Category: Excerpts

💎 Consumers systematically prefer a large percentage to a small percentage (bonus pack vs. price discount)

A price discount of 20% is economically equal to a volume increase of 25%. Chen et al. (2012) discovered that consumers err when calculating percentages and tend to ignore the base value the percentage refers to – an effect coined “base value neglect.”

The researchers observed that consumers systematically prefer a large percentage to a small percentage. This means consumers prefer a bonus pack to an economically identical price discount when both are expressed as percentages. Vice versa, consumers also prefer a size decrease to price increase when presented as a percentage.

In a field study, Chen et al. (2012) sold a hand lotion either at a 35% price discount or as bonus pack with 50% more content in a small retail store. After 16 weeks of promotion, the researchers observed that the bonus pack promotion sold 81% more units per day than the price discount promotion.

Excerpt from: The Psychology of Price: How to use price to increase demand, profit and customer satisfaction by Leigh Caldwell

💎 The need for writers to show, not tell (C.S. Lewis)

The findings Bergen describes also suggest the reason writers are continually encouraged to ‘show not tell’. As C.S. Lewis implored a young writer in 1956, ‘instead of telling us a thing was “terrible”, describe it so that we’ll be terrified. Don’t say it was “delightful”; make us say “delightful” when we’ve read the description. The abstract information contained in adjectives such as ‘terrible’ and ‘delightful is thin gruel for the model-building brain. In order to experience a character’s terror or delight or rage or panic or sorrow, it has to make a model of it. By building its model of the scene, in all its vivid and specific detail, it experiences what’s happening on the page almost as if it’s actually happening. Only that way will the scene truly rouse our emotions.

Excerpt from: The Science of Storytelling by Will Storr

💎 The negative impact of multitasking on productivity (benefits of having a clear schedule)

One nice recent study involved 218 Dutch students being asked to solve a Sudoku puzzle and complete a word search in a fixed time of twenty-four minutes. Participants in the experiment were randomly as signed to one of three treatments: one where they were forced to multitask; one where they could organize their work by freely switching between the Sudoku puzzle and the word search; and one where they performed the tasks sequentially. They were awarded points for each correctly filled Sudoku cell and each word found. The total points scored were lowest in the first group and highest in the third. 35 These results suggest that having a clear schedule of work is better for productivity So multitasking might sound cool, but it actually makes you a fool.

Excerpt from: Happiness by Design: Change What You Do, Not How You Think by Paul Dolan

💎 Lotteries to get shoppers to stop firms avoiding tax (gamification of taxes)

As early as 1951, the Taiwanese government sought to address this problem by doing two things. First, it unified all receipt and invoicing platforms into a central system, which meant that all businesses which gave out receipts would automatically send the unique receipt numbers and invoice amounts to the government for tax reporting. (In fact, in Taiwan most people don’t need to hire accountants to do their taxes – the government can directly tell you how much you owe them or how much they should return to you).

But the second step is where we see true innovation. The Taiwanese government turned each receipt and invoice number into a lottery ticket for citizens to play. For every odd-numbered month, citizens can see if their receipt numbers match the winning prize. The first place would win the equivalent of $62,000 – about five years of salary for an average new college graduate, while the second place would win $6,200, with subordinate prizes scaling all the way down to $7.

Because of this “Uniform Invoice Lottery” system, consumers are now demanding receipts and invoices from businesses, preventing the business from evading taxes by exchanging cash under the table (or purchasing with Bitcoins). In addition, consumers are more likely to spend money.

Excerpt from: Actionable Gamification: Beyond Points, Badges and Leaderboards by Yu-kai Chou

💎 Beware simplistic attempts to change behaviour (Mexico City and air pollution)

At the same time, we should be open-eyed about the challenges we’ll face as we make that shift. Take this example from Mexico City: City officials in 1989 banned the general public from driving one weekday per week, based on the last digit of their license plates. The intent was to encourage use of mass transit options and thereby improve air quality. It was a noble upstream effort to prevent air pollution.

