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Welcome to the Marketing Millennials, the no BS Marketing podcast. I'm Daniel Murray and join me for unfiltered conversations with the brains behind marketing's coolest companies. The one request I tell our guests stories or it didn't happen. Get ready to turn the up.
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Foreign.
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We're going to go into some spicy things that he has when it comes to psychology and marketing, but I'll let him introduce himself first. Welcome back, Phil.
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Hi, Daniel. Thank you so much for having me back on. For those of you who are longtime listeners, you might have heard my voice before. I'm Phil Agnew. I spent the last decade in marketing and I've got a deep interest in behavioral science. So basically understanding how.
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And Phil on.
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The Podcast, the UK's number one marketing podcast.
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I love that. See, I like that hook. I wish I, I've, I've tried to fight him in the UK for the podcast rankings, but I can never get close. So I love that you need AI.
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To to give yourself a lovely British accent and then you.
C
I feel like if I could just re release it in two voices, that'll be fun. But I want to go into some topics. I think the first one rabbit hole I want to go down is loss aversion beats gain framing. And what is loss aversion? What is gain framing? And then why does it beat gain framing?
B
Yeah, you know, you and I, I think when we were discussing this episode, we wanted to cover some of these principles that are proven to work in psychology but often overlooked by marketers. So what are some of the things that maybe marketing textbooks tell us to do? Or just as marketers, we feel like gut instinct, we should do that. And one of those things, one of those things I've always traditionally thought as a marketer, maybe it's because I've been t it when I was at university, is when you're promoting your product or service, you should also, you should always try and talk about the things that the customer will gain from buying your product. We've all seen that super Mario meme of Mario before eating the mushroom. This is what your customer is now. Your product is the mushroom or the flower. And here's what they could become. And so we always talk to talk about games. You know, here's what you could gain. Netflix will give you a thousand new shows to watch. Amazon will give you the free delivery. But what you actually find in psychology, as in many examples, it is more powerful to talk about what the customer might lose if they don't purchase your product, rather than what they'll gain if they do. So this is known as loss framing. And the reason this works so well is because of loss aversion. Loss aversion, classic principle discovered by Tversky and Kahneman, are published in the famous book Thinking Fast and Slow. And that's the idea that losses feel twice as painful as equivalent gains. So if, Daniel, if our bosses came on screen right now and told us that we would gain an extra $50 this month in our wage, we'd be a bit happy, but probably wouldn't think about it too much. If the boss came on and said, you'll be deducted $50 from your wage, that would feel twice as painful as them saying that you would gain $50. We don't like to lose things. And what marketers can do with this framing is start to talk about what a customer might lose, and that could be more powerful. So the classic example of this is a 1988 study by Elliot Ar. He found that if you talked about how much money you could lose by not insulating your home, you can encourage far more people to start insulating your home. So rather than saying, save 75 cents a day, insulate your home, you should say, you are losing 75 cents a day, insulate your home, for example. That's a classic example of how to use loss framing to improve your message. But the one that I think is most interesting and the one that most people will have encountered is anybody who has an Amazon prime subscription who has tried to cancel. So that has been me. I've had a Prime subscription. I thought, I'm paying too much for this. I don't need this. I'll try to cancel. You go to the cancellation flow, and what they don't say is they don't say all the things that you gain from having as Amazon Prime. They don't talk about the music, the TV shows, the free delivery. Instead, they explicitly call out the exact amount of money you have saved and say, this is how much you will lose if you continue to keep using Amazon but stop using Prime. So for me, they said, hi, Phil. Sure, you go ahead and cancel, but you'll probably lose £313 over the next year if you cancel. And that message talking about what you will lose rather than what you gain from retaining with Amazon is, according to Richard Chataway in his book Behavioral Business. Well, has, I think, decreased churn for Amazon by 44%. So a classic example of how going against the grain. Don't talk about what you'll gain as a marketer. Talk about what the customer might lose can be far more effective at persuading them.
C
I love that. I want to ask you one question though. Is there a way that marketers could do this wrong? Like is there a way that people abusing loss aversion the wrong way? Like for example, like is there any situation where you say you might lose something? It's actually kind of a deterrent.
B
Yeah. Yeah, that's a good point. And I think there's always ways that you can misapply. Right. Like Amazon. If they said perhaps something which was a little bit more what Amazon feel like they're doing with that message, Phil, you will probably lose 313 quid is it feels like they're doing me a favor. Feels like they're saying, phil, we've calculated it for you. You will lose more money than you will gain if you cancel. So I almost feel grateful for them. They feel like they've done me a favor if they reframed that. So the example in the UK at the moment, and this is so niche, but there is an ISA, which is a savings account in the UK created by the UK government, was set up 10 years ago to encourage people to save for their first home. They encouraged thousands of people, including myself, to put this money into to save for their new home. Except they put a cap on how much money you could use to spend on your house. Now what that has meant is thousands of people like me and other first time buyers have actually had to pay a huge penalty to take our money back out of this savings account. So we put our money in the savings account, we've ended up with less than we put in. And that is awful loss framing because what we've ended up doing is actually being paid a penalty. If Amazon did the same thing, if they said, phil, we'll actually charge you a penalty for leaving, that'll cause so much aggression and pain, that will actually probably increase the amount of churn they'll get. Even though they're putting a disincentive in there and even though it'd probably be quite illegal. So the reason Amazon's framing works so well is because it feels like they're doing us a favor.
