Modern Wisdom8 Fascinating Psychological Biases - Richard Shotton
EVERY SPOKEN WORD
150 min read · 30,176 words- 0:00 – 0:34
Intro
- RSRichard Shotton
One of the big drivers of human nature is a desire to be consistent. She looked at gym registration data, gym attendance data, volumes of search terms around things like quitting smoking, dieting. For all these data sets, she sees pronounced spikes at the start of new time periods, beginning of the year, beginning of the month, beginning of the week, after people's birthdays, after public holidays. All these moments are typified by people being more open to change. So the first thing around habit formation is you've got to break an existing habit. What behavioral scientists do is identify when you should time your communications to maximize that.
- CWChris Williamson
Someone
- 0:34 – 5:55
Why You Should Care About Behavioural Science
- CWChris Williamson
who has had their head under a rock for a long time and hasn't been exposed to much behavioral science, maybe they're not an advertiser or a marketer, but they've probably got an interest in human nature, why should anyone care about behavioral science?
- RSRichard Shotton
Okay. Good, good question. So sometimes the terminology can be confusing. So if people haven't heard of behavioral science, it's essentially what we used to call social psychology. So it's the study of how people actually behave rather than how they claim to behave. And I would argue anyone who is an entrepreneur, anyone who works in marketing, anyone who is trying to influence other people should be interested in this topic, because, you know, if you're a ... any of those groups, you're in the business of behavior change. And all behavioral science is, is the study going back 130 years of what makes for effective behavior change. So it's a super relevant topic. Above and beyond that, it is robust, which actually differentiates it from an awful lot of business theory. If you think about some very popular business theories, they're based on elegant arguments, and the problem with elegance is it's not often accurate. What's great about behavioral science is it's n- never based on logic alone. It always comes back to being proved by an experiment so we can give these findings genuine, um, credibility. And then the final big strength, so we've got our relevance and our robustness, the final big strength of this topic is its range. So there are literally tens of thousands of studies. So whatever category you work in, whatever discipline you work in, there are so many behavioral science studies that pretty much whatever challenge you have in front of you, there's going to be an experiment out th- out there that can help you solve that challenge.
- CWChris Williamson
What would be an example of an elegant business theory which doesn't necessarily show up in practice?
- RSRichard Shotton
Well, I think one of the big theories that, um, is prominent is this discussion of purpose being, uh, a successful way to drive business growth. Another one actually that got more interesting recently is every year the PR agency, Edelman, produce data on h- uh, trust. And the story that they normally accompany this data with is there has been a massive decline in trust. It's just not backed up by their own data, so it's- it's quite, um ... it's quite commonplace that the headline findings that businesses and brands subscribe to aren't backed up by, um, an analysis of the- the actual data.
- CWChris Williamson
You use an example about why margarine isn't gray at the very-
- RSRichard Shotton
Yeah. (laughs)
- CWChris Williamson
... start of the book. Why is that illustrative?
- RSRichard Shotton
Uh, so there's a lovely study, a really old study by a psychologist called Louis Cheskin where he was working with margarine manufacturers. So these manufacturers back in the 1940s are trying to, um, win over consumers, stop them buying butter, start buying margarine. And if you went out and directly questioned those shoppers, they said, "Well, I don't buy margarine because it tastes bloody awful. I don't like the taste. That's why I don't buy it." But Cheskin was suspicious of this claimed data, so he set up a really simple experiment. He got a speaker and he invited local people to come in and listen to the speaker, and after they'd listened to the speaker, there was a buffet laid on. And part of that buffet was, um, bread and a spread on it, and sometimes people thought they were eating bread and butter, sometimes they thought they were eating bread and margarine. Now, in reality, Cheskin had switched things round. So he dyed the butter gray so it looked like 1940s margarine, and he dyed the margarine yellow so it looked like 1940s butter. And when people ate margarine masquerading as butter, they said, "Oh, it tastes beautiful. It's wonderful." When they ate butter masquerading as margarine, they said it tasted bloody awful. So what he showed by that was it wasn't the taste that mattered, it was the color. You know, w- what we expect to experience is a massive guide to what we actually experience, and one of the things that sets those expectations is- is the color and the look of our food. So it's a really, really old study, but what's interesting about it is h- he recognized that a direct questioning of consumers is really problematic. What people tell us is often inaccurate in terms of their genuine motivations. So psychologists say people confabulate. You know, often they try and tell the truth, but because they don't have full introspective insight into their own motivations, when they give answers in focus groups or surveys, now they're trying to be honest, but those answers tend to be misleading. So what psychologists do instead is set up these test and control situations and they observe how people behave, and that- that tends to generate more accurate answer.
- CWChris Williamson
Stated and
- 5:55 – 9:48
Stated Vs Revealed Preferences in Human Behaviour
- CWChris Williamson
revealed preferences are just such an interesting divergence. It's something that I've been working on at the moment, looking at the mating market and- and some of the challenges that young people face.
- RSRichard Shotton
Yeah.
- CWChris Williamson
And when you look at mating preferences and you ask people, um, uh, let's say that you would ask women, uh, "Would you..."... mind getting into a relationship with a man that was the same height as you? Would you mind-
- RSRichard Shotton
Yeah. (laughs)
- CWChris Williamson
... getting into a relationship with a man that was the same education level as you? Would you mind being the breadwinner in a, uh, in a marriage? Most of the time, women are okay with these things, but when you actually look at the revealed preferences of the kinds of guys that they end up going for, they tend to be a little taller, a little better educated, and a little more wealthy. And again, this isn't to say that women are being purposefully deceptive, nor you're m- margarine-hating, butter-eating people from the-
- RSRichard Shotton
Yeah. (laughs)
- CWChris Williamson
... 1940s. It's simply a byproduct of the fact that we do not ... No, there's a few things going on. It would be socially, uh, when you're asking somebody a question, there are certain sort of s- social mores and cues and concerns about what people are going to think and say about your response. I mean, that, the, the observer effect, I suppose, is gonna be a big deal here.
- RSRichard Shotton
Yeah. No, yeah, yeah. Yeah. That, I think you're, I think you're absolutely right there. I think there are, there are two factors going on. You're absolutely right, a bit more complicated than I was making it out. I think you've got a subset of answers where people self-edit. They think, "Well, what does society ... What, what, how can I answer that makes me look like a upstanding, admirable person in society?" But then there's this bigger problem, I think, of often people don't know their own motivations.
- CWChris Williamson
Yeah.
- RSRichard Shotton
So, you put them on the spot, they give you loads of answers, but many of them, uh, are misleading.
- CWChris Williamson
They just possibly rationalize it all.
- RSRichard Shotton
Uh, I mean, on the dating point ... Yeah. There's, there's a w- I don't know if you, if you read this wonderful book by Christian Rudder called Dataclysm. So, he was the founder and chief technology officer of OkC- Cupid. And I think the, the subtitle of the book is something like, how do you know what ... What, no, what d- what do, what do people do when they think no one's looking? And it's an analysis of all the data he has on dating which show that, yeah, what people actually do is wildly different from what they say they'll do, for both men and women.
- CWChris Williamson
Yeah. I mean, Seth Stephens-Davidowitz has been on the show twice.
- RSRichard Shotton
Yes. Brilliant. Yeah.
- CWChris Williamson
Phenomenal.
- RSRichard Shotton
Yeah. Yeah.
- CWChris Williamson
Did you see his most-
- RSRichard Shotton
Everybody Lies.
- CWChris Williamson
Yeah. Yeah. So, Everybody Lies was the first one, and then his most recent book, which is about the biggest questions people ask, and I haven't stopped talking about it for ages and I can't believe that I can't remember what it's called ... Not Everybody Lies. Everybody Lies was the one that discovered that Indian, uh, th- the country of India loves-
- RSRichard Shotton
Mm-hmm.
