Forget logic, think psycho-logic!
When you fully accept that the decision-making processes that people use are most often neither conscious, logical or rational, this presents a very important consideration. What to use when creating campaigns and communication strategies?
I am borrowing this term from Rory Sutherland in his recently published, ‘Alchemy: The Surprising Power of Ideas That Don’t Work’. He describes the distinction between logic, and psycho-logic here:
“My word to describe the way we make decisions – to distinguish it from the artificial concepts of ‘logic’ and ‘rationality’ – is ‘psycho-logic’. It often diverges dramatically from the kind of logic you’ll have been taught in high school maths lessons or in Economics 101. Rather than being designed to be optimal, it has evolved to be useful”
Rory Sutherland, 'Alchemy: The Surprising Power of Ideas That Don’t Work'
The idea that our decisions are rational has been somewhat quashed with modern psychology. Instead what we have, as coined by Herbert A. Simon, is ‘bounded rationality’. It’s rationality, but with some pretty extensive limits to our decision making. We are constantly taking reasoning short-cuts that are not rational or logical, but indeed – psycho-logical.
When this product was in conception, the target was to compete with the market-leading drink – Coca-Cola. Imagine for a second that you are in a boardroom and they ask you what should be done to create a strong competitive product, you would likely say ‘we need to create a product that tastes better than coke and is better value for money’. Pretty rational answer.
What was created was Red Bull, a drink that comes in a tiny can and is far more expensive than coke. On top of this, when they did focus group product testing, the people taking part pretty unanimously said that it was gross and they wouldn’t buy it.
As you of course know, Red Bull is an international best-seller, with its brand presence everywhere. It is so successful that it has the money to create its own F1 team.
There are some psycho-logical cues that impact its success:
The slightly dodgy taste is an important part of the placebo effect that it is like a 'medicine'
The small can indicates that it can only be ‘taken’ in small ‘doses’ as it is so potent
The affiliation with risk, high-risk sports and health concerns when mixed with alcohol make it appear risky/exciting
The bull branding imposes a sense of power
The expense suggests a complex and expensive mix of medicinal ingredients
The placebo effect of Red Bull was tested in 2017 by INSEAD and the University of Michigan. They gave three groups the same mixed drink of vodka, Red Bull and fruit juice. The three groups were given different labels for the drinks, with only one group knowing that Red Bull was in the drink. They were then given a set of tasks to complete and an interview. The group that knew that they had drunk Red Bull reported feeling 51% drunker than the other groups, took bigger risks and were more confident.
This isn’t logic, it’s psycho-logic.
Another great example is The Economist subscription costs which have been researched by Dan Ariely, Professor of Psychology and Behavioural Economics at Duke University. The Economist subscription pricing offered three choices:
Online for $59
Print for $125
Online and Print for $125
Here, the middle choice is the decoy – it’s the one no one wants – naturally most people opt for print and online as they see it as a bargain.
In fact, in Dan Ariely’s research, the third choice was chosen 84% of the time, the rest were sales of the cheapest option with no one choosing the decoy as below:
Online for $59 – 16%
Print for $125 – 0%
Online and Print for $125 – 84%
Naturally, you would assume that if you have an option that no one wants, you should remove it.
When they did this, guess what happened?
Online for $59 – (was 16%) 68%
Online and Print for $125 – (was 84%) 32%
Now the most popular choice became the least popular choice.
For more on this check out his great and highly-enjoyable TED talk below...
The high risk of being rational
If rational logic was dictating the route forward in these scenarios, Red Bull may have flopped and The Economist could be struggling to sell their most expensive option. Think of the purported Ford quote of 'If I'd asked people what they wanted, they would have said faster horses', or the madly expensive Dyson vacuum cleaners, or Wikipedia being a voluntarily user generated content site or Twitter being so restrictive in characters, the list goes on and on... these examples highlight the absolute necessity and power of thinking about things from a psycho-logical point of view.
Don’t think, what makes sense logically, think what emotionally, egoically or psychologically might cause action.
Psycho-logic says be emotive, lead with a narrative, appeal to values not thoughts.
My provocation here is to forget rational, logical thinking, go rogue - think psycho-logical and hopefully, watch the impact grow.