I think the NHS could create massively

greater patient Satisfaction by

deploying certain behaviors and

techniques like what well Rory

Southerland he is an author columnist

and the vice chairman of Aug UK one of

the largest marketing companies in the

world he's an adman stories are the PDF

files of human information they're the

vehicle we use for storing information

and the vehicle we use for sharing it if

you want to improve how people feel

psychology is a better area for

exploration than rational Improvement

don't make the Eurostar faster make the

journey more enjoyable and that's one of

the cleverest reframings you can do the

Uber map is a psychological moonshot

what bothers us about waiting for a taxi

isn't actually the duration it's the

degree of uncertainty and if you have a

map which shows you where the taxi is

you're basically relaxed you can

genuinely perform magic in perception

what is the seat covering for the Tesla

it's called vegan leather now actually

to be honest we would have called those

plastic seats back in the day if it

makes things feel more valuable is it a

con without further Ado I'm Steven

Bartlett and this is the dire of CEO I

hope nobody's listening but if you are

then please keep this to

[Music]

yourself Ry first of all thank you for

being here as uh as someone who built a

marketing business and has worked in

sort of similar industry um to you for a

huge portion of my life um you're

someone that I've always looked up to

and even young members of my team here

cite you as being an inspiration on an

ongoing basis for the work they're doing

just broadly on even of these new

platforms like Tik Tok because the

principles and the psychology and the

the sort of rationality underneath much

of your work is is really really

Timeless um so thank you for being here

I that's a great honor and um uh we'll

get into some mutual fanboying later um

but no I mean I one of the great

insights I think which I hope helps

motivate everybody working in our

industry and related Industries is that

when you create perceptual value you are

creating value value can be created in

the mind every bit as much as it can be

created in the factory and I think there

was a an unfortunate story about

marketing that treated it as kind of

optional extra it was the fairy dust on

top of the real intrinsic value that

resided in a product or service and I

completely dispute that I think we value

things according not to what they are

but what they mean and what they mean is

context dependent it can be uh massively

transformed by storytelling Framing

recontextualization and you can

absolutely use psychological um

mechanisms to make things more valuable

more enjoyable more precious that's one

important point I might make the

additional point which is to be honest

over ambitious but I make it anyway

which is that actually perceived value

is a very environmentally friendly form

of value to

create because you can generally create

meaning and imbue a product with meaning

um with a lot less carbon consumption

than is necessarily involved in making

the product three times bigger or five

times faster and you know my argument

would also be if we're looking for

breakthrough 10x moonshot

improvements it's actually much easier

to find psychological moonshots than

technological moonshots you know make a

train 10 times faster you know it was

possible in 1840 1820 okay very

difficult to do now um to a point of

just dangerousness or you know

extraordinarily difficult engineering

problem making a train journey 10 times

more enjoyable that's still doable in my

view give me an example then what's the

the example that always comes to mind

for you of where someone has managed to

put tremendous moonshot style value on

something a brand po

just with marketing and advertising but

what I'm always very fond of is I think

the Uber map is a psychological

moonshot and it's based I mean the the

story which may or may not be true is

that one of the founders of uber was

inspired by watching Goldfinger and when

he saw Bond effectively following

Goldfinger using a tracking device there

was a scrolling map in the dashboard of

the db4 which showed him where

goldfinger's car was so he could Trail

it while remaining out of of sight um uh

then um what was extraordinary about

that was that it was based on a very

clever insight into human psychology

which most of us ourselves aren't really

aware of which is the we would say and

we confidently say we believe that I

hate it when a taxi takes a long time to

turn up I like it when a taxi turns up

quickly so a rational person or an

engineer would react to that by saying

what we need is a predictive algorithm

so that taxies to be available in areas

where we predict heavy demand so that we

can service customers more quickly and

by the way there's nothing wrong with

that it may be a very worthwhile thing

to do although it's worth saying that it

requires quite a lot of scale in order

to achieve

that but the real insight with the map

is that deep down you know somewhere in

the amydala what bothers us about

waiting for a taxi isn't actually the

duration it's the degree of uncertainty

in other words is he here yet maybe he's

pared around the corner or what if he

can't find that house maybe he's already

left was the person on the phone lying

and so wait that period between booking

a taxi and waiting for it to arrive was

one of General high stress now what's

interesting is you could reduce that

stress I admit by getting the taxi to

turn up very quickly or at least you'd

reduce the period of stress but the

stress would still remain on the other

hand if you have a map which shows you

where the taxi is you're basically

relaxed okay instead of going oh my God

you know where is he where is he I'm

sure you know maybe he's already left i'

