Making marketing decisions based on psychology

Do you account for perceived value?

Businesses often want to spend their marketing budget to increase and enhance the public’s opinion of their product or service. Straightforward? Not exactly. If a few dollars spent here and there could always produce new customers or happier existing customers, marketing would be, well, boring.

Rory Sutherland’s TED talk titled “Perspective is Everything”, explains that value is more than what is “real” (the product or service we offer). Value is also based on perspective, the context we see the product or service in. Perspective is psychological value and can be powerful when given equal consideration with technological and economical solutions.

Changing vs. Reframing

Economy + Technology

If a business identifies that their customers are dissatisfied, the first response is often: “How can we change what we do to make our customers happier?” This seems logical. Unfortunately, as Sutherland points out, solutions to problems like this often take the technological and economical approach:

  • What improvements can we make to the product or service?
  • How much money can we spend to do it?

Case Study: Eurostar, £6 million later


case study Eurostar

Sutherland uses a fascinating example with the Eurostar, a train travelling between Paris and London. The problem was that the travelers felt that the trip was too long. Their solution? Make the trip shorter.

6 million pounds was spent to reduce the journey time between the two cities by 40 minutes.

At some point, someone must have asked, “Why do people want a shorter trip?”

  • It’s boring
  • Time spent on the train is time wasted not working
  • You’re cut off from the world for that time period

Sure, making the trip shorter does address that problem; however, what if psychology took over the driver’s seat?

Sutherland explains that for roughly 0.01% of that budget, they could have given the trains wifi, making the trip more enjoyable and useful for those commuting for business.

The trip’s journey length doesn’t change, but the perception of the time spent on that train would have.

“Why were we not given the chance to solve the problem psychologically? Probably because there is an imbalance, an asymmetry in the way we treat create emotionally driven psychological ideas versus the way we treat rational numerical spreadsheet driven ideas.” – Rory Sutherland

The train’s time length didn’t necessarily need to change, but the trip needed a psychological reframing.


The sweet spot, according to Sutherland, is when technology, economics, and psychology are given equal weight when solving problems in business.

Economics + Technology + Psychology

Reframing: People like choices

Sutherland draws our attention to two groups of people with similar situations, but completely different levels of satisfaction: pensioners and the unemployed.

Both, those living on pensions and those lacking employment, have too much time, but not enough money. Interestingly, their outlook on their own situation couldn’t be more opposite. Pensioners are happy with their excess of time and limited budget. What’s the difference?

Pensioners feel like they have a choice.

Case Study: Waiting on Transit

case  study  transit

Similarly, Sutherland puts this concept of reframing into context with the case of the London Underground. The single best improvement in passenger satisfaction that the underground ever experienced was not when they added trains; it wasn’t when they made trains travel more frequently. Instead, the best result per pound spent was when they put dot-matrix display boards on their platforms.

Passengers didn’t seem to mind the wait as long as they knew exactly how long it was going to be.

“Waiting 7 minutes for a train with a countdown clock is less frustrating and irritating than waiting 4 minutes, knuckle biting, thinking, ‘When is this damn train going to damn-well arrive.’” – Rory Sutherland

Let’s transfer this reframing of perspective to Toronto and to the popularity of apps like Rocket Man or Rocket Radar with the city’s transit riders:

“A few years ago, the TTC did something surprisingly cool. It met with its crankiest critics—Toronto’s transit-obsessed hackers and bloggers—to help make the so-called better way even better.

The process began with a full-day gathering called TransitCamp, where the two groups sought creative ways to improve the TTC. This opened the door to further collaboration, and the TTC later released schedule and real-time GPS data for the city’s programmers to play with,”#reported Jesse Brown.

These “hackers” used the GPS data to create apps that tell riders exactly when their bus or streetcar is going to arrive and then the bloggers informed the public about it.

Adam Schwabe, the creator of Rocket Radar, said that he created the app, “[To] answer one question – ‘Where the hell is my streetcar?’” He said, “The inspiration came from watching people teeter off the curb, or right out into the road just to try and get a glimpse of the next streetcar coming over the horizon.”#

When a transit rider can look at their app and see when their bus or streetcar is going to arrive, their waiting immediately turns into a choice.

The only thing that the TTC had to do was release the GPS data into the hands of people who could reframe the wait times.

If perspective value is lower than real value

A perceived improvement your customers actually care about is much better than spending money on value your customers don’t even know exists.

Case Study: UK Post Office Almost Breaks

case study uk post office

The UK Post Office, as Sutherland relays, at one time, decided that their 98% success rate of delivering first class mail the next day wasn’t good enough. They wanted it to be 99%. Their efforts to push this number up almost broke the organization.

Sutherland says that if they had asked the public what percentage of first class mail they think actually arrives the next day, the average would have said between 50-60%.

“If your perception is much worse than your reality, what on earth are you doing trying to change the reality?” – Rory Sutherland

He says that the post’s first step should have been to tell people that they have a 98% success rate on first class mail arriving the next day. He goes on to tease that a better idea would be to tell the public that the UK post has a better success rate than the German post does: “Generally, in the UK, if you want to make people happy, just tell them that they’re doing it better than the Germans!”

Sutherland is making a joke, but his point is valid. If you choose your frame of reference carefully, the perceived value, which is the actual value, is transformed.


In the marketing world, understanding which parts of a business need a tweak in perspective as opposed to “real” value is often the difference between money well spent and money that seems to disappear with no results.

When in doubt, ask an expert

Fully understanding perspective value for your business is often an impossible task because it requires an outside viewer, someone who wouldn’t know everything about the real value you offer and could evaluate the perceived value.

Companies should seek agencies who will take technology, psychology, and economics all into account to form a strategy that adds as much value as possible. Go with an objective in mind, not a set of deliverables. Afterall, you don’t go to a doctor with a set of prescriptions, but rather, with a problem, looking for a solution.

An adjustment in your own perception about how you should spend your marketing dollars can leave space for technology, economics, and psychology to have equal voice in your marketing strategy.

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