The Magical Psychology of the ‘Uber for X’ Economy and more...




The Magical Psychology of the ‘Uber for X’ Economy

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Mashable calls ‘Magic‘ the logical extreme of the ‘Uber for X’ economy.  Magic is an on-demand mobile service where you simply text whatever you want – yes whatever you want – to Magic’s number, and they’ll get you it for a pre-agreed fee, paid on mobile via Stripe.  Started last week, Magic has received 18,000 requests in the first 72 hours.

Has the Uber-for-X economy jumped the shark?  Not if you believe the Economist, weighing in with the suggestion that an on-demand mobile workforce is the future (and the French business paper Les Echos joined in yesterday).  Bad news for people who value stability more than flexibility, but good news for the agile.  And from a business perspective, Magic is a brilliant blueprint for other budding Uber-for-X startups because it’s stripped right down to the bares essentials of what an on-demand mobile service needs to be.  No fancy tech – just text.

But it’s from a psychological perspective that Magic, Handy, Uber and the burgeoning category of on-demand mobile services are particularly interesting.  Of course, from a rational choice perspective, these services make sense because they cost us less – not in money, but in time and effort.  They offer convenience value, and their front-end apps are examples of ‘convenience tech’.  Beyond this though, there is some interesting magical psychology behind Magic – and other Uber-for-X businesses.

In a meta-analysis of magical beliefs – from alien abductions to cults, to supernatural happenings and pseudoscience – Michael Shermer has identified the three common components that made us susceptible to these ‘magical’ ideas.

  • Instant Gratification – magical ideas offer immediate rewards. For example, when you join a cult, the first thing that happens is that you get ‘love-bombed’ – other cult members will fawn over you, giving you a ego-boosting ‘I matter’ feeling.
    • Uber-for-X businesses and convenience tech do precisely the same, they offer instant gratification – playing to our impatience, and our desire for immediate satisfaction
  • Simplification – magical ideas simplifypeoples lives and beliefs.  For example, cults often have simple ‘black-and-white’ beliefs, and simple instructions for how to live the good life.  They simplify a complicated world for us
    • By saving us effort, convenience tech and Uber-for-X businesses play to our drive and desire to simplify our lives and strip out the hassle-factor
  • Credo-Consolans (I believe because it is comforting) – magical ideas give us comforting hope and purpose in the face of mortality and futility. Cults and supernatural beliefsprovide an ego-boosting dose of immortality and higher-purpose, whilst shielding us from the realisation that we are ultimately all just worm-food
    • Uber-for-X businesses and convenience tech create the comforting illusion that the world revolves around you – a self-aggrandising trick that the world is on-demand for you, and yes, it really is ‘all about me’.  As Uber’s tagline goes – ‘everyone’s private driver’.

So whilst the Uber economy has economic and rational appeal, it also has psychological and emotional appeal, playing to our predisposition for ‘magical’ ideas that offer instant gratification, simplicity and comfort.

 

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More Convenience Tech – $1.7m Funding for Uber-for-massage Soothe

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Another $1.7m funding for ‘convenience tech‘ as the digital industry rolls with the realisation that we only live for a few hundred months, so saving you time is saving you the most precious commodity that exists.

Part of the Uber-for-everything trend, Uber-for-massage Soothe has just scored $1.7m funding to grow its US on-demand at-home massage services from a team of investors including IDG Ventures, Walter Loewenstern and AngelList. Tap your screen and one of 1000 5-star rated professional therapists will ring at your door within an hour.

Soothe is no cheaper than a clinic or salon massage ($139 for 90 mins – deep tissue, sports, Swedish), but that’s not the point: Convenience tech makes things more convenient in today’s ‘Now Economy’ – it saves you time and effort. And in a busy world where schedules are ever-changing and where the only nice thing about deadlines is the whooshing sound they make as you miss them, massage that is ‘on-demand’ as opposed to ‘on-appointment’ makes real-world sense.