better go and stand out in the rain so

he doesn't miss me or get impatient you

just look at the map and you go oh look

he's stuck at those traffic lights I'll

have another pint Okay now what's

interesting is that the quantity of

waiting is the same with or without a

map you know in pure quantitative

measured SI unit terms of time and

duration no difference the quality of

the waiting is totally transformed it's

almost taking it from a a system

dependent on TR on trust how much you

trust that particular firm how have they

performed in the past do they sometimes

lie to me have other taxi drivers

sometimes lied to me to A system that is

almost completely trustless where I

don't need to trust you because I can

see for myself and I suppose there's

also an element of trust which uh okay

was provided historically in London by

the knowledge and the knowledge was an

interesting thing because I I

occasionally debate this which is was

the knowledge really about knowledge in

other words we don't need black cab

drivers to St to this level of detail

now we have the technology of the

satinav yeah and pure sort of

utilitarian people go why on Earth am I

paying a premium for a black cab driver

to learn all this stuff um when he could

simply buy a TomTom for 300 quid and

stick it on the dashboard and there's

some argument for that okay the only

other point is that you have a very high

degree of trust one of the great things

you could say about the knowledge is it

sunk cost it's commit it's proof of

commitment you're only going to actually

go through that Pro process if you're

pretty serious about being a really good

cab

driver also it provides you if you think

about if you've spent what a year and a

half two years scuttling around London

on a moped with one of those clipboards

rehearsing for your sessions of the

knowledge okay you'd be a bit of an

idiot uh effectively losing your taxi

license day one wouldn't you okay you

know it's you know in other words it is

to some it's rather like medieval guilds

they required extraordinary stringent

conditions of entry into the guild but

that was what ensured honesty because uh

the cost of being thrown out of the

guild given the effort you'd put into

actually being admitted in the first

place was therefore made it not

worthwhile to cheat you you also say

something in in your book about how

making a process more difficult can

sometimes make it more attractive to

Consumers so I mean this is known

sometimes as the Ikea effect which is

that um certainly um cprad who's the

kind of owner and founder of Ikea

believes that the fact that you assemble

the furniture yourself contributes to

its perceived value in other words

you've committed something of yourself

to its assembly and creation you might

also argue it d stigmatizes low prices

okay so I'll give you an example of that

there's a very big difference between

cheap strawberries and pick your own

strawberries now picky own strawberries

are cheap but there's a narrative as to

why they're cheap which is I put into

some of the effort into the harvesting

of the things and I have to go out into

a field and pick the things myself cheap

strawberries by contrast May create some

degree of uncertainty because you look

at the market and go well if these

strawberries were really good why

wouldn't they charge full price for them

what's wrong with this and so quite

often you know sometimes you have to

make things more expensive to make them

trustworthy oddly okay you know you can

be too good to be true that consumers

won't necessarily trust something that's

cheap unless there's a narrative around

it as to where the cost savings are made

I mean I think I think a lot of low if

you think about lowcost Airlines okay

they spent quite a lot of effort talking

about what you didn't get you don't get

a meal okay uh you have to pay to check

in your luggage uh you don't get it

originally with easy jet you didn't even

get pre-allocated seating okay it was

you know effectively like a bus uh you

had to book online you couldn't book

through a travel agent and those

constraints to some extent

were there to make it believable to the

consumer that there was a legitimate

form of cost saving going on now if

you'd said if you launched EasyJet and

you'd said we're just as good as British

Airways were but we're half the

price the untrusting consumer is going

to ask how are you doing this okay does

it mean you're not servicing the engines

all the pilots are all on day release

from prison or something right you're

going to start having doubts so

interestingly sometimes negative stories

around a product can be used to offset

the negatives which a consumer would

tend to imagine if Ikea had ready

assembled Furniture which wasn't sold in

a warehouse it was sold in a kind of

Posh heels style

Emporium we'd think there was something

a bit iffy going on so you know and

there's also the wonderful Ikea effect

which is the effort of actually going to

an Ikea and navigating the maze makes it

more or less impossible for you to go

home empty-handed you know you have to

buy some tea lights at the very minimum

just to validate your trip now the I

suppose the earliest manifestation of

this although it's sometimes called the

Ikea

effect was a very famous marketing case

study um for Betty Crocker cakes where

they had a cake mix where you just added

water put in the oven created a cake and

it didn't sell very well and a

psychologist came in and said there

isn't enough effort involved in this to

make it feel like cooking and so they

added the slogan just add an egg the

addition of the egg although it actually

imposed a cost and a small degree of

effort suddenly made the product much

more popular why now the idea would be

that now it was actually cooking you

were preparing something for your family

you weren't just

cheating perhaps I mean it's an

interesting debate because we don't

fully know that this this wasn't tested

to an absolutely robust level of

academic uh certainty uh you know um uh

but nonetheless it's a very common it's

very popular anecdote within marketing

that sometimes the counterintuitive I

think that's all you need to derive from

it okay all you need to derive from it

in business decision making is sometimes

the counterintuitive approach might be

better and this I'm I was thinking then

about these modern sort of meal delivery

companies so you have obviously on one

end Super Convenience you have Uber Uber

Eats Etc delivery and then you have this

Middle Ground of where we'll send you

the ingredients and tell you how to put

it in the pan and we'll measure so that

be gust or hello fresh yeah exactly you

putsy feel like you cooked it's a very

strange thing um because uh one of the

founders of Gusto actually met me

shortly before

lockdown and I was I couldn't really

make sense of the product okay at first

and this by the way really interested me

because Bill Gates once said of

technology that the problem we have with

technology is people don't know how to

want the things we can offer them and

one of the things that increasingly

fascinates me is products which an

economist would call them an experience

good where it's only really possible to

perceive their value by actually using

them I have to admit when I was

presented with gusto and hellofresh I

thought this is kind of dumb I've got an

you know cardo account I can order

things from Sainsbury's for click and

collect I've got well my wife more

accurately has got 20 or 30 cookery

books of various kinds all I have to do

is pick a recipe from a cookery book

effectively order the necessary

ingredients follow instructions cook at

home job done why on Earth would I want

a box with um you know pre-selected

ingredients and the right ratio arriving

with a recipe

card but anyway I met this guy and he

said well I'll send you a free box now

you know I'm not so you know ungrateful

and nasty a human being that I go I

don't want your stinking box of free

food and I think it was actually towards

the beginning of the pandemic anyway so

I wasn't entir sure that food was going

to remain abundantly available so I said

sure you know absolutely I'm delighted

the other thing is I probably ordered a

Gusto box for um the only reason we

stopped was actually we had our kitchen

replaced and had a period with an oven

but pretty much every week um my

assistant Anna who's in the Next Room

has also had a

Gusto the majority of weeks for two and

a half years ever since experiencing it

you asked me to explain this I mean this

is what's So Glorious which is I can't

quite explain

why once experience this is such a

compelling benefit true um okay um it

possibly is the fact that because these

ingredients in the right ratio and have

a limited shelf life it forces you to

cook them and therefore it forces you to

cook what ends up being a restaurant

quality meal at home with not too much

effort okay in by the way a reasonably

healthy quantity as well one of the

problems with take away food is if you

want variety you end up with completely

excessive quantity don't you you end up

either keeping the stuff in the fridge

or with an extraordinary amount of food

waste because the take unlike a

restaurant where they think well if we

give them slightly too little food they

might order a pudding or something else

in takeaway food you don't get a second

chance to top them up so the great

paranoia I think of all takeaway

restaurants is not putting enough

quantity

in and so you do end up with a

restaurant quality meal at the price of

a ready meal um which you have cooked

yourself that's very logical though give

me the illogical uh was there something

some surprise and Delight in I genuinely

I I don't I've just got one product okay

which is the greatest example of a

