Product Marketing Life [podcast]: Phill Agnew

We caught up with Brandwatch's Director of Product Marketing, Phill Agnew, about three core components of consumer psychology - distinctiveness, anchoring and scarcity - and how product marketers can apply those concepts to their work.

For more on consumer psychology, checkout Phill's own podcast, Nudge, here.

Full transcript:

Bryony Pearce - PMA 0:03
Hi everyone and welcome back to the product marketing life podcast, which is brought to you by Product Marketing Alliance. My name is Bryony Pearce and I'm the Content Manager here at PMA. In this episode, I'm joined by Phill Agnew, who's the Director of Product Marketing at Brandwatch. We saw Phill take to the stage at Product Marketing World's London summit last year, and he spoke a lot about consumer psychology, which was really, really interesting. So we thought we'd pick his brains a bit more one on one in this podcast. To kick things off, Phil, could I get you to just give everyone a bit of an introduction into you, your role and then Brandwatch itself?

Phill Agnew 0:39
Sure. So my role at Brandwatch is Director of Product Marketing. And in that role, I'm charged with doing two things basically bringing our fantastic software products to market, making sure our customers, our prospects, and all of the people internally at Brandwatch understand what the product is and the benefits of those products. And then the second part of my role is bringing the market back to the product. So doing things like helping our company understand our consumers, helping our company understand our competitors as well. And making sure that the products we create, meet a need for those consumers and resonate in the market. And so that's my role. And then Brandwatch is the world's leading consumer intelligence platform, we help thousands of the world's largest brands better understand their consumers by analysing what their consumers say online. So if a consumer is talking about a car brand on Reddit, or chatting on a news article comment thread, about their favourite marketing campaign or whatever it might be, we can collect all of that data for a brand, enrich that data, provide some extra analysis to it and help answer really difficult questions like what products do my consumers want me to build next? Or what campaign would resonate in this new market? Stuff like that.

Bryony Pearce - PMA 2:00
Yeah, it sounds like a really interesting industry to be in, and I guess day-to-day because it's so varied with different clients and their backgrounds, I guess every day is very different and interesting in that element?

Phill Agnew 2:12
Absolutely. I've always said it's the best place in the world to do marketing, because whatever you're interested in, whether it's Taylor, Swift, football or b2b brands, you can just log into the platform and start analysing them. We've got all sorts of data in there, so you can do any type of marketing.

Bryony Pearce - PMA 2:28
How long have you been at Brandwatch for?

Phill Agnew 2:30
Five years

Bryony Pearce - PMA 2:32
And what does your team look like in terms of numbers and roles, and that kind of thing?

Phill Agnew 2:36
We're expanding the team at the moment. So if you are looking for a PR marketing role, head over to the Brandwatch careers page, and you'll see like one or two on there, but the team is three people in size at the moment and we're expanding, and then we try and make sure that we link up directly to product managers, so the golden ratio that I think we look for is one product marketer to maybe two or maximum three product managers. And that just gives us the ability to collaborate properly with that part of the organisation and get ahead of launches and feed back into the business and make sure we're building the right products.

Bryony Pearce - PMA 3:15
Yeah for sure, and nice plug there! So I know you've given a number of talks around consumer psychology and have your own podcast dedicated to it. It's clearly a huge passion of yours, how is it that you first got into that area?

Phill Agnew 3:30
So actually, the way I got into it was was through Brandwatch, we had a number of customers and users who are in the consumer psychology space, and worked at really large agencies like Ogilvy or whatever it might be, and they were using Brandwatch to better understand consumers. And one of those users was was a man called Richard Shotton who joined us on a marketing call to just explain how he used Brandwatch to better understand consumers, and Richard sort of became a bit of a friend of Brandwatch and we followed up with over time, we did a few webinars with him. And he went on to write a really brilliant book about consumer psychology, which is a great entry level book for any marketer out there, called The Choice Factory. And The Choice Factory just details some of the key studies and key pieces of research that've been done around our consumers and makes them applicable for a modern day marketer. We read this book in the marketing team of Brandwatch and overnight changed a bunch of the tactics and activities we were working on. We introduced new goals, we introduced new principles, we introduced new campaigns and saw some dramatic improvements by introducing some of these laws I guess from the world of consumer psychology. And ever since then, I've just been fascinated by the field. I truly believe it's probably one of the smartest ways you can improve your marketing and your product marketing. And it basically allows you to base your decisions on science rather than gut decisions and gut instincts, so it's meant we've been far more efficient with our marketing.