The psychology of Soothe is smart. When we buy something we always pay in three currencies – time, effort and money. On-demand businesses built on convenience tech like Soothe save time and effort, meaning that you ‘pay’ less for an identical product.  In other words, Soothe makes intuitive economic sense to us because we look at costs not just as money, but time and effort too. More essentially, Soothe taps into the psychology of our minds that evolved to be efficient with time and effort (energy) long before money ever existed.  That’s why we are wired for convenience and instant gratification, and why convenient instant gratification is, and always will be, a most irresistible value proposition.

 

The challenge for Soothe, and other Uber-style on-demand businesses built on convenience tech, is not psychology.  The challenge will be to make the experience and numbers work. The risk is that the trend turns into a Groupon-style fad that fades as the experience fails to live up to expectations. Your clinic or appointment is not going to disappear, but your therapist could fail to appear. Likewise, therapists signing up to be part of the Soothe network may not realise the ‘hidden’ costs of ‘delivery’ – getting to clients. Like Groupon, perhaps the economic reality of Soothe may be less attractive than the promise…

Time will tell, but in a ‘Now Economy’ where instant gratification rules, betting on convenience tech makes sense.  Forget the ‘C-word’ was that content last year and this plagued our feeds, digital’s new C-word is Convenience.  This time people want it and will pay for it.

 

        

 

Pricing Psychology – Your Emotions Like Rounded Numbers [Study]

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Life’s little luxuries may sell better if they’re priced with a rounded number – e.g. $20.00, rather than $19.99.  That’s the finding of a new set of five studies in the Journal of Consumer Research that looked at the impact of rounded and non-rounded pricing on product appeal.

So whilst the ‘left-hand digit’ effect (we’re too lazy to read the whole price, so $99.99 is experienced as significantly less than $100.00) may work for rational work- or task-related purchases, if your customers are buying for pleasure, you’ll probably shift more stock with ‘double 0′ style pricing.

Interpreting the results the researchers suggest that non-rounded prices can encourage reliance on rational, practical thinking because they are more complex to mentally process. The practical upshot is that a .99 suffix ‘feels’ right for a product bought on reason rather than emotion.  The opposite is true of products purchased for pleasure on emotional feel.  Emotional purchases feel right with rounded prices.

Conducted in the lab rather than in the field, the findings need to be tested, but a quick real-world test would be easy for online retailers for whom cashier theft would not be a worry. Historically, a key rationale for .99 style non-rounded pricing had little to do with pricing psychology, and much to do with forcing cashiers to ring up a record of the sale because they would need to hand back change.

Wadhwa, M., & Zhang, K. (2014). This number just feels right: The impact of roundedness of price numbers on product evaluations. Journal of Consumer Research. DOI: http://www.jstor.org/stable/10.1086/678484

        

 

Kingsman: The Secret Service & Subliminal Advertising – Could it Really Happen? [Study]

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Hitting the screens this month is a new Hollywood movie about the power and influence of the smartphone today. A must-see for digital marketers.

Starring Samuel L. Jackson (and Colin Firth, Michael Kane and Taron Egerton), Kingsman: The Secret Service is a cautionary tale about how the mobile screen is becoming our window to the world.  If you control the screen you control the world – and the people in it.

The story itself is outlandish – sending a signal to smartphones causes people to spontaneously attack each other. Outlandish, yes, but the possibility of subliminal signals being sent to our mobile handsets and influencing our actions is very real.

We’re talking subliminal advertising for the mobile age here (influence below the threshold of conscious awareness). Scaremongery aside, recent research  (e.g. here, here) has shown that subliminal advertising through what is known as ‘subconscious priming’) can and does work. Flash an image or instruction on a screen too briefly to be noticed, and it can nevertheless influence us.  But only under certain circumstances.

Specifically, subliminal advertising research to date has found that we can be influenced by super-brief (too brief to be noticed) flashes of brand names or instructions (e.g. ‘Drink Coca-Cola’, ‘Eat Popcorn’) on a screen if we we’re already in a pre-existing state of need and unaware we’re being influenced (i.e. flashing ‘drink water’ on a screen, would only influence us to drink water if we’re are already thirsty and we’re unaware we’re being influenced). So relax, So Kingsman-like subliminal primes to kill are not going to be effective anytime soon (unless of course you have murderous motivations).

