Monthly Archives: August 2013

Recently Unilever announced that they intended to be less enslaved to quantitative market research when innovating and would instead aim to take more risks to be innovative and to learn from experience about what works and what doesn’t. It would seem they have listened to the growing body of evidence that shows that asking consumers what they think is really not as helpful as had previously been assumed. As it happens I was talking at an event about innovation recently and, as ever, some of the questions asked percolate around my mind and push me to consider new angles and issues. In my talk I adapted an idea from Scott Berkun, who wrote the book The Myths of Innovation. He argues, quite convincingly in my view, that each stage of innovation an innovation process has a possibility of going astray. In a seven stage process, working on the generous assumption that […]

Loss aversion, the tendency we have to attach more weight to potential future loss than future gain, has been well-documented since Kahneman, Knetsch and Thaler proposed it in 1990. Whilst it is hugely important in helping to explain a number of the ways in which consumers act, the simple act of reflecting on decisions of our own that turned out to be costly mistakes that could have been avoided with a little more thought, reveals that it is far from a universal determinant of our actions. Recently a very good friend of mine made two significant purchases within a matter of weeks: a luxury car and a luxury watch. The car cost him approximately £25,000 and the watch £4,500. What was interesting to me was that he negotiated hard on the price of one but not at all on the other. In fact, for one purchase he didn’t even shop […]

$9.99 It’s almost akin to a retail disease. Walk into any shop and the prices frequently end in the same way: $X.99 or $X.95. This used to have some unfortunate consequences. I’m old enough to remember the days when you might well end up carrying around a couple of kilos of small change in your pockets. Then, when the burden got to great, or you got irritated with sounding as though you were wearing a manacle as it ‘chinked’ with each step you took, you would act. The social consequence of spending a disproportionately long time at the checkout would be outweighed by the desire to move freely and you would pay for the next item using as many coins as you could. The upside of this was that it was very good for your mental maths. You would work out how the small change you had could be deployed […]

$9.99 It’s tempting to think that we don’t need anyone to tell us how to save money. Indeed, we may very well believe that we’re very good at saving money. A trip to most stores at the moment is a ‘money saving’ bonanza: with so many great deals around, coupons, voucher codes, referral sites that pay you a reward for buying something you were already going to get, loyalty discount vouchers, GroupOn-style great deals direct to your in-box… only a fool wouldn’t be saving money these days. Except for one thing. Most of the times we believe we’re saving money we’ve been duped into spending it first. A saving of $100 is only a saving if you had intended to spend $300 when you left the house (or started the internet search engine) and then ended up spending $200 because of the great deal you uncovered. If you left the […]