It didn’t work. Many Mexicans bought a second car often an old clunker, to keep costs down—so they could drive every day. Air quality did not improve.

Good intentions guarantee nothing.

Excerpt from: Upstream: The Quest to Solve Problems Before They Happen by Dan Heath

💎 The need for cognitive diversity (Allen Shawn)

A species in which everyone was General Patton would not succeed, any more than would a race in which everyone was Vincent van Gogh. I prefer to think that the planet needs athletes, philosophers, sex symbols, painters, scientists; it needs the warmhearted, the hardhearted, the coldhearted, and the weakhearted. It needs those who can devote their lives to studying how many droplets of water are secreted by the salivary glands of dogs under which circumstances, and it needs those who can capture the passing impression of cherry blossoms in a fourteen-syllable poem or devote twenty-fwe pages to the dissection of a small boy’s feelings as he lies in bed in the dark waiting for his mother to kiss him goodnight. … Indeed the presence of outstanding strengths presupposes that energy needed in other areas has been channeled away from them.

– Allen SHAWN

Excerpt from: Quiet: The Power of Introverts in a World That Can’t Stop Talking by Susan Cain

💎 If you provide a price or quote best to leave out the comma (it makes the number look smaller)

To manipulate the number of syllables of a given price Coulter, Choi, and Monroe (2012) introduced a comma into the same four-digit price and let it mention in a radio commercial as, for example, $1,645 (one thousand six hundred forty-five: 9 syllables) vs. $1645 (sixteen forty-five: 5 syllables). Then participants were asked to rate the magnitude of the price on a 10-point scale.

Participants rated the magnitude of the price with the comma higher than the same price without a comma.

Excerpt from: The Psychology of Price: How to use price to increase demand, profit and customer satisfaction by Leigh Caldwell

💎 Drowning in maths and starving for ideas (data is not enough)

  • Do you think Coke has data that Pepsi doesn’t have?
  • Do you think McDonald’s has data that Burger King doesn’t have?
  • Do you think Ford has data that Chevy doesn’t have?

Here’s my point – just about the same data is available to just about everyone who wants it. And if you don’t have it, with about two clicks of a mouse you can buy it.

It’s not the data that makes the difference, it’s what you do with it.

Give a mediocre person or company all the data in the world and they’ll come up with garbage. Give a brilliant person or company one critical fact and they’ll build you an industry.

Hundreds of physicists had the same data as Einstein. But Einstein had something they didn’t – the creative brilliance to formulate a vision of what the data meant.

The advertising industry – whose only important asset is ideas – has learned nothing from this. We keep heading in the wrong direction. We keep bulking up everything in our arsenal except our creative resources. Then we take the people who are supposed to be our idea people and give them till 3 o’clock to do a banner.

Sure, we need people who are tech-savvy and analytical. But more than anything, we need some brains-in-a-bottle who have no responsibility other than to sit in a corner and feed us crazy ideas. We keep looking to “transform” our industry but ignore the one transformation that would kill.

Excerpt from: Advertising for Skeptics by Bob Hoffman

💎 Awareness and intention not being enough for behaviour change (5-a-day)

All the efforts really did the trick. By the measures available, the educational program was a stunning success. In August 1991, right before the effort began, the National Cancer Institute and the produce growers conducted a telephone survey. About 8 percent of Americans were aware that they should eat at least five servings of produce daily. By 1997, the results were strikingly different. Thirty Nine percent of Americans knew that they should eat five servings a day. That’s a campaign that any political adviser would be proud of.

But this is not a book about campaigns and policy. This is a book about actually changing lives. So the real question is: What about people’s actual behavior? The program’s purpose was to get people to consume more fruits and vegetables. Did it?

At the beginning of the campaign, from 1988 to 1994, 11 percent of Americans ate five servings of fruit and vegetables daily. Almost a decade later … it was still 11 percent. The change in awareness was real; the change of behavior was nonexistent.

