The illusion of control, Optimism bias, Blue Apron Advertising

Episode 15 Cakes, furniture, and making it easy

In this episode we discuss the secrets behind the paradox of friction. Removing friction is useful for behavior change, while adding friction is useful for creating belief in the quality of a product.

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00:00 / 23:27

Episode Transcript

MichaelAaron: Welcome back to the Behavioral Science for Brands Podcast. I'm MichaelAaron Flicker.
Richard: And I'm Richard Shotton.
MichaelAaron: Today we're talking cakes, furniture, and making it easy. Let's get into it. So today's case study is really dissecting Blue Apron, which was a company that created a category. Richard, have you ever used a meal prep box before?
Richard: I have. I've never used Blue Apron. I don't think they ever launched in Britain. Gusto is the one that's probably the Market leader over in the UK.
MichaelAaron: And the experience is what with Gusto? You get the boxes. Have they got all the food in it, or just some of the food?
Richard: All the food. So, you get a big box. You pick three or six meals, whatever you want, and they send you all the ingredients, often sliced and diced, and I think really nicely. They give you all the little spices and oils, the stuff that if you were shopping for yourself, you probably wouldn't go and buy because who wants a 200 gram bag of something you might just use once? It's those little details that add, I think, to the quality.
MichaelAaron: And how does it make you feel when you put all those things together, when you make the meal with Gusto?
Richard: I feel like a proper chef when I'm doing it. Now I'm probably not a complete foodish artist. Some people might be rolling their eyes, but, I love it. It has meant that my repertoire of what I cook has gone from a dozen probably staples to a far, far broader range now.
MichaelAaron: And I think that's the insight Blue Apron first had. That the feeling of being a chef was really appealing to people. To make high quality food at home was really desirable.
Richard: Yes. I think you're absolutely right. If Blue Apron had just sent out a load of microwave meals - and let's say in this hypothetical world, they tasted just as nice - people wouldn't appreciate it because they hadn't had any involvement. That is absolutely the case.
MichaelAaron: And so that was really what Blue Apron saw in the potential of these meal-in-a-box subscription companies, that they could give people the satisfaction of cooking a home cooked meal with high quality ingredients without the need to go shopping and without the uncertainty of how to do it well.
Richard: Yeah, that, I think that insight - and there's a slight contradiction here that I think we'll come to - but that first insight of what people do is often not what they're motivated to do, it's what's easy. And the removal of friction tends to have a disproportionate effect. So, by making it easier, to cook a variety of meals, it has a much bigger change on people's diets than maybe what most brands would've done, which is try and persuade you of the merits of variety and the merits of having a varied diet.
MichaelAaron: Makes great sense. So, this starts in 2012 and it inspires a crowd of competitors in America: Hello Fresh, Purple Carrot, Plated, Freshly, Home Chef, Green Chef, all of which deliver recipes and pre-measured ingredients to customers’ doors. The pitch is kind of all are the same in their own way. Save time, mental energy and effort while still cooking for yourself at your home. So successful is Blue Apron at the beginning that they capture 200 million in venture capital. They are rewarded for their first mover advantage, but all of this starts to unravel for them as a company. The week they want to IPO, Amazon makes a 13.7 billion investment in the grocery category where they purchase Whole Foods and investor confidence in Blue Apron begins to sink. So, you know, one of these interesting stories we often profile, great companies or great brands that have done amazing things and are still sailing high. Today, we're looking at Blue Apron because of some of the original insights that help spur the brand, even if those haven't translated to business success in 2023 and beyond.
Richard: Yeah, and I think sometimes you can have a great insight as a brand, but either through forces out of your control or the fact that you don't execute those insights brilliantly, the results could not be as good as you wanted, but it's still interesting to look at the insights because they can be applied by other brands, and if they can execute them better than they, they can hopefully have better results. So, I also love those names that you've said. I hadn't heard of most of those brands.
MichaelAaron: Right. I mean, don’t they just make your mouth and water? They just make me want to put on an apron.
Richard: I actually prefer Purple Carrot. Supposedly- have you heard this story? That carrots were originally purple.
MichaelAaron: No, I didn't know this.