C
Yeah, I love that. And I think there's also applying principles and then there's also using it in a great way of copywriting versus applying principles and doing the wrong way because you could mistake one word and lose it. Like make it seem like worse off for you for saying something like that. But I want to go into another principle. You talk about A lot. But is why does scarcity work so much in marketing?
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Well, let's start with the basics, which is that all of these behavioral principles are based on evolutionary traits that we have developed over the past ten thousand, twenty thousand, thirty thousand, a hundred thousand years as humans. And as humans, we've learned over time that resources that are scarce tend to have more value than resources that are abundant. The classic example, if you're a hunter gatherer and you find berries which are extremely, highly sugar content, very, very valuable for a hunter gatherer to find because it's a lot of energy that's scarce, because you can't find them everywhere, depending on where you are and what time of year. But you are incentivized as a, as a, as a creature, as a species to collect as many berries as possible, to stockpile them. And we've learned this as a trait, as an evolutionary trait, because it's helped our survival. If you only just ate one berry and left the rest, you would probably not survive very long. So we've learned to really highly value scarce resources. Now, I think most marketers know this, and we're doing a podcast episode about things that marketers overlook. Now, I think the way this is overlooked is that it is applied so simply. The simple way of applying scarcity is to say three items remaining, buy soon or soon to be sold out or offer ending soon or 10. People are also looking at this hotel room. We've all seen that. And because it's so familiar, it started to lose its novelty value and we've started to sort of stop paying attention to it. And yet I think there are so many other wonderful ways you can apply scarcity. Let me give you an example. Movie posters. We've all seen posters for movies. They always say trailers do the same thing. They always say when the movie will air, airing this fall, airing this Halloween, whatever it might be. They all say that movie trailers never say when the movie will stop airing. They don't say going off screen this fall will only be shown up until this weekend. That's mainly because they can't actually tell. In many cases, they don't know. I think they could edit adverts to do this, and I think they should because Richard Shotton ran a study which he cited in his book the Choice Factory. And in the study, he asked a bunch of participants, will you see this movie? And they gave a yes or no answer. He then told the same part, a different group of participants. He asked them the same question, will you see this movie? But he added an Extra line. He said, I should let you know that this movie will stop airing in the cinemas this weekend. That was true for both groups. So the movie was always going to stop airing in the cinema this week. But he only told that to one group of people. When he added that the movie ends this week, people were 36% more likely to actually go and watch the movie. We are driven by scarce resources and yet we often don't talk about them. So, you know, it's crazy to me that movie producers don't talk about when the movie will stop airing. It's 36% more likely to drive people to actually go and buy a movie ticket and go and watch it. We're incredibly driven by scarcity. I think my favorite example of this is when you turn a nine ending age. So when you reach an age like 29, 39, 49, you know you're about to go into a new decade. We think about the scarcity of our lives in those years, we actually start to imagine how short our lives are. I'm 31 and went through that a couple of years ago. And what happens when you look at data is you see that when people reach a nine ending age, they start to take all these drastic life decisions because they're so impacted by scarcity. So people that are 9 enging age 29, 39, 49, far more likely to run their first marathon. You download marathon data, Boston Marathon, London Marathon, you see that to be the case. They're far more likely if you look at death certificates, to commit suicide. Incredibly, if you're at a nine ending age, 29, 39, 49, because you're thinking of the scarcity of your life. And perhaps the most shocking, most surprising, or maybe not to any of those reasons, is there was a leaked Ashley Madison data, which is a website married people can use to have illicit affairs with other people. And what they found in this leaked data was that the people who signed up were far more likely to be aged 29, 39, 49, 59 than they were to be any other age. Because when you reach that nine ending age, you think about the scarcity of your life. So I think scarcity is used in marketing. I think there are ways you can use it more and it is incredibly powerful. It really changes our behavior in all sorts of ways.
C
And I also think, I mean, it's a form of loss aversion too, right? Because you feel like the scarcity, you're losing out on a potential deal, a potential sale. Like we're like when people, when companies Say like, this is our only sale of like the year, or like, like our sale ends, but this is like, this is the only sale that you'll ever get there, or we will never go and we'll never go on discount again. Something like where people feel like they're losing out on a potential savings. I feel like it's also, you can use multiple of these principles together where there's scarcity plus loss aversion on those.
