Killer marketing secrets that always work (ft. Ogilvy Vice Chairman)

Rory Sutherland: I call this reverse benchmarking. In other words, you look at all the metrics that everybody cares about in the category. You find a metric that's been completely and ridiculously neglected and you double down on that thing. Now I first came across this in Will Gdara's fantastic book, Unreasonable Hospitality. He goes to the number one restaurant in the world. All of his team say, 'We ought to copy this. We ought to do that thing with the napkins. I really like what they do in the bathrooms with the scented jawsticks. Let's copy that.' And Gdara goes, 'Not going to copy any of that.' Because two, one, we can't afford to. And two, they're already doing it. What I want to know from you is what out of this evening at the world's best restaurant, a Michelangar restaurant somewhere. What was a bit disappointing? What was a bit me? And they said the coffee was a bit average, you know, it was nothing special. and the beer drinkers, probably the chefs who'd gone along, got treated really crappily, shabily compared to the wine drinkers. So he goes back to his own restaurant and he appoints a coffee sleier and a beer sumelier. And he says, 'Your job is not just to benchmark against these people, it's to hit it out of the park.' Now, if you think about it, taking something that's bad about the category, not not saying we need to raise our level to the category average, but instead doing it spectacularly well, something that nobody's expecting. That was what Apple did, I would argue. Okay. That's what Bies did. I don't know if you're Bies. Where where are you in the US? Yeah, I lived in Texas. We we we're big Bucky guys. Yeah. Okay. It basically started with an insight around women's restrooms. Now, you could have just had averely clean women's restrooms and you would have benchmarked. No, no, no. They're like the bloody hall of mirrors at Versailles, right? I mean, I haven't been in them, but the men's restrooms are pretty good, but the women's ones are apparently sensational.

Rory Sutherland: What you have to acknowledge is two things I think. One, you got to let go of two handholds at once, which is what makes it difficult. One is economic logic. You know, if we reduce the price, more people will buy it. Economic logic is has very bad predictive value. I think in the you know in consumer behavior and the other thing you've got to you got to partly abandon is conventional approaches to market research where you you think that we've asked the customer what it is they want and they will tell us because most of what we feel isn't even thought let alone spoken and also there are very very large areas of consumer behavior which are they may be metarrational at some level but nobody will ever tell you, I would buy that product if it were more expensive. But there are plenty of documented cases of exactly that happening. We tested three kinds of letters, 50,000 people each, randomized, completely randomized selection as with the newspapers. And one lot got postal only, one lot got phone only, and one lot as before got the choice of phone or post. Post only 5% response rate. Phone only 2% response rate. When you offer people a choice, it was just it was 7%. not quite but almost nearly I think the sum total of the of the two independent response rates that that may not surprise strike you as all that weird but to an economist this would be completely baffling because it would suggest that the more important factor affecting whether you bought the product was not what the product was or how much it cost but how you were able to actually order it. And from that moment on I remember thinking okay this is extraordinary because every now and then there are almost certainly brilliant businesses which are failing because they've failed to unblock some sort of psychological bottleneck.

Rory Sutherland: Richard Thaylor the Nobel prizewinning economist and behavioral economist the author of Nudge. He once spoke to a board of about 10 people very large company. And he goes to the eight heads of the largest divisions of this company and he asks them all simultaneously a question. Would you take a decision if it had a 50% chance of increasing your profits next year by 50% and a 20% chance of reducing your profits by 30%. And six out of the eight of them said no. And Thaylor goes back and says well you know you're all good enough mathematicians I assume to realize these are highly favorable odds. to a gambling man, you know, this is a very very good bet and yet you declined to take part. Why is that? And they reply six out of the eight of them uh because uh 20% of the time or 30% of time I'd lose my job. And then the interesting thing happens which is the chief executive is sitting at the end of the table and looks a gasast at the eight people and goes but I want all of you to take those odds because net net in aggregate we'd almost certainly end up massively better off. Yes, two divisions, one division might have a slightly disappointing year but four of them would perform spectacularly. And you realize that the way that businesses are structured, as you push responsibility and accountability further and further down the organization, they become more and more risk averse and they become more and more uncertainty adverse. So they would prefer a definite 5 to 10% to a probabilistic a 50% chance of 50%. And what happens then is that you fundamentally you become highly conservative. You're more worried about downside avoidance than you are upside opportunity. And as a result, obviously both innovation and marketing, I would argue, are fat tailed activities where 10% of what you do is probably more valuable than everything else. You know, you can't tell in advance which 10% it's going to be. They are processes of exploration and discovery. And what you do is you get rid of the discovery layer in the pursuit of efficiency. And in the short term it looks like a great idea but in the longer term it it proves fatal I think because you've lost the capacity to adapt to reinvent to reposition in pursuit of the occasional um the occasional breakthrough.

Rory Sutherland: Expectation minus reality, you know, is the formula that matters. You can provide less of something so long as you don't actually disappoint. Have you seen the slate truck? Yes. What is it? So, it's an absolutely minimalist electric vehicle. It's about $25,000 and you can effectively customize it with all manner of sort of automotive bling. But but but the the core trade-off is up front. They're like there's no heat seeders, there's no screens, there's just knobs. You got to crank the window yourself. Um, it's basic. We're not filling it up with stuff, but it's if you want simplicity and you want the price to be, it's a $25,000 electric pickup and you're just not going to get all this random junk that every car company puts in. We're not doing that. So, it was absolutely explicit and in a sense that's what, you know, Avis did with we're number two, so we try harder. This is, you know, don't okay, we don't have the scale of the other guys, but we make up for it somewhere else. And the consumer is very happy making trade-offs so long as they're explicit. The problem with a lot of kind of cost reduction and um you know and uh efficiency pursuit in business is it isn't chosen by the consumer. It's imposed on them which is a very very different thing. But no, the slate truck is a brilliant example of what you might call explicit minimalism. But but it's brilliant. They they underdid the competition where everybody else tries to overdo the competition and they were just very explicit about it and it resonated like crazy. I mean, I put I don't I've ne I would have never bought a pickup truck and I put a deposit in. I couldn't help it. I I love what they I love what they're all about.