The world of neuro-marketing with Dan Russell

Speaker 1:

Welcome to the Agency Management Institute community, where you’ll learn how to grow and scale your business, attract and retain the best talent, make more money and keep more of what you make. The Build A Better Agency podcast presented by White Label IQ is packed with insights on how small to mid-size agencies survive and thrive in today’s market. Bringing his 25 plus years of experience as both an agency owner and agency consultant, please welcome your host, Drew McLellan.

Drew McLellan:

Hey, everybody Drew McLellan here from Agency Management Institute. Welcome to another episode of Build A Better Agency. Really glad you’re here. I’ve been super excited about this interview. Some of you may know that my original major in college was psychology. I was quite convinced that I was going to go into private practice as a psychologist, which didn’t end up working out. That’s an interesting story, sometimes, maybe over a scotch. But I ended up shifting from psychology to marketing and advertising, but the way the human mind works has always fascinated me.

And so when I met Dan Russell, who owns a company called Vivid Labs and found out what he did, how he uses sort of neuroscience to understand how to create reactions in buyers and how he helps clients do that, I knew that we had to talk to him. And so I’m super excited about that. But first, before we get to Dan, I just want to remind all of you that we have some killer workshops coming up. We have Money Matters in December. That’s the ninth and 10th of December. We have Build & Nurture Your Agency’s Sales Funnel. That’s in January, I think it’s the 20th and 21st. And then we have, with our friends at Mercer Island Group, Selling with Insights, the following week. I think it’s January 25th and 26th.

So all of the information about all of those workshops is on the website. I highly recommend you check them out. I expect all of them will sell out, so don’t wait too long before you grab a seat. We’d love to have you. They all are workshops that we’ve taught before and we get rave reviews. And so I would love to see you there, but I don’t want to delay any longer. Let’s get to our conversation with Dan because I have a ton of questions. And I know that once he starts talking, I’m going to have even more. So I don’t want to waste a minute, let’s do it. Dan, welcome to the podcast. Thanks for joining us.

Dan Russell:

Thanks for having me. I’m excited to be here Drew.

Drew McLellan:

So before we hit record, already, we’re kindred spirits. We’ve had a great discussion about single malt scotches. I have no doubt that this is going to be a good conversation.

Dan Russell:

Well, look forward to having one in person at some point in the future.

Drew McLellan:

I would love that. I would love that. So tell everybody a little bit about your background and how you came to start the company and the kind of work that you guys are doing now.

Dan Russell:

I run a company called Vivid Labs. We have been a conversion optimization agency for the last eight years and built up a library of what we call neuro tactics, which are neuroscience-inspired marketing strategies. And we use those as the basis of a lot of the experiments that we ran. And over the years, we really started to develop this scientific approach to marketing, to the point that we now teach it to other agencies. So we moved out of the service space and we teach it to agencies as well as other businesses. And we help people use those same strategies and optimization techniques that we developed over the course of those years. And on a philosophical note, I did that primarily because working with a small number of clients, although it’s a great way to run an agency, I was super excited to get that knowledge out into the world. That’s really what the focus is in this phase.

Drew McLellan:

Okay. So how did you come to start the company? What were you doing before that?

Dan Russell:

Oh man, I was kind of thrust into the entrepreneurial world. I went to college for finance and technology management. So I double majored in those two degrees and was actually on an investment banking path. I was going to-

Drew McLellan:

That sounds awful.

Dan Russell:

… going straight into banking. Yep. I had my internship and for whatever reason, they thought that I wasn’t a cultural fit. And they said, “Maybe you should try something else.” And I was heartbroken for a couple of weeks, but then realized that I had already started a business in college. So told the career service office that I wanted to work with a startup. So they found one for me, it was a company called SYNDUIT and I was the second hire over there. And it was a marketing technology company. I knew nothing about marketing, but I learned very quickly.

I was on the phone with chiropractors and natural paths and other natural medicine experts pretty much every hour of every day, helping them put together the marketing campaigns. And so I cut my teeth there and that’s when I started to get into following guys like Frank Kern and Jeff Walker and Ryan Dice and the gurus, the big guys. Eventually, getting to the point where I started taking on some local clients. My first client that I signed was a local construction company owner, helped him put together a website. And I was doing everything for everyone, just no niche, no focus. Just if you’re going to pay me a thousand dollars a month, then I’m going to-

Drew McLellan:

I’m going to do stuff.

Dan Russell:

… I’ll do whatever you want.

Drew McLellan:

Right.

Dan Russell:

Yeah. I’ll do your taxes if you want me to, like whatever.

Drew McLellan:

Back to that investment banking background.