Bryony Pearce - PMA 5:07
Yeah, so is the whole company, or your team, as invested in this consumer psychology aspect as you?

Phill Agnew 5:14
Yeah, it's probably led by me. I wouldn't say it's something the whole team is as fascinated in as I am but it links really nicely with what the company's doing. The company provides a product which helps hundreds of clients or thousands of clients understand their consumer. And consumer psychology is all about looking at the science behind how consumer brains work, so it was a smart subject to learn more about.

Bryony Pearce - PMA 5:43
Yeah, sure. You mentioned that book that you first read. What are your other go to sources when you reading up on consumer psychology?

Phill Agnew 5:50
Hmm, so probably the Godfather, the legend behind consumer psychology is Robert Cialdini and he wrote the book Influence, which is probably a few decades old now. But Influence is just a fascinating book and it was really one of the first books that was truly targeted at marketers and sales people and helped them understand the world of consumer psychology. And there are some brilliant insights in there about how the power of scarcity influences consumers, about how social proof influences consumers, and a bunch of other studies as well. It really helped, I think marketers better understand consumers, so I'd massively recommend reading Influence. The Choice Factory is a modern day adaptation of that, a lot of the work that Stephen Martin has put together, he's another brilliant consumer psychology author who's written books like Yes and more recently, Messengers. Both of those are brilliant for understanding how consumers brains operate. And then there's also some more, I guess, you would say science-y versions, which are less targetted at marketers but still really interesting. Stuff like, Predictably Irrational by Dan Ariely, and then some very specific things as well so if you're in website design, there's a brilliant book by Natalie Nahai called The Webs of Influence, and that's a brilliant book which helps you understand how the principles of consumer psychology can be applied to web design. There's a bunch of different books, but the one I would truly recommend if people really want to get an understanding is Influence.

Bryony Pearce - PMA 7:24
Okay, perfect. Thank you very much for that. And then moving on to your presentation in London. I was there and I thoroughly enjoyed it and I've actually been putting a lot of what you said into practice since then, so for people who weren't there, please can you give us a bit of an overview of what you spoke about and delve into those distinctiveness, anchoring, and scarcity elements?

Phill Agnew 7:44
Yeah, so the way I started the talk was really by challenging I think, a lot of the assumptions in marketing and I think we often assume that we understand our consumers as marketers, afterall it is our job. Then you see these stats, like from eMarketer for example, the claim that 25% of marketing budget is wasted, it gets no ROI. There's another brilliant stat from HVR, they did analysis of new product launches, and they found that on average 80% of new consumer product launches fail. If 25% of our budget's being wasted and 80% of new product launches fail, then clearly something is broken, something's not right. And there's hundreds of different reasons behind why that could be the case. But I thought that one common theme seems to be that most of our marketing decisions are based on gut instinct, they're based on how we feel, what we might think to be right, rather than laws and science and data, and Forbes have actually studied this, and Forbes found that over 50% of our decisions are based on gut instinct. They're not based on data, and that's specifically for marketers. So deciding what audience to target or what campaign to go ahead with or what tagline to write is just based on what we think and how we feel rather than on science or data. And in the talk I sort of started to introduce that it doesn't have to be that way. We can base our decisions on data, on science, on laws, if we look to the world of consumer psychology because we spent hundreds of years understanding how consumers brains operate. And if we take some of that understanding and apply it to product marketing, we can really start to improve our marketing. So I give some examples of social proof, for example, so Richard Shotton, who I mentioned earlier, in his book, he went into a pub in London, and he asked the barman what the best selling beer was at that pub, and the barman pointed out that it was one of the ales and he said to the barman, "do you mind if I put a sign on top of this beer, which says that it's best selling?", and in doing that he wanted to then measure if it changed the amount the beer was bought. Now, the idea here being social proof, which is the idea that we follow the actions of others. So if we're walking down the street and we see a bunch of pedestrians looking into a window we will look into that window as well, we will follow the actions of others. So would it apply to products as well? If we put 'best selling' on a beer, will it make it sell more? And perhaps unsurprisingly, it does to a really large extent, so that pub saw sales increased by 2.5 times for that beer in the following week after just putting a best selling sign on it. What's interesting about that, is it's not just that beer that increased sales and all the other beers dropped in sales, overall sales increased as well. So just showcasing that more people bought one beer actually encouraged more people to buy beer in general. That's social proof. There's another brilliant study around the endowment effect, which is highly important to marketers. So Natalie Nahai in her book, which I referenced earlier, talks about this at length and there's this fascinating study where two groups of participants are given loyalty cards, and one loyalty card has seven stamps to collect and the other has nine stamps to collect. In that nine stamp variant, two of the stamps have already been plugged in. So essentially, the loyalty cards are the same because they both still need seven stamps to collect, they still need to buy seven coffees to get a free coffee, except in one of them two of the stamps have been plugged in. So the action has already begun. Now the endowment effect is the idea that if a project has begun, we are more likely to complete it. So they did this test with loyalty cards to see if people were more likely to complete this loyalty card that been stamped in two times. And maybe unsurprisingly, maybe surprisingly, in the study they found that people were 82% more likely to complete the loyalty card that already had two stamps on it. And this can then be applied really, really easily to product marketing. So if you are marketing an online app, you should showcase some sort of endowment in that app, you know, if you're trying to get people to sign up say to them that you've only got 50% left to go or you've just done two days and now you've only got 10 days left. Headspace are really good at doing this if you ever sign up to their free trial app or if you're an e-commerce brand and you're getting people to check out, you should always give a progress bar saying only 50% left to go until you can check out, that sort of thing. It massively improves completion rate. So that's a couple of ideas around how consumer psychology, just applying some small and simple effects can massively improve your marketing. And then I guess we went into those three distinctive principles, or three principles of distinctiveness, anchoring, and scarcity. Would you like me to talk through them as well Bryony?

