Supported by Greenhaven Road Capital, finding value off the beaten path.
This post was part of a week of posts about Rory Sutherland. I learned many things, but broadly Sutherland speaks about four big ideas; creative thinking is hard but worth it, rationality is the wrong model, framing and choice architecture change decisions, and butterfly effects are easiest using psychology. There’s also a Rory’s reads post.
Sutherland is searching for butterflies. This is what marketing is. Add value through intangible means. Small inputs, large effects.
“One of the brilliant things to look for in marketing is disproportionality, how very very small things have a huge effect.”
“That’s the glorious thing about marketing. You can create glorious delight and memorability and distinction with utterly trivial levels of expenditure.”
“Intangible value is a very fine substitute for limited resources in the creation of things.”
Think of the hamburger, says Sutherland. Start with the meat and add a bun. That’s one kind of burger. Then add lettuce, and tomato, Heinz 57 and a french fried potato, a big kosher pickle and a cold draft beer and that’s paradise. The ground beef is central and each additional part is a complementary good. Advertising is a complementary good too.
“Instead of thinking, ‘how can I persuade people to buy my product.’ — ask instead ‘what’s the equivalent of lettuce, ketchup, and bun?’.”
Here’s where Sutherland says to look for these opportunities.
“What we need to do as marketers is either look for things that are objectively similar but subjectively different…or things which are subjectively similar but objectively different.”
Too often we prefer large sweeping gestures because we think that’s what works.
“If you’re a guy at the UN with a budget of two-hundred million it is beneath your dignity, it’s insignificant, it doesn’t satisfy you own self-love to say – ‘The solution to poverty is free lentils.’ You always look for a big grandstanding heroic thing.”
As we saw in the ‘Irrational’ people section, it’s a mistake to think linearly. Big inputs do not equal big outputs. Sutherland says that the Eurostar is an example of this mistake. Engineers and politicians wanted to change a three-hour train ride to a two-hour thirty-minute train ride. That’s a sixteen percent improvement!
But at what cost? Instead of making it faster what if they made it more enjoyable? But that’s hard to measure. People like spreadsheet math, however as Sutherland says, “there is no aircraft as fast as a sleeper train.”
Building more doesn’t always help either. You’ve probably seen this in your commute. There’s a road that’s busy, too busy. Someone decides to widen it. Work begins. Barrels sprout. Bulldozers arrive. Temporarily congestion is worse. ‘That’s fine,’ you think to yourself. ‘Once the work is done things will be so much better.’ Months later the last equipment is removed and traffic is not so much better. Why? You can’t build your way out of congestion. Make something easier to do and more people will do it.
“So my tip for the day is this: spend just as much time working on how you can reduce consumer transaction costs as you do trying to reduce manufacturing costs.”
Another small effort to large effect is speed cameras versus ticketing cameras. The cameras that take pictures of car license plates, record the data, and send out a ticket are an order of magnitude more expensive to install and maintain than the ones that display “Your Speed Is…” We should ask if spending ten times as much is bringing back ten times the results.
In a talk for WIRED Health, Rory gave advice for how small changes can lead to people being a lot healthier. Start, with the name of thing. Sutherland said that if you want people not to go to the A/E for small things change the name of the A/E (which stands for Accidents and Emergencies). “What you call things affects how people behave…Because if you create a name for something we automatically assume it’s a norm.” This worked for designated drivers, says Sutherland. Once that term was introduced on television sitcoms it joined the lexicon.
Another medical example is multicolored pills. Filled but unfinished antibiotic prescriptions are troublesome. Rory thinks that these prescriptions should be filled in two colors. Then pharmacists can tell people, ‘finish the eighteen blue ones and then take the six red ones.’
“The likelihood that people will get to the end is much greater when there is a milestone somewhere in the middle.”
Sutherland calls these butterfly effects MONO ideas – Minimalist Oblique Non-Obvious interventions.
“Minor irritations are really worth focussing on because unlike things like health care, they’re relatively cheap to solve and the difference they make to the quality of life may be enormous.”
These are not obvious, so to find them you need to look in different places.
“Test strange things and when they succeed you know something nobody else does and that’s what’s really valuable in business.”
And this area of thinking is fertile.
“It’s hard to make an airplane ten times faster but you can make a hotel ten times cooler than another hotel for a fraction of the price.”
And butterfly effects are easier now than ever before thanks to the computer in your pocket. This is key because timing matters too. Sutherland says, imagine you have the option to drive or take the train. The decision point isn’t once the car is packed, the decision point is well before that. Once people are packed in a car the inertia to make it a car journey is too great.
“In fact, if you have kids and have already packed the car up with seven tons of shit the decision is already made for you.”
What if instead, you make the decision earlier. “Then the asymmetry doesn’t apply…By using technology to change the place that decision gets made you will fundamentally change the decisions that people make.”
The best billboards, says Sutherland, are ones that change. In one talk he shows a billboard advertising travel and points out that it changes throughout the day and the year. During afternoon rush hour it notes that the train doesn’t stop. Around the holidays it reminds you to visit your mum. Different messages with different means at different moments change momentums.
Here’s another example you’ve seen, please shower before swimming. My local YMCA has this sign on the pool deck. Whereas this sign should be in the locker room. On the pool deck, I think, well I’m about to get wet anyway I’ll just jump in. While in the locker room I think, well I’m about to get wet anyway, I’ll just rinse off first. Putting messages at the wrong place, says Sutherland, “is a disaster.”
Thanks for reading, tomorrow, a surprise.