Loading summary
Transcript98 lines
- [00:00]
A
Foreign. Ladies and gentlemen, welcome back to the uncensored cmo. Now, one of my favorite ever guests and the most popular guest ever on the podcast is Mr. Rory Sutherland. Rory is a fascinating person and he always comes at marketing from a surprising and very interesting perspective. So I'm catching up with Rory to find out what has caught his attention and in the world of marketing and what all of us can learn from Rory's incredible brain and how he sees the world. This is such a fun episode and I know there's going to be so much that you will just love. Here we go. Very delighted to have you back, Rory. Welcome to the show.
- [00:40]
B
Oh, it's a joy to be back. Always a pleasure. And those figures were freaky, weren't they? It was the Scott Galloway Podcast, which was number 31 on Spotify, and it just showed.
- [00:49]
A
It was one of those lucky accidents. I mean, we had you and Scott in the room for the first time, I believe.
- [00:54]
B
Yeah.
- [00:54]
A
And I was interviewing each of you kind of sequentially. And then I had thought, well, it'd be fun to get you debating topics I think you might disagree on. I thought, well, let's, let's talk Jaguar. Cause that's bound to divide the audience. And his controversial brand is dead thing. And then it was meant to be just for the audience and we decided to pop it out as an extra episode. And then when I got my Spotify unwrapped this year, absolutely blown away. In fact, I looked at the thing and it said, congratulations on ranking number 31. I'm like, oh no, that's disappointing. I usually do better than that in marketing. And I thought, oh, well, maybe it's business. Wasn't business. And it was overall global Spotify.
- [01:34]
B
So this explains why I basically can't go through a railway station now without a selfie request. It's completely bizarre. It's. It's sort of micro fame, you know, it's weird. I mean, actually it's weird of course, because the whole growth of influencer marketing, which is interesting in itself, which is you can be very, very famous within a particular milieu or area and then utterly obscure everywhere else, which is, you know, fundamentally, I think, different. I mean, it's just a product of self selected media consumption, I suppose, but it is very strange. I mean, it's been weird for me as well.
- [02:06]
A
I bet it has. Well, talking of fame, of course, you appeared as the answer to a question in a TV quiz this year, didn't you?
- [02:14]
B
So that was only connect. I was on the lion wall in the you know that one of the two connections, connection wall sequences. And they had four famous Rorys. Well, to be honest, three fairly famous Rory's, one pretty obscure Rory who were featured and I was. One of them was Sutherland. The other ones were a footballer, Kinnear and Rory. Delap, dilap, Kinnear and Stewart. I think the other three. Yeah.
- [02:39]
A
That's amazing.
- [02:40]
B
Yeah.
- [02:40]
A
Well, I think the closest I got to that, which. Which might not quite match, but I once appeared on have I Got news for your? 23 years ago this week, bizarrely.
- [02:51]
B
And was it a photo as well? Yes.
- [02:54]
A
You know, how about. You got used to it. They used to put four clues up, four images, and you have to guess what you have to reverse into what the story was. Now this was.
- [03:03]
B
Was it an odd one out? Was it the odd one out round?
- [03:06]
A
Yeah, that's right. Got it. It was very. It was one of those lessons in timing is everything. Right. Cause this is way back in 2002, I'm doing my first brand manager role ever and I'm on Di Sirona Amoretto.
- [03:18]
B
And is that the drink or the biscuits?
- [03:19]
A
The drink.
- [03:20]
B
The drink. That's it. Yeah. They also make the amaretti. They're.
- [03:23]
A
They're the biscuits.
- [03:24]
B
Exactly. They're also made. Are they the same company?
- [03:26]
A
Not the same company. Not the same company. Both in Amaretto. Di Sirono Amaretto. And it's famous for smelling of almonds. Right. And I came up with this idea that, you know, when you go into like a, you know, a supermarket, they waft the smell of the bakery.
- [03:40]
B
Yeah.
- [03:40]
A
You know, it's a genius idea because the moment you walk in, you just. You just think of bread and you go to the back and you end up spending a lot more than you plan to.
- [03:46]
B
I think there's a pretzel business which is basically predicated on fact that you blast the smell of baked pretzels wherever you are. It's amazing because, of course, the footfall is kind of almost guaranteed at that point.
- [03:57]
A
And it's one. It's one of the senses that in marketing we tend. Well. Well, not particularly for days of scratch and sniff, of course. When you and I were a lad.
- [04:04]
B
And we have magazines, a scratch and sniff piece of work, actually, once. Yeah. Believe it or not.
- [04:10]
A
So inspired by a scratch and sniff back in the day, I thought, wouldn't it be nice to pump the smell of almonds in the London Underground? Right. It's pretty, you know, smelly and disgusting.
- [04:19]
B
And you did one of those station takeovers.
- [04:21]
A
I did. Well, basically, I Picked the four biggest terminals. I think it's King's Cross, Paddington, Liverpool street and Waterloo. And in. In the terminal, you could not get from one exit to another without being given a miniature bottle of Di Serono when you went down every single escalator. I bought the entire. In fact, I wrapped each of the escalators entirely from top to bottom. And the piece de resistance wouldn't get neat.
- [04:43]
B
Or do you dilute it?
- [04:44]
A
Well, you're supposed to drink it neat.
- [04:46]
B
Got it.
- [04:47]
A
Occasionally you can. I mean, they do suggest with orange, but I came up with the idea of Di Sereno and Coke, which basically tastes like Dr. Pepper with alcohol.
- [04:55]
B
Got it.
- [04:55]
A
Wow. It was revolutionary for the brand Adult Dr. Pepper, and it was one of those Friday afternoon things. So here I was pumping the smell of amaretto through the underground, and then this is one where the timing matters. 2002, we're about to go to war with Iraq, and the Home Office issue public guidance to be vigilant for the threat of a terrorist attack. And the sun newspaper does this massive headline being public warned to look out for a cyanide attack on the Underground. Point 1 in the article is cyanide smells of almonds.