Bryony Pearce - PMA 12:31
Yeah, that'd be super useful if you gave an overview of what you told us in the event. That would be great.

Phill Agnew 12:36
Brilliant. So, distinctiveness is pretty obvious, right? It's this idea that things that stand out, are more likely to be remembered. It was actually discovered almost 100 years ago by a female consumer psychologists with a very distinctive name, Hedwig Von Restorff, and she gave participants these long lists of letters, so letters like VDHWXYASDGHJ, long list of letters like this, but interspersed within a list of letters, she put a few numbers, so 456. And she would try and measure what people remembered, and unsurprisingly, the numbers were 30 times more likely to be remembered. Reason being is because they were distinct. And the same has been found by brands as well. So if you show people a number of different brands, let's say, couple of dozen brands from the automotive industry, and put one brand in there that's from the fast food industry, people are far more likely to remember that fast food brand because its distinctive, because it stands out. Again, this might not be a surprise to anyone but what surprises me is that most brands really fail at doing this. So if you look at football sponsorship, the majority of people who sponsor football or soccer in the US are beverages brands, Heineken. Carling, Carlsberg, Budweiser, all of them sponsor major football competitions. If you look at again, let's say on the subject of football or soccer, if you look at the companies that sponsor the actual shirts in the Premier League, nine out of 20 of the Premier League shirt sponsors are gambling firms, so there's no distinctness there, it's all the same category, if you go onto SaaS products, so a lot of people listening to this maybe work for a SaaS company. If you look at the websites of Zendesk, Asana, AirTable, Buffer, if you go and look at those websites right now, you'll see they all have really similar cartoons, and a really similar web design on their homepage, so there's a lot of following competitors. And the best example of this, and one that was actually shared by Richard Shotton on my podcast, which was watch ads, and he found that watch ads not only look identical, so they've all got influencers like Daniel Craig or Leonardo DiCaprio. They all look identical. They're all holding the watch, all wearing a watch. But the fascinating thing about these watch ads is in the ads, the watch is always set to the exact same time, you're looking at Omega, whether you're looking at Dior, whoever it might be, they always set the watch to eight minutes past ten. So there's a huge amount of copying going on and a complete lack of distinctiveness. What's fascinating is when you are distinct with your product marketing, when you are distinct with your marketing in general, you can generate real performance. So a great example, it's bit of a niche one, but the Australian tax collectors, the public service behind collecting tax, they sent out letters to people who hadn't paid their tax on time, desperately encouraging them to pay their tax because if they didn't they would get a huge late fee. And the Australian tax collector didn't actually want that, they wanted people to pay their tax on time. So they slightly tweaked the letter they sent out to people, and the only tweak they made was put a big stamp on the letter saying urgent in red letters and that made it slightly more distinctive, it encouraged more people to open it, and as a result $4 million was saved in late fees for residents. The residents actually paid the taxes on time and saved themselves $4 million. Copenhagen, another example, they wanted to reduce the amount of litter on their streets, so they painted their bins neon green, and they painted on the floor these sort of neon green footprints on the way to the bins. And that resulted in 45% more rubbish, ending up in bins rather than on the street. Two public examples. And then you've got an example of really a company marketing their products as well, which is comparethemarket.com, so a UK brand that does comparisons for utilities companies or for utilities. And about 10 years ago, they were in a really difficult market because everybody in that market was using the exact same language to market their product, this'll probably resonate with a lot of people listening in, they were all talking about benefits, they were all talking about features, they were all talking about competitive differentiators, and there was no distinctiveness between Compare the Market or Go Compare or Confused.com, it was really difficult for them to stand out. So they tried a completely different strategy and introduced a brand new ad, which didn't speak about features, didn't speak about benefits, didn't speak out competitive differentiators. Instead, it told the story of a meerkat who ran the website Compare the Meerkat.com. And how annoyed that Meerkat was because Compare the Market was stealing all its SEO. Now, this didn't, as I said, showcase the product in any special way. But it did make them stand out. It did make them distinct. And that ad generated an 83% increase in awareness. It propelled them to leaders in the market within just a couple of months, and actually allowed them to achieve their 12 month objectives, so their yearly objectives within just nine weeks, actually using that distinctiveness, actually highlighting that distinctiveness had a really, really big effect.