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Things you don't want to lose out on a deal. You've reminded me of a wonderful example. It was a study done in an Iowa supermarket, I believe, where they put up big signs and told people to buy soup. And I think on average, people who saw these signs who bought soup bought about three cans of soup per person. Fantastic marketing works. He put up a sign saying, buy soup, People buy soup. And then they added an asterisk. You were talking about copywriting. This is such an incredible example. They added just an asterisk to the buy soup banner, and it simply said limited to 12 cans per person. Totally irrational. You're not losing anything there because Nobody was buying 12 cans before. Remember, the average was three. And yet just putting that asterisk, it made it feel like there was some scarcity, made it feel like you might lose out if you don't buy it. Like, oh, this must be popular if they're limiting it to 12 cans per person. And just adding that asterisk, that one line increased the amount people bought from 3 cans on average per sale per person to 4.5 cans on average per sale per person. Just limiting the amount of people can buy can actually impact it as well.
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I felt this too, because we had a egg shortage in the United States. And when you would go to the, like, supermarkets, a lot of them would say, like, you can only have. Also had this happen in Covid with like, toilet paper and stuff like that. They used to say, like, only two per person. And yeah, I was, I was like, if I come back tomorrow and it's gone, I might not get eggs. So I got two eggs, even though I needed only one.
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You have to. And this is what we're talking about. This is how marketers overlook this stuff. If we don't pay attention to human psychology, you will make mistakes like that. What they want to do with that limit is red reduce the amount of eggs and toilet paper people are buying. But what the psychology says is you're only increasing it. Limiting the amount of eggs people can buy to two per person actually makes people buy more than they probably would have done anyway. Now, there are other factors at play. I think this is more the case with toilet paper, where there was more of an abundance than there was the eggs. But it's a great example of how sometimes this stuff is really misapplied.
C
Yeah, it's misapplied, but it's also, like, sometimes you miss the intention of those shops. I guarantee the attention of those grocery stores wasn't for people to buy more, but since it was limiting, it does. It does that even. You see this with, like, natural disasters, too, or, like. Like a pending natural disaster, like a hurricane. Because I live in Miami, people will go to the store like, a week before and get everything, even though they. It might not happen just because they don't want to. The potential to happen. And it's like this. Humans always are, like, planning on, like. Like, their survival instincts kick in when they, like, think they're gonna lose something. So. Yeah, try to just survive. Instincts.
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Yeah.
C
At the end of the day. Yeah. I want to go into another one. So could you go into the endowment effect?
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This is a. I'm really glad you asked me about this one, because I think this is a really interesting one. So this is the idea of when we feel ownership over something, we value it more. And you might think, well, why is this interesting? How can a marketer use this to get people to value things more? Well, one way you can do it is actually involve people in the creation of your product. So a slight subtext of this is the IKEA effect. And this is an amazing study by Michael Norton, which found that when people build their own IKEA chairs, they value those chairs far higher than when an expert builds them. So this is why Subway is very successful. People value Subway sandwiches. They think they taste better because they've had a role in the creation of the sandwich they've picked. What goes into it? The classic one. Build a Bear workshops. Do you have Build a Bear workshops in the States? I think you can see.
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Oh, yeah, we definitely do.
B
Yeah. This is crazy to me, because what this is is some of the most potent behavioral science and psychological tactics used on kids. And it's so effective. You know, you get a kid to build their own bear, they will genuinely love that bear. Not only do they build their own bear, they actually place a tiny heart into the be at the end of the building process. It's incredibly powerful what they're doing, and they're, in a way, you could say, massively influencing these kids to love this product, which maybe they shouldn't love. As much as they should and forcing them to spend what, 50, 60, maybe even more dollars on a bear. So the endowment effect works in that sort of way. But there's another way it works as well, which is the idea that once you've started a task or an action, you're more likely to finish it because you feel that ownership on. So this is an example that I do think marketers overlook. It's an example from Ielet Fishback's book Get It Done. And it's three researchers, they partnered with a New York cafe, and at the cafe, the cafe had always given out loyalty cards to customers. And when the customers bought 10 coffees, they got their 10th or 9 coffees, they got their 10nd coffee for free. And what I ell at Fischbach found in this book and found with this study is that you can actually make people more likely to buy the coffees if you give them a head start, if you make them feel like they've already begun the process of getting their free coffee. So in the variant, these three researchers, what they did is they created a second loyalty card which they gave out to half of the customers. This card had 12 stamps that you needed to collect, not 10. But they had always plugged in the first two stamps for free as bonus stamps. So an economist would look at both of these loyalty cards and say, well, they are identical. Both sets of customers need to buy nine coffees in order to get their 10th for free. However, a behavioural scientist looks at this and says, no, the 12 card variant with two bonus stamps plugged in might be more effective due to the endowment effect. And it is. What you find when people plug in those first two stamps is that I think there's a 65% more likelihood that they'll come back and finish the card. And I think when it's measured on days, those who get the 10 stamp variant only completed the card within 15.5 days. Those who get the 12 stamp variant completed it within 12 days. So people are far more motivated to complete a task that they feel like they have already begun. Ernest Hemingway knew this. He is famously quoted as saying that he never finished a day's work with a sentence finally finished. He would always leave the sentence halfway finished because he knew he would be more motivated in the morning to finish the sentence if it had already begun. Same thing is happening with the coffee cards. Same thing will happen. If you're dreading sending an email to your boss this evening, just start writing it, write the first word, write hi boss. And it will be Much easier to actually finish it, I think.
