 Welcome, sir Lord Richard Shossen. It's such an honour to have you back on the podcast again. It's been at least a week since I spotted you in a crowd and winked and then didn't really get a chance to say hi, but it's such an honour to see your wonderful face again. How are you doing? Very good, thanks. Very good to see you again. Same. So originally we wanted to start this podcast to talk about Richard's incredible new books called The Illusion of Choice. Ta-da, are you looking at the camera? I just showed the book. 16 and a half psychological biases that influence why we buy. Another must read if you're into the world of behavioural science. It's fascinating. How long was the gap between your last book and this? Pretty much exactly five years. The Choice Factory was 2018. This was February 23. It's a phenomenal book. I read it on holiday. That is dedication. It is one of those books where you just want this just full of lots of really interesting little stories. And what I loved about it is also it's very easy to dip in and dip out of. Yes, it works if you do it in the linear fashion, but I found it was equally fine. I forgot something. I could go back in and still feel like it was part of a story. That's good. Definitely an aim was to try and make it as straightforward and simple as possible. I definitely felt, especially before The Choice Factory, an awful lot of the commentary on behavioural science was unnecessarily complex. There's even a phrase, and the academics are the worst at this. There's a phrase people use drunkenly about psychologists, which is they have physics envy. So to try and prove that it's a proper hard science, they wrap up their academic papers in an unnecessary level of statistics and unnecessary level of jargon. So often you read the original papers, and there's a really interesting point in there, but it is hidden in reams of reams of unnecessary verbiage. It's one of the things I love about your research so much. It's actually one of the things I admire the most about you is you're one of the few people, you weren't classically trained in behavioural science, and I think most people listen to this probably aren't classically trained in behavioural science or many other topics, but you've gone out of your way to become, for lack of a better word, an expert in the subject, but you've done it in a very practical way, you've found ways to do your own experiments and then without necessarily academically publishing them and hiding your data within lots of other waffles, you make it really clear and easy for people to understand. That's absolutely all I came to it when I was at university, I don't think behavioural science was an option you could have studied. I came to this marking first, it was a media planner, started back in the year 2000, it was marking first, and then I came across social psychology papers and psychology papers and saw them as a way to solve marking problems, so it's always been the practical side of the topic that I've been interested in. What was the first one you did? Well, the first bias I remember reading about was an idea called the Bystander Effect, so I was working on the blood service account and read a Malcolm Progadwell book called The Tipping Point, it's mostly about 2004, at the back of that book there is a paragraph about two American psychologists called Latin A and Dali, and they came up with this idea called the Bystander Effect, and essentially if you ask everyone to help, you tend to find a diffusion of responsibility, if you want people to come to your aid to behave altruistically, you've got to create a sense of personal responsibility. So reading about that, when I was at a media agency at the time, I went and spoke to a wonderful planner down at the creative agency, a guy called Charlie Snow, and said to him, well there's this bias, why don't we take it and rather go out and say, bloodstocks alone in England, please donate, why don't we try and create that sense of personal responsibility through a bit of regional toxic? Why don't we start saying bloodstocks alone in Birmingham or Baselund? Now that is a very crude application of a bias, but what excited me was it only took a couple of weeks, we got the results back and we saw that there had been this 10 or 15, whatever it was, percent increase in response rates. So I've always liked behavioral science because it has this practice classification. If you're a brand and you've got five or 10 or 100 people working in your insight department, it's never going to be enough. Behavioral science is essentially access to 10,000 psychologists, academic psychologists who are out there now running studies that tell you about how people actually behave. So you've got this free resource essentially, why not draw on the knowledge and experimentation of some of the world's best scientists? So I think think of this not as just an interesting academic topic, but it's something that can practically solve your problems. Where do you go, where do you look? Is there a website that you go of you're trying to look for particular studies? Is it just as simple as a Google search or is it sort of something a bit more in depth? That's a great question. So if you start with the academic papers, you've got to know exactly what you want because I reckon it takes two, three hours to read through an academic paper. And it