Bryony Pearce - PMA 17:52
It's interesting as well, I'll have to include them as attachments when we upload the podcast, but for the watch ads, and Asana and AirTable, when I saw them on the screen in London, it was uncanny how similar they all were. It got a few chuckles from the audience, I remember.

Phill Agnew 18:08
Yeah. And it's completely understandable why it happens. Because our bosses and our leadership teams and our board will often look at competitors, and they'll probably know those competitors senior management as well and admire some of the work they do. And they'll know that they're performing and growing. And it's really not uncommon to look at our competitors and think, "oh, they're successful, we should copy what they're doing. If we copy what they're doing, we'll have some of that success." But the science says the complete opposite. Actually, what the science suggests is copying competitors is far more risky than actually being distinct. Because if we copy competitors, we don't stand out, we don't get product recall, we're not remembered and actually trying to stand out is a far less riskier strategy, even though sort of internally in businesse it's viewed as the opposite.

Bryony Pearce - PMA 18:57
Do you think it's a lack of awareness into this science element of it that's causing people to just keep following the trend or what do you think the cause is?

Phill Agnew 19:07
I think a lot of us work in workplaces where, you know, we are encouraged to take risks, and we are encouraged to have autonomy. But fundamentally, we still have numbers to hit. And if we don't understand the science, behind, let's say, distinctiveness in this example, but there's more examples we could get into, if we don't have a good understanding of that science, it's really hard for us to suggest something completely different. Like a Compare the Meerkat campaign, for example, or, you know, not putting cartoons on our SaaS website, whatever it might be, because we can't actually articulate to our bosses why that strategy would be more successful. Whereas if you go to your boss and say, "Oh, I really want to do cartoons on my website, because I've seen the Buffer do and it looks really nice, and Buffer are really successful, so it must be successful for us". That's quite an easy story to tell, and it will get a hell of a lot of people's heads nodding. So I guess one of the reasons is that we haven't really educated ourselves in what makes something more likely to be remembered. And as a result of that, we're unable to articulate across the business as to why a distinctive strategy might be more beneficial.

Bryony Pearce - PMA 20:11
And then do you feel sometimes, like I know you referred to the incidents with the loyalty card stamps, because you're so into this consumer psychology side of things, do you in a way kind of feel immune to it?

