Hey there, and welcome to the Bringing Business to Retail podcast, where we talk all about ways that you can make more money in your business Now as we move into the holiday buying season. You may not have thought about how your customer's buying habits have changed. Now sure, they're gonna spend more money because it is the holiday season, but did you know there are little psychological tweaks that happen inside of ourselves and inside of our customers that we can use to make sure we end up with a win win situation?

It means that they're spending more with you and they're happy when they leave the store. With all of that, I would love to welcome to the show Phil Agnew, who has the top rated marketing podcast in the uk, the Nudge Podcast, and is also a sales psychology behavioral psychology expert. And he's going to share all of the juice of how you can leverage what your customers are thinking in this buying season.

Hey, Phil, welcome. Oh yeah. Hi. Thanks so much for having me on. I love Christmas and I love psychology, so I think I'm gonna enjoy today and we love money. In that order as well. Christmas psychology and Money. I don't think people say I love money enough. We have a bit of a mantra here within our company, which is the more money we make, the more people we serve.

It's a little bit of a double entendre because obviously we serve more customers to make more money, but also the more money we make, the more people we can serve in our community. You know, you can gift. Spend time volunteering, all that kind of thing. So I like to think that if we make more money, we get to choose where we spend that.

It's a circular economy and at the end of the day a lot of people listening are women and it is proven that women put a lot more money back into the economy. Yeah, no, fair enough. There's something I think deeply British in me that here's that, um, and makes me want to cringe. 'cause I think I'm just. Far too British.

I don't, I don't, you know, I don't want to claim what I'm actually thinking of, shall I love money? But, um, yeah, no, I think you're, I think you bang on there. I think people do love money and I think the world wouldn't be the world it is today if, if people didn't, so, yeah. Fair enough. No. And so speaking of money, as we come into the holiday season, I dug up a few stats.

The first one I grabbed was that on average, Americans spend just over $1,200 on Christmas alone, which is a lot of money. And of that around $910 is spent on gifts. So the rest is spent on food, entertainment, decor, all those sorts of bits and pieces. But what that says to me, and we're not talking about Black Friday, we will talk about that, but this number was specifically for Christmas.

What that says to me is that is a lot of money all around the world floating around that is going to be spent somewhere. What we really want. It's for it to be spent with the retailers who are listening to this show. So how are we going to do that? First of all, I would love to know when it comes to the psychology of us as consumers, as humans, does the way we think about gifting change during the holiday season?

I think the holiday season is, is fascinating from a psychological point of view. First of all, it's probably worth explaining how, why we as retailers need to be aware of, of psychology. So. All of your customers are extremely busy people. We like to think that they think about us a hundred percent of the time.

They don't. They probably think about us 1% of the time or, or even less than that. We have hundreds of different things going on in our head at any one time. We apparently get bombarded with 50,000 different pieces of information every day. How do you make your ad or your offer stand out? It's very difficult to do, but the interesting thing which psychologists have found over the past hundred years of, of studying this, is that people.

'cause they're bombarded with this information. They don't process them all, giving them the same amount of attention that they would. Instead, they use two modes of thinking. One is quite deep and quite thoughtful. It's what Daniel Kahneman, the Nobel Prize winner called system two Mode of thinking. And this is what we use when we are making quite difficult decisions.

You know, maybe what we would think, what we would use when we're deciding what to eat at a really fancy restaurant, for example. That's only used about 5% of the time. I love that You think that that's a difficult decision. Oh yeah. Is it not? I thought you were gonna say, that's the hardest decision I have.

What am I gonna study at university? Or should I buy this home? You're like, no, no. What I'm gonna eat at a fancy restaurant, what you're gonna eat at a, and that's hard decisions anyway. The remaining 95% of the decisions, like what am I gonna study at university now? Like everything else, that's usually done on what Daniel Kahneman called System one, which is fast.

It's automatic, you don't think about it. The best way to describe this is to think about when you first drove a car, your brain would've been an overdrive. Thinking about where to put your foot on the clutch if you're on a manual, thinking about how heavy to push the brake, thinking about when to change gears, when to put your indicators on all of this stuff.

And that system too when you first drive a car. 'cause your brain is an overdrive of, of course if you drive the car today and you've been driving for 10, five, even a single year, you'll be an automatic mode. You won't even think you can drive somewhere and, and not even ever really think about what you're doing.

It's all automatic. Or even, how did I get here? Like sometimes you get to your destination, you're like, oh I'm here. Exactly. Yeah. The time can just fly by. Especially if you're on a commute. You know, you hear those people who on a weekend start driving in their car, end up at their office 'cause they're just in.

In autopilot, and that's because of that system. One mode of thinking. And what we find is that these consumers, not just when they're driving, but in all walks of life. Rely on the system one mode of thinking, and they take what are called heuristics shortcuts in order to make decisions. We use these heuristics because they save us energy, and this doesn't just happen in our day-to-day life, like deciding what do we eat at lunch or where to drive.

It happens when we're purchasing as well. So an example is if you go into a supermarket and you're trying to decide what to buy for dinner that night, you might see a promotion and pick that. 'cause a heuristic kicks in which says cheaper price. That'll be better for my bank account. I'll grab that.

You're not really thinking about it, you just buy it. Or a better example would be if you see, say a tomato pasta sauce, which says, this is an extremely popular source. It's the most popular source we've sold this week. You'll be more likely to pick that due to another heuristics. Those heuristics have names.