is often mind-numbingly tedious because there are these reams of statistics. You've almost got to decode what they say. Right. So if you just randomly go through academic studies, you could spend a whole lot, you could spend a year and you might have only found one or two interesting things. Right. So what I tend to do is try and find popular books written by academics. You then can race through those often a day or two. And they will tell you 100 studies, maybe in one book, five or 10 of them might be relevant. Once you've found the relevant study, once you've read through a digest of it, then go and find the academic paper and check everything's all right. Check if there's any kind of idiosyncrasies that you might make it irrelevant. But I would start really broad and populist and then move down to the actual paper. That's such great advice. And also maybe helps explain why your Twitter account is always on fire. It's like, so if anyone doesn't follow Richard Shudder on Twitter, do write away. I think it's rshotten or rshotten. But it's one of my favorite accounts to follow because you always are taking these little snippets from books or articles that you've read. And there'll always be some like fascinating little story that shares some amazing things. I'm guessing this is why you're reading these to try and find. I originally used Twitter as a repository. I wanted to use it as my own store. So I couldn't be bothered to write out some of the studies from books. I just took photos and posted them on Twitter. It kind of works well in some respects. But actually the problem with Twitter is that it's not a great as a search function. So it hasn't worked as a repository for me, but hopefully some of the studies people find. It's incredible. And you never know Elon Musk might solve the search query function. I know he's talked about it, or you'll have to transport everything over to threads. Yeah, I've dilly-dallyed with threads. From my understanding, it's already kind of declining in usage. So my laziness might have meant that I don't want to bother. Yeah, it's a tricky one, isn't it? When the new social media sites come out that are essentially a replica of an existing one, I could see that there was a huge upsurge in usage of it. And you can get all these notifications saying, million people have followed you, not a million. I wish I was that popular. But then, yeah, as you say, it seems to have gone quite quickly. Like, I think the key people who were doing really interesting stuff seem to have stayed on Twitter. I mean, Twitter's different things for different people. It kind of depends on who you follow as to what you're going to see there. So if you want to create a space of happiness and wonderful content, follow people who are generally very positive and who you find interesting. If you want to be annoyed, then follow politicians. Yeah, it's a tricky one because I think there is snarkiness and people are often looking to criticise. And there is a definite downside to Twitter, but it still is pretty amazing that you can select 50-odd people to follow on A. I've just used it for marketing and advertising and Pavel Science. And you're getting some amazing output from people on A. What is a very, very niche topic. Maybe applying the mute button is what I'm doing a bit more. And if people are just out to cause offence, then it's just not worth the aggro. Agreed. Anyway, so massive topic diverting clients in your book. Yeah, one of the things I loved about the book actually as well, which is another reason why I think if anyone is listening, you'll really enjoy it is you take people through a hypothetical day and you link the behaviour change biases back to real life things that everyone might encounter in their day job, regardless of your job, which I thought was marvellous as well. Yeah, I think I read a book called The Norm Chronicles where they followed someone through a day and thought, well, that's a lovely mechanic. So for the choice factory and this, that's essentially what I've done. You follow an unnamed person who's essentially positioned as you for the illusion of choice. There are 16 and a half different events that happen. Maybe you get a pay rise, someone else is begging money and you react in a certain way. And then what I do in each chapter is take one bias or family of biases often to explain why you reacted in the way that you did. So each chapter essentially revolves around, here's a set of academic studies, here's the evidence for them, here's some experiments I've done that prove they're still relevant today. And then the most important bit is always the so what. So most of the chapters, what do you do differently as a small business person, as a marketer, as someone who's trying to communicate effectively? What do you do differently now you know about the bias of concreteness or the red sneaker effect or the bias of precision? You mentioned pay rises. I mean, that's a good general one. We could all do with a pay rise. What's your advice there? Well, the bias, I think that chapter is all about fairness. So there's some wonderful studies around the idea that people's reaction to a wage offer or a price commercially is not just to do with the amounts involved. I think other people have received a really nice study. I think it's the University of Washington study where two psychologists go