- CWChris Williamson
... breast porn, breastfeeding porn.
- RSRichard Shotton
Yeah.
- CWChris Williamson
Um, the most recent one was using, uh, Don't Trust Your Gut. Thank God for that. Don't Trust Your Gut is the new one. Dude, you would, you'll, you'll fall in love with that book. It's phenomenal. But it's basically just the same thing. It's, uh, um, data revealing what our genuine, uh, preferences are.
- RSRichard Shotton
Yes. P- particular subset of data.
- CWChris Williamson
Right.
- RSRichard Shotton
'Cause his argument, I think, uh, it- uh, is that in a focus group or survey situation, which most brands do, this is, you know, the vast majority of how brands and businesses find out about their customers, they just directly ask them. But he, he says the motivations of the customer in that scenario is to make themselves look good in front of the questioner. So, it's not ... The motivation is not to tell the truth. He compares that then with search on Google or Facebook or Pinterest, where he says the motivations of the searcher, when you're typing something into a search box, are completely aligned with telling the truth. Because if you don't put in what you genuinely want, you're gonna get the wrong answer. So, I think you're absolutely right. Prioritizing that data that people generate when they think others aren't watching, that's really powerful stuff.
- CWChris Williamson
Okay. So, you've got
- 9:48 – 16:12
Making Habit Formation Seamless
- CWChris Williamson
16 and a half, uh, cognitive biases that form this most recent book-
- RSRichard Shotton
Yeah. Yeah. Yep.
- CWChris Williamson
... uh, of yours. Uh, the first one is habit formation. Why is that important?
- RSRichard Shotton
Yes. Yeah. So, there's i- there's a, there's an awful lot of work by psychologists into habit formation, and it b- breaks down into two broad areas. So, the, the broad argument is people have so many decisions to make every single day, they don't have the time or the energy or the wherewithal to weigh up those decisions in a fully considered manner. And therefore, um, what they do as a coping strategy is either rely on what psychologists call heuristics, pick the middle option, pick the most popular option, or they go even further and they just, uh, repeat the same behaviors again and again. So, if they find themselves in a similar situation, they repeat the same behavior they did last time. They don't even weigh up alternative ways of behaving. So, um, Susan Fiske describes this as people being c- cognitive misers. Now, they have the capability to think deeply, but because thinking is e- um, effortful, because it's energy intensive, we ration that capability. Thousands of decisions to make every day, we can't use that capability on every one of them. Uh, Daniel Kahneman puts it a little bit more, uh, amusingly. He says, "Thinking is to humans what swimming is to cats." That we can do it, but would rather not. So, an awful lot of our behavior, uh, is habitual. Just this repeating the same behaviors again and again. That's a problem if you as a business, or you as a person want to get someone to do something differently, 'cause how do you get them to change their behavior if they'll not even weigh up your merits compared to their existing form of behavior? But the first thing that psychologists identify is that there are predictable moments when those habits are, are weakened. So, Catherine Milkman, for example, talks about this idea called the fresh start effect. Her hypothesis is that one of the big drivers of human nature is a desire to be consistent. So, many, many cultures have lots of negative language about people who are inconsistent. So, this desire for consistency gets us repeating behaviors. She then says, "Well, look, when we enter new time periods, our link with our past self is weakened and we-"... are more open to change. So that's her hypothesis. But as I said earlier, the great thing about behavioral science is no one ever stops at that stage. They then look at various different data sets and observe data sets to try and test the idea. So she looks at gym registration data, gym attendance data, uh, volumes of search terms around things like quitting smoking, dieting, and for all these data sets, when she plots them over time, she sees pronounced spikes at the start of new time periods. Beginning of the year, as we might expect, but also beginning of the month, beginning of the week, after people's birthdays, uh, after public holidays. All these moments are typified by people being more open to change. So the first thing around habit formation is, you've gotta break an existing habit. What behavioral scientists do is identify when you should time your communications to maximize that, to get, to get that biggest effect.
- NANarrator
So if you do-
- RSRichard Shotton
Now-
- NANarrator
... a, uh, an advertising campaign that plays off the back of "New Year, New You."
- RSRichard Shotton
That, that, yeah, that would be an example. So that, that would be an example. Um, Spotify is an example. So Spotify have Discover Weekly. They send you a new set of tracks, kind of a bit like things you listen to, but you've never actually listened to them. They've tried to launch that service two or three times, and it failed the first two times because they launched it on a Thursday, Throwback Thursdays. Then they launched it as Feel Good Fridays. It was only when they launched it as Discover Weekly on a Monday that they tapped into the fresh start effect.
- NANarrator
No way.
- RSRichard Shotton
And, uh, yeah, yeah. And they, they, um, I think they worked with Richard Thaler either to post-rationalize it or as a stimulus to, to test that idea. If you think that one's, uh, uh, interesting, the best example I've seen of the fresh start effect is from the West Midlands. So the police launched a intervention with criminals which tried to encourage them to stop a life of crime, get back on the straight and narrow. So they were gonna be helped with all sorts of support to get jobs and, you know, break the, break the kind of cycle. Half the people that they sent out this... They basically l- sent out a message saying, "Now, we n- we're onto you. Ring this number, and we'll help you start a new life." Sometimes they just sent that out randomly. Sometimes they sent it straight after the criminal's birthday. And they saw about, and it'd be worth double-checking this, but I think it was either three or fourfold increase in response rates when the message went out around people's, just after people's birthdays. So this is a situation in which, you know, this is a very (laughs) , very hard audience to change their behavior. Even amongst hardened criminals, using this timing technique of the fresh start effect can boost, uh, boost effectiveness.
- NANarrator
That's spectacular. That is really, really cool.
- RSRichard Shotton
It's really cool, and it's something... She, she talks about this in her paper where she says, you know, often, look at institutions that have lasted a huge time. Many institutions have realized this. So she talks about the Catholic Church. It's not necessarily relying on an existing fresh start. They created their own moment when people kind of sloughed off their past self and thought of themselves anew and therefore weren't, um, hampered by this kind of bugbear of consistency. So she talks about the confessional. You know, you go into that, you admit your sins. When you come out, you're a fresh person. Therefore, you're, you're o- it's open to change. You don't feel like you're being inconsistent, hy- hypocritical. So you can both harness this bias by targeting particular moments, but you can also harness this bias by creating kind of moments of, um, uh, reappraisal.
- NANarrator
What about
- 16:12 – 23:27
Are Loyalty Schemes & Incentives a Scam?
- NANarrator
uncertain rewards and loyalty schemes?
