Applying Behavioral Science to Marketing Strategies

[00:00:01][Music] [Music] today i am going to be talking about applying behavior science or behavioral science to marketing um and i find this a really fascinating space because marketing is all about changing the decisions that our customers and consumers make behavioral science is all about understanding how people make decisions so there's this beautiful connection i think between behavioral science and marketing that not many marketers have talked about and not many marketers speak about but i feel like you can learn a lot about so that's what i'll be talking about today but before i do just a quick introduction of myself um so it's kevin said i'm phil i'm a senior product marketer at a company called hotjar and the reason i hopefully i'm a little bit qualified to talk about behavioral science is i host nudge which is the uk's largest behavioral science and marketing podcast it's a top uk marketing podcast with over 175 000 downloads and on that show i spend loads of my time talking to consumer psychologists and behavior science these are people who attempt to understand how we make decisions why we pick the things we do and they've helped me better understand how our brains work and apply all of that to marketing but to kick off today i'm going to potentially say something a little bit controversial potentially say something that marketers in the room will will not agree with and that is that i can find marketing to be incredibly dull at times and it's something i don't like to admit as a marketer but marketing can be incredibly glib it is so intensely focused on highlighting positives that all too often it comes across as superficial advertising campaigns marketing slogans product launches they all tend to say the same things they will talk about how great the thing is you know with gillette it's the very very best a man can get with with kfc it's finger licking good and with coca-cola you're opening happiness and it's all very positive and i'm look i'm not surprised that marketers have taken this view if you want to get someone to buy something it makes sense to talk about how great that thing is it makes sense to highlight all the positives this is the conventional wisdom that we're brought up with if you want to convince your friend to to go out on a date with a work colleague you're going to tell them all the benefits all the pros about that work calling you won't tell them that they put tuna in the office microwave or something like that but is this approach right is it as effective as it could be because i think and i'm pretty sure a lot of you will agree that deep down a lot of people aren't drawn solely to positive things and no they're on occasion we actually prefer negative things we're drawn towards negative things and there are lots of examples about this in the world and this is around something called the negativity bias it's the idea that we're drawn towards negativity we're more likely to to pay attention to it and recall it and you will notice it um when you open up your your news app on your phone and i wrote this talk a month or so back so before a lot of the things that's happening today and this is very prevalent today of course but has been prevalent on news apps for for decades they know that people in general are more likely to click on negatively titled news articles because we have this negativity bias we're drawn towards them youtube channels they make fail compilations to get millions of views whilst things like success compilations don't really exist but one of my favorite examples of the negativity bias is something called london guinness excuse me for sharing on uh for swearing on a on a friday lunch time but hopefully you'll get a laugh out of this page because it shares some of the worst points of guinness people have been served in london if you like a guinness and this page really will make you well it will make your skin crawl it's really bad but it's got if you look at it 167 100 000 followers huge number of followers what's fascinating about that is it's highlighting this negativity bias we're drawn towards negative things we want to see these poorly poorly uh porn guinnesses whereas if you look at the uk guinness is uk's own account it's got 10 times less number of followers so people are drawn towards these negative things and we're not often drawn towards the positive applications of the same thing and yet if you were head of guiness's uh marketing campaigns you'd get laughed at if you were suggested that you talked about that your product's negative you get told to go away if you suggested that we should highlight some of the negatives that our brands have and i think that's a bit of a shame because if you told mcdonald's to change their slogan from unloving it to i've only got four pounds so this will have to do well you would get kicked out of the boardroom you would get told to go away but i really think it's a shame because i think it's marketing based on what marketers think works rather than what actual science tells us it's marketing that's based on opinion and not fact it's marketing that's based on experience and not science because if we focus on understanding who the people are who view our ads and how they make decisions we we might not laugh at this suggestion for a new mcdonald's slogan we might actually embrace it and think it's a good idea due to the negativity bias but i'm going to get on to all of that later on and let's start by taking a bit of a step back and looking at the importance of