Alchemy: The Surprising Power of Ideas That Don't Make Sense

by Rory Sutherland

Commitment devices of this kind exploit the fact that, once you have made a commitment – whether in time, money or effort – there is no way of reversing it. To put it another way, would I really trust a black cab driver with my daughters’ safety if they could obtain a black cab licence merely through attending three or four evening classes and shelling out for a second-hand TomTom?

Yet there are, when you think about it, two contrasting approaches to business. There is the ‘tourist restaurant’ approach, where you try to make as much money from people in a single visit. And then there is the ‘local pub’ approach, where you may make less money from people on each visit, but where you will profit more over time by encouraging them to come back. The second type of business is much more likely to generate trust than the first.

So the mail pack we produced was elaborate, and of a kind that would have been uneconomical to produce in bulk – and it also won an award. But I most recall it because we worked on it with a Midwestern account director called Steve Barton, who said something telling when he briefed the project. ‘Look’, he said, ‘I’d like you to produce a stand-out piece of creative work here. But if you can’t, what I’d like you to do is write them a really nice one-page letter – and we’ll send it out by FedEx.’ Steve was effectively describing what biologists call ‘costly signalling theory’, the fact that the meaning and significance attached to a something is in direct proportion to the expense with which it is communicated. Imagine you are the recipient – could you throw away a FedEx envelope unopened? I think it is safe to say that you could not. What we wanted from the recipient was not simply the ingestion of information: it was attention, conviction and a sense of import, something that an economically rational 50p stamp could never obtain but that a £10 FedEx envelope could. In the end, the campaign was hugely successful.

Bits deliver information, but costliness carries meaning. We do not invite people to our weddings by sending out an email. We put the information (all of which would fit on an email – or even a text message) on a gilt embossed card, which costs a fortune. Imagine you receive two wedding invitations on the same day, one of which comes in an expensive envelope with gilt edges and embossing, and the other (which contains exactly the same information) in an email. Be honest – you’re probably going to go to the first wedding, aren’t you?

If water tasted like Dr Pepper, it would be easier for sensory overload to drown out the hint of ‘dead sheep

Effective communication will always require some degree of irrationality in its creation because if it’s perfectly rational it becomes, like water, entirely lacking in flavour. This explains why working with an advertising agency can be frustrating: it is difficult to produce good advertising, but good advertising is only good because it is difficult to produce.

Quite simply, all powerful messages must contain an element of absurdity, illogicality, costliness, disproportion, inefficiency, scarcity, difficulty or extravagance – because rational behaviour and talk, for all their strengths, convey no meaning.

The advertisements which bees find useful are flowers – and if you think about it, a flower is simply a weed with an advertising budget.

To quote a Caribbean proverb, ‘Trust grows at the speed of a coconut tree and falls at the speed of a coconut.

Branding isn’t just something to add to great products – it’s essential to their existence

He claimed that it was only after the advent of penicillin that he became a true medic: before antibiotics, he was partly a glorified witch doctor – the support he offered his patients through the psychological value of a doctor’s visit being as important as the pharmaceutical value of anything he prescribed.

for me, Nurofen hadn’t gone far enough. I want to see even more specific variants of pain relief: ‘I Can’t Find My Car Keys Nurofen’ or ‘Nurofen for People Whose Neighbours Like Reggae’. Again, these need contain no additional ingredients: the only distinguishing feature would be the packaging and the promise.

In the words of Jonathan Haidt,fn1 1 ‘The conscious mind thinks it’s the Oval Office, when in reality it’s the press office.’ By this he means that we believe we are issuing executive orders, while most of the time we are actually engaged in hastily constructing plausible post-rationalisations to explain decisions taken somewhere else, for reasons we do not understand.

‘Flowers – the inexpensive alternative to prostitution’ –

after all, is a great wine really all that much nicer than a good one?fn5 The Netflix documentary Sour Grapes is a fascinating insight into this world. A crooked, though brilliant, Indonesian wine connoisseur called Rudy Kurniawan was able to replicate great burgundies by mixing cheaper wines together, before faking the corks and the labels. He was rumbled only when he attempted to fake wines from vintages that did not exist. I am told that it is possible to detect a forged Kurniawan wine by analysing the labels, but not by tasting the wine.

without these rogue bees, the hive would get stuck in what complexity theorists call ‘a local maximum’; they would be so efficient at collecting food from known sources that, once these existing sources of food dried up, they wouldn’t know where to go next and the hive would starve to death. So the rogue bees are, in a sense, the hive’s research and development function,

Heuristics look second-best to people who think all decisions should be optimal. In a world where satisficing is necessary, they are often not only the easiest option but the best.

I have always been intrigued by the scoring systems in different sports, and by the degree to which they contribute to the enjoyment of any game. As a friend of mine once remarked, had tennis been given the same scoring system as basketball it would be tedious to play and even worse to watch: if you glanced at your TV and saw Djokovic leading Murray ‘by 57 points to 31’, you would shrug and change channels to something more exciting.

there seemed to be few arguments for using JFK: Newark is closer to Manhattan, and risks fewer road-works or delays on the journey.

