Episode Transcript
[00:00:00] Speaker A: Mike, welcome aboard to the show. I'm so happy to have you on today.
[00:00:04] Speaker B: The pleasure is all mine.
[00:00:06] Speaker A: You're very kind. Mike, I want to ask you about this idea of expectations.
We, you know, when we get disappointed, we are obviously unhappy. But you have some really interesting arguments about how we can basically avoid disappointments in designing our products.
I want to hear more about this.
[00:00:30] Speaker B: Well, I want to reflect actually on a quote I heard yesterday. And apparently the person who mentioned this quote mentioned that it was from Bill Gates. And I'm going to paraphrase here because I didn't hear the quote firsthand, but it was something similar to that. We as humans overestimate what we can do in 10 years and underestimate what we can do in one. And I was like, that is. That is spot on. If I was to try to say that, it would be three paragraphs long and not, as, you know, succinct and to the point. But I think that we think that we can, you know, before we start a record, we talk about, you know, biases and thinking fast and slow.
You know, where we as humans kind of get stuck in this decision making cycle or loop that anything is possible, but what's in front of us is daunting or challenging. So we have these expectations that, you know, anything can be completed, but how do we actually get there? And what does getting there look like?
[00:01:35] Speaker A: I mean, there's so much to unpack there.
I really love the example you gave about Delta and what they were doing, because it's kind of weird, right? Why would. Why would they. And the quote was this you or them? I don't know. I want to, I want to know more about this. But the quote that I saw was, a moving airplane is a happy airplane. And I'll ask our guests, our audience to just wait with us for a second because it all comes together.
[00:02:03] Speaker B: The story behind this is. So Delta Airlines identified that they were getting some angry tweets from customers about cancellations or flights being delayed. And that's fairly standard. If you're stuck, you expect to get to point B, you know, from wherever you are, point A, by a specific time. And even if the flight lands at 1201, and it was originally designed to land at exactly a 12, you're still a minute late. Damn you, Delta. So diving further into these, you know, negative sentiment tweets or angry tweets from customers, what Delta identified was, is that these specific tweets were coming from planes that were on the tarmac, but not necessarily delayed. And so what they identified was, so they're located on the tarmac, but haven't taken off yet, but not delayed. So why are people complaining? And what they identified was, is that the plane was, you know, in line to take off. Now, as a passenger in a plane, whether you're an aisle seat, middle seat, window seat, you can kind of see up, but you can see how many planes are in front of you. Can't see forward because your vision is restricted side by side. So people, once the airplane stops moving, we think like, oh, we're stuck. We're not moving. We're going to be late. And so then Delta, what they identified was, how can we change that perception? Now, this started in Atlanta, where Delta Airlines is headquartered. So because Delta Airlines is the primary airline, they're the anchor airline, they have the ability to really maneuver most of the airport with limited restriction. So they started driving their aircraft around a long route to get to the takeoff position instead of waiting in line. So whether it's three minutes from the gate to take off or it's four minutes, the aircraft would still move for three to four minutes, just moving simultaneously instead of waiting. So therefore, the. The. The phrase inside Delta is a moving aircraft and a happy aircraft. And of course, you know, once the aircraft kept moving, the angry tweets and the complaints reduced.
[00:04:05] Speaker A: I mean, I don't know how to feel about this. I mean, am I. Am I angry because I'm basically being cheated because no real value, or am I happy because I'm objectively happy and, you know, they're not causing me stress? So what they're doing actually is reducing stress from my experience. So I just don't know how to feel about this. But this is incredibly common. I mean, this idea of expectations versus reality, it happens everywhere.
[00:04:34] Speaker B: As a consumer, sometimes I'm like, oh, that's good. I like what they did here. And one of those examples is many years ago, shopping at Ikea. And as I'm navigating through the store, you know, first, when you park at Ikea, let's talk expectations. When you park in Ikea, you see this large warehouse. So we are cognitively primed to assume that anything we want or need is going to be in that store. So then we walk in the front door, we start navigating through the ikea. You can see the other end of the store. Limited view. There's no windows, no doors, no clocks, no natural light. It looks like a casino. The same architecture design. Casinos also design the layout of an Ikea. But then when you get to the area where you want to buy that one item you came for.