Dan Russell:

Yeah, exactly, exactly. So eventually, I began to find that niche. And through the guidance of people like you and other entrepreneurs that were in my networks, I began to focus. And so started to get really obsessed over the science of human behavior and why we buy. And that obsession, that focus began to draw me towards this idea of building what I now call a marketing operating system, sort of like this master system of how to lay the right foundations. Because there’s a lot of moving parts out there, especially for entrepreneurs that don’t really know how to get started. So I would go into businesses… this is basically where the business model moved. I would go into our client businesses and help them lay those foundations and then move into that optimization territory. Because most of the time, I always say 5% of the time, they were immediately ready for CRO activities. 95% of the time, there was some work to be done.

Drew McLellan:

Yeah. I’m sure that is true. So how does one go from being in essence, sort of a marketing generalist, “I’ll build your website for a thousand dollars,” to really being a student of human behavior science? How do you make that transition and then how did you educate yourself? How did you learn what you know today? And then I want to dig into what you know. But first, how did you learn it? How did you figure it out?

Dan Russell:

I think that was really… honestly, that was trial and error for me. The way that I got the… you and I had a short conversation on a post you made a few days ago, about following your gut. And really, that was the process that I went through, the learning process that I went through, was learning to listen to my gut. Listen to my gut telling me, “This is the wrong type of project.” Listening to my gut telling me, “This is the wrong type of client. This is the wrong time to do this. You’re overloaded. You’re going to over-commit. You’re over-promising,” whatever that was. And so I started to understand where my gut was pushing me. Eventually getting to the idea of, “Okay, I do have an analytical mind and I do want to build systems.” I come from the startup world, right? I’m obsessed with scale and structure. And agencies are notoriously difficult to structure for growth, just because everything was on my shoulders. So I started to take that scientific perspective, out of a desire to have more control over my projects and my outcomes. So that’s where that focus came from.

Drew McLellan:

So how did you begin to understand sort of the science behind buying decisions?

Dan Russell:

That became a really heavy focus for me. The first step that I took was learning neuro-linguistic programming. And for those who aren’t aware, NLP is essentially the science of human language, using different speech patterns and writing patterns in order to mimic somebody’s emotional state and create new emotional states. But anyway, I started to get into that side of things, because I had run a couple of dozen different product launches, built funnels, did product launches for clients. And a number of them failed. And I was trying to figure out what about it failed and what about that product or that client, or what I did, I wasn’t ruling myself out, contributed to that failure. And I saw a big question mark. There are a lot of these moving parts, these variables, like is the product actually proven?

Early on in my agency, I ended up working with clients that just did not have viable products. Then there’s also me, is there something about the process I’m following that is not effective? And part of that was my understanding of how people buy and the different sub-variables, I guess, of that question. Why is it that people pay attention to, or feel differently about Pepsi than they do about Coca-Cola? Why is it that somebody’s going to buy from Zappos instead of some random shoe store online? Those sorts of questions were swirling around in my mind. My, as I said, “analytical mind” was attracted to the scientific side of things.

And so that led me to cognitive behavior studies, neuroscience, behavioral economics, sociology, all of these areas of research that had papers that I could just access online and read about how the human mind works. And a lot of these are typically known as biases or effects. People have probably heard of anchoring. There’s a lot of… like Robert Cialdini wrote about his major influences of persuasion in his book, Persuasion. And now more recently, Pre-Suasion. So there’s a lot of talk about these mental effects, but I started getting into that from the ground up because I was less… by that point, I was disillusioned from the distraction of another tactic and I really wanted to get at the root of what made people do what they do. And so that was sort of like me opening the door of this whole neuro-marketing world.

Drew McLellan:

So what did you discover? What are some of the… Well, first of all, let’s talk about your methodology because you talk a lot in your business about running experiments. So talk a little bit about that, because it sounds to me like how you tested all of these things that you learned was through a series of experiments, that either proved or disproved what you thought was true. So talk a little bit about the methodology and then we’ll get into some of the things that you learned.

Dan Russell:

The methodology is pretty simple. It’s the scientific method. So I haven’t invented anything new here. That’s kind of the beauty of it and the simplicity of it. I believe the most unique contribution that we’ve made as a company is figuring out how to translate those complex reports into practical and ethical marketing strategies that can be tested. So for example, let’s take anchoring as an example. For those who don’t know, anchoring is the presentation of a high number to a number higher than let’s say a price that your product is at in order to make your price seem lower comparably.

Drew McLellan:

So it’s the $1,000 hamburger model, right?

Dan Russell:

Exactly.

Drew McLellan:

Yeah. Okay.

Dan Russell:

Yes.

Drew McLellan:

Yeah.

