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Episode 175  |  16:00 min

#135: Thinking Fast & Slow (And The Reason Why Everything Is Always On Sale)

Episode 175  |  16:00 min  |  10.29.2018

#135: Thinking Fast & Slow (And The Reason Why Everything Is Always On Sale)

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This is a podcast episode titled, #135: Thinking Fast & Slow (And The Reason Why Everything Is Always On Sale). The summary for this episode is: On this episode of Seeking Wisdom, DC and DG break down lessons from Daniel Kahneman’s classic book Thinking, Fast and Slow – and why this might be the most important book for anyone in sales and marketing. Topics on this episode: -Lessons from a recent outdoor ad campaign and American Eagle -Cognitive biases - Anchoring effect - The Halo Effect - What will DC be for Halloween? Before you go leave a ⭐⭐⭐⭐⭐⭐ review and share the pod with your friends! Be sure to check out more insights on the Drift blog at drift.com/blog and find us on Twitter @davegerhardt, @dcancel and @seekingwisdomio. In this episode: 1:00 – Thinking, Fast and Slow by Daniel Kahneman 1:05 – Marketing lesson from blitz billboards in San Francisco YouTube 3:13 – How to get the referral and DC’s playbook 5:20 – Why DC loves Thinking, Fast and Slow…the third degree, black belt 6:16 – Blinkist app/website for book summary 7:38 – Why this is an important book for business people 8:13 – How we make decisions 8:38 – System 1 thinking – fast, intuitive, emotional, reptilian brain (DG!) 9:15 – System 2 thinking – slower, deliberate, logical thinker, DC’s sleep on it hack 9:59 – Learning how to modulate and create guardrails for yourself in biases 10:20 – Charlie Munger and realizing you don’t have control over biases 11:15 – Anchoring Effect 12:38 – Discounting as a form of anchoring 12:56 – DC’s trip to American Eagle with his daughter 13:43 – We’re all blind to this stuff 14:25 – The Halo Effect 15:12 – Shep Gordon, the master of the Halo Effect or Light Bulb Effect 15:54 – DG’s tips to understanding the magic in marketing 16:25 – Doing the work, practicing and applying what you learn 17:24 – What is Halloween?   Books mentioned in this episode: Thinking, Fast and Slow by Daniel Kahneman Influence by Robert Cialdini
On this episode of Seeking Wisdom, DC and DG break down lessons from Daniel Kahneman’s classic book Thinking, Fast and Slow – and why this might be the most important book for anyone in sales and marketing. Topics on this episode: -Lessons from a recent outdoor ad campaign and American Eagle -Cognitive biases - Anchoring effect - The Halo Effect - What will DC be for Halloween? Before you go leave a ⭐⭐⭐⭐⭐⭐ review and share the pod with your friends! Be sure to check out more insights on the Drift blog at drift.com/blog and find us on Twitter @davegerhardt, @dcancel and @seekingwisdomio. In this episode: 1:00 – Thinking, Fast and Slow by Daniel Kahneman 1:05 – Marketing lesson from blitz billboards in San Francisco YouTube 3:13 – How to get the referral and DC’s playbook 5:20 – Why DC loves Thinking, Fast and Slow…the third degree, black belt 6:16 – Blinkist app/website for book summary 7:38 – Why this is an important book for business people 8:13 – How we make decisions 8:38 – System 1 thinking – fast, intuitive, emotional, reptilian brain (DG!) 9:15 – System 2 thinking – slower, deliberate, logical thinker, DC’s sleep on it hack 9:59 – Learning how to modulate and create guardrails for yourself in biases 10:20 – Charlie Munger and realizing you don’t have control over biases 11:15 – Anchoring Effect 12:38 – Discounting as a form of anchoring 12:56 – DC’s trip to American Eagle with his daughter 13:43 – We’re all blind to this stuff 14:25 – The Halo Effect 15:12 – Shep Gordon, the master of the Halo Effect or Light Bulb Effect 15:54 – DG’s tips to understanding the magic in marketing 16:25 – Doing the work, practicing and applying what you learn 17:24 – What is Halloween?   Books mentioned in this episode: Thinking, Fast and Slow by Daniel Kahneman Influence by Robert Cialdini

Speaker 1: All right. We're back.