- RSRichard Shotton
Ah, okay, so if that's breaking a habit, you've then got all sorts of different studies into, well, how do you recreate, uh, a new behavior? And one of the most interesting ones is the one you mentioned, which is around uncertain rewards. So the origi- initial work for this goes all the way back to the 1930s and the kind of archetypal mad professor, a psychologist called B.F. Skinner. And what he does in his most famous bit of work is create these boxes. So he puts a rat into a box, or a pigeon, and there's a little lever in the box. The animal doesn't know what a lever is so, first of all, it just ignores it. But sooner or later, it will bump into the lever, and then out comes a sugar drop. So the rat will quickly learn to pump away at the lever to be rewarded with these sugar drops. Rats love a sugar drop. Skinner waits until the habit is embedded, they keep on pushing away at this lever and being rewarded with one sugar drop. He then turns off the sugar supply and then monitors how long it takes for that habit to decay. And it's remarkably quick. Very quickly, the rat becomes bored with the lever. Then he creates another set of boxes and puts in a fresh group of rats, and the boxes are basically the same apart from one variation. Now, when the rats press the lever, rather than always getting a single drop, sometimes they get nothing, sometimes they get one sugar drop, sometimes two, sometimes three. Averages out at one sugar drop per press, but there's this element of randomness, element of variability. When Skinner then turns off the sugar supply, well, then the rat keeps on pumping away at that lever for ages. The habit is deeply embedded. What Skinner said is if you want to create a habit, far better to reward the behavior that you want with an uncertain and variable reward rather than a fixed reward. Now, later work by people like Shen and Fishback have shown that exactly the same thing happens with humans.... we are more motivated by this variable reward than the, than the fixed one. Now, if you take this principle, you can then apply it to your, um, loyalty schemes, which are te- essentially schemes to try and generate habitual behavior by your shopper. What, uh, Skinner or Shannon Fishback would say is most loyalty schemes at the moment make a mistake. You know, what most loyalty schemes do is say, "You come to our coffee shop, you buy 10 coffees, and we'll give you a free one." You know, that is a fixed and certain reward. What they would say is, you can make that scheme far more powerful without spending any more money by adding a element of variability. You know, don't give out a transactional relationship of 10 coffees, one free reward. Instead, give your staff the option to give out roughly 10% of coffees for free. So I might go in 20 times and not get one, you might get one every five times. You know, there's an element of un- uncertainty. You know, that would be applying, uh, Shannon Fishback study.
- CWChris Williamson
Would that be the same as the McDonald's Monopoly stickers?
- RSRichard Shotton
Oh, go on. So, so what, so what do they do? Y- there, that's the, um-
- CWChris Williamson
So you-
- RSRichard Shotton
... is this the kind of interactions-
- CWChris Williamson
Yeah, you buy a Happy Meal, and on the side of a cup and on the side of the fries, I want to say, are, uh-
- RSRichard Shotton
Oh, yeah.
- CWChris Williamson
... double stickers and you peel them off, and sometimes it's a free McFlurry, sometimes it's a free whatever, and then you can also combine these together in order to build up a Monopoly board. Now if you want to go down a real rabbit hole with this, once everyone's finished watching this episode, there is an amazing documentary on YouTube just by a small creator. If you search, um, McDonald's lottery scam, and what it talks about is when McDonald's first released the lottery, it went absolutely wild, and they were very concerned around... They were, they were dropping, m- I think it was a million dollars or maybe... It was a lot of money, it was like, uh, at least hundreds of thousands of dollars that people could win with just one of these stickers. Uh, so they-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... they left one guy, one dude that used to be part of an advertising company in charge of this.
- RSRichard Shotton
(laughs)
- CWChris Williamson
So, they gave him the job of security. This guy who's always won-
- RSRichard Shotton
With all his m- uh, winning. Yeah. (laughs)
- CWChris Williamson
So, he gets in with the mob. He starts-
- RSRichard Shotton
Oh my god. Okay.
- CWChris Williamson
He starts, he, he, he becomes, uh, almost like a, a, a wannabe gangster because he's able to deploy all of these different... And they've got a sophisticated system. It's, um, people that are unrelated, cashing them in in different states, using different names, using different IDs, blah, blah, blah. But then when you actually look at where all of the money ends up coming back to, it's within a, a three-mile radius of his, uh, home postcode, or something like that. And, um-
- RSRichard Shotton
Oh.
- CWChris Williamson
... it's-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... it's just fascinating that it... This guy gets away with it for ages and ages, and the way that he gets away with it is he has McDonald's on the hook. It might not be McDonald's, I think it's technically the company that did the competition on behalf of McDonald's, uh, because they weren't following elements of security correctly as well. So, he ends up having something over them, and then he gets caught, and then... Oh, dude, it's really, really great story. But very, variable schedule reward, same thing that's happening-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... with social media, you open your phone, you don't know how many notifications-
- RSRichard Shotton
Ah.
- CWChris Williamson
... you're going to have, if you've got any DMs from someone that's cool or interesting or whatever. It's the exact thing that Instagram uses to
- 23:27 – 33:50
Using Ease to Change Behaviour
- RSRichard Shotton
... and Bergmann and Rogers, uh, run this wonderful experiment with the Department of Education in America trying to test the idea. So back in 2017, they launch this new service where parents can sign up and they will be texted information on how to encourage their children to work harder. They launched the service in one of three ways. First way is the, kind of what they call the standard way. People are texted information and they're told, "If you want to sign up for the service, just click on this link." The link took them to the form, 30 seconds of effort to fill in. And in that scenario, 1% of people sign up. Next group of randomly selected people, texted the same information about why the service is amazing, but this time they are told, "If you want to sign up, just text us back the word start." So they've removed about 30 seconds of effort, tiny, tiny bit of effort, and you get an eightfold increase in sign-up rates. Next and final scenario, another group of randomly selected parents texted the exact same information about why the service is amazing but they are told, "You are enrolled, if you don't want to be, text back the word stop." And you get 97% of people enrolling. So this removal of tiny bi- bits of friction changes the enrollment rates in this program by 96 percentage points. So it backs up Kahneman's idea that small bits of friction can have a disproportionate effect. But then comes the clever bit. The psychologists then go out and recruit 100 plus educational experts, teachers, head teachers, administrators. They tell those experts the setup, uh, of their three different scenarios, and they get the experts to try and predict what they think the sign-up rates will be in each scenario. Now, those experts aren't stupid, they know that friction will put people off. So they get the direction of change right, but they are wildly wrong in terms of the scale of the impact. So they think that about 35% of people will sign up in the standard variant, 45 or so in the simplified, 66, I think or so, on the auto enrollment. So they think there'll be a 21 percentage point change in behavior based on the removal of friction, whereas in reality it was a 96 percentage point change. So what they argue is that experts have the wrong model of human behavior, they underestimate the importance of friction, they overestimate the importance of motivation, and from that, they go and make the argument that this means that many businesses misallocate their resources. So too much time and, and effort goes into motivating an audience to want the product, too little time and, and effort goes into making it as easy as possible to get the, get the product.
- CWChris Williamson
That's brilliant. And I can also see from my, uh, history running nightclubs for a decade and a half, that some of the things that we used to do felt a lot like pressing on the accelerator as opposed to removing the brake.
- RSRichard Shotton
Yeah.
- CWChris Williamson
We would be doing things that would entice people to come down as opposed to asking the question, "Why are people not attending?" Like, why are people not attending? Is it that we need to make it easier for them to get from where they are to the nightclub? Do we need to put on party buses that can pick up 40 people at a time and give them a schedule of when they just need to be outside of their house? Do we maybe need to just run that without even asking them if they need picking up? Maybe they just need to be collected, that there's gonna be a bus at 9:00, 10:00, and 11:00 from outside of the student union and it will deposit you here. You don't need to sign up in advance, it's just first come, first serve, and it'll always be there. Something like that. We never ask those-
- RSRichard Shotton
Well, that's exactly... Yeah. That, that's, to me, that is a lovely example because I can imagine if you're working in the nightclub business and someone comes with an idea about bus schedules, you're like, "Oh my God, this guy should've been an accountant."
- CWChris Williamson
Not sexy at all.
- RSRichard Shotton
If they come with an amazing, uh, exciting creative promotion, you're like, "This is the person for me." What Kahneman says, this is almost like the kind of a Cassandra curse. It was actually the bus timetabling thing that would've been-
- CWChris Williamson
(laughs)
- RSRichard Shotton
... far more effective.
- CWChris Williamson
Should have been a s- working for Transport of London. Yeah.