C
I mean, another thing to add here is that why. This is why, like free trials work so well too, because, like, you get people a sense of ownership, of building into something without paying, and then they have owner, like they've already owned something. They've already started customizing their own workspace notion does this really well too, like with customer. And then they feel like the ownership's there and then they want. They feel more entitled to like buy because they feel like they've done something in that platform ahead of time. So that's like a SaaS example.
B
The best SaaS example I have is Wave app, the invoice company. You load up the invoice you put in your website and it immediately, automatically in the free trial, customizes your invoice with the brand colors and logo based on your website. You don't have to do anything. And that's incredible. Making you feel like you've started the process, something is customized for you. Classic build a bear technique there as well. You feel like you've had a role in the creation. It does it automatically. And doing that in their free trial, I think dramatically increased their conversion rate.
C
Yeah, I mean, it's just a call to action too, in the market out there. Like, what in your current flow could you make feel a little bit more customizable to your audience to make it feel like they have more sense of like a simple thing of just making people put their brand colors in a platform or making their logo on top. It makes them feel like they own that space more than just having an out of the box experience.
B
Yeah, yeah. There's a reason why every video game that's successful tends to let you create your character, even if you can't even look at that character for the majority of the game. So if you look at a lot of the Bethesda games for the gamers out there, you can spend hours creating your character. You'll probably never see it because you play it in first person, but just having that time spent creating it will make you more likely to continue playing that game.
C
Yeah, that's a really good example. Video games have so many good parallels to marketing because they use so much game theory and game design and psychology in there. Let's go into another thing that you talk about. A lot is like, distinctiveness is more powerful than positioning.
B
So what do I mean by this? I think it's important for marketers to realize something that is perhaps well known and yet at the same time is a little bit overlooked and this is the idea that distinct things, so things that stand out and that could be as simple as one person on the tube or train with a Mohawk while everybody else is wearing a suit. Those items stand out in our mind and we more likely to remember them. So the important thing here as a brand is you want to be recalled, probably because most times that you see a brand isn't at the point of sale. So I will see dozens of ads for a beer brand before I'm ever at a supermarket where I can actually buy that brand, or at the pub where I can buy that brand. Typically at the pub you won't see any ads for a beer brand. So it's really important that your ad is distinct. And what's really interesting is most brands fail to apply this due to probably something like groupthink or lack of creativity. So Heineken's have got a wonderful example. There was a study in the 90s with Heineken which tested lots of different taglines to see which would be most effective for recall. They tried loads of different taglines, stuff like Heineken, delicious beer, Heineken, open your world, which is their classic tagline. Heineken, the best beer money can buy. Stuff that isn't distinctive. And then they came up with a distinctive slogan, which was Heineken, the beer that made Milwaukee jealous. That's one for the folks in the States would probably understand that better than us in the uk. And that line was recalled more than any other line because it was distinct. 85% of the people who heard that line remembered it a week later. And yet what you actually find is that most marketers feel it's far too risky to come up with anything that distinct. Obviously Heineken didn't follow that tagline. They came up with a tagline which is Heineken, open your world. And I guarantee you, if you don't know that tagline, and I asked you in a week, which of the two taglines I've mentioned on this show will you remember? It'll be far more likely you remember Heineken, the beer that made Milwaukee jealous. But the important thing to remember with distinctiveness for marketers is that you don't have to just be totally distinct. You don't have to come up with something that's totally random, that stands out with someone mine. You don't have to come up with the only podcast with a pink logo because that's distinct from, from everything. What instead you have to look at do is look at your competitor set and come up with something which is slightly distinct from that, then. So great example of this 2018 study. Researchers showed a bunch of brands from the same category to a bunch of participants. So you saw a load of car brands. So Mercedes, Honda, Ford, et cetera, et cetera. And then one brand from a different category. So a fast food brand, McDonald's. What they found was the fast food brand in that example was four times more memorable. They then repeated the experiment, but switched it round. Suddenly it's a load of fast food brands. McDonald's, Burger King, Subway, KFC, and then one car brand. So Skod, for example. And suddenly the car brand is four times more memorable. So you are far more distinctive if you stand out compared to your relative peers. So what you shouldn't be doing as a marketer is thinking, how can we create the most wacky ad that has ever been created in marketing or in the super bowl history? What you should do instead is look at the competitors that are close to you. If you're selling beer, look at the other people who sell beer. Well, what do they typically say? They say stuff like, the taste is wonderful, fresh as hell, whatever it might be, and then come up with something distinct within that category. The beer that made Milwaukee jealous, that's not the most distinct ad of all time. It's just distinct compared to other beer brands. And every marketer can benefit from doing this. We spend a lot of time thinking about our unique positioning, exactly what we're about internally. We should spend a little bit more time looking at our direct competitors, looking at the other companies that our customers will consider when they're looking to buy us, and think, how can we be slightly more distinct from them?
