$22,381 Worth of Marketing Advice in 63 Minutes

marketing when done completely and holistically is a multiplier on all your other business processes during my 35 years in business I built one of the most successful marketing agencies in Asia I sold that company to PWC for more money than I'll ever need I am one of the best in the world at marketing but the genius I'm about to introduce you to is even better than me Rory suland is the vice chairman of ogy one of the biggest marketing agencies in the world which makes over 5 billion a year in Revenue today he's going to

talk you through his 10 rules for making million dooll marketing campaigns so if you can't sit down get a notepad and listen I'm sorry you're probably not going to make it this video is broken into 10 chapters number one people how to get anyone to buy anything number two why your business is nothing without marketing number three why relationships are essential for business success number four how to get customers for cheap and maximized profit number five why charging more will get you more customers number six price versus quality what matters more number seven why your

business will fail without this number eight how to make it impossible not to buy number nine save time and money by doing this number 10 how to become a master now let's jump in marketing is a very general thing so um how do you want to cover it any thoughts uh very simply it's about people um and it's about ultimately it's about creating behavioral change right uh there's no real purpose you know unless it results in a change of Behavior now the means you may adopt to change Behavior might be weirdly oblique okay EG if

you make yourself famous it changes Behavior because people come to you rather than you needing to find them all the time which is much better proactive sales versus reactive sales reactive sales is much better people come to you to exactly and and and actually uh one of the things I might say is that the way of measuring marketing via Roi uh is a mistake that the whole obsession with the quantification of marketing marketers have always had kind of what you might call Logistics Envy or procurement Envy they Envy those parts of the business that can

notionally prove their value on a spreadsheet um absolutely down to the last scent and so marketers have always had this urge to do it and when therefore the sort of tech come Consulting come Finance uh industrial complex uh when it sold marketing on this idea of perfect accountability all the marketers were very willing to go along with it because it was what they'd always dreamed of and you know I was in direct marketing that's what we always kind of aspired to and loved it's actually a mistake because marketing when done completely and holistically is a

multiplier on all your other business processes it affects who you hire how much you pay them how long they have to stay it affects whether your chief executive gets his phone calls or her phone calls returned in other words the the best description I've ever heard of it was actually used of having a great brand is that it's like playing the game of capitalism on easy mode yeah in other words all the things you have to do become less friction full less you know uh faster uh less expensive less burdensome than they were before if

you've got your marketing aligned to begin with but I think Roi got put into place it's a bit like the school system how do you measure success SCH getting an a many right it's Las quantification so if if people want to oh let's say brands are listening right now I mean how would they what's the other method for them to measure an effective use of their investment the argument would be that you can measure what you do but you should not assume that what you measure is the sum value of what you're doing nor should

you make the Criterion that you can only do what you measure and that that's where it's become problematic in other words there are very very valuable things you can do which would almost certainly be profitable okay and you're now no longer allowed to do them okay unless you can prove not only prove absolutely but very quickly the value of the activity now one of the things that obsession with quantification has caused is I think severe underinvestment in customer service M because the value of customer acquisition or customer acquisition activity is always both more measurable and

much faster to reveal itself than the value of keeping a customer you might you might have an example of say for example High Street Banks where customers hardly ever leave anyway okay I mean they may actually migrate to monzo but they'll keep their current account open they won't actually close it what happens of course in say something like banking is that if your customer service is bad if your customer experience is bad what actually happens is your customers basically just become in nert but it might take 5 years to reveal itself and nobody's got the

patience to wait and consequently they'll spend money on acquiring new customers to replace the customers they're losing simply because that's a more quantifiable activity than keeping the customers you have in the first place and so I think there are some fairly gross distortions whenever you there there's a great thing called good heart's law which is any metric that becomes a Target loses its value as a metc in other words it creates its own distortions in Behavior one of the things I regard as highly dubious at the moment is that um there's an enormous drive to

interacting in digital media not not a not a ridiculous thing to do to some degree but it's reached a point where people are defining their customers as those people who are prepared to interact with them in lowcost Channels with the minimum of persuasion okay so if you if you use programmatic digital as the kind of measure the what you might call the highest form of customer acquisition yes it's a very good idea if you can to sell to those people who are prepared to be sold to very cheaply or who are prepared to buy an

Impulse or who are you know susceptible to promotional offers not a not a crazy thing however what then starts to happen is you define your customer universe as those people who are prepared to interact with us in lowcost channels and the truth of the matter is that the better way to do marketing is to Define your um customer Universe your potential customer universe and then to sell to as many of those people as you can profitably over time okay or form relationships with with as many of those people as you can profitably over time okay

not optimizing optimizing for overall value and scale not optimizing for the efficiency of the transactional process okay now just as an example of this I you know I use train examples quite a lot um you have um very simply uh there was a lot of pressure to get rid of manned ticket offices uh in stations and effectively everybody would buy a Rail ticket through a mobile phone or possibly through a a credit card vending machine at the station um now okay people who are prepared to buy tickets through a highly automated process are indeed slightly

more profitable than people who uh aren't however there is and will always be a significant number of passengers Andor a significant number of Journeys which require a conversation they require a human conversation in order for them to happen and that might be for example um certain people don't have mobile phones certain people don't like operating machines okay that's just a preference thing but there's also the fact that there are certain Journeys even someone like me who would always use a machine or an app for Journeys they make every day where they know exactly what they

want there are certain kinds of Journeys where you actually want a discussion because you need reassurance that the route you're planning to take or the ticket you're plan planning to buy isn't insane so let me give an example okay in London you know generally transactions tend to be quite impersonal and they're all optimized for Speed once you get outside London actually fundamentally capitalism is slightly different every single financial transaction contains an element of a social transaction and an example would be for example uh if if you in deal and which is in East Kent and

you said I'd like to go to London tomorrow and I need to get to some panras by whatever it might be 10 and 12 okay uh they'd say well look mate um don't buy the uh Peak uh return ticket what you need to do is I'll buy you a peak ticket to do at which point the train becomes an off peak ticket then I'll buy you an off peak day return with your Ro card to and from DOA and then I'll give you a single you know from DOA bag that'll save you you know £12