So for example, the most popular one that's called social proof and retailers can use these heuristics to, to nudge us in order to buy. Christmas is essentially full of these heuristics. It's one of these holiday seasons, which is absolutely jam packed with, with reasons to buy. So two that would immediately come to mind is herd mentality, which is we follow the actions of the groups and we know that all of our friends celebrate this event as well.

All of our friends by presents for their friends and family. So we want to follow the, the actions of the groups. We don't want to be an outcast, so we will do the same as well. So we, that's why so many people spend so much on Christmas. Another is reciprocity. We feel this deep ingrained need to return the favors of others.

This is something that we've developed over thousands of years of evolution. TAs a big part in Christmas because people give us gift till we expect others to give us gifts. We buy gifts in advance to make sure that we reciprocate the gift. We hate that there's nothing worse than the feeling of a, of a close friend of yours coming around with a lovely gift and you thinking, oh no, I don't have anything to buy them.

It's the worst feeling in the world because of the reciprocity bias. So Christmas is packed full of, of heuristics that make us want to purchase and make us want to buy more. So saying that I have a question around. The five love languages. And you know, one of them is acts of service. That's mine. You know, the other one is giving gifts.

So how does that line up to the people who, like my husband, not a gift giver, like he absolutely buys me gifts, not because he doesn't love me, but he buys it out of obligation. It's like, it's Christmas. What do you want? And I'll just get it for you. I don't want to think about it. I don't wanna disappoint you.

Just tell me what you want and I'll get it for you. So how do, how do we leverage this psychology? Or does this psychology actually relate to every person the way these studies are, run the best studies, but this is the field of behavioral science and behavioral science is a science, and science means.

You are not basing this on the opinion of one person or one company, or one CEO. You are running what are called randomized controlled trials to essentially try to figure out what the, what the, what the average consumer would do. So. We use a study like we, we spoke about social proof earlier, which is this idea that people are more likely to pick the most popular option.

So there was a wonderful study cited in Nancy Hart's book using Behavioral Science in Marketing, which tweaked the design of a menu at a restaurant in the States. One of the menu listed the specials as specials. It just called them specials and then talked about the baked ricotta. Whatever else it would be.

And then in another menu. So this was on a different day with a different population of people. They would change the title of the specials and call it our most popular specials, which was true, but they, they were the most popular specials at that time because they were specials. 'cause they were specialists and people picked them and there weren't any others, so they were the most popular.

And so in a randomized control trial, what you do is you show those two variants. So the control which says specials, and the variant, which says most popular to different groups of people a number of times in order to figure out how the behavior changes and what they found in that example. Was that people were far more likely to pick the specials if they were listed as most popular specials rather than if they were listed as specials.

They also found, interestingly, that individuals ended up spending more when it was listed as most popular, so individuals would buy a main meal and then a special to share because they were fr by deciding idea of getting a most popular dish. But you can only do that if you compare the variant, which was the most popular version with the control, which was the standard version.

And you're comparing the difference in behavior between the populations. And what you're looking for is these overarching heuristics, these overarching biases that affect the entire population to some degree, rather than something that might affect your husband, for example. 'cause he has a different level of language than you.

So all the things I'm talking about here have been proven, or at least attempted to be proven. In these sort of wide. Nationally representative sample sizes in these randomized control trials, which means for your listeners, retailers, this stuff should be effective if you apply up to your business because it should work on the majority of people.

At least that's what's been proven in in some of these studies. I love that. And I've just written some notes down and we'll come back to those 'cause I have so many questions. I love. Psychology. I've not studied it. I've studied it as a human and I am deeply interested in it, and I always am looking at why do we do the things we do.

So thank you so much for sharing this. But I have a question around, you talked about reciprocity and you know, the herd mentality and, and feeling like we're obligated. Does what we value or does the value that we put on something during the holiday season change? So, for example, I might look at a sweater and any other time of the year, I'm like, yeah, whatevs.

But then when Christmas comes, all of a sudden it changes. And it might be because it is a gift. It might be because I'm going to, I'm gonna go to several parties and I know I'm gonna need a sweater for all of those, and I can see that it would work for all of those things. Or is it because I want somebody to.

I think that I'm a big spender, or I think that I'm a great gift giver. Like how does, how does what we value and what we're prepared to spend change during the holiday season? Hmm. There's some really interesting studies about this. Danny Zane, who's a professor who, who, who came on the Nudge podcast a few times, he's, he conducted some really interesting study last year, which looked at how.

Customers react differently during these sort of national event days. So he didn't specifically look at Christmas because it's almost, it's too commonplace. He looked at events that are a bit small, sort of national soup day or international spelling B day or something like that. And what he did is in his randomized control trials, he would show participants offers.

Though a company was sharing, say 50% off our latest artwork. And then people and he would send that email to a group of people and see how many people bought. And for another group of people, he would link it to a national day. So I think in the example it was something like 30% off all of our artwork today 'cause of it is international art day.

And he found that when the deal was linked to a national day of awareness, sales actually increased. What was really interesting about this, and I think a very interesting application for, for the listeners. That these national Days of awareness don't even have to be official. Well, there was one, there was one company, he, he ran a lot of these studies.