- [05:29]
B
Oh. Oh, my goodness.
- [05:32]
A
Now, I was, you know, being a junior brand manager at the time, I was busy at a trade show.
- [05:36]
B
Panic there and then in the place, or was it just.
- [05:39]
A
This was a funny thing because the panic happened based on the story was no actual panic. No one actually panicked in the underground. But no, this story, I. I had kind of gone to one of these Christmas trade shows and I was kind of, you know, sampling D? Serono. And I mean, this is when people used to sort of just pick up phone messages once a day, you know, as, you know, before smartphones. And I picked up my phone, wouldn't usually have many messages and I had like, 15 messages. And I'm like, what's this about? Anyway, I'm literally every journalist for every national newspaper was asking for a comment. I'm like, what's gone on? And basically they'd had to pull the campaign because of fear of panic in the underground, as everyone went on their commute and thought there might be a terrorist attack. And the story had gone so far, the national newspaper in Italy had gone to print with 1.5 million pounds poured down the drain as a result of stunt that goes wrong.
- [06:30]
B
Oh, my God.
- [06:30]
A
And this was. So basically, this happened on the Monday by the sass date. I was have I got news for you. Main story. And on the Sunday, the Sunday Times Printed a quote of the week and I'm the quote of the week saying, clearly security concerns trump marketing activity. Says brand manager for Amaretto, after pulling the Armand stunt in the underground sort of thing.
- [06:54]
B
But it probably. By the way, you probably sold a ton of product. Did you, as a company?
- [06:58]
A
The best year in D serono history for UK sales. Yep. Sales went up 20% that Christmas.
- [07:05]
B
By the way, I think there's a really a wider issue for marketing communication here, which is the problem of confected outrage, which is that effectively journalists know there's no story here, but they also know they can make it into one. It's a bit like the line Kane says in Citizen Kane, make the headline big enough and I'll make the story big enough. So you can effectively create a story out of a non event because it sounds scandalous and you can, you can effectively make someone blameworthy. And the interesting thing about those stories is that probably within the companies there's this huge paranoia about doing anything brave in communication for fear of confected outrage. But the public themselves kind of know it's confected outrage. Okay, so probably the chief executive who's having to field phone calls is regarding this as the worst moment in their working life. But as far as the public are concerned, they know it's basically a load of tabloid nonsense. Yes. And so I. Oh, sorry, I'm. I'm beeping. I'll, I'll stop that in a second. But, but there's something there which I. Which really worries me because the extent to which, as with sort of Sydney Sweeney etc, you're vulnerable to effectively people who for whatever reason want to. I don't know, they're either trying to effectively signal through excess sensitivity or they're imagining offense to third parties where none really takes place or whatever it may be. And that does strike me as fundamentally worrying because it will ultimately make advertising boring if advertising people are always navigating these kind of potential pitfalls. Even when I had to remind younger staff, my brother, who'd spent some time in the us, came back to the UK shortly after Robert Maxwell had drowned. And at the time the sun and the Mirror were in a price war. And he gets onto the Piccadilly line at Heathrow to go into London, you know, and finds himself crying with laughter at a poster opposite, which was at the time the price war was. I think the Mirror couldn't cope with the 10p cover price of the sun and had gone back up to 30p shortly after Maxwell, the proprietor of the Mirror, had Drowned. And the ad simply said, the Daily mirror now costs 30p. Don't go overboard to buy it. No, absolutely. Now I can date this exactly. It would have been early 90s. We can date it by the death of Maxwell. That was probably a few months later. It wasn't, you know, weeks later. But that was the kind of badinage and mischief you could enjoy in advertising back then and now. I mean, it wouldn't, you know, effectively no one, not even the son, would have the balls to run that. Yeah, nor would it, nor would anyone allow you to run it. I mean, bear in mind the scandal had. I ought to just make a point that Maxwell had been fairly widely discredited by that point for stealing the pension funds of, of Mirror journalists and Mirror workers. It was as if this had been seen as just an innocent victim of a maritime accident. So there was a context to it which made it perhaps a little bit more forgivable. Okay, but this is, But I mean, you suddenly look back on those things and, you know, you look back on the Timberland ads, for example, you'll remember those, you know, and nobody could even, I mean, they, you know, never mind running them in the press, a creative person will be frightened of putting them up on the wall. Now there's a problem there in a way because I think, you know, to some extent creativity involves when your brain manages to evade its own self censorship mechanism. And if we are all consciously and unconsciously self censoring with everything we think, say or do, there's a hidden opportunity cost to all that. Yes, we may cause, you know, minor offense a little less frequently, but what are the ideas which no one will eventually. I mean, you know, a lot of great advertising campaigns have kind of emerged out of a joke. The Apple campaign, Think Different. Originally it was a fairly boring campaign featuring people currently alive who are sort of business. You can imagine the kind of thing business leaders, you know, it was, you know, it was kind of, you know, you know, fairly minor people who were, I think, featured using the product. And it was some creative guy who goes in and almost takes a piss because you have this line called Think Different. I don't know, they might have put Hitler up there. I've got no clue. Okay, but eventually someone then puts up, you know, Gandhi and Alfred Hitchcock and so on and so forth and it becomes one of the immortal campaigns. But sometimes you've got to go through what I call the foothills of silliness. You know, you've gotta go through the valley of Silliness to get to the Bright sunlit uplands that lie beyond. And if we are in this kind of very, very nervous kind of environment, it has terrible implications for comedy, for all manner of the creative arts and incidentally for advertising as well.
- [12:10]
A
I think, I think I'm right in saying that should have gone to Spec Savers was a joke on a set while making a different ad that ended up becoming, you know, then got, oh, we'll mention that again in the next one. Eventually it ended up becoming the whole idea that has like carried the bag.