If the item isn't available, most stores would say unavailable. You know, back ordered, see sales associate order online or out of stock or something similar to Ikea doesn't say any of those. Ikea uses the phrase oversold because out of stock, back ordered, see a sales associate order online blames Ikea. And so we as consumers say, darn you, ikea, because of your pro logistics. I can't get my desk chair or whatever it might be. But when it's oversold, we're blaming other consumers. But in that same process and that same message, we're showing social proof. We're also validating our choice and saying, like, well, you know what? I picked a good desk. I picked a good chair. I feel better in my choice, even though I didn't get access to it. So these small things, and even they're like, I'm like, oh, that's really good. You know, as a consumer, but as a researcher, things always pop up in weird ways. So let's go back maybe, I don't know, eight, nine years. We're doing this study for this, you know, large bank. If I said the bank's name, most, most listeners probably know who it is. And so they have this wealth management division and they have this product that is designed for a very affluent group. Their conversion rate for this wealth management product was something like, I'm going to paraphrase here, like 2.14%. They weren't meeting their 2% conversion rate. And so they asked us to really dive in and look at, you know, the avatar, the campaign, what's really missing. And us and our researchers, we dove in and we're like, we don't see anything wrong. This looks like it should be. So where's the disconnect? Why is it not meeting this objective? But then after a little more analysis, we identified one key thing, is that in the avatar of the person that should be targeted, one key attribute was missing, and that was the person that's targeted should be a person who names their home. What does that mean? It's like, well, if you drive in someone's driveway and their mailbox says the cottages at the farm, or whatever name it has in the mailbox, the person who names their house on top of everything else was the 1 identifier. And then a year post research, the conversion rate was something like 4.02%. So nearly double.
[00:07:32] Speaker A: Right.
[00:07:32] Speaker B: So that's, that's of what their goal was. So those small things, like blow your Mind is like, I mean, as a researcher, like, that's so ridiculous. But when you look at the data, it makes sense.
[00:07:43] Speaker A: So what this is so interesting. How did they even get the data that the, that these clients were naming their home? I mean, that's not something you would find in any research database.
[00:07:53] Speaker B: No, that, that was very challenging. So the study started off as quantitative, and then it was really a qualitative or mixed methods analysis that really started to identify some of the behaviors. So when you're looking at who you're targeting, I mean, there's so many different ways to build a customer or target avatar. But without engaging in like, analysis paralysis and having too much information, I would say focus on like four key areas. Demographic, socioeconomic status, behavior, and geography. And when they look at like the event diagram of behavior and geography where those two come to meet, what does that person have in common? Do they one live in a zip code or a subdivision that meets the socioeconomic status? Then what's the behavior of the person at their home? And then in several qualitative studies, what we found was, is that when people refer to their home, they were referring it to it in sort of the third person as a name, a named object.
[00:08:49] Speaker A: That's so interesting.
You know, what I noticed in kind of my, you know, professional stuff is that if you find a group that have already opted in to a certain concept that is incredibly important to you, the conversion rates just skyrocket. So one example, right, and this is a stupid one, but I was reaching out to people who are experts, they have books published, and I was reaching out to them just on LinkedIn. So there's no clear criteria that they should want to do a podcast.
Conversion rates abysmal, right?
Under under 5%.
Then I go to one of these podcast sites, right, where basically people have opted in to do a podcast. They say, I want to do this. Conversion rates 30%.
So this idea that, you know, people have already said yes, you just need to find that group and then talk to them. It's revolutionary. It's not what you would think, right? It's huge. I wanted to ask you another question, right. I was listening to one of your podcasts, by the way. You have a show, it's on your website, highly, highly recommended that everybody goes and listen to it, mention the name and the website name so people have a reference real quick.
[00:10:02] Speaker B: So it's Clicksuasian Labs and the website is clickswasion.com on the navbar should be a podcast tab.