Dan Russell:

Let’s say that we have a research study around anchoring. We would read that and think, “How can this be applied in a practical and ethical way…” that’s the filter… “to marketing?” And so that ends up with us saying, “All right, well, we’re going to initiate an experiment where the question is going to be centered around this effect.” So the question could look like, “Does presenting an MSRP on our product page increase the conversion rate of the checkout?” Right? We launch an AB test and test one version with the MSRP, one version without the MSRP and we have a result. That was a test of anchoring.

And there are more complex or at least more nuanced what we call neuro tactics that we test as well. There’s all sorts of them. We have a whole library of them. So that’s the process, the method. It’s just following the scientific method all the way from problem down to conclusions or question down to conclusions. I would say the most important step is taking those conclusions and documenting them and keeping them in some sort of place for your company to apply elsewhere. Usually, people launch AB tests and forget about them. So that next step, application, should be added to the scientific method for marketing companies and agencies.

Drew McLellan:

So what was the result of the anchoring test?

Dan Russell:

Anchoring has almost always increased the conversion rate. You’re going to see this in… you’re probably familiar with Russell Brunson. He’s got his Perfect Webinar Script. He’s got anchoring all over that method. You’re going to see it on every Amazon page. You see there’s an MSRP on almost every single Amazon product page. You see anchoring everywhere. Even when you hear somebody say, “Not $10,000, not 5,000, not 1,000, only 29.99.”

Drew McLellan:

Right. Two easy payments.

Dan Russell:

Right, exactly. [crosstalk 00:14:55].

Drew McLellan:

Right?

Dan Russell:

Yep.

Drew McLellan:

Yep. Yep. So as you have been doing your experiments, what was one that you thought was going to work that didn’t?

Dan Russell:

So we had a client that was selling a wine subscription online. Their whole business is built around selling monthly subscriptions of healthy wines, like no sulfates, no sulfites, and so on. And we’d began working with them to increase their checkout completion rate. One effect one, one neuro tactic that we are testing was the endowed progress effect. And the endowed progress effect states that if you are given a headstart on a process or a journey towards a particular goal, you have a higher likelihood of completing that process. Now, we thought this would be an interesting thing to apply in the copywriting and design of the cart page.

So on this website, if you clicked, “Add to cart,” I want to add the red wine subscription to my cart, then you’re brought to the cart page. Then you click through the checkout, checked off that I’m 21 years or older. Then you’re brought to the recharged checkout page that has two steps into itself. And then you get to the order confirmation page. Well, we wanted to focus on the cart page because we saw that there was a certain percentage conversion rate on the cart page and a certain percentage conversion on the checkout page. So we had our own experiments running on the checkout page. And the experiment that we were putting on the cart page was endowed progress effect. So we change the headline of the cart page from just “Your cart,” to… I think we had a few versions. One of them said something like, “Your shipment has been reserved,” or, “We’re packing up your wine,” right? That sort of thing, to get them thinking-

Drew McLellan:

Like we’re halfway there-

Dan Russell:

… that the process-

Drew McLellan:

Right.

Dan Russell:

Exactly. So you see this in other places like progress bars on upsell pages and so on. So we ran that experiment and it ended up being just totally in line with the original just cart page. And so we’re like, “All right-”

Drew McLellan:

So it didn’t diminish the close rate, but it-

Dan Russell:

No, it didn’t reset.

Drew McLellan:

… didn’t increase it.

Dan Russell:

It was so close. So one of the most important elements of the scientific method is looking at the data, so statistics comes into play here. And if the performance of two versions of the page are so close together, you need a ton of data in order to differentiate them. So if one page is at like 12% click-through rate and another one’s at like 12.5% click-through rate, it’s at that point, statistically insignificant, between one or the other results. So we closed down that experiment and focus all of our efforts on the checkout page, which worked very well.

Drew McLellan:

Okay. So part of what makes this fascinating for me is you have to first decide what you’re going to test. So how do you dig through all the scientific journals, all of the papers, all of this stuff, and come up with this list of things that you want to test? And then of course, obviously, you have to have clients to test them again. So as you were reading all of the scientific data, what filters did you use to go, “Worthy of a test, not worthy of a test, worthy of a test, I don’t think that’s going to work?”

Dan Russell:

That’s a really good question. It has a few moving parts. So the first piece, I would say, is the filter. The second part is the creativity involved with it. So the filtering mechanism actually was pretty objective. And the filtering mechanism was, as I mentioned before, we asked the question, “Is this practical and is this ethical?” So the first piece, practical, like can this actually be translated into marketing context? There are a lot of psychology studies out there that have nothing to do with marketing at all, or the way that we communicate, or the way that we make decisions. On the other hand, there are some that are. There’s constant flows of research coming out in journals that just have no relevance.

