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The Choice Factory How 25 behavioural biases influence the products we decide to buy By Richard Shotton Harriman House HARRIMAN HOUSE LTD 18 College Street Petersfield Hampshire GU31 4AD GREAT BRITAIN Tel: +44 (0)1730 233870 Email: [email protected] Website: www.harriman-house.com First published in Great Britain in 2018 Copyright © Richard Shotton The right of Richard Shotton to be identified as the author has been asserted in accordance with the Copyright, Design and Patents Act 1988. Paperback ISBN: 978-0-85719-609-5 eBook ISBN: 978-0-85719-610-1 British Library Cataloguing in Publication Data A CIP catalogue record for this book can be obtained from the British Library. All rights reserved; no part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise without the prior written permission of the Publisher. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published without the prior written consent of the Publisher. Whilst every effort has been made to ensure that information in this book is accurate, no liability can be accepted for any loss incurred in any way whatsoever by any person relying solely on the information contained herein. No responsibility for loss occasioned to any person or corporate body acting or refraining to act as a result of reading material in this book can be accepted by the Publisher, by the Author, or by the employers of the Author. Contentsx Praise for The Choice Factory Preface Introduction Bias 1: The Fundamental Attribution Error Bias 2: Social Proof Bias 3: Negative Social Proof Bias 4: Distinctiveness Bias 5: Habit Bias 6: The Pain of Payment Bias 7: The Danger of Claimed Data Bias 8: Mood Bias 9: Price Relativity Bias 10: Primacy Effect Bias 11: Expectancy Theory Bias 12: Confirmation Bias Bias 13: Overconfidence Bias 14: Wishful Seeing Bias 15: Media Context Bias 16: The Curse of Knowledge Bias 17: Goodhart’s Law Bias 18: The Pratfall Effect Bias 19: Winner’s Curse Bias 20: The Power of the Group Bias 21: Veblen Goods Bias 22: The Replicability Crisis Bias 23: Variability Bias 24: Cocktail Party Effect Bias 25: Scarcity Ethics Conclusion References Further reading Acknowledgements Index Praise for The Choice Factory “This book is a Haynes Manual for understanding consumer behaviour. You should buy a copy - and then buy another copy to give to one of the 97% of people in marketing who are too young to remember what a bloody Haynes Manual is.” — Rory Sutherland, columnist for The Spectator, and Executive Creative Director, Ogilvy One “Most books in this area are academic and dry as dust. If you want to know how research and sociology can impact on real life in the real world, Richard’s book will show you - using simple words and examples that real people can understand.” — Dave Trott, columnist, Campaign, and author of Predatory Thinking, Creative Mischief and 1+1=3 “In a cacophony of overstatement, Richard Shotton possesses a melodious and balanced voice. In this short but powerful tome you can learn about how marketing actually does influence consumers. Or, for the more prosaic among us, how to get people to re-use towels, buy wine when German Oompah music is playing and select a broadband supplier by mentioning Charing Cross Station. The book also mentions me (all too briefly) which I also find enticing.” — Mark Ritson, columnist, Marketing Week, and Professor at Melbourne business school “Actionable, memorable and powerful... Shotton has taken the jewels of behavioral economics and made them practical.” — Seth Godin, author of All Marketers are Liars “Comprehensive, compelling and immensely practical, the Choice Factory brings the building blocks of behaviour change together in one place.” — Richard Huntington, Chairman & Chief Strategy Officer, Saatchi & Saatchi “A top class guide for those who want to put BE to work, rather than just illuminate their journey to work. Richard pushes the practical application of these central psychological concepts. An essential handbook.” — Mark Earls, author of Herd “The Choice Factory is a delightful anatomy of the biased brain that will help you understand and influence consumer decisions – including your own.” — Ian Leslie, author of Born Liars and Curious Richard delivers a wealth of cases proving the efficacy of working with, rather than against, the grain of human nature. This is catnip for the industry. — Phil Barden, author of Decoded: The Science Behind Why We Buy Richard Shotton’s application of behavioural economics is bang on the button. This book is timely, insightful, fascinating and entertaining. — Dominic Mills, former editor, Campaign “If you’re a marketer, understanding what really makes people tick – as opposed to what they might tell you – is vital. The Choice Factory book takes us on an elegant, witty and digestible tour of the 25 main principles of behavioural science. Richard Shotton has read widely so that you don’t have to, but he gives full credit to his many sources should you wish to pursue any of the topics further. This is a delightful and indispensable read for anyone in marketing, particularly those early in their careers.” — Tess Alps, Chair of Thinkbox Preface What this book covers The Choice Factory is an overview of how findings from behavioural science can be applied to advertising. Behavioural science, the study of decision-making, is an important topic for advertisers as it provides a robust explanation about why people buy particular products. It recognises that people are overwhelmed by the sheer volume of decisions they need to make each day. People don’t have the time or energy to laboriously and logically weigh up each decision. Instead, they rely on short-cuts to make decisions more quickly. While these short-cuts enable quicker decision-making, they are prone to biases. These biases are the subject of this book. If advertisers are aware of these biases, and adapt their products and communications accordingly, then they can use them to their advantage. They can work with the grain of human nature rather than unproductively challenging it. A number of successful brands – including Apple and Volkswagen – are applying behavioural science, but they’re in the minority. There’s an opportunity for you to gain an advantage by harnessing behavioural science before your competitors. Behavioural science has identified a remarkably broad, and ever-growing, range of biases. This breadth means that whatever your communication challenge, there’s normally a relevant bias that can help solve it. This book is not an exhaustive list of all the biases that have been discovered by behavioural science. I have been selective and focused on the 25 most relevant biases to advertising. All the biases covered can be easily applied to your campaigns to make them more powerful. Who this book is for The Choice Factory is primarily aimed at professionals working in advertising and marketing, whether at an agency or a brand. It’ll give you practical advice on how to apply behavioural science in your work. However, if you run your own business or you have a general interest in behavioural science, there will be plenty to interest you.

Description:

Before you can influence decisions, you need to understand what drives them. In The Choice Factory, Richard Shotton sets out to help you learn. By observing a typical day of decision-making, from trivial food choices to significant work-place moves, he investigates how our behaviour is shaped by psy