Richard: So, the Dutch, let's say the 16th century. They've got the house of Orange is their royal family. They cross breed various different carrots to get this bright orange color. Kind of celebrate the royal family. And it's them that took off. So, carrots weren't originally orange. It's certainly the story.
MichaelAaron: Do all British people know of monarchies as well as you do?
Richard: Yeah. That's all we do. We just learn about monarchs at school.
MichaelAaron: All right, so behavioral scientists would tell us that if you remove friction, you can increase behavior.
Richard: Yeah, absolutely. It is a central theme of behavioral science. Now, if people are rolling their eyes and thinking, well, that's bloody obvious, the point is, what behavioral science adds is the fact that the impact of that removal is often out of keel to our expectations.
MichaelAaron: Meaning that it is much greater.
Richard: Yes, yes. Tiny bit of friction removed, you have an outsized effect. In the world of food or my favorite studies is by a psychological Paul Rozin, University of Pennsylvania, 2011. Works with the cafeteria and alternates how some of the healthy foods are laid out.
Richard: So sometimes you go into the cafeteria and when you look at the bowl of broccoli, there's a spoon to help yourself with. Sometimes it's tongs. Sometimes people go in and the bowl of broccoli is right by the queue, other times he just pushes the bowl 10 inches away. Now those are tiny, tiny changes.
Richard: They are tiny bits of friction. Tongs are a little bit less easy than a spoon. Being 10 inches away involves a little bit of movement, but even those really, really small bits of friction change behavior. If you remove them, you get an 8 to 16% improvement in the volume of healthy food. Now, people's interest in health, their motivation to buy those foods haven't changed. If you focus on friction, you can often have a bigger effect than trying to change people's motivation.
MichaelAaron: I was at Google's New York headquarters last week and Google famously has unlimited food for their employees and they can share them with their guests when they come. When you walk up to the refrigerators in the staff, in the staff areas, healthy drinks are at eye level and available to be seen right through the glass doors. Unhealthy drinks are at the bottom level behind frosted glass. Same thing with their snacks. Healthy snacks are on the top of the countertops and in the first drawer. The more unhealthy the snack, the lower they go down. Same principle here.
Richard: Absolutely. And again, you're not restricting people's freedom. They're still completely welcome to take the can of Coke or the other soda. But it's applying this principle of ease. They know that even those tiny, tiny little barriers will put off some people from consuming stuff that in the long term probably isn't that great for them.
MichaelAaron: So, we're learning that behavioral science teaches us that the removal of friction increases behavior. But Blue Apron didn't remove all the friction. Is the recommendation to lose all friction if possible?
Richard: Now that's a fascinating part. So you have this balance. What we know from experiment after experiment is, if you want to encourage behavior change, removing friction has a bigger than expected effect.
Richard: However, it's not just behavior change that brands are interested in. They often also want to change people's perception about the quality. And this is where the balance comes in. If in a hypothetical world, Blue Apron had sent out these wonderful meals that you just stuck in the oven for two minutes, the microwave for two minutes, and you've got exactly the same tasting meal as the you cook, the argument from behavioral science would be people would appreciate them less.
Richard: There is a well-known idea called the IKEA effect. So, this suggests that the more effort you put into something, the more you appreciate it. So the study was from 2012 from Dan Ari Ailey, who's at Duke and Michael Norton. And in their study they recruit a group of people, they bring them into their lab and half of them are shown an IKEA box. So it's a preassembled IKEA box created by a professional builder. And that group are asked, do they want to buy this box? And on average people offer 48 cents for the box. Next group go through the same process, but rather than there being the preassembled box, there's just the raw material, right? They spend 10, 15, 20 minutes building this box. They are then asked how much they're prepared to pay, and the average amount is 78 cents. So, you've got this 63% improvement in willingness to pay based on whether or not people put effort into the creation of the product.
Richard: So, they call this the IKEA effect, and the central point is the more effort you put into something, the more you appreciate it. Now bring this back to Blue Apron, and here's where I think the balance is so nice. It's easy enough that you actually cook from scratch. It's easy enough that you try all these new meals, but they haven't made it so simple that you don't feel like a chef by allowing some involvement for the audience, you harness the IKEA effect and people appreciate the food that little bit more.