They have five different sort of experiments going at one. They write them all up in a paper to sort of get some validity behind the results. And one of the companies, I think was a pet, pet grooming service. Um, and, and he was, he wanted to come up with a, a national day for pet. There's no international pet grooming day, unsurprisingly.

But so what he did is he created. The anniversary of the birth of their mascot. Now that's a totally relevant day because they just created their mascot one day and it just happened to fall on that day. But then on the anniversary of that day, they sent their their customers an email and said, it's the anniversary of our mascot, Dewey the dog, whatever its name was, 'cause of this anniversary, we're giving you 30% off.

They sent that email to one group of customers, another email to another group of customers saying, we're giving you 30% off. Turns out when you link it again, even to a made up day, sorry. Anniversary of our mascot, people bought more because it was linked to the special day. So what Zane, what Danny Zane was finding from all of these studies is that we have this sort of ingrained bias for a willingness to purchase increasing during a day of national significance, even if that National Day of significance.

Is totally created out of thin air by the company. So you can imagine how this scales up for something like Christmas. It's, it's even more impactful when it's a day of significance that absolutely all of your friends follow that absolutely everyone in your family is gonna be engaged with you Feel this deep sense that you need to be part of it essentially.

So that said, we know that people will respond to offers better, but doesn't mean that they spend more. Well, yeah, good question. I think the specific studies I looked at was, was, was looking at offers, but I think around Christmas you definitely see people spending more. Part of that is is, I mean, due to a number of different biases, I think the reciprocity bias comes in there.

So we are constantly comparing ourselves to others. We're constantly thinking about what people have bought us last year and we need to buy something slightly better in order to return the favor. We spoke about that at the start, that that definitely comes into play. I think also at Christmas. What you tend to find is that the, the potential pain of, of purchasing sort of goes out the window.

So there's this sort of feeling that we feel all year. You'll notice, I think the best example of this is like if you ever go out for dinner on or, or lunch on Christmas Day in the uk it's quite common for people, some people to go to the pub. On Christmas day and buy a roast dinner. And what's hilarious about doing this is if you go to the pub on Christmas Day to buy a roast dinner, you will get probably the worst quality roast dinner you will ever get.

'cause all of the best chefs have been able to get the day off and it's all the kids working in the kitchen. You'll probably get sort of subpar service from all of the like university students who just really want that triple pay. But we're out drinking on Christmas Eve the night before. It'll be really busy.

It'll probably be like hot because the heating's on too high or something. They never quite get that right. You'll have to queue for ages and the food will be served cold. And yet, despite all of that, you will almost certainly give the biggest tip you have ever given throughout the whole year. 'cause it's Christmas and you feel this like deep need to repay, return the favor for the people who are serving you.

And so it's like, that's a very specific example of something that I think all of us do at Christmas, which is 'cause it is around this day of national significance. We forget about that sort of pain we have when we're purchasing things. We forget about the pain we have when we, we we're giving away money and put it to one side and we say it doesn't really count today.

It doesn't really matter if I give a 30 pound tip to this weight waiter because today's different. It's not like every other day. So it definitely does change our perception. Isn't that interesting? I can we just backtrack a little bit to like the cyber weekend? So we've talked a lot about Christmas and I think Christmas is really important because it is, it's a very universal holiday.

I know it's not everywhere in the world, but most of the people listening here probably celebrate it and goes for an extended period of time in the sense that I took a picture literally today. It is the 1st of October when we're recording this and it was a Christmas shortbread at the checkouts and I'm like.

What has this world come to? I feel like every year Christmas and like the holiday season it, they're just looking for, retailers are just looking for excuses to get it out in front of you quicker. But if we backtrack to, we've still got multiple holidays before we even get to Christmas. You know, the Americans have got Thanksgiving.

Thanksgiving Father's Day's just gone. We've got the cyber weekend. When it comes to the cyber weekend. Like Black Friday, it is the biggest spending day in the whole entire world for the whole year. Like people will make some, some retailers will make more than they will make in a month. On that. On that one day.

Can we just speak to why that is? Like you've talked about, you know, the herd mentality and you, we've talked about reciprocity. I feel like the herd mentality fits in here. But why is it that we will spend ridiculous amounts of money on one day of the year? Sometimes on things we don't even want or need, like I'm a little bit different because I'm a bit of a tight ass, and so I will go into Black Friday with a list of, if this is on special, I'll get it.

If it's not. It can just wait. But I know other people who just, they'll sit there in their Instagram feed and go, yeah, I'll buy that. I'll buy that. I'll buy that. I'll buy that. Just because, so I think I'm the anomaly here. We're gonna take me out of the picture, but why? Why are people prepared to spend so much money on one day?

When last year, by all accounts and purposes, the deals actually weren't very good, but yet it was still the highest grossing Black Friday ever. Yeah, you do find that, don't you? There's these fascinating studies in the UK of retailers being actually PE penalized because they claim that there are these offers on Black Friday, which aren't actually offers at all.

They're just the same price as with an offer on it. The, the psychology behind a day like Frank Black Friday really comes down to the psychology of scarcity. So as humans, we are deeply wired to prefer guest resources. This is an evolutionary trait. When we were hunter gatherers and we found a scarce resource, it would typically be something like a high sugar concentrated berry.