behavior science in the first place and one of the reasons i think it's so important is because of this most marketing decisions in general are based on gut instincts so according to forbes more than 50 percent of major decisions the market have made is based on nothing but experience gut instincts alone not even data not even science so we tend to opt towards making decisions based on whatever we think might work rather than really analyzing the problem and making suggestions on on what might be best and this sort of leaves us in this world of almost a madman anyway we've got a lot of data we've got a lot of stats we've got a lot of evidence but we don't often use it all too often we're making decisions based on what we think might work based on our gut instinct rather than applying laws science principles to our work but the thing is i think we can apply a bit of science to marketing i think we can apply a few laws i think we can apply things that can genuinely improve the impact of our work and we can do that if we take a look at behavioral science if we take a look at how the brain works because psychologists for the last hundred years have spent heaps of times and heaps of money and heaps of research figuring out how we make decisions and in doing that research they've discovered hundreds of biases that all of us fall fail to all of us have and and and and can't get rid of due to our evolutionary traits and as marketers if we try to understand these biases we can improve the marketing we create so i'll give a few examples to convince you if you need convincing and we'll start with a bias that many of you will know exists which is social proof now social proof is the idea that you follow the actions of others so if you're walking down the street and you see a bunch of people looking into a shop window you will look into that shop window as well if you're in on holiday in spain and you're trying to decide what restaurant to go to and you see a bunch of people sitting outside at one restaurant chances are you'll pick that restaurant over the empty restaurant that's social proof in practice but it can be applied to our marketing in lots of ways simple ways and really complex ways and i'll start with just a simple way of how impactful it can be on marketing so richard shotton who's an applied behavior heights behavior scientist and author of the book called choice factory he wanted to test out social proof for himself so he went into his local london pub i think in southeast london and he asked the barman what is the best-selling beer at your pub this sounds like the start of a joke okay richard shorten walks into a bar but it's not it's a start of an experiment because he asked the barman what is your best-selling beer and the barman pointed out the ale that was best-selling from the previous week and then richard said i would like to run an experiment i'd like you to record all the sales you had on the previous week and then record all the sales you have for this week but we'll have one twist we'll put a sign next to the beer that is best selling which simply tells people this is the best selling beer this week and then we'll compare sales before and after richard wanted to see if just simply showcasing to people that this beer was popular could implement the social proof bias and encourage more people to buy it turns out it does adding that sign increase sales of that beer by 2.5 times the following week compared to the week before what's interesting about this is it's not like the sales of other beers went down they stayed the same it's just more people bought that beer on top of what they already would have bought so sales in general of the pub went up and that's the power of social proof let's do a different example the endowment effect now the endowment effect is the idea that we want to finish tasks that we have already begun so if you're writing an email towards 5 p.m on friday if you've started to write that email you will probably finish it you'll probably continue it and get it done and send it off before the the clock strikes thrive on friday but if you haven't started it if you haven't started that task it'll be a lot harder for you to finish it because of something called the endowment effect which is this idea that we we try to finish tasks that we've already done tasks that we have ownership over and a great example of this comes from a study from 2006 which was done with coffee shop loyalty cards and in this study by nunes andres they gave two loyalty cards to two sets of participants one loyalty card that's the one on the left had only seven stamps that you needed to collect the other loyalty card the one on the right had nine stamps that you needed to collect but the twist was that the one with nine stamps had the first two stamps plugged in so statistically speaking if you look at the world of economics and look at these cards from that point of view these cards are basically identical they both have seven stamps that you need to collect so you would assume that the people who get these cards would act in the same way after all they both need to buy seven coffees to get free coffee but we have these biases that we fall to we're not rational thinking consumers we're irrational and when people are given the card which has two stamps plugged in when the task has already begun the endowment effect kicks in and people are 82 percent more likely to continue coming back continue purchasing coffees and actually end up getting their free coffee it's another great example of how behavioral science can be