Phill Agnew 20:25
It's a good question. I don't think so. So the way our brains work is actually quite interesting, and it means that it's pretty difficult to get immune to these things. So Daniel Kahneman introduced the now famous model of how our brain works, which is system one and system two. System one is that automatic, fast, immediate way that your brain works and system two is the more considered way your brain works. So if you think about driving to work, you barely ever think about driving to work, you know, it's automatic. It's easiest just operated by that system one positive brain, you turn corners with ease, and you almost do it blind. And I don't know if any of you have started driving towards your work on a weekend and found yourself taking turns and exits that would take you to work rather than to the location you need to go to. And that's because your system one just takes over. Whereas your system two sort of needs to be engaged to start working, so that's the more analytical part of your brain. A lot of these consumer psychology nudges really work because they affect the system one part of the brain, you know, the initial fast part of the brain that makes decisions. An example is the anchoring effect. And the anchoring effect is this idea that our views dramatically change based on the initial piece of information that we see. So for example, if you show a general population sample of British people, a headline which states "climate change bill to cost 100 million pounds" as a headline from newspapers, if you showed them that headline, if you put the Financial Times logo above that headline, the majority of people will think, Oh, that's a good idea. Climate change, yeah, this is a good idea. That's good value for money. That's exactly what that should cost. It's a positive thing. Whereas if you show that sort of identical sample of people general population sample of British people, the exact same headline, "climate change bill to cost 100 million pounds", but change the publisher, change the logo of the publisher from Financial Times to a tabloid publisher, like the Sun, the same people suddenly have a completely different view of the exact same headline. So they'd start to say it's negative, that it costs too much, that's not a good idea. And if we really thought about that, there should be no difference because it's the exact same headline and if we analyse that we would know that one shouldn't be positive and one shouldn't be negative. That's not how our brains work. We make a lot of our decisions using that system one part of the brain. So the long winded answer to your question is that it's difficult to ever feel that you're immune to it, because still, the majority of the decisions we make are made by that system one part of the brain, which is so fast that you barely have time to sort of realise that you might have been nudged in a certain direction.

Bryony Pearce - PMA 23:15
Yeah, it's not a conscious thing, it's not something you can control.

Phill Agnew 23:18
Yeah, and there's another brilliant example of this. It's around eating food or changing the layout of a cafeteria. I think Google did this by reading a bit up on consumer psychology and they wanted their staff to eat a bit healthier. So they did really small little nudges, like they gave slightly smaller plates, they put the broccoli and veg at the start of the queue. They put the ice cream behind an opaque glass, rather than a see through glass, they put the cookies on a slightly higher shelf, you know, all these tiny little things that just made it a little bit different, more difficult to get to the less healthy things. And those tiny changes dramatically changed the place that people were eating. And I think that really shows that we are led by our automatic system one approach. People think that they choose exactly what they want for dinner, but actually their choices vary dramatically just on where items are placed on the buffet. So I think that's a good example of how we are influenced by these small nudges.

Bryony Pearce - PMA 24:20
Yeah, it's really interesting. As you say that I'm thinking maybe I should start storing the chocolate on the top shelf at home and see if it works for me.

Phill Agnew 24:31
Good idea. Another example is like, people often talk about being sort of a bit addicted to Twitter or Instagram on their phone, and one really simple way of sort of getting around that is just moving the location of Instagram and Twitter on your iPad or your iPhone, whatever it might be. And just doing that, because when you go to click on it, you end up clicking on something else that snaps you out of it and makes you think, "Oh no, I don't want to be clicking on it, I don't wanna be looking here" and stops you actually from opening those apps. So yes, simple tricks like that can actually have a big effect.

Bryony Pearce - PMA 25:02
Okay, awesome. I think you kind of touched on it in your answers to one of my previous questions, the whole anchoring element, but could you just delve into that one in a little bit more detail, please?