27 or whatever it might be now unconfident buyers infrequent rail Travelers or people who are largely rail rejectors okay will need that degree of reassurance to get them over the line they need to know I'm not being an idiot is it safe to park here do I get clamped Etc if you stop selling to those harder to reach customers it looks like a very shrewd decision uh early on because you know you're you're you're cutting costs and the benefits from cutting costs appear early the consequences of failing to convert people to rail travel appear late

M and so where we got to be very careful with all forms of data is that all forms of data are highly unrepresentative and contain biases and waiting and sometimes those are chronological waiting sometimes they're demographic waiting etc etc but the first lesson of Statistics is ask to what extent the data you have is representative or maybe distorted by for example you know the relatively the cost-saving data appears fast the value creating data appears slow and you have to be able to correct for that and sometimes I would argue that correction will have to be

to a degree subjective I'll give you an interesting example okay Amazon has that extraordinary customer service thing which I think is very very good which is a button where if let's say you order something it doesn't arrive you basically just click a button that says call me back and typically within about 30 seconds your phone rings there's someone on the phone already who knows who you are who knows what the product was that didn't arrive and can get straight to the nub of solving the problem I think it's actually an revolutionary idea in customer service

I don't know any other organization that's copied it and I've asked various organizations and they said we couldn't make the business case and my argument was you don't need to make the business case Amazon's done it for you and the reason is that Amazon tests [ __ ] everything okay if Amazon does it there's a good reason for doing it they've been able to measure in a high-speed business you know the contribution it might make to customer attention or satisfaction or some other measure you don't have to prove it for yourself just steal the idea

okay well you know it's also basically Common Sense isn't it it's like ultim look after your customer well that's where Amazon is interesting which is that when Amazon when Amazon debates an innovation their general question the first question is not how do we make money the first question is does this benefit the customer and then the second question is if yes how do we make money out of it or how do we at least make it break even right okay well happy custom comes back so you know in theory and so you know obviously obviously

there are limits to customer satisfaction you you are constrained by you know lifetime value and other other ceilings you know you can't lavish love on people indiscriminately okay um although some degree of that is actually quite healthy psychologically well enough but I think there is this weird thing which is there's an attempt to turn marketing into painting by numbers marketing involves human psychology and involves human behavior and human perception human perception once you've acknowledge that human perception and human behavior are an essential part of your objective you can't afford to be reductionist linear purely mathematical

because you're in complex system space but the thing is my my experience with Brands is they're not doing they are very number driven they are very Roi driven I mean I I work with a lot of Brands right now and every time we do a post they want to know how many people signed up to X and Y we've had videos that have millions of views like they almost downplay it like oh it doesn't matter about branding exposure but I think about things like the Olympics when people sponsor the Olympics like there's no instant Roi

of of of that 100 million you spent I I would argue I mean I would argue it's impossible I mean I'll give you two examples talking to John Roberts who founded AO um uh you know if their kids in the house when they're delivering an appliance um they'll hand out a cuddly bear they got little cuddly bears that are bit of branded merch they're in the back of the van he said well I could try and work out the ROI on that maybe seven years down the line I would have some reliable data that says

that the Bears are self liquidating okay but frankly that's just getting stupid if you think something's a dispropor tionately uh um potent activity at a reasonably affordable cost I don't think you should need absolutely granular uh quantification because an awful lot of things that marketers do are neither measurable nor attributable in conventional ways and I don't think we've pushed back against this enough so when I say measurable Fame okay what is the value of being more famous than you would otherwise be it's impossible to quantify that I mean because it it has a bearing on

so many different activities by the way just generally because I have become famous in the last 12 months it has made a huge difference to what I'm trying to achieve yeah because more people want to help because more people become aware it's extraordinary yeah yeah yeah you get invited things I'm sure you felt the same no no no I mean it's completely bizarre um I think I I want to reach the optimal level of Fame where you occasionally get recognized at airports but you don't get like mobbed hard to manage that I've just accidentally I've

just gone over the top of well famously Bill Murray when people said to Bill Murray um I want to be rich and famous he said um try just Rich first and see if that doesn't do it for you that's true um because in some ways being famous can be a pain in the ass and it's kind of irreversible hey guys I hope you enjoying the insights from Rory he's a genius isn't he I've written a book and I really want your help I want this book what's your dream to drop in your unbox in January

if you make an now it means that it will get on the time's bestseller a pre-order is so important for a new book and I want this book to get out there so it helps more people all the proceeds from this book I'm giving away to fund people's dreams and make videos just like this one to help you for free do what you love buy if you can the links in the bio so one of the reasons I'm very keen to talk about marketing and psychology to an audience of young entrepreneurs and small businesses is

