was a few particularly terrifying minutes from the psycho-horror classic The Shining. The other clip consisted of a few minutes from the romantic Before Sunrise, where two strangers (played by Julie Delpy and Ethan Hawke) who meet on a train traveling through Europe spend an evening connecting intimately in Vienna. So, what happened next (not with the movies, but with the experiment)? In their excellent book, The Rational Animal, Griskevicius and co-author Doug Kenrick describe what happened when people viewed The Shining. When people viewed the ads in between segments of a scary program (clip of The Shining), they found the products more attractive when they emphasized the product’s popularity …. People who had been viewing the scary film weren’t simply drawn to follow the masses, they actively avoided products and experiences that made them stand out from the crowd. After viewing clips from Before Sunrise, people preferred products that were advertised on the basis of their distinctiveness. Rather than showing that some people are inherently disposed to be conformists while others are inherently disposed to be unique, the study found that the same person will in some circumstances want to conform and in others seek to be unique. We are inconsistent, but with very good reason. Kenrick and Griskevicius explain these apparently contradictory preferences by suggesting the film clips triggered evolutionary goals that then filtered how people viewed the advertisements. Watching The Shining primed the instinct for self-protection, and the subsequent response was to seek the safety of crowds. (Countless wildlife documentaries show, often in gory detail, how being separate from the herd when predators attack generally leads to a better outcome for the hunter than for the hunted.) Watching Before Sunrise primed the instinct for mate acquisition, and the subsequent response was differentiation. Our personal experience, or even that from movies, teaches

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us that standing apart from others in the right ways improves our chances of being noticed and selected by a potential mate. Mate acquisition behaviors, of course, are not unique to humans; many animals take great risks to attract the attention of the opposite sex. Songbirds sing loudly from prominent perches,3 while peacocks and many other game birds (that are ironically a tasty and substantial meal for humans and other predators) have prominent tails that become an eye-catching display to a mate. It would seem likely these features also attract attention to their enemies and given their bulk (a peacock’s tail is often as much as 60% of its entire length) can’t make escaping them any easier.4 Griskevicius and his collaborators identified two evolutionary drives, self-protection and mate acquisition, at work in the experiment. Evolutionary drives can also be thought of as subsets of the self, and evolutionary psychologists count a total of seven “evolutionary selves” that each drive distinct behaviors. I list all seven evolutionary selves next,5 but to understand their full context and potential application, I recommend reading The Rational Animal. • Self-protection – Protecting ourselves from enemies and predators. • Disease Avoidance – Avoiding infection and disease. • Affiliation – Making friends and allies. • Status – Gaining respect within a social group. Conspicuous singing has two roles in songbirds. Males sing loudly to assert their territory and to ward off competitive males as much as they do to attract females. The louder they sing may suggest they will defend their territory better, or that they will claim a bigger area, which marks them as prime providers and thus suitable mates to females of their species. 4 There is some disagreement on the mechanism by which the peacock’s tail attracts mates. One theory (Zahavi) is that it uses the handicap principle, that the male with the most prominent tail and thus greatest impediment must have other characteristics that have allowed him to survive. Another (Petrie) is that the number of eyespots in the tail makes the male more attractive, and if these are pruned, the males are of less interest to females. A further suggestion is that the tail isn’t about attracting mates but about intimidating predators and rivals, which has a secondary role in sexual selection. 5 These are also covered in a number of papers, for example: Neuberg, S. L., Kenrick, D. T., & Schaller, M. (2011). Human threat management systems: SelfProtection and disease avoidance. Neuroscience and Biobehavioral Reviews, 35(4), 1042–1051. 3

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• Mate Acquisition – Attracting a romantic partner. • Mate Retention – Maintaining a romantic partnership. • Kin Care – Caring for offspring and family. I was fortunate enough to collaborate with Griskevicius on a talk we gave at Advertising Week, an industry event in New York City, prior to the launch of The Rational Animal. He used a brilliant modern-day analogy to explain how human behavior serves these seven evolutionary selves. Griskevicius suggested that rather than thinking of our brain as a powerful computer that can process huge amounts of information and work on complex tasks simultaneously, we should think of it more as a smartphone with seven different apps. When a smartphone is in navigation mode and giving you directions, it “behaves” quite differently from when you are taking a picture or playing Top Eleven Football Manager. In the navigation mode, the screen displays maps, the speaker clearly gives audio directions, and other parts of the phone, like the GPS chip, are used more than they are when you’re selecting your attacking players in Top Eleven. In the camera mode, the screen serves as a real-time viewfinder, the speaker imitates the sound of an old-fashioned shutter, and the camera lens, instead of the GPS chip, plays a critical role (the GPS chip plays a useful but noncritical role by providing a geo-tag for the photograph). Griskevicius’ point with this metaphor is that, when activated in different apps or modes, the phone’s components perform quite differently. It seems the human brain does the same. When primed into the Selfprotection mode by something scary like a clip from The Shining, the brain guides us toward the safety of crowds. When in the Mate Acquisition mode, the brain drives us to throw caution to the winds and stand out from the crowd. The idea that different evolutionary subselves impact brain function and behavior has huge implications for marketers because these distinct selves are activated by the priming effect of context. When it comes to context, conventional marketing and media thinking fall short in two ways. The first is the classic approach of matching content and context. For years, the advice I have either given or been given is to put ads that tap into a certain emotion into content that mirrors that emotion. Griskevicius’ work suggests that this may, in some cases, be exactly the wrong approach. Putting an ad for a scary movie in a scary movie or TV

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show might seem to be a good idea in terms of reaching the right audience at an appropriate time, but that media context could be priming viewers in a way that makes the commercial’s message ineffective. It is better, perhaps, to use that media opportunity to tell them about a feel-good, feel-safe comedy. Or an alarm system for their house. The second is more systemic, which is our flawed, but understandable, impulse as marketers to see the world as revolving around our brand and our messages.6 We consider what we have to say – be that 15 seconds of video or a handful of square inches – on a screen or in print as the most important single thing in affecting consumers’ decisions, and we discount how their preceding experience, whatever it may be, prepares them to respond to our message. This idea of media as not just a way of just reaching but also preparing consumers reveals an opportunity to position advertising messages in a way that is of greater value to businesses and brands. If media owners can move beyond selling media as way to deliver an audience who may be interested in a brand to showing how their content can prime different evolutionary goals, then they transition from the reach business to the influence business. Media context that prepares your target audience to be instinctively open to your message is going to do a lot more for your brand than context that simply matches it. In a nutshell, what people see before your ad could be as important in influencing their decision as the ad itself.

HOW PEOPLE GET LABELED (OR LABEL THEMSELVES) AFFECTS THEIR BEHAVIOR AND OTHERS’ BEHAVIOR TOWARD THEM Earlier, I wrote about how observing the behavior of others acts as an important driver of our own behavior in ways of which we aren’t always aware. It’s not surprising then, that how we feel others see, or expect to see, us imperceptibly affects our choices and actions. This rubbing together of identity and

When a brand gets mentioned in social media, it often gets described as a “brand conversation.” Kim Lundgren, president of LRW/Greenberg, is quick to point out “conversations are really about people, not brands.” People’s motivations are generally more self-serving than brand-serving – a brand recommendation isn’t as much about the brand as the recommender saying “look how savvy/ knowledgeable/helpful I am.” 6

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culture has a profound and often limiting effect on how we behave, due to social forces such as the stereotype effect or stereotype threat. One example of a stereotype effect is gender labeling. A question I am often asked is, “How are men and women different in their decisionmaking?” I think when people ask this question, they are expecting to hear definitive tales from neuroscience and behavioral science confirming the female and male archetypes popularized in nonscientific books like Men Are from Mars, Women Are from Venus. So, what’s the answer? Should marketers think of men and women as different or similar? The answer is simply, “It depends.” The topic of gender differences is a very charged one. But again, I am in the fortunate position of not wanting to make a politically correct point, nor a politically incorrect one. My only interest is, “When should marketers think of men as being different from women, and when should they think of them simply as humans?” I am not looking for a deep truth; I am just trying to understand what insights from human nature marketers can use to develop strategies of influence. It’s just as well that I’m not looking for the truth, because gender differences are an excellent example of how fluid science is. As with any loaded debate, the gender differences literature is pretty divided, especially when it comes to what is innately different between the biological sexes. Opinions vary. Louann Brizendine, author of The Male Brain and The Female Brain paints a picture that sometimes makes you question whether men and women might be two different, but related species (this perception is, of course, reinforced by her devoting a separate book to each gender). Others, like Cordelia Fine, author of Delusions of Gender, point more to similarities. As Fine says, “the male brain is like nothing in the world so much as a female brain.” Science suggests less of a gender schism than women being from Venus and men from Mars. Certainly, most behavioral studies referenced in this book do not report statistically significant gender differences. That said, many of these studies look at the general effect of cognitive biases on our choices and are not designed to reveal differences by gender. For pretty much every study stressing similarities between male and female brains or behavior, there is another arguing that gender differences are indeed significant. This academic debate echoes the idea from earlier in the book about science being a work in progress; disagreement is what moves science forward.

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Finding agreement on the effect of biological gender on choice is difficult, but a broad consensus among experts exists about how gender as a stereotype affects our decisions. The gender stereotype effect happens for several reasons. First, obvious and fundamental differences between males and females exist that clearly go beyond physiology to cognition and behavior. One obvious difference is the female menstrual cycle; it results in hormone fluctuations that are not present in men. In addition to changes in mood, females also show significant differences in how they make decisions at different points in their menstrual cycles. During the follicular phase – just prior to ovulation and when estrogen levels are high – females are more likely to choose larger-later options in a temporal discounting experiments (we talked about how in other contexts, humans have a tendency to take smaller rewards now in Chapter 7, “Now, and the Future – Different Places with Different Rules”).7 We humans extrapolate from these obvious biological differences to gender stereotypes. Second, we have absorbed very deep-rooted and vivid schema of how we expect men to behave and how we expect women to behave. Schemas are processes and cultural cues absorbed from early childhood through which we build stereotypes. They influence how we think about each other and typically emphasize differences while discounting similarities. Schemas affect gender perceptions and behavior toward others, but they also affect how men or women may perceive their own skills and performance. A unique perspective on the effect of the female gender schema comes from Jan Morris. Morris is a brilliant writer best known for books about traveling, first as James Morris and after gender reassignment in the 1970s, as Jan Morris. In her autobiographical book describing her post-transition experiences, she wrote: The more I was treated as a woman, the more woman I became. If I was assumed to be incompetent at reversing cars, oddly incompetent I found myself becoming. If a case was thought too heavy for me, inexplicably I found it so myself. Debbie Chachra, Professor of Materials Science at the Franklin W. Olin College of Engineering, finds in her own research phenomena similar to those Smith, C. T., Sierra, Y., Oppler, S. H., & Boettiger, C. A. (2014). Ovarian cycle effects on immediate reward selection bias in humans: A role for estradiol. The Journal of Neuroscience, 34, 5468–5476. 7

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that Morris has written about in her autobiography. Chachra has published research looking at how male and female engineering students rate themselves in terms of confidence.8 Although both genders performed equally in terms of academic achievement, after four years studying engineering (and getting grades on average equal to the male students over that time), female students’ confidence levels in terms of being good at math and at solving were significantly lower than their male peers. This is a demonstration of what is known as a stereotype threat, where people feel themselves to be at risk of confirming negative stereotypes about a group they belong to and identify with. A number of other research studies show that females and males perform equally at various mathematics tests; in a study in France among 7- to 8-yearold boys and girls,9 the girls performed less well on difficult math problems when they were reminded they were girls, than if not reminded. The boys’ performance was indifferent to their gender identity being activated. Another study among adults with above-average mathematical ability introduced a simple stereotype threat to a subset of participants by stating up front that the math test was part of research to understand whether men or women are better at math. Women exposed to this stereotype threat performed worse than women who weren’t.10 As we’ve said, despite the gender differences that seem obvious to us every day, outside of the predictable areas that relate to reproduction, there seems to be less gender differences than one would expect in many everyday aspects of behavior. An evolutionary psychologist told me his theory that men scan the horizon and are more alert to movement than women, because of men’s evolutionary role of protecting territory and mates. What a wonderful excuse for the men among us when constantly distracted by the game on the screen at a bar! “I’m pre-programmed to scan for danger in the distance … I’m really just protecting you!” Whether this theory is true or not, it doesn’t

A piece Chachra wrote that combined her personal experiences and research in Nature (August 22, 2017) “To reduce gender biases, acknowledge them” is a good read. 9 Neuville, E., & Croizet, J.-C. (2007). Can salience of gender identity impair math performance among 7–8 years old girls? The moderating role of task difficulty. European Journal of Psychology of Education, 22(3), 307–316. 10 Spencer, S. J., Steele, C. M., & Quinn, D. M. (1999, January). Stereotype threat and women’s math performance. Journal of Experimental Social Psychology, 35(1), 4–28. 8

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extend to retail. I asked a shopper marketing expert, and someone who has been involved in scores of eye-tracking tests to investigate where people look in retail environments. His answer: “No … in pretty much every test we’ve seen, everyone is looking down.” Wherever marketers or scientists land on gender differences (or similarities), here is the most important thing: As a marketer, it doesn’t really matter whether gender schemas are true, as long as you know why you are tapping into them. If men relate to a schema about men – say that men make rational decisions rather than emotional ones – by all means feed that back to your target audience. Exaggerate it, make it comedic, or make it poignant to get your target nodding along with you. You would probably be wasting money trying to persuade them otherwise, even if the opposite is the truth. There is also a broadly held belief that women are better at multitasking than men. This was seemingly confirmed by a global study commissioned by Nokia published in 2007 with the headline “Survey results confirm it: Women are better multi-taskers than men.”11 However, all the Nokia survey really did was to ask respondents who they thought were better multitaskers, and both men and women thought that women were. It turns out that this research simply shows the power of an inaccurate schema in shaping our beliefs. Research from 201912 suggests that men and women are equally bad at multitasking. However, as a marketer, making a connection through the cultural belief that women are better multitaskers may be very powerful, particularly when connecting to people who see it as part of their self-concept. When it comes to putting your marketing together, remember that just like with women, emotional and instinctual aspects account for the vast majority of male decision-making processes, and while you may be praising their rationality, you need to appeal to their hearts. Also remember that even if people believe women are better multitaskers, don’t design a digital experience that assumes that they are. Understand how your consumer sees the world and tap into that to make a connection but understand the realities of their behavior before you construct marketing plans. https://www.pressebox.com/inactive/nokia-gmbh/Survey-results-confirm-itWomen-are-better-multi-taskers-than-men/boxid/138540. 12 Hirsch, P., Koch, I., & Karbach, J. (2019). Putting a stereotype to the test: The case of gender differences in multitasking costs in task-switching and dualtask situations. PLoS One, 14(8), e0220150. https://doi.org/10.1371/journal. pone.0220150. 11

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Whether or not gender schemas are accurate, gender itself is a label. Another interesting, and unexpected, label is your name. In Chapter 5, I wrote about the cocktail party effect. The cocktail party effect demonstrates how special names are – we immediately hear our name over an airport public announcement system or if someone across the room at a crowded party says it. In Drunk Tank Pink: And Other Unexpected Forces That Shape How We Think, Feel, and Behave, Adam Alter writes about how our names – things we have been given or saddled with, rather than chosen – have an effect on our behavior, our life decisions, and decisions others make about us. While the effect of your name isn’t generally as extreme or obvious as it was for the subject of Johnny Cash’s song “A Boy Named Sue,” Alter makes a convincing argument that names do make a difference. One place where the effect of your name on your life may come into play is in the distinctly nonscientific area of aptronyms (also spelled aptonym). An aptronym is a name that seems particularly suited to its owner. One example I’ve already given in Chapter 8, “Loss and Ownership,” is the economist and behavioral economics pioneer Richard Thaler; thaler is an old German word for “dollar.” Other examples include friends of mine in San Francisco who use a podiatrist called Dr Knee. Alter refers to the urologist team of Drs Weedon and Splatt, the Aussie Rules footballer Derek Kickett, and Israeli tennis player Anna Smashnova. Research examining nominative ­determinism – the idea your name influences your profession or other aspects of your life – suggests that there are more people whose first name begins with “Den” in the dental profession than found in the population at large. However, the notion of nominative determinism has been challenged by Uri Simonsohn, the behavioral scientist whose work as a data detective I’ve mentioned a number of times earlier in this book.13 Scientifically valid or not, aptronyms seem to crop up regularly. This may be, because they create a vivid connection, names that match an occupation or In a great example of scientific debate, the original research ((Pelham, B. W., Mirenberg, M. C., & Jones, J. T. (2002). Why Susie sells seashells by the seashore: Implicit egotism and major life decisions. Journal of Personality and Social Psychology, 82(4), 469–487)) was challenged by Simonsohn ((Simonsohn, U. (2010). Spurious? Name similarity effects (implicit egotism) in marriage, job and moving decisions. Journal of Personality and Social Psychology, 101, 1–24)). Simonsohn’s challenge was then countered by Pelham and Carvallo ((Pelham, B., & Carvallo, M. (2011). The surprising potency of implicit egotism: A reply to Simonsohn. Journal of Personality and Social Psychology, 101(1), 25–30. doi:10.1037/a0023526)). 13

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interest are particularly sticky, so we overestimate their actual incidence. Perhaps a memory bias called the context effect is at play. The context effect occurs as things that are “in-context” (rather than out-of-context) are easier to retrieve. So I’m not sure I would recommend a targeting strategy for a baking goods company that assumed a particularly high percentage of people named Baker are in fact bakers, or even remotely interested in baking – although this phenomenon may explain why Arsenal Football Club hired a Frenchman named Arsene Wenger as their coach, and after great initial success still stuck with him over a period of nine trophy-less years.14 Aptronyms may be a bit of a stretch, but Alter does convincingly demonstrate that names have an important influence on our lives. Names are, literally, our identity. He points to a number of studies that show how people’s names affect others’ behavior toward them and how names can even, insidiously, affect how employable that person is considered.15 Perhaps more importantly for marketing. Alter shows how names have a hidden effect on the behavior of the person who carries that name. The work of the late Belgian psychologist Jozef M. Nuttin showed how people prefer the letters in their own names, choosing these over other letters in choice tasks and selecting them more frequently when listing their top six favorite letters. Nuttin described this as the effect of mere ownership. Alter also points to an interesting analysis of real-life behavior that shows that we don’t just like the letters in our names, but we are also likely to give financial favor to an option that begins with one of our initials over one that doesn’t. Using donation records of a chapter of the Red Cross in the Midwest, a team of researchers from University of Michigan16 investigated whether the “name letter effect” influenced donations to hurricane relief. Specifically, they were looking to see whether people who shared an initial with the hurricane were overrepresented as donors to that hurricane. They found that this was the case – people whose names began with “K”

The trophy drought ended in 2013, with victory over Hull City in the FA Cup final. Wenger hung on, much to many Arsenal fans’ chagrin, until 2018. 15 “Are Emily and Greg More Employable than Lakisha and Jamal? A Field Experiment on Labor Market Discrimination” by Marianne Bertrand, Sendhil Mullainathan and published by the National of Economic Research found that a resume with a white-sounding name had a 1 in 10 chances of getting a callback, but for an identical resume with a black-sounding name that number dropped to 1 in 15. 16 Chandler, J., Griffin, T. M., & Sorensen, N. (2008). In the “I” of the storm: Shared initials increase disaster donations. Judgment and Decision Making, 3(5), 404. 14

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were more likely to donate at the time of Hurricane Katrina relief than they were to other hurricane relief efforts, and people whose names began with “M” were more likely to give within the period of Hurricane Mitch relief. A friend of mine who is Filipina was particularly moved to respond to the effects of Typhoon Haiyan on her homeland, raising many thousands of dollars for relief through her network of friends, something she had not attempted before. In the Philippines Typhoon Haiyan was known as Yolanda. My friend’s name is Yumi. It’s a little ironic that marketers gather huge amounts of hard-to-get data on consumers but using the most public information about someone – their name – has not been used often as a marketing technique. One exception is a highly successful campaign for Coca-Cola that started in Australia in 2011. Under the umbrella of “Share a Coke,” the company printed 150 of Australia’s most popular names on bottles and cans. The campaign took off like wildfire, and in Australia, a country of 23 million people, Coke sold 250 million cans and bottles with names on them, and various media reports suggest the campaign boosted consumption by 7% – a significant amount for such a large brand. The idea spread to 70 countries. In the United Kingdom, market research firm YouGov reported that “Consumer perception of Coca-Cola, Diet Coke and Coke Zero improved substantially on virtually every measure for those who were exposed to Share a Coke TV adverts,” and The Grocer, a UK trade magazine, quoted Nielsen data that showed a 10% increase year over year. A version of the campaign reached Coke’s homeland in 2014, and according to the Wall Street Journal, the campaign halted an 11-year decline for Coke in the United States, and increased sales by 2%. In a 2019 interview, Lucie Austin, Marketing Director for Coca-Cola South Pacific, said: At the end of the day, our name is the most personal thing we have, It’s our fingerprint … our identity … in one word. We’ve put the most personal thing there is on one of the most iconic brands in the world. Appeals to implicit egotism aren’t just limited to names. It extends to other aspects of identity. This was demonstrated in a study17 where

Finch, J. F., & Cialdini, R. B. (1989). Another indirect tactic of (self-) image management: Boosting. Personality and Social Psychology Bulletin, 15(2), 222–232. 17

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students were given a short biography of Rasputin (the Russian mystic who had a hypnotic hold over Tsarina Alexandra, and whom legend portrays as evil and demonic18). Some students were given an altered biography so that they shared a birthday with Rasputin. Those students who “shared” a birthday with Rasputin regarded him less negatively than students who read a biography that included Rasputin’s actual birthday. The appeal of connections like sharing a name, a letter, or a birthday gives opportunities for brands to build empathy, connections, and nudges to action with consumers. In an age where there are rightly concerns about marketers using data that consumers consider to be private, we may be overlooking the power that lies in some of the most public data about people – their names and birthdays. Our identity is precious and our desire to defend or boost it affects so much of our behavior. Debbie Chachra makes this point by adapting Upton Sinclair’s well-known line “It is difficult to get a man to understand something when his salary depends upon his not understanding it.” Chachra’s riff on this is “it’s difficult to get a man to understand something when his selfimage depends on his not understanding it.” Chachra’s version strikes me as a more profound insight into human nature. Expressing an action as part of someone’s identity can make the person more likely to carry out that action. A 2011 study19 from Stanford University and Harvard University showed the importance of word choice for invoking the concept of self. The study compared how phrases like “I am a voter” or “I vote” affected voter registration and turnout. The important distinction between the two phrasings is that the latter describes something people do (i.e., an action verb) and the former describes the self. Participants in the study received surveys that used the “I am a voter” or “I vote” phrasings. Those who read the phrasings that described the self were more likely to register to vote and to actually vote.

Legend also portrays him as an inveterate womanizer, giving credence to Boney M’s claim that he was “Russia’s greatest love machine” in their 1978 song Ra Ra Rasputin. 19 Bryan, C. J.,W., Walton, G. M., Rogers, T., & Dweck, C. S. (2011). Motivating voter turnout by invoking the self. Proceedings of the National Academy of Sciences of the United States of America, 108(31), 12653–12656. 18

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FROM MACRO TO MICRO, OUR ENVIRONMENT AFFECTS OUR CHOICES Adam Alter is an expert not just on names but also on context in many of its forms. In an interview at the time of the launch of his first book, Drunk Tank Pink, he told me: [Even broadest level aspects of the environment] like the weather, whether it’s a sunny day or a rainy day, influence whether people are likely to purchase products. It influences whether people are likely to purchase stocks. Researchers have found that, when you look at the performance of the stock market on days when it’s sunny, the stock market tends to appreciate. In general, people buy more stocks. They’re also happy to buy products, so you get the same basic effect for financial stocks and for products. Uri Simonsohn (perhaps now better known for researching other people’s research than for his own research) conducted a study that also looked into the effect of weather (a short-term condition) on a decision that has longterm, even lifelong consequences. He carried out an analysis that included college visits data and meteorological records of weather for the areas where the colleges are located. By so doing, he was able to observe if a pattern existed between the local weather conditions on a day when an individual visited a college, and the likelihood of them enrolling. Whereas Alter tells us how sunny weather prompts some choices, Simonsohn provides evidence that cloudy weather prompts other decisions, and that it potentially affects college enrollment decisions as cloud cover primes academic attributes. Consistent with the notion that current weather conditions influence decisions about future academic activities, I find that an increase in cloud cover of one standard deviation on the day of the visit is associated with an increase in the probability of enrolment of 9 percentage points. This of course relates to what we covered in Chapter 7, “Now and the Future – Different Places with Different Rules.” Simonsohn ascribes this trait to projection bias, the tendency to erroneously believe that your tastes and preferences will remain the same over time.