Excerpt from: Good Habits, Bad Habits: The Science of Making Positive Changes That Stick by Wendy Wood

💎 How Apple’s allure comes from paying attention to areas most companies ignore (opening the packaging)

“Inside Apple”, Adam Lashinsky describes the “packaging room” at the firm’s headquarters, where for months “a packaging designer was holed up…performing the most mundane of tasks – opening boxes.” The goal? A box with the perfect drag and friction on opening to introduce an enticing pause as you unveil your new phone.

Packaging is a curious thing. On the one hand it is mere wrapping, soon-to-be rubbish that stands between the consumer and the item to be consumed. Yet it can also pique our lust for what lies within. Apple lavishes almost as much attention on the design of its boxes as it does on their contents. The result is not just an elegant container but a carefully orchestrated ritual. You do not merely Open this box as if you were tearing into a packet of crisps. You are welcomed inside.

The ceremony begins before you reach the box itself which arrives wrapped in plastic film.

Excerpt from: The Economist 1843 covering Inside Apple: How America’s Most Admired–And Secretive–Company Really Works by Adam Lashinsky

💎 A wonderful fable about Louis XI, a condemned man and the power of persuasion (to save his life)

“Louis XI (1423-1483), the great Spider King of France, had a weakness for astrology. He kept a court astrologer whom he admired, until one day the man predicted that a lady of the court would die within eight days. When the prophecy came true, Louis was terrified, thinking that either the man had murdered the woman to prove his accuracy or that he was so versed in his science that his powers threatened Louis himself. In either case he had to be killed. One evening Louis summoned the astrologer to his room, high in the castle. Before the man arrived, the king told his servants that when he gave the signal they were to pick the astrologer up, carry him to the window, and hurl him to the ground, hundreds of feet below. The astrologer soon arrived, but before giving the signal, Louis decided to ask him one last question: “You claim to understand astrology and to know the fate of others, so tell me what your fate will be and how long you have to live.” “I shall die just three days before Your Majesty,” the astrologer replied. The king’s signal was never given. The man’s life was spared. The Spider King not only protected his astrologer for as long as he was alive, he lavished him with gifts and had him tended by the finest court doctors. The astrologer survived Louis by several years, disproving his power of prophecy but proving his mastery of power.”

Excerpt from: The 48 Laws Of Power (The Robert Greene Collection) by Robert Greene

💎 A wonderfully simple opportunity, that would cost nothing, but allow the government to reduce irritation (and therefore boost compliance)

As Shakespeare wrote, “there is nothing either good or bad, but thinking makes it so’.

A few hours before I sat down to write this chapter, I received a parking ticket. It was only for £25 and I was completely to blame, but it nevertheless annoyed me to an extraordinary degree – and it is still annoying me now. Perhaps a parking ticket is made even more annoying because we can see no way of reframing it in a positive light.

Could the local authority that issued me with the ticket give me a chance to play the same mental trick on myself as the easyJet pilot – a reason, however tenuous, to feel slightly upbeat about the fine? For instance, how different would I feel if I was told that the money from my fine would be invested into improving local roads or donated to a homeless shelter? The fine would have the same deterrent effect, but my level of anger and resentment would be significantly reduced. How would that be a bad thing?

Excerpt from: Alchemy: The Surprising Power of Ideas That Don’t Make Sense by Rory Sutherland

💎 Describing loss aversion in 1759 (Adam Smith)

Pain […] is, in almost all cases, a more pungent sensation than the opposite and corresponding pleasure. The one almost always depresses us much more below the ordinary, or what may be called the natural state of our happiness, than the other ever raises us above it.
(Smith, 1759)

Excerpt from: Behavioral Economics (The Basics) by Philip Corr and Anke Plagnol

💎 The BASIC model (a simple process for identifying what nudges should be applied to a particular challenge)