I think if smaller businesses just became 30% more capable at their marketing you could actually put 2 or 3% on GDP yeah well I mean now you may want to make sure we want how are we going to help small businesses be 30% more efficient what what do you think okay there are okay I okay let me tell you a story okay so I'm um I'm back in Wales um my father's in the hospital at the time and there's a Motorway service station uh on the A40 between ragler and Monmouth and we needed to stock

up with a few things uh and um we drove there and it appeared to be completely closed all the lights were off okay genuinely it looked like the baates motel you know I mean genuinely there was just nothing there and my wife said oh [ __ ] it's closed I said well this is weird because I remember going there once on Christmas Day if they're open on Christmas Day I'm pretty sure they're open 24 hours a day let's just pull in and give it a try sure enough we pull off the Dual carriageway we get

to the made away service station and um it's open now unsurprisingly we're the only customers because of course from the road it looks closed as hell in fact it looks downright dangerous stopping there okay and so we go in and the the whole shops open it's open 24 hours a day as turns out I was right okay you can buy coffee and goodness knows what else I said to the guy behind the tail I said mate um all the lights are off in the road it looks as if you're completely closed now coming from marketing

I I'm my reaction is are you completely insane you're throwing away thousands of pounds worth of potential Revenue by radiating the impression that you're not open and the reaction was yet yeah I think the guy on the last shift like might have forgotten to put the lights on you know when he ended the shift and I was kind of going we going tell the on right are you you know you are throwing away money here literally now what suddenly occurred to me is that the sin of omission in marketing gets much much less attention and

creates much much less anxiety among employees and even business owners in other words opportunity costs are much less Salient than costs and it occurred to me let's say that guy who hadn't turned the lights on the guy on the previous shift had stolen a lion bar at 2:00 in the morning right fine there would there'd be all sorts of [ __ ] right he'd be Pro almost certainly be fired massive disciplinary thing you know D D D D now to be honest the guy could have stolen 100 lion bars and binge ate the damn things

and it would have been less costly to the business than not turning the lights on but the business was not exercised about its failure to Market project itself in the same way that it would have been absolutely down on it if they were leaking some sort of Revenue in some way through theft or whatever and so an off I sympathize right you're running a one-man business running a two-man business you end up doing your Marketing in your spare time it's not your core focus of operations it probably isn't why you went into business at the

first place and you know effectively it's kind of effortful you may be uncomfortable writing Etc nonetheless at its simplest all marketing involves is what Mark richon calls doing the magic 180° flip where you see your business as a customer actual or potential would see it okay you don't see your business as you see it and a very simple level if you're running a cafe okay and you're allowed to do so legally even if it's raining or it's quite cold put chairs and tables out on the pavement and the reason is that from 300 yards away

without even doing the conscious reasoning someone will see chairs and tables on the on the pavement and even if they obviously don't want to sit on them cuz it's free in cold or it's pissing with rain they will go oh there's a cafe over there one it's like a massive ad it's a billboard okay and two it's probably open the reason it's probably open is because they've put the chairs and tables out and if they were closed they would have locked them away to stop people nicking them okay so there are things you can do

which don't involve words or pictures they're just behaviors you can adopt which have a huge effect on your revenue and your profits I I think the 30% be more effective in maret is actually a really interesting thing if we can just take people you know you I'd love to do this you know and maybe AI will make it possible by the way that you can kind of automate marketing expertise for smaller businesses maybe webinars will make it possible but if we could just get small businesses just to spend a healthy percentage of their time themselves

or possibly just bring in an external person over Zoom for half a day okay when I say you could put several percent on GDP and economic growth growth okay I I jokingly said and I'm only half joking here um one there should be well first of all okay first of all there is a reason why a surprisingly large number of people become successful entrepreneurs who've grown up in a shop or a cafe or a restaurant and that's because working in a business like that is like a free MBA okay totally agree right if you work

if you work in a shop if you work in a cafe you work in a restaurant you understand the of business in its entirety okay from you know Supply Chain management to procurement to you know legal to marketing marketing probably gets the lowest level of attention because people in shops I blame this on economics okay economics doesn't understand marketing consequently people in finance don't really understand Marketing in many cases and that's because economics assumes that demand is pre-existing people know what they want they decide on what will maximize their expected utility and they set about

acquiring that thing in the cheapest way possible and so economics begins from the ludicrous premise that demand is pre-existing and your job is to satisfy it um absolute bollocks I mean you can create demand out of nowhere simply by being in the right place at the right time with the right message or even with one or two of those three components okay you can create demand out of nowhere secondly and this is really important um what economists think people want which is the acquisition of a good with minimal transaction costs as quickly as possible at

the lowest possible price which is what a lot of businesses are optimized for isn't what people want at all now if you want the example of this one of the points I make which is vital to understand it's not true in physics it's not well according to Einstein actually it is but we'll park on that but Einstein and Neil B made this point that in high sophistication physics the opposite of a good idea isn't wrong it could be another good idea mhm now let me give you an example in retail okay um yesterday uh I

went into M&S by the way if you've got the M&S app on your phone you can actually self scan an M&S but it's deeply hidden on the phone you've got to actually find the the scanning function so you don't need to check out at M&S at all you can just go around scan your and walk out feeling like a shoplifter but it you know okay and some of the time by the way I do that okay I go in I self scan I walk straight out uh you can even pay on the phone okay I

only needed to buy five things that was perfect that is the most streamlined form of retail there is you know or Amazon thresh would be another example but alongside those things there exist things called farmers markets now farmer's market if you want to develop a farmer's market you basically imagine how could you create the version of Tesco Express that's possible okay the things are quite expensive there are multiple people often selling the same things you have to pay separately in eight separate places from a purely utilitarian standpoint of farmers market is an absolutely ridiculous idea

that's exactly the point what people want is the opposite of the Streamline retail experience they want to have a bit of a chat a bit of a shufty you know they actually if I'm being honest with you they often want to pay more for things okay never assume that all consumers all the time want to pay as little as possible complicated okay priv wine for example the entire wine industry is driven by people paying more for wine not to buy better wine principally but to mark an occasion okay so when you look at what people