product which genuinely kind of creates

massive contradictions in my own mind

which is the quooker I don't know if

you've got one of instant boiling water

effectively oh yeah I've got one you got

one over there yeah if you want the

story of the crooker by the way I'll

tell your listeners CU it's fascinating

there were two people I think at unil

who were who their brief was effectively

to invent CER soup and they did it very

successfully they produced what is a

powdered form of

soup and one of them said right job done

we've created the cup of soup boil a

kettle pour the water on you've got a

nice mug of soup job done I'll go back

to the day job and the other Dutch guy

basically felt no I've only solved half

the problem here because you still have

to wait for the kettle to

boil and for whatever reason I mean you

must have been a kind of of compulsive

inventor he became obsessed with solving

the second half of the cuper souit

problem which is how can we create

boiling water faster which was

technically off brief but nonetheless

for some reason absolutely preoccupied

him and so he effectively ended up

creating what is a Dutch company cooker

now okay half of me you know perhaps the

more puritanical rational half is going

you've just paid not quite a four-figure

sum but a very large figure some for a

very fast

Kettle and the other half of me is going

I wouldn't go back you know having I

don't know what your relationship is

with your cooker but i' find it

difficult now going back to a kettle

having experienced instant tea making

instant soup making if you want to poach

an egg you can fill a pan with boiling

water uh instantaneously you don't have

to wait for that to cook up Suddenly of

course you discover new and

complimentary uses for boiling water

that all seems very logical to me that

makes perfect sense yeah I mean the only

thing is I think you've got a lot of

products which are much much easier for

you to defend or understand or

appreciate in retrospect than they are

few to write a check for in advance

right I've got you and that's that's a

marketing problem the electric car by

the way is I mean one really interesting

question I always ask about any

technology which I think is a question

that's asked too little people ask what

are the unit sales of this technology

and how fast are they growing actually

any new technology grows very slowly to

begin with it's a sigmoid curve um

nearly anything significantly new starts

off fairly Niche yeah yeah and the

reason is that the two driving forces of

human behavior are habit and social

copying and therefore when you've never

done it before and none of your friends

do it doing something is much more

difficult to do and I'm old enough to

remember the time when the majority of

my friends said I don't understand why

you'd want a mobile phone okay I mean I

can actually remember when Mo I I used a

mobile phone on Oxford Street in 1989

two people shouted abuse at me from

passing

taxis it was like a brick it was a

social statement it was my phone it was

we had company phones and we signed them

out for the day but just the act of

using one of these things in public

would expose you to a general appr

probium and it's impossible for anybody

now to think back on that because I

don't think anybody knows anybody

without a mobile phone the example that

I that comes to mind for me and it's Al

to do with a crooker I didn't call it a

cooker I just call it the tap but yeah

instant hot water instant cold water um

is music and a friend of mine told me

the story of standing with the HMV I

think it's HMV CEO looking out on the

shop floor at all these people buying

CDs and he said to him we'll always have

a business because people love music now

what he got wrong is he was right that

people love music but they don't love

getting in their car driving in the rain

and then getting a plastic seed uh piece

of plastic which they can then get

damaged very easily they can only carry

a few of them and driving it back to the

house people loved music and he only

really found they really like CDs I

might make a point by the way that in

terms of its if someone has a design

sensibility in terms of its

proliferation the CD laughably named

jewel case the plastic hinge case in

which the CD came was probably the

nastiest single you know manufactured

item in everything from environmental

terms to just usability you know the

fact that it opened with a horrible sort

of cracking snap now what's interesting

is that vinyl has made a

Resurgence but I don't see any sign of a

CD Resurgence any more than I see there

are a few weird people who are back into

cassettes aren't there there but I think

that's fairly nichy yeah that's kind of

like lomography and photography it's one

of those sort of weird countercultures

but but but I can understand I can just

about understand it's slightly weird

when my daughter asked for a a

gramophone player for her birthday

because I'm kind of going I you know I

was born in 1965 I spent my whole life

trying to get rid of the nuisance of

physical music to you know effectively

something akin to Spotify and now you're

weirdly reverting to this thing you know

it made no sense to me um possibly

there's an element that if you're really

devoted to a particular band you want to

spend money and Signal your devotion in

some physical form I don't know what's

going on there fully I I think is that

not just a case of like scarcity yeah I

I well I suspect one of the one of the

curses of capitalism is that is

recursive fashion exactly uh so um

Jeremy bulmore who's now I suppose in

his late 80s wonderful guy who was the

creative director of Jay Walter Thompson

he was a director of wpp for many years

he made the point and by the way as you

get older you realize much more of this

here we go again you know because you

have greater chronologic context in

which to appreciate it but he made the

point that when he was a child all

cheddar cheese came with a rind so most

cheese you buy in a shop was cut from a

wheel and it would have either some sort

of wax or or else rind or sometimes it's

cloth on the exterior and someone then

started selling rindless cheddar and

they charged a premium for it you see

because you know oh brilliant I don't

have to pay for the Rind and I don't

have to cut it off what a wonderful

convenience and then memories being

short and obviously some people being

born before they could remember cheddar

with a rind anyway about 25 30 years

after that people started introducing

Farmhouse Artisan cheddar with the Rind

left on and they charged a premium for

that so you do have this peculiar thing

where um that's all marketing though

isn't advertising because what you're

saying that's the real key it's it's

it's human partly human neophilia so

that what's different attracts our

attention Okay so undoubtedly we

disproportionately pay attention to

things which are new or seemingly

different and we're novelty seeking to a

great extent what is the story though if

I buy that Artis analy the story for me

especially being Artisan is this is the

real cheese in my head I immediately go

that Supermarket stuff is just fake

processed but the Rind signals that this

I'm paying for real cheese well I mean

we can look at the we can look at the

interesting uh re exactly it's a

recursive Trend and of course in fashion

it happens all the time that you know uh

that the most bizarre Fashions including

sort of flare and um Afghan coats you

know sequins have made a massive

comeback and you um and the truth is

that when they come around a second time

the context is different so they mean

something different you see the same

with Brands like fer like these old

brands have exploded Fela is in a good

example where it was it became when I

was 10 years old re you but if you

bought feler you had no money and you

weren cool when I was 20 if you have fer

you were the coolest person Burberry had

that as as well they went from being oh

if you're if you're wearing bbery you

are a bit of a ruy right you're a little

bit rough as a person to this kind of I

guess it was a branding exercise where

brand bbery then became really cool

again maybe because of part of the term

for this is sometimes counter signaling

it was a bit like um hipsters drinking

pabs Blue Ribbon ribbon I think it's

called Uh which is it was historically

down Market Blue Collar American Beer

right okay okay it was down Market of

kind of Bud visor and the other you know

cause and so forth and this is a really

interesting thing in human behavior

sometimes in marketing itself but also

in how humans Market themselves because

I I think one of the conclusions we've

got to come to and we have to admit and

which the better understanding of will

be I think central to understanding um

how we solve things like the

environmental crisis and indeed overc

consumption is that the human brain

itself has quite a large marketing

function you know it has an accounting

function it cares about the efficient

use of resources it has you know all

kinds of kind of algorithms and

heuristics that are kind of in many

cases innate and built in but it also

has a marketing function it very much

cares about uh image and Status

effectively what something you do means

to other people now one thing that is

common to lots of animals is signaling

you know the most common example is the

peacock's tail elk antlers things you do

often costly things you do to

demonstrate that you can do them

Ferraris okay um and you know in many

Ferraris in London of course you know I

mean the extraordinary thing when you

think about it is having a Ferrari in

central London is about as deranged A

Car Choice as you can imagine okay but

the very fact that it's impractical and

ludicrous is almost what gives it