A way of identifying behavioral problems that may be amenable to a nudge intervention is given by the Danish organization iNudgeyou, which use the BASIC model to design interventions. The acronym stands for: B = behavioral mapping: collecting data to define the problem – the what phase. A = analysis: why people are currently behaving as they are – the why phase. S = solution mapping: this is the scientific and systematic process of making suggestions – the how phase. I = interventions – this is the testing of possible nudge solutions before full implementation – this is the test phase. Once a nudge intervention has been selected, there is then C = Continuation: solutions may fail due to poor implementation or lack of maintenance, so a process of on-going monitoring of the success of behavior change is needed, as well as an evaluation of possible unforeseen side-effects – the results stage. An approach such as BASIC is needed whenever nudging is being considered – jumping from general knowledge to specific behavioral problems is fraught with problems.

Excerpt from: Behavioral Economics: The Basics by Philip Corr and Anke Plagnol

💎 Five things that are more or less true about copywriting (not rules or laws!)

I’ve never been much of a theoriser about copywriting but here are five things that I think are more or less true:

1. Put yourself into your work. Use your life to animate your copy. If something moves you, chances are, it will touch someone else, too.
2. Think visually. Ask someone to describe a spiral staircase and they’ll use their hands as well as words. Sometimes the best copy is no copy.
3. If you believe that facts persuade (as I do), you’d better learn how to write a list so that it doesn’t read like a list.
4. Confession is good for the soul and for copy, too. Bill Bernbach used to say “a small admission gains a large acceptance”. I still think he was right.
5. Don’t be boring.

Excerpt from: D&Ad Copy Book by D&AD

💎 A review of life satisfaction found 9 groups consistently scored higher (for happiness)

a. are wealthier (especially when compared to people who are like them)
b. are young or old (being in your forties and fifties is a bad time for life satisfaction)
c. are healthier
d. have lots of social contact
e. are married (or at least cohabiting)
f. are a little more educated (having a degree is good but you probably shouldn’t get a PhD if you want to maximize your life satisfaction)
g. are religious (it doesn’t matter which religion)
h. have a job
i. commute a short distance to work

Excerpt from: Happiness by Design: Change What You Do, Not How You Think by Paul Dolan

💎 A real world example of the power of defaults in shaping behaviour (car insurance)

The taxpayers of New Jersey and Pennsylvania felt the brunt of this firsthand in a real-life experiment in 1992. Both states switched that year to a no-fault insurance regime where consumers could save money by limiting their right to sue for tort damages, but the way the option was framed differed by state: New Jersey made limited right to sue the default option, while Pennsylvanians were presumed to select full right to sue, unless they opted out. This small change in the status quo had a profound effect on their behavior: 75 percent of Pennsylvania consumers paid to retain full tort, while only 20 percent of New Jersey consumers did.

Similar effects have been found with many other kinds of behavior, including student loan repayment and even, interestingly, willingness to donate organs.

Excerpt from: Blindsight: The (Mostly) Hidden Ways Marketing Reshapes Our Brains by Matt Johnson and Prince Ghuman

💎 How constraints inspire creative thinking (the birth of just-in-time manufacturing)

It’s often assumed that Just-in-Time (JIT) Manufacturing was devised by the Japanese in the 1970s. It wasn’t. The Empire State Building, built in 1931-32, is a great example of JIT building. New York City refused the builders permission to store materials on site in case it disrupted traffic on Fifth Avenue. To overcome the problem, the architects, working without a computer, scheduled the delivery of all materials so that they could be unloaded from a truck and immediately fitted into place on the building. At the height of the construction, trucks were drawing up outside the building site every ten minutes!

Excerpt from: The Little Book of Big Management Theories: and how to use them by James McGrath and Bob Bates

💎 On the folly of forecasting (those who predict don’t have knowledge)

As the sixth-century BC poet and philosopher Lao Tzu observed, “Those who have knowledge don’t predict. Those who predict don’t have knowledge.”