- [12:27]
B
Oh, by the way, just like actually areas like major scientific progress, the role of luck and serendipity as opposed to process and intentionality in the greatest advertising campaigns. The Dulux dog wandered onto set by mistake. They'd happen to rent a house, they'd happen to take over a house in which to hold a photographic shop showing an exciting range of Dulex colors. And the owner of the house happened to have an old sheepdog and the photographer had the inspiration just to leave the dog in the chute. And it's now a brand property worth millions. David Ogilvie picked up the man in the Hathaway shirt, eye patch on his way to the photographic shoot simply as a kind of whimsical, kind of, you know, you know, it was a sort of spur of the moment kind of, you know, whimsical punt if you like. And I mean that has actually quite a big bearing I think on our approach to everything from scientific progress, technological advancement and advertising, which is what we're trying to pretend, and I think what science is trying to pretend is that great scientific advances mostly arrive through intended actions and pre designed consequences and simple observation shows that it's actually fat tailed. The process is every now and then you get spectacularly lucky and the skill lies in spotting when you've got lucky and doubling down on your luck. It's a bit like poker or something. I've got an extraordinary good hand. I really need to play this really well. It's not like chess at all, it's like poker effectively. And there's a great book and the title is fantastic by David Clevely, who's a Cambridge sort of entrepreneur and investor and it's called serendipity. It doesn't happen by chance. And the point he's making, and the point that Nassim Talib makes a lot is that you can't avoid luck, you can't plan luck, but you can plan to increase your surface area exposure to upside. Good fortune. And one of my complaints is that when you turn something into a process or an algorithm and you regularize it and you make it formulaic. The hidden cost you pay is that you're no longer exposed to these lucky accidents. Now, I would argue that the problem marketing has. I think I don't need to think this because Nassim Taleb, who's the world's leading expert on fat tailed distributions, said to me, marketing is fat tailed. By which he means that a small number of freak successes almost outweigh in importance. What you might call the day job. And your job is as a marketer is to try and get, you know, is to try and hit on that utterly magical thing. I think we saw one this Christmas with if you can't find the words, find the gift, which to me is just copyrighting gold. I hope they keep it for the next 10 years. It says something in monosyllables, by the way. You know, the entire sentence consists of monosyllables. Yes, that's right. Yes, yes. Yeah. So what if you can't find the words, find the nine. Nine monosyllables conveys something that sort of economists have been wrestling with, you know, about why it is that people, you know, give presents as gifts rather than, say, vouchers or money. And it just answers that question in nine syllables. And the problem we have is that marketing. And I blame media agencies for this, partly I blame finance for it, I blame procurement for it, are trying to turn this into a Fordist production line where every car is equally valuable and where the value created is kind of proportionate and linear. And they're using the wrong maths in the same way that, for example, fat tailed businesses would include pharmaceutical research, Hollywood, movie industry, music industry, publishing, where in all of those cases it's not really, well, it's worth doing, but it's only really worth doing because every now and then you have a blockbuster breakout success. You can't totally predict them. I remember a year in which there was some sort of $500 million film made which nobody watched, and instead everybody went to see March of the Penguins. Do you remember that? Yeah, yeah, I went to see do. You could do it. And I kind of going, this is weird because someone's made a blockbuster. It must drive people into Hollywood insane when that happens. But you're doing this partly just to do it because it's worth doing in and of itself and it's not a total waste of time and, you know, and so forth. But the real reason you're doing market marketing is because every now and then you have what you might call a 10x, Jeff Bezos says, you know, in baseball the most you can score is 4 in a single hit. But in business you can hit 1000. And a large part of the value of marketing, I think comes in those moments where you hit 1000. Again, as I said, it's not a process you can engineer in advance. The problem is, is that marketers don't get to claim the full credit when that happens. So we're held accountable for every single unit. It's also true of agencies at a micro level. If you come up with a sensational idea as an agency, it buys you six months forgiveness, that's it. The following year, it's some bloke in supply chain management who's basically claiming the credit for the increase in profits. And so it's true as an agency, I mean, I mentioned the fact that the Coke idea, Ogilvy Australia, you know, share a Coke with putting people's names on Coke, 10 year idea gift that keeps on giving, run in 110 countries. Ogilvie Australia made about $350,000 for that.
- [18:27]
A
Wow.
- [18:28]
B
They did the maths. So you come up with a billion dollar idea. I don't think Coke would deny that. And you get to buy a very small flat in a shit part of Sydney. Okay, it's not really commensurate because you are held responsible for every penny you spend. But then when you hit pay dirt or hit the mother load, you only get 10% of the upside credit and then only for six months because the next financial quarter or the next financial year, everything's reset to zero. As Bill said, one of the mistakes we make, I think as marketers is we think that finance people are good at maths. They're not good at maths. They just do addition, subtraction, multiplication and division. This is infantile maths. Now the maths you need to understand, something like marketing are probabilistic, nonlinear, you know, dynamic, you know, non equilibrium, da da, da, da. And yet we're being judged by people who are holding us to this incredibly narrow world where every quantum of effort has to be matched to a quantum of incremental revenue. Otherwise you're not allowed to exist. You made a wonderful point at lunch, actually, which is you've mostly done jobs for three years. Yes. And you suddenly realize when you did a job for six that the payback only arrives in year four. You know, there are an enormous number of things where effectively, I mean, for example, the first Heineken ad wasn't actually very good. You know, that wouldn't have moved the needle at all. I suspect it was something to do with a policeman standing on a block of ice. I remember watching it as a child. I couldn't really understand it. What it led to, however, was, you know, worth billions. And so a lot of these things are, you know, fame, for example, is a compounding asset. It doesn't grow linearly at all. And if we had held to this artificial time horizon of the quarter and the, you know, and the annual report, then you can't really do proper marketing in that sense.
- [20:26]
A
I tell you, if there's one concept I wish every market would understand, it's literally compound interest. Because the moment you realize that being in a role for two or three years makes zero sense, you need to.
- [20:35]
B
It's like your pension. The first few years you have a pension, you go, why the fuck did I bother? It's gone down in value, you. And then you get to, you know, I'm 60 now, and I have to admit, and I don't want to sound, you know, braggadocio, man, but you kind of go, where the. Did all this money come from? Right. Because I don't remember putting away this money. And of course you didn't. It's compounded over time.