The problem with this past research into subliminal advertising is that has typically been conducted in the artificial conditions of the psychology lab.  It’s one thing to demonstrate that subliminal advertising could work in principle in a lab, it is another to show that it works in the real world.

Enter the public broadcaster BBC, who last week published the results of a real world test of subliminal advertising – just in time for the release of Kingsman.

The BBC subliminal ad test attempted to replicate a 2006 laboratory study by psychologists Johan Karremans, Wolfgang Stroebe and Jasper Claus who had demonstrated the effectiveness of subliminal advertising, but only in the lab.

Audience members attending the recording of a BBC Radio 4 science show were given a bag of crisps (to make them thirsty), and then split randomly into two and shown a clip of a TV drama (Spooks) on a theatre screen. Half the group (the test group) saw a doctored version of the clip that flashed the word ‘Lipton’ every 5 seconds for 10 milliseconds (too briefly to be consciously noticed). The other half – the control group saw the un-doctored clip.  All audience members were then invited to choose a drink – Lipton tea or a bottle of water. If the subliminal advertising had worked, then more people in the test group who had seen the subliminal ad would choose Liptons, compared to the control group.

So what happened? It worked – sort of. The proportion of people choosing Lipton who had seen the subliminal ad jumped by 24% (from 37% to 46% n = 98).  But when the numbers excluded those likely to those likely to have been immune to the subliminals because they had a strong pre-existing preference for or against Leptons, there was no statistically significant effect.

What does all this mean for digital marketers? In short, subliminal advertising may be more tricky to pull off than we thought, and may be more complicated than simply targeting people in a state of need. In principle, (and given an ethical-bypass) subliminally flashing the logo of a drinks sponsor in the opening animation of a mobile app for ordering refreshments at a ball game, or on a digital display at a food stand (for example), could – and should – positively influence sales – but the BBC experiment suggests that the messy multi-senory reality of real life might get in the way.

So fear-not; the mobile screen does not yet have Kingsman-style control over us, and owning the mobile screen does not mean owning the world. Yet.

        

 

Artful Insight – #20Things Digital Art Reveals 20 Digital Insights for 2015

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Can you spot 20 hashtags of recent Internet happenings in this artful piece of content marketing commissioned by digital innovation group Syzygy? Each hashtag corresponds to a digital insight that could usefully inform your digital strategy.

Check out the hashtags with insights below.

And beyond the insights themselves, note the medium chosen for this content marketing.  Art. Psychologically, using digital art for content marketing makes sense. Art harnesses what Nobel prize-winning psychologist Daniel Kahneman calls our ‘System 1′ mind, our instinctive, intuitive and emotional mind that works by association rather than reason. We see art, and we ‘feel’ it, and are moved by it. And because art works by emotional association – sponsored art makes us feel good makes us feel good about the sponsoring company as well.

So could art work as content marketing for your business?  It’s been working for the Catholic Church since the 16th Century, when the Vatican commissioned its content marketing masterpiece, Michelangelo’s Sistine Chapel ceiling. Ever since, brands have been working with artists and using art as a marketing medium. Art impresses; art communicates; art has impact.

Surely art certainly beats the Twitter fails, social spam and camouflaged ads (aka native advertising) that pass for content marketing today?

