Rory Sutherland: External Wisdom session

Advertising adds value to a product by changing our perception, rather than the product itself. Rory Sutherland makes the daring assertion that a change in perceived value can be just as satisfying as what we consider “real” value — and his conclusion has interesting consequences for how we look at life.

Change behaviour by telling a story, make people perceive something differently.

Economics makes decisions based on fact. Works under the impression that people buy things they haven’t used because they know exactly what it is and what they will pay for it. Not true. We don’t have perfect information or perfect trust.

Today we see marketing as simply ”bought media” but that is just one arm of marketing. You have to look at it through a psychological lens.

Rory is a huge video call advocate. “If people delivered meetings at the speed they typed it would be a very long meeting”. Huge importance of face to face or Skype.

Brilliant efficiency doesn’t always need marketing budget – see TED talk for Eurostar case study.


Kings Cross Champagne bar example – “longest champagne bar in Europe” – moved a transport hub into a destination. Created value.

Virgin case study – first airline to introduce films in Economy and handed out choc ices at the start of the film – emotional efficiency.

BT case study – they knew from research people were annoyed about waiting in all day for an engineer but what were they really annoyed about. They had to take a day off work? No, the uncertainty of when someone was going to arrive. So BT text them when they were 40 mins away.

Christian Aid Week – 4 direct mail tests:

  1. Flap at the end of the envelope to return easier.
  2. Mentioned that it was dropped in by hand.
  3. Higher quality paper.
  4. Mentioned gift aid.

The first 3 all increased the response rate by 40%. The mention of Gift aid reduced the response rate by 35%. Learning – test everything.

KFC case study – one of their new products wasn’t selling well, so suggested they put the price up. It worked. Perceived value. Taste has a different psychological advocate, need to be able to perceive the trade off or they don’t trust it.