C
I think this is amazing, especially, I mean, we both come from the software space. And if you go to an average software or a conference, the number one thing you see most brands saying is, we're the number one, or we're the best in the space, or we're the best CRM. Instead of figuring out what is that thing that makes us different, that we can say that that would stand out. It doesn't have to be wacky, like you said, but they could be like one little thing that is very different, or you get a mascot versus they don't have mascots, or like, something little different that could make you stand out. But most people just go with the easy thing where it's like, let's just say we're better than everybody else.
B
Can I give an example of sas? Because I worked on this at Buffer, so Buffer before I went full time on My podcast, I was there for a year and a half, and we had social proof on our website. And the social proof was classic. The same social proof all of your listeners have seen on every SaaS website. We are used by HubSpot, we are used by Huel, we are used by Google. We're used by Microsoft. You know, the same sort of grayscale loads that are floating along the screen in a little carousel. And obviously that is absolutely pointless because everybody is used by Amazon, everybody is used by Uber, everybody is used by Facebook because these companies are so massive that everybody's got an account somewhere. So what we decided to do instead is come up with something distinct. How can we be different from everybody else in our market? So we got rid of Amazon, Facebook, whoever else it might have been that we had on the site, and instead we found users, very small users, who have grown dramatically since they started using Buffer. So Bob's hot dog van has grown 255% on Instagram since they started scheduling social media content on Buffer. That was one of the little carousels that went past. Sharon's hairdressing company has grown by four times on LinkedIn since they started using it. Julia Comedy's TikTok account has increased their content production by four times and growing their follower count by 100,000 since starting using Buffer. These are so different from everybody else. Suddenly, we're not talking about the giant companies who everybody else is using. We're talking about far smaller people, and we're giving actual concrete examples of how they've grown by using this tool and just making that one change to the social proof being slightly distinct compared to the competitor set. And there's other nudges in there that are helping. That alone increased the conversion rate on the homepage compared to Control. And for homepage conversion rate, to see a noticeable difference from just changing one part of your homepage, you know that that's a significant impact. So being distinct compared to your comparison set can be. Can be very impactful.
C
I love that I actually saw a. I think it was a supplement brand. And I went on to, like, their landing page. And right next to the product was like a customer quote that was. Was basically exactly like the pain point. I was thinking, like, I was trying to solve by, like, getting a. Like, I get no bloating from this, like, protein brand, like, blah, blah, blah. And it was like, right next to the protein, like, right next to the image. And I was like, okay, this is exactly what I want. Like, it got. I knew they were doing this to get me. But exactly what, like being a marketer, I know when they trying to get me, but it still got me because it's like that quote is exactly what I'm trying to solve with like a logo. Doesn't really tell you that it's going to solve anything. A direct customer quote from like social proof of people like you. Exactly. And it makes you distinctive. Like you said, if. If no brand is doing it.
B
So you.
C
That's why I think like some of these things which you were saying you could use so many multiple different things of psychology, like social proof mixed with distinctiveness. Missed a quote. That shows loss aversion and it. Like there's so many things that we talk about that you could use multiple in one or you could just use one, which is cool. What is the pratfall effect?
B
Yeah, I love this one. So from a young age, we are told to highlight our strengths. This is sort of a classic thing. You go into an interview, you're told to practice talking about your strengths, what is good about you. If you go on a first date with someone, you probably don't want to tell them you're an awful cook and you can't clean your house. You'll instead tell them that you were number one in track and field. Field, for example. We like to highlight our strengths. And what's interesting is this is pretty concrete amongst everyone. Politicians do this, brands do this, salespeople do this. We always like to talk about our strengths. And yet there is a part of psychology that suggests that purely talking about your strengths can actually make you less likable than if you highlight a weakness. So this is an Elliot Aronson study. I think I spoke about him towards the start of the show. And in this study, this is a fairly old study from the 80s, he recorded a video of a very intelligent quiz show participant who was asked a lot of quiz show questions and got them all right. In reality, this was just an actor. But the participants who were watching this video didn't know that they were watching someone who they perceived to be very intelligent, answering all sorts of quiz questions correctly. Half of them just watched that video and they were asked, how likeable do you think that quiz participant is? Half of them watched a slightly longer video and in the slightly longer variant of the video, the quiz participant walks off stage, grabs a coffee, takes a sip of the coffee and clumsily spills it down himself and says, oh God, I've got to spill my coffee down myself. What a game. What a silly person I am. So they see A weakness. The weakness isn't huge, it's just clumsiness. Everybody's a bit clumsy sometimes. Maybe not as clumsy as that, maybe we don't spill coffee down ourselves, but it's a weakness. Now you might look at that and think there should be perhaps no difference in how likable this person is perceived by both groups of people. Or if anything, the person who doesn't spill coffee