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Episode 165

The Psychology Marketers are Missing with Phill Agnew

Telling people not to listen drove three times more podcast listeners than telling them why they should. That's behavioral science at work, and most marketers are barely scratching the surface of it.

This week, Elena, Angela, and Rob are joined by Phill Agnew, host of "Nudge," the UK's number one marketing podcast. Phill breaks down the hidden psychology that shapes how consumers think and buy, from why visible effort makes your brand more valuable to how scarcity can be applied in ways that go far beyond a "limited time offer." You'll walk away with principles you can apply immediately... and a few that might change how you think about advertising altogether.

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Topics Covered

• [03:00] The labor illusion: why showing your work increases perceived value

• [05:00] What System 1 vs. System 2 thinking means for marketers

• [12:00] Costly signaling and why TV advertising commands trust

• [17:00] The mere exposure effect

• [24:00] Distinctiveness vs. differentiation and how to stand out

• [33:00] Scarcity done right: the KFC Australia example.

• [40:00] The Pratfall Effect and why admitting weakness builds brand likability.

Resources:

Buell, R. W., & Norton, M. I. (2011). The labor illusion: How operational transparency increases perceived value. Management Science, 57(9), 1564–1579.

2018 The Choice Factory Book

Behavioral Business Book by Richard Chataway

Phill Agnew’s LinkedIn

Today's Hosts

Elena Jasper

CMO

Rob DeMars

Chief Product Architect

Angela Voss

Chief Executive Officer

Phill Agnew

Host of Nudge

Transcript

Elena: Hello, and welcome to "The Marketing Architects," a research-first podcast dedicated to answering your toughest marketing questions. I'm Elena Jasper. I run the marketing team here at Marketing Architects, and I'm joined by my co-hosts, Angela Voss , the CEO of Marketing Architects, and Rob DeMars, the chief product architect at Misfits & Machines.

Angela: Hello.

Elena: Hello, and we have a guest today. Phill Agnew is the host of "Nudge," the UK's number one marketing podcast, where he breaks down the hidden psychology behind what we do and why we do it. He's had guests like Richard Shotton, Rory Sutherland, and Rand Fishkin on the show, and he's been running "Nudge" for over seven years now.

But before that, he spent nearly a decade in product marketing at companies like Brandwatch, Hotjar, and Buffer. Thank you for joining us, Phill.

Phill: Ah, thank you so much for having me. It's lovely to be here.

Rob: Phill, you have such a fun podcast. It's so interesting, and you really go all out for your listeners. You watched 50 hours of MrBeast for one episode just to be able to deliver behavioral marketing knowledge to us. I mean, did you have to go through detox after that? Like, what was that like?

Phill: The sacrifices I make for my show. I genuinely found that quite interesting. I got very ill. This was the pretext to that. I was quite sick — not serious, just flu or something.

And I was — you know when you're sat in bed and you're too sick to watch anything that is meaningful or interesting? And about the only content I could muster was rubbish on YouTube — and apologies to the MrBeast fans out there. I ended up watching a lot of it. And like immediately, and marketers will notice when they watch MrBeast, I just became so interested by how much of an amazing marketer he is and how he hooks people in.

And I realized quite quickly as I was watching that he repeats very similar themes each time he creates a video, which are really just themes baked in behavioral science and psychology, which is designed to really hook you in quite quickly. I won't go through all of them because we've just started, but my favorite is the juxtaposition effect.

So he uses this amazing principle where he's just an average American young guy, looks like any of us, dresses really normally, normal haircut. And there were these interviews he would do where people would go around his studio and they'd say, "You spend like millions on your camera equipment. Why aren't you recording in 4K?" And he revealed, he said, "You know, I just wanna look like one of the guys — I don't want it to look too professional."

And what he wants is for his content to look really normal and approachable, but then to juxtapose that with incredible prizes. So saying, "I'm gonna give you a million pounds," "I'm gonna give you a million dollars," or, "You can win this Lamborghini," or, "You can win this tropical island," sort of thing.

And it's that juxtaposition which really hooks people in.

Elena: He's definitely a master marketer. I don't watch MrBeast on YouTube, but I did watch "Beast Games" on Amazon Prime, which was a fun show and definitely a lot of psychology built in throughout that. All right, super excited to have you here. We're back with our thoughts on some recent marketing news, always trying to root our opinions in data, research, and what drives business results.

And I'm gonna kick us off quickly, as I always do, with some research. There were way too many studies to choose from for this episode, so I picked one titled "The Labor Illusion." This is by Ryan Buell and Michael Norton, published in Management Science, and they found that when people can see the effort that went into producing a result, they value it more, even if the outcome is identical.

So they did this experiment. They had a simulated travel search engine that showed users the work it was doing in real time, and it was rated as more valuable than one that delivered the same results instantly. People actually preferred waiting when they could see the effort being expended on their behalf.

So this study calls this the labor illusion — the idea that visible effort signals competence and care, and that transparency about how hard you're working actually increases perceived value of what you're doing. And this is just one example of how behavioral science impacts advertising. We're gonna get into a lot more today with our guest.

So Phill, thanks again for being here. I wanted to start broadly with why the topic of behavioral science is relevant for our listeners. For marketers who maybe haven't gone deep on it yet, what's the case for why they should?