Phill Agnew 25:10
Yes, so anchoring is the idea that we can change our behaviour based on the initial piece of information we see. There's a really fascinating study by Dan Ariely, who I mentioned earlier, in his book Predictably Irrational, and he wanted to see if you could change the amount people bid on an item based on just a random number that they saw. A bit of a weird one. So what he did, he was a university lecturer at the time and he split his class into two groups. In the whole audience, he asked everybody to get out their social security cards. So in the US, you have a social security card, it's got a 10 digit number on it, and that number is completely random. And he asked people to split themselves in half by the last number on their social security card. So if you had a number of zero to four you were to sit on the left hand side of the room, and if you had a number of five to nine, on the right hand side of the room, so people were split at random, because your security number is random. He then asked the students to actually look at that number, whether it was 0-4 or 5-9, and really remember the number that they had. So some were looking at a higher number, some we're looking at a lower number. Then he asked the students to bid on a number of different items. So a bottle of Prosecco, a keyboard mouse, a book, random things, there should really be no statistical difference, or statistically significant difference in the way these people bid because they've been grouped randomly and the only difference is their social security number which we know is given to them at random. But it doesn't work that way. Because of the anchoring effect. Those that saw a number of five to nine, so high number, on average bid I think three times more for the exact same items than the people who are who are forced to look at the lower number first. So I think the average bid for a keyboard was $16 for the low group, and actually $55 for the high group, which is an incredible difference when you think that the only thing that differentiates them is that they were thinking of a high number rather than a low number. And there are some more interesting examples of anchoring used in sales as well. So this is an example in Britain done by Stephen Martin and Joseph Marks in their books Messengers, and they went into a real estate agents and just tried to improve the efficiency of sales in the real estate agents and they took this principle of anchoring to heart and tried to see if they could change the initial piece of information that somebody gets when they call up a real estate agent. If they could change that, make it slightly better, would it affect sales? So what they did is they asked the receptionist when he or she picked up the phone, instead of just saying, "I'll pass you over to Peter", who was the real estate agent or "I'll pass you over to Jane" who was a real estate agent, they were asked to say just a couple of lines to add bit more information about that real estate agent. So for example, they were asked to say, "I'll pass you over to Peter, he has over 20 years of experience and would be perfect for you". They're not lying, he has 20 years of experience, and he probably is the perfect person within that organisation. And they pass them over just with that little bit more information, a little bit of an anchor. And by just changing that, by only making that small tweak, they actually increase the amount of inquiries that will convert into valuations by 20%. And ultimately, increased sales by 20% as well. So just by adding that tiny little anchor right at the start, generated a massive, massive change in the behaviour of people actually going on to do things like buy houses, you know, huge, huge decisions, there was a noticeable difference in their behaviour when they had a positive anchor at the start of that session.

Bryony Pearce - PMA 28:59
It's incredible just to hear those numbers as well, because for all the examples you've given so far, it's not just a 1% here or 2% there, they're really kind of game changing numbers, aren't they?

Phill Agnew 29:09
Yeah, and I think you need that really, because otherwise, it wouldn't be worth copying and trying. I would definitely argue that it's worth trying for your business, your organisation. Some of these nudges might work really well, whilst others might not be too effective. So they're always worth trialling to see if they work in your industry and for your market.

Bryony Pearce - PMA 29:31
And then finally just before we move on to some questions that were asked at the event, can I just get you to give an overview of the scarcity element as well?