We would want to hoard that resource, so we wouldn't wanna just pick one berry and eat that berry. We wouldn't wanna pick all of them, take them back with us, because that resource is, is, is highly valuable to us. And so we developed this heuristic, this shortcut to think. If something is in scarce supply, we should hoard it as much as possible.

This makes total sense. We can all think of dozens of examples where this has happened from COVID buying toilet paper. Being a classic example to, I think one of my favorites is cited in the book influenced by Robert Cialdini. He talks about the day that Concord announced they would stop flying in three years time, so there was still hundreds of thousands of tickets on Concord flights between London and New York.

And they said in three years time, we're, we're gonna discontinue the Concord. What happened within hours of that announcement was that all of the remaining tickets for all of the remaining flights on all of the years left, sold out immediately. What's fascinating is nothing about the service had changed, the flight hadn't got faster, the ticket prices hadn't got any cheaper.

The food on board hadn't got any better. The only thing that happened was that an abundant resource suddenly became a scarce resource, and scarcity forces us to act. There's a wonderful study by Richard Shotten in the Book Choice Factory. Fantastic book. Actually, Richard Shotton is releasing a new book today on Wednesday, the 1st of October as well.

So if you are interested in these types of studies, I would recommend checking it out. Anyway. In his first book, the Choice Factory, he ran this really interesting study where he showed participants, again, this is a randomized controlled trial. He showed participants information about a movie, so showed the movie poster, showed them the trailer, and then said, how likely will you be to watch them?

I think, uh, a certain amount of them said they would be likely to watch. The majority said they wouldn't. That's typical. And then for a different group, he showed them the exact same information except he sold them, which was true. This movie will stop airing. Stop airing this weekend. And when he said that, when he introduced this little bit of scarcity, this idea that the movie won't be airing forever, people were 36% more likely to attend and actually go and watch the movie, which is, which is really interesting for me because it shows just how much marketers can learn from psychology because there is not a single trailer I have ever seen, a single movie poster I've ever seen, which says.

This movie will stop airing in Halloween. It always says when it'll start airing rather than when it will stop. And retailers can apply this in all sorts of ways. One way is just highlight your, your scarcity. So there's a, a, a wonderful study I've read about, which looked at the promotions you give your customers.

Again, two different variants. One group of customers are given a voucher code, which has a two month period in which you can use it. Another group of customers are giving a voucher, which has a three week period in which you could use it. Now, an economist would look at that and say the two month period is longer than the three week period, so the two month period will get more sales because people have more time to use it.

Not a chance, my friend. It's not true. No, it's not true. What happens is the scarcity, the limited amount of time in three week ones inspires people to act and people are more likely to use that voucher code. And that leads me to probably my, my like favorite study on scarcity in retailers, which was done in a supermarket in the us.

And it was a study where they, they basically put up signs in the supermarket telling people to buy soup and it worked. People bought soup when they saw signs to buy soup. Marketing's actually not that hard. You just tell people to do something and a lot of times people will do it due to all sorts of interesting reasons.

Before you tell us the story, I think you've said something that a lot of people haven't actually clicked on. You have to tell them what to do. And I think sometimes if we aren't experienced marketers, we think people will know what to do. We have a rule in our household. It is rule number one. People are dumb, and I don't mean they're stupid.

It just means that, like you said right back, like circling right back to what you said at the beginning is we are doing a billion things. Our brain is thinking about a billion different things. We're operating on system one, not on system two. We actually don't care. So unless you tell us what we need to do, that's not going to float into our brains.

And so like you just said, you, if we tell you to buy soup, that is very different to just saying soup. Yeah. Yeah. And I think also it's, it's, it's just reminding people, many people will have soup on their mental to buy list, but will forget about it. And you see a sign to buy soup, you're more likely to do it.

And that, that, that's not a surprise. The interesting thing with this study is they again, created a variant. So on an alternative weekend at the supermarket, they slightly changed the sign. Suddenly the sign didn't say buy soup, it said buy soup. Asterisk limited to 12 cans of soup per person. And what's fascinating about that is nobody was buying any more than 12 cans of soup.

Prior to that. Nobody was getting close. Well, nobody would. Um, there was no, there was no purchase, no offer you would get if you bought in, in, in sort of bulk. They just put this asterisk on and they limited the amount people could buy. And what they found was what they, but when they put in that limitation, suddenly, 'cause we're thinking we're in system one, we're using heuristics.

We're, we've got 101 decisions to make. We see a limitation. We think, oh, that must be a good deal. It must be a good deal. Otherwise they wouldn't put a limit on it. I'll buy slightly more. And what they found is that the, the sales of soup per customer went up by 112% when they put the limitation on versus when they didn't have the limit on.

And there's a final example of scarcity just 'cause it is pertinent to. Cyber by Monday in Black Friday is KFC applying. This KFC applied this in Australia. They had a a, an offer chips for a dollar, which is a very good offer, I think. And then they decided, they were, they came up with this idea of like, okay, we want to promote this on Facebook.

We can get people to order through Facebook, you know, click through and go to Uber Eats or whatever it is. And they got their marketing team to come up with 90 different slogans to promote chips for a dollar. And they came up with all this imaginative stuff. You know, the kernels never been so generous.

Their love from Perth to Brisbane chips for a dollar, all these different imaginative. Ways you could market chips for a dollar and they added one in there, which was just pure scarcity. It was chips for a dollar limited to four per customer. They tested all of these different messages on Facebook, monitored the amount of people who clicked through the amount of people who bought.