Phill: Marketers, frankly, we are in the decision-making industry, right? We're trying to influence the decisions our customers make, whether that's buy our product, don't buy our competitors', continue using our service rather than churning. We need to influence those decisions. And what the world of behavioral science and psychology has spent essentially the last 200 years studying is why the human brain makes certain decisions.

Probably the most seminal finding, which has happened at least in recent years, is the sort of finding or analogy that was put forward by the Nobel laureate Daniel Kahneman. Now, many of you will have heard of Daniel Kahneman's book, "Thinking, Fast and Slow." It's often on bookshelves, often gathering a bit of dust.

But there is a really interesting insight within "Thinking, Fast and Slow" which Daniel Kahneman puts forward, which is that the brain in general has two modes of thinking. System one, which is a really fast mode of thinking, which we use pretty much all of the time because our brain's lazy and we just want unconscious, fast thoughts to come to our mind. And system two, which is really slow and systematic and deliberate. The best way to describe this is driving a car. If any of you are driving right now, you are almost certainly not thinking about the amount of pressure you are putting on the accelerator or the brake, where your hands are on the steering wheel, whether you've indicated recently.

You're completely on autopilot. You are completely in system one. Your brain does not have to pay attention. But the first time you drove a car, the very first time you got in, you would've been in system two — this slow, deliberate mode where you were thinking very carefully about how much pressure you were putting on the steering wheel.

And because 95% of our decisions are made using system one — which is the fast, unconscious one — you know, what do I want for lunch? Do I want tea or coffee? Should I go to the shops later? All of these sort of unconscious thoughts. Because they are almost unconscious, they can be influenced by what behavioral scientists call heuristics, shortcuts, nudges, so to speak.

So, for example, the best way to explain this is if you are on holiday, trying to decide where you're gonna go for a meal, and you walk past a bunch of restaurants, and one restaurant has just one sort of sad table in the corner, a couple questioning why on earth they decided to go here, a waiter outside pleading with people to come in.

That's restaurant number one. And then restaurant number two is almost fully booked. There's a queue out the door. Almost every table is taken. Which restaurant do you go to? You use a heuristic. You use a shortcut — the social proof shortcut in this case. You follow the behavior of the crowd, and you go to that one, which is why, for those of you who are in B2B sales and have websites, for example, when you say, "We are also used by Amazon, Zoom, and NVIDIA," other big companies, you're more likely to get more sales because people follow the actions of others.

So behavioral science for me is very interesting for marketers because it reveals laws behind how the human brain operates, and if we apply those laws to our marketing, we can create marketing that really works.

Elena: It seems to me like it should be required reading — or required understanding — for marketers, because it's such a great shortcut, and it's so important to understand your audience and how people make decisions. Rob mentioned in the intro that you've watched a lot of MrBeast, and that wasn't random.

You're known for doing things like that. You don't just study behavioral science, you actually run your own experiments. Curious what inspired you to adopt this approach, and could you walk us through maybe some of your favorite experiments you've run?

Phill: So I've always been — I'm a big believer in sort of practice what you preach. Online, it's very easy for someone to start talking about marketing tips. It's quite different to have someone share tips from a place of experience. Maybe they've tested something themselves, they've experienced it themselves, they've tried something out themselves. And I've been fascinated, especially with the study you shared at the start, Elena — this idea of the labor illusion, or input bias, or IKEA effect, the idea that the more effort we put into something, the more people value it.

And I remember reading a study, I think it's from 2013, which is similar to the one you cited. It's a great study because so many studies are done in laboratories or in university canteens. For this study, the researchers flew to Mauritius, and I think that's a great start to any study — basically, get on a plane to Mauritius.

And specifically, they watched a Hindu festival, Thaipusam. Now, any of you who know about Thaipusam will know that this is an incredible festival. Because what you have in Thaipusam is what the researchers called high devotee, high ordeal worshiping. Now, these are worshipers who put themselves through extraordinary pain and effort in order to show their devotion.

They pierce their skin with spikes. They attach to those piercings in their skin very, very heavy, multiple-stone weighted packs, which they then drag along the floor. They walk barefoot for over four hours to pilgrimage to specific parts of this festival.

And they go through an awful lot of pain and put an awful lot of effort into their devotion. That's one group of people. There are, of course, other devotees who do very low ordeal devotion. They will just pray and sing for a similar amount of time. And the researchers did something really interesting.

They found people who were doing the high devotion, they found people who were doing the low devotion, and then they gave all of them 200 rupees afterwards and sent them to an anonymous donation box and said, "Donate as many of these rupees as you like."

That's equivalent to about two days' worth of pay for two days' worth of work. And what they found is really interesting. First, those who watched the low ordeal worshipers donated the least. So if you see someone not really worshiping very much, you won't donate as much. Those who saw the high energy devotees donated the most, and also those who did all of that painful devotion, they also donated a lot as well, but not as much as those who watched the painful devotees.

So what they found is basically: when you watch someone going through pain and delivering a lot of effort, you value them more and you donate more. I've always thought this is a really interesting thing for a marketer, because what it basically suggests is that if you show the work you've put into something, if you show the effort, if you show the pain, you'll probably get a better result. And I've tried to apply this in all sorts of interesting ways.

Probably the most literal way I applied this is last year, I was speaking at a conference on the south coast of the UK, and the UK train system is lovely for getting to London. It's really difficult to get anywhere else, and I was trying to get somewhere that wasn't London. And I realized the train journey to this place was gonna take me way too long.