- [20:55]
A
Yeah. I want to come back to you on the luck point as well, because I don't know if you've read Great By Choice by Jim Collins, but he studied loads of, I think, 500 different companies, I think, in this study. And he tried to answer the question, were the successful companies just lucky? And he actually broke down all the different businesses, and he actually categorized them in terms of did they have good luck or bad luck over time. And what he worked out is successful companies are no luckier than unsuccessful ones.
- [21:22]
B
What made the difference is how they respond.
- [21:24]
A
Exactly. Is entirely so good luck.
- [21:26]
B
So you have the opportunistic mentality.
- [21:28]
A
There's supposedly an experiment how you experiment.
- [21:29]
B
In behavioral science, and I hope someone can find it for me, which is you gave people a completely mundane task, which was counting the number of times the word the appeared in the news section of a newspaper, over two pages or something of that kind. You weren't supposed to count the. The use of the word the in advertisements, but there happened to be some advertisements alongside these news articles. And then, of course, the. The whole exercise was complete, completely bogus exercise. What they measured was the extent to which people could recall and remember and had noticed the advertisements alongside the main day job of counting the word the in editorial or whatever. And I'M pretty sure they actually found that the people who noticed the advertisements, in other words, the people who are not so focused on the boring task at hand as not to be keeping an eye out for opportunity elsewhere, the people who noticed the advertisements and the accompanying material were actually more successful people. And so, yeah, so, yeah, so there's, there's, there's basically this business where I think a lot of bureaucracy has this hidden cost, which is it kills off opportunism or what you might, I suppose. Yeah. I mean, Nassim Talib would call it, what you do is you increase your surface area exposure to positive upside optionality. In other words, you. The more you effectively expose yourself to the possibilities of accidental good fortune. And then of course, you have this asymmetry, as Nassim would say, which is that when an opportunity comes along, you don't have to take it, you're not obliged. It's not an obligation, it's an opportunity. And you can then pick and choose from the lucky things that happen and decide which of them you act on and which of them you effectively ignore.
- [23:15]
A
Going to the talking about accountancy as well, you kindly put me in touch with Will Godara. I had him on the show recently. One of the favorite things he did is 95. 5 rule. Did you come across that?
- [23:27]
B
Yeah, Absolutely brilliant.
- [23:28]
A
It's absolute genius, isn't it? Like, you know, spend 95% like your life matters on it and be ruthless in efficiency, but then spend 5% irresponsibly on something so indulgent, so spectacular that people end up talking about it.
- [23:43]
B
And by the way, I think in customer service, I think in marketing in general, it's not a bad policy. Marketing, of course, within the organization would probably you probably 50% of your marketing budget or 30% of marketing budget should be spent on a maze. And so it's the explore, exploit, trade off. But his wonderful subtitle of his book is the Amazing Power of Giving People More Than They Expect. And I would argue that the magic of everything, you could take everything from the doubletree cookie, which of course is, you know, is an unexpected treat when you arrive at a hotel and you could take it to the AO Teddy bear. Those acts of discretionary generosity seem to be unbelievably communicative precisely because you weren't expecting them and you weren't entitled to them. And they seem to possess a signaling power which is way above. I mean, one of the things I think a few of us were talking about yesterday is that banks don't give you anything anymore. You used to get a checkbook cover, you used to get, you know, bits of stuff. Now I'm sure that's basically. That is usually driven by procurement and justified by environmentalism. That's usually. Marketing's job is to pretend that the actions of procurement are actually done in the interest of environmental sustainability. As in, when you get to the gold level on ba, they no longer give you luggage tags to help the environment. And you kind of go, mate, you're an airline, okay? I don't think you're gonna make an appreciable difference to your carbon footprint by cutting back on luggage tags. And these things are actually problematic because those things are so disproportionately important. If you think about it, politeness is generally achieved, likability actually is generally achieved by displays of discretionary effort or discretionary generosity. What's the classic phrase, you really didn't have to. And it's because you didn't have to that it's meaningful. If you did have to, it would, you know, obviously a hotel I stay in has to provide me with a room and a television and a toilet and everything else. But I'm not, I'm unlikely to write home about those things. Whereas they give me a cookie when I check in. I last stayed in a double tree. Geez, it must have been 20 getting off 20 years ago. I can remember two things about it. Three actually. I can remember that was in Chicago. I remember being surprised by the cookies and thinking, what's this hokey American book actually? Then being surprised that they were warm cause there's an oven underneath the check in desk. And then going up to my room and eating one and discovering they were absolutely delicious. And I can still, I can't remember anything about the hotel, the room, the television, any of those details. I can't remember anything about the service. I can't remember anything about the food. Nothing. But the cookie sticks, precisely. Because, I mean, there is a kind of brain theory about this, which is that most of what we perceive as a prediction and the things that we use our eyes, ears, noses and other senses for is to correct for prediction error. In other words, we disproportionately attach attention to the unexpected. And Will Godara's, one of his stories was taking over an ice cream stand about right in the middle of a museum in the US or an art gallery.
- [27:10]
A
And he had an incredibly extravagant spoon. Wasn't it? You know, that made zero sense, it was ridiculous.
- [27:16]
B
So the ice cream was all pretty good. But he allowed his accountants to choose the ice cream supplier and the pots and everything else. But he absolutely went out on a limb for these Italian made spoons. And what he noticed was that if he ever mentioned that ice cream stall anywhere to anybody who'd ever been there, they all talked about the spoons. And in the same way there's a gym, I know where they were quite shrewd, which is it was a mid priced gym to a lead, almost to a low priced gym. But they always had, I don't know, you're probably a gym go and you have all those unguents and strange liquids. They always had keels back in the day when Kiehl's was less well known but seen as very, very premium. And a few people asked them, they said, well, you know, you're competitively priced. Jim, why do you do this? It's very simple. Every time we research our users, every single person mentions the keels. And so, you know, I mean, you know, I think that one of the problems you have is that those very, very potent things are the first thing that procurement or finance try and kill off. Because they go, it's not in our service level agreement. It's, you know, there's no record of anybody complaining about a hot because it doesn't give you biscuits when you check in. So why on earth are we engaging in this discretionary expense? Because finance people have a kind of fantasy world which is just optimized around minimalist efficiency and as a result they completely fail to understand human anthropology.
