Business

A story of perception

By October 11, 2015 No Comments

After doing some research into human perception and its impact on consumer behaviour recently, I came across a story that has changed the way I think about business.

The story is about the Eurostar train, so brilliantly told by the legendary advertising executive, Ogilvy’s Rory Sutherland. A lesson in framing;

Engineers were recently tasked with improving the Eurostar train journey from London-Paris. Their solution was to spend £6 billion on the relaying of completely new tracks from London to the coast, which would reduce the train journey by 40 minutes, to just under 3 hours.

Rory suggested that this was a very unimaginative way to improve a train journey, merely by making it more efficient and shorter. He had a much more creative idea..

“Let’s employ all of the world’s top male and female supermodels to walk up and down the length of the train, handing out free Chateau Petrus to all travellers for the entire duration of the journey… We’ll have £5 Billion pounds left in change, and people will ask for the trains to be slowed down”.

This is an undeniably clever way of pointing out the value of perception, and the different ways of spending advertisement and development budgets in a business of any size.

It took me back to when we had a 1,000 capacity nightclub, 2020 in Bournemouth. We thought nothing of spending £5,000 on a DJ, filling the club by use of an outsourced third party entertainment provider.

Looking back, that £5,000 could have been spent in better ways to greater enhance the events. For a start, we could have given one lucky customer £5,000 on the night. People would have queued up for the chance to win. It could have been used to give away holidays and other expensive eye-catching gifts to customers every week on entry. It could have been used to improve the customer experience in many ways, such as upgraded glassware, increased labour or product development.

For £5,000, I could have hired 50 stunning female and male models to welcome guests with free Champagne every night, giving the party the ambience that hiring the £5,000 DJ was trying to achieve, leaving considerable change. Customers would have bought into the product itself, which was the club, not the name on the flyer.

Rory’s example can be used across every business…

Most recently, with our gourmet fast food restaurant, Chicken & Blues, we made the decision to give away free Apples during lunch periods (midday-5pm) to everyone that makes a lunch order over the counter. The ‘badge value’ of this, and the immediate response from customers, has been interesting to watch.

We obviously buy Apples in large quantities, so the unit price for us is negligible. If we were to offer our customers a discount from their bill, to the value of what an Apple costs us to give away, it would generate zero uplift in sales.

However, when offering a complimentary and health conscious Apple to a customer that isn’t expecting it, the actual value of the giveaway is irrelevant, the gesture is perceived to be of much higher value than the product itself. It breeds good feeling, loyalty, and positive word of mouth.

You can’t pay for that.

As always, thanks for reading.