meaning okay as I said you know if the

um this is a very mischievous sentence

but if people were attracted to people

who drove expensive Vehicles okay then

they find Lorry drivers more attractive

than Ferrari owners in many cases

because the truck is actually more

expensive as a vehicle or a really

Luxury Motor Coach but the motor coach

actually has a practical function which

diminishes its signaling value because

if you want to show that you really have

resources to spare nothing beats waste

indiscriminate waste shows that you

really have resources to spare you know

or you pursue things that are

disproportionately scarce the real

interesting thing with humans though and

I don't think there's a case where

animals do this is they also practice

something called counter

signaling which is showing that you

don't have to try because you're

confident enough in your other

attributes okay so an example of that

would be in

Academia a an a professor who's aspiring

to get a let's say a named professorship

or tenure will go around in a suit okay

a tenard professor who has job security

for life will go around dressed like a

[ __ ] you know if you've won Nobel Prize

my hunch is once you've won a Nobel

Prize I think famously George stiglets

used to actually turn up at the World

Bank with no shoes on okay now

interestingly you do that it's a bit

like that old joke why do dogs lick

their own balls because they can okay

and to some extent people do what they

can get away with so you know the the

classic example is you know people who

play in very fashionable bands can

afford to be extraordinarily scruffy

because what effectively Liam and Noel

are saying is that our presence in this

band renders us so unbelievably cool and

sexy that we don't even have to make an

effort on the sorial front I've seen

this in my own life it's funny just

through the Journey of my career in the

last 10 years the example I'd give is in

my early career speaking on stage I

would try and dress really smart and

wear a suit now yeah I think it's much

better that I present myself in the

track suit bottom in the tracksuit that

I would wear like going around the house

when I speak on stage a because it's

more akin to who I am B because I can

and see I think the psychological that

I'm not adting because it might make

seem like an [ __ ] is it's actually

more of a status play to not wear a suit

and to not show off and the same applies

for Louis Vuitton like early part of my

first five years of my career when I was

just about getting some money I'd buy

these designer Brands like Louis Vuitton

now I genuinely think if I hold a Louis

Vuitton B bag it makes me look bad so I

i' I've like rid myself and when I walk

in some I say to my man cuz I've just

got the one left that hasn't managed to

break yet I say can you hold that cuz I

want to be associated with that level of

signaling if that makes sense I guess no

and the argument is that you know you're

famous enough now that you no longer

need fashion

brands um uh to Accord you know in in

fact the very fact that you were trying

um uh given your Fame to actually uh

signal your success through fashion

would probably be counterproductive it

would stress you insecure or trying too

hard and so that thing of we do what we

can get away with to Signal what we're

cap you know what we're capable of so

it's a very oblique form of of statea

signaling it might be very valuable

environmentally counter signaling might

be something you need to harness in

other words it's cool you know it's cool

to own less yes because I don't have

things I don't have a watch I don't have

as I said to you I have an electric bike

which you've just seen like I to be fair

I do have a nice Cut um car that they

drive me in sometimes but other than

that in terms of my own possessions it's

really all about utility and not buying

it in excess and I actually think that's

a really good point that that can be

leveraged to try and um help the

environment which I I think that's

happening there's a very interesting

thing happening which is in electric

cars and I was speaking to the marketing

director of scoda they produced

something called the enyak which is

actually it's similar to the Volkswagen

id4 but it's very very good electric car

and one of the things they're noticing I

migrated from a Jaguar to the Ford

Mustang

macki um quite a few people on The macki

Forum are actually ex luxury car owners

m and quite a few people um the the

scoda marketing director was telling me

um that quite a few people who'd gone to

the scoda ENC had actually come from for

example Audi Jaguar um fairly premium

cars so there is a thing that actually

having the electric car even in a you

know a less leather clad you know Walnut

infested form uh that's now the status

component it's not the brand of the car

it's the fact that it's electric Tesla's

the same I think of Tesla as a big um I

don't give a [ __ ] in a weird way I think

it's a big for me it's a um The Journey

honestly would be you you get a lamb if

you were insecure and this is what

you're into you'd get one of those

really fancy Brands and then the next

step is saying do you know what I don't

give a [ __ ] which is what you see going

on in San Francisco with the

billionaires and the CEOs and the VCS

I'm going to be a Tesla person now which

is I care more about the environment and

other things and I don't really care if

you think it's still a premium brand I

mean let's be honest because let's face

it any Tesla is probably less than three

years old and actually most people don't

buy cars from new ever or only once in

their life it's not fancy though but

it's not it's not particularly fancy I

mean there's a wonderful piece of Little

Alchemy in it of course which is the

invention of the phrase vegan leather oh

really if if you think the reason I

wrote the book Alchemy is partly to

elevate the status and centrality of

marketing in business success that

actually what you are is effectively a

product of how you make people feel okay

ultimately and that's psychological it's

not technological and therefore if you

want to improve how people feel

psychology is a better area for

exploration than what you might call

rational Improvement don't make the

Eurostar faster make the journey more

enjoyable okay put Wi-Fi on the trains

serve better food okay it's a cheaper

way actually to compete okay strangely

Engineers see it as cheating you see if

you have a an engineering or a finance

background you see psychological value

is invalid but the vital thing about

psychological value is whereas it's very

difficult to perform magic in the world

of physics or engineering you can

genuinely perform magic in perception

now what is the F what what is the seat

covering for the Tesla it's called vegan

leather now actually to be honest we

would have called those plastic seats

back in the day in my childhood in the

1970s and ' 80s we

G it's got plastic seats okay now I'm

sure that vegan leather is better than

the plastic seats which you'd find in a

voxal Viva in 1977 okay I'm sure it's

better in all kinds of ways

breathability you know cleanliness

whatever but nonetheless calling it

vegan leather in other words I'm doing

this for the planet rather than plastic

which is in other words what you're

doing there is you're making it a choice

not a compromise yeah and that's one of

the cleverest reframings you can do an

aspirational Choice as indeed so yeah no

and so you know I I ABS you know I look

at things like range anxxiety and I get

that's psychological okay what's that

okay range anxiety is a big obstacle to

electric car purchase oh yeah in the UK

in two in two two levels okay one it

prob well three levels one it means that

cars tend to compete on their range

which in a sense is further emphasizing

a negative to the consumer because if

electric car advertising is all about

range okay people start to see range as

more of a problem than it is secondly it

makes the batteries bigger the cars

heavier and more expensive than they

probably need to be so it's interesting

because so often I think the obstacles

to technology adoption are really

psychological hurdles much more than

technological hurdles this is why I

think marketing is so fascinating

because there there are these products

exactly like Gusto or hellofresh which

once you experience them 50% of people

become a convert but the real marketing

challenge is well that's fine that's

great but how on Earth do you convert

people in the first place and that's a

very interesting case where after the

pandemic and this is I think the value I

think there's a multiple value to having

occasional disruptions in life one of

which is that businesses become much

less risk averse when they're facing a

crisis MH it's of necessity is the

mother of invention but consumers also

have a narrative for why they're doing

things

differently I mean in a way you could if

you looked at the whole path of human

history the 19 30s in the United States

I.E the decade immediately after the

Great Depression was probably the period

of greatest innovation in terms of you

know human welfare in everything from

Cars aircraft Etc it was an

extraordinary period of innovation and

yet it came on the heels of this total

economic disaster and I think there is

something there in that idea that um

it's almost like a kneeling when you

make a samurai sword you actually bang

the thing while it's cooling that

actually

um some periods of disruption that some

degree of variance and instability in

economies is possibly long-term healthy

I mean I I I I I'm a huge Dev more so

than you I I know you've got a very

intelligent approach to flexible working

which is yeah that's what I wanted to

talk about is yeah yeah but but it was

interesting it was interesting that