Speaker 2: You got to do intros, this is your show, man. [ crosstalk 00: 00: 17 ]

Speaker 1: This is weird cause G2 here upgraded the mics here.

Speaker 2: We're far away.

Speaker 1: So we're far away. We're not used to being close, so you can see our faces. I don't know how I feel about that.

Speaker 2: The mics have changed, but the good news is that we're still talking about me being in Europe, which is good.

Speaker 1: It's good. It's never going to end. That's the gift that keeps on giving forever. crosstalk Anyway so...

Speaker 2: He texted me that day, he said something about... You're three and a half weeks... as each day passes.

Speaker 1: Three and a half weeks in Europe

Speaker 2: So by popular demand, we're going to do an episode on one of our favorite books we've never talked about, but I saw you...

Speaker 1: We're going to talk about a book?

Speaker 2: We are going to talk about a book.

Speaker 1: Oh, awesome.

Speaker 2: You talk about this book a lot, and you have talked about it a lot recently. And so I said, you know what? Let's do an episode on this. Somebody actually suggested it. So, we're going to talk about'Thinking, Fast and Slow' today, by Daniel Kahneman. I want to show something, I want to teach people, I want to share a lesson really quickly.

Speaker 1: What kind of lesson? Marketing lesson?

Speaker 2: I want you to teach a marketing lesson. So, this fall we did a bunch of...

Speaker 1: So, if you're listening to this crosstalk, you're missing out because of TGA is showing us how go to YouTube, subscribe to drift, G2 needs subscribers, and you'll see what he's holding up here. And so, we do a video version of the podcast there. He's holding up something that came in the mail today.

Speaker 2: Came in the mail today. This is pictures of these ads that we did across San Francisco for the last, probably 60 days.

Speaker 1: Yeah, billboards.

Speaker 2: Great present, right? Cause you know...

Speaker 1: Amazing photos

Speaker 2: Stroked the eagle... Looking at that, bus shelters, signs. We had a double- decker bus...

Speaker 1: IKEA Association right there..

Speaker 2: The train... Wow, the IKEA, I didn't even think of that. In the train station, Fourth and Market, bunch of bus shelters. And so, I opened this up, and I was excited, and this is how it usually goes. I get excited about something, and the DC says...

Speaker 1: They're going to tear it down.

Speaker 2: Hold on a second. This is cool. But what did you say?

Speaker 1: I said, that's a cool, crosstalk but, here's the problems with it. That's usually how I start my conversations with Gigi. That's cool, but here are my challenges. We got this from a vendor, who did the billboards for us, and I said, the vendor's name logo crosstalk which is covered up here, we don't want to shame them, is bigger than our logo on this thing. And it's supposed to be a present for us. So, we have a tiny little drift crosstalk in the left corner, and we're hiding the vendor's logo, but it is massive. It's 10 times the size. And, then it says, thank you on it. And I said, this is nice, but you should never hang this, because this is just an ad, aka billboard for this vendor. An amazing present would have been, for him just to send the photo. I would have removed the thank you, not even our name on it. Just put the photos, let the photos pop. Let the photos do the justice. Then, we would have hung this on here, in our office. And then, when someone would have asked about it and say, wow, those are amazing, I would have said... yeah, our friend over at XXX company hooked us up with these billboards, and you would have got a referral.

Speaker 2: Come on, see this is unintended. That is such a good marketing lesson, because I think, what happens is marketers... we want to: that's got to be mine, I want you to know where it came from..

Speaker 1: To go right for the close crosstalk

Speaker 2: This is the whole... this is actually related to our take on lead forums, and gated content, and selling the way that DC's play would have been the Gary V, or the something we talked about playbook here, which is the DC playbook. crosstalk No, it's different. Gary talks about punching. We don't punch people. Our playbook is give, give, give, and then ask.

Speaker 1: Yeah. Or just keep, give, get... actually, my playbook is different. Our playbook is give, give, give, give, then they ask. Very different.

Speaker 2: Give, give, give, some hate us, even though we give.

Speaker 1: Yes. A lot of haters, even though we just give, crosstalk, but then different from Gary V because he's going to ask, he's going to punch in the face. My thing is, you give, if you give enough, eventually you'll get.