- [28:48]
A
Yeah. Is it the Maynard Keynes quote? They know the cost of everything and the value of nothing. Oscar Wilde, was it Oscar Wilde?
- [28:55]
B
Oscar Wilde, Yeah, yeah, yeah. And of course there are these weird things. It's very similar actually. I was talking to Will about this, to the idea of Kano or Kano theory, the Japanese theory that all products have three attributes. So there are table stakes which are effectively, you know, things where if you fail there, you're not even in the game. So that would be for example if you made a cassette deck and it constantly jammed or you know, the sound quality was appalling, you know, you're out of the game. Then you have performance attributes which are generally they scale linearly and then tail off, which is sound quality, battery life, you know, volume, build quality, that kind of stuff. But then you have this third category of things. Now bear in mind, Kano was at the University of Tokyo. He worked a lot with the Japanese consumer electronics industry. He, he called them delighters or whatever the Japanese for delighters is. And that would be to those of our age, the eject mechanism. In other words, you put a ludicrously disproportionate amount of effort into a gorgeous eject mechanism. Because although it has no real bearing on the functional attribute of the product itself, it disproportionately accounts for the person's affection for it. I argue there's this concept called reverse benchmarking. I was influenced in this by a Roger Martin piece called Benchmarking is for Losers. He argues that when you benchmark you actually put enormous. He's very popular with people like sort of, you know, McKinsey. Cause you can do a really laborious benchmarking exercise, but you end up effectively competing on the expected. You become more and more alike to your competitors. You lose differentiation and distinctiveness. And he's absolutely right about this. My argument is you do reverse benchmarking, which is what Will Godara did, which is you find out what your competitors are doing badly and you basically double down on that. So he had the beer sommelier at a Michelin starred restaurant. No one was expecting that. And I'd argue that that's what Steve Jobs did at Apple. I think that's probably what Dyson did to an extent. You take the things that all your competitors aren't doing well and you just do them brilliantly so that it gains so much attention and so much saliency that everything else you do, provided it's satisfactory to good, almost becomes completely secondary in their appraisal of what it is you do. I mean, I had a moment, you know the Angel Hotel in Abergavenny, Very simple thing, okay. It's a, you know, it's, it's a hotel in a, in a Welsh market town. Check in. What's the latest I can have breakfast? And you're expecting the answer, aren't you? Nine or ten, since it's Saturday, it's 9:30, just go 11. But basically as late as you like, you know. And so it's, it's those things which actually go thank for that, you know. You know. You know, I don't have that usual bit of. And I think it'd be very interesting for hotels and lots of service industries. I mean actually that's what BUC EE's did with restrooms. You know, gas station restrooms were terrible. Everybody thought they were you know, basically, you know, pretty ghastly. What they did is they didn't just have relatively clean restrooms. They made the things palatial, you know, and it's kind of the badge of pride of the whole. In fact, the entire business was basically built on that single act of differentiation.
- [32:25]
A
I almost wrote a book called Toilets of the World on a theory that you can judge any destination by the quality of the toilet and you could literally have a toilet rating.
- [32:35]
B
Ah. The philosopher has written a piece on this because he thinks you can tell a lot about the Germans from the inspection platform. Yeah, yeah.
- [32:43]
A
And. And I met the CEO of a big pub chain and he said whenever he did a pub visit, he would go unannounced and the first thing you'd do is go to the toilets. He said I could judge the kitchen on the quality of the toilet, on how clean the toilet was.
- [32:56]
B
So it's a. It's basically a fantastic heuristic. And interestingly, Rush, the hairdressing chain, they spend sort of 20 to 30,000 on their toilets, even though most people who get their hair cut don't use a toilet. And the argument is, it's what you might call a delighter moment. Cause you're expecting the toilet to be dismal, utilitarian, effectively a staff toilet, you know, with a mop leaning against the wall and a bucket and a few cleaning products stored, you know, in a pile. And instead you go in. It's kind of marble and gold.
- [33:29]
A
Yeah.
- [33:30]
B
And it's. It's one of those moments which is. And I think. No, no, I mean, actually you also notice attention to design and things. Like, I always notice that in countries which have a really strong design aesthetic, if you go to Scandinavia, there is always a hook on the back of the door, you know, for you to hang your jacket or if you're, you know, I. I don't go into women's toilets generally, but, you know, I imagine you want to hang a bag because you don't want to put an expensive bag in a. You know, on a toilet floor. So some. There was a. There's a Nat west in Tunbridge Wells, which did the most brilliant thing. I only noticed it because I was there with my wife, really. But next to the cash machine, the indoor cash machine, they had a little handbag shelf. Now, when you think about it, retrieving, you know, a cash card, which we do less and less often because of contactless phone payment, retrieving a, you know, is slightly painful and awkward, but if you have a nice tiny little shelf, it probably cost them, you know, 100 quid to install the thing. But you immediately notice it because it's fundamentally a kind of empathy demonstrator. And actually, I suppose what it is, it's actually what it is really is, it's emblematic of your customer focus. It is, it says we're not a psychopathic business run exclusively for the shareholders. We actually spend some time, you know, trying to understand life from a consumer's point of view, not from a, you know, not from an investor's point of view. Because businesses, I think we've created, the shareholder value movement has created businesses which are almost examples of institutional autism. In other words, I'm not, I'm not suggesting that the people within, individuals within the organization are autistic. I'm suggesting that the way they interact and the way in which things are siloed and the way in which things are measured and the way in which things are have to be quantified. Means that the behavior of the business is effectively socially inept in a way or socially lacking in, you know, in understanding of another person's perspective in some peculiar way.