spend on wine it isn't really a quality price tradeoff as economists would like to see it okay what it is is it's it's it's Wednesday evening it's £6.95 it's my wedding anniversary it's 28 quid okay now the reason that's important is that the British sparkling wine industry I think Chapel down were the people who pioneered it finally had this very brilliant Insight which is that if you're producing a competitor to Champagne it doesn't matter how good the drink is if the perception is that you paid $1.99 for it it's not doing the job of champagne

because the job of champagne is to Signal the importance of an occasion or it's to Signal Hospitality I I'm you know I'm saying my daughter's birthday is important by not buying the cheap shed right okay or it's the signal generosity thank you here is a bottle of champagne the perceived value of champagne the fact that champagne costs below God I'm out of date here but I generally buy the British stuff uh you know you can't really buy it below 178 quid means that champagne unlike prco is a fantastically reliable um Mark of generosity or Hospitality

because you go okay this guy is spent here okay and some things just need to be perceived to be expensive so Chapel down started it other people uh we're we're pretty much in Wine Country here in fact aren't we okay other people have done it they suddenly realiz if you charge 23 quid for a bottle you're actually competing with champag it doesn't matter now the contents by the way I'm just going to defend the British sparkling wine industry the contents are astoundingly good I would argue at their best they're well up there even better than

most mainstream Champagnes but the point is the the you're not doing the job of champagne if you actually make it 8.95 doesn't matter how good the contents are you've basically failed and there this is really important because one of the things you have to understand about marketing is that to some extent it's the science of knowing what economists are wrong about so I'll give you I'll give you a really interesting problem which often besets marketers I don't think it appears in many marketing textbooks but it's a surprisingly common problem which is what I call the

too good to be true problem let's imagine you're going in to buy a coffee machine an espresso machine okay and one of them to have more functionality it's got an LCD display it's got a bit of fancy stuff okay on it and it seems to have more functions and therefore more utility than the one alongsid it but the one with more functions is also cheaper than the one alongsid it now to an economist to any rational person that's the easiest decision you have to make highest utility lowest price slam dunk no brainer nothing to see

here credit card out move on in reality because humans have second order intelligence in other words they don't just think what they're thinking they try and second guess what the other person's thinking this is actually going to be deeply confusing because they go well if I had a better coffee machine I'd charge more for it to make more money so this doesn't really make sense and now they've got cognitive dissonance which is better machine lower price I'm now confused okay uh I'll probably buy neither of them this actually happened when Nespresso launched the virtuo machine

they had the virtuo and the virtuo plus and they charged the same price for them and F out I went in and spoke to a Salesman in it was a shop in Canterbury and I said why are they the same price if this one's a bit better and he said everybody asked me that it was basically screwing with people's heads I said look just put five quid on the price of the virtu the virtuo Plus or knock 5 quid off the price of the virtuo manual cuz otherwise people are just know why did they charge

everybody was going I don't get this so so they've got the same price but one of them has a lid that opens automatically and the other one has a lid you have to open manually okay now you have to have a price difference there for the consumer to make sense of what you might call the assumed tradeoff between price and quality okay and they they arrive at many decisions with this assumed tradeoff which is you get what you pay for and if you mess with that assumption you might well be throwing money away even though

your economy your accountant will tell you you've cracked this Market okay you got a high quality product at a lower price no you haven't cracked the market because people are going to be confused as hell and so an example of a category that falls into that I think is frozen food so my friend Guru madavan who's a very brilliant engineer he said there were actually two industrial revolutions there was the one where we mastered Heat and the production of heat and there was the one where we mastered the production of cold freezing as a preservative

is astoundingly efficient not for every single food stuff but for a huge range of food stuffs it's amazing at the preservation of nutrients uh you have a much more efficient supply chain because you don't need a chilled supply chain you have a frozen supply chain you can store things in uh at a frozen state for weeks or months you don't have to worry about you know throwing away food that isn't sold within the cell by date um consumers can take it home and they can keep it in their magic cupboard also called a freezer and

they can eat it tonight or they can eat it in 6 weeks time uh it reduces the number of artificial preservatives and other you know processed chemicals that are required the whole thing was basically a gift from God and yet frozen food because it consequently became cheaper became slightly stigmatized and is now seen very largely I think as a down Market food and that not not quite true there are people who've broken that kind of in other words to break through the too good to be true heuristic you've got to do something quite weird now

the chain cook which you probably have around these parts do you which is a a vertically integrated retailer which makes its own food and sells it only actually it's own stores and some concessions okay in France you have a thing called P which is their equivalent of M&S simply food basically only sells frozen food it's like a traitor but for Frozen stuff it's amazing but in the UK we have this problem which is literally the too good to be true problem which is that people you know maybe what we should have done is made frozen

food really expensive okay but we didn't we followed economic logic and we made it you know generally cheap and so consequently it was also I think marks and Spencer probably did frozen food a disservice because they tended to offer fresh ready meals and the consumer in Britain tended to assume that if M&S does it it's probably best but there was a similar case which happened to me about this too good to be true problem which is that you if you have a really good Cafe make it a bit pricey okay um otherwise it doesn't make

sense and the to could to be true heretic someone contacted me from um uh Berkeley in California they're at the University there they're um uh indian-americans and theyve worked out that using NASA food preservation technology you can basically make and I can vouch for this mishan Star Quality Indian food biryanis for example helak Bari Etc um preserve it in a pouch with no need for even for refrigeration and you can give it a shelf life of about um uh you know 8 months you can just leave it in the cupboard and then you pop it