- RSRichard Shotton
Yeah, yeah, yeah, yeah. And-
- CWChris Williamson
Wasn't there, wasn't there an equivalent that I read about a long time ago, it may have been from you, to do with pension contributions when people got raises?
- RSRichard Shotton
Yes. So there is a lovely example. So the Behavioural Insights Team did the work in Britain, I think 2013, 2012, and it's an amazing one. So up until then, this is a kind of a natural experiment, you had to do about five minutes of admin, so early 2010s, and then you would be enrolled in your company pension scheme. Y- And when that was the case, about 61% of people in large companies were enrolled. The government then make a change, which is everyone has to be enrolled unless they sign a form saying they don't want to be in it. So it takes about five minutes of work to get out of the pension scheme. Now suddenly within, well, sorry, within six months, uh, enrollment rates in those companies has gone up to 83%. That's a 22 percentage point change. Now remember, the government are spending tens of billions pounds in tax incentives to get people into a pension, and what turns out to have the biggest effect is not those tens of millions, billion- billions of pounds incentive, it is a tiny, tiny bit of admin. If you move it from having to opt in and spend time to get into the pension to opting out, you have a phenomenal change of behavior. So you're absolutely right, that would be a massive scale example of how these little, little bits of friction have a much bigger than expected, uh, effect.
- CWChris Williamson
I have no idea where I've pulled that study from, but I remember it, I remember it being lurking in the back of my mind. There was also something else to do with...... um, increases in pension contribution, uh, you try to suggest to workers, "You should give more of your pension next year," or something like that, and you got very low levels of enrollment. However, when people got a raise, you said, "We're going to give a higher percentage or, o- of this raise, just-"
- RSRichard Shotton
Yeah, yeah.
- CWChris Williamson
"... a little bit less raise is gonna come to you because a tiny bit more is gonna go to the pension." It was this unseen, as yet, unactualized extra salary portioned off a little bit more aggressively into pension and the uptake from that was way higher-
- RSRichard Shotton
Yes.
- CWChris Williamson
... as well.
- RSRichard Shotton
Yeah, no, that, that, that's a great one. So that is a, uh, Richard Thaler and Shlomo Benartzi, uh, idea called Save More Tomorrow. And what they talk about is this idea called present preference bias or present bias or hyperbolic discounting rate, which essentially means I've, m- anyone values, uh, pleasure in the now much more than pleasure in the, the future. So, and the same with pain. The point being if I, uh, lose f- if I t- if I'm told something's gonna cost me five pounds now, it's painful. If I'm told that something's gonna cost five pounds in a month's time, it doesn't bother me. You know, we, we act as if there is a very steep discount rate between now and the future. So what, yeah, what Shlomo Benartzi and Thaler did was say, with these companies, "Why don't you set up a scheme where you're not essentially asking people to put money into their pension now, you're saying, 'Will you agree to put money into a pension in a year's time?' We'll sign it, it'll come out automatically in a year's time." And people think, "Well, I don't care what happens in a year's time." I mean, you know, that's s- so distant, it's attenuated, it doesn't fiscally affect me. And that led to significant increases in, in pension contributions. So yeah, there's this whole host of bias. I think you, what you're, what you're getting to there is that there are so many of these biases. As long as you can match the right one to the challenge you have, you've got these really effective evidence-based tools to use.
- CWChris Williamson
Do you ever look at the other guys and girls that are in your industry, like the Thalers and the Sutherlands and the Schottens of the world, and look at yourselves kind of like wizards? Because you pretty much are.
- RSRichard Shotton
(laughs)
- CWChris Williamson
Like what it is that you're able to do is akin to alchemy or wizardry.
- RSRichard Shotton
Uh, I know, well, Roy Sheth has that wonderful phrase, I mean, his book, i- it's called Alchemy. Um, so I, I, I think that this is something that is available to everyone. I mean, the great thing is you have hundreds upon hundreds of psychologists, thousands upon thousands of psychologists working full time running studies that are then put into the public domain. So, if, if you run a business, you know, and you haven't got a giant research department, well, why not use the accumulated knowledge of, of all these psychologists? So, I think you're right, there is some very powerful work that other people have been creating. It is a crying shame not to harness, uh, th- these studies.
- CWChris Williamson
Okay, make it difficult.
- RSRichard Shotton
Uh, so what I argue make it easy is if you want to change behavior, the first thing you should think about is removing friction. What are the blockage stopping people put more time and effort? Think about those and getting rid of them.
- 33:50 – 49:29
Increasing the Perceived Value of Something
- RSRichard Shotton
However, there are nuances to these studies. And on some occasions, you might wanna add a tiny bit of, of friction in. So, if you want to change someone's perception of the value of your products, if you want to make people think this is a, a premium worthwhile product, then there is an argument for adding friction in. So, the study that's relevant here is from, uh, Dan Ariely. So he comes up with an idea called the IKEA Effect. And what he does, him and Michael Norton, they recruit a group of people and they show them a professionally made IKEA box and then they ask those people, "How much do you want to bid to take that box home with you?" And from memory, and I'll be a little bit out here, but let's say average bid is 40 cents. Next group, same process, bring them into the lab, show them an IKEA box, but this time it's not assembled, it's just in pieces on the floor and the participants have to build it themselves. These people then spend a bit of time putting the box together and then they are asked to, um, put a bid in for how much they'll pay to take this box home. And you see a jump, I think it's in the order about 60%. So I think we get up to about 70 cents is the average bid. Now, what Norton and Ariely argue, and they do this test in multiple different ways, they try essentially the same thing with origami birds, lots and lots of different experiments improve the same point. But what they argue is, the more effort someone goes to, the more they appreciate the product. So you have this slight tension. If you wanna change behavior, remove friction. But if the problem you have as a business is people think your product is a bit crap, maybe they think the cr- the quality is the problem, well, there, you might wanna think about adding a small, uh, dash of friction in. So, an example of this in practice, there is a lovely study which has real world, uh, implications by, uh, Ryan Buell, where he creates a, or works with a, a travel comparison site and gets thousands of people to look at, uh, searching for holidays. And sometimes the results are served up immediately, sometimes there is a very small delay and whilst there's a, that delay, for, you know, a few seconds, there's a little bar that goes round and round saying, "Searching Alitalia, searching British Airways, searching Delta Airlines." Now, when the two groups are asked to report back on how comprehensive they think the results are, the group...... that have the delay, that see the effort that's going on, they will rate that product as better. So, you can take this study in slightly abstract settings that Arielle and Norton have done. You can then apply it to your web design or your restaurant layout, you know, let people see into the kitchen so they can see the work that's going on. Then you can take some of these ideas and they can have a very practical, uh, set of implications for a brand.
- CWChris Williamson
I use Skyscanner a lot.
- RSRichard Shotton
Oh, yeah. Yeah, yeah.
- CWChris Williamson
Uh, they deploy exactly the same thing. "We're searching Air France, we're searching Air Lingus, we're searching KLM, we're searching British Airways." Are you telling me that that's all fucking performative?
- RSRichard Shotton
I'm saying that there is a... well, it'll be, it... if it's not, it's highly coincidental. There is a study-
- CWChris Williamson
(laughs)
- RSRichard Shotton
... from about 10 years ago on travel comparison sites which shows-
- CWChris Williamson
Wow.
- RSRichard Shotton
... if you purposely slow down the site, and you've gotta make sure people, uh, the effort they go into is visible-
- CWChris Williamson
Yes.
- RSRichard Shotton
... then that product-
- CWChris Williamson
They've diddled me.
- RSRichard Shotton
...
- NANarrator
Will have more people.