- [35:32]
A
Now there are some times where it works in reverse. I know you gave this example earlier of gales where actually inefficiency in how you deliver your service is sometimes a built in feature.
- [35:43]
B
So I think they like, they realize that if other passersby, because bear in mind they have enormous windows. It wouldn't work if you didn't have the enormous windows. They see a queue and they infer that there's something highly desirable. And some part of the queue in gales is to be honest, created in that they make you order your coffee right at the end and then you have to stand around waiting for it. Which creates a kind of buffer in the system that means a people spend longer staring at the bread. I mean, there may be some interesting finding that unless you've been looking at get, you know, expensive sourdough for 40 seconds or more, you're, you know, you're less likely to buy. But it also creates the impression that this is a desired product and I better get there fast before it all goes. Yeah, worth queuing for, you know, is a, you know, it's a fairly common heuristic, well done, well known in sort of Spanish nightclubs because you couldn't, you couldn't play this trick so well locally because people will get wise to it. But if you're running a nightclub in Benidorm, you basically artificially hold people outside and they queue for ages to get in. And then when you finally let them pass the velvet rope, they discover the place is half empty and the entire thing is a kind of scam.
- [37:01]
A
This is true though, like when you're on holiday and you're Looking at restaurants, there'll be a restaurant that's absolutely packed and one that's completely empty. And rather than going the one that's empty, you make the assumption, which would be a nicer experience.
- [37:11]
B
There's an interesting theory there, which is that in some cases that may emerge completely arbitrarily so that both restaurants are empty. You come to sort of six o' clock in the evening and two or three people turn up and they happen just to go to the restaurant on the right. And then you could literally have a kind of snowballing effect where of people who come along who are undecided, who have no prior preference, three people will go to the restaurant on the right to everyone who goes to the restaurant on the left. And it could be completely arbitrary. So you might argue. Now, I have heard that Guinness pay people early on in the day, not necessarily in the uk, but in certain countries. Guinness is very interesting because if you see somebody else drinking Guinness, you're inordinately more likely to order a Guinness yourself. And I have heard the rumor that they employ people to stand around very prominently near the entrance, around about opening time, very visibly drinking Guinness on the grounds that then the knock on effect, you know, effectively you create a flywheel effect. Then after, after the first hour, maybe that person can go somewhere else or go home, whatever they do. But there's this initial kind of decisive moment where effectively everything that follows on from there is a product of whether customers 3, 7 and 9 order a Guinness or whether they don't. And I mean farm. Large parts of business success, I think, are often down to, you know, weirdly quite arbitrary, what you might call feedback loops of this kind. I think, you know, I'm sure there are brands which have succeeded simply. There's a company with which I do some work and I find them very interesting, called Herdify. And their whole approach is to look geographically at product sales so that you upweight your advertising activity in places where there's already momentum. And it's obviously particularly applicable to anything which is visibly consumed. If you look at something like solar panel adoption, famously, you know, once one person in your street has solar panels, everybody else becomes sort of 20 to 30% more likely to get them. And you could arguably use herdified data in two completely opposite ways. You could say there are areas where we've completely failed to take off and we need to get some seed corn in there and just establish a little bit of normality, a little bit of visibility to this. And you could equally do it where, well, hold on we've reached this sort of threshold here and actually one extra marketing push will effectively take us into the steepest part of the curve a bit earlier. And, you know, you can use it also negatively, which is, look, actually for the moment we've got a limited budget. There's no point in bothering in these 20 places. You know, electric car adoption you'd probably see would be pretty uneven geographically, for example, and some of that would just be these network effects.
- [40:09]
A
I think Red Bull did that famously, didn't they? When they launched, they went around nightclub, they focused on nightclubs and then they actually paid people to crush cans and leave them on the pavement just outside nightclubs.
- [40:20]
B
And the overflowing bin phenomenon. Yeah, yeah, yeah, yeah.
- [40:23]
A
Same logic.
- [40:24]
B
Of course, we, you know, we draw inferences to the behavior of other people. Completely rational thing to do. They are hacking that a bit. It's a bit naughty. But equally, you could look at it another way and say in the consumer adoption of important new technologies, let's take a technology which we all agree is quite important and useful, the washing machine or whatever it may be. You do get this sigmoid curve, which is people find it difficult to do something they haven't done before and they find it difficult to do something that nobody else around them is doing. Unless you're one of those people who's just willfully perverse or eccentric. Most people, you know, set their default mode in life is do what I've done before, do what everybody else does. And it's not a bad heuristic for avoiding catastrophe, certainly. And you can see why we've evolved that instinct. But it does mean that the adoption of new behaviors is painfully slow at first, which leads me to wonder actually what proportion of great ideas were abandoned too soon. Google Glass would be an example. Okay, Google Glass would be an example where I think because it requires quite a lot of behavioral change and it's visible and you've got to wear it on your head. I'm the sort of, to be honest, I'm the sort of awkward cranky fucker who just go and do it anyway. And also, we both have a superpower in that we're Welsh, so we don't really care what other people think because, you know, what these Anglo Saxon invading forces think of us is of no concern of ours. But Welsh people are a bit, I would argue Welsh people are a bit less self conscious actually about things like that. But nonetheless, it's going to be painful to do. And I would argue that a product like Google Glass really You have to realistically plan for a five year, a five year wait before it makes it into the, I mean mobile phones, for crying out loud. Were we all assume that they arrived instantaneously because we're looking at history backwards and concertina ing it? No, no, no. There were years and years between the mobile phone becoming available, then affordable, then it reached a ceiling and then they introduced pay as you go. Because bear in mind, until they introduced pay as you go, there was a sort of 30, 40% holdout of the population who weren't prepared to get a mobile phone contract. Yeah, they then, they then got a pay as you go phone, put it in the car glove compartment and then discovered they were using it all the time. And in fact many of them ended up spending more on pay as you go than they would have paid had they been on a contract. But they just didn't like they