in a pot okay and um uh it's effectively I I they they posted it to me it arrived just in the ordinary post no Refrigeration from California um I put in pot my my wife will vouch for this as well if you'd had the meal at say Tamarind in Mayfair you wouldn't you you you wouldn't have complained at all in fact you would have been you know uh you know completely satisfied pleasantly surprised even amazing and I said you you know in logical terms you've hit the motherload in psychological terms you're up against this massive

problem because people won't believe it and we're discussing now what you have to do to overcome this hurdle now now I spoke to Dan arieli about this one of the ways you can do it is you can have a frontman who is perceived to be a magician which is broadly speaking what Steve Jobs was so Steve Jobs had this extraordinary power to stand on stage his own personal mythology and people were willing to suspend their usual cynicism about things Elon has a bit of this among some people but alienates other people but Elon has a

little bit of the element of the magician to him M um you that's one way of overcoming it another way is by actually adding work to the production so even though all you have to do is put in a pot and heat it you know do we need to have other ingredients that need to be added do we actually stipulate that it can't be microwaved in fact you can microwave and it's absolutely fine but we asked Charlie bigam interestingly all of those Charlie bams dishes I think this is what's called the Ikea effect okay it

says you have to put them in the oven to cook them now I think that's because you enjoy the food more when you've waited for it the effort you've put into it by putting into the oven basically creates a culinary experience which the microwave doesn't the other genius thing that he did is that kind of bamboo packaging stuff the weird wooden packaging which fundamentally creates a kind of craft craft manufactured Vibe rather than the factory made Vibe but all of those things we exactly like the the chairs outside the cafe we perceive them without actually

being conscious of perceiving them we don't actually go rationally there are chairs outside the cafe therefore it must be open because a cafe that was closed would have locked the C locked the chairs inside it's system one we just automatically go well hey coffee chants over there now one of the other things by the way all small businesses one uh British schools should have a mini MBA course for one term okay uh in teaching them basically the basics of business in the sixth form there there should be there should there should be a business secondly

one entire week of the course consists of one sentence which is answer the phone partly there's this weird thing this is what I mean about the 180 degree flip so literally after I'd been to that service station okay we ring the local fish and chip shop now there's always a bit of weird debate about whether chip shops open on a Monday right because traditionally a lot of them didn't a lot of them didn't know open on Sunday I think but chip shop opening hours are slightly erratic at the beginning of the week we ring them

up no answer we ring again no answer okay now what do you assume they're shut no point in even going there as it happened we drove past place was open okay went in we why don't you answer the phone they said oh no when we're busy we don't answer the phone now don't really rude but if you know if someone came into your store and you said okay everybody would recognize that's really bad business you just lost a customer okay if you don't answer the phone you just lost a customer in fact you might have

even lost a repeat Customer because if you don't do that two or three times in a row they'll never come to you and they'll never find out how good your bloody fish and chips are okay second thing and I noticed this extraordinary for anybody who runs a retail business the last words before he died of I think it was William Sainsbury's who is the founder of Sainsbury's literally his dying words were make sure the stores are kept well lit and the number of shops I don't know if you noticed this but a lot of corner

shops for whatever weird reason they put up loads of posters and things in the window and you know or whatever strange kind of wraps they put up in the window consequently no light leaks out so to anybody in a car okay they'll assume the place is closed because there's no light coming from the inside there's one bit of advice I'll give I don't know if you know squares no okay it's a wonderful thing where it's a brewery and a deli it's it's it's just outside Westrom so it's on your way to London actually from here

forever you want to stop in they have street food in the evenings they don't pay me to do this right I just like the place okay sponsored things down below while you're there also go into westr and go to busy bites which is a Jamaican Italian Cafe and Restaurant sounds like it doesn't work it's actually brilliant uh she's Jamaican he's Italian and the way she describes it is he does the culinary genius I add the spice but actually it's utterly fantastic okay but um for a long time they had an entrance which was not lit

up and so as soon as it was dark it said to my amigdala shut okay not answering the phone says to my amigdala they're shut what I mean about the 180° flip about marketing is you have to make the effort to see your business as someone who knows nothing about your business be the customer every single day for effectively and be the really ignorant customer who comes to it completely blind what does your typography say about who you are um if you're if you have the apart else it's quite a difficult turn to make off

quite a fast road so if you don't really light out the entrance people won't be able to go there but but I mean when I say the last words of William SSB make sure things are well led the use of lighting as an invitation and the signal that we're open and we're keen for business is really valuable an awful lot of small businesses I noticed are actually completely pissing that away by look as soon as as soon as it's dark the consumer if lights are not streaming out of the inside will assume that you're shut

mhm uh there was an extraordinary place in West Street in C Garden which was actually a Joel Roberson restaur I'm not even sure it didn't have a mish L St but they blacked out their windows now part thing else you don't want to go into a restaurant if you can't see inside I mean literally there are there are these extraordinary mistakes which small businesses make as I said answer the phone make it absolutely explicitly obvious that you're open okay genuinely if you miss a phone call call back 1471 or leave a voice message if because

a lot people listening to this might be like well I don't have the man are open yeah yeah I mean by the way I don't know why there isn't off ship delivery business that's that's taking taking the UK by storm but that side I also think that they're taking that online what I see is you go on someone's website say Service Company and people put all their social media links down the bottom because they think that they should yes and then you click on one and it's not working or you click on one they haven't

posted in three months and by the way by the way okay I'm paid to do marketing right that's my job I'm really simp my Dad ran a small business and looking back we should have done a lot more advertising when we advertised it was very successful we couldn't in time High track it or attribute everything but when you ran ads in the local paper you got a lot of business and we should have done more and the truth of the matter is the daytoday of running a business if you've got kids and you can if