applied to marketing to have a real business impact let's look at another one loss aversion and this is one of my favorites lots of version is the idea that losses loom larger than gates so nobel prize winner daniel kahneman in his book thinking fast and slow helped uh popularize this he showed that losing a hundred pounds actually feels worse than gaining a hundred pounds losses feel worse than games and there are some interesting ways you can apply this in your marketing and nobody does it quite as well as amazon see when you try and leave amazon they use some really smart loss of version messaging i should say amazon prime here specifically and they used it on me and it made me really hard for me to leave i wanted to stop using amazon they make it really difficult because they don't say oh here's all the benefits you'll be missing out on that traditional marketing approach here's all the benefits you'll be losing you'll lose access to free delivery you'll lose access to amazon private tv you'll lose access to all these benefits they don't really talk about that the main message that they share with you has is complete loss aversion they tell you about all of the savings you have made all of the savings you've cashed in on and show that you'll be losing those savings in the future so they say phil you have saved 313 pounds shocked when i saw that that's actually how much i'd saved i didn't think i'd used it that much you've saved 313 pounds on delivery fees since august 2019 being a prime member are you sure you want to cancel and that loss aversion messaging highlighting the things that i'll lose out on making me feel connected to those those losses makes it much harder for me to leave and according to richard chattaway and his behavioral business this uh this effect this line that they use in when you try and leave amazon prime had a 42 reduction in churn compared to the control so another great example of behavior science applied to marketing i'll do a quick one which many of you will know about anchoring so anchoring is the idea that we when we are trying to make a decision about something to buy and we're not we don't have much information about that thing that we're trying to buy we get anchored to an initial piece of information we see um so for example if you're yeah shopping in a place you've never shopped before in a country you don't know in with a language you don't understand you'll get anchored to messages that you've seen and i think a great example of this comes from a study which was in phil barden's book decoded and it's a wonderful study because it's kind of hilarious it was when snickers the snickers team decided to sell their ice cream products so many of you will know that snickers is a chocolate bar but they also sell an ice cream version of their chocolate bar and snickers wanted to do some marketing in supermarkets on the freezers with a bit with a sign saying buy snickers for your freezers when they introduced them so they put these big signs up and they measured the sales turns out when they put up the sign buy snickers for your freezer customers tended to buy 1.4 bars of snickers how great is that marketing works hey if you tell people to buy something they might actually go and buy it that's fantastic but what happens when you apply a behavior science what happens when you use an anchor so they did use an anchor they decided to use a ridiculous anchor they said buy 18 snickers for your freezers this is ridiculous nobody was buying 18 before nobody should buy 18 snickers for their freezer take up too much space you don't need that many but they trialled it it was irrational it was something that shouldn't work and yet it did because when they added that one those two digits to that message people almost doubled the amount of snickers they bought for their freezer now customers were buying 2.6 bars we'd anchored to things we make decisions based off those anchors i'm going to give you one more before i go into a little bit more detail about one because it's one that people always ask me about scarcity we value scarce resource resources the day the concorde at concord announced they would stop flying within six months between new york and london the sale of tickets of those flights went up tremendously as soon as that resource became scarce people wanted to buy it glastonbury lineup came out today i'm sure loads of people who have signed and tried to go to glasgow before know the value of scarce resources you're willing to spend hours refreshing your computer to try and get a ticket to something which is scarce you wouldn't be the same for something which is not and scarcity is hugely impactful for marketers it can be very impactful especially compared to some other messages you could try and a fantastic example of this comes from kfc australia and kfc australia had a unique deal that they were bringing to market the deal was very simple chips for a dollar in australia that's quite good value basically chips for around 50p in here in the uk very good value very good offer they wanted to find the one message that would be most impactful at selling chips for a dollar so they did and remember remember kfc is owned owned by yum brands which spends billions each year on their marketing so they've got lots of lots of copywriters they've got lots of agencies to write from them they got all of the best copywriters in the business to come up with ideas for how we could promote chips for a dollar they wanted to find the very best bit of copy to trial and so they came up with all these examples