Richard Shotton: Behavioural insights could be used in more B2B settings

Richard Shotton’s latest book, The Illusion of Choice, continues his work exploring how behavioural science can be applied to marketing.

We caught up with Richard to ask him a few questions about his writing, where behavioural biases might be being overlooked in the profession, and about the use of price reframing in a time of poor consumer confidence.

Are there any domains where you feel behavioural techniques are underutilised?

Richard Shotton: I think behavioural insights are not used as much as they could be in B2B settings. There’s a tendency to rely too heavily on claimed motivations.

The trouble is that professionals tend to deny the impact of cognitive shortcuts on their choices, and instead report purely rational decision-making. But there’s plenty of evidence that professional decisions are just as likely to be swayed by biases as any other decision.

A powerful example of this can be seen in a study among doctors, whose decisions we’d assume to be purely evidence-based. In 2018, David Olshan, Charles Rareshide and Mitesh Patel in 2018 at the Penn Medicine Nudge Unit explored the influence of the default bias in medics.

The researchers analysed prescribing behaviour for generics and branded medications between 2014 and 2017. Prescriptions were made by selecting the medication they wanted to give their patient from a drop down list. Branded drugs were listed at the top.  Then the researcher switched the list around, moving the generics to the top and effectively making them the new default option.

The impact was huge. At the start of the study, the prescription rate for generic drugs was 75%. After re-ordering the list, generics made up 98% of all prescriptions. Doctors drastically changed their decisions — but not on the basis of a rational review of new evidence.

This is just one example that shows the power of biases on workplace decisions. This should be a compelling argument for applying behavioural biases in B2B settings as well as B2C.

Do you have a favourite study in your latest book?

RS: There are so many great studies, it’s really hard to say. I do like concreteness as an idea, and the studies that demonstrate it have been simple but consistent — including the ones I do myself.

The original research was conducted by Ian Begg in 1972. He read out a series of word pairs to participants — half of the terms were abstract, such as “apparent fact”, and half were concrete, such as “square door”. He then asked the participants to recall as many words as they could. The concrete terms far outstripped the abstract in terms of memorability  — 36% of the ‘things’ came to mind, versus just 9% of the abstract concepts.  It’s such a simple demonstration of a really powerful concept, and one that’s easy to apply in marketing: use language that allows customers to visualise something, and they’ll remember it.

An example that I love is Apple’s “1000 songs in your pocket”, the headline for their early iPod. It’s much more meaningful and memorable than ”5GB memory”.

I also love the concreteness study because it’s so easy to replicate. I often test the experiment on audiences. No matter who I am speaking to, people always recall far more of the concrete terms than the abstract. It’s just much easier for us to remember something when we can picture it in our heads.

Is there lots of reframing going on during a near-recession?

RS: Yes, businesses are reframing products and prices right now — although not perhaps as much as they could be.

One example that comes to mind is a new Marmite brand, Marmite Truffle. Priced at £4.50 per 250g – considerably more than the £3.25 you pay for standard Marmite – at first glance it may seem unlikely that an expensive luxury item would do well at this time of squeezed household budgets.

But what Marmite has quite cleverly done is made use of extremeness aversion. This bias suggests that we tend to avoid items priced at the highest or lowest levels, as we perceive them as overpriced or poor quality. Instead, we gravitate to the middle option. So when you search for Marmite at your supermarket, the cheaper alternative spreads may seem like a compromise on quality, and the truffle version too extravagant — so the standard Marmite becomes an attractive option. Counterintuitively, introducing luxury versions during hard times can boost overall sales.

There are plenty of pricing hacks that can help businesses during financially tricky times, which I cover in The Illusion of Choice.

Does human behaviour change? Do consumers not get clued up about certain dynamics?

RS: You might expect that as we get wise to the cognitive shortcuts we take, we’d maybe start to override them. But it’s really interesting to see that we don’t – I am just as susceptible to a “last few remaining” message as I ever was!

And really, that makes sense. Because they work. These biases help us make essentially safe decisions in situations of uncertainty — which is almost always. There’s just no way our brains could handle the data we’d need to analyse in order to make fully informed and rational decisions.

So,  taking social proof as an example,  doing what other people are doing is likely to be a sensible option, even if we can see we’re doing it.

And these biases really are hard wired in us. I love the quote from advertising legend Bill Bernbach:

“It took millions of years for man’s instincts to develop. It will take millions more for them to even vary. It is fashionable to talk about changing man. A communicator must be concerned with unchanging man. With his obsessive drive to survive, to be admired, to succeed, to love, to take care of his own.”

In prehistoric times, maybe we’d show off a fresh new deerskin to our cave-dwelling peers, signalling hunting prowess and thus status. Today it’s the latest iPhone. The drive is exactly the same.

So whilst superficial behaviours may have changed — how could they not, with the digital revolution? —  what drives us as humans has not. New technologies just offer new ways to channel motivations.

Did you learn anything about your own behaviour writing this second book?

RS: One of the biases I discuss in The Illusion of Choice is ‘chunking’ — that is, the idea that breaking information into manageable bitesize pieces makes it much easier to process. And writing the book, I discovered how true this really is.

Writing a book is a daunting prospect. But writing a 300-word intro to a chapter, less so. So I set myself small, achievable writing  targets, and worked through the book that way, splitting my task into tiny sections.

I also discuss intention implementations — the idea that making a plan to carry out a particular behaviour at a specific moment makes it more likely you’ll do it. Think Taco Tuesdays. I got into a nice routine. On Saturday mornings after breakfast, I’d head off to one of the local cafes to write. It became a habit.

So, I suppose you could say that one of the things I learnt is that the biases work at a personal level as well as for businesses.

What’s the best nugget in here for marketers?

RS: Of course that’s impossible to say as there are so many! One of my favourites though is the power of precision. We treat round numbers with scepticism, we assume that they’ve been rounded up. They are just too convenient to be quite right.

Much better to use a very specific number, which is perceived to be more accurate and transparent.  It’s a really easy one for brands to apply, and can have significant impact.

A good demonstration of this comes from Uber, who observed that when people saw rounded numbers for surge pricing (e.g. 2.0x higher), they were much less likely to accept the trip than when that cost was precise (e.g. 2.1x higher). Even though it was more expensive, the precise price was more palatable.

And that’s why The Illusion of Choice has 16 ½ chapters.