Money Can’t Buy LOVE (Or Conversions)

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ADOTAS EXCLUSIVE — “Predictable Irrationality,” a book by M.I.T. Economist and Federal Reserve researcher Dan Ariely, has been the talk of the geekerati in recent weeks. The book, in its seventh week on The New York Times best seller list, has been the subject of commentary in professional media from the Financial Times to NPR, and is now a hot topic among the online elite.

From the book’s Web site:

Do you know why we so often promise ourselves to diet and exercise, only to have the thought vanish when the dessert cart rolls by?

Do you know why we sometimes find ourselves excitedly buying things we don’t really need?

Do you know why we still have a headache after taking a five-cent aspirin, but why that same headache vanishes when the aspirin costs 50 cents?…

By the end of this book, you’ll know the answers to these and many other questions that have implications for your personal life, for your business life, and for the way you look at the world.”

The book is well written and insightful, but reading it I couldn’t help but think over and over again that it was really a book about branding written by a mathematician who – working deep below the earth in an undisclosed location insulated from brands of any kind – had somehow uncovered the existence of brands through an elaborate mathematical proof.

If you replaced every instance of the word “irrational” in this book with the word “emotional,” it would lose 80% of the revelatory irony that forms its spine, to the point of making observation after observation which would seem plainly obvious to your average small agency Account Coordinator.

“People love free, even when they’re not getting much!” Thanks, Bernbach. Duh.
The question worth pondering here, at least from a marketing perspective, is why even really smart people still don’t get the brand thing. Why is it so hard to grok the concept of assigning emotional value to something, beyond whatever rational utility one derives from it? And is doing so really “irrational,” or is it just a function of the fact that, for better or worse, we are all emotional beings?

Few people can produce a coherent definition of the word “brand” on demand. Try it yourself … next time someone uses the word “brand,” ask them to define what it means. I did this today, and here’s what I got:

“A brand? Are you kidding? Well, it’s a kind of a trademark, like, or a logo. Well, not actually. It’s more like a, well, er, a product, like. Or the name of a product. Something like that. You know what a brand is!”

The same is of course true of many words, like jocund, and evanescent, and agoraphobia. Yet unlike those words which rarely come up in business conversation (unless you’re a happy physicist locked in a room someplace) people use the word “brand” all the time. I hear it constantly from people who obviously don’t know what it means, which frankly drives me pazzo.

So what’s a brand, you ask? Well, I think of a brand as a collective emotional response.

First and foremost, a brand is a response. It is not something you dictate, not something that becomes real by virtue of your 12 gig slide deck. It is something inside “them,” out there, separate from whatever it is you spend your time trying to sell. This seems like a subtle distinction, but it is in fact profound.

In my experience, the best communicators maintain what is sometimes called a “listener based model of success.” That is, they focus neither on communicating in such a way as to confer the most praise upon themselves (tragically common,) nor on the intrinsic quality of their particular method of communication (the clear speaking voice, the iron-clad logic, the eloquent prose…) Instead, they try to understand what the listener thinks/feels/does before, and what they want the listener to think/feel/do after. They focus on saying whatever needs to be said however it needs to be said, in order to effect exactly that change in knowledge, perception or action. This is a very good discipline, and I strongly encourage it for people at every level of an organization.

In the context of branding, marketers are often guilty of subscribing to one of the first two success models. In the first case, a brand becomes an avatar of its brand manager. Like children burdened with their parent’s disappointments in life, these brands are most often much “cooler” than they need to be to deliver the business result.

In the second case, just the reverse is true. Marketers obsessed with intrinsic quality create communication that reflects great skill and no talent, brilliant advertising that nobody really sees, artful design for its own self-indulgent sake.

So what kind of response are we talking about here? A collective, emotional response.

Building a brand is the process of adding emotional value to your product. A lot of people think this is ad guy hooey, but it’s as real as Coca-Cola’s market cap. Is sugar water in a red and white can really worth more than 99.9% similar sugar water in a black and white can? Whatever you think, the market decides. And every day the market says, “yes.”

If people are rational, you have to ask why. It’s either the brainwashing of repetition (nonsense), or people are actually getting something more from that red and white can.

I worked on the Taco Bell brand back in the day, and we used to say 69 cents was a good deal for a taco, but it was a great deal for a taco and the feeling that you’re not like everybody else. That’s what a brand is, and that’s why people invest billions to create them. Is that irrational? Sorry, but I don’t think so.

Collective just means that a brand requires n people to deliver this emotional response, where n > 1. It’s also meant to imply that brands are built one person at a time, something which has become truer as media has become more fragmented.
So is anything that elicits a collective emotional response a brand? No. Brands are defined by intent; they create emotional value as a means to an end, rather than as an end unto itself (we call something whose primary intention is to elicit an emotional response for its own sake “art.”)

People are, in fact, “predictably emotional.” While that assertion may not sell books like it’s more ironic and provocative cousin, it’s a more actionable insight for people who are just trying to sell a little more soap.

4 COMMENTS

  1. You hit the nail on the head. Marketing is all about rationally developing a brand in anticipation of a collective emotional response. Clearly, and historically, the best marketers are people who understand humanity. While data is enormously important, using data to drive decision-making vs influence decision-making is the hallmark of a company, a marketer, a manager who has no idea what people are about. The older I get, and the more time I have in the industry, the more I’m convinced marketing is best done by the men and women who truly embrace a customer as a human being, not as a conversion number.

  2. I’m not sure you completely understood what the book was saying. For example, your critique of his “free” chapter. He’s not just saying people like free stuff, he’s pointing out the power the concept of “free” has to get people to make irrational decisions.

    For example, why are people willing to wait in line for over an hour to get a free scoop of ice cream (worth about $1.65) when most of those same people would not be willing to do so if instead of being free, the scoop of ice cream cost 1 cent? Basically, free and 1 cent are the same thing, so why does this happen?

    This shows how the concept of “free” causes people to make irrational (yes, emotional, but also clearly irrational) decisions. Is it actually worth it to stand in line for so long just for a scoop of ice cream? No, but people will do it because of “free”. When you make it 1 cent, it loses that symbolic power and people decide it’s not worth it. Basically, the author is pointing out that “free” often costs us a lot more than we think, and he hints that it may have to do with the perception that when something is free, there is no way to feel “loss”, so this causes people to chase “free” in a very irrational way.

    I have found that most critiques of this book seem to be misguided, and are based on misinterpretations of what the author is saying.

  3. Now that’s what I call a book review. Well done, Mike. It may be a light-weight book by your standards, but stimulating enough to evoke your response. Paul Hope al is well at home…love to Sarah and Max

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