And lo and behold, out of the 90 messages, that scarcity message was the most effective. As humans, we are deeply driven to, to, to, to want and find and source scarce resources, and that is really why KFC, were able to sell so many chips for a dollar, but also why we love things like Black Friday. I think you've given us so much, but what I, and you've given us a lot of examples, so thank you.

I want to circle back to some of them and put them into. Into that format for people who are listening because you have just dropped so much knowledge. I think a lot of people have forgotten what you said right at the beginning, so I want to circle back, but we'll start with where you just were just then the urgency and the scarcity.

I think that this concept of saying a limit to per customer or limit for per customer. A lot of people listening, you know, if you're selling fashion or accessories, that concept has never occurred to you. But you saying that to me, hearing you say that right now, I'm like. Why is everybody not trying this?

Because the reality is, like you said, you know, if we have two polo shirts that we're buying, most people aren't buying more, more than two, but it doesn't mean that they won't come back again tomorrow and buy another two if they don't, you know, if they, if they really wanted those. And so you had some other, you, you threw another few examples in there.

You know, limited time, it's only available, you know, 12 per person. What do you see works really, really well during the holiday season? I love the limit and I hadn't thought about that one, so I've written that one down with a big asterisk. Thank you very much. We, we've always used things like, you know, offer ends Sunday or offer ends in 48 hours.

But I would love to know from you, this is something that is your passion. It is something that you're looking at every day. When it comes to retail in the holiday season, like what would be your top three that you would be your go-tos? One thing is, it's worth pointing out, is there is no one size fits all.

You know, ev all of the studies I'm sharing, they might work in a supermarket. In the states, you'll need to test them like KFC did to make sure they work for you. But these, if, if, if you're building based off principles that are built on human psychology, like the principle of scarcity, like the principle of social proof, you'll be far more likely to get a positive result than if you're building off gut instinct.

For example. So with scarcity, I think there's a number of different things you could try. There is the limiting the amount people can buy. That is one. Uh, there's limiting the amount of stock you have as well. So another classic would be, you know, limited amount of Christmas jumpers for the holiday season.

The important thing with that is not to just say this is a limited amount, but be very specific about exactly how much of that stock you have left remaining. An interesting thing with scarcity is that when that stock runs out, you should be very careful about what you say, so you shouldn't say unavailable.

That actually increases the amount of disappointment and anger People feel. This was an online study, people tested this instead, you should just say sold out because if you say sold out, it implies that it has been very popular. It implies that lots of people have bought it implies that your company hasn't experienced some stock problems, which means they can't sell it or offer it.

And that makes people less disappointed and more likely to go and buy other things on, on your shelves as well. We said at the start about the offers. You know, the amount of time you, you give your offer for. I think that is a big one. It's easy just to say. We often see, oh, this is discounted. You know, if I go into my supermarket today, I'll probably see 50, maybe not 50, but 40% of the, the products in there will be discounted.

And yet I have no idea how long that discount runs for and how long it has run for what would actually be useful. And I think more retailers are doing this is information on exactly how long that offer will run for. Because if I know. The toilet paper offer to go back to the COVID example, only runs for another week, and I'm not going to the store again for another week.

I will buy more because of the scarcity of that offer as well. So it can be really useful to share scarcity of offer too. I love that in the sense that many retailers who are listening, they're not somewhere you go every week. You know, if it's a fashion store or a pet store, maybe you go there every couple of weeks or every month.

And that concept of actually just reminding me that this finishes on Sunday then allows me to make the decision of, or will I be back before Sunday or should I just grab it now? Like you're actually, to me, this is a win-win because you. You might be thinking, well, if I say it end Sunday, people will be like, oh, oh, oh.

But actually what that does in my brain is it, it helps me make a decision and it's like, okay, well if I'm not coming back, I'm moving into to system two now because I'm having to think I'm having to. Like contemplate, I'm having to make a decision. I'm not doing this on autopilot. And I think even, I think there are some things that you said, which is great to be using the system.

One, it's like, I don't even have to think about it. I'm just gonna put that in my cart. But moving into system two can, especially if it's a bigger purchase, knowing these things helps the customer make a decision. And that's a win-win because it's a win for them. Because you don't want them, you know, coming back next week and going, oh, but you didn't say that.

The, the promotion was gonna be finished this week, or I would've just bought it then. Hmm. Yeah. Yeah. And I think with system one and system two, it's worth also clarifying that Daniel Kahneman, when he presented these said. We don't literally know how the brain works. There is not literally two systems in the brain.

Nobody actually has figured out exactly how the brain functions. These are analogies that a lot of neuroscientists agree with that seem to explain how the human brain works, but we don't actually know how it works. And, and, and, and people switch between system one and system two all the time, and we might think we're in system two or system one.

We're never really sure, but in in general, yeah. If you see something like, we know that an offer is going out, we will be more likely to buy it 'cause of that feeling of scarcity. A another one, which I think is really important, which has been replicated, this is a, A study which is cited in Thomas McKinley's brilliant newsletter Science says.

A very simple study, an online study where people saw one of three conditions, they, they saw a product page online, so they were buying a handbag and it would just showcase the handbag, the price, all the standard things that was the control. In another variant, they would show the amount of people who had also viewed the handbag.