were commitment phobes. And so the mobile phone, you know, television in the US was weirdly slow, slightly faster in the UK because the BBC kind of got it up to, you know, speed. You know, in other words, you, you already had the programming, as it were. But TV adoption in the US from the, what was it, 50s, I guess if you actually look at it, really, really long period where it's almost being adopted in the air fryer. Another example. Now here's an interesting thing. So I think there are various things marketers need to teach the rest of the business world that we know and they don't. And one of them is multi channel that actually the same person at different times will buy you in one channel and won't buy you in another or vice versa. And therefore, you know, that business of physical availability is crucial. What I think the finance people in a business do is they go, let's try and force all our customers to use the cheapest to serve channel, which is, I'm totally in favor of those screens where you order at McDonald's. I'm not in favor of getting rid of the person behind the counter because they're different, you know, they're contextually different. You know, there are times also is it really a restaurant if there isn't someone standing there looking at the tables? You know, what, what are you, are you a canteen? Well, it's weir. Okay. I'm totally in favor of ticket machines at railway stations. I'm not in favor of closing down the ticket office because sometimes you don't know what ticket you need. And so I think that fact that that's one marketing lesson, the other marketing lesson I think everybody needs to learn is this business of the Bass diffusion curve, which is that adoption of. So I used to think that the bigger the idea you had, the less marketing it needed. Because obviously if it's a really big idea, it'll just sell itself. Then I realized it's the opposite, that the bigger the idea you have, the more behavioral change it requires, the more unusual it makes you seem by adopting it and therefore the more marketing it needs. Because people need the, the psychological reassurance to get over all those initial hurdles. Now a perfect example of that, you know, penny post, one of the most fantastic business ideas in the last 200 years. 1840, Roland Hill, who suddenly works out it's a mathematical insight in a way that whereas there had been single flat rate postal same day, next day services or same day services in London, he worked out that with the coming of the railways, you could get so many letters on a trunk route between say London and Edinburgh, that distance had become distance. Price per letter per mile had almost gone to zero. Because if you watch the film Nightmail with the Auden poem, I think they're quarter a million letters on that train. So it's a sort of 400 mile journey. But actually if you think about it, you know, the price per letter per mile is as close to zero as you can imagine because they're quarter of a million of the buggers. And he worked out, hold on, you can take this same day principle which exists within London, you can extend it to the whole country. It then extended to the whole of the British Empire that never made money except Australia and New Zealand, you had to pay extra for those. But India, you know, Canada, all of those other, you know, the whole of Africa, you had a penny post. And the interesting thing of course, like it lost money for the first few years because people weren't in the habit. They didn't know anybody 200 miles away and they, they weren't in the habit of writing to people 200 miles away. Cause it would have cost a fortune. And so you had to wait three, four, five years before it hit break even for the behavior to catch up with the importance of the idea. And I think people think that good ideas are self evident and therefore will be adopted immediately. And they go and look at the initial. I was hearing about a thing on a podcast which is Cisco had invented a video conferencing for your tv. And the. No, I'm just trying to think who it was. Was it Gary Hamill on a. And the truth of the matter is, okay, the Idea was it didn't succeed very quickly in the first year. Well, first of all, you've got to wait for somebody else to do it, right? Okay, so it's not an obvious sort of, hey, I'll just buy that and I'm all set. But actually what they needed to do was to maintain that product line, let it grow incrementally and, you know, and one hopes, you know, slightly exponentially or geometrically at least. And wait for Covid to happen.
- [47:27]
A
Well, exactly. They needed Covid. The use case had to come later.
- [47:31]
B
Part of that, a very large part of life is staying in the game long enough to get lucky 100%. And if you're demanding instant returns, you're demanding a particular rate of growth and a very predictable rate of growth in line with city estimation. What you're doing there is you're destroying a completely different form of success, which is you hover around for ages and then something happens. You know, more people start traveling. You know, if you look at, you know, things like American Express, you know, I mean, for example, you know, the. The whole penny post was dependent on the railways to some extent. You know, things happen which suddenly change the whole game for everybody and. And you get lucky. And this is one of the most interesting sentences which suddenly I realized why a lot of businesses are being destroyed by excessive quantification, measurement, and also by excessive kind of internal regulation, an internal process, what you might call process consistency. So this guy, mathematician called, a brilliant guy called Stephen Wolfram, and I'm in this meeting with him. I've never met him before, but I completely idolized the guy who's, you know, recognized maths genius. And he said this thing, which is really, really sounds quite banal, but you suddenly realize it's critical. He said the reason evolution works in nature is because it actually has quite a loose fitness function. It basically says if you can stay alive long enough to reproduce and you can find an ecological niche of whatever kind in which you can meet those two criteria, then it doesn't matter whether you're a patch of moss or you're a shark, you get to stay in the game. And he argues that if you have a really narrow, narrowly tightly defined fitness function, you don't get any of the biodiversity, the variation, the overall economic growth, and just the overall variety that you get when you have loose fitness functions. And I would argue that you should give marketing a loose fitness function. In other words, you should say you need to do, you know, we need. And actually business objectives should be loose. So if you've got a call center, you should say, as actually as Greg does at Octopus. Right. They're basically measured on customer satisfaction. They're rewarded on the number of people they look after and how well those people feel looked after. That's it. They don't have loads of call center time, average call length, wait time, da, da, da. Those are total impositions by tragic nerds. And because those people impose all those stupid rules, all the innovation, variety, happenstance, lucky accidents, lucky discoveries, all the tacit skills, all the entrepreneurial urges of the people within that call center unit get completely suppressed if you give them a loose fitness function, which is make people really happy. And as many of them as you possibly can. Right. Then what you're unleashing is an enormous amount of not only human ingenuity, you know, and also intuitive judgment, which is valuable in itself, but you're also allowing people to get lucky.
- [50:48]
A
Yes.
