Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life

by Rory Sutherland

Economists tend to dislike the idea of branding and are inclined to see it as an inefficiency, but then they might view a flower as an inefficient form of weed. The reason they might not understand the flower’s extravagance in squandering its resources on producing scent and colour is that they don’t fully understand what it is trying to do or the decision-making and information-transfer context in which it is trying to do it. It is not any more irrational for human consumers to pay a premium for heavily advertised products than it is for bees to prefer to visit heavily ‘advertised’ flowers. It seems unlikely that a company would spend scarce resources advertising a product they believed to be bad – it would simply lead to the unpopularity of a bad product spreading more quickly. Moreover, a company with a long-established reputation for high-quality products has much more to lose from customer disappointment than a company with no reputation. To quote a Caribbean proverb, ‘Trust grows at the speed of a coconut tree and falls at the speed of a coconut.’