And then I started looking at it and I thought, "I could hike there. I could walk there." I realized it was 61 kilometers, which I didn't realize at the time is a marathon and a half. But I thought, "Well, wouldn't this be interesting if I hiked to the conference?" Because I wanted to do a talk all about this idea of the effort effect, talking about these studies from Thaipusam.

And if I could go there and say, "I've literally just walked here from basically the other side of the UK," what a great way to show the effort I've put into the talk as well. So that's what I did. I woke up at 4:00 a.m., I hiked to this conference, I gave the talk, and look, it went down really well. I like to think that is because I hiked 61 kilometers.

But it's this example of how you can find really interesting ways to showcase effort, apply these principles, and get quite interesting results.

Elena: Yeah, that's amazing. I hope you did take a train or a bus home after.

Phill: I did. I took the train.

Elena: Yeah, yeah, yeah.

I wanted to dive into some of the behavioral science principles, some of the ones you talk about on your show. So we talked about the psychology of effort. One other one I was interested in is costly signaling.

Could you walk us through how it works and how it shows up in advertising?

Phill: Costly signaling is part of this same family. It's the idea that the cost and expense you use to share your message will have a direct impact on how that message is received. So imagine you want to ask your partner to marry you. You could take your partner to a McDonald's drive-through, buy them a meal deal, and then get down on one knee.

Good luck. Or you could take them to a Michelin-star restaurant, have them serenaded by their favorite band, and drive them home in a Rolls-Royce, and then get down on one knee. I think nobody's gonna judge me for saying that the second option is gonna lead to a higher success rate, and that is literally in part because the individual who is sharing that message has just spent more to deliver that message.

And we see this in marketing all the time. People rank TV ads higher — or once they've seen a company that has delivered a TV ad and they hear that that ad has been played on some of the main news channels, perhaps it's been played during the Super Bowl, for example, they'll perceive that brand as higher quality than if they watch the same TV ad and say, "Oh, that's just been on YouTube."

Same thing goes for Facebook ads. If you see a Facebook ad, you'll have a lower perception of a brand, whereas if you see them advertising on a massive billboard at your favorite sports center, for example. And I've applied this myself. I've shown people images of my podcast. So I did this with a representative sample of around 200 participants in the UK.

None of them had listened to "Nudge" before. I showed both groups an image of my podcast. One group just saw the image. The other saw the image superimposed onto a billboard, so it looked like I'd paid to have the podcast sponsored on a massive billboard. Those who saw just the image — I think just 7.4% said they would listen.

Those who saw the billboard version, 15.5% said they would listen. No different in the message, just showcasing that perhaps there was some expense behind it. Now, the interesting thing with costly signaling is that the expense doesn't just have to be cost. This isn't just saying to people listening, "You have to do a Super Bowl ad."

It is saying perhaps if you ever do an out-of-home ad, use that content, use images of your out-of-home billboard ad on social, because that performs really well, because it's showcasing costly signaling. It's also saying, for example, the effort you put into your ad — if people can see that effort and the time you put in — can change how people perceive it.

A really good example of this is an amazing study with a South Korean e-commerce store. Again, really nice study because it's a real study. It's done with a real e-commerce store in South Korea. And they found the last 3,000 people, I think, who had bought from that store, split them into three groups.

One group was the control. They just bought something from the store, got nothing. The second group was the variant. They bought something from the store and then got in the post a letter thanking them for buying something from the store. The letter was printed out and typed up, a normal sort of letter all of us would receive.

And then the final group got the same message — the exact same words as the second group — except it was handwritten. So someone had taken the time to actually handwrite this message. And then they measured how many sales each of these groups made in the future compared to the control. Those who received the printed thank-you note spent, I think it was 28 South Korean dollars more.

Those who received the handwritten variant spent $52 more — considerably more. And the message is the same. This is what's so interesting from a marketing point of view, right? They're not changing the message. This is not reinventing the message, which is what we as marketers talk about all the time.

They're simply putting more cost into their signal. By appearing to handwrite the message, it appears like it took a lot more time, it appears like it took a lot more effort, and people respond to that. It's also distinctive and it stands out. And if you can make your message appear like it's got more expense behind it, people will react in a more positive way.

Angela: You're making me realize, Phill, that both my husband and I have been taken by a company here in the US called Sweetwater. My husband buys a lot of guitars and amps from them, and there's always candy and a handwritten note that comes in that box, and now I understand why they're doing this to us.

He always gives me the candy, which — I think we gotta talk about this later. Phill, listeners of this show know we spend a lot of time on marketing effectiveness, obviously here on this podcast, and behavioral science keeps coming up because, honestly, you can't talk about advertising without it.

One principle we haven't visited in a while is the mere exposure effect. Can you talk us through what that is and how it shapes the way advertising actually works?

Phill: I definitely can. Angela, you're not the only one, by the way, because I bought this lovely little print here. For the audio listeners, I'm sharing a little picture of a postcard that was sent to me by an artist who I bought some paintings from. And they handwrote quite a long note to me, which is on the back.

I bought this six months ago. This has been sat on my desk. I can't throw away this postcard that they attached with the painting because of that effort. So I'm the exact same as you. The mere exposure effect, though — it's a really important one, and it reveals something that I think a lot of marketers forget.