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The fact a decision as important as which college to enroll in can be influenced by such trivial and transparently irrelevant transient factor as cloud cover on a single day, suggests that projection bias is likely to be a rather general phenomenon, probably playing a role in an important share of intertemporal decisions. One very practical application of this research for anybody marketing colleges or adult education is to think about testing media placements next to cloudy weather forecasts, to use “weather-triggered” marketing or even test imagery in creative work that creates a sense of cloudiness. “Place” is of course a context. James Hallatt, for many years the global head of GlaxoSmithKline’s (GSK) Oral Health Category, told me of the importance of sampling for one of GSK’s global brands, Sensodyne: Being given a sample for Sensodyne by a dentist in his or her surgery for a sensitive teeth sufferer is clearly a powerful recommendation because it comes from a professional. But the surgery environment, the patient’s full orientation to their oral care whilst lying in the surgery chair and the dentist’s one-to-one attention all add context to the moment and further endorse the message in a profound manner. In a 1985 paper20 on mental accounting,21 Richard Thaler reports on a choice he gave to regular beer drinkers who were participants in an executive development program. You are lying on the beach on a hot day. All you have to drink is ice water. For the last hour you have been thinking about how much you would enjoy a nice cold bottle of your favorite brand of beer. A companion gets up to go make a phone call and offers to bring back a beer from the only nearby place where beer is sold (scenario A: a fancy resort hotel) [scenario B: a small, run-down grocery store].

Thaler, R. (1985). Mental accounting and consumer choice. Marketing Science, 4(3), 199–214. 21 Mental accounting covers our tendency to think of money differently, depending on its source, or what we intend to do with it. This can lead to beneficial or nonbeneficial outcomes. For example, people will sometimes resist using savings to pay off high interest loans, even though it would be in their best interest to do so. The irony of mental accounting is that money becomes less fungible. 20

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He says that the beer might be expensive and so asks how much you are willing to pay for the beer. He says that he will buy the beer if it costs as much or less than the price you state. But if it costs more than the price you state he will not buy it. You trust your friend, and there is no possibility of bargaining with (scenario A: the bartender) [scenario B: store owner]. What price do you tell him? The difference was striking. In scenario A, when the beer was bought from the luxury hotel participants were prepared to pay $2.65 (equivalent to $6.36 in 2020), and in scenario B (the run-down grocery store), they were prepared to pay $1.50 (equivalent to $3.60 in 2020). Thaler points out that the beer is the same in both cases (your favorite brand), that the place and time of consumption was the same (on the beach), and that no “atmosphere” (and I would add, no “service”) is consumed. Thaler uses transaction utility as an explanation of the difference. Transaction utility is how we feel about the deal we are getting, or what we end up paying versus what we expected to pay. But what might drive that expectation of higher prices? Is it just a nonconscious calculation of reference prices (the explanation Thaler offers) or could it also be the effect of imagining the opulence of the place where the beer would be acquired, the tuxedo-wearing barman passing the beer over an Italian marble bar with his spotless white gloves? Environment cues have an effect on what we buy and how much we are prepared to pay for it. Other research shows retail effects of low versus bright lighting, of scents, and even of the amount of space between displays. (Research shows that shoppers “placed in a narrow, confining aisle seek greater variety in their candy-bar choices than people placed in a wide aisle.”22) A study looking at wine selection in a supermarket in the United Kingdom showed the dramatic effect that different types of background music had on how people chose.23 French and German wines that were similar in price and quantity were displayed. Music played from the display, and it varied on alternate days. One day stereotypically French accordion music was played, but on the next day, wine shoppers heard recognizably German brass Oom-pah music. When the French accordion music was played, nearly

Levav, J., & Zhu, R. (2009). Seeking freedom through variety. Journal of Consumer Research, 36(4), 600–610. 23 North, A. C., Hargreaves, D. J., & McKendrick, J. (1999). The influence of in-store music on wine selections. Journal of Applied Psychology, 84(2), 271–276. 22

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8 out of 10 bottles sold were French wine. When the Oom-pah music was played, just over 7 out of 10 bottles sold were German wine. After their purchase, shoppers completed a questionnaire. Responses to the questionnaire suggested that customers were unaware that the music played a part in their choice; 86% reported music had no effect on their choice. In marketing, we focus so much on the foreground but forget what a difference the background can make to people’s choices.

HOW WE FEEL – THE UNRELATED EMOTIONS THAT INDIVIDUALS BRING TO THEIR DECISIONS We’ve all experienced the feeling when it seems someone has been a little short with us or seems irritated by our greeting. Often, our first reaction is to question what we did to earn this reaction. “What is wrong with me?” we ask ourselves. Or we simply attribute their behavior to their personality and think the worse of them. More often than not, though, a subsequent conversation reveals that something entirely unrelated – an argument with a family member, a frustrating experience with a customer service representative, a worry about health or finances – was what really affected their behavior toward you. Your brand will often find itself in the same position. Howsoever you may have set out its stall with your marketing, you are at the mercy of a shopper’s personal previous context, something that is often beyond your control. Previous contexts can have a profound effect on the choices people make. Take, for example, a famous experiment from the 1970s that took place at Princeton University. The study is often referred to as “The Good Samaritan Study,”24 after the New Testament parable about a man who has been beaten, robbed, and left at the side of the road for dead by his assailants. In the parable, two people with religious backgrounds – first a priest and then a Levite – subsequently passed by the injured man without stopping to help. Finally, a man from Samara, who had no vocational reason to help, stopped and assisted the victim, patching up his wounds and paying for his stay at an inn while he recovered.

Darley, J. M., & Batson, C. D. (1973). From Jerusalem to Jericho: A study of situational and dispositional variables in helping behavior. Journal of Personality and Social Psychology, 27(1), 100–108. 24

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In the Good Samaritan experiment, students at Princeton Theological Seminary were asked to prepare a short talk to give to a group of people in a building a short walk away. Some participants were asked to speak about job prospects for seminarians, while others were asked to speak about the parable of The Good Samaritan. To gauge the likelihood that they would offer help to others, all students were also asked to complete a short personality test with some specific questions asking how they felt about religion. Students were then asked to walk to the building where they were to give the talk. Before the students left, the researchers spoke to them. To one third of the students, the researchers said, “Oh, you’re late. They were expecting you a few minutes ago. We’d better get moving …” To another third of the students, the researchers said, “The assistant is ready for you, so please go right over.” To the final third, the researchers said, “It’ll be a few minutes before they’re ready for you, but you might as well head on over …” On the way to the building where they were to give their talk, all students passed by someone who appeared to be in distress (this person was actually a research confederate), but only a handful of them actually stopped and offered help. Interestingly, neither the rather heavy-handed prime of drafting a speech about the Good Samaritan parable nor the results of the personality test indicating whether the individual was likely to help others predicted the students’ behavior. It was only the third variable – the state of hurriedness the students felt before walking to the building where they were to give their speech – that determined whether the students offered help. Those students not in a hurry were more likely to stop and help. The study leaders, John Darley and C. Daniel Batson, wrote in their paper: Thinking about the Good Samaritan did not increase helping behavior but being in a hurry decreased it. It is difficult not to conclude from this that the frequently cited explanation that ethics becomes a luxury as the speed of our daily lives increases is at least an accurate description. In short, being in a state of hurry not only had a more significant effect on participant’s behavior than their philosophy or sense of values did, but it also

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beat out a very recent reminder of the importance of offering help, writing about the Good Samaritan parable, which should have been very persuasive to the theological seminarians who took part in this study. Having some understanding of a potential chooser’s state of mind when he or she is getting your message or making a choice is important. Accounting for state of mind is one of the factors behind the success of the discipline of shopper marketing. People behave differently enough in a retail environment (actually, even from one retail environment to another) to require a different sort of expertise to market to them. The traditional view of brand marketing is that the differences between people’s psychographics and demographics underlie their behavior. What we have learned from evolutionary psychology and behavioral science would suggest that people’s state of mind at the time of the choice makes a more significant difference. Context, in its broadest sense, makes a big difference in how people choose. As marketers we fixate on content, and see it as king, because it seems easier for us to control. However, that is an illusion. Context can either nullify or turbocharge content in terms of how it influences choice. Your content is only as good as the context that surrounds it allows it to be. The king isn’t dead, but long live the queen. The takeaways from this chapter are: • Everything about how people reach decisions is context dependent. It’s so important, I’ll say it again. Everything about how people make decisions is context dependent. • The context that surrounds a choice primes powerful evolutionary goals. These (sometimes subtle) situational differences can make the same person make very different choices. • Humans use schemas and stereotypes to help us make quick evaluations that are (often inaccurate) extrapolations of actual behavior. Marketers, being human, do this as well. We need to make sure that we understand that stereotypes aren’t predictors of actual behavior. • We tend to favor things that have connections with us. Sharing a birthday or an initial makes us feel more warmly toward that person or entity. If you are a fundraiser, don’t just send your appeals from one person – recruit a panel of people and match the names or initials of senders to the recipients.

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A couple of thoughts other people had when they read this chapter: • “It’s not just about saying the right thing. Say it in the right place. In the right way. Context is what drives the insight and content.” • “[…] thinking about content without context verges on pointless.”

13 SAME AND DIFFERENT; NATURE AND NURTURE

Both nature and nurture drive people’s choices, so marketers need to factor both into their thinking. In Harry Potter and the Chamber of Secrets, Dumbledore says “It is our choices, Harry, that show what we truly are, far more than our abilities” to Harry to reassure him that while he may see similarities between himself and Tom Riddle (Voldemort), Harry is different because he chooses to use his powers for good. If it is our choices that show what we truly are, what shapes our choices, and thus shapes us? Universal aspects of behavior? Our individual biological differences? The effect of our cultural context? Our personal experiences? The answer is, of course, all the above. So, conveniently, we don’t need to get into a debate about whether our choices are driven by nature or nurture. The answer is both. In the last chapter, we saw how the social context of gender differences affects behavior, and I discussed how context molds our choices, leading us to choose differently in different circumstances. But aren’t there also innate differences between individuals that affect their choices? When I first became interested in the application of behavioral science to marketing, I was struck by how many of the experiments in the various fields focused on the average effect across the sample of participants rather than considering why that effect is more or less observable in some individuals. To be honest, you could read a number of the brilliant books that have popularized the discipline of behavioral economics and be left scratching your head and wondering whether you are any different 189

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from your neighbor, from a taxi driver in Tokyo, or a teacher in Hamburg. Of course, in so many ways you aren’t different from them, but there are also so many ways in which you are. A prominent focus of behavioral economics (especially in the earlier studies) has been establishing the existence of cognitive biases in humans rather than revealing what range of effects these biases may have. As discussed in Chapter 8, “Loss and Ownership,” prospect theory suggests that a loss has approximately twice the negative psychological impact as an equivalent gain has a positive psychological impact. Pretty much every time I have run a workshop with or given a presentation to marketing professionals, I’ve been asked the question, “Is that number true of everyone?” It’s a good question, and the answer is no.1 It’s a question that marketers ask because so much of marketing thinking focuses on the differences between people rather than similarities. We look to target different people with different products. We divide our users into different groups. We buy media based on the demographic and psychographic differences of the audience it attracts. We come up with “handles” for groups born after a certain year and before another – Boomers, Gen Xers, Millennials – and ascribe to them completely different attitudes, beliefs, and even behaviors. Sometimes it feels like we are making our brother and sister humans seem like a collection of different species. Marketers spend considerable sums of money trying to find differences. Every large client I have worked with has invested heavily in a segmentation study, the purpose of which is to divide the total market into groups that are similar in their differences. These groups (or segments) can then be assessed for their potential value to the brand, their addressability, and whether they should be a priority target. Typical criteria used to form these segments might be how one group’s needs from the category or brand may differ from other groups; how their claimed behavior differs; demographics and psychographics; or how a group’s media use is different, how group attitudes and emotional needs may lead them to be more or less receptive to a particular product or message than the other groups. In Chapter 8, “Loss and Ownership,” we discussed how loss aversion is context dependent. Other factors, including age, may also lead to variations in the size of loss aversion’s effect. Research among a sample of 660 Germans across a range of age and socioeconomic groups showed older participants were more loss averse, and more educated participants were less loss averse. Gaechter, S., Johnson, E. J., & ­Herrmann, A. (2007, July). Individual-level loss aversion in riskless and risky choices. 1ZA Discussion Paper No. 2961. 1

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Segmentation studies don’t run cheap – a thorough one including analysis can run anywhere from $300,000 to $1 million, or more, depending on the scope, size, and number of countries covered. That’s just the beginning of it – segmentation often directly influences marketing investments that cost tens or hundreds of times the cost of fielding the study. Individual differences are important to marketers (this chapter suggests some novel areas of individual difference that are directly related to behavior), and from a practitioner’s perspective may seem rather less important to behavioral scientists. An over-generalization that I sometimes make is that marketers often place too much emphasis on perceived differences and that behavioral scientists (from the perspective of the application of their work to marketing) place too little emphasis on them. Behavioral experiments are generally designed to suggest an effect at a population level. In contrast, segmentation studies, while incredibly valuable, always have the effect of magnifying differences, which may or may not be useful. One way the head of consumer insights of one famous clothing company I have worked with gets around this magnification is by identifying individuals who fit into the key groups described by the segmentation study and then making mini documentaries about their lives and their tastes. The consumer insights team even finds individual consumers who are representative of the groups identified in the segmentation study and has them come to key briefing meetings with the broader marketing and product teams. While this personal approach helps people see differences between the segments, it also subtly reinforces the importance of more universal human motivations and desires that a segmentation study can lead marketers to ignore. The lack of discussion I found in much judgment and decision-making research about the potential effect of culture on people’s choices also perplexed me. Marketers, particularly advertising agencies, are obsessed with culture – and for good reason (as Engel, Blackwell, and Miniard say in their book Consumer Behavior, “a marketer with a defective knowledge of culture is doomed”). In the previous chapter, I wrote about how stereotypes can create cognitive consonance – things that we implicitly agree with and get us figuratively nodding along. Ideas and themes that have cultural resonance probably do the same thing. From the receiver’s perspective, an idea that connects with what people are talking about, what they are watching and listening to, what they are interacting with and sharing is probably worth acknowledging.

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As often as not, the effect of a culturally relevant theme or meme2 in marketing is less a mechanism that will trigger a decision or behavior and more a hook to get people to become attentive and engaged. What actually moves the chooser to make a choice is the connection between a feeling a message creates and innate behavioral tendencies, many of which I covered in the preceding chapters of this book. For example, let’s look back into the archives of advertising at a commercial that ran more than 40 years ago and that in 2007, the UK marketing trade magazine Campaign, called “one of the best-loved and most influential ads in TV history.” The commercial, featuring hundreds of young people singing “I’d like to buy the world a Coke,”3 nailed the Zeitgeist (a term borrowed from the German for “ghost or spirit of the times”). When the commercial aired, American troops had already been fighting in the Vietnam War for six years with no end in sight, and the Cold War was dividing almost the entire world. The commercial, as many people from Coca-Cola have said, quickly became more than an ad; it became a rallying message of tolerance and hope. Coke’s commercial had a huge cultural effect at the time (and more recently, in 2015)4 – 100,000 people wrote to the Coca-Cola Company (at a time when letting a company know that you approved of something they had done involved a lot more effort than clicking the “Like” button on the company’s Facebook page), and radio stations were inundated with requests to play the

A meme is “an idea, behavior, style, or usage that spreads from person to person within a culture,” and was coined by Richard Dawkins in his 1976 book The Selfish Gene. 3 I’m sure you’ve seen this commercial – it is actually called “Hillside.” As the titles at the end read “On a hilltop in Italy we assembled young people from all over the world to bring you this message …. It is my, and many other people’s all-time favorite TV commercial. A written description won’t do it justice, so if you haven’t seen it go and watch it on YouTube. If you do know it, give yourself a treat by watching it again. 4 The iconic stature of the Hillside/“I’d like to buy the world a Coke” commercial was reinforced in 2015. It was used to bring down the curtain on the final episode of Mad Men, when Don Draper finds calm and peace from his complicated life at a retreat on the Northern California coast. With some poetic license from the producers of the series, Draper envisions a world of harmony and hope and appears to conceive the famous the commercial. Matthew Wiener, the creator of Mad Men, said afterward “To me, it’s the best ad ever made, and it comes from a very good place,” he explained. “The ambiguous relationship we have with advertising is why I did the show.” 2

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jingle as a song. (Incidentally, the song was recorded shortly thereafter, but without a mention of Coke in the lyrics, by The New Seekers. It reached number 1 and number 7 in the UK and US charts, respectively.) Although the commercial’s message of tolerance and the cultural impact it had are a large part of what made it a much-loved ad, the behavioral engine that made it effective may lie more in its brilliant and positive use of social proof. By finding an artful and meaningful way of showing so many people holding Coke bottles, the commercial didn’t just remind viewers that Coke was popular, that it was something many people with whom viewers could identify were buying and drinking. Because social proof is a powerful way of activating the innate behavioral tendency to do what others do, it made choosing Coke an intuitive behavior. It made Coke a natural choice. What’s happening in society or in pop culture or how congruent something is with an individual’s values or tastes are all important in shaping how people choose. While human nature operates – by definition – at a timeless and universal level, what about things that are more individual or anchored in a specific time? What about the things that make us different from the people around us and the people who came before us? Differences between individuals exist for many reasons. Some are inherited in the form of genes that have helped a homogeneous group fare better in their common environment. For example, indigenous Scandinavians have adapted to get the most out of the little sunlight available in northern latitudes and thus get the benefits of vitamin D3 (vital for strong bone growth, immune response, and functioning of the brain) from the sun. Adaptations include not just fair skin that maximizes absorption but also a culture of sunseeking behavior (tourists in Stockholm are often amused that deck chairs outside bars and in public places are arranged in neat rows, angled precisely to catch the maximum rays at a certain time of the day). Other individual differences may occur because a mix of personalities and behaviors in a population benefits the population as a whole. A study published in 20135 reported the discovery of a “leadership gene” and created a frenzy in the popular press. One of the authors, Dr Jan-Emmanuel De Neve reported:

De Neve, J.-E., Mikhaylov, S., Dawes, C. T., Christakis, N. A., & Fowler, J. H. (2013). Born to lead? A twin design and genetic association study of leadership role occupancy. The Leadership Quarterly, 24(1), 45. 5

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We have identified a genotype, called rs4950, which appears to be associated with the passing of leadership ability down through generations … the conventional wisdom – that leadership is a skill – remains largely true, but we show it is also, in part, a genetic trait. If leadership is to have societal value, then not everyone can have that role. Whether people are destined to be leaders or followers gets into a moral discussion which is not within the scope of this book (but could be an interesting conversation over a pint of beer), but the idea that a society may fare better when its population has diverse but complementary strengths is an interesting and welcome one. The point for marketers is that while human nature is universal, it comes in different strains. In order to grasp how nature and nurture and how population similarities and individual differences play into how we choose, I developed a map a couple of years ago, and although it doesn’t completely answer the questions about how our background and environments affect our decisions, it at least allows one to plot a wide range of influences on human choice. (Way bigger brains than mine continue to debate how nature and nurture affect choice. In any case, the answers, if they are ever discovered, will be more interesting to philosophers and scientists than marketers.) I find Fig. 13.1 useful Fig. 13.1.  Universal/Individual and Innate/Absorbed (UIIA) Map.

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as a framework to help visualize the latent variables impacting choosers’ behavior.

HUMAN NATURE The Human Nature quadrant lives at the intersection of Universal and Innate and is really what many of the chapters of this book have been about. This space is all about the shortcuts all humans use and how our intuitions have evolved over thousands of years. These factors are near to universal and, as we’ve said before, they are the bedrock of human decision making. But as we’ve discussed, and will discuss more in this chapter, context, culture, and an individual’s experience of life can all moderate these installed tendencies, a little, a lot, or not at all.

GENETIC MAKEUP Moving up to where Innate and Individual meet, our Genetic Makeup dictates many of our physical differences, so it should come as no surprise that genes also play a role in differences in brain structure and thus in our behavior and our choices. In 2010, Itamar Simonsen and Aner Sela published a paper examining similarities and differences in the decision-making behavior of identical and fraternal twins.6 Simonsen and Sela begin their paper with the observation: While constructed preferences have received a great deal of attention, there has been virtually no research regarding the genetic basis of consumer judgment and choice. In their paper, Simonsen and Sela suggest that genetics research will lead to discoveries about individual differences in decision making. Despite the advances made by genetics researchers, Simonsen and Sela nonetheless think it may take decades before it is possible to find “the links among heritable

Simonson, I., & Sela, A. (2011, April). On the heritability of consumer decision making: An exploratory approach for studying genetic effects on judgment and choice. Journal of Consumer Research, 37(6), 951–966. 6

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effects and the mechanisms underlying such effects on things such as risk aversion, divorce, or liking jazz.”7 There is no doubt that we will start to see more findings from genetic research casting light on what underpins differences in preferences and decision-making approaches between individuals (the “leadership gene” mentioned earlier in this chapter is an example). The issue for marketers will be how addressable these insights will be – targeting people on the basis of their genetic makeup may not just be a technology challenge but more importantly, an ethical one. De Neve, one of the authors of the “leadership gene” study “Born to lead? A twin design and genetic association study of leadership role occupancy,” states the ethical hazards of genetic tests for leadership selection and assessment, and the potential for this to lead to genetic discrimination in the labor market. An obvious and observable individual trait where genetic differences affect behavior of a sizeable minority of the population (between 9% and 11% in the United States) is right- or left-handedness. One dirty little secret of neuroscience is that almost all studies (both academic and commercial) use right-hand-dominant people as research subjects8 because significant differences in brain organization, many of which are not yet fully understood, exist between right- and left-handers. It isn’t simply a question of flipping brain images around and using a mirror image of a right-hander’s brain to interpret left-hander’s activity! As marketers, we don’t have to delve deep into the neuroscience of these differences (though it is a fascinating area of research), but we can think of its effects in the real world. One obvious effect in terms of physical brand and retail experiences is to make sure that, wherever possible, they are as easy for left-handers as right-handers. However, a real opportunity presents itself in digital environments.