Phill Agnew 29:38
Yeah, so this is the final principle that I talked through at the summit in London. And here, the scarcity principle is really just the idea that we're more likely to want scarce resources. So if you think about the the bell that gets rung in the pub for last orders, that's showcasing a bit of scarcity that idea that time's running out to buy a beer and that will encourage an increase of purchases. Or if you think about Glastonbury tickets, people who rush to their computers and log in on multiple different devices. And the reason we do that is because we know they're a scarce resource. The power of scarcity, I think was truly discovered back in 2000 in a fascinating study around selling jam, funnily enough. So in this study, the researchers placed jam booths, so booths that were selling jam within supermarkets, on a number of different weekends across the country in the US. And there was only one variation to this booth. So they had two different types of booth with any one thing that was different in each booth. In one booth, there was a large variety of different jams, so 24 different jams for consumers to choose from. And then in the other booth there were just six jams for consumers to choose from, and they were testing out which of these booths would generate more sales. Now conventional Product Marketing wisdom would say that the booth with the 24 varieties would generate more sales, and it would generate more sales because consumers can look at all the different types of jam and they can find the jam they really like. And if they see a chilli jam, ' oh, I really like chilli jam' or it they see raspberry jam, 'I really like raspberry Jam', whatever it might be, they can find the jam that they like in that large number of varieties and that should generate more sales than the six variety version. But consumers don't think that way. Actually, they're far more likely to buy in the six variety version because of this scarcity effect. So in that six variety version in this study, 30% of consumers went on to buy, where it's just 3% of consumers went on to buy in the 24 variety edition. And I think what that shows is that when a resource is scarce, even if it's not claimed to be scarce, even if it's just a lower number of products available, scarcity is perceived and people are more likely to buy. The same is true in other studies as well. So there's a fascinating study with cookies. If you give somebody a jar of cookies, and the jar is full, and ask them, "How much would you be willing to pay for a cookie?", they'll give you a price, but if you then show the same people, the same cookies in a jar, but the jar is emptier, there are just a couple of cookies left, people are far more likely to pay more for the cookies that are in scarce resource that are in the jar that's almost empty, even though the cookies are the same. The same's been found with movie posters, if you show people movie posters and say "how likely are you to go see this film?", on average you'll get let's say 10% of people saying that they're going to attend. But if you then say, "Oh, this film is ending this weekend", you add a bit of scarcity, it makes people 36% more likely to attend. Same people, same movies, just a bit of scarcity dramatically changes or influences behaviour. I think my favourite study about scarcity and the one that I think is just so interesting because it stands out and I think just reveals how much people are nudged by marketing messages is one that's done with cans of soup in a supermarket. So what the researchers did is they put big marketing messages up in the supermarket saying, 'buy soup, come and buy some soup we've got an offer on soup', and the marketing messages worked, people went and bought soup, on average they bought three cans of soup just with this marketing campaign. So brilliant, right? Marketing works, we'll pat ourselves on the back and know that we're doing a good job. But then they trialled adding a bit of scarcity to that message. So all they did is they put a little asterisk on their marketing message, and under the asterisk they said 'sales are limited at 12 cans per person, 12 cans of soup per person, you can't buy more than 12 cans'. Now this should have had no effect on behaviour whatsoever because nobody was buying 12 cans of soup in the original control group. Should have had no effect. But people are influenced, people see, 'oh, I'm limited at buying 12 cans', and that scarcity, that small limitation you put on them dramatically changes behaviour. Instead of buying three cans of soup on average, when they see that slightly tweaked message, they actually buy four and a half cans of soup, people are far more likely to buy more cans of soup, just when there's a bit of scarcity in the messaging as well.

Bryony Pearce - PMA 34:27
Okay, awesome. Well, thank you so much for that overview, that's the second time I've heard it in the space of a few weeks and it is still really, really fascinating and interesting, so thank you so much for telling us all about that again. I know in London there were a lot of questions asked after your presentation, and for time reasons we weren't able to get through them all. So can I just run a few of the questions by you that people from the audience asked but that you didn't get chance to answer on the day?

Phill Agnew 34:50
Sure, of course.

Bryony Pearce - PMA 34:51
Okay, so the first one was, how do you apply neuro-marketing tactics to b2b SaaS products?

Phill Agnew 34:59
I really like this question because it's a bit more specific and I think there's a bit of lateral thinking you have to do for it. But fundamentally b2b SaaS products, you are still selling to a consumer, and that consumer might be a marketer within a brand or an analyst within a brand or a financial manager within a brand they are still consumers, and they'll still be affected by the exact same nudges as consumers that would be targeted by a b2c brand. I guess slight tweaks are, because it's a SaaS product, that the marketing messages are all online, they're all sent out via websites, so you've got to think a lot more about web design, and stuff like that. But they work in the same way. So Natalie Nahai who I referenced earlier, she shared a number of really interesting examples of how you can nudge people online by slightly changing the content of your website. So for example there's a really interesting study around typography and how clear a website is because that dramatically influences people. If you have a really clustered website with a bunch of difficult to read words, people are less likely to convert, obviously. But actually what they found was if you make the pricing really difficult to read, so the rest of the website is very easy to read, but you put the pricing in a difficult to read font, sales actually increase because people are less likely to read that price. I don't recommend that, but that is an interesting study. So yeah, the principles apply in the same way, you're still targeting a consumer even if they are as a brand, and they're definitely worth trying out.

Bryony Pearce - PMA 36:42
Okay, perfect. Thank you. And then the next one, does exclusivity equate to a feeling of scarcity and drive the same results?