So the mere exposure effect is the idea that the more we see something, the more we actually like it. The more we become exposed to something, the more we like it. An interesting story to kick us off — the song "Hey Ya!" by OutKast. Many — all of us know this song. All of us love this song, actually.

It's like a universally loved song. Now, I know there'll be like four people listening now who are like, "Phill, I hate that song. You're so wrong." But the majority of people really like "Hey Ya!" by OutKast. Go to any wedding when "Hey Ya!" comes on and you'll see what I mean. What's really interesting is about when they first released "Hey Ya!" — everyone hated it. They really did. You can go back and look this up. When they did the focus groups about it, people didn't really understand the song. It had rhythmic sections and then spoken word sections. It had audience participation. It was at a different beat and melody than people were used to.

They didn't know the band very well. They didn't know OutKast. And so when it was first released, it didn't do well. It tanked in the focus groups, but the producers really, really wanted it to succeed. So what they did was quite innovative. They asked the radio presenters — which back then was really the way you made your songs popular, was getting them on radio — they asked the radio presenters not just to play OutKast, not just to play "Hey Ya!" They specifically told them to play it near other popular songs. So you put on The Beatles, for example, and then you play "Hey Ya!" right after it, and then you put on another good song after that. And the reason they did that was because they knew if they played it near songs that other people really liked, they would be more likely to listen.

And they knew that people would change their opinion of the song not once they'd heard it one time, but once they'd heard it seven times. Because the more you're exposed to a piece of music, the more you start to like it. And this has been revealed by some amazing studies in the 1960s. These studies were done on American college students who were shown Turkish words.

I believe it was a study done at MIT. And for the study, back in the '60s when the study was run, there was a really popular magazine/newspaper that was read by pretty much everyone on campus. So this was a really good place to run marketing tests because almost everyone was reading this newspaper. And for the study, the researcher took out full-page ads in the newspaper and just put a single Turkish word or a single Mandarin character in there, no other context.

For all they knew, the Turkish word could say "crap" or "trash" or "poo." It might have been a completely ridiculous word, but they didn't know what it meant because the majority of people at the university did not speak Mandarin or Turkish. After he had done that for a few months, he invited a bunch of participants to his lab.

Some of the participants were the ones who were at the university and would've been reading that newspaper. Other participants were outside of the newspaper, so he had a control group. He then showed them a huge number of Turkish words and Mandarin words, so people were getting confused about what they'd seen before and what they hadn't seen.

And despite doing all of that, he found that people have a dramatic preference for the word or symbol they've seen before, even when they do not realize that they have seen that word or symbol before. So the more we are exposed to something, the more we tend to like it. And the important takeaway here for marketers is that it's really common as a marketer — I've been in marketing meetings like this — where you get to the end of the quarter and you've just put, you know, you've put your new website copy up at the start of the quarter, and it's done okay, but it hasn't maybe done as well as you thought it would do. Maybe your Facebook ads have been live for a quarter and they're doing all right, but maybe not as well as you had hoped.

And you think, "Okay, quarter's over. Let's try something new." The problem with that is it's the exact opposite of what the psychology tells you to do, because the psychology tells you to make sure people are exposed to this message for as long as possible, because the more they're exposed to it, the more they will therefore like the message.

And what we as marketers — especially in the B2B tech space — tend to do is change it really quickly, because it's never been easier to update website copy. So we probably change things before they have a chance to benefit from the mere exposure effect.

Angela: Phill, I think as you know, we've situated ourselves as an agency in one particular channel. We only operate in television, and we're specialists in that area related to both linear and CTV. So I can't resist asking your take on what behavioral science tells us about why TV advertising hits consumers differently than other channels. You kind of hinted at it a little bit earlier, but yeah, interested in your take here.

Phill: I think it really goes back to this idea of costly signaling that we spoke about at the start. When people watch an ad — and the ad can be, you know, one of the best ads of all time, it can be a mediocre ad, it can be a bad ad — their perception of the ad will always change if they learn that that ad has aired on TV versus if they just hear that that ad has been on YouTube a few times.

And that is because we have this inherent knowledge that appearing on TV, advertising on TV has some cost. It also has risks attached to it. We know that you have to jump through more hoops in order to get your ad on TV. It's not as easy as it would be to, say, put an ad on banners across a website, for example.

It's also much more expensive per minute. I mean, there's so much more we could go on about. It requires a lot more, in terms of how you film it, all of these things. And because of all of those expenses that we know are attached alongside a TV ad, the more we will value it when we see it — even if it is the exact same ad as something we've seen online. And it makes the point for putting ads on television. It makes the point for doing a couple of things as well. If you ever do air a TV ad, there is real value in doing the "as seen on TV" or "as talked about on TV," because that allows people who are maybe seeing the out-of-home version of the ad to make the link.

What you also find is that if you've had a TV placement for an ad, for example, but then you back it up with out-of-home ads or Facebook ads — if you have seen the ad on TV and then you see an out-of-home variant or a Facebook variant — you value those out-of-home variants and Facebook variants more as well, because you've seen it on TV too.

And that's not just because of the mere exposure effect, it's because of costly signaling as well. There's so much evidence that suggests it's just a good idea if you can afford to do it, because it just elevates your brand in so many ways. And it does not surprise me that some of the most technologically developed brands at the moment — say, OpenAI, for example — are still sinking a huge amount of money into TV advertising, because it clearly works.