So little number beneath the image saying about 1,200 people have viewed this handbag. Then in a final variant, they had the amount of people who had bought the handbag. So 120 people had bought the handbag. There was no hint of scarcity there. They weren't saying there's a limited amount of stock. This is more about social proof.

So it's literally saying lots of other people like you are more likely to, to buy this thing. And what they found was that both showing had the amount of people who had viewed the product and the amount of people who had bought the product, increased sales versus the control. So when you didn't showcase that information at all.

Was really what I liked about this study is it gave. Customer, it gave retailers who haven't, who, whose product hasn't sold an awful lot. So let's say you've just released a new product and it's only got 10 sales, but a thousand people have viewed that product. If you put the view number on, people are still more likely to buy.

So it gives you the, the, the option to use social proof without necessarily having to showcase that lots of people have already bought that product. So that could be a very helpful one as well. I think social proof is a, is a fascinating way that people can increase the number of sales They've got that sort of classic example of this again from Richard Shot's book, the Choice Factory.

I love this example so much 'cause it's so simple, it'll stick in your mind. He went to a, an East London pub and he asked the bartender, what's your best selling beer? The bartender said, it's London Pride. It's a really awful British ale. Actually, I don't recommend it if you go to London. Anyway, they, they, the London Pride was the bestselling there.

And Richard Schon said, I wanna run a run a randomized controlled trial. And what, what I'd like to do is for you to put a sign in front of London Pride for the next week, saying This is our most popular beer. And then we'll compare the sales during that week, with the week before and see if saying its most popular changes, anything.

It comes back a week later, ask the bomb. And for the, the sales day when he finds that sales have increased for London Pride by three times. Compared to the meme before. So three times increase in the amount of purchases just by saying it's the most popular beer. And what was interesting is that sales of other beers hadn't dropped.

They'd stayed relatively the same. People were just more likely to try London Pride in addition to maybe what they would've already bought. Typically, there's a very clear example of how just showcasing what the majority of other people are doing, they're viewing this product, they're buying this product.

This is our most popular beer. That can be a very effective way at, at increasing the amount people will purchase. Clearly the good podcaster. You did the perfect segue for me because the next one that I wrote down was the social proof. And I had written down that when you were talking, the first thing that came to my mind is I wear glasses, I need some new sunglasses.

My health fund money is about to, to roll over. And I've been, you know, I want to spend it before it runs out. And I've been looking for sunglasses and I'm a little bit picky, and I've been going to all of the optometrists looking at the glasses, and I walked into an optometrist the other day. There were a pair of sunglasses that I thought were okay, but gosh darn it, there was a great big sign.

It was on a little stand and a big sign. A big sign relative to the glasses that said, our best seller. Yeah, I'm a marketer and I knew exactly what that was doing, but do you think I put those glasses on and do you think I gave a, you know, I struck a little pose and was like, I think I quite like these glasses.

Yeah, it's fascinating. I'm not fascinating. Usually one who falls into that trap of the best seller. Like I just like what I like, but I trust me, when my BRI marketing brain was going, this is really interesting because optometrists typically not very good retailers. They don't, you know, they, they're service providers.

They don't think about customer experience. They don't think about how, you know, psychology, all that kind of thing. But I thought. There was just one pair sitting on a little stand out of the whole shop, and it just happened to be the pair that I liked. And I was like, I reckon they sell a lot of those glasses just because they call it bestseller.

So when you were talking about social proof, the couple of things that I wrote down was, one, using this concept of bestseller or top selling, which is what you're just talking about, and not our number one, but the other one was things like staff picks. And I think that we underestimate that social proof.

'cause people hear social proof and we think, oh, they're talking about reviews, which that is a form of social proof, but you've just given us some very little sneaky things like, you know, how many people viewed, like, I love that. But the idea of staff, we go back to these heuristics, which is, well, these people are doing this every day.

They see these things every day. And they like that out of all the things that they're selling. These are the things that they've chosen. So now you've just made it easy for me to buy because if they think it's good, I'm gonna think it's good. And it's that age old walking into a a restaurant and saying, you know, to the server, well, what would you recommend?

You shared a lot of very interesting things there. The one about the glasses I find really fascinating because I think there's a way that could potentially backfire for the, for the retailer there in that. Glasses is something that you actually do want to be quite personal to you. You almost don't want to have the pair of glasses that everybody has.

This is what Facebook might struggle with with their Ray Band, Oculus glasses in terms of that, that you don't want to look like everyone else. Like a better example of this would be a tattooist who says, this is my most popular tattoo that shouldn't sell very well. 'cause a tatar is something that you want to be very individual to you.

But I think if you look at the, the sort of the science behind social proof, you can understand maybe, maybe how they could improve that message and how it works. So a lot of the initial sort of findings behind social proof come from Robert Cialdini's work in Arizona. He published it in his book Influence, I think published back in 1984.

His initial studies in Arizona hotel rooms are really interesting. So in the hotel room, every every room would get a card, which would ask people to reuse the towels. Every hotel wants you to reuse the towels. They claim it's because they care deeply about the environment. But I think the real reason is because they care deeply about money and they don't want to spend an awful lot of money washing the towels every single day.