MichaelAaron: You know, one of the best parts of that paper that Dan Ari Ailey, wrote was how they started, which they call the Betty Crocker story. And the Betty Crocker story is originally cake mix was just at taking the package, ripping off the top, pouring the powder in, adding water, stirring, and throwing it in. And really it didn't get the uptake that you would hope for because people didn't feel like they were really making it.
MichaelAaron: Add cracking an egg and whisking it, and now all of a sudden people feel like they're bakers. And so it's just that little bit more effort. It's just that sense of really adding that special ingredient that helps make it really feel that you're making the IKEA effect happen.
Richard: Yeah. That’s a lovely story that inspired them for their paper. I think what it sets up for a marketer is you've got to use your expertise here. You know, you've got to match which of these seemingly contradictory biases you should apply for your challenge. If you just want to change people's behavior and you don't care about product perception, remove friction relentlessly.
Richard: However, let's say you charge a premium for your product, you need people to think it's high quality. Be very careful, a little bit of friction at the right moment, will boost those perceptions of your products and can pay back. So at the moment, one of the things that noticeable in the food and drink market is San Pellegrino. So they have redesigned their cans and they've got rid of that foil label? I think that's a mistake. They charge a premium. That foil label involves a little bit of effort. It's completely distinctive. I think removing that might-
MichaelAaron: Degrade from the brand?
Richard: Yeah. They're no longer harnessing the IKEA effect. They'll be appreciated less, and people might start wondering why are they paying a little bit extra for that product?
MichaelAaron: Certainly that could be the case for existing users. And then think about new users that are entering the category for the first time. Why would you ever choose more? Why would you ever pay more for that product?
Richard: The danger is sometimes people approach brands in a completely narrow, logical mindset. And there might have been an accountant thinking, well, why are we spending 2 cents to every can? It's really hitting our margins. Part of that expenditure gives you the magic and the excitement that makes it worth paying for in the first place. So be very, very careful about removing seemingly unnecessary elements of your product like that.
MichaelAaron: Said it another way, removing points of distinction.
Richard: Yeah, you're right. It's a real world example. So I think there are two parts here. One is the bit of friction might make you appreciate the product more, but secondly, it's the one thing that makes it stand out from every other soda. And we know from the Von Restorff effect, we notice and remember what's distinctive. So I think, there's a double whammy there.
MichaelAaron: Von Restorff effect coming back from season one, episode five: Absolut. We talk about how they use the Von Restorff effect to stand out against all Russian vodkas.
Richard: Yeah. It's not that Swedishness is per se, great provenance for a vodka brand, but if you are in a sea of Russianness, being Swedish will make you stand out. It's the distinctiveness that's important, not the country itself.
MichaelAaron: Alright, I think it's about time for a break. When we come back, we're going to talk about the other side of adding a little bit of friction and what behavioral science could teach us there.
MichaelAaron: Behavioral Science for Brands is brought to you today by Method 1, a digital-first marketing company that brings science to the art of persuasion. They're behavior change experts who solve business challenges by creating meaningful connections with consumers. Method1 has deep disciplines across many brand categories. To unlock behavior change that fuels brand growth, visit them at method1.com
MichaelAaron: And we're back. Before we went to break, Richard, you and I were really discussing this idea of threading the needle. We want to remove friction, but we don't want no friction because then you don't have that illusion of effort. And so, what can behavioral science teach us about how much effort to add and maybe what are the right types of effort to add?
Richard: Yeah, there’s a few studies that might be helpful. I think probably the most helpful study, it's one of my favorites. It's from 1975 and it's from a wonderful psychologist called Ellen Langer. So, she was at Harvard and she goes to an office block and she sells people lottery tickets for a dollar.
Richard: Sometimes though, she lets people pick their numbers, other times people are just given the numbers. She waits a week, goes back to that office block, and just before the lottery draw, she tries to buy the tickets back off people. Now, the people who were given their numbers had no degree of control, no choice. They want $1.96 on average to sell them back. So more than they paid; that's an idea called the endowment effect. Once we own something, we value it more. But the interesting bit in the study is not the endowment effect, it's the difference in valuation. Between the no choice group and the choice group-