Angela: Yeah, absolutely. Certainly a validating channel for consumers, establishing trust and things like that. I know we've seen that with clients just in terms of their ability to not just be in an exclusive space where perhaps their competitors aren't — so there's white space opportunity there — but just in terms of brand value creation, pricing power, things like that.

So certainly we've seen that. Rob mentioned earlier the research that you do to prep for your own podcast — the MrBeast one as an example — but clearly you've immersed yourself in an abundance of real-world examples of behavioral science in advertising. Can you talk us through some examples of these principles showing up in the wild?

Phill: Yeah. I once watched 300 TV ads for an episode as well, so that was a bit different from the MrBeast one.

And there was this amazing British website called TellyAds.com, I think it is. And you can go and watch a bunch of ads from like 2006 and 2007 and 2008. And I watched these 300 ads, and then I started to code them for what behavioral science nuggets and insights they were applying.

And I found some really interesting things. One was that many ads didn't seem to apply a behavioral science insight, but the perhaps more interesting one was that many did, but in ways that you might not expect. So I found, for example, that a large majority of ads would ask the viewer a question.

So they would always finish with a question, which is quite an interesting way to end an ad. And the idea behind that — which is sort of the generation effect or Barnum effect, whatever you wanna call it — is that if you get your audience to engage with an ad, they'll be more likely to remember it. One of the most interesting ones was the use of distinctiveness.

So especially around 2008, you found this number of ads which were being created that really tried to stand out from the previous ad, especially in the UK. The best example of this is utility search companies in the UK. So these are websites you go to in order to search for a gas supplier or a water supplier.

And up until around 2009, every single one of these companies had the exact same ad. They talked about how they were cheap, how they were quick to use, how they had great customer support, and how they gave the best options. All talking about textbook marketing, right? Showcase your benefits.

And then one of them, a company called comparethemarket.com, decided to do something distinct from their competitors. Rather than talking about all their benefits, they created an ad which showcased a meerkat, and the meerkat on screen during the ad complained about the fact that his website, comparethemeerkat.com, was losing SEO traffic to comparethemarket.com.

Extremely niche, but extremely distinct. You know, this industry had only ever told me about how easy these websites are to use, and now showing me an ad about a meerkat complaining about their website — totally distinct. And because it was distinct, because it stood out, it benefited from something called the Hedwig von Restorff effect, which is the idea that when we are distinct in our comparison set, we are more memorable, and if we're more memorable — especially as a utilities comparison site — we're more likely to be used.

And they hit their year-long goals within 12 weeks, and more importantly, they're still using that exact same ad today. That's how successful it's been. But what I find so interesting about that is how it changed the whole market, because as I said at the start, all of them were doing the same thing, and as soon as the meerkat ad launched, every single one of their competitors started to change.

So one of their competitors developed an opera-singing ad man who would come on the ads and start singing about how you should use their service. Another one invented breakdancing builders who were selling their service. Another one invented a whistling duck.

It was ridiculous. They all suddenly went distinct, and it's almost like they weren't learning the lessons, because the lesson was not "do something radical and you'll benefit." The lesson was "be distinct from your comparison set and you'll stand out." But by being radical, they were almost not being distinct.

They were almost copying their competitors. So that was a very interesting insight as well. But a really interesting takeaway is: look at what your competitors are doing and try to be slightly distinct from them.

I'll finish with one final example, and this is a plea to anybody in the watch industry. Every single ad in the watch industry seems to show the clock face on the watch at a very specific time — 10 minutes past 10. Every single one seems to do it. There's some rubbish circulating online which suggests that it makes a smiley face, and that smiley face makes people more likely to buy.

It's bogus. It's not true at all. The only reason they're all set to 10 minutes past 10 is because we love copying our competitors, and I'm desperate to see a company come out and just move their clock to a slightly different time. I was so excited when the Apple Watch launched because I thought, "These guys, you know, they're so advanced."

They set their Apple Watch to 10 minutes past 10, so everybody's following it. I think there'll be real benefit to being distinct and going for 10:30 or 11:45. Try that next time.

Angela: It's been a while since we talked about this, but I know as we were discussing AI, that came up because if you ask AI to generate an image of a clock, nine times out of 10 you're gonna get 10:10, and that's why. So you're totally right there. You're bringing up another topic that we wanted to get into.

You were talking about distinctiveness, obviously. Anyone that's immersed themselves in marketing effectiveness knows about the heated debate between distinctiveness versus differentiation, and sounds like you've got an interesting take on this, so would love you to enlighten us.

Phill: Yeah. I think what's always interesting when we talk about this is that all of us just intuitively know that distinct things stand out. For example, if we were to go to a conference tomorrow and it's a suit and tie affair, everyone's dressed smart, and one person in the conference has a purple mohawk, you'll remember that person.

They're distinct, right? They stand out. Whereas if we went to a heavy metal gig and we're the only people there without mohawks, a purple mohawk would not stand out, right? So we all know this intuitively, that distinct things stand out. But I think what we miss is maybe the nuance. So I spoke about the Von Restorff effect in the last answer. She's a researcher from pre-Nazi Germany, and she did some really, really interesting research before that — in 1933 in particular. She was fascinated by this idea that if things are distinct, they'll be more memorable.