Excerpt from: The Little Book of Behavioral Investing: How not to be your own worst enemy by James Montier

💎 On how we evaluate ourselves by comparing to known references (cognitive dissonance)

Leon Festinger and Merrill Carlsmith of Stanford University once asked their students to carry out an hour of excruciatingly boring tasks. They then divided the subjects into two groups. Each student in group A received a dollar (it was 1959) and instructions to wax lyrical about the work to another student waiting outside – in other words, to lie. The same was asked of the students in group B, with one difference: they were given $20 for the task. Later, the students had to divulge how they had really found the monotonous work. Interestingly, those who received only a dollar rated it as significantly more enjoyable and interesting. Why? One measly dollar was not enough for them to lie outright; instead they convinced themselves that the work was not that bad. Just as Aesop’s fox reinterpreted the situation, so did they. The students who received more didn’t have to justify anything. They had lied and netted $20 for it – a fair deal. They experienced no cognitive dissonance.

Excerpt from: The Art of Thinking Clearly by Rolf Dobelli

💎 On harnessing social proof in ads (and not making it dull)

Many years ago, the Ford Motor Company wanted to tell American motorists that they sold more convertibles than did any other automobile manufacturer. They could perfectly well have said: ‘America’s bestselling convertible.’ Instead they ran a headline that read: ‘The only convertible that outsells Ford.’ And the picture was of a baby-carriage. That is a kind of humour; and it’s almost a joke. It certainly depends entirely on a contribution from its audience for the communication to be complete. But the contribution is a small and pleasurable one, well within the capacity of anyone in the market for a car. And what could have been a piece of self-congratulatory manufacturer’s so-whattery became engaging evidence of confident leadership. The point had been seen.

Excerpt from: Behind the Scenes in Advertising, Mark III: More Bull More by Jeremy Bullmore

💎 On how survey answers vary according to the medium (whether asked online or in the presence of someone else)

But people give different answers to certain questions when they are sitting in front of a computer screen alone from those they express when someone is there to ask the question. In one study, the answers to questions such as “How do you manage on your income?” varied between 29.9% and 47.7% saying they were “comfortable,” depending on whether the question was answered in the presence of someone else or not.

Excerpt from: Consumerology: The Truth about Consumers and the Psychology of Shopping by Philip Graves

💎 On comparing new technology to old (to anchor improvements)

The long-distance telegraph began with a portent—Samuel F. B. Morse, standing in the chambers of the US Supreme Court on May 24,1844, wiring his assistant Alfred Vail in Baltimore a verse from the Old Testament: “WHAT HATH GOD WROUGHT.” The first thing we ask of any new connection is how it began, and from that origin can’t help trying to augur its future.

The first telephone call in history, made by Alexander Graham Bell to his assistant on March 10, 1876, began with a bit of a paradox. “Mr. Watson, come here; I want to see you”—a simultaneous testament to its ability and inability to overcome physical distance.

The cell phone began with a boast—Motorola’s Martin Cooper walking down Sixth Avenue on April 3, 1973, as Manhattan pedestrians gawked, calling his rival Joel Engel at AT&T: “Joel, I’m calling you from a cellular phone. A real cellular phone: a handheld, portable, real, cellular phone.”

Excerpt from: Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian and Tom Griffiths

💎 On the power of anchoring (for items that are hard to value)

Another experiment: students and professional real-estate agents were given a tour of a house and asked to estimate its value. Beforehand, they were informed about a (randomly generated) listed sales price. As might be expected, the anchor influenced the students: the higher this price, the higher they valued the property. And the professionals? Did they value the house objectively? No, they were similarly influenced by the random anchor amount. The more uncertain the value of something – such as real estate, company stock or art – the more susceptible even experts are to anchors.