[00:10:08] Speaker A: It's right there.
It's right there. So this concept of loss aversion, you've got to explain this to me because it is so counterintuitive.
It's not, not what you would expect.
[00:10:21] Speaker B: Well, loss aversion, and really, like a soft definition would be that we're placing more emphasis or more care or concern on the losses in our life more than our gains. So for example, if I was to say, here is a dollar bill. Congratulations, you won a contest. Here's a dollar. Oh, okay, I feel good, I'm happy, I want a dollar. But on the contrary, if I was to say, here's an invoice for a dollar like, woo, people are going to get mad. I owe you a. Have you lost your I owe you a dollar? No way. And the way we look at it, a good example is Netflix. I would say I'm going to assume most listeners have a Netflix subscription or at least some kind of streaming service. So let's say that the cost of that streaming service is $14.99 per month. Well, we don't come home from work and we don't say, ah, Netflix, so glad I have unlimited access to all these movies and shows.
Only pay $15 a month, right? No, we turn on our TV, we click the remote, we watch our shows and it's an escape. We don't think about the price, we don't think about the business model. But then randomly, once a year, twice a year, whatever it might be, Netflix is going to raise their price. They raise their price by $1 per month. So now it's $15.99 per month. And people lose their collective minds right now because Netflix raised it by a dollar. It's on cnn, msnbc, Fox News. It is the front page of the Wall Street Journal. Netflix is gouging. It's a dollar. What, what non important stuff do we spend a dollar on every day? And therefore, when we focus our decisions and our thought process on things that we lose more so than what we gain. And in a business perspective, it's like as a leader, do you focus on money as an expense or as an investment? Sort of the same kind of aspect.
[00:12:13] Speaker A: Yeah, I love that. I mean, I went through a real life experiment with this and they, and our professor, she gave half the class, I can't remember what it was like a toy or something. The other half, she didn't actually give them the toy. She just, she just put was on her desk and for half of the class she said, okay, how many people want to pay a dollar to get the toy? And Then for the other half, she said, how many people want to pay a dollar to keep their toy?
Now this sounds like the stupidest thing in the world, right? Because both of them basically need to pay a dollar to have the toy, but one already has it and is trying to keep it and the other doesn't have it. It's basically, you know, hands reach away and they're like, do I want this toy or not? Now you would expect. What would any insane person expect?
Same thing, right? Both groups are going to behave in the. Overwhelmingly, the people that already had that toy in their hand paid that dollar as opposed to people who didn't have it where like, meh, I don't want it. And that's ridiculous. That's completely ridiculous. And you know, loss aversion, which you just explained, it's that, right, they had it, they didn't want to lose it, as opposed to they didn't have it. And they're like, do I want this? That is mind boggling. I mean, it has so much impacts on, you know, how we think about sales, how we think about anything in life.
[00:13:31] Speaker B: We frame our messages. So I would assume that most people that took a psychology class in college came across what's known as the Asian disease scenario.
[00:13:42] Speaker A: And this is, I actually did not come across that. So you gotta share it real fast.
[00:13:45] Speaker B: Okay, so I'm not gonna be able to repeat the whole thing verbatim, but I'll paraphrase and give an abstract. So in scenario one, you're confronted with this. Asian disease is going to infect a large portion of the population.
And if you choose option A, you can save, you know, 600 people. But 200 people, these numbers are, I'm paraphrasing here. And 200 people are guaranteed to, you know, to die. And then when you look at the other two versions that a different group would get, the numbers are the same, but it's framed differently. Whereas you can, you know, save, but most people would choose the number the scenario that is most positively framed, even though the number of people that die or save don't change. So we're looking for the positive portion, right?
[00:14:30] Speaker A: That's exactly right. I mean, it's incredible, right? Our, our brains are basically reacting with emotion based on wording and we're not really stopping to think, wait, hold on, how many people? Actually, the situation is worse, right? Because it could be that the total quantities are not the same, but you'll pick the worst one because of how it's framed, right? So, so this can, you know, that's an equals among, you know, but it can actually be that actually you're choosing the worst situation because it's positively framed. It's just mind boggling how this works.