So she gave her participants combinations of different letters to remember — W, X, Y, A, F, G, H, T, Q, for example — and they would have to remember as many of them as possible.

But within that list of combinations of letters, she would include one combination of numbers — two, four, seven — and then more letters. She'd ask what each person remembered, and she found that the numbers are always more memorable than the letters. Now, you might say that's because digits are just more memorable.

Our PIN numbers are digits, for example. She repeats the experiment. This time it's a load of digits to remember and one combination of letters, and now the letters are more memorable. Now, that was 1933. Richard Shotton, brilliant researcher, in his book "The Choice Factory" in 2018, he repeats the experiment.

This time he gives people combinations of digits to remember. Rather than using letters, he makes one of the combinations blue. So they're printed combinations of digits to remember, they're all in black, and then one combination is in blue. The blue font version was 30 times more memorable. Being distinct makes you stand out.

Shotton did another experiment with his colleague Laura Weston. 500 people in this experiment. He gave them different brands to remember, but they were all from one industry — all automotive brands. So Chrysler, Land Rover, BMW, Volkswagen. But then within that list, he includes one brand from a different category — a fast food brand, Domino's.

People are shown this list, have to remember as many as possible, go away, do something else to try and take their mind off it. Come back. "How many brands do you remember from that list we showed you earlier?" Domino's — the brand that is distinct within its comparison set — was four times more memorable.

Repeats it again. This time it's a load of fast food brands. There's one car brand like Volkswagen. Volkswagen becomes four times more memorable. So the important thing for marketers to remember here is that your memorability is not just down to yourself, the product you create, the logo you have, the messaging you go for.

It's down to your comparison set as well. You need to look at how you compare to your competitors in order to know how to stand out. We used the example of heavy metal earlier. Heavy metal logos for heavy metal bands are very distinct. If you look at a heavy metal logo, it's gothic, it's got all these amazing lines.

It looks kind of creepy like a spider. And then if you Google — people who are listening right now can do this, or when you're next able to Google — you can Google a heavy metal band called Party Cannon, and they apply the Von Restorff effect brilliantly. Because what Party Cannon do is they haven't created a logo which looks gothic and scary and like a giant spider crawling across the screen.

They've created a logo which genuinely looks like the Toys "R" Us logo. It looks like a logo that you would see at your local kids' soft play center. It's like big, goofy, Comic Sans letters — multicolored, sort of blues, yellows, and greens. Party Cannon logo. And when you look at a heavy metal festival lineup, everybody's attention is drawn to Party Cannon because it is distinctive in its comparison set.

So the takeaway is: look at the people you're up against. Look at your competitive set. Look at the brands your customers will compare you to when they're thinking about using you, and come up with something that is distinct from them there.

That's the takeaway.

Rob: Phill, you're like Willy Wonka — and not just because of your wonderful accent, but you just keep dropping candy, right? For us marketers, just left and right. I mean, these are all so amazing, simple, applicable things that we could use. What's your personal favorite behavioral science principle?

Like, what's your everlasting gobstopper of marketing principles?

Phill: There's one I really like, and I like it because it's overused by marketers, so you will all know it, but I think there are fascinating ways you can apply it in ways that you might not expect. So it's the scarcity principle. All of us have heard it, right? It's a hereditary trait — we've evolved to like things that are scarce.

As cavemen and women, if we saw a berry on a tree which was scarce, we would collect as much of it and eat as much of it as possible because it was crucial to our survival. So we really like scarce resources. We're less interested in abundant resources. The very best example of this is Concorde — you know, that supersonic flight that flew between London and New York.

They decided to stop running it for a myriad of different reasons, partly cost, partly safety. And they basically agreed to stop running it well in advance of when the final flight would be. So it's not like they stopped Concorde and there were no flights the next day. They announced that they were stopping Concorde, and then there were three more years of flights after that.

Now, as usual with flights, right, you don't sell out many flights three years in advance. Nobody is buying a flight between London and New York in three years' time right now. But when Concorde announced that they were gonna stop flying between London and New York, the sales for those three years of remaining flights sold out — I think within 24 hours.

Nothing had changed about the product, right? It was still the same price. You're still flying for the same amount of time. You still had the same service on board. The only thing that changed for Concorde was that an abundant resource suddenly became a scarce resource, and that drove people to act.

And now many marketers hear this and think, "Oh, okay, I know the secret to scarcity." Say "limited offer," say "sale ends soon," say "limited edition version," and it's fine, but it's lazy. It's a lazy way to apply the scarcity effect. You know, the Booking.com "10 other people are looking at this room right now." It works, but there are more creative ways you can apply it. And my favorite example of this comes from KFC Australia, and it's a brilliant example cited in Richard Chataway's book, "Behavioral Business."

And KFC Australia — they have a lot of marketers, and they asked all of their marketers to come up with slogans to promote their latest deal, and their deal was chips for a dollar.

Pretty good deal, because an Aussie dollar is quite cheap. Chips for a dollar. And so their marketers came up with all these interesting things: "The colonel's never been so generous," "From Perth to Brisbane, they're loved," "Fresh hot chips just for a dollar" — all this sort of quirky, interesting marketing copy, the stuff that we've been taught to write.