down themselves should be perceived as less likable. We shouldn't really like someone who's, who's clumsy. They might spill that coffee on us. After all, that is not the case. Consistently, people are far more likely to rate the person who has a weakness alongside a strength. So the intelligent quiz participant who was also a bit clumsy, they are far more likely to rate that person as more likable than the person who doesn't show a weakness of the all. Now this has been followed up, that was 1980 study. This is followed up by a study done in Wales In I think 2006 where the researcher got dozens of her researcher assistants to apply to thousands of different jobs. And in these applications it would send out very consistent looking CVs and just cover letters. Except some would only talk about the strengths that participant had, whereas some would talk about the same strengths but also highlight a weakness. And what she found was when job applicants highlight a weakness weakness within their CV as well as strengths, the two always have to go hand by hand. You can't just highlight weaknesses. When you highlight a weakness as long as, as well as a strength, you're far more likely to get an interview, far more likely to go through to the next round. And the interesting thing with brands here is as brands, we only ever talk about the benefits that we might get as a brand. We only ever talk about the benefits that customers get. We talk about how fantastic our product is, how fantastic it is, and yet when they start to talk about about negatives, start to talk about problems with the brand, you actually start to get a lot of benefits. So the classic one being Marmites, you either love it or you or you hate it. I've tested it out as well. I erroneously or supposedly erroneously sent my listeners a link which was supposed to be to my podcast episode and it was actually a link to a cute dog meme. And then I immediately sent them an email afterwards saying, oh, I'm so sorry, I've messed up. I had, I apologized after this. I hadn't actually messed up, I did it on purpose to test if I could increase my click through rates and my Signups and then I sent them the actual podcast link and it increased my click through rate by 120%. So an example of how having a stupid floor putting a dog meme in an email rather than a link to a podcast increased my click through rate. That worked. And then I tested it on a Reddit ad as well. I created two identical ads, except one said, here are five reasons why you should listen to Nudge. It's got great guests, it's short so you can listen to it in the car. Insights that you'll be able to use in your job. And the other was a slightly different framing. It said five reasons why you shouldn't listen to Nudge. And it was sort of tongue in cheek stuff. You'll learn so much that your offers, your colleagues will be pissed off with you, you'll have so many things you'll want to apply, you won't know where to start, that sort of thing. When I framed it in terms of weaknesses, so five reasons why you shouldn't listen to Nudge, that ad had a four times higher click through rate. So finding ways to bring in weaknesses, finding ways to showcase your flaws can often be quite effective. Especially if you're the type of brand who only talks about positives, only talks about benefits. I think those are the ones who can really benefit it from actually showcasing a weakness.
C
Yeah. I also feel like it's a trust building mechanism because you see this all the time in restaurants where waiters come up to you and say like, hey, I wouldn't try like the fish, but like, our steak is like amazing. And you automatically trust them more than a waiter that came and said, these are everything's good on the menu. You can't go wrong.
B
Wrong.
C
Like you trust the waiter who, like, who already said like, admitted there was something not that good on the menu, but also told you like, here are the good things, like, it's just a. And Avis did this with their like ad. There's so many ways where you, like, if you admit your flaw up front and then would you say, like, add a benefit to it? But like, yeah, you can't just say we are the worst without say anything.
B
It has to be. So go back to that initial study. The quiz participant they were watching was highly intelligent in both scenarios. That's why the likability was there. When the quiz participant answered the questions incorrectly and was seen as less intelligent and then spilled coffee down themselves, they were perceived as less likable than the same quiz card participant who also answered a load of questions Incorrectly, but didn't spill coffee. So you need to have a split strength. You need to combine that strength potentially with a weakness. My favorite example of these are the very, you know, the companies that post one star reviews that actually showcase a strength. So the famous one is Snowbird Ski Resort and they showcase. They did a huge sort of double page magazine ad which said one star, the slopes are too technical. I wasn't able to get down it. I wasn't experienced enough. I couldn't, I couldn't handle the slopes. And Snowbird put this up and it's sort of this wonderful ad because it makes you realize, oh, this is the place you go. If you're a really good skier or snowboarder, this is the place you go because other people are rating it as one star. So you're combining a strength, which is a highly technical course and for some people that would be hugely beneficial, with a weakness, which is a one star review, which is usually what customers try to hide rather than showcase.
C
I love the one also with the Bible app, like rated by the devil, which I thought was funny. One star, like something like that where they, you can, you could like, I think like combining it with like some fun, like what you did with your ad where you like are saying five reasons but then you're like having like silly things where like people know, but at least you like have something. I mean you could say something like something that's like, like, hey, we don't talk about this. And if you want to listen to this, like, don't come to our part like something. But then having 5 benefit, I love that. Lastly, I'd like to ask everybody in this podcast this question is what is a marketing hill you would die on?