Although it may be some time before we get an extensive picture on genetic differences affecting choice, it is something researchers are tackling already. A study I reference later in the book (Doll, B. B., Hutchison, K. E., & Frank, M. J. (2011). Dopaminergic genes predict individual differences in susceptibility to confirmation bias. Journal of Neuroscience, 31, 6188–6198) suggests that people with a polymorphism of a certain gene are more affected by the confirmation bias. 8 Willems, R. M., Van der Haegen, L., Fisher, S. E., & Francks, C. (2014, February). On the other hand: Including left-handers in cognitive neuroscience and neurogenetics. Nature Reviews Neuroscience, 15, 193–201. 7

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A 2012 paper by Ryan Elder and Aradhna Krishna9 reports on their research into the visual depiction of cues in advertising and their likely effect on behavior. In one test, the researchers showed participants three versions of an ad. One had a bowl of yogurt with a spoon on the right-hand side (the spoon serves as a cue to consumption or action), another had the spoon on the left-hand side, and a third had no spoon at all. For other tests, they showed two versions of ads, one version showing cues that were righthanded (including forks, a hand holding a burger or mug handles), the other showing left-hand cues. Across these studies, the findings showed an increase in purchase intent when participants’ own hand dominance matched the image they were shown (so right-handers responded better when the spoon was on the right-hand side of the plate, or when the coffee mug handle was turned to the right). This research shows two things. The first is a reminder of the importance of visual cues as a path to action. If there is a way of showing a cue that relates to the action you want people to take – be that an eating utensil, a button on a screen, a bottle opener, a keypad, dial pad, or pen – there’s a pretty good chance that featuring it will nudge your audience a little closer to action. However, what interested me most about Elder and Krishna’s work was the opportunity to address people with different hand dominance in different ways in digital media. If one could identify whether the person being served ads is left- or right-handed with some degree of accuracy, through different keystrokes, mouse, or touch screen actions and gestures (just as a handwriting analyst can determine whether someone is right- or left-handed), serving ads designed to appeal specifically to lefties or righties would be possible. As mentioned earlier, left-handers account for around 11% of the population, which is bigger than every cultural minority in the United States except for African Americans (13.6%) and Latinos (17%). By ignoring the differences innate in left-handers, we run the risk of serving that 11% of the population suboptimal advertising. In a battle of increments, that could make a difference.

Elder, R. S., & Krishna, A. (2012, April). The ‘Visual Depiction Effect’ in advertising: facilitating embodied mental simulation through product orientation. Journal of Consumer Research, 38(6), 988–1003. 9

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CULTURE As we move from left to right at the bottom of the framework, we look at how what people experience at a group level may affect their choices. Without debating the existence of a “collective unconscious,” there are some ideas that seem to fall somewhere between “innate” and “absorbed.” Archetypes are just one example. Some argue that the archetypes described by Carl Jung and others are so deeply rooted as to be as instinctual as cognitive biases. Others argue they are learned or absorbed. Many marketers are very familiar with archetypes as a way to distill a brand’s meaning, largely due to Margaret Mark and Carol Pearson’s book The Hero and the Outlaw. Mark and Pearson have adapted the archetypes made famous by Jung and built upon by Joseph Campbell in a way that can be applied to the roles that brands inhabit. For example, American Express and Mercedes may be seen as fitting with the archetype of “The Ruler,” whereas Nike and the brand of the US Marines might be seen as embodying “The Hero” archetype. Although the scientific validity of brands as archetypes in consumers’ minds is debated, archetypes are nonetheless a useful way of thinking about what territory a brand occupies and as a tool to guide brand activity and imagery that is consistent with that territory. Similarly, some experts believe metaphors operate at an unconscious level. Gerald Zaltman, the Joseph C. Wilson Professor Emeritus at Harvard Business School and the author of How Customers Think and Marketing Metaphoria, sees the surface metaphors used in everyday conversation as connecting to frameworks that are familiar to everyone and that relate to us in very deep ways. Language also lives in this space. In The Language Instinct, Steven Pinker argues convincingly that language is not entirely learned but is instinctual as a concept. (Probably the simplest way to say this is that we have an instinct for language, but that languages are learned.) Pinker uses the example that children’s mistakes when talking come from their own constructions; they do not memorize and copy what their parents say. An example that Pinker gives is that a young child may say, “He teared the paper and then he sticked it,” which it is unlikely to be how their parents speak. Children grasp the idea of language before learning the specifics of their native tongue. That said, the details and idiosyncrasies of your home language, which are learned, can influence your behavior. Kofi Amoo-Gottfried, who is head of marketing at DoorDash, and a board member of NGO Population Services International (PSI), was born and raised in Ghana. At one stage in his career, he ran the

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Accra office of a global advertising agency network. According to Kofi (and he is as loyal to his country as anyone), Ghanaians have a reputation for a flexible notion of punctuality. Kofi believes that this might be partly due to the fact that there isn’t a pejorative connotation to the concept of “lateness” in Ashanti, the language spoken by many Ghanaians, nor is there a directly translatable word. As Kofi says, “Rather than saying ‘you’re late’ we say, ‘it’s taken you a while’ and that doesn’t carry the same sense of admonishment.” The structure of a language doesn’t just affect how people speak. It can affect what they do. Keith Chen is an associate professor of economics at UCLA Anderson School of Management (he also consults with businesses and was part of the team that conceived Uber’s surge pricing model). Chen conducted an interesting analysis10 of how languages with different structures affect behaviors with future consequences. Specifically, Chen’s paper looks at the effect of languages that have differences in how they require future events to be grammatically marked when making predictions. Languages that require more “marking” are considered strong in “future-time reference” (FTR), while those that require less are considered weak-FTR languages. Chen writes: […] a German speaker predicting rain can naturally do so in the present tense, saying: Morgen regnet es which translates to “It rains tomorrow.” In contrast, English would require the use of a future marker like “will” or “is going to,” as in: “It will rain tomorrow.” In this way, English requires speakers to encode a distinction between present and future events, while German does not. This makes English a strong-FTR language, and German a weak-FTR language. Now before English speakers start doing celebratory laps on the basis of their language being stronger than German, in terms of leading to what should be considered better and healthier behaviors, having a strongFTR language isn’t necessarily a good thing. In this respect, a strong-FTR language is like having a high score in a golf tournament. Chen’s analysis using OECD data shows that member countries of that organization whose population mainly speaks strong-FTR languages save 4.75% less on average than those member countries whose member population mainly speaks weak-FTR languages. While it is impossible to say how Chen, K. M. (2013). The effect of language on economic behavior: Evidence from savings rates, health behaviors, and retirement assets. American Economic Review, 103(2), 690–731. 10

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much of this effect is driven by language, it is safe to say that language, culture, and behavior are all intertwined. It also seems the tense in which something is expressed may have an effect on how we react to it. Andrea Weihrauch, Assistant Professor of Marketing and Consumer Psychology at the University of Amsterdam, has investigated the role of tense in the context of advertising claims and social interactions, and she is particularly interested in the power of the present continuous tense. Her research11 shows that the use of present continuous versus present tense can affect judgments of product use duration (e.g., how long a battery will provide power before needing to be recharged), which translates into more favorable attitudes toward products and brands. The present continuous (or present progressive as it is also known) has a number of strengths from a behavioral perspective. I often suggest its use for brands talking about their purpose. It seems to act as a bridge between present and future, by suggesting an action is immediate and ongoing. It avoids making the future too distant, and thus too easy to discount. Weihrauch notes that this subtlety of tense difference is not always captured when marketers translate their copy. For example, McDonald’s “I’m Loving It” uses the present continuous in English, but in a number of languages is translated as “I Love It.” This may be because of a present continuous form not existing or not being part of colloquial speech in those languages. Closer to the far right of the map, as we move from “individual” to “many,” we get into the effect of culture. Culture has a huge impact on our behavior and choices, and any decent exploration of the subject is beyond the scope and constraints of this book. It’s a huge topic, not just because of the number of cultures in the world but also because culture is constantly changing.12 Richard Weihrauch, A., & Dewitte, S. (2015). The present is not the present: How processing the present progressive brings future events and promotional deadlines closer. In K. Diehl & C. Yoon (Eds.), NA – Advances in consumer research (Vol. 43, pp. 734–735). Duluth, MN: Association for Consumer Research. 12 The work of Geert Hofstede and his Cultural Dimensions Theory is a widely used resource. The Hofstede Centre provides courses and tools based on Geert Hofstede’s research. One interesting tool lets you compare the cultures of 102 countries across six key dimensions: power distance, individualism, masculinity (meaning a culture driven more by competition than cooperation), uncertainty avoidance, pragmatism, and indulgence (which in this context means a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun). The tool can be found at https://www. hofstede-insights.com/models/national-culture/. 11

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Nisbett, author of The Geography of Thought, has looked at these both on an international and intranational level. His research covers the effects of culture on behavior, showing differences between males who have grown up in the Southern states of the United States and those brought up in the Northern states,13 and how Eastern and Western cultures affect people’s perception of self and others, and thus their choices. A number of years ago, I interviewed Nisbett and asked him specifically how he thought these differences might affect global brands and their marketing strategy. His suggestion was that rather than one size fitting all, you might want to consider at least two sizes … MW: What might global brands learn from the work that you’ve done in terms of how different cultures actually go about making decisions and thinking about things? RN: One (finding) is that some cultures are much more interdependent and others are much more independent. Interdependent people have closer ties to other people, especially those who are in some direct relationship with them like friends and family and company. They have more to do with them, they care more about them, they’re more sensitive to socio-emotional cues than the independent people. Independent people have wider circles of acquaintances where they deal with people who are typically in a wider range of occupations, of businesses, and there is a big difference in how likely you are to trust someone in the in group versus the out group. Interdependent people trust completely in the in group, people that they’ve gotten to know well, that they feel like they understand what makes them tick. Independent people cast a much wider net; they trust a much wider range of people and sources. MW: So, should brands think about a strategy for interdependent societies, and a different strategy for independent societies? RN: For marketing, almost surely, there are examples of ads that show the difference of what people believe to be more effective in

Cohen, D., Nisbett, R. E., Bowdle, B. F., & Schwarz, N. (1996, May). Insult, aggression, and the southern culture of honor: An ‘experimental ethnography.’ Journal of Personality and Social Psychology, 70(5), 945–960. 13

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interdependent societies, which include East Asians in particular, probably South Asians. Eastern Europeans are more interdependent than Western Europeans. Continental Europeans are more interdependent than Americans. Basically, the further West you move, the more independent people are as opposed to interdependent. Although global brands may not want to address every cultural difference (it would be both expensive and create a more fragmented brand), I do think the idea of considering global strategy in terms of how it might separately address independent and interdependent mindsets is an intriguing idea. One potent area of culture is religion. Asking people about their religious beliefs in market research is either taboo or prohibited in many western countries (in France, e.g., you cannot ask people about religious beliefs in screening questionnaires to recruit respondents for focus groups). But, not surprisingly, given the depth of its role in many people’s lives, different beliefs lead to different choices – beyond spiritual ones. My former colleague Ambi Parameswaran is an expert in how religion, brands, and business can become intertwined. One of his books, For God’s Sake,14 covers how religion – and the differences between religions – affect people’s choices and behaviors in India. He says: Mining cultural differences provides fertile opportunities for product and service innovations; in high religiosity countries like India, we have seen products and services exploiting religious differences to build large businesses. Azim Shariff, associate professor and Canada research chair at the University of British Columbia has looked15 at how the nature of the god at the helm of a religion can affect peoples’ likelihood of cheating. Shariff’s research found that people who viewed God or Gods as vengeful, harsh, fearsome, angry, punishing, jealous, and terrifying were less likely to cheat in a test than those who saw God or Gods as forgiving, loving, compassionate, gentle, kind, comforting, and peaceful.

Parameswaran, A. (2014). For God’s sake: An adman on the business of religion. New Delhi: Penguin. 15 Shariff, A. F., & Norenzayan, A. (2011). Mean gods make good people: Different views of god predict cheating behavior. The International Journal for the Psychology of Religion, 21(2), 85–96. doi:10.1080/10508619.2011.556990. 14

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Beyond different religions, the degree of religiosity has been found to have an effect on consumer behavior. In a study among Muslims, Buddhists, Hindus, and Christians in Kuala Lumpur, Malaysia,16 people with higher levels of religiosity were found to be more price and quality conscious and less likely to make an impulsive purchase.

LIFE EXPERIENCE As we move up the y-axis from Culture, we see how individual experiences may impact the choices we make. In The Rational Animal, Griskevicius and Kenrick discuss how the experience we have growing up affects our choices through our lives. To answer the question as to why so many people from underprivileged backgrounds who make substantial amounts of money often end up bankrupt (sometimes multiple times), Griskevicius and others conducted research17 that suggests that thinking from evolutionary biology known as Life History Theory may point to an explanation. Life History Theory suggests animals use one of the two reproductive strategies – Fast, which means having as many offspring as possible as early as possible; Slow, which means focusing on a higher quality upbringing for fewer offspring. This varies by species (some species of frogs lay 20,000 eggs at a time and invest very little in them; humans take the opposite approach), but we also see differences within species. At times in history and places in the world today where life expectancy is, or has been, shorter and the environment more uncertain and dangerous, humans have had more offspring – the fast strategy. As the environment feels more certain, people adopt a slower strategy, which includes having children later. Two or three generations ago, the number of children an Irish woman bore in her lifetime was often near double digits. World Bank data for Ireland put that figure at an average of 1.8 in 2017. A quick glance through these data for the rest of the world shows a statistically significant and directional decline in births per woman from 1990 to 2017 for virtually every country outside of Western Europe. Mokhlis, S. (2009). Relevancy and measurement of religiosity in consumer behavior research. International Business Research, 2(3), 75–84. 17 Griskevicius, V., Tybur, J. M., Delton, A. W., & Robertson, T. E. (2014, December). The influence of mortality and socioeconomic status on risk and delayed rewards: A life history theory approach. Journal of Personality and Social Psychology, 100(6), 1015–1026. 16

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In Kenya, the number has gone down from 6.0 to 3.6, in Iran from 4.7 to 2.1, in Paraguay from 4.5 to 2.5, and in the Lao PDR from 6.2 to 2.7.18 Getting back to those who start with little, make a fortune, and then lose it, the hypothesis that Griskevicius et al. wanted to test was whether an unstable upbringing leads people to intuitively follow “fast strategies,” even if they are successful in later life. Griskevicius et al.’s research looked at how people who have experienced uncertainty and resource shortages when they were growing up differ in certain aspects of their decision making later as adults. When people from lower socioeconomic status (SES) groups were primed into a stressful and uncertain condition, they tended to make decisions that would result in getting a smaller reward immediately rather than a larger reward in the future. Participants from higher SES groups, or participants from lower groups who were not primed for stress and uncertainty were less impulsive and more future oriented in their choices. You have almost certainly heard of the famous marshmallow experiment conducted by Walter Mischel19 and colleagues at Stanford in 1972. In a series of studies, Mischel et al. tested nursery school students’ (aged between 3½ and 5½ years old) ability to delay gratification meaning they were less swayed by the forces of temporal discounting). The study has become famous as much from what participants did in later years than what they did in the experiment – in the years that followed participants were tracked and those who were able to wait out the temptation to get the additional reward were seen to do better on a number of measures including higher SAT scores. The popularized story of this research has suggested that the ability to delay was the factor that contributed to successes later in life, though Mischel himself was always keen to point out that it was the participants use of strategies to distract themselves that was the more significant factor. The superpower that the kids who got the better SAT scores years after delaying their marshmallow consumption may have come down to them being more creative creative problem solvers than anything else.

World Bank. World development indicators: Reproductive health. Retrieved from https://data.worldbank.org/indicator/SP.DYN.TFRT.IN?end=2017& locations=KE-RO-IR-PY-LA&start=1990. 19 Mischel, incidentally, was one of the first to argue that personality traits don’t remain consistent over different situations and contexts, which relates to many of the things we discussed in Chapter 12, “If Content Is King, Context Is Queen.” 18

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An interesting follow-up experiment relates to Griskevicius and Kendrick’s research on how uncertainty affects people’s tendency to take smaller sooner rather than larger later. In a 2012 study, researchers from University of Rochester gave kids a similar predicament to the original Stanford marshmallow experiment. However, in this study,20 before the marshmallow part of the study, the kids were given a creative exercise that required the use of crayons. The crayon boxes were deliberately made difficult for the kids to open, and the researcher told the kids they would be given a better box. For half the kids, this promise was kept, but the other half were told that there had been a mistake and no new boxes of crayons were available. The first group’s environment was “reliable,” while the second group was in an unreliable environment, where there was uncertainty as to whether what was promised would be delivered. After the crayon box experience, all of the children took part in the marshmallow test. The kids in the reliable environment, who had been given the new box of crayons to replace the difficult to open box, were able to delay their consumption for an average of 12 minutes. Those in the uncertain, unreliable environment acted more quickly to take the smaller reward and ate it after three minutes. It’s not just kids and marshmallows. An analysis of the 2015 Gallup End of Year survey, and of literature investigating the relationship between income, age, and discounting (the tendency to take smaller sooner over larger later) by Giovanni Burro from the University of Warwick, shows a paradox, which is that wealthy individuals are more patient as they age (especially if they are from Canada, Sweden, Finland, or Germany), while poor individuals are less patient as they age. A 2018 study among Gitanos (the Romani community in much of Spain) looked at a discount delaying at a group level.21 Gitanos have lower life expectancy and poorer health than the majority, along with a historical and proximal experience of discrimination and persecution. The researchers reported:

Kidd, C., Palmeri, H., & Aslin, R. N. (2013). Rational snacking: Young children’s decision-making on the marshmallow task is moderated by beliefs about environmental reliability, Cognition, 126(1), 109–114. ISSN 0010-0277. 21 Martin, J., Branas-Garza, P., Espín, A. M., Gamella, J. F., & Herrmann, B. (2018). The appropriate response of Spanish Gitanos: Short-run orientation beyond current socio-economic status. Evolution and Human Behavior, 40(1), 12–22. 20

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According to Life History Theory, Gitanos will tend to adopt “faster” life history strategies (e.g., earlier marriage and reproduction) as an adaptation to ecological conditions and, therefore, should discount the future more heavily than the majority. Our results support this prediction, even after controlling for the individuals’ current SES (income and education). Moreover, group-level differences explain a large share of the individual-level differences. Our data suggest that human inter-group discrimination might shape group members’ time preferences through its impact on the environmental harshness and unpredictability conditions they face. Our experiences, especially those early in life, shape our choices later in life. And this is true not just of the harsh realities suffered by Gitanos. Our more trivial experiences, such the brands we were exposed to when we are young stick with us. Most people’s preference for Coke or Pepsi wasn’t something they developed in their 20s or 30s. Specialty grocery stores in San Francisco do a nice line in selling foreign chocolate bars at premium prices (ToffeeCrisp, Aero, Double Decker, and Twirl, to name just a few) that transplants like me grew up on, and many decades later happily pay that premium when we feel an urge for sweet nostalgia. Now, still in the top half of the framework (the part that is labeled “Individual”) we drift back from the right-hand side. Here at the intersection of nature and nurture are some interesting areas that can lead to different behavior. We covered gender to some extent in the previous chapter, so I won’t dwell on it now. The effects of birth order are a common topic of conversation among parents as they notice differences between their oldest, their youngest, and even the children in between. Frank Sulloway, Visiting Scholar in the Institute of Personality and Social Research at the University of California, Berkeley, and author of “Born to Rebel” would agree: Birth order is the single most obvious factor that makes the shared family environment different for each sibling. Birth order sums up several variables, not just one. It is a surrogate for differences in age, size, power, and privilege among siblings.

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A paper by David Rink22 suggests that this could spill over to purchase decisions made in later life. Rink reviews previous research (including Sulloway’s) and hypothesizes that being firstborn may lead to different behaviors during the decision making, buying, and post-purchase processes. From his analysis and interpretation, he concludes that in terms of seeking information, firstborns may tend toward more adult-oriented or authoritative sources and look at more sources, while later-borns may tend to favor peer-oriented sources and look at fewer overall. Post-purchase Rink suggests that firstborns may require more confirmation that the purchase is the correct decision than later-borns. Rink also posits that later-borns will be more likely to be early adopters than firstborns. In The Consuming Instinct, Gad Saad points to further work by Sulloway that suggests that younger siblings are more prone to base stealing in baseball.23 Newer research24 suggests that the effects of birth order may not be as strong as those reported in Sulloway’s work. There is little doubt, though that age is a factor in how we choose. There is some truth that we become “set in our ways,” or certainly more defined by our experience, as we get older. Two aspects of general intelligence, fluid intelligence (solving problems in novel situations, and independent of acquired knowledge) and crystalized intelligence (the ability to use skills and knowledge that we have acquired) play a part in this. With age, fluid intelligence declines and crystalized intelligence increases. The optimal intersection of both is estimated to be when we are in our late 40s and early 50s. However, every passing year doesn’t affect our behavior and decisions in the same way. Some milestones seem to affect us in different ways. An interesting and ingenious analysis of data25 from a number of sources by Adam

Rink, D. R. (2010). The impact of birth order upon consumers’ decisionmaking, buying, and post-purchase processes: a conceptualization. Innovative Marketing, 6(4), 71–79. 23 Sulloway, F. J., & Zweigenhaft, R. L. (2010). Birth order and risk taking in athletics: A meta-analysis and study of major league baseball. Personality and Social Psychology Review, 14(4), 402–416. 24 Lejarraga, T., Frey, R., Schnitzlein, D. D., & Hertwig, R. (2019, March). No effect of birth order on adult risk taking. Proceedings of the National Academy of Sciences of the United States of America, 116(13), 6019–6024. doi:10.1073/ pnas.1814153116. 25 Alter, A. L., & Hershfield, H. E. (2014, October). People search for meaning when they approach a new decade in chronological age. Proceedings of the National Academy of Sciences of the United States of America, 111(48), 17066–17070. 22

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Alter and Hal Hershfield looked at what happens when people’s ages end in nine, whether that is 29, 39, 49, or 59. Their analysis suggested that when people reach this milestone, they are: • unfortunately, a little more likely to commit suicide (at 15.05 per 100,000 of population in the United States, versus 14.71 in a control of 25- to 64-year-olds); • more likely to run a marathon for the first time (among 25- to 64-yearold first-time marathon runners, “9-enders” were overrepresented by 48%); • likely to run a marathon more quickly (people aged 29 and 39 had a mean completion time of 3 h:15 m:18 s, versus a time of 3 h:18 m:32 s for people two years before or after those ages); and • (for males between 25 and 64 with a 9 ending) nearly 18% more likely to be registered on a website for people seeking extra-marital affairs than the total of registered users in the same age bracket. The implication is that “9-enders” might be more interested in acquiring products that might symbolize defiance of the passing years or be more open to experiences that may give them a sense of meaning as they enter the new decade. So if you are marketing sports cars, adventure travel, or anything else (a certain kind of website perhaps?) that might relate to what Alter and Hershfield call “a search for, or crisis of meaning,” you might want to eschew the traditional age target of looking at a spread (25- to 44-year-olds) and focus instead on 29-, 39-, and 49-year-olds. Our choices are an extension of us. And all of us are a blend of how our genes makes us similar or different, and how our environment and experiences lead us to behave like others, and yet differently from others. Knowing that our choices are part individual, part universal, part innate, and part absorbed can help us not just understand people’s choices but also be a little more understanding of them. The takeaways from this chapter are: • Many things affect our choices, from deep-seated and universal human instincts to our individual physical and cognitive differences, to our upbringing and personal experience.

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• Existing segmentation studies tend to look at self-reported behavior. Including questions in areas like birth order and life history can help provide insight into areas of differences that have a nonconscious effect on choices. • Differences in native language may lead to different behaviors and choices. For global marketers, language provides an insight into cultural differences that drive behavior. • Culture can lead to a huge amount of behavioral differences from group to group, but one large macro division, between cultures where an interdependent mindset dominates versus one where an independent one dominates, is something global advertisers might want to pay attention to. • Middle classes in developing countries may increasingly adopt “slow” strategies as increases in wealth and certainty become seen as a norm rather than a windfall. • Don’t just think of your potential users in broad age bands. Being more specific is sometimes helpful. Behavioral research and neuroscience reveal differences that may be predictive of choice that marketers have traditionally not focused on: birth order, dominant handedness, and being of an age ending in “9.” What other people said after reading this chapter: • “I find I’m either in ‘same’ mode (thinking how an audience is similar), or in ‘different’ mode (hyper focusing on differences between groups). I’m going to try to hang on to this duality of ‘same and different’ when I’m thinking about my target groups.” • “I’m going to be 49 next year – I’m going to be very aware of what might be driving some of my choices now!”

