Rory Sutherland-Direct Marketing Prisen 2013-The Power of Touch to Trust

7/27/2019 Rory Sutherland-Direct Marketing Prisen 2013-The Power of Touch to Trust

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KL. 15.10 KEYNOTE SPEAKER RORY SUTHERLAND

RORY SUTHERLANDOgilvy Group UKExecutive Creative Director, Vice Chaiman


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How economists* pretend it works

* Business executives and civil servants are more guilty than economists in this respect


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Thus, the conventionalview that natural selectionfavors nervous systemswhich produce ever moreaccurate images of theworld must be a very naiveview of mental evolution

(Trivers 1976/2006)


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Heuristics

snt more information always better? In economics, Nobelprizes are regularly awarded for work that assumes that peoplemake decisions as if they had perfect information and couldcompute the optimal solution for the problem at hand. But how doreal people make good decisions under the usual conditions of little time and scarce information? Consider how players catch aball in baseball, cricket, or soccer. It may seem that they would

have to solve complex differential equations in their heads topredict the trajectory of the ball. In fact, players use a simpleheuristic. When a ball comes in high, the player fixates the balland starts running. The heuristic is to adjust the running speed sothat the angle of gaze remains constant that is, the anglebetween the eye and the ball. The player can ignore all theinformation necessary to compute the trajectory, such as the balls

initial velocity, distance, and angle, and just focus on one piece of nformation, the angle of gaze.

Gerd Gigerenzer

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"

I


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Social and second-order heuristics

A mail order advertiser sold women's clothing to people of the poorer classes. For yearshe used the slogan, "Lowest prices in America." His rivals all copied that. Then heguaranteed to undersell any other dealer. His rivals did likewise. Soon those claimsbecame commonplace to every advertiser in his line, and they became commonplace.Then under able advice, he changed his statement to "Our net profit is 3%." That was adefinite statement and it proved very impressive. With their volumes of business it wasevident that their prices must be minimum. No one could be expected to do business onless than 3 percent. The next year their business made a sensational increase.

At one time in the automobile business there was a general impression that profits wereexcessive. One well-advised advertiser came out with a statement, "Our profit is 9 per

cent." Then he cited actual costs on the hidden costs of a $1,500 car. They amounted to$735, without including anything one could easily see. This advertiser made a greatsuccess along those lines at that time.

Claude Hopkins


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David Rock's SCARF model

Status Certainty

Autonomy

Relatedness Fairness


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Signalling& Trust


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Quaker brands

Clarks, Barclays, Rowntree, Cadbury,Lloyds, Terry's, Carrs, Duane Morris,Bethlehem Steel, Bryant & May, FriendsProvident, Huntley & Palmer, Amnesty,Greenpeace, Oxfam, Sony, IBM


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Reading List: or people who get it.

Earls, Kahneman, Gigerenzer, Taleb, Ormerod,Munger, Adam Smith, Kurzban, Matt Ridley,Thaler, Benartzi, Trivers, God, Fehr, Santos,

Ariely, Camerer, farnamstreetblog.com,evolvingeconomics.com, Austrians, CharlieMunger, Claude Hopkins, Greg Davies, Paul

Craven, thehuntingdynasty.com and Oliver Payne, The Santa Fe Institute, GeoffreyMiller, EO Wilson, David Sloane Wilson,Ludwig von Mises, Nick Chater, The

Behavioural Insights Team at the UK Cabinet


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Five important conclusions

1. Research is often wrong2. First order logic

is often wrong.3. Dare to be trivial.4. Test. Experiment.5. Be less stupid than your rivals

Rory Sutherland-Direct Marketing Prisen 2013-The Power of Touch to Trust

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