given the fact that the whole promise of

the internet really I mean I think this

is in a Douglas Copeland book called

microserfs where one of the Geeks

features in this Douglas Copeland book

it was written in the '90s I think but

he makes a very interesting comment

which is the whole purpose of what you

might call Silicon Valley technology is

to make location Irrelevant in other

words it's to make where you are

irrelevant to the performance of a

particular function and by the way there

are negatives to that there were great

positives in my childhood to the fact

that what you could do was constrained

by where you were so when you left the

office you couldn't meaningfully work

okay cuz your computer was on a desk you

photocopied in the photocopier room you

met in the meeting room you you know you

uh you wrote things at A T at a keyboard

where you were determined what you were

doing and so a certain Focus arose from

that which I think has been destroyed by

the mobile phone to some degree which

technically lets you do anything from

anywhere I find myself on holiday and

day three worrying about what I'm going

to order from a cardo when I get home

and I go actually you shouldn't be doing

this another thing it probably does by

the way is it encourages us to over plan

and I'm a big believer I I've booked a

holiday um in July and August and I'm

trying to say to my family no no we're

going to land in Chicago we're going to

leave from New York what we do in

between those dates we're going to leave

open until the very last moment the the

other great problem the internet allows

you to do I think with your holiday is

to plan it down to a kind of granular

level of detail which is actually anical

to having a good time you know a good

time often requires spontaneity and you

know my my wife and I discovered New

Mexico in just whole American St we knew

it existed okay we discovered New Mexico

more or less by accident we were on a

driving holiday and we got stuck in El

Paso and needed to get somewhere else so

we said well let's try this you know

let's L Alamos I've heard about that

right okay fairly famous okay let's go

and have a decco absolutely gorgeous

State and we've been that back five

times we discovered it effectively

through Serendipity so there are

downsides to this you can do anything

from anywhere but is a bit weird that

you know trillions of dollars invested

in the capacity to to obtain effects

remotely hadn't made a dent in the

commute all now I'm by the way I'm

totally open to people who say entirely

you know okay Airbnb has gone uh

effectively remote forever fully remote

forever now bear in mind as a company

working as a company the entire company

is is going to be 100% remote working

now there are two interesting things

going on there one of which is if you're

Airbnb and your slogan is be at home

anywhere okay it's it's a bit

countercultural to demand that people

why weren't you at your desk okay there

may be an element of Henry Ford to it

you know that Henry Ford partly created

slightly ocal but not entirely created a

two-day weekend for his own workers

because he thought if it actually spread

then it'll be worth people buying cars

if he could increase the salary for

factory work and give people two days of

guaranteed Leisure then you had people

who could both afford and make use of a

car and with their BNB if you think

about it uh they stand to be fairly

major beneficiaries of working from

anywhere oh yeah so doing it with their

own staff there was a rumor I'm not sure

it's true so for God's sake don't sue me

on this there was a famous rumor that

unila created uh dress down Fridays okay

and the I to be honest I think it's a

conspiracy theory I don't think this

happened if it did all credit to them

and the idea was if we could create a

social Norm where people went into work

in chinos and you know sweatshirts on a

Friday uh we get one extra day of

laundry because you dry cleaner suit but

you launder a uh chinos or you launder

um you know polish shirt you launder

ordinary white shirts but you launder

cotton jackets and you know casual

clothes so the argument was it was

actually a laundry maximization Ploy by

either PNG or unver not sure that's true

it would be very clever if it were but

Henry Ford undoubtedly did write about

this that creating leure was part of his

strategy for selling cars now that's

interesting because most businesses

nowadays don't have that Vision to say

actually we don't necessarily have to

optimize what we do for Imagined static

human economic behavior we can actually

change the way people behave we can

change what things mean we can change

whether something feels cheap or

expensive we can make feler a really

cool brand you know and this is why you

know I wrote the book Alchemy partly

saying we have a kind of culture in

business particularly in the finance

function of business which does which

refuses to believe in magic now I'm not

saying magic is easy or that everybody

can do it all the time it's certainly

not that easy but you shouldn't discount

it because there are vegan leather the

Uber map there are magical Solutions out

there I had a few words to say about one

of my sponsors on this podcast what's

this one hule that's hule so do I need

to mix it with water or do I just drink

it it's um no no no you wouldn't put it

in the water don't put it in the water

yeah we'll give you a separate glass if

you want it is a nutritionally complete

it's a meal and a drink effectively oh

fantastic this is a this is an

interesting brand actually for many of

the reasons we've been talking about so

this is the

last year the fastest growing e-commerce

company internationally and think about

what what what they're doing so H are

nutritionally complete

convenience um it's basically I think

it's certainly Delicious By the way

delicious it's not Nest quick I'll say

that so it's not like you know raving

delicious but nor should it be because

we wouldn't believe it amen if you made

it too tasty we wouldn't believe its

medicinal properties it's exactly like

the weird Taste of Red Bull which I was

so two lessons are magic is possible in

Psychology even if it isn't in

physics and the second lesson is

sometimes the opposite of a good idea is

another good idea in Psychology you can

actually uh you know there's Dyson and

there's the Henry you know they're both

strong vacuum CA brands in entirely

different um uh directions if you like

and the point I'm making is that I think

that High School maths encourages us to

believe that there's a single optimal

answer

uh which comes from resolving a

tradeoff and economics economics always

assumes tradeoffs I want to show you

this grenade bar it's in the draw down

so this is this shows how what you're

saying about that the the Opposites can

be two good ideas because this company

run by another one of my friends both

these companies run by my friends has

taken the complete opposite approach

they are a a protein bar right yeah I've

bought them actually tastes amazing

tastes as good as a chocolate bar and

I'm I'm going to probably tell a lie

here but I believe they are the fastest

growing chocolate bar or the most bought

chocolate bar in the UK now they are a

protein bar and they focus entirely on

taste and they've just sold to mon delay

I think for well I know for several

hundred millions so the founder is very

very wealthy now good friend of mine

right they went for Taste and they won

these have gone for much the opposite

which is really really focused on being

nutritionally complete and healthy and

I've sat in the it's not repellent it's

not absolutely not

quite quite the opposite I would drink

this perfectly content but you it it

tastes good enough for you to trust it

if it tasted even better I would stop

trusting it and having sat in the room

with the CEO and the founder we they

brought in these bars that tasted like

this what tasted good yeah and there was

a small compromise to the nutritionally

complete um um part in these new bars

and the founder and the managing

director said no we'd rather have bars

that taste worse

and protect that nutritionally complete

um sort of philosophy than to have it

taste really good an interesting an

interesting piece of psychology is that

Diet Coke has to taste slightly more

bitter than standard Coke for you to

believe it for you to believe it in

other words it's kind of

um in other words you have to have that

slight little bit of extra bite because

otherwise it does you you it doesn't

feel like a diet drink what are you

going to say about Red Bull you were

saying about you write a lot about the

there's lot about Red Bull because it's

this mysterious thing which is so

counterintuitive in that you know it

tastes nastier than Coke it costs a lot

more than Coke and it comes in a much

smaller can than

Coke and part of that is I think it's

not a drink it's a it's a medicine I

mean the whole marketing behind it it's

it's a drug

it's and actually the promise of

psychoactive Powers is delivered much

better by high price and weird taste and

small portions you wouldn't really I

mean okay to give you an extreme case

there there is a case where they

discover that drugs that op

work for relatively minor conditions by

which I let let's say as mild asthma

okay also work for certain rare Cancers

and apparently when they do this they

exaggerate the side effects because you

feel that if it's to be tackling a much

tougher challenge which is cancer you

would expect greater side effects I mean

you what you wouldn't want is an

oncology treatment which was pineapple

flavored and so there's this weird thing

which is you can you can do things which

kind of make sense which is we want this

to taste as nice as possible and you can