you're running a small business and you've got kids if you could delegate the marketing to your kids that wouldn't be a bad thing to do because you need someone who isn't absolutely embedded in the daytoday of kind of cost Control meeting with the accountant you know the freezer's broken okay you need someone just to sort of float above that a bit because I totally sympathize with anybody running a small business but I mean if we had genuinely you know if I think schools included uh first of all I'd give everybody their own business to start

with by default because once you have a business bank account and you can actually put money away and keep it without it being taxed instantaneously you fundamentally think differently about the business so I'd almost make that a default um you know give everybody a limited company when they leave school totally right everyone should think like a limited as an individual you should one of the best things that happened okay it was the unintended consequence of the Thatcher era and it was a thing which was called the Enterprise allowance scheme and something very funny happened with

the Enterprise so what in rather than being unemployed they would give you more money more unemployment money if you basically said you running a business now it was intended I think so people would start as window cleaners or start small businesses or do building work or whatever it might be and actually um a lot of people thought they were gaming the system CU they had a band and they discovered this hack which is if we pretend this is partly why the 80s was so good at creating really good music these people in a band if

we pretend our band as a business they literally thought they were just pretending they are which is if we pretend our is a business and we like maintain accounts and da d d d da we'll get more D money so that's what they all did but the Fantastic un intended consequence and I think they were kind of more sort of funy daddy conservatives the more enlightened conservatives went that's great there used to be a band now they're a business the more FY daddy people said this isn't what we intended at all okay but once you

actually looked at your band as being a business you thought about it in a completely different way you became inherently more businesslike in actually kind of induced a kind of discipline and so what actually happened was a lot of these bands obviously some people G the system they never had the intention of doing it but a hell of a lot of these things actually turned into really successful bats and it was the actual inculcation of a little bit of business discipline that probably helped so I mean as I said I mean you know one of

the things I I genuinely believe is if we could just make sure uh in in various ways that um uh small businesses would just all they don't have to be brilliant marketers but if you can simply be competent in other words you stop doing the things that without your awareness are actually either putting customers off or causing customers to think you're not interested in them okay um I'll give you a little tip okay here's a little marketing tip for anybody who runs a shop if you want to lose a customer for life okay um uh

lock your door at the second your your shop closes and if anybody comes and tries the door just wave them away and Shout we're closed now that's not an unreasonable thing to do an hour after closing time 3 minutes after you're technically supposed to close most coffee Shoppers do it 15 minutes before they even go that's for getting the mop out it's so they can bunk off early it's so bad for the brand and what they do what they've discovered is that if you put a chair upside down on top of a table or chair

upside down on top of another chair or you lean them up against the the um the wall basically no new customers come in so you can descale the machine clean the toilets get the gunk off the off the cappuccino nozzle and you can bunk off home early now the problem that causes is that coffee shop owners looking at the data notice a fall off in coffee sales between say 330 and 4 that forward and assume there is declining demand for coffee after 3:30 therefore there's no point in opening until 5 rub the actual thing is

there's declining demand for coffee after 3:30 because coffee shops which are radiating the signs of closing down in other words we don't want you in here and if you if you do come in you'll be drinking your coffee effectively under time pressure that's highly off-putting to the consumer once there's a chair upside down on top of another chair once there's a mop leaned up against the wall once someone's mopping the floor nobody wants to come in by the way I I discovered this by accident myself I had a coffee shop I started in Hong Kong

called Grace and we assumed like all the coffee shops closed at 4 that Starbucks all his other outlets had done their research and it wasn't as popular after four so we started serving Mojitos from four we kept the coffee machine coffee machine going turns out we got so many more orders for coffee than Mojitos but we assumed that we assume that Starbucks is in well we're obviously now Starbucks someone is looking at the data and they're extrapolating logically from what the data appears to tell them except there is what is technically called there a confounding

variable okay the con the variable they're looking at is time of day and demand for coffee the confounding variable is the staff in the coffee shop now I realized I'm actually going to be on a bloody Coster employee Hit List after I've done this well it's not their fault because they they're told 4:00 4:15 your pay your pay stops so in some aspects they've got to close the whole thing and be out by 4:15 so they're just trying to do the job efficiently CU they know we probably need half an hour the DC incentive exactly

perverse incentives by the way let's talk about that for a second because that that happens a lot in people's businesses un own any metric that becomes a Target loses its value as a metric apart from anything else that's good heart's law um I'll tell you the lovely story about where you can um uh since we're in Sussex is um um uh the lovely story about where you can look at data CU one of the problems with logic is that once we come up with a logical explanation for something we stop looking and we say well

okay after 4:00 people don't want coffee that kind of makes sense right nothing to see here move on no further investigation needed and the real thing the confounding variable there is the staff irradiating bad vibes to potential customers through their behavior it's nothing to do with the um actual demand for coffee in fact a hell of a lot of people would like coffee to take on the train home okay you just want a treat at the end of the day um but a lot of coffee shop shs as you said you you assume they'd all

done their research and said no point in staying open no no it's a bit like you said about Amazon you assume Amazon done a research and know what they're doing one of the most brilliant marketing moves of any cafe or restaurant in the last 20 years was Dum had the problem that every Indian restaurant does which is it tends to be empty at lunchtime busy in the evenings busy when the clo pubs close uh actually half dead at lunchtime and how do they respond to this they opened a breakfast they open for breakfast now my