[00:15:03] Speaker B: The way that applies into sales would be something similar to if you were to say, well, the total cost to you is going to be $5, all right, or it's going to cost you $5, or the total amount is $5. We're removing sort of the pain of paying and taking away the price or the monetary aspect of the transaction.
[00:15:21] Speaker A: Right. Like should we explain this in, in percentages or should we explain this in, in dollars and cents? But if you calculate the percent and it's like, oh wait, hold on, I'm saving 15 cents, but it's 30% cheaper. But maybe I don't care about that at all.
It's these games that, that we're basically playing with ourselves. What about the 99? The do, like, why is something, you know, 399 and then on other companies, other products, you see them actually intentionally not pricing them as 99. What is that about?
[00:15:54] Speaker B: So there's a lot of studies here, but I'm going to explain this in this and we don't want to oversimplify. So first let's start with 9 or 9. When using prices, odd numbers are typically going to be more advantageous than even numbers because even numbers are easily divisible. If we were to say something's going to cost $16 and someone makes $8 an hour, then they know I'll have to work two hours to get by this item. But if it's $15.99 now, there's math involved, right? And so first of, it's an odd number. It's more difficult to divide. Now that puts a barrier for the person wanting to do math. And so they're just gonna see it as a different perspective. But then whether it's 99, 97, 95, there are different studies, but into the day they all come out to the same. It's really, it's just like that they're the same, but you're showing that it's not really $16, but it's cheaper or lower cost. But then some businesses have strategies where if it's, if it's a 99 at the end of the price, it means that that is the full price. If it's 97, it means it's going to be discounted in the near Future and it's 95, it's going to be, you know, potentially removed from the shelves. In the next like quarter or so. Now those are internal codes, have nothing to do with the consumer facing decision. But really a consumer facing, you know, I would say for, for most items Try to use a 999795 an odd number but the higher the ticket item and the higher the app. Let me phrase that, the higher the ticket cost and then the more affluent the audience zeros are just fine.
[00:17:25] Speaker A: Yeah, so, so that's, that's an incredibly interesting point. One is, and we need to bring a little bit of background here to you know, thinking fast and slow. But very simplistically the idea is that we make a huge amount of our decisions intuitively very quickly. Right? That's the thinking fast. And you know, many, many times we make mistakes in that decision process because of all these and there is more than a hundred of these biases and we've just talked about two or three here so far. But you basically make mistakes due to these, the psychology that is impacting you and what you said about the non divisible, the 9 9, you're basically stopping people from making a more rational decision in some way. That, that is, that is so interesting. And, and what I would argue is that maybe what more people want to do is actually consider what are the things that are preventing them from making an irrational decision.
[00:18:25] Speaker B: Well I mean that, that, that, that's another whole argument because what is irrational and what is an irrational decision? If we look at the definition of say you know, traditional economics is that you know, a consumer is making decisions or a person's making decisions for utilitarian purposes only. But then behavioral economics suggests that people are making decisions to fulfill a need, a want or desire. So you know, we can say, well.
[00:18:51] Speaker A: This might be, let's just explain the utilitarian.
We're not all economists, utility.
[00:18:57] Speaker B: So the definition I like to use for utilitarian is a life saving decision.
So if we categorize purchases in two ways, utilitarian or experiential. Utilitarian is going to be something that sustains life. And so I ask all the listeners to self reflect over the previous 30 days, how many purchases have you made that sustained life? Meaning that how many credit card swipes, how many checks have you signed, how many dollars have you handed over that sustains life? For most people, that purchase doesn't exist for a select few. Might be maybe a healthcare bill, prescription medication, but you know, let's say there's you know, a thousand people listening to this, you know, session right now. So I'm at clickswasian labs and it's about 2,000 square feet. We can probably put a bunch of bug beds in here and we can start cramming people and we can, we can all sleep in this building, we can live here, but we don't want to. We choose to have the three bedroom house with a fence and backyard based upon the experience it provides for us. So most of our decisions are based upon experience. More so than actually utility and then saving our life or giving us the best value for the lowest cost.