end up being logically wrong rather than

illogically right yeah and I think that

distinction is really useful because um

I'll give you an example actually nearly

all pharmaceutical

companies make the pills as easy to take

as possible okay as small as possible

you know and as few needed as possible

and so forth and when we heard this both

Dan arieli and I who were on I think a

zoom call at the time said oh dear and

they said well it's logical you know

we're designing a drug we produce the

drug how can we make the drug and we

said well when you make something very

small and very easy to take you also

make it very

forgettable and we actually said there

are you sure we shouldn't add a degree

of difficulty should you actually

require people to grind the drug up mix

it with water because there are several

reasons for that the more effort you put

into the preparation of the drug will

probably boost the placebo effect okay

uh but the second thing is you'll also

create a ritual which means you'll

remember whether or not you've taken it

whereas if a pill is literally you know

you have these pills where the biggest

problem with treating the condition is

not finding the medication it's it's

patient

compliance and we said maybe if you had

a bit of a Dar ritual around this where

you had to actually grind in the pestel

and mortar and add something you'd find

much higher levels of compliance and and

a boosted placebo effect as well really

interesting that this idea that friction

can create create value but it also can

can ingrain something in your routine

the other thing that I I I think about a

lot sometimes by the way some travel

websites deliberately make the search

procedure artificially

slow because you value the results more

highly if you've had a screen that says

we're now searching EasyJet British

Airways Alitalia d

and then 15 seconds later after a load

sort of flurry of activity on the screen

it delivers you your holiday

results you attach more significance to

those results and are more likely to go

through and book than if it just goes

bang and gives you an instantaneous

result well I think you did a thorough

job so I trust you more if I see you've

done you've searched 50 I go okay well I

don't need to do that myself then you've

looked at them all for me yeah that's

really interesting I now feel

scammed well interesting thing is this

is the interesting and this is a sort of

philosophic question which is if it

makes things feel more

valuable is it a con so okay I mean if

you take this whole question of how we

perceive value you could undou you

wouldn't disagree with the fact that the

nature of a restaurant and how it's

designed or the service adds to the

appreciation of food well if it's too

quick to deliver me my meal I think they

yeah well that's that's that's a very

interesting point yeah if absolutely

right um so the way in which the food is

presented it affects your appreciation

of the food now my argument is your your

job as a business person is to create as

much perceived value as

possible

and if you okay now I was talking to Jay

Raina the other day and just to be clear

on this you cannot create a great

restaurant with rubbish food okay yeah

yeah okay that's not going to happen but

once you reach what you might call table

stakes in terms of food quality the

things that make a restaurant great are

often what you might call tangential to

the food or the meal itself magic um or

you and it's it's atmosphere Decor you

know

theater who the other diners are it can

be all manner of different things and so

just as I think you're wrong Running a

Restaurant where you say the food is the

only thing that matters because you

could serve mandard food in a restaurant

that smelled of Wei and nobody would

enjoy their meal even though the food

was objectively superb um I think the

worst thing you can do in in in both

environmental terms and in business

terms is to create underappreciated

value is to go to the effort of

manufacturing something without actually

working out how to allow people to

realize how great it is scarcity in

packaging um one of the things that I'm

quite I I saw one of my favorite Brands

the other day do a trip around their

warehouse showing the warehouse and on

one hand I love seeing the warehouse I

love seeing the the craftsmanship that

goes into it and then they panned across

to this big Rail and I saw the item that

I and I saw like a like thousands of

them and I remember thinking oh [ __ ] and

it made me reflect on what Apple do by

just laying out like one of the products

on the shop floor and how much how much

more that makes me think there's

tremendous value because I just see one

iPad and one phone and one watch there

is a kind of Genius to that yeah they

will the ancillary products they will

show in some sort of bulk won't they and

if you're buying Mouse mats or something

they don't mind having 10 of those but

the mainstream products there is one of

them and the rest of them are kept out

of sight yeah which is very interesting

Brands don't do that enough I don't

think there is also that interesting

question about the tour of the warehouse

which is you know how much do you want

to let people in on the reality on the

yeah because it can be like it can kill

the magic to to a certain point

depending on what's going on in that

warehouse it all depends I I went out

and when we were working with laa the

famous Italian you know lingerie brand

and I flew out to the there were a

client of they flew out to Italy to

their warehouses and I I I read the

story of golden scissors the original

founder would make all of the lingerie

with their hands and golden scissors and

I saw these women who all have a another

woman standing over their shoulders

ensuring perfection in the garments and

my biggest thing to the CEO of luro at

the time was like oh my God you've never

told the story of golden figures you've

never filmed this process you're now

just competing on the High Street

against um these sort of uh cheaper

lingerie Brands who are selling at 30s

you're selling at 150 and no one knows

why no cuz you just haven't told you've

not sort of it's what you said L as a

fairly insubstantial product so it's not

if you're getting sees it this is the no

so no one sees the craftsmanship I had

no awareness of that either there you go

and isn't that and I tell you what

happened to laa they went bust and and

and when I got when I seen in Italy just

the unbelievable the fact that all of

the people hand so they never told that

story they never told the story on a

slightly more praic basis I always every

time I meet KFC I always tell them to

tell people that Colonel Saunders

effectively founded KFC when he was 65

years old you know he had a a convoluted

career but he had spent about eight

years perfecting this recipe for chicken

and it's an extraordinary story you know

the fact that a multinational

corporation was created by someone in

there basically at retirement age and my

argument is I can't explain entirely why

but it just makes me think of the thing

differently knowing the knowing the

foundational story behind it can I tell

you a really secret a really easy way I

found to do exactly that to instill any

product with a apparent sense of huge

value in historic like story is just by

naming it after a person so if if I

named if I name if I have salad if I

have Italian uh spaghetti sauce which

I've just made in a factory and I called

it I don't know la la Bellis yeah you

immediately think of a family history

that must have been attached to that

product and and years and years of

iteration from this family and it was so

good that people now Buy on mass and

Tesco and I think that's that for me is

such an interesting example where just

by calling it after someone who sounds a

Italian yeah implants this whole you

know this this story of Heritage what do

you think about personalization and when

I say personalization I really mean this

the surface level personalization of

tickling someone's ego by yeah I always

talk about Starbucks them just writing

your name on the side of the cup or the

Sher a coat campaign where they put your

name on a that was us actually that was

in Australia who instigated that

brilliant idea but um um it's very

interesting personalization because it's

one of those things you have to be very

judicious about you know it can be

spooky okay and you know there are

companies that get it worryingly wrong

uh by essentially uh playing back to

people things that they shouldn't know

or didn't need to know I've had that and

so it's often one of those things which

I think is interesting because it's best

done obliquely spooky example give so if

you know something about someone in a

personalized letter you say uh you know

uh you may be the kind of person who

recently did this rather than saying you

did this and it can it can be spooky and

it's one of those very interesting

things where knowing how to play it uh

is um uh really really critical I'm

going to give you an example where I

think someone played it wrong because I

was thinking about yeah so one of the

this is maybe slightly different but um

I went I I registered for a gym on the

other side of the world I won't say the

country because they might listen on the

other side of the world right and 30 or

40 minutes after registering for the gym

I got an email from the CEO saying hi

Steve I've just seen you've registered

for our gym um if there's anything I can

do while while you're in town please let

me know blah blah blah blah blah now on

one hand people might think that's

that's great and that's lovely of them

to do but I don't know how that

individual got my details so I gave it

to an iPad on the front desk to a nice

Indonesian lady right and then the CEO

who's a British person is clearly what