B
I think the marketing hill I would die on is probably exactly what we've been talking about in this episode, which is that behavioral science and consumer psychology is extremely powerful. And as marketers, if you're not learning about these things, you are missing a huge opportunity to influence your audience. That said, there is one part of behavioral psychology which for me personally I think is extremely powerful, which I think even people who know a lot of behavioral psychology don't care enough about. And that is this idea known as input bias or labour illusion. But put simply, it is the idea that if you showcase the work that you have put into something, people will value that thing more. So the classic example study by schindler Back in 2006, people watch presentations, two presentations. One group is told at the start that the presentation took eight hours to create. Another Group is told that it took 18 minutes to create. The presentation is identical in both scenarios, but the ratings at the end were heavily influenced by the amount of time people perceived was put into the presentation. When we hear that something has taken a long time to create, we value it far more. So what we should do as marketers, we sort of told this idea that everything needs to be a quick one win. We need to use AI to optimize our work, we need to use Zapier to connect things. Everything needs to be extremely efficient, everything needs to be automated, personalized, perfectly ready to go in an instant. And what you actually find is sometimes doing the really labor intensive things can be more impactful at converting your audience. Sometimes writing a handwritten letter to someone you want to buy your product can be more effective than sending 100 emails using AI to people who don't really care about about you. I recently, I take this really to heart and the best example I've had it recently I went to a present, I was invited to a conference to speak about this topic, how showcasing your effort makes people value your content more. And I thought, what's the best way I can showcase my effort? Well, I thought I'll hike to the conference. The conference was 60 kilometers away. That's like 35 miles. For those of you in the States, which is not very far. In terms of America geography, it's quite far. In terms of UK geography, it's a really long way to walk as well. It's about a 12 hour walk. And I thought I'll hike to the conference and I'll start my presentation by talking about all of the wonderful things I encountered during the hike. And then I'll weave in this idea that people value effort and people value things. And the idea behind that of course was that if people can actually see that I put a lot of effort into just getting to the conference, maybe people will value my talk more. And at the end of the show I was like, I emailed the the organizer, I said, you need to tell me what people think of this talk. And he sent me a bunch of feedback from pretty much every participant saying this was one of their favorite talks of the day. And I like to think that it's because I'm a very charismatic speaker and I had some good content. But I'm actually certain it's because I showcase the effort I put into it. If I hadn't hiked to the talk, there would be far more qualified people to actually give an interesting talk and talk more interesting than me. But the Effort I put in in to creating that presentation made people value that presentation more.
C
I also, I mean, it's so funny because like everything you're saying is like, you can apply one, but I also think like, you could have applied like distinctiveness as well. Like which participant of like those people are going to say that they hiked that and then you become really like the one that was remembered because like you did something different in your presentation than everybody else was doing, which is like, it's like the effort plus, plus like you're doing something different, which helps you get remembered. So I think it's cool that like learning these things can like help you apply 1, 2, 3, 4, 5, and you mark and it. But if you just take one out of this and apply this, your marketing today and let Phil and I know if this worked well, let Phil know because he's the one who's talking about it. But let it. Let us know if it worked on your marketing and we'll be happy to hear about that. But lastly, where could people find you and what you're doing?
B
Yeah, if you search for nudgepodcast.com, you'll find me. I'm on Apple, Spotify, YouTube. Just search for Nudge Podcast. I also have a reading list. I know I've mentioned a lot of studies, a lot of books, a lot of authors. Sometimes people email me and they say, I actually want the reading list. I want to know where to learn about all this stuff. So if you do want that, you can search for Nudge podcast reading list. Or perhaps we can even just drop the link to the reading list below. I'll send that over to Daniel and we put it in the show notes and that's a really good way to get a really quick Overview. I have 25 books in there that I recommend you read in 2025 and I have five books you should avoid as well. People love that. They want to know what they shouldn't read. There's a bit another nudge for you there and five books you should avoid. So if you're interested in learning more about all of this and you don't just want to listen to me, you can actually go and read those books and download my reading list.
C
Well, thank you for coming on and sharing all your knowledge and all your studying of this topic because it's actually super. I'm a big fan of how this applies to marketing. And even when people like think they, they, they know these topic, I feel like when you get into like the marketing craziness you feel, you start forgetting that, oh yeah, if I just apply one of these principles, like this could work, but you just like go into your like tunnel vision and forget that. There's so many things you could apply for this conversation that can help today. So thank you so much for coming on.
B
Thanks Daniel.
A
Thanks so much for listening. Keep tuning in to hear more great insights from the coolest marketers from around the world. If you haven't already, make sure to subscribe and follow the Marketing Millennials podcast on Apple Podcasts, Spotify, YouTube, or wherever you get your podcast. And if you like what you hear, I would greatly appreciate you giving us a five star rating. It helps bring more marketers into our community.
Podcast: The Marketing Millennials
Host: Daniel Murray
Guest: Phill Agnew (Host of Nudge Podcast)
Episode: 388
Date: January 30, 2026
In this engaging episode, Daniel Murray sits down with Phill Agnew, behavioral science enthusiast and host of the Nudge Podcast, to dissect the often-overlooked psychology hacks that can dramatically improve marketing outcomes. Pulling from foundational studies and Phill's practical experiences, they cover why certain psychological principles work, how marketers often misapply them, and actionable insights for using these hacks in both copywriting and product experience. The discussion is practical, witty, and rich in stories, making complex behavioral science understandable and immediately useful for marketers.
