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What most people miss about marketing | Rory Sutherland (Vice Chairman of Ogilvy UK, author)
43 segments available
Rory Sutherland is widely regarded as one of the most influential (and most entertaining) thinkers in marketing and behavioral science. He’s the vice chairman of Ogilvy UK, the author of Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life, and the founder of Nudgestock, the world’s biggest festival of behavioral science and creativity. He champions thinking from first principles and using human psychology—what he calls “thinking psycho-logically”—over mere logic. In our conversation, we cover: • Why good products don’t always succeed, and bad ones don’t necessarily fail • Why less functionality can sometimes be more valuable • The importance of fame in building successful brands • The importance of timing in product success • The concept of “most advanced, yet acceptable” • Why metrics-driven workplaces can be demotivating • Lots of real-world case studies • Much more Note: We encountered some technical difficulties that led to less than ideal video quality for this episode, but the lessons from this conversation made it impossible for me to not publish it anyway. Thanks for your understanding and for bearing with the less-than-ideal video quality. — Brought to you by: • Pendo—The only all-in-one product experience platform for any type of application: https://www.pendo.io/lenny • Cycle—Your feedback hub, on autopilot: https://www.cycle.app/lenny?utm_source=youtube&utm_medium=paid&utm_campaign=lenny • Coda—The all-in-one collaborative workspace: https://coda.io/lenny Find the transcript and references at: https://www.lennysnewsletter.com/p/what-most-people-miss-about-marketing Where to find Rory Sutherland: • X: https://x.com/rorysutherland • LinkedIn: https://www.linkedin.com/in/rorysutherland • Book: Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life: https://www.amazon.com/Alchemy-Curious-Science-Creating-Business/dp/006238841X Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Rory’s background (02:37) The success and failure of products (04:08) Why the urge to appear serious can be a disaster in marketing (08:05) The role of distinctiveness in product design (12:29) The MAYA principle (15:50) How thinking irrationally can be advantageous (17:40) The fault of multiple-choice tests (21:31) Companies that have successfully implemented out-of-the-box thinking (30:31) “Psycho-logical” thinking (31:45) The hare and the dog metaphor (38:51) Marketing’s crucial role in product adoption (49:21) The quirks of Google Glass (55:44) Survivorship bias (56:09) Balancing rational ideas with irrational ideas (01:06:19) The rise and fall of tech innovations (01:09:54) Consistency, distinctiveness, and clarity (01:21:12) Considering psychological, technological, and economic factors in parallel (01:23:35) Where to find Rory Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Lenny may be an investor in the companies discussed.
Segments Timeline
The Power of Marketing in Product Success
Rory Sutherland discusses the critical role marketing plays in the success of products, emphasizing that good products don't always succeed and bad ones don't necessarily fail. He highlights the importance of distinctiveness and fame in building a brand, suggesting that marketing can be the decisive factor in a product's journey to success.
"Steve Jobs was not a technologist he was a pitch man he was a brilliant salesman he was a fantastic marketer when products succeed we forget the extent to which marketing was actually instrumental or ..."
The Importance of Timing and Perception
In this segment, Rory shares insights on how timing affects product success and the perception of products like Facebook's Meta TV. He explains how consumer concerns, such as privacy, can overshadow the quality of a product, illustrating that even great products can fail due to external perceptions.
"that's pleasure it's a an audience I don't normally speak to and it's an audience which I think is particularly valuable particularly important but also um actually probably could benefit quite a bit ..."
The Comedian's Approach to Marketing
Rory introduces a unique perspective on marketing by suggesting that if you can envision a stand-up comedian doing a routine about your product, you're onto something. He argues that the urge to appear serious can be detrimental, and that embracing humor and distinctiveness can enhance marketing effectiveness.
"marketing often looks like so you once said if you can imagine a stand-up comedian doing a routine about your product then you're on to something the urge to appear serious is in many ways a disaster ..."
Maximally Advanced Yet Acceptable
Rory explains the concept of 'maximally advanced yet acceptable' in product design, emphasizing that consumers prefer gradual evolution over radical change. He shares examples from the automotive industry, illustrating how maintaining certain idiosyncrasies can enhance a product's appeal.
"could know what your customers really need cycle unifies all of your customer interactions from support chats to user research gong calls and App Store reviews into one neat collaborative space Cycles..."
