I recently discovered the marketing expert Rory Sutherland, a fiercely insightful and witty ‘chap’ from the British ‘old school.’ Sutherland has worked for the marketing firm Ogilvy and Mather since the 1980s, where he founded the company’s Behavioural Science Practice (BSP) in 2012.
The BSP looks at how companies can leverage human psychology to better market their products and services. Your first impression may be that it probably specialises in underhand techniques that will part you from your hard-earned cash. This is an understandable response but, far more often, the job of the BSP is to re-frame issues so that companies can better serve their customers. This, in turn generates better returns from happier customers.
So how does it do this? There are many examples of how businesses have used simple and often low cost strategies to change perceptions for the better. For example, Sutherland argues that Uber is not cheaper or quicker than a regular taxi, but it does show users exactly where their ride is and how long it will take to arrive. This does away with the stress and uncertainty of the wait. Most people are happy to wait nine minutes when they know it will be a nine minute wait, but become stressed during a five minute wait when they don’t know where their driver is.
Re-framing can also come into play when comparing products to others in the market. A luxury car manufacturer noticed that it wasn’t selling well at motor shows because its cars seemed expensive next to other vehicles. Instead of lowering its prices, the manufacturer pivoted to yacht and plane shows. Its cars subsequently sold far more easily as, against a backdrop of multi-million dollar machinery, a US$500,000 car suddenly looked ‘cheap.’ In a similar vein, it was thought for many years that a rival to Coca Cola would have to be cheaper, tastier and come in a larger can. The emergence of Red Bull - “more expensive, awful tasting (according to Sutherland) and in a tiny can” - would appear to refute these assumptions.
Sutherland uses this last example to point out that the opposite of a good idea is not necessarily a bad idea, it could be another good idea. This is highlighted by the simultaneous existence of convenience stores and farmers’ markets. Sometimes people want to rush into a store, grab five items, tap their card on an automated register and leave within two minutes. At other times, they want to spend a morning wandering between five different stalls to buy five items, chat to the stall holders and stop off for a coffee. A convenience store laid out like a farmers market would be a nightmare!
Throughout his examples, Sutherland points out that ‘logical’ arguments usually win out in business decisions, often at the expense of customer experience and, ultimately, the business itself. He cites the €6bn upgrade to the railway line between London and the Channel Tunnel in 2007 as a project that was not given the opportunity to explore a full range of options.
The technical team, when challenged to upgrade the service took the view that ‘faster equals better’ and built an entire new US$8bn line that cut 40 minutes from the London to Paris journey. What, asks Sutherland, would have happened if the contract had been given a high-end restaurant? Instead of building the new track, he suggests that it could have employed the world’s top male and female models to serve free food and drinks for less than 10% of the cost of the new track... and passengers would plead for the train to be slowed down! What about handing the contract to Disney? It might have themed the carriages, provided soft-play areas for children and built cinema carriages for their parents. These solutions may not be for everyone, but neither is a marginally reduced transit time if you’re staring out of the window. Even free WiFi would have been a major upgrade in the 2000s.
What can the light building materials sectors learn from Sutherland’s observations? Businesses should consider economic, psychological and technical angles when seeking solutions and marketing their products and services. The best solutions are to be found where these three considerations are all broadly satisfied. Those launching alternative solutions, including low-CO2 products, should take note.
Sutherland argues that logical arguments currently take precedence in the boardroom because they can be demonstrated to be ‘best’ on a spreadsheet. This is a risk-averse approach that only selects solutions from an artificially small range of options, as seen in the case of the London-Paris train line. This approach insulates number crunchers from any repercussions should their suggestions fail, but leads companies to similar conclusions to their competitors. Sutherland suggests that being selectively random can offer major wins for brave leaders. Otherwise the company won’t be able to gain any advantage over its competitors at all.
So... Are you feeling random? The real options may be more numerous than you think.
To find out more on these ideas and more, visit: www.youtube.com/watch?v=iueVZJVEmEs