the colonel has never been so generous chips for a dollar don't go hungry chips for a dollar all his favorite chips for just one dollar love from perth to brisbane they're just one dollar all these different examples all these creative ways that you could pitch chips for a dollar and they tested every single one of these messages on facebook ads to see which one drove the most clicks to see which one drove people to action the next what's incredible the message that won was none of the creative stuff it was none of the storytelling it was simple scarcity chips for a dollar full stop limited to four per customer just adding a little bit of scarcity to that messaging just suggesting that you're only allowed to buy four chips because it's such a good deal that if you bought any more we would run out and everybody would go crazy for them just that tiny bit of scarcity was that effective and i think that shows the value of behavioral science it often it can trump the most creative campaign you could come up with so i really love that idea from richard chattaway's book behavioral business but today i want to spend a bit of time talking about the practical effect because it's an effect that i think is fascinating and it links back to what i was saying at the start about the negativity bias so the practical effect is this bias that shows that we're drawn towards things that aren't perfect it's why london guinness have so many followers and it's why mcdonald's could perhaps benefit from changing their slogan from unloving it to something a little bit more accurate and this effect isn't just based on opinion there is science to back it up so the practical effect was first discovered back in 1966 by a harvard psychologist named elliot aronson and in his study aronson recorded an actor answering a series of questions in the first version of the experiment this actor answered all of these questions incredibly well the actor answered 92 of the questions correctly so looked very intelligent however after answering the final question the actor spilt a cup of coffee down himself went all over his trousers and all over his shirt the actor then recorded the exact same set of questions the exact same scenario he'd got changed was in a new suit and this time he answered again with 92 accuracy only he doesn't spill the coffee on himself at the end so aaronson had two recordings one the exact same except one where the actor spilled coffee on himself aaronson then showed these two different recordings to participants to different sets of participants and asked those participants to rate how likable the actor was and what he found was that when the actor spilled the coffee on himself he was viewed as more likeable and this was interesting this was unexpected you would expect to rate someone as being more likable if they weren't clumsy yet this person who was seen as clumsy was rated was more likeable in aronson's words the powerful effect made the actor seem more appealing increasing his approachability and making him seem more human and there's all sorts of interesting ways this practical effect can apply to other scenarios as well so a similar study was carried out at swansea university in wales by joe sylvester this time the researchers here looked at the effect of using a platform effect in job interviews so they looked at how admitting to past mistakes in a in an interview might make you more or less likely to get the job so they sent fake candidates to a bunch of different interview interviews dozens of different interviews and these candidates were told to have the same skills the same experience they told they had the same strength they gave all of the same answers that they would between each other there was only one difference the team found that when one of the set of candidates revealed a weakness they were considered as more likeable and interestingly were more likely to get offered the job highlighting a weakness highlighting a flaw contradictory irrationally made you more likely to get a job now conventionally this shouldn't work we should pick people for jobs that don't appear to have weaknesses and yet that's not the case and i'm sure all of you sort of nodding along being like yeah you don't want someone that's perfect we do prefer people who show a bit of vulnerability we can see how that works but this isn't just the case for people it's the case for products as well so there's a wonderful study by a consumer psychologist called adam ferrier who i've had on my podcast nudge before and he showcased how the practical effect could be applied to products he did this by asking a sample of 260 226 people a question about cookies the participants were shown images almost identical to this and they were said which cookie would you prefer one has a rough edge it's a bit imperfect one has a smooth edge it's perfect and people consistently pick the imperfect rough edged cookie the practical effect didn't detract from the appeal of the cookie it actually increased the appeal of the cookie and the problem is marketing these days that highlights imperfections that showcases our flaws is really few and far between it's really hard to come across historically there's been some fantastic examples so luckily uh us cough medicine since the mid 80s have been using this wonderful slogan which is it tastes awful and it works highlighting a negative about themselves to showcase the strength it tastes awful so it must work and this marketing slogan must be working for them because they've kept it for the last 40 years another great example