So they put cards in the room to try and persuade people to reuse their towels. The control, the card that they always had in the room. Talked about the environment. It says we care deeply about the environment. Re uh, washing a towel uses X amount of water. Please reuse your towel to help us reduce our environmental impact.

That was the control. And then they had a variant, which said, most people in this hotel reuse their towel. Please reuse yours. What they find now, mention nothing about the environment. What they found was that when people heard that most other people in the hotel reused their towel, there was something like 25% more likely to reuse their towel themselves versus the environmental message.

So you find that showcasing the actions of others changes the behavior. What is perhaps more interesting is there was a third variant of this study, and in the third variant, they didn't say, most people in this hotel reused their towels. They said, most people who have stayed in this room, room 1, 1 2, have reused their towel.

Now logically there is no difference in our message. It shouldn't make any difference. It doesn't really matter what people who in 1, 1 2 did. And yet, by being more specific, by being more personalized, they found that that message was even more impactful. That increased the amount of people who used their towels by, I think, another 12% on top of the initial message, on top of the, uh, social proof message.

So what you find is the more personal you get with your social proof, the more effective you get. Another classic example of this is a study which was done on adverts in the uk, in in train stations in the uk. Promoting fast broadband, fast internet service. They found that if you have a standard message, which says this is the UK's fastest broadband, it gets a good amount of engagement, good amount of memory, good amount of people wanna buy it.

But if you say, this is the fastest broadband in Waterloo Station, which again, logically is less important, doesn't really matter what the internet is like in Waterloo Station, but because it's personalized, it becomes more believable and more memorable. People are more likely to take action off that. So that is a better message.

And I think if we go back to your glasses example, I think there could be a slightly better way that the opticians could, could, could frame that rather than saying, this is our best seller, you could try and personalize the social proof. So you could say, this is the best selling glasses for, for women who are brunette, or this is the best seller for men with a heart shaped face.

Yeah, or heart shape, but there's probably exactly far better terms to apply it from that. And if you personalize it, not only do you get the ability to put best seller on far more products, which is what you want to do. But you also are benefiting from that study we shared at the start, which is the more personalized you get with your social proof, the more effective it gets as well.

So social proof a fascinating one, but I think people forget that they, like you say, they think it's just reviews. They forget that the more personalized and specific you get, the more effective social proof becomes. And is this where we would use the concept of eight out of 10 people would recommend this to a friend?

Is that, is that where we, we are putting this in the same bucket. Yes, it's exactly that actually. And there's a wonderful example of that, again, in the UK with a, with an advert for cost of coffee, cost of coffee. It's owned by Coca-Cola now. Nationwide Coffee Company serves awful coffee. Don't, don't buy it.

If you come to the uk it's a bit like Starbucks. Yeah, it's a bit like Starbucks. Uh, but it's perfectly fine. You know, if, if, if all you can find is a cost, uh, go there, you'll, you'll be okay. They did some surveys in which they asked. People around the UK if they like Costa Coffee, and the majority of people aren't that interested in Costa Coffee.

So what they did is they went hyper specific. They got a group of coffee lovers and asked them if you liked Costa. Now, I think they actually asked people who were going to Costa Coffee a lot and called them coffee lovers because they said, oh, if you're going to Costa Coffee lover, you must be coffee lovers.

So it's a bit, it was a bit cheeky. They asked them, and obviously people who go to Costa Coffee I love a lot, do like Costa Coffee, and so eight out of 10 of them said they prefer Costa Coffee to other brands, and so they then ran a national ad campaign which said, eight out of 10 coffee lovers prefer Costa.

That specific line, you can look up this ad. It went everywhere and it was incredibly successful Right after. Publishing that nationwide ad there was a, a big spike in sales. If you look it up, you'll find that the results. But it was, it was noteworthy enough to have lots of awards and, and blogs written about it.

And it's interesting 'cause it is just, it's a very simple thing, which is eight out of 10 people, but it's also benefiting from that specificity. If they'd sent eight out of 10 Brits prefer cost of coffee, it wouldn't have been effective at saying eight out of 10 coffee lovers. Because by being specific, by targeting a specific audience.

It becomes even more effective. So if you're a retailer and you are selling whatever it might be, let's say it's building supplies, you are, you are, you are, you're promoting your product to construction workers saying This is the most popular hard hats amongst construction workers in London, or construction workers in Sydney will be more effective than just saying, this is our best seller.

So getting that specificity in there can be really important. And so do we drill down a you? How far do we drill down? Do we, do we say something like eight out of eight out of 10 mums with toddlers love this product. Like, do we get that granular? Depends how many products you have. I think Amazon DI think if you go to Amazon, you'll, you'll find those ridiculous.

Like if you start looking at books on Amazon, you'll say. 90% of nonfiction narrative, historical loving book readers who read books written in the 1920s or less, who like books for less than five pounds prefer this. You'll get that level of specificity. And Amazon, unsurprisingly, have a team of about a hundred behavioral scientists on site applying this stuff and testing it consistently.

I think there's limits to all of this. I think you can overdo it. I think there can be a point where if you apply endless amounts of psychological principles to your work in a sort of non-coherent way, it can start to feel quite scatter gun approach. So what you don't want to do, if we go back to your optician example, we don't want to have labels on every single glass, glass of glasses.