Speaker 2: You can't price cause DC maybe giving somebody a tour around the office, they say, oh, that's amazing, you guys did some ads. Who did them? They look amazing. Then, you're going to get DC to tell you who it was.

Speaker 1: Totally, you can't pay for that. crosstalk, worth well more than putting their logo, which again was 10 times the size of ours, over there on this thing, and then sending it to us. Cause this will never get hung out. crosstalk

Speaker 2: Free lesson. All right, let's change gears and talk about'Thinking, Fast and Slow'.

Speaker 1: If you would like for me to send you messages, like I send Deejay everyday, just let me know, hook me up. Find me on WhatsApp.

Speaker 2: Am surprised a lot of people say they want it. They don't want it.

Speaker 1: They don't want it. crosstalk

Speaker 2: Let's talk about'Thinking, Fast and Slow'. I got my notes.

Speaker 1: Okay, I have no notes.

Speaker 2: So, I actually have notes because I've read this book first time, two years ago, would you put me on it?

Speaker 1: How was that experience?

Speaker 2: The book is long.

Speaker 1: I was waiting for that. So, this is a book that I love. I try not to talk about it too much, because you need to go through the training wheels first. You need to have at least your black belt, first degree, before you get the red stripes on it.

Speaker 2: I would say, if you haven't read'Influence' you can't... don't read this. crosstalk, start with Cialdini. Obviously that's a classic.

Speaker 1: Start building up into it, build up. crosstalk This is third degree, black belt, red stripe level for you, MMA people, thing's here, you can't start with this. And, I've made the mistake like I did with the young nephew over here, Deejay, aka the young nephew, and to suggest this book, and most people suffer through this. This one is a hard one to read. It's not readable, not an easy one, but once you're a black belt it up, or if you're feeling ambitious, pick up this book right here,'Thinking, Fast and Slow'. And, someone on the team, Dan Murphy, young Dan Murphy was tweeting recently, that's what we do here, tweet a lot. And according to crosstalk, all we do is tweet and he was talking about a service called Blinkist, B L I N K I S T.

Speaker 2: I've seen that.

Speaker 1: Free promo for you guys. Okay. That's how I'm feeling today. Generous and Blinkist is an iPhone app, and a website. And, basically what they do is really good job. I usually don't like summaries, but they do a really good job at summarizing books, and letting you digest them, either through text, or through audio, or through both, and you sign up for a subscription service. We have no affiliation with Blinkist. I'm giving them free love today, but the reason that I brought them up was that, this book,'Thinking, Fast and Slow' is a Blinkist title. So, if you don't feel ready to take this on, there's some good lessons that you can come out from the Blinkist version of it. And, it came, in the old days, we used to call them CliffsNotes.

Speaker 2: CliffsNotes?

Speaker 1: I don't know if they have CliffsNotes anymore.

Speaker 2: It'd be a before class, I would be on the computer, sparknotes. com trying to crosstalk

Speaker 1: SparkNotes, that's what it's called.

Speaker 2: What happened in the book, and then praying that they didn't call on me.

Speaker 1: If you could believe that, I didn't read any books in high school. I would just read the CliffsNotes.

Speaker 2: Why is this such an important book? I got some stuff from the book that I want to talk about. Why is it such an important book for business people?

Speaker 1: Because, the same reason we always talk about Cialdini in the book,'Influence','pre- suasion', and all of these kind of things. The reason that I think it's so important is because, the thing that we forget in life, in relationships, and in selling and marketing, but it's in everything, and managing people in life, managing relationships, and all of that, we always forget how we make decisions. Most people don't know. Even if you know, you forget how people make decisions, that's why we talk about influence and cognitive biases so much. But in'Thinking, Fast and Slow', Daniel Kahneman, amazing writer, and a teacher, basically breaks down this thinking into two types of thinking, which he calls System 1 and System 2, right? And System 1 is what we're used to thinking about, which is used to tuning all of us, which is fast, intuitive, and emotional. Right? We're making decisions. We're making decisions on the fly.

Speaker 2: I've seen somebody else talk about this in other articles as, this is the reptilian brain. This is the quick, fast reaction right?