To your watch, an hour always means exactly the same thing, regardless of whether you are drinking champagne or being waterboarded. However, to the human brain, the perception of time is more elastic.fn2

WHAT THE BRITISH SAY WHAT FOREIGNERS UNDERSTAND WHAT THE BRITISH MEAN I hear what you say He accepts my point of view I disagree and do not want to discuss it further With the greatest respect He is listening to me You are an idiot That’s not bad That’s poor That’s good That is a very brave proposal He thinks I have courage You are insane Quite good Quite good A bit disappointing I would suggest Think about his idea, but I should do what I like Do it or be prepared to justify yourself Oh, incidentally/by the way That is not very important The primary purpose of our discussion is I was a bit disappointed that It doesn’t really matter I am annoyed that Very interesting They are impressed That is clearly nonsense I’ll bear it in mind They will probably do it I’ve forgotten it already I’m sure it’s my fault Why do they think it was their fault? It’s your fault You must come for dinner I will get an invitation soon It’s not an invitation, I’m just being polite I almost agree He’s not far from agreement I don’t agree at all I only have a few minor comments He has found a few typos Please rewrite completely Could we consider some other options? They have not yet decided I don’t like your idea

from a psychophysics problem. They match reality with behaviour as though the one maps perfectly onto the other. But this is wrong. For example, the data might say that people won’t pay £49 for a jar of coffee and that’s true, mostly. However people will pay 29p for a single Nespresso capsule which amounts to a similar cost – without understanding human perception it is unable to distinguish between the two. Will people pay £100 for a pair of shoes? In Walmart, no chance, but in the designer store Neiman Marcus, easily. Will people pay £500 for a mobile phone handset? Nokia’s data said no, but Apple discovered they would. Big data makes the assumption that reality maps neatly on to behaviour, but it doesn’t. Context changes everything.

The focusing illusion is indeed an illusion, but so is almost all our perception, because an objective animal would not survive for long. As neuroscientist Michael Graziano explains, ‘If the wind rustles the grass and you misinterpret it as a lion, no harm done. But if you fail to detect an actual lion, you’re taken out of the gene pool.

A final note. When working with pharmaceutical companies, I discovered that every developer tried to make their drug as easy to ingest as possible – however, the behavioural economist Dan Ariely and I disagree with this apparently logical assumption. We both feel that the placebo effect might be strengthened if the drug requires some preparation, whether prior dilution or mixing. In additon, by creating a routine around the preparation of a drug before you take it you also create a ritual, which makes it much harder to forget. It’s easy to forget whether you have swallowed two miniscule pills, but much harder to forget whether you have mixed liquid A with liquid B before adding powder C.

the behaviours we adopt shape our attitudes. Perhaps someone who separates their rubbish into waste and recyclables will become more environmentally conscious as a result of having adopted the behaviour, just as Tesla drivers will wax enthusiastically about the environmental purity of their vehicles, regardless of their initial reasons for buying the car.fn2

Then the pilot made an announcement that was so psycho-logically astute that I felt like offering him a job at Ogilvy. ‘I’ve got some bad news and some good news,’ he said. ‘The bad news is that another aircraft is blocking our arrival gate, so it’ll have to be a bus; the good news is that the bus will drive you all the way to passport control, so you won’t have far to walk with your bags.

Could the local authority that issued me with the ticket give me a chance to play the same mental trick on myself as the easyJet pilot – a reason, however tenuous, to feel slightly upbeat about the fine? For instance, how different would I feel if I was told that the money from my fine would be invested into improving local roads or donated to a homeless shelter? The fine would have the same deterrent effect, but my level of anger and resentment would be significantly reduced. How would that be a bad thing?

If you allowed people to tick a box on their income tax form whereby they paid 1 per cent extra to improve healthcare, many people would happily do so. And if you then gave them a car sticker to display the fact that they had paid more, as the Romans effectively did, even more people would join in. How would that be a bad thing? And yet, for some reason, government institutions and businesses seem to shy away from such solutions. Perhaps they think of them as cheating; maybe they are cheating, but the fact remains that, if emotional responses have such an influence on our brain, we have no choice but to at least try to present things in a way that it finds least emotionally painful.

The result was that people taking out a ‘Save More Tomorrow’ pension would never be poorer because of it – they would just be ‘less richer

The job of the alchemist is to find out which framing works best. I persuaded my father to pay for TV at the age of 82, simply by reframing the cost. He begrudged paying £17 a month for a satellite television package – it seemed like a waste of money to him. However, when I pointed out that £17 each month worked out to around 50p a day and he already spent £2 each day on newspapers, everything changed. As 50p a day rather than £17 a month,fn3 the same cost seemed perfectly reasonable.

As Bill Bernbach observed, conventional logic is hopeless in marketing – as you end up in the same place as your competitors.

Acting on Spool’s advice, the site’s designers fixed the problem simply – they replaced the ‘Register’ button with a ‘Continue’ button and a single sentence: ‘You do not need to create an account to make purchases on our site. Simply click Continue to proceed to checkout. To make your future purchases even faster, you can create an account during checkout.’ The number of customers completing purchases increased by 45 per cent almost immediately, which resulted in an extra $15 million in the first month; in the first year, the site saw an additional $300 million attributable simply to this change. So, people hate registering, and you can increase sales spectacularly by allowing them to bypass registration? Well, it’s not quite that straightforward – there’s a stranger aspect to this story, which is that most of the site’s customers (90 per cent or so) who chose to ‘continue as guest’ were subsequently happy to register as customers once they had made their purchase – the very people who had baulked at registering before completing the purchase were only too happy to leave their details and create an account at the end of the process. This shows that what mattered was not the actions we asked them to perform, but the order in which they were asked to make them. Typing your address in order to confirm where your new washing machine should be delivered feels like a good use of your time; performing the same task when all you seem to be doing is adding your details to a custome...

Remember, if you never do anything differently, you’ll reduce your chances of enjoying lucky accidents

Why do we have more faith in a theoretical mathematical model than in what we can see in front of us?