So we look at utility more of like, well, is that rational? Is it irrational? Because if you force someone or you know, we look at, I don't want to do that on a rabbit hole, but if we kind of like force someone to make decisions that are against their own will and desire, is that a good nudge? Is that, is that really something that is good for the utilitarian process or is it going to make them regret it and still go back to that prior decision later in the future?
[00:20:43] Speaker A: We're making decisions all the time. So how do we know we're making the right decision? What are the things that are influencing us in decision making?
[00:20:51] Speaker B: Well, you know, I think it's hard to say if we're making the right decision, maybe the best informed decision with the information available. And so even if you were to conduct, be, you know, have due diligence and conduct your research, you know, there's still a point where you have to say, I'm going to make a decision with the information available and then let's test and see how it works. Now we might fail, we might succeed, but what does failure look like?
And so that becomes sometimes a challenge as well. Because if the right decision is how we justify it, right? So we make decisions based upon the information that's available and sometimes information that really confirms what we originally thought. And regardless of how much due diligence that we use, there's, there's always going to be a bias. We can't eliminate every bias possible. And so let's say someone wants to conduct due diligence to make a decision on something, they maybe open up their Google browser, they search for items. Now first they're getting information that is readily available to them. And in marketing there's an old adage of the best place to hide a dead body is on the second page of Google. No one's going there, no one's going to scroll. Like I hope they, I hope they do scroll and look at, you know, conflicting statements and alternate viewpoints to kind of make that Informed decision. But most people are going to make a decision based upon the information that is readily available. But the information that's readily available is also influenced by ourselves as well. So let's say I have 40 tabs open on my Google Chrome browser. I think I probably triggered some people in the audience because we're all like that. And then we open up Google. But Google is going to give us results based upon the other tabs that are open in our browser. So in an, in an indirect way, it's already somewhat confirming what we already believe based on the other information that's already readily available to us.
[00:22:42] Speaker A: This is. So this is called confirmation bias. This is so much worse in social media.
[00:22:50] Speaker B: Absolutely. That algorithm is tailored specifically for us based upon things that we enjoy, things we search. And sometimes we feel like it's things we think about but haven't communicated yet. But we do have our behaviors that do tell the algorithm, hey, this is potentially something the person might like. And therefore it gives us a test, a little beta version. And if we remain on that video or engage in that video or that content for X number of seconds, then it's going to suggest to the algorithm that was potentially of interest to the person. Let's share some more with them.
[00:23:26] Speaker A: I have a discussion in the car with my wife.
There's no, you know, I didn't do a Google search. I'm not on social media. I didn't record anything.
And, you know, there's maybe three topics in that conversation. The next time I go to Google, there's an ad for one of those things. I'm like, you know, I'm like, you know, Uncle Sam is listening to everything that I'm saying. You know, Google is listening.
[00:23:51] Speaker B: So in a way, the software is listening. Now, it's not like John and, you know, software development's like, oh, you know, Mike said so. And so let's target him with a mattress ad. That's. That's not happening. No one specifically is listening to the conversation, but the microphone is listening, and it will pick up certain keywords, and it's its simplest form. Let's pick on Google for a moment. We'll go with Google Smart ads. Google Smart ads will identify if that person said a keyword. And based upon the other information in your phone, that information together combines well. You know what, this person may want an ad for a new headset, a new microphone, or a new car. And therefore you start receiving those ads that match that criteria.
But, you know, it's funny because a lot of us will complain like, why am I getting ads for that? I just mentioned it, or I thought about it, now I'm getting ads. But in a study to measured or wanted to measure how people perceive the targeted ads compared to the non targeted ads, most people appreciated and preferred the targeted ads. Because if we were talking about cars, mattresses, notepads, but we started to receive ads about windows and drywall, like, that has nothing to do with me. Why do I want that? It didn't feel like it was personal. It didn't feel like it was part of who I am and didn't match my behavior where I traveled through a journey throughout the Internet. So most people preferred the targeted version. But then the argument I also hear from a lot of people is, well, you know, they're just collecting all my data and they're going to use it against me.