You know, it'll just be ridiculous if every single one is a bestseller for someone else. You'll immediately see for it. The value is in finding ex examples, ways you can apply this in ways that doesn't feel overwhelming. That doesn't seem like a gim. You can push it too far. And I think the example I've given of, of, of UK supermarkets, I'm sure it's the case in, in other supermarkets across the world, everything is on offer all at once.

It suddenly doesn't look like that good an offer. And that's going back to scarcity again. If we really think that an offer is, is scarce. Then fewer products would have that offer. And I think the same goes for labels. You know, if every product has a label about how, as a bestseller, it starts to become less believable.

Whereas if we do, if we find the products that really are best sellers, then it, then it's far, far more effective. I think what you've given us here is a really good toolkit of different types of strategies we can use throughout, I mean throughout our marketing in general, but coming into the holiday season, you know, there are a lot of brands who will be doing sometimes multiple promotions a week or promotions every single week, and sometimes it can feel a little bit daunting of what's next, but what you've just done is given us.

Probably a dozen that I've written down that we can then go and use one after the other, which don't actually dilute that exactly what you're saying. We can't just put bestseller on everything, but these messages don't dilute the offer. What they do is they just pick a different, a pain point or pick a different psychological trigger for us to, if that one didn't work for this person, then we're doing the next one for the next person, and we'll find the ones that work for our customers.

Because like you said, right back at the beginning, marketing is just an experiment. It's gonna work. Sometimes it's not gonna work. Others, what works for you might not work for me. All those kinds of things. So it really is making sure we have this toolbox where we can just be dipping in and going, okay, we know this one works.

Or, you know what, we haven't tried this one before. We haven't tried it with that languaging. We, you know, what? Going into the holiday season, why don't we put how many people viewed this product? Let's just see. Let's just see what happens. I love that. I love, I love marketing. In the testing and the being able to see the data.

Not so much when it doesn't work, but when it works, we really love it. I, I would love to hear from people who tried this. I think a reminder of what we've covered today, we've said that. Using a National Day of significance tends to make your offers more effective. So, you know, why not pick 1st of November to be the anniversary of your mascot and send all your customers a nice promotion saying it's the anniversary on that mascot.

See if it works. It the really savvy customers run an AB test with just a normal promotion to see if that specifically works for you. Then you've got. Data, which you can use for the next year. Uh, we talked about how putting the amount of times that product has been sold on the website tends to get people to buy more.

I think that's one that definitely people should try. Limiting the length of your promotions tends to be really successful. So don't give your voucher code out for, for two months. Give it out for three weeks. That tends to work better as well. And then like we said, with social proof, getting specific, it's not just reviews, like you said.

I think we can find ways to say this is the best selling pair of glasses for. Brunette men with beards. I think that can be a really effective way and I'd love for folks if they are able to try this out to, to get in touch and let me know if it's worked. Oh, thank you so much for sharing all of these. If people love behavioral psychology as much as I do, where can they hear more about it?

I did mention it right at beginning, but we're circling right back. We're wrapping this up with a bow. We are making sure that we are giving, we are telling people what to do. Yeah, it is Nudge Podcast, N-U-D-G-E. That is the podcast I run. You're gonna hear some social proof now in which nudges the UK's number one marketing podcast.

You won't be surprised that I tell people that now after listening to this episode. Um, I should also put a, a limit on there. Shouldn't I, I should say, you know, listeners are only allowed to listen to 10 episodes per day. Yeah. Um, kids to health and Health Limited. Limited to one download per Person Per Day.

Unfortunately, I can't do that. If I could, I would love to try that. I reckon that would be quite effective. That would be, yeah. That would be, that would be a great test. If we could do that, it would be great. It would be great. But yeah, you can find Nudge wherever you get your podcast. It's got a nice orange logo.

And yeah, I produce episodes every Monday on the Psychology Behind Why People Buy Mine is orange too. Why did you pick orange? Because orange is not my brand color. But why did you pick orange? Oh, good question. I, I think I looked at the, there's a, there's a lot of science into the science of distinctiveness and I looked at a lot of the other podcasts out there and noticed it wasn't the color that was used very much.

That is exactly what I did. I went through all the marketing, all the retail, and no one was using orange. And so we have bright orange and Navy and I was like, there, there we go. When, when we did our cover artwork, there was nothing like it. But clearly you and I think along the same lines. Good choice.

Good choice. Thanks Phil. Thanks so much for having me. Cheers. So that's a wrap. I'd love to hear what insight you've gotten from this episode and how you're going to put it into action. If you're a social kind of person, follow me at the Selena Knight and make sure to leave a comment and let me know. And if this episode made you think a little bit differently or gave you some inspiration.

Or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review on your platform of choice. Because the more reviews the show gets, the more independent retail and e-commerce stores just like yours, that we can help to scale. And when that happens, it's a win for you, a win for your community, and a win for your customers.

I'll see you on the next episode.

Phill Agnew hosts Nudge, the UK's #1 marketing podcast. It's a critically acclaimed behavioural science show that has featured world-renowned guests such as Richard Shotton, Rory Sutherland, Tali Sharot, Jonah Berger, Dan Pink, and Chris Voss. With a knack for demystifying complex psychological concepts, Phill translates cutting-edge behavioural science into actionable insights for marketers, business leaders, and everyday professionals. His podcast has been downloaded by hundreds of thousands across the globe, establishing Phill as a trusted voice in behavioural marketing.