  1. #FlappyBird – Digital is a great leveller. #FlappyBird came from a small independent developer and not a gaming leviathan. Does the levelling power of digital mean your next big competitor or collaborator could be an agile start-up?
  2. #GoogleNest - How will your brand ‘Nestify’ and use a combination of smart connected technology and smart design to refresh products and services? The digital future is the Internet of Things, not the Internet of Screens
  3. #SochiProblems – The Sochi ‘brand experience’ did not live up to expectations and a hashtag hungry world heard about it. Avoid becoming the Sochi of your category by ensuring you under-promise and over-deliver on brand experience
  4. #TwitchPlaysPokémon -  That Amazon went on to purchase Twitch.tv for US$970m is testament to the size and buying power of the global gaming community. Do your marketing, sponsorship and innovation investments in 2015 reflect the reality that gaming is bigger than both the music and movie industries?
  5. #FirstKiss – Exhibitionist and voyeuristic in equal measure, #FirstKiss is an ode to our Tinder times where digital technology increasingly mediates human intimacy. In 2015, how could you target a world looking for labels and love?
  6. #25Web – So much more than a mere advertising or publishing channel for brochureware, the Web has become the planet’s leading innovation platform. Is the 25th anniversary of the Web the time to shift out of the early gears of digital marketing and embrace the full potential of digital innovation?
  7. #ActionMovieKid – Helping people show off online has always been a smart digital strategy, but how could your brand learn from #ActionMovieKid and help proud parents show off their progeny online?
  8. #RightToBeForgotten – Google is not a search engine; it is a reputation management system. The #RightToBeForgotten EU legislation reminds us that brand reputation is built not on what brands say about themselves, but what others, especially Google, say about them.
  9. #FacebookExperiment – Aside from the risks of experimenting on people without their consent, the #FacebookExperiment mood highlighted that the Internet now influences not only behaviour but also emotions. In 2015, what will your brand help people feel online?
  10. #IceBucketChallenge –  The #IceBucketChallenge was all about ‘conspicuous compassion’ – looking good by doing good. Could the digital future of your brand lie in conspicuous compassion, managing brand image through conspicuous acts of compassion?
  11. #SaddestManInBrazil - A digital image is not merely worth a thousand words; it is worth an emotional connection. Is 2015 the year when your brand embraces the power of online imagery to resonate more emotionally with audiences
  12. #PotatoSalad –  Crowdfunding prank on KickStarter to back a potato salad meal received $55,492 funding showed how digital culture likes to mock itself. How could your brand use digital culture-jamming to make playful fun of the latest tech trends in 2015?
  13. #MonkeySelfie – So humans are not the only selfie-prone simian species. Could selfies culture be a foundational part of our digital identity – a digital mirror used to prove to the world and to ourselves that we exist? If so, what part could your brand play in this existential game of digital identity construction?
  14. #TheFappening - So sex, scandal and celebrity sell, who’d have thought? The bigger insight is that we’re all, celebrities included, uploading more and more, including our intimate selves to the Internet. What #TheFappening taught us about ourselves is that we don’t need a coercive Big Brother to log our every move and moment, we’re quite happy to do it ourselves
  15. #AlibabaIPO – Does the #AlibabaIPO mean Western digital hegemony is finally over? Perhaps our digital futures may lie to the East, not in Silicon Valley. What could your brand learn from today’s hotbed of digital innovation in Asia?
  16. #DeleteU2 – Personal tech is deeply personal, so hands off! Violating our digital lives with uninvited gifts is to violate us personally. iTunes gift of Songs of Innocence became the most deleted album of all time. Just don’t.
  17. #BendGate – Digital perception is reality. Armed with hashtags, scandal-hungry digital media is not about truth, it is about selling advertising space. If your brand is collateral damage, too bad…
  18. #AlexFromTarget - Don’t underestimate the power of celebrity in digital media. Celebrities may not cause today’s digital sensations, but they certainly validate and amplify them, as Ellen DeGeneres gave a Twitter and TV boost t0 16 year-old Justin Bieber lookalike Alex Lee
  19. #MicrosoftMinecraft – The value of Microsoft $2.5bn purchase of Minecraft lies neither in the game nor the user base, but as a digital platform for creativity. If enabling creativity is what digital does best, what role could your brand play?
  20. #BreakTheInternet – Yes, celebrity and nudity still sell, but Kardashian’s #BreakTheInternet lesson is that it is the Internet, not Hollywood or TV, that has become the new measure and gold standard of fame. If brand fame is what you’re after, digital is your solution

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