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14 THE POWER OF AFFIRMATION AND SPARKING JOY

Marketing shouldn’t just be about getting people to make a decision to buy your product – it should also be about helping them feel good about their choice. We are all the center of our own universes – and marketers are no exception. But it’s not all about your brand. It’s about their – the chooser’s – decision to choose it. I’m never sure whether this is blindingly obvious or a profound insight.1 If it is the latter, it supports the argument that we should think of marketing not as brand-centric, or even consumer-centric, but as decision-centric. Brand health monitors ask people how brands make them feel. I’d suggest adding more decision-centric questions to probe “how does the decision to choose the brand feel – how does the prospect and process of choosing it feel, and how does that choice feel afterwards? About a year ago, I bought some travel binoculars. Of course, I researched a range of binoculars, compared their specifications, and read any reviews I could find. I ended up choosing one of Swarovski’s CL Pocket models. I am very pleased with the purchase. Why then (and I will admit to this) have I checked out reviews on these binoculars at least three times since I bought them? Apparently, I’m not alone. Research from the Georgetown Institute for Consumer Research2 found that 78% of consumers sought out A wry definition of an insight: something that is blindingly obvious to the man (or woman) in the street but a revelation to marketers. 1

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information about their brand or product after making a purchase (including information from product packaging and product manuals). Further, 47% of consumers sought out information from sources other than the product packaging or manual, such as ads, online information from third parties, or online information from the original brand. Of those searching for more information, 67% agreed with the statement that they were looking to reaffirm their purchase decision. Additionally, 88% agreed with the statement that they wanted to learn more about the product, and 65% wanted to learn more about the brand. Rationally, this makes little sense: Why invest further attention in a decision that you have already made? Typically, as marketers we tend to put this tendency down to conscious affirmation of the purchase decision. However, findings from neuroeconomics and behavioral psychology suggest that this behavior could be the result of some powerful instinctual mechanisms. Research suggests our brains are selectively tuned into information that reinforces decisions we’ve already made. Essentially, anything that makes us feel good about a choice, whether that choice is the new car we just bought or the toothpaste we have used every day for the last 30 years, doesn’t just make us feel good about our decisions but makes us feel good about ourselves. After we make a decision, a phenomenon called the confirmation bias occurs. The confirmation bias is our tendency to selectively seek information that supports our decisions. We discount all but the most overwhelming suggestions that we have made the wrong choice, and, importantly, we inflate evidence and memories that support our choice. Neuroscience work suggests that the confirmation bias is mediated, at least in part, by the neurotransmitter dopamine.3 Dopamine is memorably known as “the brain’s pleasure chemical,” but dopamine’s role in the brain exceeds just tracking pleasure. Dopamine release communicates information about expected rewards – what we got compared to what we thought we would get. (Dopamine’s role in tracking rewards is important because

Willcox, M., Hydock, C., Carlson, K., & Banerji, I. (2014, October). A new model of consumer engagement. Georgetown Institute for Consumer Research (GICR) Research Brief. 3 Doll, B. B., Hutchison, K. E., & Frank, M. J. (2011). Dopaminergic genes predict individual differences in susceptibility to confirmation bias. Journal of Neuroscience, 31(16), 6188–6198. 2

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reward accumulation drives decision making. Remember in Chapter 5, “Getting Familiar,” I wrote that neuroscientists and psychologists would classify a “good decision” as one that maximized rewards.) The flipside of the confirmation bias is that we also tend to hold on to pre-conceived notions, and sometimes it can be a roadblock. Dopamine helps our pre-frontal cortex signal the rest of our brain to perseverate on things we already know – even if that information is obviously incorrect. Not only do we seek validation but we also want to preserve the feeling that we have made the right decision. (The alternative – the feeling that we have made the wrong decision is an inordinately big downer.) Making the “right” decision feels good … so when we feel we have done so; we don’t want to spoil the party in our heads. Confirmation is rewarding. No wonder we try to get as much of that feeling as we can by seeking out affirmation of our decisions. The confirmation bias is at play even when we’re seeking advice. This may seem a little odd, because the rational utility of advice is to give us a perspective other than our own. But often it seems that another perspective isn’t what we actually want from those advising us. In a recent study,4 researchers at SWPS University, Wroclaw looked at how people rated a financial advisor on the quality of their advice across a number of scenarios. The researchers reported that: When consumers had a positive opinion towards life insurance, they ascribed higher epistemic authority (EA) to the advisor who recommended purchasing it. Epistemic authority is defined as the extent to which individuals are inclined to treat a source of information as an incontrovertible evidence for their judgment and decision-making. However, when the clients’ opinion was negative, the results revealed a reversed pattern: Recommendation “against” led to assigning a higher EA than recommendation “pro.” Essentially, when a financial advisor’s recommendation was in line with the previously held views of the client, the client rated the advisor more highly. Zaleskiewicz, T., & Gasiorowska, A. (2018). Tell me what i wanted to hear: Confirmation effect in lay evaluations of financial expert authority. Applied Psychology: An International Review, 67, 686–722. doi:10.1111/apps.12145. 4

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Reinforcing a good decision and the confirmation bias are important because they suggest that, at its best, marketing isn’t just about influencing decisions or just about making people feel good about your brand. An important additional role of marketing is helping choosers feel good about their decision to choose your brand. There is wonderful simplicity and deep consumer-centricity (or choosercentricity) in this notion … it is about their decision, rather than your brand. And taking this a step further, it is not brands that have the greatest potential to make people feel good: it’s people’s decision to choose them. Just as we all know that feeling in the pit of our stomachs when we feel we have made a bad decision – be it a sandwich in a meeting room lunch that disappointed or not taking the damage waiver insurance on a rental car and then scratching it as you return it to the lot – we also know that near-euphoric feeling when we get confirmation that we have made a good one. This happy feeling in turn creates feelings of greater confidence in the choice we have made, which is not just emotionally valuable to consumers but financially valuable to brands. Research specifically into how people feel about their choice process (rather than the product they chose) shows that when people feel confident about the way they have chosen, they show greater persistence with that decision, meaning they are more likely to repeat their purchase of that product.5 Stanford’s Baba Shiv suggests that when people feel confident in their choices, they get more utility out of the product, and they also feel good about the brand. But this confidence in choice is not just a powerful form of brand equity. The real payoff maybe how decision confidence translates choosers into influencers. Shiv believes that people who are truly confident about their choices are more active and more credible recommenders and advocates. There are some important things for marketers to take from Shiv’s perspective. One is that an individual’s satisfaction with a product or brand doesn’t just come from its performance but also from how good purchasers feel about their decision to choose it. In most cases, if it feels like the right decision, our emotions and experiences tell us it is. People might run faster in their new running shoes when their choice has been affirmed as a good one or enjoy wine more if they feel they made a smart decision in selecting it. Muthukrishnan, M. V., & Wathieu, L. (2007). Superfluous choices and the persistence of preference. Journal of Consumer Research, 33, 454–460. 5

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Another is that when a decision feels good, it’s contagious. We often feel compelled to let people know about our great choices. It certainly boosts self-esteem. Perhaps contagiously spreading a good decision with others has evolutionary roots – sharing a good decision might have benefited both the individual (in terms of social standing) and their community (in terms of others in the community benefitting from that decision by making a similar choice). Pinterest and Amazon tap into this desire to share our choices, by offering you the option to share what you just bought online. Traditionally, marketing has focused directly on influencing an initial decision. But in a world where the opinions of “others” are the greatest influence, investing a little more effort in helping people who have already bought your brand feel good about their choice could bolster their instinct for spreading that feeling. An interesting finding from research by scientists at University College London is that the more we think about a good choice, the better that choice becomes. In an experiment in which participants imagined taking a holiday while their brain activity was monitored, participants were shown the names of 80 locations around the world and asked to imagine spending next year’s vacation in each of those destinations. They then rated (using a keypad with a scale of 1–5) how happy they would be to vacation at each of the 80 locations. In a second brain scan, participants were shown two options they had rated similarly. (Let’s say they had rated both Thailand and Greece at 5 on the scale.) They were asked to imagine vacationing in these two locations they had rated equally. When asked to choose between the two options, people chose the destination that most activated the caudate nucleus, which is a brain area important for anticipating rewards and for learning. In fact, activity in the caudate predicted which destination would eventually be chosen from a selection of similarly rated alternatives. After making their choice, participants were once again asked to rate the two destinations (remember – they had rated both of these equally in the previous round). If Thailand was chosen over Greece, it was subsequently rated even higher while Greece was rated lower. And activity in the caudate measured by the brain scan tracked with the reevaluation: Activity increased for Thailand and decreased for Greece. University College London professor Tali Sharot, the expert on the optimism bias whose work we mentioned in Chapter 7, “Now, and the Future – Different Places with Different Rules,” led the study. Sharot said:

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Re-evaluating our options post-choice may serve an adaptive purpose by increasing an individual’s commitment to the action taken. In the absence of a rapid update of value that concurs with choice, we are likely to second-guess our decisions and actions. Affirming our decisions helps us derive heightened pleasure from choices that might actually be neutral, which in terms of net human happiness must be a good thing. Without affirmation, our lives might well be filled with second-guessing. Have we done the right thing? Should we change our mind? We would find ourselves stuck, overcome by indecision and unable to move forward – and from an evolutionary perspective, that would be a very, very bad thing. Back in Chapter 8, “Loss and Ownership,” we covered how Marie Kondo had found a way to unstick herself (and, subsequently unstick millions of others) from the tyrannical hold that loss aversion has on the clutter in our closets. By asking “what should I keep?” rather than “what should I throw out?” Kondo helps us reframe the decision so that it doesn’t feel like a loss. But her intuitive use of the intuitions that guide our decision making doesn’t stop there. Kondo slays other beasts as well. Kondo urges us to touch all our items and only keep those that “spark joy.” In so doing, she helps us think about the items in the present, rather than in the hazy, less-concrete ways we construe them in the future. It’s all too easy to justify keeping that shirt that is now too tight on the basis that we will lose weight at some unspecified time in the future, or that the questionable T-shirt we bought on vacation a decade ago might be part of some yet-to-be conceived Hallowe’en costume. By considering whether an item “sparks joy” Kondo is essentially asking us to reaffirm our original decision to choose that item. As we know from Tali Sharot’s research, when we think a little more about the things we really like, we like them even more and anticipate greater emotional reward from them. And the good news is that once we have concluded that an item “sparks joy,” we will enjoy it even more in the future. Equally, we become less excited by the options that we favor less, and more open to discarding them. The result is a closet containing fewer items but one storing greater potential happiness. Before donating or throwing away items that don’t spark joy, Kondo asks her clients to thank the item for its service. By honoring your relationship with that item, she suggests, it’s easier to let it go forever.

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Again, Kondo is onto something. Creating a sense of closure about choice can be important in terms of letting us move on with our lives. Used correctly, creating a sense of closure could be beneficial for choosers and marketers. The labeled hooks that we found in the changing rooms of Old Navy stores in Chapter 10, “Make It Easy – For the Mind and the Body,” are a good example of this. They make it easier for people to rule out options (when they put items on the hooks labeled “Not For Me”) and help them feel good about the items they have chosen (when they put items on the “Love It!” hooks). Simona Botti, David Faro, and Yangjie Gu have studied how seeking and avoiding closure affects how people feel about their choices. One insight they offer is important for marketers contemplating how they might facilitate choice closure. The act of closure has to be performed by the decisionmaker rather than someone else. In one of their experiments,6 Botti, Faro, and Gu asked participants to choose from a selection of 24 chocolates in a cake dome (cake domes are those platters with a domed glass cover that you often see in patisseries for displaying confections). In one condition, they asked participants to take a chocolate and try it. In the second condition, they were told to place the transparent dome back on the selection before tasting the chocolate. When asked about their satisfaction with the chocolate they had chosen, those who had replaced the cover on the selection indicated higher levels of satisfaction than those who had not replaced the cover and thus had not created physical closure on their choice. Those who covered the selection were also less likely to think about the chocolates they hadn’t chosen, reducing potential regret. In an interview with Emily Cloney, in the London Business School Review,7 Botti suggests helping choosers bring closure to their choices by: designing spaces or procedures to facilitate choice closure; for example, by positioning sales tills at a distance from displays, or requiring website customers to cancel items they’ve considered but rejected. In a line of thought that supports the notion of taking a decision-centric approach to marketing, Botti continues, Gu, Y., & Botti, S., & Faro, D. (2013, August 1).Turning the page: The impact of choice closure on satisfaction. Journal of Consumer Research, 40(2), 268–283. 7 Cloney, E., & Botti, S. (2016). Being choosy about choice. London Business School Review, 27, 10–13. doi:10.1111/2057-1615.12109. 6

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(there are) two principle benefits of cultivating strong brands: firstly, that they become decision-making short cuts, offering customers a clear pathway to a particular choice without navigating through a myriad of products. Secondly, they offer a guarantee of quality, reassuring customers that they’ve made a good choice, helping them to make peace with their choice. And, in case you’re interested, I’m still feeling good about my choice of binoculars. The takeaways from this chapter are: • It’s not about your brand, but the chooser’s decision to choose it. Our choices can make us feel very good or very bad. When someone feels good about a choosing your brand, it is not so much your brand that triggers the feeling as it is their choice. • Confirmation bias and choice affirmative bias make us feel good about choices we have made. Our brain doesn’t want us dithering over choices – it wants us to either stick or switch and will do what it can to make us feel good about whichever we choose. • Don’t think of marketing as being just about influencing decisions. How can you make people feel good about their choices? When they do, they are more likely to get more out of the product, to buy it again, and tell other people about it. Remember, though, they aren’t really telling others about your brand, they are really telling them about their great choice. What other people felt when they read this chapter: • “I run an e-commerce site. I am going to test sending links to articles that praise particular products AFTER people own them.” • “[…] this chapter emphasizes that we’re in a relationship with our customers. Why would anyone stay friends with someone or continue to be someone’s partner if that other person didn’t make them feel good about themselves and their decision?”

PART III LOOKING FORWARD

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15 THINK DIFFERENTLY ABOUT MARKET RESEARCH

What people think or say they will do are poor predictors of actual behavior. When Steve Jobs was asked if Apple had used consumer research to help design and launch the iPad, he replied, “No.” And when asked why not, Jobs said, “It’s not the consumer’s job to know what they want.” While many of us might not want, or might not be well advised, to trust our guts to the extent that Jobs did when he oversaw the creation of the iPad and iPhone, we could learn from his skepticism toward people knowing what they really want. Actually, a better answer for Jobs to have given would have been, “Consumers aren’t very good at telling you what they really want.” While more and more organizations have realized the importance of understanding nonconscious aspects of decision making, a lot of marketing research is still based on asking people what they think about products, brands, or ideas, whether through questioning them in focus groups or having them answer direct questions in quantitative research. In 2018, I partnered with BEESY, a behavioral science research firm, on a project with a large consumer goods company that aimed to encourage people to reduce their impact on the environment. The process involved developing messages and experiences based on insights from behavioral science, which were then tested in a RCT (we’ve briefly covered these earlier in this book but will go into more detail on RCTs later in this chapter). In this study, we were able to measure the behavioral impact of each intervention by giving respondents a real-life choice task. At the end of the survey, they were asked

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to estimate how much of an effect the intervention had on their decision. The intervention that had the biggest behavioral effect, as measured by the actual choices it prompted people to make in the choice task was estimated by the respondents themselves to be less effective than a number of the other interventions! What they thought might affect their choice didn’t, and what they thought wouldn’t affect them did …. Although I wouldn’t go as far as Gregory House, M.D., the character for whom the very popular TV show House is named, when he says, “I don’t ask why patients lie, I just assume they all do,” we marketers really shouldn’t take everything people tell us in research at face value. There is increasing opportunity to use methods that don’t force our potential choosers to deliberate unnaturally over questions regarding decisions that they will make intuitively. There are many reasons why people aren’t good at telling you what they want, or what influences them, especially in traditional research situations. The first is that traditional qualitative and quantitative research can make people pay attention differently than they do in the real world. Robert Heath, professor at the University of Bath Management School and author of The Hidden Power of Advertising, has written a lot about the theory that we tend to be in one of the two modes when we are processing information. One mode is high involvement processing, which is when we are actively paying attention to something, and the other mode is low involvement processing, which is when our attention is running in the background. (Low involvement processing and high involvement processing can be seen as alternative descriptions of what Kahneman refers to as System 1 and System 2, respectively.) According to Heath, these two modes work in quite different ways from each other. High involvement processing enables us to remember logical detail and recall limited amounts of it very accurately but often only for a short period of time. Memories recalled during high involvement processing are triggered voluntarily. Low involvement processing seems to seed memories that can be subsequently triggered involuntarily by external episodes with which the memory has some association. These types of memories are often more emotional, last longer, and feel more powerful. They are also formed without deliberative attention. But when we are primed to be in the high involvement processing mode, we may miss noticing these incidental, but potentially important, events or details.

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The famous “Invisible Gorilla” experiment,1 conducted by Chris Chabris and Dan Simon while they were at Harvard University (later, they published a book with the same name), demonstrates this effect beautifully. Without spoiling the book or experiment (you can find the test and take it yourself at the URL in the footnote at the bottom of this page, and if you haven’t taken it you may want to now, before reading any further), Chabris and Simon’s research shows that if people are primed to pay attention to a piece of film and then given a memory task, they will recall detail from the memory task but likely will miss nonprimed events that may be more significant in a broader context and more emotionally loaded (like failing to notice a large primate in the midst of a group of people). We seem to pick up emotions better when we aren’t actively paying attention. Robert Heath points out two important aspects of how humans pay attention that are relevant to advertising and in particular to how we research it. Heath’s first point is that much consumer research puts respondents in a high involvement processing mode and gives them high involvement processing tasks like detail recall or having to abstract meaning from an advertisement. However, the nature of much of the media exposure that our brands get is likely to be consumed via low involvement processing. The second point Heath emphasizes is that for many brands, entering memory through low involvement processing may be more helpful for marketers. Low involvement processing allows the brand to forge emotional connections, and external associations can trigger these memories at a later date. Research that – implicitly or explicitly – asks respondents to pay attention to advertisements might be putting too much emphasis on what they perceive through high involvement processing and might fail to get a measure on what information is being retained by low involvement processing. Unfortunately, the former is likely to contribute less to the advertisement’s effectiveness than the latter. Another pitfall in asking people direct questions in research is that we are not as rational as we want to think we are. When asked to explain a decision

http://www.theinvisiblegorilla.com. Chabris and co-author Dan Simons were recipients for an Ig Nobel prize for psychology in 2004 for their work in the area of inattentional blindness, including the invisible Gorilla experiment. The Ig Nobel prize. The awards “honor achievements that first make people laugh, and then make them think.” Other winners from the field of psychology include David Dunning and Justin Kruger, who first described incompetent people’s inability to recognize their incompetence, which is commonly known as the Dunning–Kruger Effect. 1

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or a preference, we want to feel (and want others to feel) that we were consciously aware of each of the steps of that choice. No one wants to say, “I don’t know why I like that” or “I just chose it without thinking about it.” The store we place on rational intelligence in education and culture makes this seem an admission of stupidity. But as a reminder (though I’m sure none is needed), most aspects of most of our choices are not deliberative. You might have even heard numbers stating this is as high as 90% or 95%. Most scientists who study decision making would say it is nigh on impossible to put a number on the proportion of our decision making is nonconscious and would stop simply at a “a lot” or even “most.” The 95% estimate comes from Gerald Zaltman, whose work in the field of metaphors we discussed in Chapter 13, “Same and Different; Nature and Nurture.” This number has been used a lot by practitioners (including me until three or four years ago), with some level of blind belief. In 2019, Elina Halonen did what many of us should have done before and asked members of the behavioral science practitioner community if they knew where the that 95% number came from. One of the members had previously investigated this, as while the number is used in one of Zaltman’s books, there was no apparent source, so they emailed him. Zaltman’s response was this: It is a helpful number to make a point but impossible to actually measure. There are probably a family of such numbers in various fields: directionally correct but ultimately unmeasurable. The 90% figure is attributed to Gary Klein, whose research pioneered the field of naturalistic decision making and whose findings led to significant changes in military training. The issue here is more about the number being taken out of context. Klein’s 90% is based on observation. He is famous for his research into first responders and military making decisions under pressure, and his suggestion is not that 90% of decision making is intuitive, but that we use an intuitive “recognition-primed model” in 90% of our decisions. Overall, it’s probably best to avoid numbers. In Thinking, Fast and Slow, Daniel Kahneman tells us, “Although System 2 (deliberative thinking) believes itself to be where the action is, the automatic System 1 is the hero of this book.” Getting people to reveal the nonconscious aspects is the tricky bit. People see their choices and want others to see them as a result of their rational thinking. The science fiction writer Robert Heinlein famously said, “Man is not a rational animal, but a rationalizing animal.” But, as we’ve discussed earlier in this chapter, we just don’t see ourselves that way.

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Dan Ariely dissects the mismatch of how rational we think we are and how rational we actually are in his excellent books Predictably Irrational and The Upside of Irrationality. Ariely writes that we hate to see ourselves as irrational, which explains why research participants often choose a more rational advertising approach or one that is easy to rationalize when asked to make a choice. The reasons we attribute to our decisions are very often not really the reasons at all. Social and political psychologist Robert Abelsen said we are “very well trained and very good at finding reasons for what we do, but not very good at doing what we find reasons for.” We routinely post-rationalize emotional or instinctual decision-making processes, making them appear, on reflection, rational; these intuitive processes were not understood by experts 50 years ago but are now starting to filter their way into how marketing research is designed and executed Despite this encouraging movement, research still often asks people to explain why they prefer one option to another. This seemingly necessary and innocuous line of questioning is a great example of how research that delves into people’s “reasons” for doing things can lead a marketer down the wrong path. When people have to explain a choice (which much research either explicitly asks them to do or implicitly makes them feel they have to), it affects the choice they make. In a famous study by Timothy Wilson and Douglas Lisle from the University of Virginia,2 two groups of participants were asked to evaluate a poster from a selection of five. Poster images varied from Les Irises Saint Remy by Dutch postimpressionist Vincent van Gogh to more literal images, such as a photograph of a cat looking at a fence with a caption “One Step at a Time.” Participants in both groups were given a questionnaire that asked them to rate each poster on a nine-point scale, but one group was given additional questions asking them to give the reasons why they liked or disliked each poster. All participants were told that they could return their poster if they didn’t like it, but before selecting a poster, one group was told that they would be asked to explain why they liked the poster they chose. There was a notable difference in the types of posters chosen by each group. The group that didn’t have to give the reasons behind their choice were more likely to select the more artistic options, like the Van Gogh print, with 95% of them choosing one of the art posters. Only 64% of the group that did have to give their reasons selected the art posters.

Wilson, T., Lisle, D., Schooler, J., Hodges, S. D., Klaaren, K. J., LaFleur, S. J. (1993). Introspecting about reasons can reduce post-choice satisfaction. Personality and Social Psychology Bulletin, 19, 331–339. 2

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The requirement to explain our choice leads us to make choices that we can explain. The image of the cat looking at the fence can be explained as, “I used to have a cat like that,” whereas a preference for a van Gogh print is more difficult to put into words. Perhaps the most interesting finding was revealed when the respondents were contacted two to three weeks later to see whether they were happy with their posters. The respondents who had to explain the reasons behind their poster choice were significantly less satisfied with their choice. Wilson and Lisle summarized their findings: When people think about reasons, they appear to focus on attributes of the stimulus that are easy to verbalize and seem like plausible reasons but may not be important causes of their initial evaluations. When these attributes imply a new evaluation of the stimulus, people change their attitudes and base their choices on these new attitudes. Over time, however, people’s initial evaluation of the stimulus seems to return, and they come to regret choices based on the new attitudes. It’s not just that people can’t tell you why they might make a certain choice. If they know that you are going to ask them why, they may make a different choice – and, crucially, that choice may be one that they end up being less happy with!