up to students and his students, so take it with a pinch of salt. They go up to students in their first day at university and say, will you take part in a psychology study tomorrow and we'll pay you seven pounds, $7. And they get, I think it's 70% of people saying yes. They go up to another group of people, fresh group of people and say, we'll pay you $8. But they then mention a little white lie. They say, I'm really sorry, but we're paying people $10 early. We've run out of cash. Now, even though that second group are getting more money, there is a, I think it's a 25% reductions in people who expect the offer. So that seems to run at first counter to classical economics. I think people should be interested in the amount of money they get for a job rather than what others can pay. But the argument is that we are hardwired to be deeply attuned to fairness. And if we feel that others have got a better deal, it reframes how we look at the offer. Now, you can take a principle like that and you can apply, I think on a grand scale or a very, very tactical scale. The grand scale might be to think, well, how do I as a marketer reframe my competitors' behavior as transgressing fairness norms? Now, that would be a large, hard to do, potentially very effective way of changing behavior. You know, think about direct line in the 1980s, how they reframed the insurance broker, not as a useful professional who gave you advice, but they positioned them as leeches you were just sucking out and fees and adding costum. That would be a big way of applying it, tiny way of applying it, a tactical way would be to think of your e-commerce site, most e-commerce sites today transgress fairness norms. What they do is when you've, let's say, bought a pair of traders, you've put them in the basket, $100, you're completely happy with these traders, as you're just about to click on the buy button, what normally sits above that button? Most e-commerce sites, there is a big box that says, put your discount code in here. But people would have been completely happy with $100 price, they think these amazing trainers, but the discount box essentially tells them, loads of other people are getting this cheaper. That transgressive fairness norm and that University of Washington study suggests an awful lot of people will no longer be content with the offering. I can't exactly know that. Get rid of that discount box, only show it to people who have come via an affiliate or make it so recessive, like who would do this very well? Maybe just put a tiny little link on, rather than a big box. It's the only people who are really looking for the code will find it. You could also say, I think we played around with it a bit, you could say like redeemed gift voucher. Yeah, yeah. Well then you're thinking it's not necessarily a discount code, if it's a gift voucher it's like, well this is where you go if someone gifted me something. Absolutely, that would be a lovely way of doing it. People shouldn't underestimate the importance of language and how that affects interpretation events. There's a really nice set of studies by Loftus and Palmer, like 1974 study that I talked about in the book, where they recruit a group of people and they play them a video of two cars crashing together. So everyone watches exactly the same clip, but you can still get this online, if you Google saying like Loftus and Palmer, framing video car crash, you'll come up. And then the experiment is they get people to estimate the speed of the cars, but some people are asked how fast the cars were going when they collided. Others were asked how fast do you think the cars were going when they smashed together. And I think there's five or six different verbs that are used in different groups, bump, smash, collided, contacted. And what they find is there is a 25, 27% swing in viewers' estimates of the speed dependent on the verb that's used. So if you heard smashed, people think it's about 40 miles an hour or 30 miles going on average. If you hear bumps, contacted, it's about 30 miles an hour. Their argument was the language that's used to describe something, act as a lens or a filter through which we interpret events. So you change the language that you use to describe something, you change people's reaction. Their interest was actually with witness testimonies, and they were very interested in how if a police person was being kind of manipulative, the language they use when interviewing witnesses could change people's recollection. That's where they started. But you can see this being applied by brands or politicians. That's 100%. Yeah. In the US, the big one is there is an argument between Democrats and Republicans for an inheritance tax. Democrats want to call it death tax. No, estate tax, because that emphasizes the richness you need to fall out of this tax. Whereas the Republicans call it death tax, because they're trying to draw attention to the fact that it happens at a very inopportune time. Yeah. Frank Luntz has polled people on their opinion of this tax. And if you call it a death tax, far, far lower agreement with it than if you call it an estate tax. Exactly. We had the same argument in the UK, I think, if I remember rightly. Spare room, sub-steel, the bed, what was it, the spare room, sub-steel, what was it the way, the bedroom tax, yeah. Absolutely. You know, you see a lot in