The Role of Distinctiveness in Branding
In this segment, Rory discusses the significance of distinctiveness in branding, using examples from Jaguar and Rolls-Royce. He emphasizes that unique features can create a memorable identity for products, which is crucial for standing out in a crowded market.
"their behavior rather than Reinventing their behavior but nonetheless one of the things I always point out is that idiosyncrasies kind of count double there a wonderful thing actually years ago back i..."
The Impact of Quirky Marketing Strategies
Rory shares anecdotes about quirky marketing strategies, such as MCI's 'friends and family' plan, which generated significant interest despite being irrational. He highlights how unconventional approaches can capture attention and drive consumer engagement.
"calls to those numbers I it started off with 10 and I think they eventually ramped it up to kind of 25 but actually most people 90 it's a partic principle most people make 80% of their calls to probab..."
The Right Amount of Weird
Rory discusses the appeal of Scandinavian media and products, describing them as having 'the right amount of weird.' He argues that products should be relatable yet distinct enough to intrigue consumers, striking a balance that enhances their marketability.
"not want to S by selling them in France and then the Brit said okay by the way that champagne can you send us more of the champagne with a yellow label it's going down really well and they said okay w..."
The Complexity of Consumer Psychology
Rory concludes by emphasizing the complexity of consumer psychology, suggesting that non-linear thinking can lead to innovative marketing strategies. He encourages marketers to embrace psychological insights to create compelling narratives that resonate with consumers.
"whatat made you buy it and he said great phrase he said 'w he said if you're British true also if you're American by the way he said if you're British the great thing about Scandinavians is they're ju..."
Rethinking Rationality in Business
In this segment, Sutherland challenges the conventional wisdom of rational decision-making in business. He argues that psychology often operates on nonlinear principles, where the opposite of a good idea can also be a good idea. He illustrates this with examples of hotel check-in experiences, advocating for a more nuanced understanding of human behavior in business contexts.
"things I love all these examples you're sharing of ways products stand out sometimes by accident sometimes intentionally if you if to zoom out and try to describe what you encourage people to do you b..."
The Flaws of Multiple-Choice Testing
Rory critiques the limitations of multiple-choice tests as measures of intelligence, highlighting their reliance on a single correct answer. He shares insights from historical perspectives on intelligence testing and how these tests fail to account for the complexities of real-life decision-making, which often involves multiple valid answers and incomplete information.
"understanding the fact that what we're trying to do is we're trying to run the world of business entirely to a reductionist kind of maths and physics and finance model you know where everything's kind..."
Real-Life Decisions vs. Academic Models
Sutherland contrasts real-life decision-making with the simplistic models often used in academic settings. He discusses how business decisions involving human behavior are rarely linear or straightforward, emphasizing the need for a more holistic approach that considers psychological factors rather than just mathematical models.
"can have multiple right answers and also you don't have all the information you need uh to answer the question contained within the question and some of the information you have which you think is imp..."
Companies Embracing Creative Autonomy
In this segment, Rory shares examples of companies like Octopus Energy and Shopify that foster creative autonomy among their teams. He explains how smaller, autonomous groups can lead to happier employees and better decision-making, as they feel a sense of obligation to their teammates, contrasting this with traditional top-down management structures.
"world decisions and yet we select and promote people on their ability to perform those artificial activities I'm curious if you've seen a company figure out how to do this better so you clearly are in..."
Customer Service Redefined
Sutherland discusses the innovative customer service philosophy at AO Appliances Online, where employees are encouraged to treat customers as they would their grandmothers. This approach prioritizes human connection over metrics, illustrating how a focus on empathy can lead to better customer experiences and employee satisfaction.
"structure because in normally in a call center environment you'd have one person managing a hundred people and you had effectively a team leader with a team of 10 and what was interesting that emerged..."
The Dangers of Metrics-Driven Workplaces
Rory critiques the obsession with metrics in workplaces, arguing that it can lead to demotivation and a loss of autonomy. He shares insights from Zappos, where call center speed is not prioritized, allowing for longer calls if necessary to solve customer issues. This segment emphasizes the importance of human judgment and emotional intelligence in business.
"effectively you know you're at a party you see friend X who's one of your dumb Bar number one of your 150 people talking to a complete stranger and you can go over and join that conversation without f..."
The Role of Psychology in Decision-Making
In the final segment, Sutherland explores the complexities of human decision-making and the limitations of traditional economic models. He argues for a broader understanding of psychology in business, emphasizing that real-world decisions often involve uncertainty and require a more nuanced approach than what is typically taught in schools.