WHAT PEOPLE SAY THEY LIKE CAN CHANGE … UNINTENTIONALLY What people say in a research setting is dictated by their mental and physical state at the time; it is not always ecologically valid. (Remember “ecologically valid” is the phrase scientists use to indicate that the research environment might not be a good proxy for real life.) The majority of market research doesn’t happen near the actual time of choice. Participants are often asked what they will purchase when they next go shopping or how a healthy meal option in a fast food restaurant might appeal to them next time they visit. However, different time horizons change how we perceive things and the nature of our decisions (remember CLT in Chapter 7, “Now, and the Future – Different Places with Different Rules”?), adding a dimension of unreality to much research. Typically, we are asking people what they will do in the

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future, and as we’ve seen, how we think we will behave in the future is often very different from how we do behave. In a study in the Netherlands,3 researchers asked participants to select one of the four snacks for a meeting they would be attending in one week’s time – an apple, a banana, a candy bar, and a molasses waffle; 49% of the participants indicated they would choose the apple or banana. However, when presented with the actual snacks a week later, 27% of those who had said they would pick a healthy one switched to the candy bar or waffle. The fact that virtually everyone now carries a mobile device does provide opportunities to ask people questions closer to the time and place of choice. One example is Over the Shoulder a research platform that allows for panel (or community) members to report their feelings and decision process in the moment, whether that is in a supermarket aisle, a changing room, or midway through a video game, through their phone. But time and place aren’t the only contextual factors that are difficult to capture in the confines of research. Neuroscience shows that, perhaps not surprisingly, when people are hungry, they respond differently to images of food than when they are sated.4 Research shows (and personal experience confirms) that our stress levels affect how we respond to information. A bland research room with office furniture may be more stressful than your couch at home but less stressful than trying to navigate the aisles of a supermarket with two screaming kids in tow. On top of this, people may state one preference, and a short time later indicate exactly the opposite. In an interview with Knowledge@Wharton, Sheena Iyengar, author of The Art of Choosing, describes an experiment where perception is affected by awareness. Participants were shown pictures of two attractive women – one blonde and one brunette: […] (participants) were shown a whole set of different pairs of female pictures, and asked which ones they thought were prettier. They were then shown the pictures they chose again and asked why they picked

Weijzen, P. L., de Graaf, C., Dijksterhuis, G. B. (2008). Discrepancy between snack choice intentions and behavior. Journal of Nutrition Education and Behavior, 40(5), 311–316. 4 LaBar, K. S., Gitelman, D. R., Parrish, T. B., Kim, Y.-H., Nobre, A. C., & Mesulam, M. M. (2001). Hunger selectively modulates corticolimbic activation to food stimuli in humans. Behavioral Neuroscience, 115, 493–500. 3

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them. In some cases, though, unbeknownst to the respondent, the images were switched – if they had chosen the brunette they were sometimes shown the blonde. What did they do – 87% of the time they didn’t even notice. They simply said, “Oh, I prefer blondes” … even though they had actually chosen the brunette! One of the reasons that research uses questions is to measure attitudes. While people’s answers to questions about their behavior is not a good indicator of what they will do, marketers often assume that attitudes are predictive. But as Elys Roberts, CEO and founder of BEESY, says: We should stop just assuming that if we ask a bunch of people a question and get answers back, then those answers are the insight, or even correct. People’s attitudes only predict about a third of their behavior. The route to behavior is not always via attitude …. An excellent paper “Research in a world without questions,”5 by Tom Ewing and Bob Pankauskas sums up the need for going beyond questions. Their conclusion of that paper seems to be a good way to end this section and introduce the remainder of this chapter. Research without questions is not a novelty or another option – it’s essential if we’re to truly understand consumer decisions. It’s also more exciting, innovative, faster in many cases and more actionable than direct research has been. A world entirely without questions is not on the horizon – but the reign of the question in research has ended, and we should celebrate that. Our industry is finally aligning itself around what consumers do, not what they say.

WHAT MIGHT LEAD US TO BETTER MARKETING RESEARCH, THEN? It seems that asking people to reveal how they make decisions and what may influence them isn’t always going to help us make the best decisions as to Ewing, T., & Pankauskas, B. (2013). Research in a world without questions. Journal of Direct, Data and Digital Marketing Practice, 15. doi:10.1057/ dddmp.2013.62. 5

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how to market to them. Fortunately, the science that has revealed this to us also led to the development and improvement of tools and thinking that can make us less dependent on asking people questions that require deliberation to answer. I review some of these in the next sections.

Better Understanding of the Cognitive Biases and Heuristics that Drive the Pre-conscious Aspects of Decision Making I really believe that anybody involved in market research should be a keen student of human nature. These days that means working to maintain an understanding of behavioral science. This can help with more enlightened research and questionnaire design and can even help marketers and researchers to get a lot more out of traditional research, by providing a framework for further interpretation. An understanding of heuristics and cognitive biases can enhance your perspective on quantitative research and can provide a filter for qualitative research. The best qualitative researchers do this intuitively. Arnie Jacobson, one of the founding partners of the Qualitative Research Center (QRC) talks about how he takes in people’s body language and facial expressions as much as the literal meaning of what they say. So, rather than rushing out to buy any or all of the latest research approaches (many of which are listed in the remains of this chapter), I would suggest the first step for any customer, consumer, or marketplace insights department (or for anybody commissioning, designing, and analyzing research) would be to spend some time learning how nonconscious factors affect people’s behavior. Some insight in this area may make the insights even from traditional research methodologies more reflective of human behavior and decision making. That said, experimentation is good, and here are some techniques that have gained traction over the last decade or so.

Implicit Association Measures Implicit association covers a range of techniques where response time is used to study how readily a respondent connects two words, terms, objects, or images. A straightforward implicit association test (IAT) uses the speed with which people respond to two images, words, or phrases to make assumptions

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about the strength with which people connect those two things, normally by pressing an assigned key on a computer keyboard (the speed of this action can be measured in milliseconds, even when the participant is responding remotely through a web browser). A faster response suggests the connection is more intuitive. IATs have attracted a lot of attention as their advocates believe them to reveal implicit biases that we may bring to our decision making (you might have taken an IAT at the behest of your human resources department, as implicit bias is often seen as a roadblock to diversity in the workplace). The use of IATs to reveal implicit bias has been controversial, and led to some criticism,6 which has been magnified because of their association with societally important areas, such as racial bias.7 Two of the proponents of the technique8 run a free-to-use online test called Project Implicit, where anyone can take a number of IATs that measure implicit associations that they believe indicate nonconscious biases in areas like race, sexuality, gender, and disability. The major criticism of IATs is that the analysis of the associations doesn’t show a causal connection to real-world behaviors, particularly at an individual level or with small sample sizes. That said, taking IATs at their most functional level – which is measuring the response latency (reaction time) between images (e.g., logos), words, or phrases (like a short brand statement) to understand how automatic the association between them has potential for aspects of research. Many of you might have had the experience of having people agonize over the meaning of a logo in a focus group, when their evaluation of the logo in the real world will happen in milliseconds. IATs do seem to add some real value in measuring nonconscious associations, so although making a direct link between a logo or advertisement and desired behavior may not be possible, IATs do provide a useful way of measuring whether the nonconscious associations revealed fit with aspects of a brand’s strategy. While there may be some doubt about IATs and what they reveal about big and important societal matters, I think it is an interesting area for Bartlett, T. (2017). Can we really measure implicit bias? Maybe not. The Chronicle of Higher Education, January 5. 7 Payne, K., Niemi, L., & Doris, J. M. (2018). How to think about “implicit bias.” Scientific American, March 27. 8 Anthony Greenwald of the University of Washington and Mahzarin Banaji of Harvard University. 6

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marketers to experiment with. Not least because it is relatively inexpensive and, because it can be deployed online, fieldwork can be conducted, and results analyzed reasonably quickly.

Facial Expression Recognition A number of copy-testing firms have started using a technique where, instead of asking people to respond to how a commercial makes them feel using words, they have them point to a range of emoticons. To me this seems an interesting approach, because it avoids people mediating their feelings through verbalization. There is also evidence that these emoticons work across languages and cultures. While this isn’t a form of facial expression recognition, it uses humans’ intuitive capacity to classify even simplified expressions in a less deliberative way than we might classify written words and numbers. A technique that holds great promise is automatic facial emotional expression recognition.9 A sibling of the facial recognition software that is used by governments, law enforcement, and Amazon’s Ring and Google’s Nest, automatic facial recognition uses techniques that seek to evaluate an emotional response from facial expressions captured in the moment while people make choices or are responding (or not) to marketing materials. While I find this approach particularly intriguing, it is probably not ready for prime time in your research plans. As the technology becomes portable and pervasive, the opportunity exists for getting people to opt in at “ecologically valid” times – for example, when they are looking at a display in a retail environment or sitting in front of their screen at home. A camera captures their facial expressions, and these expressions are then “recognized” as emotional reactions by computer analysis, most often based on a standardized system used by most academics called Facial Action Coding System (FACS). But while this approach holds great promise, a number of insights professional with whom I have worked, and who have used it to measure responses to advertisements felt that it gave very broad feedback (by bucketing positive

Kodra, E., Senechal, T., McDuff, D., & el Kaliouby, R. (2013). From dials to facial coding: Automated detection of spontaneous facial expressions for media research, In 2013 10th IEEE international conference and workshops on automatic face and gesture recognition (FG), Shanghai (pp. 1–6). 9

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expressions and bucketing negative ones) rather than giving insight into more nuanced expressions. Using computers to analyze facial micro-expressions may be as challenging as using computers to create them. In a December 2019 interview with NPR, Pablo Helman, who led the special effects team for the Martin Scorsese film The Irishman, talked about how – from the perspective of a computer – the differences between a wince and a smile are very, very small. Ordinary humans pick these differences up intuitively (and instinctively adjust their behavior as a consequence), and humans trained by people like David Matsumoto (the expert on facial micro-expressions and seventh-degree black belt judoka who we met in Chapter 6, “Thanks for Sharing (Whether You Meant to or Not)”) can recognize and analyze microexpressions in detail. Computers aren’t quite there yet.

Eye Tracking and Pupillometry Eye tracking measures where a person is looking, and pupillometry tracks the size of the pupil. Both kinds of data can be collected using the same equipment, but eye tracking is an indicator of where attention is directed, whereas pupil size suggests arousal levels.10 When examined in aggregate, eye tracking can provide insight about visual salience via heat maps. It is a good indicator of how people are distributing their attention over a sustained period of time, although we do not necessarily know why they are looking at particular points. Using eye-tracking data from people viewing a display of snack foods (chips), neuroscientists from the California Institute of Technology modeled how objective measures and subjective measures influenced attention.11 The objective measure was how visually salient a product was, and the subjective measure was how much the subject valued each product in the Gilzenrat, M. S., Nieuwenhuis, S., Jepma, M., & Cohen, J. D. (2010). Pupil diameter tracks changes in control state predicted by the adaptive gain theory of locus coeruleus function. Cognitive, Affective, & Behavioral Neuroscience, 10, 252–269. 11 Towal, R. B., Mormann, M., & Koch, C. (2013). Simultaneous modeling of visual saliency and value computation improves predictions of economic choice. Proceedings of the National Academy of Sciences of the United States of America, 110, E3858–E3867. 10

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test display. Models that included both visual salience and subjective value fit the eye-tracking data better than models just including visual properties or subjective value alone. Such models can accurately predict choice based on a given display and also guide product display design. Eye tracking is widely used in UX and creative testing, and one of its advantages is that it is highly intuitive, and the findings are easy to explain. A downside, though, is that you’re not actually measuring attention – you are just measuring where people are directing their eyes.

Electrodermal Activity Electrodermal activity (EDA), sometimes known by its older name, galvanic skin response (GSR), has a history going back to the late nineteenth century, and is a component of polygraphs (lie-detector tests). EDA can be used to detect changes in the electrical signals across the skin’s sweat glands. Change in physiological arousal leads to changes in these electrical signals. It is considered good indicator of when people are engaged – higher levels of arousal indicate higher levels of engagement. However, a major drawback of EDA is that it doesn’t provide information as to whether the arousal signal is positive or negative. EDA is portable and relatively inexpensive to deploy. One disadvantage is that it has low temporal resolution so cannot provide reliable results for studies in which people are only seeing a piece of content for less than 2–3 seconds.

Neuroimaging and Analysis Neuroscience started as a medical discipline, but the use of neuroimaging has “emerged from medical analysis identifying abnormalities and dysfunctions to delving into lie detection and decision making.”12 Its use in market research is sometimes known as neuromarketing, though that is a term I don’t like at all – it conjures up images of planting messages in people’s minds or activating their (nonexistent) “buy buttons” via neuroprobes. A number of companies that have used this term in the past prefer to now use neuromarketing research or consumer neuroscience. Strutin, K. (2008, December). Neurolaw and criminal justice. Retrieved from llrx. com. 12

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The use of neuroimaging in understanding decision making is known as neuroeconomics. Neuroeconomics applies neuroscience methods to economic problems and choice tasks; for example, using biometric measures, like neuroimaging, to understand cognitive load and arousal to stimuli or choices. One of the helpful things about neuroscience is that it allows us to put language to one side, so there’s no need to debate whether something is rational or intuitive, but simply see what happens in terms of activity in the brain – what parts are activated, what connections are made, and so on. Freud foreshadowed this possibility in his landmark essay “Beyond the Pleasure Principle”: The deficiencies in our description (of the mind) would probably vanish if we were already in a position to replace the psychological terms with physiological or chemical ones …. We may expect [physiology and chemistry] to give the most surprising information and we cannot guess what answers it will return in a few dozen years of questions we have put to it. They may be of a kind that will blow away the whole of our artificial structure of hypothesis. Neuroscience is having an impact on marketing, and as Freud predicted, brain imaging does show physical and chemical responses to stimulus. While neuromarketing has already become somewhat established in the area of market research it has had success mainly as a way to evaluate messages and products. At a broad, theoretical level, we see potential from neuroeconomics as a field because it combines a number of disciplines including neuroscience and behavioral economics. It explores fundamental questions about how people make decisions, by providing an understanding of what areas of the brain and neural processes are involved in different aspects of decision making. From the perspective of advertising and marketing strategists, it can be seen more like exploratory research that helps you find the insights to base creative ideas on, rather than another form of copy-testing, which is what neuromarketing has become synonymous with for many marketers. There are some examples of what you could call “neuroinsights” that can be gleaned from the work of academics in this area. One of our favorites

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comes from research by Hal Hershfield, covered to some extent in Chapter 7 that investigated how thinking of ourselves in the future may inhibit our likelihood to save for that very same future. Hershfield’s research used fMRI – a technique that tracks brain activity based on changes in the oxygenation level of blood. He found that the part of the brain – the rostral anterior cingulate cortex (rACC) – that is believed to be linked to concepts relating to self showed relatively little activity when thinking about ourselves in the future. In fact, the activity was more similar to levels he saw when people were thinking of another person than it was to when they were thinking about themselves in the present! Not surprising then, that we would rather spend the money now than invest it for our retirement, because as far as our brain is concerned, our future self is more like someone else – an insight any creative strategist in an advertising agency might be proud of. Another example is some interesting research13 by Hilke Plassmann, Baba Shiv, and colleagues. In this study, people tasted a selection of wines that they were told sold at different prices. However, unbeknownst to them, the wine was in many instances the same. When respondents were told the wine sold at $90, the researchers saw significantly increased activity in an area of the brain associated with pleasant experiences than when the respondents were told the exact same wine cost $10. At a neural level, when people were told the wine was more expensive, there was evidence that they enjoyed it more. There is an interesting implication for luxury brands here, which is that pricing information isn’t just important at the time when make their choice, but it can also help create a better experience when people use and consume the brand. In the United Kingdom, some years before Plassman’s research, Stella Artois, the Belgian lager brand, had a long-running slogan “Reassuringly Expensive” (they ran a similar, but less inspired line, “Perfection Has Its Price” in the United States). I’d say this is a good example of advertising creatives not just being unwitting psychologists but being unwitting neuroeconomists. The brain-imaging techniques discussed next are the most relevant to marketers. Plassmann, H., O’Doherty, J., Shiv, B., & Rangel, A. (2008). Marketing actions can modulate neural representations of experienced pleasantness. Proceedings of the National Academy of Sciences of the United States of America, 105(3), 1050–1054. 13

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fMRI MRI scanners visualize the inside of the body by using changes in magnetic fields to create pictures. MRI is widely used in medical settings to image the entire body. Because it is noninvasive, MRI is especially useful for studying the human brain, and MRI scanners are housed in neuroscience, psychology, and even marketing departments of universities across the globe. In the brain, gray matter (neuron cell bodies) and white matter (axons or the “wires” connecting neurons to each other) differently affect the magnetic field created by the scanner and therefore show up as distinct regions on an image. When MRI is used to study how the brain works, it is called fMRI. To visualize brain activity, fMRI measures how, when, and where the brain consumes oxygen. When a brain area is active, its oxygen consumption increases. For reasons that will fascinate chemistry and physics aficionados but probably not marketers, increased oxygen consumption causes blood to become magnetic. This magnetization of blood interferes with the magnetic field generated by the MRI scanner, which means active brain regions can be identified by a decrease in MR signal. The results of fMRI experiments are colorful brain pictures even though the brain is truly a peach color and regions do not “light up” when active. These pictures are color-coded to identify brain areas that cross a statistical threshold. As a technique, fMRI is powerful but the problems with using it in market research outweigh the benefits in most cases. It is powerful because it is noninvasive and allows an unprecedented view into how the human brain works. It is problematic because it is incredibly expensive. There’s also the small matter of it seeming like a medical procedure – participants have to lie perfectly still while in a noisy, claustrophobia-causing tube – so it is far from ecologically valid! A more mobile, and less expensive technique, functional near-infrared spectroscopy (fNIRS), also measures blood oxygenation levels, and while it has better temporal resolution, it has inferior spatial resolution and penetration depth (fNIRS cannot analyze past the cortex, unable to capture any subcortical activation). While early studies are encouraging,14 fNIRS is at the bleeding edge for academics, let alone market researchers. But it may well be a viable methodology in the future. Liu, T., Pelowski, M., Pang, C., Zhou, Y., & Cai, J. (2015). Near-infrared spectroscopy as a tool for driving research. Ergonomics, 59, 1–25. doi:10.1080/00140139. 2015.1076057. 14

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It was an fMRI study from Baylor College of Medicine in Houston, Texas, that sparked the creation of the field of neuroeconomics; this study was the first to lift the lid on how the human brain perceives brands.15 The study was a modified version of the “Pepsi Challenge.” In the MRI scanner, participants viewed cues, or pictures, that told them whether they were about to drink a squirt of Coke or Pepsi. In a first experiment, a squirt of Coke followed a red circle while Pepsi followed a yellow circle. Brain regions that process rewards, such as the striatum and regions of prefrontal cortex, pay close attention to cues that predict rewards. When the cues were just colored circles, their brains treated the squirts of Coke or Pepsi the same; regions of the medial prefrontal cortex responded to the colored circles in agreement with stated drink preferences. When the researchers changed the cues from circles to pictures of a Coke can or Pepsi can, what happened in the brain was remarkable. The brain response stopped just tracking stated behavioral preferences. In fact, there was no brain response to the Pepsi can image at all, but the prefrontal cortex and hippocampus robustly responded to the image of the Coke can. “We know that the hippocampus and DLPFC together are involved in direct memory recall, so it makes sense that they’d be determining what you think of the brand,” said Samuel McClure, lead author of the study, who is now a professor at Arizona State University and one of the academics who has been particularly helpful to the author over the last decade, and who has a great knack for translating high science for lowbrows like myself. Another example of the power of fMRI for marketing comes from a study that showed brain responses from a small group of people predict the behavior of an entire population.16 Researchers from the University of California, Los Angeles, collected fMRI data from smokers as they watched several different smoking cessation advertisements. The group of subjects were also asked which advertisements they felt would be most effective. Researchers focused on the response in the medial prefrontal cortex, which had been shown previously to be involved in behavioral change. McClure, S. M., Li, J., Tomlin, D., Cypert, K. S., Montague, L. M., & Montague, P. R. (2004). Neural correlates of behavioral preference for culturally familiar drinks. Neuron, 44, 379–387. 16 Falk, E. B., Berkman, E. T., & Lieberman, M. D. (2012). From neural responses to population behavior: Neural focus group predicts population-level media effects. Psychological Science, 23, 439–445. 15

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It was the response of medial prefrontal cortex – not what subjects thought about the commercials – that predicted which anti-smoking advertisements were the most successful across the country. In another approach,17 Emory University’s Gregory Berns (who pioneered fMRI of dogs) and Sara Moore tested whether brain activity measured with fMRI from a small group of people could predict purchase behavior in the population at large. They had a group of 27 teenagers listen to 15-second song clips from unknown artists while undergoing fMRI scanning. After each clip, the participants rated how much they liked the song. Three years after the fMRI scanning, Berns and Moore used a Nielsen music sales database to determine how well the songs used in the experiment had sold. Then, the researchers looked at how well the participant ratings and brain activity predicted “future” song sales. The subjective ratings did not predict song sales, but measures of neural activity in the ventral striatum were positively correlated with unit sales. This is a great example of the difference between what people say they like and what their brains and actual behavior show they like. At this stage, the most practical use of fMRI for marketers and insights professionals may not be in using it for their own projects. I would suggest keeping up to speed with academic studies that seek to answer broad questions about choice and using these as a knowledge base to inform emerging thinking on choice and behavior and to inspire and support strategies and solutions.