hunch is that one of the reasons uh that people don't go into Indian restaurants in at lunchtime is cuz they're already empty if you open for breakfast there'll be people hanging around and there'll people sitting around there at 10:00 11:00 12:00 once there are five or six people in a place it feels a lot less weird going in that I mean literally if you're running an unsuccessful restaurant um you could almost give free meals to people to populate the restaurant particularly if they're sitting outside on a table or something because nobody wants to be the

only customer in a restaurant the nightclub model isn't it where they make you wait in the que outside there's no one there no one inside at all um but the example of where I give the data can be misleading is the John Lewis tumbridge Wells story which is if you go to the what used to be John Lewis in tumbridge Wells at the retail Park do you all know that you yeah okay um it went bust and they closed it down it's now derel and I'm convinced that people inside JN have come to conclusions like

the demography of tumbridge Wells is not sufficient to support a a branch of John Lewis and there's a great book I recommend to everybody who's running a business okay any small business it dates from like 1916 it's called obvious Adams and it's by a guy called Robert up degraph you can buy it on Amazon for sort of 4450 you can read it um in a s well you can practically read it in a single but you can certainly read it in a single sitting because it's a very short book when you first read it you'll

think this is a really hokey book why is Rory recommended this kind of American hokey Business book about five pages in you'll start to realize it's actually very very brilliant but obvious Adams is a guy who does what they did in the big short one of my favorite films he goes and looks when something happens he doesn't look for an explanation from available data he acts like a detective as you did with the coffee shop and he said what's really really going on here what's really driving this we have our logical explanation our logical explanation

has has caused us to stop asking questions but maybe there's another explanation altogether so going to have a shufty around John Lewis and tambridge Wells first of all it has its own car park you have to park in their car park it doesn't share a car park with anybody else so you can't combine a trip to John Lewis with a cheeky visit to TK Max or boots or anybody else no no it's John Lewis or nothing first mistake second mistake the entrance to the car park was in such a stupid place that you could only

conveniently turn in if you were leaving the retail Park heading for the a21 because if you were coming into the retail Park you had to do a 180 ROM mini roundabout which is a pretty perilous thing to do okay and then turn left but the sign for the car park was in the wrong place so by the time you'd seen the sign you'd miss the Turning okay thirdly the John Lewis was arranged in a way that the narrow the signage was on the narrow edge of the building which made the building look about a third

the size than it actually was it was actually enormous so it was kind of it it was narrow side onto the road so it didn't look like a big deal it actually went back for bloody miles uh there's another reason which I can't remember but I I I I might remember it at the end which was another off-putting reason to go but then the final fatal thing was some weird branding decided to call it John Lewis at home okay now when you see the words at home you assume it means Furniture 95% of people aren't

in market for a big furniture purchased at any one time people whove moved house might go there you know people who you know a refurbishing might go there most people will go don't need a sofa not think home home base Etc okay now I don't know why they didn't just call it John lur but they didn't because I think cuz it didn't sell women's fan and it didn't sell Cosmetics I may have got that wrong but there were a couple of things that a big John le would have sold they didn't sell now I'm a

bloke neither of those things is particularly High interest to me now the only reason I went there is because at 7 Oaks the waitrose Before Christmas the click and collect cupboard actually got full so they said if you want to click and collect your Christmas present you'll have to get it sent to John Lewis at home in tdge Wells so I did that so the first time I actually went there expecting to pick up my present from what was was a furniture shop they soell flat screen TVs they sold computers digital radios they soell Crockery

they sold lighting it was Fant was Cornucopia right and I keep talking to people and they said I assumed it was Furniture I drove past that store for 5 years without going in because I didn't want to buy a sofa okay now that simple off-putting thing it's exactly the same as the motorway service station not turning the lights on if people can pick pick up a signal that says not for me okay there's sometimes more information that puts people off absolutely right do you think there is an art to the marketing side that you know

we could give the audience like how how do people what you described there is I think simple marketing is there a tip on if people are listening now they've got a business how do they Market themselves any any structure you could give people to think about yeah very interesting um not everybody has this opportunity but cuz if you start from scretch it's was a bit easier um first of all you've got to decide who your customers are and who your potential customers might be [Music] um sometimes by the way uh invest in things that seem

a bit gratuitously expensive because if a business invests in its awnings or its furniture or a business goes to the discretionary effort for example cafes that put rugs on the seats okay those things don't always do these things by the way if you're a cheap place very popular with local locals for your low prices if you fancify the interior people will perceive that your prices have gone up even when they haven't there's a reason why Aldi and little kind of look a bit okay and it's price perception Tesco found they did some research I think

and they found that when you renovate a Tesco store people's perception of the prices goes up even when the prices haven't gone up um price perception was very very odd by the way if you interview people outside a supermarket and say all those things that you bought what did you pay for them they haven't got a clue they'll know what they paid for milk there are a few known price items but once they bought them they haven't got a clue what they paid for them um uh but generally you know there there is a scope

for you know there scope for being a really you know scruffy Pub the scope for being you know the the market niches for those places exist I'm not suggesting the last thing I want is uh economically for marketing to create homogenity because when marketing creates homogenity you actually destroy the value of the overall Marketplace the value of a the value of a category is maximized when lots of different entities competing within the category explore and and uh Target different need States different Market niches different demographies I've always believed that there is a kind of Jack

of all trades heuristic which is if you only do one thing people believe you're going to do it really really well so there is a reason why people basically think that fish bought from a fishmonger is better than fish bought from Tesco they think that meat bought from a butcher tends to be you know or a farmer's market similarly they tend to um believe it's a reasonable heris that someone who only does one thing has to be good at that thing CU if they weren't good at that thing they wouldn't be in business anymore whereas