"workplace I think you know because there's no discretion there's no sort of discretionary judgment allowed anymore because someone saw any deviation from this imaginary Optimum as being a cost and you..."
Psychological Decision-Making
In this segment, Sutherland explores the complexities of human psychology in decision-making. He contrasts traditional economic models that assume certainty with the reality of human behavior, which often operates under uncertainty. He highlights the need for decision-making frameworks that account for imperfect information and trust, advocating for a psychological approach to understanding consumer behavior.
"psychological psych psychology psychology a few times psychologic yeah and psychological yeah in other words there's a different there's a different kind of mechanism for logic and decision making wit..."
The Advantage of Irrationality
Rory Sutherland explains how behaving irrationally can sometimes be advantageous, particularly in unpredictable environments like New York's real estate market. He discusses the concept of unpredictability as a strategic advantage, using the metaphor of a hare evading a dog through erratic movements. This segment emphasizes the value of randomness and unpredictability in both survival and marketing strategies.
"know evolving on the Savannah if an animals very predictable and very logical they're a lot easier to catch yeah yeah can you just talk a bit about that cuz I no no no I mean I mean things like you kn..."
Learning from Social Behavior
Sutherland delves into the evolutionary benefits of social copying and habitual behavior in decision-making. He argues that humans often rely on past experiences and the behaviors of others to make choices, which can lead to effective survival strategies. This segment highlights how social dynamics influence consumer behavior and decision-making processes.
"those game theoretic kind of moves okay and there were people who basically encountered this thing maybe I should have put it right at the end of the book and I put it somewhere early on who were then..."
The Power of Social Proof
In this segment, Sutherland discusses the impact of social proof on consumer behavior, particularly regarding the adoption of new technologies like heat pumps. He explains that people are more likely to adopt innovations if they see their neighbors doing so, challenging traditional economic assumptions about rational decision-making. This insight underscores the importance of social influence in marketing strategies.
"basically it just enters this random movement high speed mode and the point is it can't consciously know what it's going to do next because the dog would then learn to anticipate what it was doing it ..."
Heuristics in Consumer Behavior
Rory Sutherland examines how consumers use heuristics based on past experiences to make decisions about new products. He discusses the tendency to wait for improvements in technology before making purchases, illustrating this with examples from various consumer electronics. This segment emphasizes the role of learned behaviors and expectations in shaping consumer choices.
"pumps and it is not tell them the environmental benefits it is not tell them how much money they'd save by having a heat pump no the single thing that would persuade people to have more heat pumps is ..."
The Role of Marketing in Product Success
Sutherland argues that marketing plays a crucial role in the success of innovative products, often overshadowed by the products themselves. He highlights historical examples where effective marketing was instrumental in product adoption, such as the introduction of electricity and vaccinations. This segment reinforces the idea that successful marketing strategies are essential for the acceptance of new technologies.
"plan to ask each guest also during the recording itself I have a Kota page up to remind myself what I want to talk about Kota is an all-in-one platform that combines the best of documents spreadsheets..."
Timing and Marketing: The Key to Adoption
In this concluding segment, Sutherland discusses the significance of timing and marketing in the success of various products, including the Japanese toilet and Google Glass. He emphasizes that even great products can fail without the right marketing strategy and timing. This segment encapsulates the overarching theme of the conversation: the critical interplay between marketing, consumer behavior, and product success.
"it's a bit weird why are there no famous belgians and it turns out it's a bit like why there aren't very many famous Canadians and the reason is if you're a famous Canadian everybody assumes you're Am..."
The Absurdity of Modern Conveniences
Sutherland humorously critiques modern conveniences, such as the use of dry wipes in the West compared to the more hygienic practices in other cultures. He argues that many everyday products, like house keys and traditional toilets, are outdated and inefficient, showcasing a disconnect between innovation and consumer adoption.
"chasm of the early adopter I still think it's barbaric I've got a Japanese toilet here I don't have one in my other little flat I think it's barbaric that the Western Hemisphere dry wipes right the wh..."
The Wine Box and Consumer Preferences
Rory discusses the innovative wine box, which allows for easy wine storage and consumption without waste. Despite its advantages, the product struggled to succeed in the market. This segment delves into consumer preferences and the psychological barriers that can prevent even the best products from achieving success.