which unfortunately hasn't been kept is listerine back in the 70s they run a poster ad that read i hate it but i love it let me tell you it tastes lousy but that's why it works so good it's refreshing to see examples of this to see brands highlighting negatives and it really stands in contrast to some of those examples i showed you at the start like the best a man can get or finger looking good but there are some examples in modern day of brands doing this and one of my favorites actually comes from this ad which is for snowboard snowbird ski resort it was originally only published in magazine but people liked this ad so much they started sharing it on social and someone wrote a medium article on it and it took off according to google this image this image of an ad which was only ever published in one magazine has now been published over 5 000 times online why because it highlights negativity it says one star too advanced i've heard snow bird is tough it's a tough mountain but this is ridiculous felt like the trail was steep littered with tree woods how is anybody supposed to ride in that not fun and yet this ad which highlighted a flaw about the ski resort was probably the most successful ad that any ski resort has ever done at least in that area and i think all of these ads are brilliant because they play on the platform effect this idea that we like in perfection and they capture our attention because of it we're so bored of seeing endless positivity in marketing that a little bit of negativity actually catches our eye but i'm well aware that this is my subjective opinion i would have a really hard time convincing ibis hotels to create an ad which stated that their breakfast was crap but cheap it's really not easy to do this as a marketer right and i felt like i needed to prove it for myself so i wanted to collect some data for myself i wanted to see if the platform effect really does capture attention so i decided to run my own test one that showed that the powerful effect wasn't just a gimmick that it was a bias that is so effective that you can create whole marketing campaigns around it and this ad would be to promote my podcast my podcast nudge so i could really see if the effects worked or not um so i decided to pick reddit to run my on my test and in the test i created two different reddit ads the first ad was the sort of traditional textbook marketing this is what we're all told in marketing school talk about your product positives talk about your benefits talk about the good things why people should purchase your product it stated five reasons why you should listen to nudge number one your foot you'll learn science buying great marketing guests include all these wonderful people has a hundred thousand downloads at the time and 125 uh five star reviews episodes are 20 minutes long with no fluffs and you'll learn marketing science that you can replicate sounds like a jml advert and i'll admit this is not the most creative copy right it's it's not wonderful it's not creative but it is what the textbooks tell us to do this is what we are told to do as marketers highlight your benefits and that creates a variant a platform inspired version so this is advert number two this one is inspired by the practical effect and it said five reasons why you shouldn't listen to nudge number one you'll realize how useless your marketing degree was number two episodes are packed with examples you might get a headache number three you'll piss off your colleagues with your great new ideas and before it's only 20 minutes which isn't ideal for long car journeys and number five you'll learn marketing science not linkedin guru wisdom now i'll be honest i really did not think this would work i was pushing it the title of this ad literally said do not listen to this podcast i was telling people not to listen to my show and giving them reasons why and i'll admit those reasons aren't damning like they're not too bad are they it's tongue-in-cheek it's jokey reasons but i was still telling people not to listen i'm still telling people not to do something so i didn't think this would be the control um so i spent around 200 in total around 30 000 people saw the ads and i couldn't believe the results not only did the platform version outperform the control it was four times more effective i got almost a 400 uplift from telling people simply not to listen to my show over 500 new listeners came to the show from that one ad and today it's one of my most effective bit of marketing and i run this a version of this ad regularly telling people not to listen because it captures attention it's really interesting and now comparing the two i can sort of see it when you're scrolling through reddit that's the sort of thing that's going to catch your eye that's the sort of thing that's going to intrigue you that's the sort of thing that you're going to want to click on to figure out why on earth somebody would say something like that and get you hooked on the product and yet this is something that i'd almost certainly never be able to use in a business your boss wouldn't dare let you try something that says not to buy the product and that's why i think so few people use it but it really does pay to be different it pays to apply science to marketing and it pays to run tests that no one else would dare now to finish up i wanted to give you an example of probably my favorite example of someone who benefited from using a pratfall strategy so stephen bradbury was a speed skater who represented australia at the 2002 winter olympics now the winter olympics