else did they see of my details did they

see my my password did they see my bank

details so it just kind of it hurt me it

I was a bit shook by it I was like how

in 35 minutes since I put that details

into the iPad has the CEO in the UK

emailed me email not just has emailed my

manager and then I'll give you a good

example which is I flew to India I got

to a a hotel in India and as I went into

the room they had a chocolate Taj Mahal

and they had my company logo social

chain and a small rice paper sticker on

the the thing and I thought that that

made me feel special yeah one of them

made me feel like they'd invaded my

privacy a little bit and the other one

had made me feel really special and I

took my phone out and I do loads of

Instagrams about this hotel and this Taj

Mahal rice paper sticker that cost $2 so

you're right there is a fine line there

and you can I mean it's very interesting

because there's all you've also got to

be very very alert to cultural

differences so that Germans have a

paranoia about data protection and

privacy uh which is an order of

magnitude greater than that you find in

say the US where I think most people in

the US kind of have the mentality that

the horse is already bolted it's too

late everybody already knows all this

stuff so leaving aside things like

medical data and stuff that is you know

naturally expected to remain secret um

it's CU I thought with a machine it's

funny cuz when you put your details into

computers and like login forms and

registration you assume they're going

into some Vault it never occurred to me

that that now because you'd self inputed

it yeah um you'd assumed that

effectively it was Anonymous yes and it

was going into some vault in a computer

yeah that was encrypted and secure so to

get an email 35 I go well these people

saying all my dat got my phone number

he's got my passwords and that was just

felt like a bit and what's interesting

is you you you found it unpleasant

another person otherwise demographically

identical to you would be cool with it

yeah they put thought it was great

customer service generally it's probably

it's probably a caution that people who

work in

marketing are less um likely to be

sensitized to positive possible negative

interpretations of what they're doing

sure because people who work in

marketing are high on openness I'll give

you a lovely example of this which I I

better not name the client but it was

simply there was a special offer by a

credit card

company and uh the envelope sent out

just said final reminder in red because

the offer was about to expire okay and

we thought it was you know reasonably

cute you're going to open a letter with

final reminder on it and it'll tell you

that you've only got 10 days left to

enjoy this particular

discount and a significant minority of

people went bananas with this and the

reason was do you know what they said

that to a Londoner this is

incomprehensible okay if you live in

London or you live in a large city my

Postman thinks I don't pay my bills

because they'd received a letter with

final reminder on the outside of the

envelope now most people in London don't

really know their postmen and they

certainly wouldn't worry about their

postmen going around and gossiping about

them because in a place like London

there's a l of anonymity if you live in

a small Country Village totally

different matter because the postman

drinks at the same Pub as your friends

oh yeah of course and that's one of

those cases where no nobody working on

the thing had had any consideration

because londoners wouldn't be bothered

by by that equally as someone who shares

a doormat with five other people might

be bothered by that let me give you let

me I want to get some real um some

advice from you then so I'm I'm

launching a uh a brand soon and it's an

apparel brand and we've been working

very hard on it over the last year or so

maybe a bit too hard on it when when it

comes to delivering that apparel brand

to the world and making it um It's

actually an extension of this podcast

it's called doac D CEO um what advice

would you give me as it relates to

delivering that product to the world to

make sure that it is inherently valuable

and that people you know uh one one

piece of advice in any form of uh etail

two two forms of advice actually uh the

two M and by the way I think marketers

spent too much time focusing on the

addition of positives when a lot of time

needs to be spent on the removal of

negatives uh one thing is answer the

phone okay and do not hide your phone

number I I that so what seems to happen

in most e-commerce is you have what you

might call the sales area which is

everything that happens up to and

including a point of

purchase and everything there is

glorious and attractive and you know and

Slick okay assuming by the way you don't

have a weird question to

ask um but I would argue one um what

then happens is if something goes wrong

with your experience either the delivery

of the experience or you need to cancel

something as soon as you deviate from

that very narrowly preconceived sort of

purchase funnel you enter a world of

pain okay and the two things which are I

think grossly under underinvested in uh

in terms of e-commerce are one giving

what what tends to happen is once once

the marketing job is done because the

person has clicked

by the responsibility for that customer

is now hand it over to people whose

metrics are anything but customer

satisfaction their cost reduction how

can we make sure that nobody phones us

up how can we make sure that every phone

call is as brief as is feasibly possible

and how can we minimize the cost of

delivery and distribution now one of the

things I think is a grotesque mistake

that most e-commerce providers make not

all of them but many is not offering you

a choice of delivery couriers for

example okay now I know why they do that

they want to put everything through one

delivery Courier so can maximize their

rebate through through volume economies

of scale actually I think I you know I

think many me two two problems happen

there one if you don't get to choose how

your item is delivered if anything goes

wrong you blame the company you don't

blame the delivery company or yourself

if I had chosen to have it delivered by

Royal Mail and it went missing I blame

Royal Mail if they insist that I have it

delivered by you know without singling

out UPS dpd whatever and it goes wrong I

blame them MH um secondly you know

people have various preferences you know

uh your liking for ivery used to be

called um uh Hermes okay varies

enormously depending on which postcode

District you're in because if you have a

very good local driver it's incredibly

good and if your local driver's off sick

it's a disaster in some cases okay um

and by not not respecting the the fact

that the person is paying for the

delivery should choose who delivers it

yeah yeah strikes me as a fundamental

failing the business of hiding the phone

number so that anybody who has a problem

is effectively treated like a second

class citizen so you have this very

characteristic thing which I think is a

problem with e-commerce which is when it

goes well it's miraculously good okay

but the second anything out of the

ordinary happens you enter a world of

pain you know um and I think that is

that's a fundamental failing this is a

customer service point the importance of

customer service right a few people I

mean selfes do selfes do it pretty well

okay

um other things I do is I would offer a

kind of Amazon Prime equivalent where if

you pay a few pounds for delivery you

get free delivery for a year that seems

to be a you know fairly obvious and

brilliant idea because why should loyal

customers pay you know inordinately more

for you know delivery than one off

customers

do um I think you know I I think you can

make an effort around how the thing is

delivered and packaged and presented

which some people do well and some

people don't bother to do at all what do

you think the secret is there to doing a

good job with pack

um possibly there's a little bit of

costly signaling involved I mean if you

order something from selfridges um the

uh inside of the box is actually yellow

with the self's logo on a kind of shiny

backdrop and there's a little bit of

tissue paper okay so you're never left

um that will have a halo effect on your

perceived value of the product by the

way you I know we don't like it but

actually packaging is to some extent

packaging is where a product first

becomes a brand

it's where it first takes on a

personality an identity uh you know

um you know a kind of an implied target

audience and so in in this thing now the

interesting thing is how are you going

to uh what's your stick do you have for

example scarcity is the clothing

available in a limited so limited runs

we we actually we actually sold some

before when I did a tour of the UK and

you had to come to the tour to buy it

and every single night on the tour we

did nine nine nights three nights at the

London plaum took it up in another

country it sold out every single night

every single item to the point that we

sold the ones on our backs yeah and well

gave them away but um every single item

sold out in every single size on the

tour so this is like the second drop of

it everyone's well aware that the first

the first run of it all sold out um we

have a very limited line uh we have a

limited amount of items again this time

and I think the key thing with this um

release is we've just agonized over the

story of the piece so it's like it

really looks more like art than it does

clothing and we've worked with artists

and there's this big movie that I'm

releasing with every single item to

explain the meaning of the piece and

then we've put a lot of effort into the