- CWChris Williamson
They've bloody diddled me. So, one of, uh, my, my old business partner for the nightclub stuff, one of his housemates-
- RSRichard Shotton
Hmm.
- CWChris Williamson
... is a, uh, quantitative analyst, uh, freelancing.
- RSRichard Shotton
Yeah.
- CWChris Williamson
And he's been brought in by people like Lloyd's to, uh, do all manner of complex analysis that, uh, to them, apparently is just total cutting edge stuff, whereas to him is, he can do it in his sleep. He's a smart guy. And, um, he created a spreadsheet. He needed to create a spreadsheet in order to be able to do this presentation for them. He's presenting this, finally, the culmination of maybe six months of work by him, uh, as this consultant. And he created... he spent, he said, at least a full day learning how to artificially render loading bars in Excel, and he did it for exactly the same reason, that he pressed a button and Excel just... it's numbers, right? It's not, it's not computing the world. It's not trying to calculate the trajectory of the sun. It's trying to work out that how much money's left in the bank account. Uh, and apparently it would just ping, it would do it instantly, but he artificially added in this computational-
- RSRichard Shotton
Yeah. Yeah.
- CWChris Williamson
... effort with a, with a loading bar. And he even managed, I think he managed to get it to get almost to the end and then it would stop for about five seconds, uh, as if it was really having to turn the cogs of the, the processing power within the computer or whatever.
- RSRichard Shotton
Yeah, yeah, yeah, yeah, yeah. Yeah.
- CWChris Williamson
And then bink, and then it would arrive. And yeah, you can feel you're on the edge of your seat. You know, you're waiting for the, the... comparethemarket.com do-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... exactly the same thing.
- RSRichard Shotton
So you've got, so you've got two tactics I think that you can apply here. You've got make your customer go to a little bit of effort, and you've got to be careful to do it at the right time and not do it willy-nilly, you know, f-f-focus few moments. But this is essentially like the wine cork, you know, someone has to spend physical effort getting into the bottle, it makes them feel like this is a high premium item. So, getting your consumer to go to a bit of effort boosts quality perceptions, that's the IKEA effect. And then I think you've got this other bit which is very related, which is if the consumer can see the efforts you've gone to, they appreciate it more, and sometimes that's kind of moving to this idea of the illusion of effort. Now, my favorite example of that is probably Dyson. So if you think about what is the repeated PR story of Dyson? It's the fact that he went through 5,187 prototypes before he got to his vacuum. Now, if consumers were completely logical, rational decision makers, it wouldn't matter. Doesn't care if he's gone through one or a million prototypes. What should matter is the quality of the product itself. But what people like Eva, uh, uh, Morales say is that's how people should behave, but behavioral scientists are interested in how, how people actually behave. And working out the quality of a product is a very time-consuming and difficult thing to do. Working out how much effort that product has been to, that is the, uh, much easier to, to take in. And what people often do is when they're faced with a complex, difficult calculation which gives them an ideal answer, is they, almost without knowing it, replace that calculation with a simpler and almost as accurate question. So people perhaps should be asking, "How high quality is this product?" Because that's tricky, they end up saying, "How much effort do I think that brand has gone to?" And they use that as a proxy f-for, for quality. So the argument to, um, service providers like your friend or to brands is not to fictitiously invent efforts, because most people go to them, but it's to make sure your client or the consumer knows you've been to them. Be much, much more transparent. Make sure you, you, you tell them.
- CWChris Williamson
I can't remember who it was that I was speaking to that used the example of bags of flour and, uh, precooked breads in the windows of Italian restaurants.
- RSRichard Shotton
Oh, go on, yeah.
- CWChris Williamson
Just that it is, you know, especially if it's artisanal flour that's been ecologically sourced from the-
- RSRichard Shotton
Okay, yeah, yeah.
- 49:29 – 57:55
The Generation Effect in Behavioural Science
- CWChris Williamson
All right. The generation effect. What's that?
- RSRichard Shotton
So, the generation effect, uh, 1970s start, I think it might have been 1978, two Canadian psychologists, uh, Graf and Slomeck, are at the University of Toronto, recruit a group of people, they give them a long list of words. The first half get, let's say, cat, fish, dog, weasel, elephant. They're given this list of words, then they, they can read through it, it's taken away, and they try and later on recall as much as they can. Next group of people get essentially the same list of words, but rather than it being CAT, it's C blank T, then it's D, O, blank. Then it's... I'm not gonna try and spell weasel and elephant. Um, but it's just the, uh, all the words with one or two letters missing. When that group try and recall the phrases a little bit later, they remember between 10 and 15% more. Now, the psychologist's argument is that the second list of words is more memorable because people have to generate the answer themselves, hence the generation effect. And it's that act of creation that sticks the idea in, in people's minds. So there you have this fascinating tension again with advertising. You need to create an ad that is easy enough for people to understand, they don't just walk on by, but if you don't give any role for the consumer then it's very forgettable. What you really want to get is this kind of, uh, this balance of ease and difficulty again. So some people have applied that in a very pedestrian way. Um, you know, there was a, there was an ad for, um, cancer research, I think, where it said the second biggest cause of cancer is O, B, blank, S, blank, T, Y. That's the generation effect. You know, it's a very literal, um, use of a well-known psychological experiment and it will have very positive results, it'll stick in people's minds. But when it is done really well is when, I think, people apply these experiments with a bit of creative flair. So you go back to, um, 1980s, 1990s, and you think about the classic Economist ad. You know, "I never read The Economist." And at the bottom it said, "Management trainee, age 42." Now that, I think, is a lateral application of the generation effect. What David Abbott, the writer of the, the poster was doing there was not directly stating, "You are a failure if you don't read The Economist," he was setting up this interesting, amusing, and reasonably simple puzzle the, uh, viewers had to solve. And by solving it, they're essentially generating the answer and that makes it sticky, that makes it memorable. So you've got this literal application by cancer research, gre- you know, great ad, but where I think you get to the real brilliant ads is when people are doing it with this, um... They're harnessing the general insight of the study, they're not sticking to it, um, completely literally.
- CWChris Williamson
Y- That's beautiful. Like, I, I... That, that idea, the subtext of a 43-year-old management trainee, somebody that is floundering in their career, they should be-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... further along than now. Uh, still, it, it... There's even, "I don't read The Economist," or, "I never read The Economist," there's something kind of snooty and self-righteous about it as well, "I already don't like this 43-year-old management trainee."
- RSRichard Shotton
Yeah.
- CWChris Williamson
It's just... It's g- It's gorgeous. It's like a razor-sharp incision of, of a bunch of different memes.
- RSRichard Shotton
Y- Y- Well, that's what I think. I think that idea of it being multiple things at once is, is, is brilliant. So you've got this generation effect of the audience answer, uh, c- coming up with the, uh, the, the, the solution, as it were. You've got this distinctiveness, you know, most brands never go out and say, "Do not buy me." So firstly, that grabs your attention. And then I think the third and final point is, at least, I think we might have heard Rory Sutherland say this, is that often you can get across a slightly, uh, unflattering or not very nice message with a dash of humor. You know, the underlying message in The Economist is a little bit nasty, it's, "You're a failure if you don't read our product." But they manage to say it with a bit of charm, which means that they can convey that slightly mean message without offending people. So yeah, I think there are lots of strands in that particular ad that make it so good.
- CWChris Williamson
Can you ask questions to trigger the generation effect as well?
- RSRichard Shotton
Yes. Um, there is a, uh, an... I think it's Ahluwalia study which shows, um, if you pose a statement as a question, it tends to boost credibility and believability. However, I think the, the kind of slight complication was the success of that depended on the, um, prestige the brand was held in. So if the brand is admired, it works very well. If the brand is low status or unadmired, it works quite badly. Which I think-
- CWChris Williamson
What's an example of that?