MichaelAaron: Everybody has the endowment effect.
Richard: Everybody does, yep. But the people who picked their numbers, they want $8.67 on average to sell their ticket back to Langer. So, you've got this fourfold increase in valuation of what is a commodity. Now there's no greater chance of winning, but people value that lottery ticket four times more if there has been this cursory degree of control. What Langer argues is one of the biggest drives of human behavior is our desire for a sense of agency, our desire for a sense of control. So, if you are a brand, if you are going to add extra work in, one of the things you can do, if you're going to add this extra friction in is think, can I give my customer even a cursory degree of choice in the product I give them?
Richard: So, let's say you give people a reward for buying your products. What most brands would do is say, okay, you buy a product and you get a $50 Amazon voucher. What Langer would say is, give people a choice. You either have a $50 Amazon voucher, or you get a voucher for a Domino's Pizza. Even in this imaginary scenario, if every one of your customers picks the Amazon voucher, what you shouldn't do is get rid of the Domino's voucher. It's very presence makes the Amazon voucher seen as more valuable, more rewarding, because people have picked it over an alternative. So, give people that degree of choice, and when you evaluate those options, Don't get rid of the secondary option, even if it performs poorly. It is a rock.
MichaelAaron: I would say you see this very commonly in loyalty programs or in reward programs across many different industries. In airlines, you get your choice benefits with your airline, you choose between this or that. With credit card programs, you could choose how to use your rewards. It feels like that choice is what gives people the satisfaction.
Richard: Yeah, absolutely. The same benefit feels better if someone has actively picked it rather than they were given it. Even if they're a massive Amazon fan, the fact there was an alternative will make it better. You've just, I suppose, got to think as a brand, be careful, like with all these things, not to push it too far.
Richard: We’re going back to the principle of ease. If you give people a hundred different things to pick for 10 different variables, then you're going to start irritating. And I think what you've honestly got to do is recognize how interested the customer is in that category, how familiar they are with that category, and then your skill at presenting options in meaningfully different ways. And if you can balance those three or four different ideas off, you can hopefully avoid the problem of excess choice.
MichaelAaron: So, as we think about this idea of the illusion of control, you can really see how it touches so many areas of marketing. When you think about how you even show up at the shelf as a brand, you see a single product have one shelf facing, you're really saying, choose my brand or choose another brand. If you show up at the shelf and you have three shelf facings of different products, variations on your product, different sizes, now you're choosing between your brand and instead of somebody else.
Richard: Yeah, it shifts the conversation from should I buy the brand to what variant of the brand I should buy.
MichaelAaron: Yeah, that's right. And I think that that's really something that can get overlooked when we're doing product development with brands. So often we're asking, well, what's the white space? Or so often we're asking, what else can the brand credibly own? Those are important questions, but just having another product on shelf, helps us choose between one instead of choosing something else altogether.
MichaelAaron: And when we have the opportunity, Richard, we also love to throw out ways for our listeners to become better professionals in their job or ways for agencies to better serve their clients. And you and I were talking at the break, you know this really applies even to the way that you give options in a professional setting.
MichaelAaron: If you go into a client as an agency or as an outside consultant with one option, you are asking them to buy it or to not buy it. If you go in with three options, you're saying, “which of these do you want to buy?” and you're comparing and contrasting them. Same thing if you work in a brand and you're talking to your boss.
MichaelAaron: If you go to your boss with, this is my recommendation, you're only giving that boss the chance to say, I'll buy it or I won't buy it. Not here's three options that we can buy between them.