"Roman but the way the Romans never invented the Stirrup would you believe that they they didn't actually have a stirrup for horses so you basically had to cing on with your knees oh my God how okay so..."
The Challenge of Innovative Products
In this segment, Sutherland reflects on the challenges faced by innovative products like Google Glass and the Japanese toilet. He emphasizes that even great ideas can fail due to misjudged marketing strategies or societal readiness, urging that past failures should not deter future innovation.
"basically you know we should it keeps for weeks okay it's got its own tap you can have a glass of wine in the evening without opening a bottle and letting the other five you know five glasses go off y..."
The Definition of Insanity in Innovation
Sutherland challenges the notion that repeating the same strategies in innovation is insanity. Instead, he argues that many failures stem from timing and market conditions rather than the ideas themselves. He encourages a deeper understanding of complex systems in product development.
"interesting phenomena I I I would have bought Google Glass actually even at the insane launch price of about $1,000 because I would really really like being able to walk around now I don't know what t..."
The Importance of Timing in Technology Adoption
Rory shares anecdotes about the evolution of mobile phones and grocery delivery services, illustrating how societal perceptions and timing can affect technology adoption. He emphasizes the psychological hurdles that consumers face when adapting to new behaviors and technologies.
"not the definition of insanity that's the definition of a complex system right you know that actually I mean quite a lot of Internet ideas failed I think quite a lot of online ideas failed because the..."
User Imagery and Product Perception
In this segment, Sutherland discusses how user imagery affects the perception of products, particularly electric cars. He highlights the stereotypes associated with early adopters and how these perceptions can hinder broader acceptance of innovative technologies.
"timing right it's 199 no hold on it's 1989 okay I sign out a mobile phone it's like a brick it's made by Mo Motorola sign out a mobile phone from the office in 1989 and I because I'm going to a meetin..."
The Evolution of Mobile Phones
Sutherland recounts his personal experiences with mobile phones from their inception to their current state. He reflects on societal attitudes towards mobile technology and how perceptions have shifted over time, emphasizing the slow evolution of consumer acceptance.
"huge huge psychological hurdle to changing Behavior or to getting people to uh adopt Behavior which is slightly unusual there was massive I mean okay one story I I then bought my my own mobile phone t..."
Marketing Missteps and Product Failures
Rory discusses how marketing missteps can lead to the failure of otherwise great products. He emphasizes the need for understanding consumer behavior and the psychological factors that influence product adoption, warning against the survivorship bias that overlooks failed innovations.
"phone itself was not rapid they've existed for about 50 years right you had to be pretty rich and they most mostly were in people's cars I saw someone with a portable telephone I think in 1984 and tha..."
Creative Thinking in Decision Making
Sutherland introduces the idea of a two-stage decision-making process, inspired by ancient Persian practices. He advocates for incorporating creative thinking alongside logical reasoning in business decisions to foster innovation and avoid pitfalls.
"that stuff I agree I'm excited I'm excited for the Tesla version of yeah I completely I completely you've shared all these amazing examples of products that are great but didn't work out many of the r..."
Historical Perspectives on Electric Cars
In this segment, Rory shares historical insights into early electric cars and their societal perceptions. He discusses how user imagery affected their adoption and contrasts it with the current acceptance of electric vehicles, highlighting the evolution of consumer attitudes.
"something really really interesting about having what you might call two a two-stage a double lock on decision making which is okay there's this fundamental asymmetry which is creative people have to ..."
The Smugness of Electric Car Owners
Sutherland concludes with a reflection on the social dynamics surrounding electric car ownership. He discusses how perceptions of smugness among electric car owners can create barriers to wider acceptance, emphasizing the need for a shift in societal attitudes towards innovative technologies.
"user imagery right and the user imagery was because it was quiet you didn't have to hand crank it it didn't give off fumes it didn't make a loud noise they were really popular with women and they beca..."
The Smugness Factor in Electric Car Adoption
In this segment, Sutherland explores the social dynamics surrounding electric car ownership. He points out that many non-owners perceive electric car drivers as 'smug environmental tossers,' which creates a barrier to adoption. He argues that the actual motivations for many electric car owners are often not environmental but rather based on personal preference and status, complicating the narrative around electric vehicle adoption.
"when you meet environmental people okay they don't have electric cars they've always got some crappy excuse like yeah but my wife needs to do the school run and said we decided we get a diesel right r..."