- RSRichard Shotton
So, um, I think the, the sentence he has kind of in his study is something along the lines of, you know, "Did you know Avanti shoes can, um, reduce osteoporosis?" I, I've not got that quite right. Other times, the other half of people in the study just saw a statement, "Avanti shoes reduce osteoporosis," and he found, uh, if there had been preceding positive information about Avanti, th-... big boost by using the question. If he had run some n- people had seen negative information about this fictitious corporation, the question often backfired.
- CWChris Williamson
Oh. So it's mediated by how the-
- RSRichard Shotton
That's wh-
- CWChris Williamson
... how well the brand's per- I mean, I think a lot of these questions as well, if you're going to, um, use a very cool, slightly effortful advert with, you know, some blank spaces in where someone's got to fill it in, that, for instance, The Economist advert works because The Economist is an institution. It wouldn't work for edition one of-
- RSRichard Shotton
(laughs)
- CWChris Williamson
... the new Businessman Monthly, perhaps.
- RSRichard Shotton
Yeah, or, or maybe it wouldn't, it would work for both those brands, but it wouldn't work without, uh, David Abbott's copywriting skills. You know, you could imagine someone trying to pose essentially the same point in a slightly, in a pedestrian, pedestrian way, and it flopping. Which to, to me is one thing it's worth stressing about behavioral science. I would always take the approach that these experiments are just h- and, and insights are just hypotheses about human nature. It's just half the task. What a marketer or an entrepreneur needs to do is then take the insight-
- CWChris Williamson
Mm-hmm.
- RSRichard Shotton
... and then they need to, uh, apply a dash of creativity. So if that sounds a little bit wooly, one of my favorite examples that I've come across, a few took from separate sources, a few separate sources recently, is around a creative use of social proof. So social proof is the argument that we are deeply influenced by the people. So what most br- so if a brand looks like it's popular, it will become more popular still. What most brands do to, to try and harness that idea is to say, "We have a million customers. Nine out of 10 people use our product." That's the kind of literal interpretation. What I'm saying is, that's just the start. What you need to do is think about how can you can apply this idea a bit more creatively. How can you imply popularity without directly saying it? And my favorite example at the moment is Red Bull when they launched. Uh, you'll like this, it was around nightclubs. Supposedly when they launched, they go and find nightclubs, uh, and then they crush up loads of empty Red Bull cans and stick them in the litter bins around the nightclub. So that when people come out, they see these, you know, bins full with Red Bull and they assume that everyone else in there was massively energetic 'cause they'd had a couple of Red Bulls. So it made it feel like it was a popular product amongst that, that, that group. That's supplying social proof, I think in a truly, truly creative way.
- 57:55 – 1:04:10
The Behavioural Science of YouTube Thumbnails
- RSRichard Shotton
- CWChris Williamson
One area that I would love one of the guys from Behavioral Science-
- RSRichard Shotton
Ooh.
- CWChris Williamson
... to get in- to get into would be optimizing YouTube thumbnails and titles. So this is the world that I live in, right? This is my currency for at least o- one part of the show. I need to get people to click on the video.
- RSRichard Shotton
Yeah.
- CWChris Williamson
CTR, click through rate percentage, how many people get shown it versus how many people click on it, and watch time, so retention. Retention and watch time is down to the editing, it's down to the first five to 15 seconds of the video, it's, uh, there's a number of things that go into that. But the way that not only your title, title length, are you posing a question, are you using punctuation in an interesting way, are you using the Zeigarnik effect to create open loops, how does this relate with the text that's above it, um, i- that is if there is not a behavioral science competent team applying these insights to optimize thumbnail and titling for larger YouTube creators to give those insights, th- there is a huge agency opportunity available there. Because the MrBeasts of the world and the PewDiePies of the world, and the guys that are at the, the absolute, absolute top, they will be doing this. I know that MrBeast spends between 10 and $30,000 on each thumbnail. He has hundreds and hundreds of thumbnail options for every different video.
- RSRichard Shotton
I do.
- CWChris Williamson
Um, and then when it comes to titling too, he'll have reverse engineered... I mean, I know for instance that the average number of characters in the top video of your suggested feed is going to be 44. So it's 44 characters long is the average number, um, y- the use of words that invoke a powerful or aggressive response, words like war, battle, um, uh, uh, shock, um, these are sort of things that cause people to click. But generally, I mean, this is-
- RSRichard Shotton
Okay.
- CWChris Williamson
... both for brands and for creators, uh, is an incredibly important thing to get right. Okay, I have this amazing piece of content, I've worked incredibly hard on it for a long time, and I'm being defeated by CTR and watch time. It's like I can't get people to click on it, and I can't get people to stay with it. This is one of the reasons why, uh, Fast & Furious 9, if you look at the pace of the cuts in F9, it is unbelievably quick. And if you think about the pace at which people swipe through TikTok, it's like swipe, swipe, swipe, swipe, swipe. It's more than once a second, and that pace that you move at is the pace that people are becoming used to. So MrBeast, his most recent video where he cured 1,000 people's blindness by paying for their cataract surgery, that employed a new tempo of cuts within the edit. I'm not actually sure, I'm sure he'll speak about it at more length, but yeah, he, he tweeted about it a couple of days ago. Um, so that, I mean, he's always using eyes to camera. He's, uh, focusing very heavily on blues. There's almost always a red somewhere in there, the use of arrows, especially red arrows is something that causes people to click. So there are all manner of different bits and pieces going on here that will be grounded in stuff that probably already exists. But it's such a new format, and given that YouTube is the number two search engine in the world after Google, and it's so high volume, uh, first off, selfishly, I don't want to have to reverse engineer this stuff myself, so someone should write a book on it, uh, behavioral science for YouTubers. Uh, but also, there would be, it, it, it's just a, a fascinating new medium to deploy all of this through.
- RSRichard Shotton
Yeah, so I mean, that's fascinating. I think the, what, what the, uh, the behavioral biases are essentially, I think stimulus to come up with ideas to solve some of those problems, so it's the ones that might be relevant. Uh, there's a lovely idea, one of my favorites, um, called the illusion of control, and it's by Ellen Langer, who was a Harvard psychologist back in the '70s. And it's 1975, she goes round an office block and she tries to sell people lottery tickets for $1. Half the people just are given the lottery ticket for a dollar, and they are given their numbers, there's no choice. Half of them get to pick their numbers. She then waits a week, and then just before the draw for the lottery, she goes back to the office and she tries to buy back those tickets. Now, the first thing she finds is that everyone wants more than they paid. So there's an idea called the endowment effect, once we own it, we value it more. But that's not what she was studying. She wanted to know the difference in valuation between the two groups. The first group who had no choice, on average they want eight- uh, $1.96 to sell their ticket back, but the group who got to pick their numbers, they want $8.67. So there is a fourfold variation in the valuation of what is quite obviously a commodity. Langer's argument is one of the biggest drivers of our, um, uh, of our behavior is the desire for a sense of control, for a sense of agency. So even if you give someone a completely meaningful, uh, a meaningless or superfluous choice, it will make them value whatever they pick that much more. Now in my world of thinking about how you get people to buy things or change their behavior, you can take that principle and you can apply it to your promotions. So you could say, well, what most brands do is say, "You buy this product and you get this reward." Well, Langer would say, "That's a mistake. You should give people an option of two things." So maybe it's a free pizza or a car wash. Even if 100% of people pick the pizza, there is still a value in offering the car wash. It's very presence allows people to choose, and because they have picked it, they value that, that pizza more. So I wonder with some of these, um, uh, attempts to encourage people to engage is, is that, is giving the audience maybe some degree of choice. It doesn't have to be meaningful, it could be whether your background is blue or red, or you're gonna launch on a Tuesday or Wednesday. The more ch- the more you can get them to feel like a sense of control, the more, uh, likely it is they will appreciate the product.
