Rory Sutherland - Value, Creativity, Influence & Persuasion (#62)

Introduction to guest:

Rory is the vice chairman of Ogilvy UK, a hugely successful advertising, marketing, and public relations agency that advises some of the largest brands on the planet.

He is one of the most influential thinkers on consumer behaviour, trends and influence and in this podcast, he takes us through all sorts of interesting techniques that you can use to become a better thinker, advertiser and persuader.

Some of the topics we discuss in the show include:

How to create value from persuasion and imagination.
How to come up with creative ideas.
The real purpose of a brand.
How humans make purchasing decisions.
The biggest mistakes advertisers are making right now.
Specific advice for small businesses trying to grow their business.
Books that small business owners must read on advertising.
And we have a bit of fun at the end playing overrated/underrated, where we give Rory some random items and he tells us whether they are overrated or underrated.

We discuss so much more during the show, but I can’t list everything, so as an overview: if you’re looking for practical tips on branding, advertising, influencing or persuading, this is the podcast for you.

More from Rory:

Twitter: @rorysutherland

Books: Rory Sutherland

LinkedIn: Rory Sutherland

Key quotes and takeaways from the show:

Economics dismisses the value of persuasion and imagination which are central to any economy. Any form of human cooperation (truck and barter) requires one person imagining what can be achieved as a collective, and the ability to persuade others to join them. Other primates do not have this ability (it is probably due to our development of language and imagination).

Value includes psychological, linguistic, persuasive, presentational and other factors which economics ignores. You can generate value not only in the factory, you can generate value by telling stories too.

Value is context dependent, meaning dependent and significance dependent.

You don’t need everybody to believe in something for it to be valuable!

Rising value: tell stories (KFC), package it differently (eggs), explain a logical benefit/give information (breakfast bar), change the perspective (Sky TV vs. newspaper), anchor the price (Rolls Royce at aircraft shows) – You can increase value and make disadvantages advantages by changing any one of these (26:32 – examples).

How to be more creative: humour, wilful perversity, having a punk mentality, question assumptions and rapid reframing (looking at things in 10 different ways against 10 different anchors). “Very successful business ideas arise out of total ignorance or even stupidity. People weren’t intelligent enough to know what the category norms and assumptions were, so they go and do something totally dumb and it just happens to work.”

For Innovation and creating a new business:

Look at a category/human want/human need.
Look at the business/people/product trying to satisfy that human need.
Make a list of all the assumptions they make.
Find out (through a perverse creative process) which of those assumptions weren’t correct to begin with and/or which of them won’t be true in 2 years time.

“Business is an error correction mechanism. It’s the only mechanism on the planet where you get rewarded for changing your mind.”

“The real why and the hidden who” – understand the real motivation behind something and who is actually making the purchasing decision.

Lucky accidents are just as important as intelligent guesses!

“Just because something makes sense, doesn’t mean it’s true and just because something doesn’t make sense, doesn’t mean it’s wrong.”

“We think brands are all about what makes them great, whereas, actually, the main value of a brand is a reliable guarantee of non-sh*tness.” Branding is a variance reduction tool (knowing what you get within a specific variance – i.e. everything is going to be okay), not an optimisation tool. True value of a brand: everybody knows you, everybody feels safe buying from you, it’s a low risk purchase, etc. “We spend too much time trying to make brands brilliant and not enough time saying: the most important thing is we are never crap!”

Don’t compare the value of your brand against other well-known brands in your industry, compare it against unknown brands because the value of a brand is that people choose you over an unknown brand.

You will often take a punt (uninformed purchase) on a product supplied by a brand that you know rather than an unknown brand.

“Some brands are often bought more by poorer people than by richer people, because they can’t afford to make purchasing mistakes (e.g. they have to buy food the kids will eat).

Status and social considerations can also be important for brands. For example: “Most champagne is bought to give or to serve to other people to show off, it’s not bought for personal consumption. If you put champagne on the label and turn up to someone’s house, they immediately go “oooo you’ve spent £20 here!” You might have bought it for £15.99 but there’s no way you bought it for £8 because you can’t get champagne for £8. So until you find some mechanism that can go on the label that says, “I’ve spent £20 on this mate!” you’re missing out on a huge part of the market.”

You don’t want your brand to instil a fear of blame, fear of feeling like an idiot or fear of being made to look foolish when someone buys your product (e.g. buy something a bit weird and everything goes wrong, everybody will say, “told you so mate” vs. if you buy a Samsung TV and it breaks everybody says, “ooo that is unlucky”). Another example: “Ryanair, what do you expect?”