And one marketer came up with something which I really love. I won't tell you until the end. Anyway, they then put all of these slogans on Facebook, and they do an A, B, C, D, E, F test. I think they tested six in total. They do this massive comparison test, and they measure exactly how many people actually click on it and then go to Uber Eats, for example, to go and buy the chips.

And they find the winner is not these creative, imaginative slogans. The winner was scarcity, but in a really interesting way. So the scarcity wasn't "a limited offer only available until January." The scarcity was "chips for a dollar, limited to four per person." What an interesting way of applying scarcity, because that is not saying, "Oh, we're limiting this because we wanna get more sales."

That's saying, "This deal is so good, we have to put limits in place, otherwise people will abuse it." What an amazing reframing in people's minds. And what I love about that as well is it reveals how shortsighted so many of the COVID limitations were. Because in the UK — I'm sure in the States as well — we were getting all these limits on how many toilet paper rolls we could buy.

"Only four packets of toilet paper per person." And what that does not do is tell people to buy less. It instead tells people, "Well, I have to buy four because that's the amount I can buy." So scarcity is a really wonderful one.

I think that's one a lot of us could use.

Rob: I know I would order four packs of french fries just for myself, so that was probably smart business for them. You talk about Facebook, and that's such a great lab for practical application of so many of these principles in market. But there are oftentimes where you're doing research in a lab and it doesn't quite translate to actually working in the marketplace.

Have you seen any good examples of that — where, gosh, you can just really prove it behind the walls, but when you get it out there, it just doesn't seem to click?

Phill: The most well-known example of a bias not applying to the real world in recent years in the behavioral science world is priming. Now, the book I referenced at the start — Daniel Kahneman's "Thinking, Fast and Slow" — has a whole chapter on priming at the beginning of his book, and it cites all these really interesting studies.

So there's this one amazing study where they got Americans to read a newspaper, and within the newspaper there were words that were strategically placed there, and some saw normal words, and some saw words that related to old age. So I think for the American audience, it was "Florida," because at the time, apparently Florida was where people go to retire.

But it was stuff like "pension," "wheelchair," "old age," "retirement home," that sort of thing. And then they apparently read this newspaper, and then they monitored how quickly they walked down the hallway after the experiment was over. And supposedly, at least what they claimed in this study, people walked slower when they had read words priming them to think about old age.

Very interesting study. Daniel Kahneman cites it in his book, and then people try and repeat the study, and they find out they cannot repeat the study whatsoever. Priming doesn't seem to work. If you, in your ad, give people lots of words like "buy now" or "sale" — these aren't really manipulating people in the way that some of these researchers had hoped.

But what I think is really interesting about priming — this is not always the case, but it suggests that when it comes to persuasion, the input will have an effect on the output. So the smaller the input, the smaller the probable output. If you're just adding the word "Florida" to a newspaper, you cannot expect this massive behavioral change off the back of it.

In the same way that if you create the world's best ad but you only show it to someone one time, that's not enough exposure to make them like it. What it actually suggests is that if you want a really big output — if you want someone to be persuaded and change their behavior — you have to create quite an impressive input.

You have to come up with something really interesting. And I think if you look at some of the best ads — I just was watching before we came on air this ad for batteries. You know, little AA batteries that you'd put into your remote control. And it was a 1989 ad, I think it was for Energizer or something.

And it's an ad of a little toy that is climbing up a ladder, right? And they put a battery in and watch it climb up a ladder. Now, they could have just done that on a normal ladder and come up with a quirky little ad. But instead, this tiny little toy — which is about the size of a wallet — they put the ladder up the side of a skyscraper, and they filmed this tiny little toy with this one battery in its back climbing all the way up the ladder.

What an amazing way to showcase the power of a battery, right? Watch a toy climb up a skyscraper. And it puts out a little cigarette at the top of the building as well. And that's because there's a bigger input there. You know, it's a lot more effort to film something like that, to go commandeer a skyscraper.

Effort effect, like we were talking about at the start. You know, film it going up a ladder, showcasing the actual benefits and the results. It's a big input, and big inputs drive big outputs. If you do a really small input — you know, if you just have an ad showing a technician at a local store saying, "This is the best battery I've ever found" — you're gonna get a small output as well.

It's not gonna change people's minds in the same way that something really impressive would.

Rob: Now, you've talked about a lot of different studies here, and you conducted one of your own with MrBeast. What is the weirdest study that you've come in contact with where you're like, "Wow, they really went for it, and that was just kind of weird"?

Phill: There are a few weird ones. The weirdest one I've probably found is a study that persuaded me to tell 1,000 people on Reddit not to listen to my podcast. And then, in some amazing result, that ended up driving more people to listen to my podcast. Now, why is that the case? That is because of a study from the 1960s by a researcher called Elliot Aronson, and it's a great study that reveals something called the Pratfall Effect.

So what he did in this study — this is before videos, this is really just an audio recording — he gets an actor, pays an actor to pretend to be a quiz participant, and this quiz participant is given really hard questions to answer. So: what's the capital of Costa Rica? What's the 17th prime number? What's the best-selling book in 1932? Stuff that most of us would never get. But unknown to the people listening, the quiz contestant is given a lot of the right answers and is able to answer 92% of the questions correctly. And so he records this very intelligent quiz participant, and then as they finish the quiz, the participant goes to take a sip of his coffee, and you can hear on the audio recording — he spills the coffee all down his white shirt.