- [50:49]
B
Which is. Isn't it weird? I've just come up with this funny phrase and people who used to be pissed off when, you know, I used to say this and people were always pissed off and now I say this slightly different thing and people aren't pissed off, you know, and actually then you can build a kind of intern. And then ideally what you do is you'd have frequent contact between the different groups where they'd share their best discoveries. And that's an evolutionary model of how, you know, a good call centre should work.
- [51:19]
A
You. You write for the Spectator. And I discovered something today which I hadn't appreciated before, but the Spectator is the longest running weekly publication and it's something like 10,000. Is it 10,000 additions?
- [51:33]
B
A couple of. It was during COVID actually, because I remember I was actually on a bedroom floor reading these photocopies of 10,000. So it would have been about 2021 or 2020. They hit the their. I think they were founded in 1828. I think I've got that right. And it's the oldest continuously published magazine in the English language. They sometimes complain claim in the world, but I think they're much might be something weirdly older like in South America or something.
- [51:57]
A
And if you got advertising, is that had advertising in it?
- [51:59]
B
Yeah, so it's had advertising in the go, I'm pretty sure. And so they asked me to review sort of 10,000 issues worth I getting on for 200 years worth of Spectator advertising. And it was fascinating because it's still really interesting, most of the content from 1850 or where they're having huge arguments about the Corn laws or The Great Reform Bill. All of that stuff which we regard as important news in effect seems totally irrelevant and ridiculous, you know, in the light of 150 years later. But the advertising is still fresh. And it's, it's, it's. And you suddenly realize, of course, that base human, you know, what you might call all the noise around human activity, you know, the kind of thing that journalists regard as high minded, wonderful, you know, tremendous journalists, is actually, that's the chip paper. Whereas the advertising, because it's focused on essentially eternal psychological truths that aren't going to change. Every single advertisement is kind of interesting and you understand exactly what it's doing. And it's really quite fresh and charming and pleasant to look at. And you see, by the way, also you see these recurring devices, you know, the advertisers. There are certain, certain, you know, there are certain sort of narratives or certain strategies that work pretty well in 1850 and work pretty well today. So it was. I. I only got a cross section. Obviously, the whole section of the magazine would have required a. I was gonna say that.
- [53:39]
A
That would have kept you for the last five.
- [53:40]
B
I got a cross section of interesting ads sent to me on an enormous A3 photocopies, as I remember. But it was. I also think it's true that in a weird kind of way, tabloid journalism is much better. So in other words, there's information we really want and there's information we like to pretend to care about. And actually, advertising is in a way quite eternal because it does deal with the eternal human needs. Verities. The need to be admired, the need to take care of your children, the need to do those things are all eternal motivations, whereas the other stuff is largely people showing off that they care about stuff.
- [54:18]
A
That's brilliant. Oh, Rory, that's amazing. Listen, thank you so much as always. Complete blast. And I think for anyone watching, you've got a matching suit to this amazing visible, by the way. Yeah, if you want to check this out on YouTube, go check it out, because Rory and I have been the most, probably the most relaxed, laid back position we have ever to do an interview in. But listen, mate, thank you very much.
- [54:42]
B
Absolute joy, pleasure, great time. Delighted. I don't think we'll batch the last one in terms of Spotify.
- [54:47]
A
Well, I gotta say, we'll have to set a new target this year. Top 30 in Spotify.
- [54:51]
B
But there are some really important questions about this, which is the. The marketing people are justifying themselves according to metrics laid down by finance, which is like fighting a jewel where your opponent gets to choose the weapon. And that doesn't matter if it's the right maths. It isn't the right maths, but the worst thing we've done. And this, this is. This is how I reverse engineered the fact that I got famous, if you like. Okay. What I suddenly realized is I had to talk to a load of people about what we did who weren't in advertising or marketing. And I realized you can't just show them 20 ads because if they're. If it's a procurement conference or a compliance conference or whatever, these people are never going to get to make an ad. So it's largely irrelevant to them. And so, of necessity, not really intentionally, this is what I mean, that most of success isn't intentional, right? Totally of necessity. I stopped talking about what we did and started talking about how we think. And I suddenly realized, and I realized this even more when I wrote the book, that how we think has an audience and a market that's 150 times larger than the market for what we do. And we've all made a mistake because marketing people have defined themselves as marketing with a capital M, which is a business function which is then associated with markoms and maybe with pricing and, you know, a little, you know, you know, maybe staging a conference or exhibition. It's kind of associated with things people do. But capital M marketing is only about 5% of small M marketing, which is the understanding of business from a customer's point of view attached to the creative possibilities that emerge when you adopt that new viewpoint. That's it, really. Okay. You know, in other words, marketing with a small M is actually a branch of phenomenology which is around human perception and, you know, effectively what we perceive and how we feel in response to it and that stuff. Okay? Now, the market for understanding in that and the opportunities for improving the world through small M marketing, which isn't a function. It isn't defined by what it does, it's defined by how it thinks. That's an enormous market. And instead, we've all focused on what we do, but what we do is a fraction of the value of how we think.
- [57:17]
A
100. Well, that's a brilliant, brilliant place to end. Rory, thank you.
- [57:21]
B
Ah, it's a pleasure. Delighted. Absolutely happy.
- [57:24]
A
Thank you. Thank you very much for listening or watching uncensored cmo. I hope you enjoyed that. If you did, please do hit the subscribe button wherever you get your podcast. If you're watching, hit subscribe there as well. I'd also love to get a review Review. Reviews make a big difference on other people discovering the show. So please do leave a review wherever you get your podcast. If you want to contact me, you can do I'm over on X UncensoredCMO or on LinkedIn, where I'm under my own name, John Evans. Thanks for listening and watching. I'll see you next time. Awesome.
- [57:56]
B
I think that's the fatal mistake, which we've allowed other people to decide what we do. Yeah. And actually, it's not really. It shouldn't really.
- [58:03]
A
It's a tactic rather than a strategy.
- [58:04]
B
Yeah, yeah, yeah.