Well, yes, data is being collected. But again, no, like John in software development is not listening and saying, I'm going to target that person specifically. But a lot of it is used for more good than bad. Whereas, let's say you're traveling from point A to point B, you're driving, and then your GPS says, hey, there's a traffic jam ahead. Would you like this alternate route, that traffic jam or that traffic ahead, that red line on the route, is that same data being collected? Because more people in that one location than anywhere else.
[00:25:54] Speaker A: I've had situations where I've just thought it, right, so can they read my mind? And the answer is no, obviously not. The reason is that because you thought about it, you noticed that ad. Well, you wouldn't have noticed it otherwise. So it's really you noticing the ad because you just talked about it. It's not the ad coming because you thought about it. And that kind of causality is something that's, that's, you know, we don't naturally understand that. It doesn't make sense. We're like, oh, I thought about it and then I saw the ad. So if this happened first and then this happened second, it must be a cause and effect. While in fact it can be the other way around. You could have had all those ads all the time and you just didn't notice it because you weren't thinking about it. Um, so. So, you know, it's definitely a very interesting dynamic happening here. I, I have a question to you, right? We, we just went down the whole rabbit hole of the elections.
Social psychology, I would argue, has, has been used extensively throughout the election. Um, one of the main tactics, and please keep me honest here, if you're seeing other things happening is what we call negativity. Bias is the they're eating the dogs, they're eating the cats. I mean, why did that spur us to so much action? It's crazy.
[00:27:13] Speaker B: Well, there's two sides. It spurred action on those who believe it was happening and those who believe it was not happening. And so we'll talk about both a little bit. For those that believe that Haitian immigrants were eating the dogs, were eating the cats is because they heard it from another source somewhere, maybe on social media, but someone that they believe is an authoritative figure or has that influence to give them truthful information. Now, what's factual and truthful, two different things. Factual things that actually happen. Truthful would be something that we believe is true because it comes from a reputable source. So let's say President Elect Donald Trump.
Well, back then in the debate, you know, candidate Donald Trump said, you know, they're eating the dogs, eating the cats. People who would support him or believe that have heard that in other channels that they believe is truthful as well. But then the other side of that coin, those who don't believe that is true are also hearing it's not true from channels and authoritative figures and influencers or influential sources that they believe are truthful as well.
[00:28:23] Speaker A: And I have a more philosophical question to you.
These approaches that politicians on the left and the right are using, is this benefiting America? Is this the right way? Is this helping them win? Is there a cross between the two? Is there a compromise? What would you put out as your, let's say, philosophical stance on the topic?
[00:28:43] Speaker B: Let's start with the end goal, right? The end goal is benefit America. So how I believe America might be benefited from candidate one to candidate two is probably different from what you believe would be benefit from America and then another person and another as well. But collectively, because the topics being discussed are nearly narrowed down to like three to four topics of why we're making a decision over Canada one, over Canada two. And then those key points really drive us to what would make America better. But the messages being shared are likely, the portions that are likely, the reasons or the justification for selecting candidate one over candidate two, or vice versa.
But some people, I would say, are well informed voters. But if you look at voter research over decades, most voters are a one policy voter. Like, one key point is what they're voting on, not a matrix of decisions. Whereas you got this policy, this policy, this policy. But if you look at politics in the news, whether it's, you know, the US Executive branch Or it's a legislative branch. So let's say, you know, we have 400 plus congressional members and 100 senators.
You know, you'll hear them on the news. They're going to say something like, well, the person that's from the other party did this. And I don't like that. But in reality, those two people have lunch together and they agree on policy that is not sexy enough for the news. It doesn't get clicks, it doesn't sell ads, and therefore it's not newsworthy. But in a way, they are making policy that does advance America. And whether there is all these or whether that, whether there's a Democrat in the White House or Republican in the White House or, you know, an independent or something else, it's going to take bipartisan effort to agree on policy and advance the country forward in whatever shape or form that looks like.