He says, "Oh, God damn it, I've spilled this coffee down me. Oh, what an idiot I've made of myself. I can't believe I've spilled that coffee." So Aronson has this recording, and then he's thinking, "I'm gonna show this recording to people," but he tweaks it. One group of people see the participant answering all the questions correctly and spilling coffee down himself.

Another group hears the same questions being asked and the same answers being given, but then it cuts right at the end of the quiz — so no coffee being spilled down himself. He plays the recordings to two different groups of people and asks them how likable this individual is, and finds that conclusively, no matter who you ask, everybody thinks the actor who spills coffee down himself is more likable than the one who doesn't.

It's irrational. I don't want friends to spill scalding hot coffee down me while we're waiting in Starbucks. That's not a good friend to have. And yet we all feel this urge to like the person who has a weakness. And there are amazing studies that have backed this up. Jo Silvester at Swansea University sent identical CVs to a number of different jobs, except one CV would include a small weakness, whereas the others would only include strengths.

You are far more likely to get an interview if you include a small weakness alongside your strengths — showcase a flaw. Marketing campaigns are really good at applying this. So Avis: "We're second, so we try harder." Marmite: "You either love us or you hate us." Guinness: "Good things come to those who wait." All of these marketing campaigns seem to know that when you showcase a weakness, when you showcase a flaw, people seem to like you.

And this is why I created two ridiculous Reddit ads. One ad said, "Here are five reasons you should listen to 'Nudge.'" And it said, you know, "It's the UK's number one marketing podcast," "Experts like Rory Sutherland," "Short, 22 minutes." The other ad, which went to a different audience — but again, people who are interested in marketing on Reddit — said, "Here are five reasons why you shouldn't listen to 'Nudge.'"

And it gave tongue-in-cheek reasons. It said, you know, "It's only 22 minutes long, so not as long as some of the podcasts you might love," or "There are so many studies in there you might get a headache." Stupid stuff like that. But still showcasing flaws and weaknesses. And the ad where I told people not to listen drove three times as many clicks as the ad where I told people to listen.

There are multiple reasons behind that. There's distinctiveness, there are other things there as well. But there is also this kernel of truth, which is that we repeatedly think that only showcasing our strengths is the only way to succeed in marketing, and it is not true. We can use a weakness to make ourselves — make our brands, make our product — seem even more likable, even more desirable than a product that seems too good to be true.

Elena: I think that's a great thing as a marketer — knowing you don't have to have a perfect product or service, and sometimes that can actually help you out. I wanted to wrap us up with something kind of fun. Phill, what is a recent purchase you've made where you knew that behavioral science was working on you?

Phill: I recently bought a kilo of coffee, and I spent £5 more than I usually do, and it is because of something called the country of origin effect. So there's this amazing effect where we value things more when they come from a country that we really desire, right? So, for example, if you are told that your lemons come from Sicily, you'll pay more than if you're told that your lemons come from Utah.

Sorry, Utah. I don't even know if you can grow lemons in Utah.

Rob: Utah is very much known for their lemons.

Phill: I used to buy blends from my favorite local roastery, but the blends would never call out a specific country they were from. And I was looking this week about which coffee to buy, and it said "Peruvian single origin coffee." And I thought, "Oh, I can really picture the Peruvian coffee beans. I can really picture the value of that coffee." And I bought that one, and it cost me £10 more. The coffee arrived two days ago. It tastes exactly the same, but I love it, and I know I was persuaded by behavioral science.

Elena: Ange, Rob, did you have any ones you thought of?

Angela: Sure. The default effect is that which requires no action wins. So subscription models, suggested quantities, default decisions made in advance or on behalf of myself — I actively avoid understanding how much the default effect has on my share of wallet.

Rob: I ate a scorpion at a restaurant, and it didn't sound appetizing. It actually sounded a little dangerous, and I actually paid extra to eat this thing. And I'm like, "Okay, well, that was novelty." I was paying a premium for novelty. I wasn't buying an appetizer. I was buying a story I could tell on a podcast, right? Like, "I ate a scorpion." There you go. So

yeah, it got me.

What about you, Elena?

Elena: I decided to share one from this morning. I was considering running a race in October — it's a race in the Twin Cities here in Minnesota that's pretty popular. I was looking it up, and right as I got to the signup page, this pop-up came up that said "80% sold out," and I signed up immediately.

So there's the scarcity principle at work. So I guess I'm running this race in October, even though I've actually run this race before, and I've signed up later than I did this time around — but it just worked immediately on my brain. Just like, "Oh, I gotta sign up."

Amazing. Phill, thank you so much for joining us. That was so fun. I learned so much. I was just captivated the whole time. Everybody should listen to "Nudge." Anything else you wanna plug? Your LinkedIn, website, where could people go to learn more about you?

Phill: No, everyone here is listening to a podcast. If you liked what I spoke about today, after you've listened to this brilliant podcast and given this podcast a five-star review — because it's fantastic — you can search for "Nudge." You'll find an orange logo, so you'll see my name, Phill Agnew. It's a great show.

If you liked what I just spoke about with the country of origin effect, I've done an episode called "The Scottish Tea Scandal." People really like that episode, so you can start with that one.

Angela: Love it.

Elena: Great! Thank you so much.

Angela: Thanks so much, Phill. Thank you.

Rob: Thank you, Phill.