He zooms in on the impact of behaviour on marketing.
The second session of day one at the Times of India Star FLOW fest revolved around the ‘impact of consumer biases’. It was presented by Richard Shotton, author, behavioural science expert, and founder of Astroten, a consultancy specialising in applying behavioural science to business problems. Shotton is also the author of The Choice Factory, a book on how to apply findings from behavioural science to advertising. He started his career as a media planner 19 years ago, working on accounts such as Coke, Lexus, and comparethemarket.com.
Shotton initiates the session by stating, “The core job of marketing is behaviour change. A lot of it is gut feeling, but it is not the right thing.”
“Why isn’t every brand applying it?” he asks. Shotton then explains that one of the first objection marketers and executives make is, that they buy in a rational manner and then ask why are consumers swayed by psychological biases? He reveals that studies show we all are affected by biases. “Marketers are as affected as anyone else,” he opines.
He mentions his survey where he asked two questions. First, ‘how good are you at your job compared to your colleagues?’ The answer could be either above or below average. He reveals that 95 per cent of respondents thought that they are better at their job. “This finding isn’t a one-off and overconfidence extends to many other studies. Most people think that they are better drivers than others. Even the most awful drivers (who got into accidents) thought so. It shows that when people answer surveys, they don’t have full insight into themselves. People don’t lie, but they don’t realise,” he explains. He suggests that instead of asking questions, marketers should set up simple experiments to understand.
The second question was, ‘How many calories does an apple have?' It could be either above or below 50. The majority mentioned that it was 85. But there's a psychological twist here. When the same question was asked with the option of more or less than 150 calories, the general answer was 118 calories. “The response changed with the question. There is a well-known bias in anchoring. When consumers decide worth, they don’t really have a certain answer but measure it based on possibilities. While 50 calories are too low, 150 is too high. It ends up affecting their thinking,” Shotton explains.
What can we really tell from an artificial survey? If the same effect happens when there is cash at stake, will they be more rational? "No, the outcome is as effective commercially as in lab settings,” he reveals. He goes on to explain the situation with the example of diamond rings and marriage.
“Francis Gerety came up with an amazing lie in the ‘40s, ‘diamonds are forever’, fusing the strength of a diamond with the timelessness of love. The best line that peers came up with was, 'most valued symbol of your devotion’ by spending a month’s salary. The next was spending two months of your salary. In Japan, De Beers said ‘three months of salary’, and they ended up spending more than the rest of the world,” says Shotton.
He further opines that the changing consumer is a myth and the fundamentals are still the same. “Communicators should be concerned with the unchanging man,” he adds.
He uses Nespresso for a more recent example. Nestle Nespresso had to sell half a kilo at $90 vs the rest of the world’s $10. Instead, it sold capsules and pods. The cup-sized offering was then suddenly compared to Starbucks. 60 cents a cup compared with $4 a cup of Starbucks. Nestle still maintained its $90 price range.
He further goes on to explain the Pratfall effect on brands which suggests the likeliness of purchase increasing with higher ratings, and it decreasing gradually as it is perceived as too good to be true. He says that Volkswagen once accepted a product flaw in its ad campaigns and so did other brands over the years. They said that their cars were slow and ugly or as Listerine said that its product had bad taste. This self-depreciation actually benefitted brands, Shotton explains.