The Role of Status in Technology Adoption
Sutherland delves into the psychology of technology adoption, suggesting that many early adopters are motivated by status rather than functionality. He uses the example of electric cars and air fryers to illustrate how novelty and the desire to stand out can drive consumer behavior. This segment emphasizes the importance of understanding the social implications of new technologies in marketing.
"reasons they may be happy to have zero emission cars I would like to get solar panels to charge my car not really to reduce carbon emissions but just to be really cool to have a car that runs on the s..."
The Walkman Case Study: Less is More
Rory shares a compelling case study about the Sony Walkman, explaining how its initial design focused on a single function—playing music—rather than adding unnecessary features. He discusses how this principle of simplicity can lead to greater consumer acceptance and success, reinforcing the idea that sometimes less functionality can be more valuable in product design.
"occasionally say to an audience of 500 people if you got anybody here go n and there' always be six people go yeah best thing I've ever bought okay and it's only occurred to me that actually in a way ..."
Branding for Startups: The Key to Fame
In this segment, Sutherland offers practical advice for startups on building a brand. He emphasizes the importance of being consistent, distinctive, and famous. He explains how achieving fame can change the dynamics of customer acquisition and retention, making it easier for brands to attract attention and loyalty. This insight is crucial for early-stage founders looking to establish their presence in the market.
"nothing else once people start going is it a Dictaphone does it have a corporate function you know should I use it to record concerts Etc once it's got more than one function people don't know where w..."
The Nonlinear Value of Brand Building
Rory discusses the complexities of measuring the value of brand building, likening it to a pension that pays off over time. He argues that traditional metrics often fail to capture the long-term benefits of brand fame and recognition. This segment highlights the need for marketers to understand the nonlinear nature of brand equity and its impact on business success.
"on Twitter what I should ask you when you were coming on the podcast and the most common question came around branding for startups so say you're a startup you're trying to figure out how do we build ..."
The Three Pillars of Great Branding
Rory Sutherland outlines the three essential elements for building a successful brand: consistency, distinctiveness, and clarity. He explains how these factors contribute to a brand's promise and trustworthiness, allowing it to resonate with consumers. Sutherland emphasizes that a strong brand not only conveys prestige but also fosters a sense of security among customers.
"subtraction and division to try and quantify the value of an activity which doesn't which which actually is about power laws it's not about that kind of linear okay it's really about kind of power law..."
The Celebrity Effect on Trust
Sutherland explores the relationship between fame and trust, using celebrities as a metaphor. He explains that well-known figures are often perceived as more trustworthy due to their reputational investments. This dynamic extends to brands, where familiarity can lead to consumer confidence, making it easier for famous brands to navigate challenges and maintain customer loyalty.
"to which it contributes to trust okay which is that if you met a celebrity on the street right okay I don't mean a serial killer celebrity I mean a famous actor okay one thing you wouldn't think about..."
Navigating Brand Perception in B2B
In this segment, Sutherland discusses the unique challenges of brand perception in B2B marketing. He highlights the importance of established brands like IBM, which provide a safety net for decision-makers. Sutherland illustrates how familiarity with a brand can influence purchasing decisions, emphasizing that the perception of risk is often tied to brand recognition.
"velocity I always say about Coke that coke has reached a magical level of Fame where it is your expectation that any shop or bar or cafe or Bean restaurant will stock it okay in other I can ask for th..."
The Nonlinear Process of Innovation
Rory Sutherland argues that innovation is rarely a linear process, challenging traditional business methodologies. He encourages businesses to integrate psychological, technological, and economic factors in parallel rather than sequentially. Sutherland shares examples of products that initially failed but later succeeded through innovative marketing strategies, reinforcing the idea that the path to success is often unpredictable.
"with Brands it's not just a simple cons consumer it's not just a simple business consumer relationship there are all kinds of things what does the brand I use say about me it's do the people who I who..."
Marketing and Innovation: Two Sides of the Same Coin
In the concluding segment, Sutherland emphasizes the interconnectedness of marketing and innovation. He advocates for a holistic approach where businesses simultaneously understand consumer needs and develop innovative solutions. By doing so, companies can create products that not only meet market demands but also resonate with consumers on a psychological level, leading to greater success.
"there loads of products which by the way have completely failed at first iteration and then someone sold them in a different way and they then turn out to be completely successful I mean you know uh y..."