Excerpt from: The Art of Thinking Clearly by Rolf Dobelli

💎 On the power of a small first commitment (foot-in-the-door)

In the mid-1960s psychologists Jonathan Freedman and Scott Fraser published an astonishing set of data. They reported the result of an experiment in which a researcher, posing as a volunteer worker, had gone door to door in a residential California neighborhood making a preposterous request of homeowners. The homeowners were asked to allow a public-service billboard to be installed on their front lawns. To get an idea of just how the sign would look, they were shown a photograph depicting an attractive house, the view of which was almost completely obscured by a very large, poorly lettered sign reading DRIVE CAREFULLY. Although the request was normally and understandably refused by the great majority (83 percent) of the other residents in the area, this particular group of people reacted quite favorably. A full 76 percent of them offered the use of their front yards.

The prime reason for their startling compliance has to do with something that had happened to them about two weeks earlier: They had made a small commitment to driver safety. A different volunteer worker had come to their doors and asked them to accept and display a little three-inch-square sign that read BE A SAFE DRIVER. It was such a trifling request that nearly all of them had agreed to it. But the effects of that request were enormous. Because they had innocently complied with a trivial safe-driving request a couple of weeks before, these homeowners became remarkably willing to comply with another such request that was massive in size.

Excerpt from: Influence: The Psychology of Persuasion by Robert Cialdini

💎 On the benefits of getting customer feedback on prototypes (as early as possible) rather than the finished product

The level of feedback you get is so much more valuable and impactful… The problem with showing something to consumers when it’s almost totally done, people don’t necessarily want to give negative feedback at that point because it looks like, “This company has spent a lot of money already getting it to this stage and now I’m going to tell them, ‘It sucks.’ ” On the other hand, if something hangs together with tape, and it’s clear that it’s an early prototype, the mindset of consumers often is, “These people still need some help, so let me tell you what I really think about it.”

Excerpt from: Little Bets: How breakthrough ideas emerge from small discoveries by Peter Sims

💎 On our desire for variety being greater at purchase not consumption (think All-Bran in cereal variety packs)

We also seem to crave more variety at the point of decision than we will actually desire down the road. When I was young, for example, I was obsessed by the Kellogg’s variety packs of cereal. Wooed by the sight of the Apple Jacks and Frosted Flakes jostling up against each other, I would clamor for my parents to buy the largest package on offer, a towering block of shrink-wrapped goodness. Having raced through my favorites, however, I would find my liking gradually diminishing, from dizzy Applejacks heights to the sad denouement of a few sparse clusters of Special K and All-Bran, which often went unconsumed, dying a slow death in a shroud of plastic. My parents would, of course have been better off simply buying a few boxes of my favorites, which I would reliably eat every day.

Excerpt from: You May Also Like: Taste in an Age of Endless Choice by Tom Vanderbilt

💎 On personalisation being nothing new (YOUR COUNTRY NEEDS YOU)

So they ran a recruitment poster.

But the visual didn’t show massed ranks of soldiers.

With the headline, ‘THE BRITISH ARMY IS SHORT OF TWO MILLION NEW RECRUITS’.

The visual was Kitchener pointing out of the poster, straight at the person looking at the poster.

And the headline said, ‘YOUR COUNTRY NEEDS YOU’.

One-to-one.

And that poster worked.

It got millions of recruits.

By talking to people one at a time.

It was so successful the USA copied it a few years later with a picture of Uncle Sam and the same headline.

And it recruited millions of men there, too.

Excerpt from: Predatory Thinking: A Masterclass in Out-Thinking the Competition by Dave Trott

💎 On the power of prestige (name versus quality)

Of the twelve journals, only three spotted that they had already published the article. This was a grave lapse of memory on the part of the editors and their referees, but then memory is fallible; however, worse was to come. Eight out of the remaining nine articles, all of which had been previously published, were rejected. Moreover, of the sixteen referees and eight editors who looked at these eight papers, every single one stated that the paper they examined did not merit publication. This is surely a startling instance of the availability error. It suggests that in deciding whether an article should be published, referees and editors pay more attention to the authors’ names and to the standing of the institution to which they belong than they do to the scientific work reported.

Excerpt from: Irrationality: The enemy within by Stuart Sutherland