EEG Electroencephalography (EEG) is another noninvasive technique used to measure what the brain is doing. As its full name suggests, EEG measures the brain’s electrical activity, but it is only capable of measuring activity from brain areas on the surface (adjacent to the skull) or near the surface. While fMRI brings more precision for spatial information (which brain areas are active), it is sluggish temporally compared to EEG. fMRI measures brain activity on a timescale of seconds; the emerging technique fNIRS we covered earlier can improve this by measuring activity in tenths of a second. EEG allows for a far great level of temporal accuracy as it measures brain activity on a timescale of milliseconds – by allowing for 500–100 samples per second. Berns, G., & Moore, S. (2012). A neural predictor of cultural popularity. Journal of Consumer Psychology, 22, 154–160. 17

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EEG is a useful technique for marketing because it is noninvasive, inexpensive and portable. It reliably measures arousal levels, cognitive load or effort, and also directed attention. The electrical wave that occurs around 300 milliseconds following a stimulus is a hallmark of directed attention; this wave is called the “P300” (where “P” stands for positive and “300” for 300 milliseconds). Differences in arousal levels show up as differences in the frequencies of the EEG typically from electrodes placed along the brain’s midline. A unique benefit of EEG compared to fMRI for marketing research is collecting data both in real time and in ecologically valid situations. EEG data can be collected from a person sitting on his living room couch watching the Super Bowl; this simply is not possible with other neuroimaging techniques. (fMRI data for the same situation would require the person to be lying flat on his back in the MRI scanner.) EEG is improving all the time – for example, machine learning algorithms that recognize small electrical signals called event-related potentials (ERPs)18 have potential to reveal data that have previously not been analyzable. Measured neural, or emotional, engagement does not always translate to success from a business standpoint. This mismatch between neural measures and business success does not mean that neuromarketing cannot predict business success (indeed a number of companies claim they can already, although I have not reviewed their supporting data for these claims in detail enough to support or dispute these claims). It is important to remember that application of neuroscience to marketing research is still in its infancy; this applies to neuroeconomics as well. Neuroscience itself is hundreds of years old, yet we still do not have a complete understanding of the brain and are unlikely to have one anytime soon. But with labs now dedicated to neuroeconomics in many leading schools, we will see an increase in research that will give us a deeper understanding of how people reach their decisions. Not all of this will be useful, but every year a few gems will emerge. Rather than looking at this as validation, I believe the opportunity for marketers and their agencies is to find ways to translate these into powerful insights – and thus use what we see going on in other people’s brains to inspire creative ideas in our own. Luck, S. J., & Kappenman, E. S. (2016). Electroencephalography and eventrelated brain potentials. In J. T. Cacioppo, L. G. Tassinary, & G. G. Berntson (Eds.), Handbook of psychophysiology (4th ed., pp. 74–100). New York, NY: Cambridge University Press. 18

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BEHAVIORAL TESTING/RCTs RCTs are a pretty straightforward concept. They have been around for a good hundred years more than most of the other "emerging" techniques covered in this chapter (EDA, covered earlier, has a history going back to the middle of the nineteenth century). The first recorded RCT was carried out in 1747 by Scottish doctor James Lind who was testing ways to prevent scurvy, a disease that had dogged sailors for hundreds of years. Lind conducted a trial among 12 sailors suffering from the affliction on HMS Salisbury, two months into a voyage where the ship was patrolling the Bay of Biscay. He assigned two sailors to each of six conditions, where all received their normal diets, with a different addition for each condition. For example, one condition added eating three pieces of citrus fruit every day to the sailors’ diet, another added drinking a quart of cider every day, and another added two spoonfuls of vinegar taken three times a day. One condition that added drinking half a pint of seawater a day was effectively the placebo control. Sailors in the citrus condition recovered within a week.19 While the sample size was small by modern standards, the approach has remained pretty much the same over the last 270 years. RCTs are the standard by which new drugs are tested, and many of the psychology experiments in this book will have used RCTs. They can be used in the lab, in the field, or online. Large-scale RCTs can be conducted through an organization’s website where visitors are randomly exposed to different offers or experiences before making a choice. The Behavioral Insights Team experiment into organ donation consent, referenced in Chapter 6, “Thanks For Sharing (Whether You Meant to or Not),” randomly channeled each of tens of thousands of visitors to the UK DVLA website to one of eight different versions of the page seeking their consent to donating organs. You could almost call this an in vivo test as it was measuring responses in a real-life situation. This kind of approach is often used by online retailers, or brands that have a direct-to-consumer (DTC) business model. For businesses where the choosers make their decision through an intermediary, one may have to be a little more creative in designing the research. One technique I have used has been to recruit participants from an online panel, randomly expose them to the conditions (plus a control) that you want to test (normally disguising the reason for the research in some way), and at the end of the survey The only other condition that showed any effect was the one that added a quart of (hard) cider daily to the sailors’ diet. 19

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giving them a proxy for the choice that the conditions have been designed to influence. In an example I gave earlier in this chapter, for a study designed in conjunction with BEESY, participants were randomly shown one of a range of interventions designed to reduce use of plastic bottles, mocked up as social media posts, and mixed into a “clutter” of unrelated posts. The intention of the research was disguised by asking the respondents general questions about social media. After these questions, as a reward for participating they were asked to participate in a draw for the chance to win either a gift card for a reusable bottle with a water filter system or for a gift card for the same value to buy bottled water. While RCTs are a cornerstone of an evidence-based approach, they do have one pitfall. Mike Daniels, founder of the Behavioural Architects20 practice in Australia, expresses this very well. […] we strongly believe in the value of testing and evidence (we run many RCTs ourselves) Behavioural Insights can be applied to improve things in far less formal ways. To my mind what is key is actionability – nudges have to work to be nudges. However, we (Behavioural Architects) place a lot of emphasis on understanding why they work not just establishing that they work. We think it is valuable to the clients that we work with to know why something works in order to be able to further utilise that insight.

IN SUMMARY In terms of putting or and all of these techniques into practice, I spoke recently to Naomi Sparks Grewal, who combines a rare breadth and depth in terms of her experience and knowledge in the area. In 2013, Sparks Grewal won the Neuromarketing Business and Science Association (NMBSA) Neurotalent of the Year competition for her work on the effect of the hormone oxytocin on decision making. Beyond her academic credentials, she’s worked with research companies, notably as Director, Behavioral & Neuro Research and Development at IPSOS, and has held senior insights and research leadership positions at some of the most exciting and innovative companies around, including The Behavioural Architects is a global consultancy with offices in the United Kingdom, China, Australia, and the United States. 20

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Pinterest, Uber, and Facebook (where she currently works). Having seen both the theory and the practice, and the emerging and the traditional, I asked Sparks Grewal what she has learned, and what advice she has to give: Behavioral methods have become more mainstream, primarily in the integration and ingestion of “passive” streams of behavioral data companies collect on their users/consumers. Neuroscience methods have remained emerging and rare due to internal pressures (i.e., legal may not want us publishing work about using neuro techniques on our users) and cost. Many industry research teams, at least in tech, are stacked with individuals with strong research credentials and want to execute work in-house. This has led to smaller budgets and more talent within industry. Behavioral insights and consumer neuroscience should be considered techniques that help answer business questions. Focus on the business question and identifying the most effective technique given the company’s constraints (budget, time, etc.). Behavioral and neuro approaches should be part of the solution, but never the only solution.21 New methods add new ways of doing what humans have always done to improve their chances of success – observing what our fellow beings are doing, why and how they are doing it and trying to figure out how what we learn from that can help us achieve our own goals. The takeaways from this chapter are: • The fact that so much of human decision making is non-conscious means we have to think differently about how we do market research. Rather than ask people to consciously think about what they might do, we need

A large-scale study led by Temple University’s Vinod Venkatraman compared how well neurophysiological methods predicted advertising success, versus traditional methods. The broad findings reflect Sparks Grewal’s conclusion – a combination of new and traditional techniques provide the most complete cover. In Venkatraman’s study, of the emerging techniques, fMRI seemed the best bet to add an additional layer of insight to conventional research. Venkatraman, V., Dimoka, A., Pavlou, P. A., Vo, K., Hampton, W., Bollinger, B., …, Winer, R. S. (2015). Predicting advertising success beyond traditional measures: New insights from neurophysiological methods and market response modeling. Journal of Marketing Research, 52(4), 436–452. 21

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to explore methods that can give insight into the non-conscious aspects of choice and help us understand how our marketing efforts can affect this. • People don’t always know what they want, and if you ask them to describe why they like something they will default to what is easy to explain. • People’s choices are extremely context sensitive. Research too often removes context from the equation. • Emerging techniques, such as the various forms of brain imaging, will transform research, but these are really still at the experimental stage. Developments in techniques such as implicit awareness, tests, eye tracking, and facial expression analysis provide additional opportunities to get beyond people’s “reasons” for choice and get us closer to understanding the underlying motivations. That said, best practice seems to be to use a toolbox approach, often combining newer techniques with tried and tested methodologies. • The best way to learn about these new techniques is to take a small percentage of your insights budget and experiment with these emerging methods. Compare what they tell you with more traditional measures or with marketplace performance. • And, if nothing else, apply a behavioral sciences eye to your traditional research. Can you design questioning and lines of enquiry that truly reflect how people make choices? Simply bringing an understanding of human nature to research design and interpretation will go a long way. Some thoughts this chapter sparked with other people: • “[…] interesting that so much market research tries to access conscious decision-making processes when so much of our decision-making process is pre-conscious. Is most of that research a waste of money? And is there a Texas sharpshooter fallacy at play here in that we measure what people can tell us about and make 100% of our decisions on 5% of the data?” • “This reinforces for me how ingrained we are in old research habits. This chapter is a wake-up call to challenge the conventional methods we use and to become more thoughtful in the design of research that will break through to the unexpected, fresh, and game-changing insights that are hidden in the depths of the unconscious mind.”

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16 THINK DIFFERENTLY ABOUT HOW YOU WORK

Marketers can employ an understanding of decision making to their decisions as marketers. Most of what The Business of Choice has suggested so far is how an understanding of the nonconscious mechanisms that people use to make choices can be helpful to marketers trying to influence those choices. However, this is the point where I shift the focus of the investigation … to me and you. The cognitive mechanisms discussed in this book are used by all of us – mostly, as we’ve seen, to make quick and efficient decisions that are good enough most of the time. However, sometimes our choices will be revealed to have not had the results we or our organizations desire, whether that is victory in the marketplace or on the battlefield. Innate tendencies don’t just drive people to choose a certain brand or offer, they affect human decision making on subjects that have far greater consequences. An understanding of cognitive biases has been used to look retrospectively at military and foreign policy decisions, with suggestions that these biases played a part in leading the great powers blindly into World War I.1 The optimism bias certainly seems to have played a role, with all the powers claiming the conflict “would be over by Christmas,” presumably with themselves as victors. Loss aversion has been suggested as a cause behind the Union Army’s General George McClellan and his failure to take Richmond, Virginia, in

Jonathan Renshon, in an interview with Harvard Magazine, June 2007, about his book Why Leaders Choose War: The Psychology of Prevention. 1

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the American Civil War. Historian Robert Pois and educational psychologist Robert Langer wrote that McClellan was “was less concerned with winning then he was with avoiding failure.”2 There is evidence that attributes the German’s decision not to invade Cyprus after they had captured Crete in the World War II to anchoring.3 The British used deception to convince the Germans that there were 20,000 troops garrisoned on Cyprus when in fact there were only 4,000. Despite subsequent reports and analyses showing that the British number was too high, post-war documents revealed that the Germans anchored on the higher number, believing it “almost without question.” Others have written about how cognitive biases affected decision making in the planning and execution of more recent conflicts such as the Suez Crisis of 1956 or America’s war in Iraq in 2003. If our innate biases can color decisions about actions that involve many thousands of human lives and the fate of cultures and nations – decisions that normally involve a meticulous level of planning and the threat of ­accountability – then we can be pretty sure the same biases affect the professional decisions of marketers. There is a particular irony in marketers, who have the goal of trying to influence the decisions of others, themselves making flawed decisions. Intuitions – or gut reactions – are a critically important part of all decision making, and so they absolutely do have a very important role in the decisions that marketers make. Without our gut instincts, we would be significantly less decisive than we are. But when our instincts come calling, we need, as best as we can, to think about where they are coming from. Note, though, that awareness of a cognitive bias will not make you immune to it – even if you are Daniel Kahneman. “It’s not a case of, ‘Read this book and then you’ll think differently.’ I’ve written this book, and I don’t think differently,” he says, of Thinking, Fast and Slow. During a short interview with Dan Ariely a couple of years ago, he made a very good point about intuitions: Our nonconscious thinking can be surprisingly well informed. What we have learned through experience as a marketer may lead us to an instinctive decision and action (just as a firefighter or pilot will automatically follow training in emergency situations).

Lieutenant Colonel Michael J. Janser, “Cognitive Biases in Military Decision Making,” US Army War College, 2007. 3 Major Blair S. Williams, “Heuristics and Biases in Military Decision Making,” U.S. Army Military Review, September-October 2010 2

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Following our gut instincts will probably lead to good outcomes most of the time. But marketers, being human, are subject to the cognitive shortcuts described in Part II of this book. For example, even if the market situation requires moving away from an established campaign, the endowment effect may make us feel intuitively bad about doing this, because it leads us to emotionally overvalue that campaign. Loss aversion may make us, like General McClellan, too concerned about losing. The latest action by a competitor may drive us to deviate from a long-term plan, because the recency bias makes the competitor’s action seem more significant. Or we may find ourselves as the victims of the Curse of Innovation, so well described by John Gourville, by focusing too much on the exciting gains our new product can bring consumers, rather than thinking about what we need to do to make them feel good about what they’re giving up. In these four example scenarios, we should try to ignore the nagging, inner voice of our intuitions. The corporate environment and how companies structure executive incentives, often amplifies the human tendency to favor suboptimal short-term solutions over ones that offer greater benefits in the long term. How then, might you encourage your team to make their decisions based on larger later rather than smaller sooner? Paul Polman, who was CEO of Unilever from 2009 to 2019 managed to do this, by removing one of the key drivers of short-termism in publicly traded business – the expectation that they will report their performance on a quarterly basis. On his first day on the job as CEO, in what was an audacious move at the time, he scrapped the company’s quarterly earnings reports. In an interview three years later with the Harvard Business Review,4 he revealed that he announced the decision the “the day I started this job, because I figured I couldn’t be fired on my first day.” A Financial Times article5 from July 2018 reports that Polman’s move away from quarterly reporting has become the norm for progressive companies, suggesting that “any UK boss sticking to quarterly reporting is more likely to attract investor ire than those ending the practice.” In June 2018, the investor and philanthropist, Warren Buffet and Jamie Dimon, the Chairman and CEO of JPMorgan Chase, co-authored a piece in the Wall Street Journal6 Captain Planet from Harvard Business Review, June 2012 issue. Walker, O. (2018). The long and short of the quarterly reports controversy. Financial Times, July 1. 6 Dimon, J., & Buffett, W. E. (2018). Short-termism is harming the economy: Public companies should reduce or eliminate the practice of estimating quarterly earnings. Wall Street Journal, June 6. 4 5

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that urged public companies to reduce or eliminate the practice of estimating quarterly earnings. Quarterly earnings guidance often leads to an unhealthy focus on short-term profits at the expense of long-term strategy, growth and sustainability. The lesson in this for any organization is the importance of understanding what ingrained practices, incentives, or values are enabling our appetite for short-term rewards. As we’ve seen, thinking about the future can be difficult, and it often requires some mental jujitsu to allow people to do this. In workshops where the goal is to get people to think about long-term objectives, I use an exercise that is designed to make it a little easier. It is a form of behavioral time machine (remember, these are the prospective exercises described in Chapter 7). I introduce the exercise by talking about how human nature is a poor judge of the future, and how the short term dominates our thinking, not because we as individuals have shortcomings, but simply because that is the way our brains and decision-making systems have evolved. With the right conditions, we do have the capacity to take ourselves out of the immediate and then we can be quite effective at conceiving the future. One way to do this is rather than having people follow the normal tendency of thinking from now to the future, have them think backward. One technique I use is this: It’s December 2025 (or whatever a suitable time frame is for the realization of long-term goals). The main feature in (Time Magazine/ Fast Company/other suitable magazine/journal) tells the story of the extraordinary positive impact of (your company/your program), on your business, your category and society in general. As you review this story describe the following: • What is the cover story headline, image and subhead? • What are the main themes of the story? • What was the realization that sparked the change leading to your organization’s success? • One of the interviews is with someone who resisted or wasn’t convinced about the idea and pathway. They are now a convert – what is the gist of that interview? When were they swayed, and what swayed them?

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• What nearly went wrong? What could have stopped you getting where you got to?7 • What experts outside of your organization did the writers of the piece interview for comments. Why did they choose those people and what did they say? • What does the article say about changes in the culture and how people thought and behaved in the organization? • The article has one of those inset boxes “Five Things You Can Do If You Want to Replicate Organization X’s Success.” What are those five things? • Reverse timetable: There is one of those timetable infographics that shows the timeline to this great success. It works backwards from December 2025. What are the key milestones? The reverse timetable and the milestones that populate it are often very helpful to participants, as they help them see a path that connects tomorrow’s success with the situation today. This exercise is just one way you can put make your intuitions cooperate with rather than impede your planning and decision making. Exercises like this may not be necessary for the true marketing greats, who  – like Steve Jobs – seem to have a natural alignment between their personal intuitions and the purpose of their company or brand. The rest of us need to pause and examine the motivational roots of our intuitive or gut response. Norman Maier, who was an experimental psychologist and creator of the famous “two rope problem”8 suggested one way of putting our intuitions This part of the exercise can be like a mini pre-mortem. A pre-mortem, as the name suggests, is a session where team members use prospective hindsight to think about what might go wrong with a project. A great paper “Performing a Project Premortem” by Gary Klein that explains the process can be found in the September 2007 of the Harvard Business Review. 8 This is a test where two ropes are hanging down from the ceiling, and the research participants are told they have to tie them together; however, they quickly realize that the two ropes are too far apart from each other to be both grasped at once. If they haven’t found a solution after 10 minutes or so, a researcher comes into the room and “accidentally” brushes against one of the ropes making it swing. This cue leads almost all participants to the solution of making one rope swing, but almost none of them attribute it to seeing the researcher making the rope swing. 7

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on hold: “Do not propose solutions until the problem has been discussed as thoroughly as possible without suggesting any.” Or as the German poet Rainer Maria Rilke rather less tersely advised a protégé: Do not now seek the answers, which cannot be given you because you would not be able to live them. And the point is, to live everything. Live the questions now. Perhaps you will then gradually, without noticing it, live along some distant day into the answer. I’m the worst offender in the respect of leaping to answers, of jumping to conclusions. I have to physically bite my tongue to stop myself from offering solutions before a problem is even fully explained. My let-off is that this is just really human nature. The role of our intuitions is to propose a quick solution rather than having us ponder, to push us toward taking action (or not, in the case of the status quo bias). Our intuitions want us to reach a conclusion, but sometimes, to reach the best decision, we need to pause a little. Nigel Jones, Global Chief Strategy Officer of advertising agency FCB, started playing chess semi-professionally at the age of seven (he and two of his brothers were all semi-professional chess players at one stage). When we were chatting about intuitions and decision making after a meeting in Lisbon, Jones told me that when playing chess, he (and he believes most other decent chess players) see the right move, the move they should take, almost immediately. The weaker players then make that move. However, the stronger – and more successful – players think for 10 minutes about it before moving. That period of 10 minutes’ heavy deliberation is critical, Jones says: Nine times out of ten, after thinking about it, I will make the move that came to mind immediately. It’s nearly always the right one, but every so often I will realize that after examining it closely it was flawed or there was a better move. My initial (intuitive) thought would get it right nine times out of ten, but by thinking about it a little longer I can get closer to getting it right 99 times out of a hundred. And that’s the difference between winning at the top level or losing. This is a great example of our fast, intuitive processes allowing us to get it right most of the time. But moderated with a little consciousness, we can get it right more often.

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In his excellent book, Incognito: The Secret Lives of the Brain, neuroscientist David Eagleman writes, “consciousness developed because it was advantageous, but advantageous only in limited amounts.” It is the auditor of our intuitions, not a replacement for them (maybe an auditor from before the Sarbanes–Oxley era … it signs off our choices without too much scrutiny. Kahneman describes the deliberative system as “an endorser rather than an enforcer”). Though we will never be immune to the effects of cognitive biases (and it would not be a good thing if we were), seeking to understand biases can help mitigate their effects, whether they be in responding to an advertisement or how we navigate office politics. Or, at least the knowledge could make us feel better and not so stupid about our own “irrationality.” I’ve written extensively about how an understanding of behavioral science can help you influence the choices of others and also about how it can improve your own choices as a marketer. A bonus is that an interest in behavioral science also brings you into contact with the work of academics studying creativity, and just as marketers don’t spend enough time learning from those who study choice, creative businesses seem to largely ignore the work of scientists who seek to understand the conditions that lead to creative thinking and problem solving. Some of it is pretty obvious but useful. If your job includes briefing creative teams and designers, when possible try to do it either on a Friday or before a holiday. The best time to lodge a problem in someone’s mind to solve is when they are about to be doing things that will send the problem to the back of their mind rather than having it require conscious attention at the front. Archimedes was reportedly taking a bath when the Eureka! moment came to him. Sleep helps as well. It is much better to ask people to come back to you tomorrow with ideas rather than asking them to come back today. Or at least, as research by Sara Mednick,9 Assistant Professor of the Department of Psychology at the University of California, Riverside, and author of Take a Nap! Change Your Life, suggests that people are more likely to have solved problems after a sleep where they have dreamed. Her theory is that rapid eye movement (REM) sleep primes associative networks, meaning we make connections that we might not while we are awake. Cai, D. J., Sarnoff, A. M., Harrison, E. M., Kanady, J. C., & Mednick, S. C. (2009). REM, not incubation, improves creativity by priming associative networks. Proceedings of the National Academy of Sciences of the United States of America, 106, 10130–10134. 9

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Other techniques can help you get more creativity out of people. I’m sure you have been in a brainstorming session where the facilitator states at the beginning “all ideas are good ideas” and asks that participants only make positive comments. The thinking is that from a feeling of safety and being free of criticism, great ideas will flow. Research by Charlan Nemeth, the author of the 2018 book In Defense of Troublemakers: The Power of Dissent in Life and Business, suggests that this might not be the optimal state for getting the most original thinking from people. In a paper titled “The Liberating Role of Conflict in Group Creativity,” Nemeth found that instructing participants in a group to debate and criticize each other’s ideas led to that group coming up with more ideas – both before the brainstorming session and after it – than groups that had been told not to criticize. One technique I use is to split ideation sessions. First, we have a classic “no idea is a bad one” brainstorming, but after that we take the ideas that come from each group and have another group criticize and improve the ideas. This helps overcome ideas being valued too highly by their creators as a result of the endowment and IKEA effects. I then have the group who have improved the ideas to come up with a plan for how they might implement them. I call this the 5–5–5 plan, and it is a great bridge between the theoretical, no-consequences environment of a brainstorm and the pragmatic real world. The 5–5–5 plan, like the prospective technique described earlier in this chapter, asks participants to imagine they are already well down the road to executing the idea that they have just come up with. Then they are asked to describe what they had done at specific times: • 5 minutes: What did you do 5 minutes after leaving this meeting to start the ball rolling? The very first step you took – however small that was (it could be calling someone, setting up a meeting with to bring others into the process, checking the idea with legal, etc.). • 5 days: After 5 days, what had you achieved, and what did you set in motion as the next step? • 5 weeks: It’s 5 weeks since the meeting. Describe where you are, and what needs to happen over the next month or so? The 5–5–5 is helpful because it gets participants to apply a practical filter to the ideas generated in the workshop. And thinking practically and describing how you will do something also strengthens your commitment to the

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idea. In a way it is like the channel factors or implementation intentions we covered earlier in this book. A rather charming technique to boost creativity is to get people thinking like kids. Darya Zabelina and Michael Robinson conducted research10 in which they had two groups of participants (who were mainly freshmen or sophomores at North Dakota State University) imagine that school was canceled for the day. They asked them to write down what they would do, think, and feel – but for one group, they added the short phrase, “You are 7 years old.” After this exercise, participants then completed a version of the Torrance Test for Creative Thinking, which measures creative performance. Those in the group who had been primed to think of themselves as sevenyear-olds scored much higher. Another way to prime creativity is one that is of personal interest to me, as someone has lived and worked on three continents, and is married to an Italian. Angela Leung is a professor at Singapore Management University and has developed a specific research interest in the effects of a multicultural perspective on creativity. In a 2008 article in American Psychologist,11 Leung and her co-authors show through their research that a slideshow that makes people think about and compare different cultural contexts tends to lead to increased levels of individual creativity in a subsequent writing task, versus participants exposed to a slideshow that shows only one culture. In Leung and her collaborators’ experiments, the effect of seeing cultures juxtaposed led to creativity that went beyond just synthesizing the imagery from American and Chinese culture that they were shown. One of the tasks that was used to measure the multicultural effect had nothing to do with either cultures: It was to write a version of the Cinderella story for Turkish children. The participants who had been exposed to a juxtaposition of cultures wrote stories that were judged to be more creative than those exposed to only one culture. The mechanism may be that this juxtaposition creates a little bit of discomfort (earlier we talked about how a little dissent in brainstorming session might have the same effect). Zabelina, D. L., & Robinson, M. D. (2010). Child’s play: Facilitating the originality of creative output by a priming manipulation. Psychology of Aesthetics, Creativity, and the Arts, 4(1), 57–65. 11 Leung, A. K., Maddux, W. W., Galinsky, A. D., & Chiu, C. (2008). Multicultural experience enhances creativity – The when and how. American Psychologist, 63(3), 169–181. 10

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Many companies go to great lengths to promote cultural diversity within their organizations. Leung’s work suggests that a benefit of doing this could lead to an increase in personal creativity. Creative organizations that have footprints in different cultures could use this thinking to create conditions that foster greater creativity around their networks. Juxtaposing cultures rather than melding them is important. In a telephone interview with Leung, she told me that to get the benefits of a multicultural experience, companies should embrace a cosmopolitan mindset rather than a globalizing one. Cosmopolitan suggests drawing from different cultures, rather than sitting above them, and trying to make them homogeneous. And cosmopolitan sounds way cooler than global. Finally, if like me you find yourself over-committing and under-delivering, here is a practical tip to help you avoid the stress that comes with that. How often do you find yourself scrambling for a deadline because you underestimated how long a task would take? Or find that people you are relying on to do things haven’t allowed themselves enough time to do them in? This human trait is caused by cognitive bias called the planning fallacy giving us the tendency to underestimate task-completion times.12 For example, university students were asked to estimate how long it would take them to finish writing their theses. Their average estimate was 33.9 days. Students also estimated how long it would take “if everything went as well as it possibly could” (the answer was 27.4 days) and how long it would take “if everything went as poorly as it possibly could” (the answer was 48.6 days). In reality, the actual completion time averaged 55.5 days, and only around 30% of the students completed their thesis in the amount of time they predicted. One suggestion is that optimism bias is one of the things behind these inaccurate estimates. You can make yourself a little immune to this by taking your belief in your own superpowers out of the equation. Instead of thinking “how long will it take me to do this?” think instead “how long will it take someone like me to do this?” To get better estimates from your colleagues about completion times, don’t ask them how long it will take them to do the task, but ask how long it will take someone to do it. Understanding human nature is the key to understanding how we can influence choice and behaviors, which make us better marketers, but it also Buehler, R., Griffin, D., & Ross, M. (1994). Exploring the ‘planning fallacy’: Why people underestimate their task completion times. Journal of Personality and Social Psychology, 67, 366–381. 12

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helps us understand how intuitions shape our own choices – so that we can make better calls when it comes to making marketing decisions. The takeaways from this chapter are: • Marketers are human! We use the same decision-making shortcuts as the people we want to influence. Sometimes our intuitions don’t lead us to the best marketing decisions. • Short-term goals are more appealing to us as humans than long-term ones. This isn’t always good for the brands we manage. Status quo bias can lead us to not change what we should. • Learning from behavioral and related sciences can also help you and your partners be more creative. How this chapter made other people think differently about how they work: • “There are tons of tips and tricks lurking in this book. In this chapter, I liked the idea of taking a nap, briefing on Fridays, and logging what your gut says first, then doing the homework with a willingness to change (if one can become aware of biases just a tad more) …. ” • “Priming and framing are magical tools for unlocking creativity. How you frame tasks (for yourself or your team) can make all the difference.”