How to grow your brand:

“We often see expensively bought fame as a reliable measure for product quality.” This is a necessary costly signal to generate trust.
Fame and mere brand familiarity also seem to have a significant impact on purchase decisions.
A very large part of brand growth comes from infrequent buyers so you can’t just focus in on your 30% of most valuable buyers at the start (especially in the FMCG category).

FMCG – Fast Moving Consumer Goods.

Auditory property (jingles and audio) has an extraordinarily high value which isn’t accounted for.

Old forms of marketing are still useful (direct mail, long for copy, handwritten letters, direct marketing, etc.)! The only reason marketing agencies don’t use them now is because of pure fashion.

On standing out: “You don’t have to be differentiated, you merely have to be distinctive (visually, audially, etc.), in order to be a brand.”

The “Jack of all trades” heuristic – If you’re good at everything, you’re good at nothing. People pay more if you specialise in something (e.g. Starbucks and Wings & Tins).

“Brummie logic” – A mixture of intelligence and common sense.

“Co-branding” – Find someone who approaches the same audience that is non-competitive and sell alongside them. “Find complementarities.”

“Freemiumise” – “Make parts of the programme free and then charge for incentives because it reduces the risk of purchasing (e.g. I can see the value before I start paying).”

“High value & high margin Zoom-based products” – One-to-ones. “I think the widespread adoption and normalisation of video conferencing is much more economically important than anybody realises… by a factor of 10!” “We need to rethink geography completely!”

“Don’t talk about inclusion, talk about access” – Every time you do something, think “who is denied access” (e.g. Person from Scotland travelling to London for a seminar).

“Be good at 2 things” – “Don’t bet the farm on 1 thing because you’ll probably lose.”

“Always invert” – “Always look at the opposite.”

“Learn the technique for regular reframing” (e.g. “reduce the cost” frame, “make it pink” frame, high status frame, and low status frame).

“Try to deploy frames without any particular preference for one over the other.”

“Unlearn what you learned at University” – There is no one “accurate model” or “correct way” – always reframe! There are multiple right answers in psychology – e.g. no one has it (scarcity) vs. everyone has it (social proof).

Sometimes, you need the audience! Things are different when you watch them with a large number of people.

Can you develop a product or service that forces you to pay attention in a world full of distractions? e.g. Cinemas or subtitles.

“We think we know more about the world than we actually do.” There is an over optimism in the ability for science to have cracked everything already.

“If you want to understand psychology, you have to understand science-fiction because although they are so farfetched, they still have to include “human-givens”, like parents loving their children, otherwise the films wouldn’t make sense to us.”

Question of the day:

There will be some people out there right now, during COVID, that have come up with business ideas and want to get themselves, their product or their service noticed. What advice do you have for these people?

Links to podcast sites:

The full podcast:

Related episode:

For more on influence and persuasion, watch this episode with Chris Parker who introduces us to the most powerful techniques he has found from over 45 years researching communication.

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Show notes:

00:00 – Overall show introduction.
00:45 – Finding your purpose and getting things done in life – mhvpath.com.
02:46 – Introduction to today’s show.
04:23 – Rory, Shaun and Gaz embracing lockdown.
05:34 – German COVID advertisement.
06:41 – What Rory does, the concept of value and how to create value from nothing (Alchemy).
17:19 – How to be more creative, innovative and create a new business.
20:44 – How to question assumptions in daily life and how to change people’s perspective.
24:06 – More techniques for creativity and turning disadvantages into advantages.
27:18 – How tax rules have influenced some iconic products and ABBA’s costumes.
29:34 – The importance of luck and accidents in life and business.
32:58 – Why economies need brands.
35:03 – What are brands doing wrong today and what makes a good brand?
44:25 – How to grow your brand (and business) and how to make yourself (and business) stand out.
01:00:20 – Successful brands and ideas that don’t make sense.
01:05:41 – The benefit of specialising in business.
01:07:22 – Using your local area as branding (i.e. Birmingham or “Brumminess”).
01:09:09 – The downside of “smart” products and taking products back to basics – “lo-fi”.
01:17:07 – How to market and advertise a small business and how to sell as a small business owner.
01:20:35 – The increasing importance of video conferencing.
01:26:32 – Principles and life-lessons that Rory lives by.
01:28:40 – Resources Rory recommends for absolute beginners in marketing and advertising.
01:29:47 – Contradictory ideas can both be good ideas.
01:32:13 – A bit of fun: Overrated/Underrated
01:45:54 – Rory’s perspective on a parallel universe and a simulated universe.
01:48:55 – Where to find more, next week’s guest and mhvpath.com