politics, arguing about the descriptor is important. So in the same way that you're going back to your point of, add gift voucher, add discount code, leads to a very different set of expectations. You might be doing the same thing, but you have a very different reaction. So, I mean, the only thing I can think of that was on my head for behavioral biases to use for getting a wage increase is probably that you'll remember the name of this on hopeless names. The one where they looked at the judges and they were dishing out harsher sentences just before lunch. Oh, now, that's an interest when you mention that. Unfortunately, that is... So the principle seems to be vindicated elsewhere. It's called decision fatigue. The study, Israeli judges one, has become, or has come under criticism because the argument is... And also, what the Danzinger study originally showed was proportion of people who were... I don't know, was it let out early by judges, starts off high in the mornings and then drops over time till they have lunch. They come back to lunch, it's high again, and it drops down over time. They're getting harsher sentences or something nearer than the other time. Danzinger argument was... It took mental effort to break against the norm and allow people early release or shorter sentences. And their argument was, well, over time, we expend energy, we become fatigued, and then it's harder to kind of make those decisions. So that was the argument. Unfortunately, someone looked at the data and said, well, wait a minute, the people that are going in front of the judges are not the same over time. Often the harder cases are left towards the end of the sessions. So that study came on quite a lot of scrutiny and people felt that in the end it probably wasn't a robust study. However, there are other studies around doctors prescribing antibiotics, which show something very similar, that doctors tend to give out antibiotics too readily because they know that it will get the patient out of their office and it'll make for an easy life. So what tends to happen is the inappropriate prescription of antibiotics starts reasonably low during the day and just as Danzinger found, but in a different setting, it goes up until lunch, drops back a little bit, then keeps on increasing until it peaks just before people go away for the day. So their argument is, we expend energy over time, we therefore become exhausted and find it harder to move away from what the easy course of behaviour is. So if you want to get someone to break their habits, if you want to get someone to behave in a way that is tough for them, better to reach them early in the morning rather than later on in the afternoon leaving. Yeah, so we can't necessarily help you with your salary, but if you want more antibiotics, just before lunch. Well, if we're talking about, this might be the most useful thing, but if people were, there are a couple of studies actually, I think in all seriousness, that if you were trying to get a raise, you could think about. So the first one is, and this is why the book has 16 and a half chapters, the half chapter is all about the power of precision. So there is a, and I'm not even sure if I've mentioned this in the book, because I think I might have stumbled across this study after I finished writing it, after it had gone to print, but Uber have a team of behavioural scientists and they're constantly running experiments. So if you've been in an Uber, you've probably been in one of their studies. Now this is a brilliant database because you don't know you're in a study. It's a really realistic circumstance and it's a massive sample. So it gets around some of those problems that afflicts other 1950s psychology studies. And one of the studies they've looked at is willingness to accept a surge price. And the key finding was, if you send out a message telling someone it's a 2x surge price, they are less likely to take that ride than if it's a 2.1x surge price. Now the argument here is people assume a round price has just been plucked out of the air and it's probably been exaggerated to the benefit of the brand. So they're a bit skeptical. They think it's overinflated. They think it's too pricey. If people see a precise price, they think that it's been worked out very accurately and only a small little margin's gone on. So the application there for a brand is if you are charging someone £5 to your lager, charging them £5 and £5 to a rare situation which you can increase the price, you'll make the price more appealing and you've got more margin. Flip that to a wage debate scenario. Don't go in and ask for a £10,000 rise because it sounds like you don't know what you're talking about. Just pluck this number out of the air. Give a really specific number. Now you want a £10,450 rise. Suddenly, the negotiation you get into will not be, well, we won't pay you £10,000, we'll pay you £7,000. We won't pay you £10,400, we'll pay you £10,000. Narrow down that space for negotiation. So I think that's an interesting one that is very, very simple to apply. Definitely a genius one. I remember I think you wrote in your last book as well, one of the examples I remember from that was, I think it was car prices or car price negotiations. If you had round numbers, they would discount it more on a round number. Your negotiation was worse or whatever it was. Yeah, I'm going to