Speaker 1: I don't recognize the young nephew crosstalk.

Speaker 2: That's the reptilian brain.

Speaker 1: Wow. Who are you?

Speaker 2: Check me out.

Speaker 1: Wow. That is not the young nephew I knew before. This is European nephew.

Speaker 2: Yeah, this is European nephew.

Speaker 1: He's getting all sophisticated with me. Okay, and then System 2 is your slower, more deliberate, and logical thinker. So, you would say, Elias is a System 1 thinker, emotional fast. I'm a System 2 thinker by default, slower, deliberate, logical.

Speaker 2: So here's a good example, right? If you've been listening to the podcast recently, you know that one of the DC hack, is the whole sleep on it things. Sleep on it, sleep on it, sleep on it. And, I think this is really interesting, because the reason why you do that, is basically that's you acknowledging that you have System 1, and saying, I don't want System 1 to influence my decision. So, I'm going to sleep on it. And then, I'll make the decision, where System 1 would say, oh, I loved her. She's awesome. We got to hire her.

Speaker 1: Jump on it. And she got to be able to... we all have both. Some of us are more dominant in one system than the other. You just have to learn how to control these things. That's where we talk about cognitive biases so much, about'Influence', about'Pre- Suasion', about'Thinking, Fast and Slow'. It's not that you can avoid these things, or you can learn to modulate and create guard rails yourselves in order to control them. That's why I always go back to Charlie Munger, and he says something about one of the biases that he says that, no matter how many years he thinks he has this under control, every year he looks back, and he realizes that he had no control over that bias.

Speaker 2: So, I think that's why this is such an important business book. And, I think if you've heard or listened to podcasts, are you listening to us at all? Or do you see... you hear a lot about these biases. And, I think they break down all of the biases that people have. And, so just to run you through a couple of them, I'll get your take. So confirmation bias, crosstalk which we did an episode about this recently. The anchoring effect, this is such a powerful thing. The anchoring effect. And, I think in this book, they use the example of, the way I understood it was, it's the reason why if you go in warm water, after it's cold, when you're cold out, it's going to feel much warmer. But the reality is the temperature of that water is the same. crosstalk

Speaker 1: Exactly. crosstalk

Speaker 2: It's the contrast crosstalk.

Speaker 1: But, this anchoring is a technique that's used by all the best sales people and marketers. So, in a sales scenario, this is where most people would encounter an anchoring effect. If you walked in to try to buy super high priced item, or someone was talking about a super high price item, they may first anchor you in the conversation by saying, imagine the item, the service I wanted you to pay me$ 10,000.

Speaker 2: Sure.

Speaker 1: Right? The first way that I would anchor you, is to say something like, I was talking to this other person who does something similar to what I'm trying to sell you. They sell for$ 30,000 a month, right? What they're doing. So, and then blah, blah, blah. And then I can explain, and finally tell you that I only charge$10, 000. What I did just there was anchor you, right? I set your relative. I set you to look at, and evaluate me relative to the 30,000, right? Where you might've come in with your own anchor, and said like, I think whatever DC is selling is worth five bucks, I anchored you 30,000, then talk to you up a lot about that$ 30,000 person. And now, when I deliver the 10, 000, I, relative to them, I seem cheap, right? I'm a third the costs. That's anchoring. In marketing you can do the same thing. Marketers have done this forever. So, when you see something like, think about an infomercial, think about an ad. And they say, normally it costs X, Y, Z, and then they have a big X through it. And then, a discount discounting is a form of anchoring. I've anchored you. I was just in American Eagle the other day with my daughter, I don't go to American Eagle. [ inaudible 00: 11: 21 ] You knew too much stuff, that fans have been asking. And I have my daughter walks in, and she needed something. She's doing interviews for high school. And she said, wow, everything's always on sale at American Eagle, you walk in and everything has discount signs on it. And, I taught her a little anchoring lesson. I said, why do you think that is? And she said, and she's smarter than me. She said, that's probably just made up. Right. That's actually the real price. And, then they tell you that it's X percent more. So, it makes you feel you're getting a bargain every time. That's anchoring.

Speaker 2: And the point is, you could say that to anybody, and they're," yeah". But the point is, that people we forget, we're blind to this stuff.