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17 CHOOSING WITHOUT CHOOSING – ARTIFICIAL INTELLIGENCE AND CHOICE

Artificial intelligence takes aspects of choice out of our hands (or more accurately out of our brains). What might that mean for marketers and for choosers? Amos Tversky, whose partnership with Daniel Kahneman led to many of the foundational ideas of behavioral economics, was also as quotable as Mark Twain or Winston Churchill. Michael Lewis gives us some examples in his book The Undoing Project. After hearing Nobel laureate in physics, Murray Gell-Man cover a range of subjects with some pomposity, Tversky said: You know Murray, there is no one in the world who is as smart as you think you are. Or a useful piece of life-wisdom that he used to explain his habit of not opening mail that didn’t interest him: The nice thing about things that are urgent is that if you wait long enough, they aren’t urgent anymore. Once, he reportedly described what he did in a characteristically witty way: My colleagues, they study artificial intelligence; me, I study natural stupidity. This was perhaps the first time that the power of behavioral insights and AI were linked. It has taken 30 plus years since for that potential to start to be realized. 257

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Let me also add that AI is an area of infinite breadth, and it can have a role in pretty much any part of a marketer or customer insights professional work. This chapter looks at a few narrow aspects of it, focusing primarily on how AI and behavioral insights can be linked to create more effective interventions and marketing. First, what does AI mean? Let’s use Andreas Kaplan and Michael Haenlein’s definition that it is “the ability of a system to correctly interpret external data, to learn from that data and to use that knowledge to achieve specific tasks and goals through flexible adaptation.” We’ve talked a lot about how behavioral effects are shifted and shaped by context and timing. A stimulus – pretty much the same stimulus – experienced from a different perspective (whether that is because of a different cultural context, an individual difference, or the same person experiencing it at a different time or in a different place) can have a remarkably different effect on the behavior it prompts. Timing often explains the gap between intention and action, and as we said in Chapter 7, the pat on the back from your cardiologist for persisting with heart-healthy behaviors is nothing as effective as it could be, if that encouragement was dispensed either seconds before you might have acted unhealthily or seconds after behaving well. So, the “perfect” approach for applying interventions based on behavioral insights would be one that has the flexibility to adapt to changes in the decision-making environment (context), to understand and allow for individual differences and finally to be able to provide prompts, reframes, or incentives (be they stick or carrot) in the moment. This seems like a good fit with Kaplan and Haenlein’s definition of AI. Of course, AI has been driving choice for some time already – even back in 2015 Jeff Bezos, in a letter to investors, revealed the extent of Amazon’s “digital nudge” programs: Through our Selling Coach program, we generate a steady stream of automated machine-learned nudges (more than 70 million in a typical week) alerting sellers about opportunities to avoid going out-of-stock, add selection that’s selling, and sharpen their prices to be more competitive. These nudges translate to billions in increased sales to sellers. This was 2015, and Amazon’s Selling Coach program is a small fraction of Amazon’s activities, focusing on sellers, a significantly smaller community than the 197 million people who shop on Amazon every month. But the

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Amazon number may be a bit misleading, as many of these “nudges” are simply timely reminders, enabled by machine learning. That isn’t to say what the Selling Coach program is doing shouldn’t be considered nudges, but I wouldn’t describe all of them as interventions that use insights from psychology. I am not the expert to take you through the science and methods of AI. But one important aspect that is easy to grasp and explain is decision trees. A decision tree is simply a way of classifying stuff – you might use one intuitively to sort your laundry, first you sort items that need to be washed in a delicate cycle from ones that can be washed in the normal cycle and then you might sort the dark items from the white ones for the normal cycle, but not bother to do this for the delicates. Our brains, for the most part, can’t handle more than a few decision trees at a time (actually when you are doing the laundry you are probably running two at the same time as you probably go straight to three piles – delicates, dark normal, white normal – rather than dividing it first by delicates and then by coloreds), but computers, of course, can. Many decision trees can be run simultaneously, each looking at different classifications and outcomes together as an ensemble, which is often called a random forest. The trees then “vote” for their classification, so for our laundry example you might end up with “less than 80% cotton = delicate.” For random forests, the saying not being able to see the forest for the trees is not true – the trees help you see the forest. This idea of an ensemble of decision trees has been augmented, by, among others, a group of data scientists from Technion – Israel Institute of Technology. This group has developed a “synergetic approach incorporating psychological theories and data science in service of predicting human behavior”1 which they demonstrated through choice prediction competitions. Dubbed the “psychological forest,” this approach builds behavioral tendencies into a decision tree forest, making it a little less random. This led to a system that was better at predicting human behavior (in this case a number of choice prediction competitions) than a range of AI algorithms or the psychological measures alone. My non-data scientist way of thinking about the psychological forest is that rather than random trees, this forest is made up of a mix of trees some of which have been thoughtfully selected or adapted to flourish in the environment.

Plonsky, O., Erev, I., Hazan, T., & Tennenholtz, M. (2016). Psychological forest: Predicting human behavior. AAAI. 1

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Ori Plonsky, one of the data scientists from Technion who developed the psychological forest approach, describes the method as using “behavioral scientists to develop theory-grounded features, with data scientists providing best tools for their integration.” I’m a great fan of this idea (perhaps because it seems to require some level of employment for behavioral insights specialists in ever-more automated times), as it also aligns with much current thinking in data science, which is that there is great power in combining human and artificial intelligence. The tendency of marketers to date has been to use AI for o ­ ptimization – essentially increasing efficiency by continually reducing the error in a trial-and-error approach. AI has enabled marketers to do this by replacing traditional AB testing at substantially higher speed and lower cost by running multivariate testing as opposed to the reliable but time-consuming AB testing that is a standard approach. So rather than just testing headline A versus headline B, AI allows for many variables to be tested at the same time. Maybe three different headline options in combination with different images and different calls to action (CTAs). In these situations, AI chooses what is working and continues to optimize, so you as a marketer can just throw in a range of options, be they headlines, copy, pricing, images, callouts – pretty much anything. You can then delegate decision making to technology, while your marketing gets increasingly efficient. What more could you ask for? The ease with which marketers can test options using AI means that we can be pretty undiscerning about the variations we put into the machine. To some extent, AI defies the old saying “garbage in, garbage out” (GIGO). GIGO (or the English equivalent Rubbish in, Rubbish Out or RIRO) which normally refers to using data inputs that are flawed or nonsensical. My meaning here is when marketers use inputs that aren’t as well thought through as they could be and then allow the machine to refine from that baseline.2 The results keep improving, but what if a little more thought had gone into the inputs to be optimized? Just as the Psychological Forest improved predictions An example of this is given in a July 2019 Fast Company article by Gary Smith, author of The 9 Pitfalls of Data Science: “An internet marketer tested three alternative colors for its landing page (yellow, red, and teal) against its traditional blue color in 100 or so countries, which virtually guaranteed that they would find a revenue increase for some color for some country. They concluded that England loves teal, except that it didn’t.” 2

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of human behavior over the random forest, infusing your marketing inputs with behavioral insights can give your AI a leg up over standard optimization. The opportunity is to use behavioral insights to amplify and accelerate the optimization that comes from a marketing machine learning engine. AI tells us what, but behavioral insights can tell us the why behind the what. Tom Griffiths, who collaborated with Plonsky and others on a paper3 that Griffiths summarized in a keynote at the 2019 Society for Judgment and Decision Making Conference, asked the question “Behavioral decision theories aim to explain human behavior. Can they help predict it?” The first part of this sentence is interesting to me. Behavioral insights can be used to explain why an aspect of an experience or the framing of an intervention is climbing up or has dropped out of the optimization process. Understanding why allows for step changes rather than the smooth curve of optimization. When we understand why something works, we can imagine how that effect might be amplified, rather than just tweaked. Understanding how a round log works as a roller allows you to conceive a wheel; understanding how a wheel works gets you to pulleys and gears and cogs. Mike Daniels of The Behavioural Architects agrees with this: Artificial Intelligence can bring to our understanding of behaviour better and more granular descriptive answers to where, when, what, who questions. The happy convergence of behavioural insights with AI and ML is that BI (Behavioral Insights) helps to answer the explanatory and imaginative questions – the why and the how. When I asked Naomi Sparks Grewal what the skillset of insights professionals might be as we move forward, her answer embraced this complementarity of behavioral science and data science: A dangerous combination is a behavioral scientist with coding/computer science skills, and an ability to present findings at all levels. I want to hire that person! Having humans provide explanations and add imagination to AI’s optimization is a good example of using humans and computers for what they are each Plonsky, O., Apel, R., Ert, E., Tennenholtz, M., Bourgin, D., Peterson, J. C., …, Erev, I. (2019). Predicting human decisions with behavioral theories and machine learning. ArXiv:abs/1904.06866. 3

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uniquely good at, which is where natural, human intelligence and AI can have most impact (and as we will see later, where AI is most acceptable to people). I developed such a process for a consortium of medical and technology organizations bidding for a large public health grant. In a simplified form, the process went as follows: Step 1: Define desired behaviors and hypothesize what might be headwinds that hinder, and tailwinds that might enable their adoption. Step 2: Run behaviorally inspired workshop with designers (UX and beyond), based on insights about the target behaviors. Step 3: Synthesize and develop ideas for interventions coming out of workshop. Step 4: Run these ideas and see what happens! Ongoing: Optimize and individualize through AI engine. Step 5: Every three months, take the bottom 20% and top 20% of performers and use Behavioral Insights experts to hypothesize why they are/aren’t working. Use this analysis to brief designers to improve interventions. Ongoing: Optimize and individualize through AI engine. Step 6: Every year run behaviorally based creative workshop based on new baseline and revised hypotheses. Ongoing: Optimize and individualize through AI engine. John Lowell, who runs a consultancy called Field Collective and was previously Chief Intelligence Officer at the giant advertising agency Leo Burnett, has deep experience and understanding of the practical application of AI. He suggests one way to push this approach further, would be to build a type of neural network called a generative adversarial network (GAN) into the process. GANs have been described as “the coolest idea in machine learning in the last twenty years”4 and essentially fulfill the role of

RI Seminar: Yann LeCun: The Next Frontier in AI: Unsupervised Learning. However, the reputation of GANs has been somewhat tarnished recently by their use to produce “deep fake” images and videos. Retrieved from https:// www.youtube.com/watch?v=IbjF5VjniVE. 4

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creative thinkers in the world of AI. GANs use two neural networks, one – a generative network – the other a discriminative network. The generative network provides new “creative” input, that may break some of the rules that the discriminative network is policing but still fits inside the required classification. The success of the generative network is based on how many errors it can get the discriminative network to make! This “battle” leads to novel solutions – “black swans” that are not at first recognized as swans by the discriminative network. The combination of AI and natural intelligence is often held up as AI “best practice.” For marketers, this combination offers the opportunity use deep insights into human nature, built into experiences customized for each individual, delivered at the right moment. Uber has done this with great effect (and in the process attracted some criticism). A famous 1997 study5 among New York taxi drivers (who may not have benefited from the hippocampus enlarging exercises of London cabbies discussed in Chapter 3, “The Natural History of Choice”) revealed that they did not work in the most efficient ways to maximize their income. On days when there was a lot of work to be had (maybe a rainy day, or there was a big convention in town) the drivers would finish earlier than on a less busy day. On these quieter days – often when the weather was better, they would work longer. The explanation the researchers offer is that the drivers were calculating how long they worked based on a daily target (“I’ll quit when I’ve made $250 for the day”). This means on busy days they worked less, but on quieter days they work longer.6 An explanation based on prospect theory is that the taxi driver thinks of any shortfall of that $250 as a loss and thus is driven to drive as long as it takes to avoid it. However, the researchers’ analysis suggested that if the taxi driver put in a couple of extra hours on busy days and worked a couple of hours less on quiet days, they could earn 10% more. Two decades later, in 2017, human nature, of course, hadn’t changed, but the way we hail our rides about town had. And while the inefficiency Camerer, C., Babcock, L., Loewenstein, G., & Thaler, R. (1997). Labor supply of New York City cabdrivers: One day at a time. The Quarterly Journal of Economics, 112(2), 407–441. 6 A study of taxi drivers in Singapore found similar behavior. Chou, Y. K. (2002). Testing alternative models of labour supply: Evidence from taxi drivers in Singapore. The Singapore Economic Review (SER), 47(1), 17–47. 5

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of the self-employed taxi drivers studied in 1997 only hurt their personal income, ride-sharing apps like Lyft and Uber have an interest in their drivers maximizing their earnings. In a New York Times piece, Noam Scheiber investigated how Uber was using insights from behavioral science, paired with AI to prompt their drivers to work longer. Scheiber sums up Uber’s problem nicely. As the drivers are not employees7 but independent business owners, Uber can’t order them to be in a certain place at a certain time. But Uber’s brand utility to users is all about cars being where their users want them, when their user want them there. As Scheiber says this “lack of control can wreak havoc on a service whose goal is to seamlessly transport passengers whenever and wherever they want.” The New York Times piece clearly shows how a combination of behavioral insights and AI were used to keep drivers driving. When they were getting close to what might appear to be a goal, based on their past driving behavior, the drivers received a prompt telling them how close they were to making a “stretch” amount. Scheiber reports Uber has experimented with video game techniques, graphics and noncash rewards of little value that can prod drivers into working longer and harder – and sometimes at hours and locations that are less lucrative for them. The various nudges (or “sludges,” to use a term coined by Richard Thaler to describe interventions that use behavioral insights that lead people to act in ways that aren’t beneficial to them) that Uber has used to appeal to drivers innate aversion to loss, and attraction to goals, are individualized based on the drivers behavioral record and in-the-moment environment and are delivered, through the Uber app, at the time most likely to have an effect on drivers’ behavior. While an illustrative example of how behavioral insights and AI can work together, this is also a lesson in how tailored nudges served faster than the speed of consciousness may lead to outcomes that favor the server more than the receiver. In an article titled “Uber Shows How Not to Apply Behavioral Economics,” Francesca Gino8 warns of situations that work more for the company than for the chooser or user.

The employment status of Uber drivers continues to be under scrutiny in different jurisdictions. 8 https://hbr.org/2017/04/uber-shows-how-not-to-apply-behavioral-economics. 7

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There are plenty of cases where AI-powered nudges are at best dubious and at worst encourage illegal activities. In Evil Nudges,9 Dr Michal Lavi, who specializes in cyber law warns of cases where the intermediary uses data mining and artificial intelligence to create personalized nudges that match the characteristics of every user and specifically push users to illegitimate forums, or to be engaged in illegal activities. AI can take what might be considered an acceptable nudge to an ethically dubious place. If a mechanic works in terms of encouraging in-game purchases in a mobile game, unless limits are built into the algorithm, AI will serve up individually tailored mechanics more frequently to players who respond. A subset of players will be more responsive than others, and in little time you can find people racking up huge in-game bills. Kotaku,10 a gaming news and reviews site, reported in October 2019 that one player had spent over $150,000 in microtransactions on Transformers: Earth Wars, and that AI had become adept at identifying potential “whales,” as these high-spending players are known. John Lowell, the marketing data expert who we referenced earlier, says: Companies can make smart, optimized, legal, and even ethical (in the microview) decisions that lead to a system that is unethical and exploitative. Earlier I talked about the importance of adding human insight to AI. In cases like these, adding some human oversight could also be a good idea. Kartik Hosanagar11 is a professor at The Wharton School of the

Lavi, M. (2018). Evil nudges. Vanderbilt Journal of Entertainment and Technology Law, 21(1), 1+. 10 Walker, A. Retrieved from kotaku.com. Accessed on October 14, 2019; Someone spent over $150,000 in microtransactions on a transformers game. Retrieved from https://kotaku.com/someone-spent-over-150-000-inmicrotransactions-on-a-t-1839040151. 11 Hosanagar is the John C. Hower Professor of Technology and Digital Business and a Professor of Marketing at The Wharton School of the University of Pennsylvania, and author of A Human’s Guide to Machine Intelligence: How Algorithms Are Shaping Our Lives and How We Can Stay in Control. The interview Who Made That Decision: You or an Algorithm? can be found at https://knowledge.wharton.upenn.edu/article/algorithms-decision-making/. 9

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­University of Pennsylvania who believes this is critical. In an interview with Knowledge@Wharton, Hosanagar suggests: […]companies should formally audit algorithms before they deploy them, especially in socially consequential settings like recruiting. The audit process must to be done by a team that is independent of the one that developed the algorithm. […] I’m not an algorithm skeptic. I’m actually a believer in algorithms. The message I want to share is not “be wary,” but “engage more actively and more deliberately and be part of the process of influencing how these technologies develop.” Used responsibly, AI and machine learning can benefit marketers. They can also benefit users and choosers. The recommendations Amazon or Google serve me are often very useful – they make choice easier and more rewarding. AI bots have on many occasions resolved a support or service issue I’ve been having without me having to hang on the line to a call center. But what are people’s limits with AI, how does it make them feel about their choices, and even about themselves? Lucy Farey-Jones is someone who deeply understands the intersection between humanity and technology. She runs San Francisco-based Register Ventures, and prior to that was co-founder and Chief Strategy Officer of the advertising agency, Venables Bell and Partners. While so much of the talk about AI has been what it could do for businesses, Farey-Jones became interested in another question. What did it mean for people, and how did they imagine it fitting into their lives? In a study of 1,200 people across the United States,12 she asked people about different scenarios where they could embrace AI and their comfort level in so doing. Farey-Jones reports that people seem very comfortable with AI’s help on things like house cleaning and package delivery, OK with AI-powered lawyers, teachers, and financial advisors, but “currently firmly closed” to the idea of AI/robotic childcare. Farey-Jones points out a contradiction which is that many of the people who expressed a discomfort with AI consume it already. Farey-Jones’ findings can be found here https://medium.com/@lucy_94635/ artificial-intelligence-real-fear-3caa790abb24. Her TED talk based on the research can be found here https://www.ted.com/talks/lucy_farey_jones_ a_fascinating_time_capsule_of_human_feelings_toward_ai. 12

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1 out of 5 who rejected the idea of an AI matchmaker had, in fact, tried online dating services that employ AI-powered algorithms. 45% of those who were deeply uncomfortable with the idea of an AI assistant own devices featuring Alexa, Google Home or Siri. A full 80% of those who rejected the idea of an AI plane with a pilot backup had, in fact, flown commercial. Perhaps not surprisingly, those who had already experienced voice AI agents showed significantly greater comfort across all of the scenarios in the survey. As we’ve said earlier, familiarity breeds content. How we feel about AI is one thing. But how do our interactions with it make us feel? As someone who raises my voice at Alexa, Siri and Google Assistant when they don’t seem to understand me but will also sometimes thank them13 when they tell me the weather forecast for the day, I am one among many who anthropomorphize the “conversational interfaces” in my life. And recall in Chapter 9, “Make People Feel Smart, Attractive – or Even Lucky,” how people taking a quiz responded to flattery from the computer on which they were taking it. They performed better at the quiz, reported more positive emotions, more positive evaluations of the interaction, and more positive regard for the computer. The tendency to anthropomorphize runs deep in humans – some suggest that it had a role in making us open to domesticating animals. Soldiers who operate bomb-disposal robots will often give the robots names and hold funerals if they take a terminal hit. The best robot–human relationships seem to come when the robot complements human activity but is not seen as a rival. Not unlike how we might feel about domesticated animals. And just as every hero has their flaws and vulnerabilities (whether it is Achilles and his heel, or Superman and kryptonite), we may like our AI agents better if they show us they aren’t perfect. Over 50 years ago, social scientist Elliot Aronson showed that when a successful person makes mistakes, they may become more likeable. This Pratfall Effect14 has been shown to extend Amazon has developed a feature that provides positive reinforcement for kids using the “magic word” when they ask Alexa a question. If the kid asks “please” in the request, Alexa will give the answer and add “by the way, thanks for asking so nicely.” Recently, I got a childish kick out of discovering Alexa’s “whisper mode”, were if you whisper a request to Alexa, she whispers in reply. 14 Aronson, E., Willerman, B., & Floyd, J. (1966). The effect of a pratfall on increasing interpersonal attractiveness. Psychonomic Science, 4, 227–228. doi:10.3758/BF03342263. 13

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beyond human–human interactions (which are, almost unforgivably, known as HHIs) to human–robot interactions (perhaps more forgivably called HRIs). Researchers demonstrated this through a user study15 where they had deliberately programed faulty behavior into a robot’s routine and then observed and measured how people’s reactions differed when they were interacting with the faulty robot versus interacting with an error-free one. Just as with humans, the competent but flawed robot was liked significantly more than the perfect one. Tyra Banks, the creator of America’s Next Top Model urges us to embrace our flaws, as these make us awesome, and she tidily contracts this idea into the portmanteau flawsome. Perhaps “flawsome” should be in the brief of every AI-powered experience. People might like their AI better if it reveals a small, but not serious flaw, but surely speed is one attribute of AI that is nonnegotiable? I mean, isn’t that what it is all about … the ability to crunch a gazillion options and give me the best one in the bat of an eyelid? We are all time-pressed, everything is coming at us and to us faster and faster, so it seems a safe bet that the AI that works faster wins. Not so fast, say Mike Norton and Ryan Buell of the Harvard Business School. Norton and Buell conducted a number of experiments that investigated the concepts of operational transparency and the illusion of labor. Operational transparency is the interest we have in seeing the process that gives us the products or services we are choosing or using. Whether that is the sushi chef behind the counter precisely (we hope) slicing the pufferfish you are about to eat, tracking packages on UPS, or seeing where your pizza is in the cooking and delivery process with Domino’s Pizza Tracker, we like to keep tabs on the things being done for us, even if keeping tabs on them doesn’t help us get them any faster. In one experiment,16 Norton and Buell created a simulated website called TravelFinder that looked and operated like its real-world counterparts. They then asked the research participants to use the website to find and book a flight from Boston to Los Angeles. Whereas some participants were given the Mirnig, N., Stollnberger, G., Miksch, M., Stadler, S., Giuliani, M., & Tscheligi, M. (2017). To err is robot: How humans assess and act toward an erroneous social robot. Frontiers in Robotics and AI, 4, 21. 16 Buell, R. W., & Norton, M. I. (2011, September). The labor illusion: How operational transparency increases perceived value. Management Science, 57(9), 1564–1579. 15