Phill Agnew 36:50
Yeah, this is a really important one because I use scarcity in a really broad term, and it's sort of covering two things and covering that example of the resource's about to run out, which is sort of the typical example of scarcity, so that example of Glastonbury for example, the resource of Glastonbury tickets is about to run out if I don't go buy them now, and that generates a change in behaviour. I think the study I cited from 2000 actually showed a different type of scarcity. So there's none of the researchers were telling participants, or telling consumers that the jam is about to run out it's still there, it's not going anywhere, there's just a fewer number of jams available, and that created scarcity in a different way. So just by limiting the amount, the number of products available it still generated a change of behaviour, it still generated that feeling of scarcity as well. So it works in two ways. As an interesting example, just to refer back to that cookie study, the researcher then did a third version. So the first version, full can of cookies, second version a tin of cookies but only a couple of cookies left, and the third version he showed the tin of cookies but with only a few cookies left in it and then said, "there are only two cookies left because they've been really popular today". And in that third example, people were likely to pay even more. So when you combine saying that something is in a scarce resource, and then actually showing them that there's a limited number left, that generated the biggest change in behaviour. So subtly different, they both seem to have an effect, but when they're combined, they're even more impactful.

Bryony Pearce - PMA 38:25
Great, thank you. Onto my penultimate question, when you drive change in brand behaviour and then all your competitors copy you, how do you still stay distinct?

Phill Agnew 38:34
Yeah, this is a really good example because of course one of these SaaS websites was obviously first to create these beautiful cartoon designs and they must be pretty pissed off. Same with Compare the Meerket, Go Compare did the exact same thing creating an opera singing man who complained about something. And then same with EasyJet as well, so EasyJet are famous for creating a very distinct brand with that distinct colour of orange and hilariously enough, if you can ever fly in New Zealand or Australia you'll see that Jetstar, the equivalent EasyJet brand in that region, have copied almost the exact same colour and the exact same branding. So it feels like there's this endless game of people constantly copying what you do. So it's difficult. I think the principle still applies, right? It's still worth trying to be distinct even when competitors are going to copy you eventually, because it will have an effect in the time that competitors take on catching up. It can allow you in the case of Compare the Market, for example, or EasyJet, to generate market share and become leaders and to create advantages that way. But then I would also say that if it gets to the stage, like with SaaS products at the moment where it really feels like there's a lot of similarity and not much distinctiveness, that is probably a good time to review the strategy and see if it's time to change and to try with something more distinct again. So yeah, I think it's still showcases that it's a worthwhile endeavour to try and be those things. But it is the frustrating part of being successful, that everybody copies you.

Bryony Pearce - PMA 40:10
I guess as well it goes in cycles doesn't it? The same way it does with pretty much everything. It's not a one off job. You'll do something and then you'll have to review it anyway, so it's more of a work in progress than a, "I've done this and that's that forever more", it's always going to change I guess regardless.

Phill Agnew 40:24
Exactly. Exactly.

Bryony Pearce - PMA 40:26
Awesome. And the last question, based on these psychology principles, what advice would you give to b2b product marketers?

Phill Agnew 40:34
I think rather than talking about specific studies and nudges that you can apply, because I've gone into that in quite a bit of detail, the main bit of advice I'd give is just just try and educate yourself on the world of consumer psychology, or at least I think that's a really valuable thing to do, because the majority of our decisions are made by our gut and I think because we make decisions just based on how we feel or gut decisions we don't actually generate a lot of efficiency. And it means that a number of our product launches end up failing. But if we try and understand our consumers, if we learn the science behind how they operate, behind why they make decisions, we are just more likely to generate behaviour that we want and to actually generate the results we want with our marketing as well. Same is true for b2b, same for b2c, I work in a b2b organisation, and I've noticed that they work there as well. So I would educate yourself, definitely try and read a couple of these books that I mentioned earlier. And this is a small plug but if you have the time, check out the podcasts I run as well - Nudge. It's just 20 minute podcasts, you can listen to them on your commute to work, we speak to a lot of the researchers, authors that I've mentioned on this podcast and they explain in their own words, how these nudges affect people and how they've been used by marketers in the past. So doing little things like that is probably the best advice I could give you because that will allow you to create Product Marketing that actually resonates.

Bryony Pearce - PMA 41:57
Okay, perfect. Well, thank you so much for your time today Phill, I for one am thoroughly consumed by this area, so I'll definitely be doing some further reading into those resources. And hopefully for everyone else who's been listening they feel the same.

Phill Agnew 42:10
Alright, thank you so much for having me Bryony.

Bryony Pearce - PMA 42:12
Oh, you're welcome, it's been an absolute pleasure.

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