[00:30:36] Speaker A: My interpretation of this is that we have this superficial, like, Hollywood show happening on the news in social media. You know, it's, it's not tightly coupled to the actual policy decisions that are happening because it's too boring for us to care about that.
Is there any solution? I mean, it feels to me like we should all put the sensationalization aside and focus on the boring stuff. And that would really be better for, you know, every citizen, every American citizen.
[00:31:08] Speaker B: As social psychologists, we would desire to give information to the person we're targeting, whether it be politics, consumer, or even just like convincing someone to go on a road trip with us. We want to deliver that information to the recipient in a channel and a method that is advantageous to the recipient. Because if we give that information when in a location or a time or channel that has barriers in the way, when we don't have their attention, they're not going to absorb that information and likely not make a decision that we want them to make. So first, identifying where are the people engaging the behavior of that target audience, right. Or the voter audience, what is their behavior? Where do they go? And then use those channels to one, get the information to them. But the information also needs to be short, concise, attainable. If a bill at the congressional level has 400 pages, how do you get those points across and you know, 30 seconds of a video or you know, on a small screen to say, here are the key points, but you're also leaving out information. But then we're also biased by the messenger. Which messages did the messenger choose to select to go into that short message or short snippet and then get that person to make a decision? Based upon there. But then we have reasonable argument. Most people already have a. They're already primed by something that already happened, so they already have that confirmation bias. So they might push back on something that they don't believe is true or be open to argument or open to discussion about a certain topic as well. But at the end of the day, most people aren't going to, you know, blah blah.gov and opening up a bill and reading it because 400 pages of legalese is not advantageous for anybody and it's not fun. Just like in marketing, when we target consumers, you know, the order of precedence for content is video, then audio, then images, then text. Text is the last thing. Like we're Americans, we don't want to read like a paragraph. You've lost your mind.
[00:33:10] Speaker A: AI is giving us the ability to really automatically create highly effective content. We can go and research your LinkedIn, we can research your browser history, we can do all these things. We can create your Facebook, etc. We can automatically create a message which is just for you. And the ludicrous part of it is we can even create a video of, you know, the CEO speaking about to you directly. Now, it's the CEO's voice, it's the CEO's body. The CEO is okay with all these automatic messages being created, but he didn't actually say it.
And it was just generated by deep fake AI. But there's nothing illegal happening here. So this hyper personalization, I think that's some, you know, to the level that we've never seen before. I think that's going to be a thing that's going to happen. But then for me as a consumer, I'm like, hold on, this is not real. Like, I get it that everybody's okay with it, but this is not actually real. An algorithm kind of gave me what I wanted to hear because I decided this is what I wanted to hear. Now it's just not a. It's not just an ad on Google. It's a whole video of somebody talking to me and giving me something. It's just, it kind of blows my mind on where. And we're not quite there yet now, but it kind of blows my mind on where this can go.
Do you think that, you know, consumers should be concerned of the authenticity of brands? Kind of thinking about the introduction of AI?
[00:34:39] Speaker B: Oh, that's a really good question. So I would say yes with an asterisk. And here's why.
The more curated content becomes, the less likely it is for consumers to trust it.
And that Is because.
[00:34:57] Speaker A: Wait, hold, explain what you mean by the more curated.
[00:35:00] Speaker B: Yeah, so let's say we create a 30 second television ad designed for traditional television, NBC, ABC, et cetera, or cable TV. Right. That is a very polished, you know, post pre production, principle photography, post production, 40k.