Speaker 1: Totally, and she.... we've talked about it before we walked in again, and again she thought at American Eagle, no affiliation with them, they're having a great sale. When in reality, everything's always on sale there. And, something I want to talk about here before you go on, thank you.

Speaker 2: Go, please.

Speaker 1: One of the great ones crosstalk

Speaker 2: We can't give more because I want people to go do the work. We can't be Blinkist because they charge. This is free, but crosstalk

Speaker 1: I'm going to give them one more, cause there's a lot more here. Anchoring is amazing. So, I'm going to give you only one more, cause I've given you too much today, relative to the number of six star reviews I have, I've given too much today. Give, give give, must be broke. crosstalk The Halo Effect. Here we go. Right? So the Halo Effect is a great one. I'm going to show you a little example of the Halo Effect.

Speaker 2: Show me.

Speaker 1: I'm going to show you this. Again, you need to be on YouTube here to see this. We have a little billboard here up in San Francisco, I know exactly where that is, but there is an Ikea sign above this billboard right here. So what just happened here? We got a little... so, for the people who love IKEA, we got a little Halo Effect that just happened because of our association with IKEA here. We have no association with IKEA, but because there, our sign is next to their sign, we just were able to get a little bit of the Halo Effect from them. crosstalk

Speaker 2: I love that. A person we've talked about recently on the podcast was Shep Gordon who has produced a massive Halo Effect crosstalk Victor Küppers, the master of the Halo Effect. He called it the Light Bulb Effect. He was a music producer. Whenever he had a new artist, he would bring them around, and get other famous people around them. So people would say, who is that guy with Sinatra? Oh, that's my new so- and-so. He must be famous. He's hanging with Sinatra. crosstalk

Speaker 1: Exactly. That's the Halo Effect. Now, let's not give them any more, because we're giving them too much there.

Speaker 2: There's too many more. Look, you've got to go out and read the book.

Speaker 1: Read the book.

Speaker 2: Get the book, listen to the episode.

Speaker 1: Leave a six star review, send me a screenshot, and I will send you the book for free.

Speaker 2: But my takeaway, is I want you to take away the thing that I've learned recently, is that to me being a good marketer is not about understanding the technology, the tactics, the hacks, whatever. If you can understand this stuff, if you can understand how people think, and how people behave, and how people buy, you can find people that you can work with, that can go and do all of those other things. This is the magic. This is the magic in selling. This is the magic in marketing, but it's like studying. And a lot of people don't want to put in the work and do it.

Speaker 1: Yeah, and what I've found from even some of our amazing listeners out there, is that most people aren't good at knowing this stuff. Some of them are good at digesting this stuff, learning, they've learned some stuff from the podcasts, which is the goal of the podcast, right? To share some of this stuff, and help other people learn and grow. But they're not good yet at applying any of this. So they'll do the work, they'll read it, they'll understand it theoretically, they'll enjoy it, but they're not doing the work to then figure out, how do I apply this in the thing that I do? And we suffer from that ourselves. When we talk about this stuff all the time, we study it all the time, because we still don't have the level of frameworks and processes that we need to have for everything that we do, to make sure that we're applying the lessons that we're learning from, the stuff we're talking about today.

Speaker 2: Amen. Love it. All right, we're out of here.

Speaker 1: All right, six star reviews only.

Speaker 2: We will talk to you. Next time we'll talk, will be after Halloween, which everybody is anxiously waiting crosstalk

Speaker 1: inaudible we are a global phenomenon.

Speaker 2: What is Halloween? Halloween is, what is the definition? Halloween is an American holiday where people dress up in costumes.

Speaker 1: And, they go around and they get candy.

Speaker 2: Which, if you explain it that way, it is the most ridiculous thing

Speaker 1: Yeah, who knows where it comes from, but we are based in Massachusetts here, and at this office at Drift. And there's a place called Salem, Massachusetts, which is world famous for their Halloween celebrations. I will not be going there.

Speaker 2: DC's call to action was to leave six stars. My call to action is, I want you to google, New York's next head coach, and then tweet at me if you think that looks like David Fizdale. Okay? That's all I want. Thank you.

Speaker 1: Tweet at us. See you.

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