actually you know would you buy oysters okay from a burger bar you go well they're not really going to you know are they going to be that great at maintaining the hygiene of oysters and if it's only 10% of their business they're not going to be paying that much attention whereas if you're an oyster stall okay a whole different set of rules apply you know if you only do one thing you have to be really really good at that thing great advertising campaign for Gordon's gin which never actually um this is about 20 years ago

and the headline was you can the whole point that Gordons only make Jin okay and the headline was you can only be really good at one thing and the visuals were hysterical there were things like Jeff Cap's butterfly connection Jeff capes was a famous Shu butter an enormous great beefy guy and his butterfly collection was like loads of bent pins and butterflies with their wings falling off you know the idea being you can be good at shop putting but you can't be good at shop putting and Butterfly collecting and that was kind of an ad

that effectively was exploiting the jack of all trades turistic in other words master of one so I've always wanted to own a chain just called bacon sandwich and the point is you only sell bacon sandwiches you probably have two kinds of bacon you'd offer three kinds of bread okay you'd only offer two drinks which would be champagne and Builder's tea that's it okay and uh you'd have a really perverse rule which is you'd allow brown sauce but you wouldn't serve ketchup can we just actually open that up and do it should we should we just

do it do it my view is that about 30 to 40% of the time I always get annoyed in the Euro star because they have this attempt this sort of Belgian attempt at a full English breakfast on the Eurostar which is a tragic apology for an English breakfast and I go on the way home when I'm coming back from my meeting I wouldn't mind going large on the way out I want to lose my laptop I want a bit of table space can you just bring me a bacon sandwich and there are an awful lot

of occasions where I I grant you it's perhaps not you know we'd possibly have to have um uh vegetarian bacon no actually that that no you so there's a weird thing where oddly there's a signaling value to not being this is what I mean about the opposite of an of good idea is another good idea you can be very customer focused but there's also this weird signaling value at some level of being not customer focused of just going these are the rules we know about this stuff take it or leave it now Five Guys when

they develop their chips fries they went for expertise to a place uh it's in Ocean City Maryland and it's called Thrashers I think and they they've got three Outlets they perversely like Clos for part of the season they only sell chips okay now this is the weird thing bear in mind this is the United States you buy a cone full of these french fries from Thrashers in Ocean City Maryland now as a Brit I've got a totally high five these guys right you can have salt you can have vinegar you can't have ketchup Now in

America that's really really pervy and weird okay not offering people ketchup or mayonnaise to go with chips but only salt or vinegar but they're a hugely successful business that's been going since the 1920s and they just go this is how we prepare our food this is how you believe you should like you should like it and actually well whatever reason that kind of oddly that kind of corporate assholery sometimes works I think it also symbolizes that the quality of the potato must be good because you don't need to perers it in other words what you're

saying exactly that I think now my view of my view of to about offering brown sauce but not allowing ketchup is just one of those Whimsical things it gets conversation you know it then that it's one of those massively divisive things isn't it the the the catchup versus HP Sauce bacon sandwich argument now one of my colleagues um guy um uh um called um P mat uh he's absolute um Cafe Guru and he weirdly as a catchup fan which I strikes me as totally perverse and weird but broadly speaking you know I think HP source

is a remarkable thing the yin and the Yang contrast but I I I think bacon s bacon roll as a place which just only sells bacon rolls champagne uh build's tea brown sauce or no sauce that's it you're making me hungry by the way talking about it you know I I I think you do something really remarkable it's a good lesson for people listening if you look at any show like the Gordon Ramsey goes into a restaurant to fix it nine times out of 10 it's because there's too many things on the menu and he

but Donald's actually the number of businesses which basically were rescued by um focus uh the two biggest ones are uh uh Apple where Steve Jobs I literally had a friend who was in the presentation from Steve Jobs who by the way on a personal level was a total [ __ ] I mean Steve Jobs turned up late for the meeting basically so he could humiliate the two Executives who turned up on time mhm it the whole thing was I he basically came and said I don't know what these idiots have told you but I'm going

to tell you this and he said when I arrived at this company we had these 19 products in development I'm getting rid of this one this one this one this one this one and we're going to focus on these four and I I think it must been the iMac and possibly the iPod at the time okay so I had an advertising friend who was actually you know had Steve explain all that and interestingly if you look at the early days of Apple in the first incarnation of jobs their choice architecture was a total mess it

was like you know the so and so 2C actually the iPhone's always gone wrong when they [ __ ] with the choice architecture when they've added the iPhone 5C and they've added low margin iPhones under pressure from typically the investor Community who say you're too expensive you need to produce a lowcost variant forgetting the fact that the lowcost variant of the iPhone is your dad's old iPhone okay they're not really understanding the consumer at that level you know people would rather have a three-year old iPhone okay then have a new brand new iPhone that says

I'm not a real iPhone okay it's very similar to Second Hand cars actually to some extent um you know people you know actually you know that's one of the problems you have with the new car industry which is that secondhand cars are pretty soding good you know and actually people would rather have a 2-year-old really good car than the than a brand new slightly compromised car and the same I think pertains with iPhones but the choice Arch there and of course the most famous one is McDonald's and um that wasn't Ray Croc actually that was

the McDonald brothers who basically borrowed from uh they borrowed from car manufacturing slim down the product that was available which meant that you could serve people really fast which was the diametric opposite of the American Diner where you could have anything anywhere you liked you know substitutions eggs over easy sunny side up everything made to order and McDonald's basically just did a 90° flip and said see that we're going to do the absolute opposite and that's what I mean is that there there's often a gap at the market Gap in the Market at the opposite

end of the market I'm Rory Southerland and I'm on help Bank [Music]