About this episode
Michael explains that people often struggle because "adding and adding must be more effective," yet humans are "more confident when just one advantage is presented." He shares that Five Guys succeeded because they "only do burgers and fries" and that "if you say you are best at one thing most of all, they're more likely to believe that." He emphasizes that "buyers…have a top force-ranked prioritization of the most important thing," and focusing on the thing you are "best in the world at" is "more believable and more memorable." On pricing, he notes that "thinking is to humans like swimming is to cats. They can do it. They just prefer not to," and the brain "uses twenty percent of the calories in your body." He explains that humans rely on shortcuts and that price is "a relativity game." He describes how Red Bull "broke the comparison" by avoiding the soda can format and launched at "two dollars and fifty cents" instead of one dollar. He explains left-digit bias: "Forty-nine ninety-nine is going to be a much more attractive price than fifty dollars," and that ending in a seven "feels much more specific." He describes how indulgent framing changed behavior: "sweet sizzling plant-based beans and crispy shallots" increased selection "twenty-five percent more," while "light and low carb" suppressed it. He states that appealing to the emotional side "will always feel more indulgent and will always be more appealing," and that consulting services should focus on "what does the buyer really want" and how to communicate emotionally, not only rationally. On scarcity, he shows that breaking enjoyment boosts desire. Pumpkin Spice Latte sells because "they decided to make it for a limited time only," and the shorter deadline in a voucher study produced a "four and a half times increase." He warns that in professional services "you have to be careful that it's still believable." Time scarcity rarely works; instead, "we only have three seats left in this class" or "we only have room for two more clients to onboard this quarter." Michael explains that nostalgia reduces price sensitivity, noting people were willing to pay "three times more" when feeling nostalgic. He says social connectedness lowers price concerns: "there will be less pricing sensitivity when there's higher social connectedness." He points out that many consultants think this is about likability, but "that's not actually what the science says is happening." He introduces the publicity principle — "if someone revealed what you were doing, would you be ashamed or embarrassed by it?" — and the grandma principle: "if you had to tell your grandmother the way you landed that big account," would you feel proud? On humor, he explains that humor creates "higher attention," "higher positive emotions," and "higher purchase intent," but jokes must reinforce the brand or they become "the vampire