And so that's very curated. Opposed to you're holding the camera out in front of, the camera's kind of shaking and it looks like you're having a candid conversation. Another example would be you're watching your favorite show on HBO compared to watching your favorite reality show on MTV or Bravo. Whereas the camera's a little shaky, the audio isn't perfect. So the more curated content becomes less trustworthy over time because when we, when it's perceived to be raw footage or it was filmed on site or potentially came from social, or it's created with those social media parameters or variables involved, then we believe it's potentially trustworthy. So that's where the asterisk comes in. But then there's the personalization. So I can't say that personalization trumps all as the best way to go. But if a brand has the ability to personalize content, please do so even if it's using AI. Because when, when content or anything that is customer facing is personalized, it adds a bit of exclusivity to that kind of engagement. And we feel like we have now an attachment with that brand because they know who we are. And I'm going to give the simplest forms of examples. If you walked into my store and you and I have a brick and mortar store and you walk in and say, hi, how can I help you? The first three words you're going to say are, I'm just looking, right? Like I'm here, I want to see, but I'm just looking. I don't want to talk to you. But in the morning when your alarm clock goes off, the first thing you do is you grab your phone, your eyes are squinted, you can't really see and you start scrolling your email. You click on an email you like and it says, good morning John. Good morning Sarah. Good morning, Mike. Like, oh, they know my name. I feel like they know me. So digital communication can be so much more personal than, you know, face to face communication. The personalization keeps the consumer engaged for just a little bit longer. I don't have time to put on it, but it keeps us engaged for longer and it allows us to have that experience be a little more memorable.
[00:37:23] Speaker A: Yeah, this is so, so incredibly true.
The place where we do our, like Dry cleaning, laundry.
The lady Myra, every time I walk in, she's like, well, she remembers me.
Every time I walk in, she's like, or, Ari or Mr. Block, how are you doing today? And now this lady has exceptional memory. Like, this is incredible, right?
Inhuman, almost. But I can almost imagine a technology solution that there would be a camera there. You know, the first time I got in there, I get registered as a cat, as a customer. It takes a picture of my face. And then every time I come in, you know, it's facial recognition, like on the iPhones. And then it's just popping up my name automatically on her computer screen. And then she goes and she says, hey, Ari.
I mean, there's a level here that I'm like, I love Myra, because I can't believe that she remembers who I am every time I come in. And the other level of this absolutely horrifies me that they're doing facial recognition to know who just came into the store. So, you know, I think that there's a certain balance here that is yet to unfold, and the scary stuff that technology can do is not yet happening.
So I think there's an ethical question here that we need to discuss. For sure. Maybe we're a little premature to this game.
[00:38:45] Speaker B: Well, yeah, the ethics is hard. There's so many different ways to look at ethics, and I wouldn't call myself a subject matter expert in ethics, but there's a common method that I like to refer or reference when looking at ethical situations, and that's called the 10-10-10 model. And that is, how would we and the other person feel about this decision in 10 minutes? How would we and this other person feel about this decision in 10 months and then 10 years? And there's no matrix to say if there's two yeses and a no. You make this decision. But it's a reflective model to say, all right, is this the best thing to do? And just because we can do it doesn't mean that we should.
[00:39:26] Speaker A: Yeah, I think that's very, very fair, though. The one that I love is the if. If this whole story of what you said and decided was tomorrow first page in the newspaper, you know, would you. How would you feel about it? And if you have any concerns about that, then maybe you're making the wrong decision decision. So I think there's a lot of place for us to stop and think about the ethical implications of our decision. Michael, what a delightful discussion. As I said, this is the art of going down the rabbit hole. There's one scripted question that we have and it's a very personal question, a very difficult question. So brace yourself. If you had to go back to 20 something year old Michael, what would you advise him?
[00:40:08] Speaker B: I would advise to slow down, enjoy the moment and yeah, maybe slow down and enjoy the moment a lot of things. You know, as we get older we realize that time isn't as, you know, slow as we think it is. And you know what we think was two years ago was really like, you know, 20 years ago. And when someone says like hey, 20 years ago, I'm like oh, 1980, like no, that was 20, 22,004. So yeah, probably slow down and enjoy the moment more because life is only so short.
[00:40:47] Speaker A: Michael, thank you so much for joining the show today. It was a lot of fun.
[00:40:51] Speaker B: No, the pleasure is all mine. This is a phenomenal conversation. Happy to be here.