- 1:04:10 – 1:12:54
Explaining the Keats Heuristic
- RSRichard Shotton
- NANarrator
The Keats heuristic.
- RSRichard Shotton
Keats heuristic. Uh, so that is a idea that, uh, phrases that rhyme are more believable. So study done in 1999, I think a follow-up maybe 2000 by Matthew McGlone, uh, and I think, and apologies if I'm pronouncing this wrong, Jessica Tchokobash. And what they did was give people lists of pseudo-proverbs. So we would both get a list of proverbs, and on your list you might see something like, um, what might you get? Um, uh, I don't know. "If you drink, it will help you think." And I might get, "If you drink, it will help you ponder." Now that isn't actually one of their examples, that's pretty naff, but that's the basically what they did. You know, it's exactly the same sentiment for the fake proverb, but one of us gets it in a rhyming form, one of us gets in a non-rhyming form, and they give out loads of these different lists with lots of different variations. So essentially they can compare how believable the proverb is when it rhymes, how believable is it when it doesn't rhyme, and they see a signif- statistically significant increase in believability and belief in the accuracy of the proverb if someone got it in a rhyming variation. Now fascinatingly, going back to what we were talking about at the very beginning, if they say to people, "Look, you rated all these different proverbs. Do you think you were influenced? Do you think you picked the rhyming ones because they rhyme? Do you think they said they were accurate?" And I think it's one person in the entire study says, "Yeah, that might have influenced me." Everyone else says, "Oh, no, no, definitely not." But by her dispassionate, you know, A versus B test, she sees rhyme does have an effect. Now I was interested in this for a couple of reasons. Like firstly I thought, "Well, that's really interesting, but advertisers don't just need to boost believability, they also want to boost memorability." So we reran that study and we gave people these long lists of fake proverbs, s- half of which rhymed, half of which didn't. We then invited them back, uh, in the evening, so they looked at them in the morning, then came back in the evening, and we saw people were about twice as likely to remember the rhyming phrases as the, uh, non-rhyming ones. It was about that order. Forget exactly the, the, the swing. But what's fascinating there is you've got this set of experiments which shows rhyming phrases are more believable and more memorable, yet if you then go and look at the, uh, regularity with which businesses use, advertisers use rhyme, it has been in massive long-term decline. It was a phenomenally common tactic 50 years ago. Um, you know, Pringles in the '80s, "Once you pop, you can't stop." Uh, Haig in the 1930s, "Don't be vague, ask for Haig." You know, Mars a day helps you work, rest, and- work, rest, and play. You know, again and again we see rhyme being used, but if you think of the last 10 or 15 years, it has almost disappeared. I did a study looking at ads over the years, and it drops to about 10%. So what's interesting here is you've got ad- uh, advertisers, or at least the people creating the ads...... ignoring a technique that is very effective, and then I think you have to ask, well, why is that the case? And my thought, often, uh, drawing here on, uh, Taleb's work, is that if you pay an expert and you don't reward them, um, directly, so the agency is not rewarded, uh, according to whether you sell a product or not, if they're just given a, uh, a payment for their, uh, advice, what tends to happen is it leads to complexity. Because if you are a consultant or advisor, you know that if you give very simple but effective advice, you'll get fired, 'cause it sounds obvious. So what, what ends up happening is you build an increasingly complex, uh, model to, uh, e- e- explain and, um, and make recommendations because it's that sense of sophistication that justifies your fee. So I'm fascinated here, not just by the behavioral science showing the effect on the end consumer, I'm fascinated by the, uh, fact and the, uh, system which means this tactic is very, very rarely used.
- CWChris Williamson
The internal machinations of the advertising industry are pretty fascinating.
- RSRichard Shotton
Yeah, and, and, and, you know, that's the area I'm interested in, but the same would be true I think for any service industry. Um, you know, if you are a consultant who sends a one-line email that saves your com- uh, the, the, the company hundreds of thousands of pounds, it will be very hard to justify a massive fee 'cause it looks so simple and so easy and people will begrudge you. If you produce a 100-page report and have, uh, loads of people running around creating the, creating that report, it's easier to charge a large amount. So there's a, there is a tension between what's a, what creates effective solutions and what is in the interest of the agency or consultant who is supplying those, those solutions.
- CWChris Williamson
Was it Ogilvy that did the thing to reduce complaints of wait times at security at London Heathrow?
- RSRichard Shotton
Oh, no, so I don't think so. Um, I th- oh my gosh, that was, uh, I think I saw it first when it was reported in the, in the, it was in a Houston airport, I think, so I think it predates, and I'm pretty sure it's kind of a story going around in, in America, reported in The New York Times, so reasonably th- uh, accurate, that at Houston airport people were landing, uh, minute walk say to the baggage carousel and then a, a seven-minute wait.
- CWChris Williamson
Mm-hmm.
- RSRichard Shotton
And after a long flight, they got annoyed quickly and they started to complain. So what the airport did was try and reduce the wait but found it wasn't really possible, so rather than keep on spending more and more money on a fool's errand, instead of sending the passengers directly from passport control to the baggage carousel, they just sent them on a kind of six-minute walk zigzagging across the airport with this, you know, fence laid out so they couldn't go there directly, uh, and so people, by the time they got to the baggage carousel there was only a minute wait, and complaints plummet. And the, and the argument was we treat occupied waits very differently from unoccupied waits. So we're not bothered if we're walking, but if we're standing staring at a baggage carousel, then it's deeply, deeply frustrating.
- CWChris Williamson
I think Rory missed in his Transport for Humans book, uh, something that we could have done with regards to this, that I would like way more options on Google Maps from getting from point A to point B. For instance, I will opt to drive a route that puts me in less standstill traffic but takes longer to get home if I'm going home at a time where there might be a little bit of, uh, o- other drivers on the roads, because for me it is existentially less painful to go a route that takes 10 minutes longer and maybe five miles further, however one that I know I'll always continue-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... to move along, as opposed to being in standstill traffic, even if it's both shorter and quicker. So I would like to opt for the route that has the highest average speed perhaps.
- RSRichard Shotton
Ye- yeah, yeah, yeah, yeah. That also, so that, that I, uh, um, so I live in London so far less driving 'cause it's just painful, but my view would be to get to another place in London, it's not just the time I'm interested in, I'm interested in the fewest possible changes. Because if I have to walk to, uh, get on a bus then change the Tube then change to another line then get on a train, I can't sit and relax. If it is a single train which takes longer and then there's a long walk and I've only got one change of mode, I would massively prefer that. Absolutely right, there is a f- I think Rory's book with, um, Pete Dyson is, is brilliant looking at some of these areas, that all the systems that transport providers have created optimize to shortening time when there are many, many other factors that, that, that would, um, make a journey more pleasant.
- 1:12:54 – 1:17:30
The Power of Concreteness
- RSRichard Shotton
- CWChris Williamson
Concreteness.