talk about the... There's a couple of studies around precise pricing. I think it's a Yanishevskian shoe study, which I might mention previously. The reason I really like that Uber one is it's not in a lab setting. Yanishevskian's shoe, I think they began by showing people pictures of blocks of cheese or rocks and saying either it's, to some people, it costs £10 to others, it costs £10.75. And they did find that, that people thought when they were asked, when the participants were asked to estimate the actual value of the item, they were much closer when it was a precise price. I've always had a little bit of doubt about that study because it was such a kind of forced academic abstract study. I think the Uber one has greater validity because it has such realism. And if people are actually in a real-life purchasing situation, they are behaving the way they normally would. They're not thinking, well, how should I behave? I have some random experiences when we were buying a house through the end of last year. When we put our offer in, we put our offer in a very precise number. I think it was whatever it was, hundreds of thousands plus £125. And the offer we got back was they wanted, obviously they wanted more, but they didn't actually raise it that much. And yeah, I don't know because I didn't try the same thing with a thousand different buyers at the same price. But it certainly seemed to work. When you're going into negotiations using those round the numbers, it seems to make it easier for them to just go, we'll just go up to the next round number. Yeah, I think it suggests that you are open to change. You've not got particularly firm views because it is a suspiciously rounded number. If you want to give a signal that this is something you strongly believe in, that you've put effort into finding out it's the right amount, give the people a precise number. Doesn't actually matter if what you've really done is plucked a number out of the air and then added a few other extras until it becomes very precise. But that's one I would apply. The other one, the famous one, is the principle of anchoring. The idea that if you throw out a large number even if it's irrelevant, people tend to use that as a benchmark to start their estimations of their counter-response. And even though they are just from your initial number, they tend not to adjust far enough. So if you go into a negotiation you're being paid £50,000 and you say you want £55,000, the likelihood you end up with, let's say, £53,000. If you go out and say you want £60,000, and I'm forgetting the precision bit, let's put that to the side as a separate overlay, you're more likely to end up at like £54,000 or £55,000. The boss who is looking at your number will take your initial suggestion and then they will begin adjusting on it. People tend not to adjust far enough. I think the argument there is ask for an amount that you are embarrassed about, frankly. You're on the edge of embarrassment. Go out with that number. You won't get it, but you'll end up with a higher salary than if you just worked out what you're actually worth and opened with that starting offer. I remember growing up, the advice was always think of what you want and double it and then ask that. I was wondering whether you were going to say in your example you could go in and say, look boss, I'm not going to ask you for a £1.5 million bonus anchoring the £1.5 million and then say actually what I need is £50,000. It makes the £50,000 seem right. Now straying away from experiments into expert point of views. This one people have to... We love these, don't worry. They'll have to take their own opinion but there's a really good negotiation book by Chris Foss called Split the Difference. He talks about anchoring and he makes the assertion but I don't think he gives any evidence for it. I mean, he's got a lot of experience and effort behind negotiating all sorts or negotiating at least. He says anchoring works but if you stretch the bounds of credibility it can backfire. He says it shows that you're negotiating in bad faith. His warning would be don't go in and say the £1 million salary. It's think about there is a grey zone of what is a reasonable amount. Just make sure you're right at the edge and the boundary of that grey zone. I think that inkling of I'm starting to feel like I'm pushing it too far that's where you want to, I think, start with. That's his argument. It sounds sensible. I think that's the great thing about human psychology is most of it, if it sounds sensible and it kind of makes sense to you, often there is something in it. If you've found yourself going, oh yeah, I've done that or thought that before then there probably is something in it. There was an amazing, because there's always this problem with some studies don't replicate and I'll try and dig out the link and maybe we can put it in somewhere but there was a study done where random people on the street were shown psychology studies and they had to say, do you think this is a genuine finding or is it bogus? Has it later been developed? People didn't get exactly right. People were pretty spot on. I always think it's a fair way of if you have no other information, Google's not available. You can't search for some reason. One thing to think is does this feel like horseshit? And if it does, within a year or two the study often gets