are not a big deal in australia as maybe you can imagine so it was a real surprise when stephen made the final stephen was up against the fastest skaters on the planet he had to race them over a thousand meters he was the slowest person racing by some way he was the oldest person racing by some way and he really stood no chance of winning so rather than do the traditional textbook thing which is just go out there and do your best he decided to embrace his flaw he built a strategy around the pratfall effect he wanted to use his weakness to his advantage so bradbury knew that every other racer was desperate for win to win for them only gold would do so he could try and do two things he could try and compete with them and go head to head with them and see if he could win but all that would probably mean is he would tie himself out halfway or fall too far behind or even more likely he would slip on the ice and not finish which is something that's very common in speech skating so his pratful inspired strategy was simple he would skate a few meters behind the other four he would let them all battle it out between themselves and hope that one or two get knocked down or disqualified so he could just squeeze a bronze medal for australia and this is exactly what he did he skated at least a meter or so behind the leaders of the pact and just went round in circles skating behind them not really trying benefiting from the slipstream that they created and going around and round circles but eventually it became obvious he would finish last it was going around to the last lap he was still in last place he hadn't really made an effort and it became obvious that he would be going home with nothing but then something happened 10 meters from the finish line going around the final corner the russian fell and took out the american and the american then fell and took out the canadian and the chinese skater fell and they all went down and then meters from the finish line all four other skaters were lying on the ice and bradbury just went past her you could see the like amazement in his face he crossed the finish line before they could get up and just like that stephen bradbury became the first athlete in the entire southern hemisphere of the planet to win a gold medal at the winter olympics not by fighting to compete not by only focusing on his positives but by embracing his his flaw and using his weakness to his strengths and that is the power of the practical effect in action but you are probably thinking sure that's great for an olympian that's great for a sports star but i work at a company where there's a large brand what examples could i use how could i leverage this bias for my brand and i'll leave you with an example of that a classic example which i'm sure many of you know and we'll take a look quickly at marmite and obviously if you're in the uk you'll know all about marmite some of you i think or not i think we've got someone from madrid so if you don't know marmite is a yeast extract spread now that is not what makes marmite interesting at all if i just called itself a yeast extract spread nobody would buy it what makes marmite interesting is how they consistently and constantly highlight their flaws in fact their slogan is you will either love it or you'll hate it they highlight the fact that literally millions of people half of the uk hate this product and this type of campaign goes against the trend it shouldn't work it shouldn't work yet it consistently gets results and in 2014 unilever who create marmite they produced an eight-week variation of this campaign slightly tweaking the love it or hate it slogan in this version marmite was pictured as being left behind at the back of the cupboard unused and unopened for months the campaign which was called end marmite neglect was highlighting the fact that for most consumers marmite is barely used yet in showcasing this clear weakness sales soared the brand saw a 14 increase in year-on-year sales they generated an additional 37 million pounds in revenue and the advert itself helped marmite bags the 2014 brand of the year award at marketing week's engage awards now that is the power of applying science to marketing and avoiding the typical conventional stuff that maybe some of the marketing textbooks tell us to opt for there's real value in looking at how people make decisions there's a real value in really understanding why people do the things they do and then approaching that and taking that wisdom and applying it to marketing because ultimately it will help you better understand what makes marketing great it'll help you improve the work that you do and if you want to learn more if you've enjoyed this show if you've enjoyed listening to me then please do go check out match podcast um it is uh catherine at the start gave me some lovely social proof saying it was her most listening to podcast or what used to podcast you listen to a lot so that's wonderful social proof that i can use to make you want to go and listen to it but it is a it is a show hopefully you'll go and check out it's only 20 minutes long every week every two weeks i go and speak to a behavior science expert and apply some of the learnings just like i've done today to marketing so go check that out you go to nudgepodcast.com to check it out and then subscribe wherever you listen to podcasts and you can also follow me on social as well i'm phil agnew or p underscore agnew on twitter so you can find me on there and you can i'll share lots of interesting stuff about behavior science on those platforms too you