Definition & Power:
Loss aversion is the idea that people feel the pain of losses more strongly than the pleasure of gains – roughly twice as much. Instead of highlighting what the customer will gain, marketers should highlight what the customer might lose by not taking action.
Classic Study:
Referenced by Phill, a study found that telling homeowners “you are losing 75 cents a day” by not insulating (loss frame) was more persuasive than “save 75 cents a day” (gain frame). ([04:45])
Amazon Prime Example:
When canceling Prime, Amazon tells you exactly how much you’ll lose per year in savings. This approach reportedly decreased churn by 44%.
Pitfalls:
Loss aversion can turn customers off if misapplied (e.g., punishing penalties or negative-sounding copy). Instead, frame it as the brand helping you avoid loss. ([05:17])
Why Scarcity Works:
Evolutionarily, scarce resources are valued more. Scarcity taps into this survival instinct. ([07:16])
Creative Applications:
Traditional uses (“Only 3 left!”) are becoming less effective. Novel applications, like stating when a movie ends rather than when it begins, can drive a 36% higher likelihood of attendance ([09:05]).
Ages Ending in 9:
People hitting ages like 29, 39, or 49 are more likely to take big life actions because of scarcity awareness ([10:40]).
Overapplying Scarcity:
During product shortages (eggs, toilet paper), limiting purchases (e.g., “Limit 2 per person”) can backfire, causing people to buy more ([13:17]).
Definition:
People value things more once they feel ownership, even partial. Build-a-Bear and Subway are cited as brands that leverage this by involving customers in product creation ([15:12]).
Loyalty Cards Study:
Giving customers a punch card with “2 free stamps” (making them feel they've started) led to 65% more completions than starting at 0, despite requiring the same purchases ([16:55]).
SaaS Applications:
Free trial setups that auto-customize with a user’s brand colors/logos increase conversions—Wave Apps, Notion as examples ([18:50]).
What Distinctiveness Means:
Standing out against your competitors makes brands more memorable, not just unique in a vacuum. Memorable taglines and social proof that break category patterns work best ([20:57]).
Heineken Example:
“Heineken, the beer that made Milwaukee jealous” was recalled by 85% of people a week later—much higher than generic taglines ([21:26]).
Category Contrast Study:
Exposure to a unique brand outside a set (e.g., McDonald’s among car brands) increases memorability fourfold ([23:00]).
Practical SaaS Story:
Buffer replaced generic “used by big companies” social proof with real stories from small businesses with measurable success, boosting homepage conversion ([25:23]).
Definition:
People (and brands) come across as more likable if they show a small, relatable flaw—the “pratfall effect” ([28:36]).
Quiz Participant Study:
An otherwise smart participant spilling coffee was rated more likable than a flawless one ([28:42]).
Marketing Applications:
Ads and pitches that candidly confess a minor flaw (“Marmite: you either love it or hate it”, or “five reasons you shouldn’t listen to Nudge”) can increase trust and response rates up to fourfold ([31:00], [31:30]).
Restaurant Example:
“You trust the waiter who already said like, admitted there was something not that good on the menu, but also told you like, here are the good things.” (Daniel, [33:18])
Definition:
When you show how much effort went into something, people value it more (“input bias”). ([36:08])
Study Example:
Presentations “taking 8 hours” to make are rated as more valuable than identical ones “taking 18 minutes” ([36:48]).
Personal Story:
Phill hiked 60km to a conference just to demonstrate input bias (“If people can actually see that I put a lot of effort…maybe people will value my talk more.”) ([38:18]).
On Loss Aversion:
“Losses feel twice as painful as equivalent gains.” — Phill ([03:00])
On Distinctiveness and Social Proof:
“We are used by HubSpot, we are used by Huel, we are used by Google... obviously that is absolutely pointless because everybody is used by Amazon, everybody is used by Uber... So what we decided to do instead is come up with something distinct.” — Phill ([25:23])
On Showing Flaws:
“There is a part of psychology that suggests that purely talking about your strengths can actually make you less likable than if you highlight a weakness.” — Phill ([28:36])
On Effort in Marketing:
“Sometimes writing a handwritten letter to someone you want to buy your product can be more effective than sending 100 emails using AI.” — Phill ([36:48])
On Combining Principles:
“You could use multiple of these principles together where there's scarcity plus loss aversion on those... there’s so many things that we talk about that you could use multiple in one or you could just use one, which is cool.” — Daniel ([28:12])
Behavioral psychology offers powerful, often counterintuitive levers for marketers. By understanding and applying principles such as loss aversion, scarcity, the endowment effect, distinctiveness, the pratfall effect, and input bias, marketers can cut through the noise and craft more effective, human-centered campaigns. And as Phill and Daniel underscore, thoughtfully combining these principles multiplies their effect.