packaging the bo unboxing experience so

it is limited it will honestly probably

sell out in the first day and um I don't

even think we're going to make money

from it but that's not really why I do

it it's more because I just love the I

love the process but um probably will

you probably will make money I mean

merch is um I'm just really not bothered

by making money from it it's not the

thing in my life I same with a tour like

I spent every penny I could on on the

bloody tour because it wasn't really why

I was doing it there's probably more of

a br a wider brand play yes to doing it

which is like it's it's bringing our

audience closer to us so it's maybe a

lost leader in terms of the financials

but in the broader engagement to no I

mean this is this is actually the great

curse of a lot of modern business given

the title of your um podcast which is

that people generally over obsess about

things which are immediately

quantifiable and

underinvestment or loyalty of course I

mean it's worth noting that customer

loyalty is much much slower to measure

than for example conversion yeah and so

the extent that money is invested in

Performance Marketing or the bottom of

the funnel relative to let's say wider

brand Fame yeah uh it's a widespread

problem in the whole business World

which is that the money isn't

necessarily being spent in in the in the

channels it is because it's more

effective there but simply because it's

more it's easier to prove that it has an

effect the truth of the matter is the

world will always be too uncertain for

us to know who our customers are in

advance and therefore since you know 97%

of the potential customer base aren't in

Market at any given time and therefore

won't being covered by search or you

know uh remarketing or whatever

spending money on the 97% of people in

advance ahead of times is still a very

effective thing to do the reason people

do too little of it is that it's hard to

quantify on that particular point then

having worked in the advertising

industry this is a conversation we have

all the time with clients which is

you'll meet a certain type of client who

is very uh who who's they're religious

about the bottom of the funnel they're

if it if I can't track it and I don't

know exact I won't do it then you'll

sometimes meet the opposite which is who

just loves to spend on brand and I don't

NE they're both wrong I don't think they

yeah I mean I mean Mark riten very good

marketing Professor always talks about

the importance of both ISM and he says

it's vitally important that when I

actually speak about the importance of

brand marketing that you do not

interpret this as denigrating digital

marketing in fact I go a bit further and

say the bottom of the funnel in many

respects is the thing you have to

optimize

first because there's no point in

actually uh if there's a a bottleneck at

the bottom of the funnel if there's some

constraint or a problem or a failing uh

you know if you have very poor

conversion okay there's no point in

spending money on Advertising because

you'll just introduce more people to a

disappointing experience you're wasting

money so youve got to get the back end

and I would argue the first thing in

theory you should optimize if you're

being an absolute purist is repeat

purchase um because having gone through

the expense to acquire these customers

and actually that's the that's the

metric that always fascinates me because

we were talking earlier about electric

cars and I said the question about

Electric carss isn't how many people are

buying them okay it's not what

percentage of the new car market in the

UK in July were plug-in

Vehicles now only question worth asking

really in the long term is does anybody

who buys an electric car go back to

buying a gasoline

car because if the answer to that is

hardly anybody then okay you don't know

the exact shape of the S curve but you

know the growth is going to be pretty

spectacular and so the thing to

understand I think in a market is to

what extent does your uh product

actually convert someone to something

and then the lifetime value so You'

start with repeat purchase then you go

to conversion and then you'd work your

way up but what tends to happen is that

when people are OBS are obsessed with

quantification of everything okay it's

worth noting by the way that all big

data comes from the same place the past

all right so there's a limit to how much

big data particularly if you've had some

major event like a pandemic in between

how much big data can actually tell you

about the future in any case um as David

Ogie famously said you're not

advertising to a standing army you're

advertising to a moving parade people

are coming in and out of Market all the

time um and so uh you're absolutely

right you get some people who are just

Fame junkies and by the way I suppose

there are brand categories where that's

appropriate if it's sold through

retailers you know in other words if

it's mostly sold in the physical space

you might you know you might argue to an

extent you know for let's say a burger

or McDonald's that's not a totally crazy

position although it is now because

suddenly they got to think about

delivery and and whether people order

through the app or order through an

intermediary because it has a major

bearing on their business but but at the

same time yeah I mean the tragedy is

this idea of this false dichotomy

between brand advertising and what you

might call Performance or digital

marketing as if you have to be in one

camp or the other where is the balance

though and how does one go about is it

just in is it just there are figures on

this so if you look at the work of um

Les Benet for example and Peter field uh

the ratio shifts a little bit but

generally they'll stipulate a figure

around about the 6040 Mark in favor of

what you might call Brand mass media uh

expenditure because they have a a

mutually beneficial relationship top of

the makes the the first 20 years of my

life I spent in direct marketing and

actually you know because direct

marketing was unfashionable we spent a

lot of time denigrating advertising

spend because they got much bigger

budgets than us not necessarily rightly

but they were also you know much more

indulged than we were because they

didn't have to prove Effectiveness down

to the same sort of level of statistical

significance but we came to realize

pretty quickly that actually um first of

all there's nothing harder than direct

marketing a product that nobody's ever

heard of yeah and that every time just

to give an example every time American

Express went on television or advertised

big in mass media uh the response rates

to direct mail would not quite double

maybe but they increased pretty

significantly you had to work less hard

and you had to work it's that wonderful

phrase which comes from a book by uh let

me get his job right uh his his his name

right

um I think it's Matt Johnson who's just

written a book called um uh brands that

mean business and his wonderful line is

having a great brand means you get to

play the game of capital m in Easy Mode

yeah so true and that's and what what is

true is is Fame to some extent brings a

load of benefits which aren't

necessarily sales related so for example

you can [ __ ] up and your customers will

be more forgiving okay uh take the

example of Apple I mean on a couple of

occasions Apple has produced products

which had Fairly major flaws which might

have proved pretty fatal to lesser

Brands you know the famous f where if

you held it in the wrong way it didn't

make phone calls for example and um

given the reality Distortion field

around the Apple brand people have

passed over those incredibly rapidly and

so there you know people are less price

sensitive that's not easy to measure by

the way as well it's very easy to

measure the the extent to which

something has an effect on sales but the

effect to which something has an effect

on price elasticity and the extent to

which you can command a premium because

it's a great brand because it's a great

brand is harder to measure because you

don't have the

counterfactual you know when you sell

something the counterfactual is that you

assume that you wouldn't have sold it

otherwise but if you sell something for

a high

price you can't in fact determine that

without your advertising you wouldn't

have sold it yeah for you know for that

for that premium price so it's it's to

some extent this quest for perfect

measurement to to reduce marketing to a

kind of Newtonian physics is a bit of a

false god Fame you about Fame there Fame

can also be applied in the topic of

personal branding as well obviously

social media has allowed us all now to

build our personal Brands you've got the

Gary Vaya Chucks of the world who have

built you know you know their companies

are famous because they've they've

branded a person at Ogie and within your

sort of your your marketing what kind of

shift have you seen in the desire for

people to become Brands themselves and

how valuable do you think that is I

think advertising always had those

personal Brands and if anything it's

slightly diminished actually really um

uh campaign magazine always did a very

good job of you know making sure there

were 30 or 40 sort of famous names

within the within the business that that

just happens in a different medium now

right it happens on LinkedIn with yes I

I agree I mean you know so I mean one of

the greatest things for example there's

a wonderful wonderful guy who now must

be I don't want to name his age but you

know his you know past retirement age

called Dave Trot you probably know okay

uh he'd be a brilliant interview by the

way on the show absolutely fantastic but

what has been absolutely fantastic is

that um uh you know he's a glorious