retracted. There is a smell test that's worth applying. All that stuff around priming, holding hot drinks and therefore thinking the person you're talking to is warmer. It never felt like it was genuine. I'm not surprised that stuff has often been retracted. Don't tell me that. I always give people a hot drink when I'm eating. I probably think you're a very nice person for giving them your drink but it would be no different than if you gave them the cold drink. I know one of the other things I thought was really nice. I was reminded on this book which I loved was talking about moments in people's lives where they were more likely to create or start a new habit and then the older book you talked about nine enders and then this one you found some other stuff which I thought was brilliant because it's way more you don't have to wait to someone to become 29 or 39 which is helpful. I don't know if I found this study after I'd written the book I think I might have even gone back and edited it right at the last moment but the fresh start effect and this was always in there it's essentially lovely set of studies by Catherine Milkman it's the idea that we behave in the same way again and again because we feel a need to be consistent with ourselves we feel like a hypocrite if we start behaving differently but her argument is at the end to new time periods that link with our past self is weakened and we become more open to change so her argument is target people at the start of the new season start of the year, start of the month, after their birth after a public holiday any of these fresh start moments are characterised by greater openness to change your behaviour and she runs a number of different studies that show this is the case but what I came across later in her behavioural insights team report Midlands Police who applied this in 2017 or 2018 they did a test sent out I think it's 2077 emails or letters to criminals people who had repeatedly been court offending and they essentially said to them do you want to start a new life if so we will help you if not we know where you are and we're going to help you so they would give them an offer to help with training, help them find a job and things now when they sent those out at random times there was a vanishingly small response rate 2.6% of people called the help line to get the support 2.6% I think other people were sent a birthday card with the same message just after their birthday and there you see I think it's a 50-55% increase I think it was 4.05% of people responding so I love that as an example of even hardened criminals these are probably the hardest people to change in the world even they are more likely to make a radical change in their life if you harness the fresh dark facts if you target them after their birthday now I know why I got that letter and why I started this my days of crime are behind me now but it's an element I think of anything that is embedded in your life anything that is a sense of your identity moving away from it is really hard because it feels like you have wasted previous efforts you are being a hypocrite but if you meet people at these transition moments that kind of ball and chain of their history that drag on starting a new he's slightly weakened and they become more open to change so frankly if you're selling yogurts or gym plans or trainers your audience is going to be a hell of a lot more easy to influence than hardened criminals so if it can work for the Westminster police I'm sure it can work for those other brands I think it's also genius if you're a smaller brand where you don't have budget necessarily to just have an always on kind of campaign or something you could just go okay well we know that the nation is coming up like bam or do everyone after that or if there's whatever bank holiday the day after that that would be so good if you could I think Facebook certainly used to be on Facebook by people's birthdays you could identify people a week either side a lot of people if they've got a database built up will know when their birthdays are there are a lot of data signals out there if you put the effort into finding them it's just genius I love that kind of stuff but I know you said you've got to run away so you don't take up too much of your time but are there any other things that you absolutely loved in this book that I mean look regardless anyone has to buy this book it's amazing if you've listened to any further you've got to buy it so it's all good yeah the bits I really liked were I did a lot more on how to break and then recreate habits there's a lot more on that that was quite interesting and there's a lot more on pricing but how do you make the same price appear more powerful I think that's an absolutely fascinating area so I think those were all very relevant to lots of brands and then the studies around fairness I think are less well known but have you know some quite interesting applications yeah it's brilliant thank you so much for taking time and anyone who's listening obviously book is available at all good bookstores and Amazon and everything else and then also don't forget to follow Richard on our Shotton on Twitter or possibly thread but yeah thank you so much for taking time I really appreciate it it's always an honour and I look forward to hope you're seeing again in a really nice evening thank you so much