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selection of suitable flights almost immediately, others were made to wait while the website showed it was working by showing updates on the screen like “52 results fond so far” and “We are now searching approximately 100 sites including JetBlue.” As Buell and Norton reported in an article17 in the Harvard Business Review, One site delivered the results instantly but invisibly, whereas the other took either 30 or 60 seconds but showed the labor being done. A majority preferred the transparent – and slower – site. The waiting, of course, was entirely unnecessary – it simply created the illusion of labor. Even though we know that algorithms work at the speed of light, we prefer them when they show us the effort they are putting in – and if they take a little bit of time to do this, we like them even more. Even though I’ve dragged you through a whole chapter about making choice easy earlier in this book, marketers should be mindful of AI making choice too easy and a less valuable emotional experience for choosers. Our choices are communication, as Jonah Berger has said. Our choices can make us feel smart. Baba Shiv has told us how feeling good about our decisions can lead us to get more utility out of what we have chosen. But what happens if we feel those choices are a little less ours, because an AI agent has taken on some of the decision making? I haven’t yet come across research that investigates this directly, but a thoughtful paper Consumer Choice and Autonomy in the Age of Artificial Intelligence and Big Data,18 suggests interesting topics for inquiry. I won’t cover all of them here (the paper is worth reading in its entirety – it is only seven pages, not including references). The authors cover areas such as utility from positive self-attributions, which is how, when we feel more strongly that a choice is ours, it can lead us to take greater responsibility for positive outcomes from that choice. And utility from agency can make us more satisfied with our choices as

Buell, R. W., & Norton, M. I. (2011, May). Think customers hate waiting? Not so fast … Harvard Business Review, 89(5). 18 André, Q., Carmon, Z., Wertenbroch, K., Crum A., Frank, D., Goldstein, W., …, Yang, H. (2018). Consumer choice and autonomy in the age of artificial intelligence and big data. Customer Needs and Solutions, 5, 28–37. https://doi. org/10.1007/s40547-017-0085-8. 17

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the experience of freely choosing leads consumers19 to bolster the features of the preferred option and to minimize the attractiveness of the non-preferred option. Marketers should be concerned about AI’s potential to reduce these and similar psychological benefits to choosers. Removing the sense of autonomy conferred by choice can affect the chooser’s well-being, can make the actual choice itself less rewarding and could conceivably reduce the importance of brand intangibles. In the process of choosing a brand we nonconsciously retrieve brand associations from our memory (remember Sam McClure’s fMRI experiment with Coca-Cola, which should be easy to retrieve as we featured it only two chapters ago). When we do this frequently, we make those connections stronger and more enduring. When the process of choosing is done for us, it is not unreasonable to assume that we are less likely to strengthen the emotions, feelings, and cues associated with the brand in question. I’m not suggesting that marketers should not embrace AI. That genie is well and truly out of the bottle and has potential – as all genies should – to create and scale helpful and good magic. But I am suggesting that when designing programs that use AI, practitioners should also include cues and experiences that help choosers preserve their sense of agency and contribute to building their decisionmaking self-efficacy (DMSE). Sometimes reaching your decision through a hint is more rewarding than having the answer served up on a plate for you. Researchers at the Rotterdam School of Management, Erasmus University, in the Netherlands have investigated20 what the promise or threat of automation does for decision making around activities where an aspect of someone’s identity is wrapped in that activity. The research suggests that when an activity is not just about utility for an individual (cycling from A to B) but is about identity (identifying as a cyclist), automation can deplete that sense of identity. And the prospect of losing something of our identity makes us less likely to act and more likely to dig our heels into the status quo. A number of times in this book, I have suggested that for marketers it’s not all about your brand. It’s about their – the chooser’s – decision to choose it. A challenge for marketers in the age of pervasive algorithms is helping Their choice of word, not mine! Leung, E., Paolacci, G., & Puntoni, S. (2018). Man Versus machine: Resisting automation in identity-based consumer behavior. Journal of Marketing Research, 55, 818–831. doi:10.1177/0022243718818423. 19 20

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people feel it is still their choice – a choice that springs from within them, from their individual preferences and needs, and from how they see themselves and how they want others to see them. I’d like to conclude this chapter with some encouragement to those who uncover behavioral insights and design solutions using them. Back in Chapter 7, “Now and the Future – Different Places with Different Rules,” we met Professor Nick Peters, a renowned cardiologist and global advocate for and implementer of digital health programs. In October 2018, Peters wrote a very insightful piece How AI Can Inspire Doctors to Be More Inventive21 for the World Economic Forum’s website. Many of the points he makes in the piece go beyond health care – in fact you could change the word “Doctors” in the headline to “marketers” or “behavioral designers.” In 2017, DeepMind’s AlphaGo computer beat the world champion of the strategy board game Go. The computer knew only the rules of the game, which has more possible moves than there are atoms in the visible universe. Some saw it as a watershed – the point at which machines officially became more intelligent than humankind. Yet, a subtle point (not so widely reported) was that AlphaGo defied long-held conventions for moves. Consequently, the grand masters of the game have admitted to being liberated and have dared to imagine new moves and strategies which are leading to extraordinary winning streaks. We are currently in the throes of a technological revolution in which machines are being empowered with the ability to learn and to work out solutions for themselves. Machines are beginning to challenge human imagination in a way that may not have been anticipated, and which could, paradoxically, teach humankind to dare to imagine beyond our current constraints and unleash a revolution in creativity. While embracing AI in the design of behavior change and marketing interventions has many challenges, there is something quite thrilling about the

https://www.weforum.org/agenda/2018/10/how-ai-can-inspire-doctors-to-bemore-inventive/. 21

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idea of it inspiring people like you and me to be more liberated and more imaginative strategists and practitioners. The takeaways from this chapter are: • Behavioral insights and AI/ML are a powerful combination, but getting the most out of this combination requires going beyond optimization. • While AI can get you to the “what” interventions may work best, human analysis using behavioral insights can give a better sense of “why,” and the understanding of “why” can help fuel creative leaps. • Ongoing human input can lead to AI developing more effective interventions; but human engagement in the process isn’t just about ­effectiveness – human engagement and auditing is important in identifying algorithm bias and helping avoid algorithms suggesting courses of action that are unethical or even illegal. • “Flawsome” works for machines as well as it does for people! Algorithms that aren’t perfect or that take a bit more time than they need may be better liked and more highly rated than flawless ones. • If your resume combines data science and behavioral science skills, you are likely to be in very high demand. • And never forget the importance – for the chooser and for your brand or business – of people feeling the choice is theirs, rather than one being made for them.

CONCLUSION

Typically, we think of marketing as benefiting marketers and their objectives. But over the last few years, in the process of learning more about how people make choices, I have come to believe that it can do much more than that. Marketing’s next evolution should be to always benefit the people it seeks to influence. There are obvious areas where marketing can do this – using what has been learned from behavioral science we have seen how organizations like Ideas42 have uncovered insights to design and construct marketing programs that will be more effective at encouraging healthy behaviors, better financial habits, and actions that are good for society and the environment. However, the benefits shouldn’t stop there. For every choice we seek to influence that is as profound and as important as the preceding areas, hundreds of choices exist that are not going to save a life or the planet. Should I put Crest or Colgate on my next trip to the supermarket? Should I sign up for a package of 12 Pilates classes, or should I pay as I go? As I meet a friend for a beer after work should I have an Anchor Steam or a Sierra Nevada (actually, I’ll have an Anchor Steam – it’s America’s original craft beer, brewed in San Francisco since 1896), but even these more trivial choices can be addressed by marketing in ways that benefit the chooser. The first way is something we covered in detail in Chapter 10, “Make It Easy – For the Mind and the Body,” which is the benefit of making choices easy. We’ve talked about how our brains favor easier choices and more “evaluable” ones, and that is what I believe marketers should seek to provide – first because it works for marketers, but second, time is too precious and attention too limited to be making what could be simple decisions more

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cumbersome than they should be. There are times when creating some decision uncertainty in a category may be a good strategy from a business perspective, where the natural decision may be to choose an established brand leader. But rather than throwing choosers through cognitive loops, wouldn’t it be better to start by trying to find ways to make your brand an easier, more natural choice than the established one? Unintentionally creating marketing that is not aligned with how the brain works and how humans intuitively make choices is not going to best serve the brand or business. And intentionally making a choice more complex, more difficult, or more confusing than it needs to be is not marketing’s best service to humanity. Richard Thaler rails against products that make unsubscribing difficult. The rule of thumb that subscription services should follow, he says, is that it should be as easy to unsubscribe as it was to subscribe in the first place. When choices are difficult, the effort of reconciling them puts unnecessary strain on people. It makes them feel less competent, and it distracts them from other things that may be important for their well-being and happiness. Life is too short for any of us to spend large amounts of time in decision paralysis over everyday choices. For these kinds of decisions, easier choices equal happier chooser and happier marketer. There are of course cases when making choices more difficult is beneficial and can save lives. Making the decision to buy cigarettes less cognitively fluent and physically difficult is obviously a good thing. And making it just a bit more difficult to ingest an overdose of Tylenol (or other brands containing paracetamol) by reducing the amount that people can buy at one time and by requiring manufacturers to pack them in blister packs where the pills have to popped out one by one, rather than in easy-to-empty bottles reduced suicide deaths from paracetamol overdoses in the United Kingdom by 43% over 11 years.1 A second area is the upside of the emotions around choice. Our fictional friend Professor Louis Levy, and Dumbledore in his conversation with Harry Potter told us of the importance of choices in our lives. It is quite remarkable how the feelings around our choices affect our moods – the absence of autosensing windshield wipers, a trivial car accessory – briefly clouded my entire new car experience. Equally, when people affirm my choice of a Brompton folding bicycle by remarking on how convenient it is, I unfold it and pedal

1

Emanuel, E. J. (2013). A simple way to reduce suicides. New York Times, June 2.

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off with whatever the pedaling equivalent is of a spring in my step. One of the best compliments you can give someone is one that compliments a choice they have made. Perhaps the best strategy in marketing and in life is to do just that. But then, people like you who’ve had the curiosity to buy this book, and made the choice to stick with it to the very last word know that already ….

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INDEX Note: Page numbers followed by “n” indicate notes. Account planning, 25n2 Advertisement (Ads), 123, 145 attention to Ad and size of donation, 146 Advertising, 66, 167–168 Affiliation, 171 Affinity, social media message using, 145–147 Affirmation, 211–217 Amazon, 214 Amazon One-Click, 101 Mechanical Turk, 17 America’s Next Top Model, 266 American Association of Advertising Agencies (4As), 112 Amplitude of Low-Frequency Fluctuations (ALFF), 32 Anagram exercise, 127 Analysis, 43–49 Anchoring, 155, 157–159, 163 Antenatal HIV testing, 149n5 Anticipation, 119–120 “Apple envy”, 153 Apple Watch, 156 Aptronyms, 177–178 Artificial intelligence (AI), 258, 261 behavioral decision theories, 261–262 and choice, 257 combination of behavioral insights and AI, 263–264 digital health programs, 269–270 intersection between humanity and technology, 265–266 and machine learning, 265 operational transparency, 267 psychological forest approach,, 259–260 Selling Coach program, 258–259 threat of automation, 268–269

Association of Tennis Professionals (ATP), 54 Associative coherence, 158 Athletes, 68 Athleticism, 135 Auto-escalation, 97 Auto-sensing windshields, 106 Bandwagon effect, 38 Bandwagon effect, 69–70, 74 Bayesian analysis, 71 BEESY, 221 Behavior(al) changes, 70 decision theories, 261 economics, 16, 20, 25n2, 89, 115–116, 151–152, 155, 189–190 people getting labeled affects, 173–180 principle, 38 science, 17, 123, 189, 250 strategy, 65 targeting, 167 testing, 238–239 time machine, 247–248 Behavioral Marketing Summit, 6 Behavioral Time Machines, 92 Behavioural Insights Team (BIT), 80–81 Birth order, 204 Boomers, 190 Brain plasticity, 30 “Brand in” approach, 10–11 Business of choice, 3–4 brain processes, 7 “brand in” approach, 10–11 decision-centric approach, 8–9 marketing, 4–5, 11–12 pop-culture phenomenon, 5–6

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Calls to action (CTAs), 260 Campaign (magazine), 191 Caudate nucleus, 215 Caudate nucleus, 33 “Cecil”, 77 Celebrity, social media message using, 145–147 Channel factors, 140 CL Pocket models, 211 Cocktail party effect, 57 Cognitive biases, 37, 46–47, 104, 111, 228–229, 245–246, 253 Cognitive consonance, 191 Cognitive disfluency, 145 Cognitive fluency, 139, 143–144, 150n12 Cognitive functions, 34 Cognitive load, 143 saver, 152 Cognitive mechanisms, 23, 37, 89, 245 Cognitive neuroscience, 15 Cognitive pricing, 154 Cognitive processes, 46 Cognitive shortcuts, 47–48 Collateralized debt obligations (CDOs), 26 Colonoscopy, 87–88 Comparison, 152–153 anchoring, 155, 157–159, 163 cognitive pricing, 154 pricing mechanism, 160–161 scarcity, 162 Social Security, 156 Compromise effect, 72–73 Computer voice, 123 Conference on Digital Experimentation (CODE), 17–18 Confirmation bias, 212–213 Construal level theory (CLT), 90–91 Consumer neuroscience, 232 Consumer-centric approach, 4 Context, 185 effect, 177 Context activates evolutionary goals, 169–173 Contextual targeting, 167 Conventional marketing, 57, 172 Conventional thinking, 169 Cortical relief, 145 Cortical remapping (see Brain plasticity) Cosmopolitan, 253 coup de grâce, 97

Crystalized intelligence, 205 Culture, 196–201 Customer dissatisfaction, 139 Customer Effort Score, 144 Customer service, 139 Data science, 260 Decision making, 37 environment, 258 strategy, 43 system, 29–30 Decision making self-efficacy (DMSE), 126 Decision neuroscience, 15 Decision science, 143 research, 212 Decision tree, 259 Decision-centric approach, 8–9, 211 Deliberative thinking, 46, 224 Descriptive social norm, 69–70 Diarrheal disease, 141 Digital marketing, 22 “Digital nudge” programs, 258 Direct-to-consumer business model (DTC business model), 239 Discriminative network, 262 Disease avoidance, 171 Dopamine, 212 Driver and Vehicle Licensing Agency (DVLA), 80 eBay auction, 167 Ecological validity, 18 Ecologically valid, 226 Electrodermal activity (EDA), 232 Electroencephalogram, 145 Electroencephalography (EEG), 145, 237–238 Emotional contagion, 67 Endowment effect, 104, 107–109, 115–116, 120, 246 Environment affects choices, 180–183 Environmental Protection Agency, 70 Epistemic authority (EA), 213 Ethics, 23 Even consumer-obsessed approach, 4 Event-related potentials (ERPs), 237 Ever-advancing science of choice CODE, 17–18 marketers, 22–23 marketing, 24–25

Index

Moore’s Law, 16–17 neuroscience, 15 nonconscious processes, 20–22 nudge, 23–24 RCTs, 18–19 Evolutionary selves, 171 Exceptional visionary, 21 Exercise, 249 Eye tracking, 231–232 Eye tracking studies, 69 Face Retirement program, 92 Facial Action Coding System (FACS), 231 Facial emotion expression, 67 Facial expressions, 66–69, 162 recognition, 230–231 Fair and Square pricing program, 154 Familiarity, 51–52, 124 advertisements, 56–57 human behavior, 54–55 matching behavior, 58–59 Oreo Daily Twist, 60 recognition, 53–54 tendency in marketing, 57–58 Familiarity breeds contempt, 61n1 Fast strategy, 201–202 Fear of missing out (FOMO), 116 Federal Trade Commission, 33 Feel attractive, 125 Feeling smart, 129 Film advertising, 66 Film clips, 170 FinalMile’s approach, 7 First-person shooter games (FPS games), 32 5–5–5 plan, 251–252 Flattery, 123–124 Flawsome, 266 Flexitarian, 115 Florence syndrome, 62n11 Fluid intelligence, 204–205 Functional magnetic resonance imaging (fMRI), 17–18, 32, 91, 144, 234–237 functional near-infrared spectroscopy (fNIRS), 235 Fusiform face area (FFA), 67 Future-time reference (FTR), 198 Galvanic skin response (GSR), 232 Garbage in, garbage out (GIGO), 260

279

Gaze heuristic, 45–46 Gen Xers, 190 Gender differences, 173 Gender stereotype effect, 174 Generative adversarial network (GAN), 262 Generative network, 262 Genetic makeup, 194–196 Gitanos, 203 GlaxoSmithKline’s Oral Health Category (GSK Oral Health Category), 181 “Good Samaritan Study, The”, 183 Google Doodles, 60, 63n18 GPS chip, 171–172 Heuristics, 37, 45, 48, 53, 228–229 High involvement processing, 222 HIV test, 138 Homo erectus, 34 Homo floresiensis, 30 Homo sapiens, 30, 39n3 House (TV show), 222 Human behavior, 54–55, 71 Human brain, 67 evolution, 30 Human Intelligence Tasks (HITs), 17 Human intuition, 37 Human nature, 193, 248, 253–254 Human–human interactions (HHI), 266 Human–robot interactions (HRI), 266 Hunting, 85 Hurricane Katrina, 178 Hyperbolic discounting, 89, 94, 97, 143 Hyperion, 158 Hyperkulturemia, 62n11 Identifiable Victim Effect, 77–78 IKEA effect, 48, 251 Implicit association, 124 measures, 229–230 Implicit association test (IAT), 229–230 Incentive scheme, 105 Individual differences, 190–191 Industrial Revolution, 102 Inequity aversion, 79, 117 Injunctive social norm, 69–70 Innovations for Poverty Action (IPA), 141 “Invisible Gorilla” experiment, 222

Index

280

iPad (Apple), 221 iPhone (Apple), 221 Joint Attention, 69 Kin care, 171 Language, 108, 197 Leadership gene, 193, 195 League of Legends games, 32 Learned helplessness, 127 Life experience, 201 Life History Theory, 201, 203 Loss aversion, 104, 106, 109, 115–116, 245–246 Low involvement processing, 222 Loyalty, 59 Machine learning, 265 “Mad Libs” style exercise, 92–93 Mad Men (Tv series), 118 Market research behavioral science research firm, 221–222 behavioral testing/RCTs, 238–239 cognitive biases and heuristics, 228–229 decision making, 223–224 EDA, 232 EEG, 237–238 eye tracking and pupillometry, 231–232 facial expression recognition, 230–231 fMRI, 234–237 implicit association measures, 229–230 improvement, 228 neuroimaging and analysis, 232–234 people saying like can change, 226–228 respondents, 225–226 Marketers, 167 Marketing, 4, 11–12, 21, 24–25, 66, 214 program, 135 Mate acquisition, 171 behaviours, 170 Mate retention, 171 Media context, 172 Media thinking, 172 Mental accounting, 181, 187n21

“Mere-Exposure Effect, The”, 51 Millennials, 190 Mitigating, 115 Money, 152 “Moore’s Law”, 16–17 MRI scanners, 234 National Health Service (NHS), 80 National Museum of the Economy (see Royal Coin Cabinet) Natural history of choice ALFF, 32 being part of successful team, 35–38 decision-making system, 29–30, 33–34 human nature comes naturally to marketers, 38–39 plasticity, 30–31 video game studies, 34–35 Natural selection, 37 Naturalistic decision making, 224 Nespresso, 127 Neuro Engagement Score (NES), 67 Neuroeconomics, 232–233 Neuroimaging and analysis, 232–234 Neuroinsights, 233 Neuromarketing Business and Science Association (NMBSA), 240 Neuromarketing research, 232–233 Neuroscience, 15, 212, 227, 232–233, 238 New York University (NYU), 5 Noise, 85 Nominative determinism, 177 Nonconscious aspects of decision making, 221 mechanisms, 245 processes, 20–21, 24 thinking, 246 Nudge, 23–24, 264 Nurture, 189, 193 Omission bias, 104 Operational transparency, 267 Opportunity, 260 ‘Opt-out’ approach, 149n5 Optimism bias, 76, 88–89, 245 Ownership, 108–110 Paper money, 151 Personal empowerment, 70

Index

Persuasion, 74–75 Pig-tailed macaque, 135–136 Piggybacking, 141 Pinterest, 214 Planning fallacy, 253 Plasticity, 30–31 Point-of-collection chlorine dispenser system, 141 Pop-culture phenomenon, 5–6 Popularity, 74 Population Services International (PSI), 76 Pratfall Effect, 266 Pricing mechanism, 160–161 Primacy bias, 86 Primacy effect, 55 Processing information, 143 Project Implicit, 229 Projection bias, 181 Prospect theory, 103–104, 110, 120, 190 Psychological forest approach, 259–260 Public policy, 125 Pupillometry, 231–232 Qualitative Research Center (QRC), 228–229 Quarterly earnings, 247 Random forest, 259 Randomized controlled trials (RCTs), 18–19, 221, 238–239 Rapid eye movement sleep (REM sleep), 251 Rationality, 154 Recency bias, 86–87, 246–247 Recency effect, 55, 87 Recognition, 53–54 heuristic, 53 recognition-primed model, 224 Reference price, 154 Response learning approach, 33 Reverse timetable, 248–249 Rostral anterior cingulate cortex (rACC), 234 Royal Coin Cabinet, 151 rs4950 genotype, 193 Rubbish in, Rubbish Out or (RIRO), 260 “Save More Tomorrow” program, 97 Savoir faire, 125, 148 Scarcity, 38, 116 Schemas, 185

281

Segmentation study, 190–191 Self-efficacy, 125–126, 128, 131 Self-esteem, 125 Self-protection, 171–172 Self-Storage Association, 103 Selling Coach program, 258–259 Semantic targeting, 168 Serial position effect, 86 Sharing behavior behavior of others, 65 other people’s behavior, 69–82 other people’s faces, 66–69 Shopper marketing, 184 Shortcuts, 43–49 Simple banner ad from charity, 145–147 Sleepers, 13n6 Slow strategy, 201 Sludge, 23 Smartphone, 171 Social marketing teams, 142 Social media, 79 Social networks, 71 Social neuroscience, 15 Social norms, 69, 81 Social proof, 79–81 social media message using, 145–147 Social science, 17 Social security, 156 Society of Judgement and Decision Making conference (SJDM conference), 50n8 Socioeconomic status (SES), 202 Sparking joy, 211–217 “Spatial learning” approaches, 33 Status, 171 Status quo bias, 21, 104, 109–111, 120 Stendhal syndrome, 62n11 Stereotype(s), 185 effect, 173 threat, 173, 175 Stromer ST2, 160 Technology, 96 Temporal discounting, 89, 97 Tetanus inoculation, 141–142 Texas sharpshooter fallacy (game), 47 Thaler, 177 Three-dimensional platform games (3D platform games), 33 Torrance Test for Creative Thinking, 252 Transaction utility, 182

Index

282

Transfer window, 167 TravelFinder, 267 Trial-and-error approach, 260 Triune brain theory, 30 Two rope problem, 249 Ultimatum game, 78 Universal/Individual and Innate/ Absorbed Map (UIIA Map), 194 Unrelated emotions brings to decisions, 183 Usability testing, 69 User experience (UX), 36, 69 Variety, 59 Ventral striatum, 25n1

Vitamin D3, 192 Watts theory, 136–137 Willing to accept (WTA), 115 Willing to pay (WTP), 115 Work behavioral science, 250 behavioral time machine, 247–248 5–5–5 plan, 251–252 human nature, 253–254 loss aversion, 245–246 recency bias, 246–247 reverse timetable, 248–249 think differently about way of, 247–248