- RSRichard Shotton
Oh, w- a lovely bias. So, uh, the study here comes from a, a Canadian psychologist called Ian Begg. So back in 1972 he, uh, was working at the University of Western Ontario, recruits a group of students, uh, 25 of them, and we'll come back to that, and he reads out a list of 22-word phrases. Now the phrases are all jumbled up, but 50% of them are what he calls concrete phrases, so things like square door or white horse. The other 50% are what he calls abstract phrases, so things like subtle truth or basic fact. The students read through these lists of words and then the words are taken away and Begg ask people to recall as much as they possibly can.... and his key finding is that the students remember 36% of the concrete words, 9% of the abstract words. So there's a massive four-fold change in memorability. Huge change. Now remember, some of these studies we're talking about are eking out 5 or 10% improvements. This is a massive four-fold change. His explanation is, according to Begg, vision is the most powerful of our senses. So if you can picture a, um, a word, now if I say square door, a square door pops into your mind, almost unbidden. If you can picture it, it's sticky, it's memorable. But with an abstract phrase that you can't picture, it's very, very forgettable. So the tactic that communicators should use is think, well, work out what you want to convey to an audience, and it might be an abstract benefit, but you have to translate that abstract benefit into very concrete, visualizable language. So if that sounds a bit vague, best example that I know of is Apple iPods. Every other brand that they were competing with, all these MP3 players, they, um, had the abstract benefit of memory that they wanted to convey. But the way they conveyed that was in abstract terminology. You know, Philips and Samsung would talk about 215 megabytes of memory. Completely abstract, completely forgettable. What Apple did was convey that same abstract benefit of memory, but using very concrete, visualizable language. You know, a thousand songs in your pocket. You can picture a pocket, that makes it sticky, that makes it memorable. So currently, businesses are communicating abstract objectives in abstract language. They need to change and translate those ab- that abstract language into something far, far more concrete.
- CWChris Williamson
You need to get customers to be able to easily imagine using your product.
- RSRichard Shotton
Yes, yeah, absolutely. So you say oh, you need to be able to get them to easily imagine your product, first of all, and imagine the benefits, 'cause people, you know, Samsung probably, or Philips, whoever, probably put a picture of their MP3 player, but people wouldn't remember the, the benefit of the 215 megabytes of memory. So Apple's genius was turning that benefit into something that's visualizable. There are separate studies which are right, uh, there's a guy called Ryan Elder who's come up with these ideas of perceptual fluency, where he argues if you can get people to imagine using your product, and it's a pleasurable, enjoyable product, they, the purchase intent will increase. So he did this, uh, bizarre study where he shows people pictures of cake and the fork on a plate, so the cake's on a plate, and the fork's either on the left or right, and he asks people to say whether they would be interested in buying that cake, how delicious does it look? The twist in the experiment is half the people see the fork on the left, half on the right, he then questions people a- to their handedness, if that's a word, whether they're left or right-handed, and what he finds is if the fork is in the place where you would normally leave it, so I'm a right-handed person, I'd normally leave the fork to the right, uh, purchase intent goes up about 30-ish percent. His argument is you're just removing a bit of friction, you make it easier to imagine eating it, that gives you a chance to, uh, mentally experience some of the benefits, that entices you in. Even that tiny, tiny bit of friction, um, can, uh, change, change levels of, of desirability.
- 1:17:30 – 1:28:56
Are Stories Better than Statistics?
- RSRichard Shotton
- CWChris Williamson
What about stories over statistics?
- RSRichard Shotton
So the, the argument here is, um, I think the, the study was by Paul Slovic at the University of Oregon. He came up with this idea called the identifiable victim effect, which is probably the only bias that is supported by both Stalin and Mother Theresa. And in his study, it's a beautifully designed study, he recruits people under false pretenses. So they, they think they're doing, like, let's say some maths puzzles, that's the psychological experiment. They finish the study and then he says, "Oh, before you go, um, read this from our sponsors. It's a message from Save the Children, and if you're interested you can donate some of the fee, I'll give you $5," or whatever it was, um, "You can donate some of your fee to that charity." Half of the participants hear about malnutrition in Mali, h- uh, 100,000 people affected, lots of statistics. The other half hear about the story of a single girl called Rokia. And what Slovic shows is more people donate when they hear the single story, and they donate on average more money. So his argument is, i- i- it's hard to conceptualize or visualize a statistic. Now I can't picture a million people, I can't picture 100,000 people, so it leaves me cold, but that description of that single girl suffering, that is easily relatable. That is visualizable. So I think, you know, a lot of these biases you start to see, you s- see interlinking.
- CWChris Williamson
That one definitely comes up in podcasting as well. So...
- RSRichard Shotton
Oh, go on, yeah.
- CWChris Williamson
When it, when it comes to trying to convey any sort of story, I mean, you're phenomenal at this because every single concept, every single statistic that you try to put across comes with an analogy, it comes with a story, and it causes people to be invested. When I first started doing this show, you know, when you first came on four years ago, maybe even longer, uh, five years ago now, um, I was adamant that what you wanted to try and achieve in a podcast was to ruthlessly index information and to kind of high pressure hose it into peoples' ears, which-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... I didn't realize at the time, but basically makes you a slightly more conversational book summary service, which isn't what you're here for.
- RSRichard Shotton
Yeah. Yeah. Yeah.
- CWChris Williamson
What you're here to do is to get exactly what can't be conveyed within a book, what can't be conveyed within a summary, and that's a vibe.... so, I, I've, uh, taken to referring to podcasters as vibe architects. Like, you're just here for a vibe. And Adam Mastriani, who has a phenomenal Substack called Experimental History, which you would adore, uh, he did a take down of peer review recently, he, uh, decided to completely pirate a study that he'd done and just release it on the internet in a PDF, bypassed all the journals, all the peer review, and just said, "Look, you can have a look. Here's all of the data, you can reassess everything. Just put it on-
- RSRichard Shotton
Yep.
- CWChris Williamson
... put it online." He's phenomenal. Uh, and he, uh, wrote a post lamenting why we forget all of the things that we learn. You know, you go through... I, I, I made an analogy about accounting, I did first year accounting when I did business at uni, uh, and I can remember that one of the five principles of accounting is prudence, and I can't remember what it means, I, I don't understand what prudence-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... means in an accounting context, the numbers are the numbers, I don't underst- I don't know what the-
- RSRichard Shotton
I'm not a good student. Yeah.
- CWChris Williamson
... what the other four are, uh, but I, I just have this... and he was like, "What you have is this word sort of floating around in the back of your mind." But what I can remember, the vibe that I can remember, is getting on the bus to uni, on the morning of the exam, and speaking to my housemate, who was, uh, less prepared than me and I felt very underprepared.
- RSRichard Shotton
Yeah.
- CWChris Williamson
And the vibe that I remembered from that interaction, and that exam overall, was, "Wow, no matter how underprepared you think you are, there is still way further to fall."
- RSRichard Shotton
(laughs)
- CWChris Williamson
"And for the most part, you're gonna be in the middle of the bell curve of whatever it is that you're doing." That's the vibe-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... that's the lesson that I took away from it. I can't remember anything, I did, uh, AS and A level business, then a f- three year business degree and a one year masters, still don't remember the five principles of accounting, but I took that away.
- RSRichard Shotton
Yes.
- CWChris Williamson
And for me, that's the same as stories. You know, it's the reason that if you look at, uh, Morgan Housel's The Psychology of Money.
- RSRichard Shotton
Oh, what a book. Yeah, yeah.
- CWChris Williamson
Just outstanding. But he-
- RSRichard Shotton
Yeah.
- CWChris Williamson
... he's talking about what is an unbelievably dry topic, uh, f- for quite a lot of, you know, there's only, I think, maybe 15, between 10 and 15 chapters on principles or whatever, might even be eight, uh, across the entire book, and it's a big book, ish. Uh, but it just falls by because you're learning about Warren Buffett when he grew up and you're learning about... You know, all it is is just easy, easy, easy stories.
- RSRichard Shotton
Yeah.
- CWChris Williamson
So...
Episode duration: 1:37:36
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