Richard: And the danger there is if you are a professional and you are purchasing from agency. If you don't comment, if you don't apply your expertise, you probably feel a bit remiss. People are going be wondering, well, why is that person getting paid a big salary if they are not changing what comes in from the agency? So, you are giving people a single option, you're forcing them on occasion to reject them. Better as absolutely, as you say, give people a couple of options to choose between rather than the options being yes or no.
MichaelAaron: And as marketers, especially when we sell within our organization or within or to our clients, becoming masters of the illusion of control helps everyone feel that they weighed in before they bought it. Helps everybody feel that they helped build this final solution instead of just as you say, buying it and then “what value am I adding?” So Richard, we always like to come to a close with the key things we want our listeners to take away. What are they today?
Richard: We have discussed two principles, which seem contradictory at first, sometimes about removing friction, having an outsized effect, sometimes adding in friction. The point is though, that what bias you should be applying depends on the challenge you're facing. If it is a question of behavior change, if you just want people to do things differently, absolutely relentlessly, remove friction. If it's a question of belief, if you want people to believe your product is high quality, believe it's better, then you should be thinking about adding in a dash of friction at the right moment. And one of those types of friction is to think, how can I give people a sense of control over the product or service? Give them a small amount of options. That will make them appreciate whatever they pick that little bit more.
MichaelAaron: We're coming to a close Richard. And the question… We've been talking about savory meals, we've been talking about delicious cooking. When the Shottons are at home, what's the favorite dish to cook at home?
Richard: Ooh, okay. I think we're going to say favorite food, and I was going to say Twiglets.
MichaelAaron: Well, hold on, hold on. We're having a cross-the-pond discrepancy. What's a Twiglet?
Richard: A twiglet is a baked snack. It's not a crisp, it looks like a twig and it is covered in marmite flavor, so a kind of a yeast extract, which is a very salty, strong flavor. Yeah. The danger was, I think I must have mentioned to my mom, how much I like these. And then basically every year, I get more Twiglets than anyone knows what to do with.
MichaelAaron: I mentioned to my mother that one of my favorite cookies is a Mallomars, which is a regional cookie. A graham cracker base and a marshmallow on top, covered in chocolate. And every fall you can bet there'll be a Mallomars box at my house. And a favorite thing to cook at home?
Richard: Favorite thing to cook? I would say… I must admit I'm a big fan of mushrooms, so some type of fried mushroom, a variety of different mushrooms, chuck them in there. That would be high up there.
MichaelAaron: Ah, that's a great one. And for me, I always believed I was an excellent stir fry chef. So, I have a wok. And I season the wok with the right oils. And on the second date with my then-girlfriend, future wife, I invited her to my apartment and I said, let me cook you dinner. I will stir fry for you. And when she got there, I asked her to cut the vegetables. I thought it was an interactive experience. She will to this day tell everybody who asks, that was not her expectation that she would be a sous chef while we cooked together. So woking, or stir frying, is my favorite thing to do. But I have to do it alone now.
Richard: Oh, okay. When I first started going out to my wife, I misread a satay recipe and I put tablespoons of peanut butter in it, instead of teaspoons. One of the most disgusting meals I've ever sat through.
MichaelAaron: But I'm sure it was fun nonetheless.
Richard: Yes, yeah, I think we had enough drinks to not care by the end of the evening. But, I’m not a great chef.
MichaelAaron: Neither of us are.
MichaelAaron: Thanks for tuning in today for this episode of Behavioral Science for Brands. I'm MichaelAaron Flicker.
Richard: And I'm Richard Shotton.
MichaelAaron: If you've used friction to help grow your brands, we'd love to hear about it. Email us at [email protected] or drop us a comment on any of our social channels.

Episode Highlights

Nudge to Nobesity

5:30 - 6:27

Paul Rozin's study proves that removal of friction can significantly increase behavior, even with tiny changes in friction.

The IKEA Effect

8:10 - 9:42

The more effort people put into something, the more they appreciate it. Blue Apron strikes the balance between ease of cooking and allowing some involvement for the audience, which harnesses the IKEA effect and makes people appreciate the quality of the meals more.

Illusion of Control

14:00 - 18:15

Psychologist Ellen Langer argues that one of the biggest drives of human behavior is our desire for a sense of control. The more you can give your customers control over certain elements of your product, the more you will incite their positive feeling of control and encourage conversions.

Resources & Useful Links

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