Drew McLellan:

Sure. Right.

Dan Russell:

That’s the first filter. The second one is ethical. So there is a neuro-marketing code of ethics that you can find on the NMSBA website, Neuromarketing Science and Business Administration. And that sort of outlines the guidelines or the playbook for people who want to be responsible. Because there are a lot of tactics, as you would guess, that aren’t ethical, that are just evil. And you can manipulate people and just not be serving the betterment of the world. So after you go through that filter, then you end up with the ones that you can test. That’s totally objective. So let’s say that you go through 10 journals and you come up with two mental heuristics or effects that you’d be able to apply and test their marketing context.

That’s why we have a library. So we just throw that in the library and then categorize it appropriately. So in our library, we categorize things according to a few different methods. So [ADA 00:20:38], which is a popular method of categorization. We have our own called DREAM, which stands for desire, routing emotion, attention, and memory. And a few others. So that we can look them up when we have a client that we say, “All right. Well, we’re having a problem with conversions,” or, “We’re having a problem with branding,” or, “We’re probably having a problem with customer experience.”

So we just look them up by that point and that’s the point where the creativity comes in. Because you can have a list of five neuro tactics that could equally be applied to a checkout conversions problem, but not all five of those are going to be appropriate to test. So then you have to think, “Okay, well, how can this be uniquely crafted? How can we invent an experiment that can test this hypothesis?” We did this actually with the endowed progress effect when we had a client’s checkout flow that we were testing, we… oh, no, it wasn’t the endowed progress. It was the Zeigarnik effect.

So there’s another effect known as the Zeigarnik effect, which basically states that we will feel a mental tension until a task has been completed. There’s a whole backstory to this with the researcher. But I’ll skip to the punchline, which is, we thought, “All right. How can we use this tension to increase the likelihood that somebody will complete an upsell?” So we thought, “All right. Well, what if we just had this animation? And we checked off all of the steps of this person’s funnel that they’ve already completed up until this point. Like it’s all green and it’s nice and they can feel like they’ve got it done.”

Drew McLellan:

But there’s two boxes left.

Dan Russell:

Exactly.

Drew McLellan:

Yeah. Right.

Dan Russell:

And we had that last box or the last two boxes that were yellow or red, and they were unchecked and they just appeared one at a time. So we just built this GIF image and put it on the checkout page, checkouts increased by 30%.

Drew McLellan:

Wow.

Dan Russell:

That was it.

Drew McLellan:

Yeah. Huh.

Dan Russell:

That was it.

Drew McLellan:

Fascinating.

Dan Russell:

Yeah. But that’s the creativity, right? It’s the… in the same way a researcher has to invent the experiment. Sometimes they’ve got precedents. But in this case, you really have to think, “How can I use the copywriting and the design and the technical performance of my page or my funnel or whatever it is, my direct mailer, to incorporate this scientifically proven mental effect?”

Drew McLellan:

Awesome. All right. So I have a ton of questions, so let’s take a quick break. And then when we come back, I want to add two questions. One, all your examples so far have been online. So I’m wondering if this works in the analog world as well. And two, I want to hear about some of the effects that you think are sort of most universally potent. So let’s take a quick break and we’ll come back and dig into those.

Hey, there, I am really sorry to interrupt, but I want to tell you about a brand new workshop that we’re offering on February 17th and 18th. It is going to be taught by Carla Johnson, international speaker, bestselling author. And it’s all built around her new book, Rethink Innovation. And the whole idea is how do you build your agency’s idea machine? Let’s face it, the one thing that we have got to be good at is generating big, bold ideas for clients. And Carla is going to teach us why we struggle with that today. How to reignite it, not only in us, because in many agencies, you, the leader, are the one who has all the big ideas, but not everybody else can do it. That can be changed.

She’s going to teach us a scalable framework that we can take back to our agencies and teach everyone how to generate more reliable, effective, big, big ideas. It’s going to be a great workshop. It’s going to be very hands-on. I’m super excited about it, and you are going to love Carla. So head over to, on the website, head over to how we help under workshops. You can see Rethink Innovation. And by all means, sign up quick, because I think it’s going to sell out. All right? Let’s get back to the show.

All right, everybody. We are back with Dan Russell and we were talking about sort of the psychology and science of decision-making. So I posed two questions right before the break. One was the examples you’ve given so far in our conversation have all been digital examples. So does this only work online, or do these effects, as you call them, work just as powerfully in the analog world?

Dan Russell:

They work just as powerfully. The digital medium is only… that’s not going to affect whether or not a particular mental effect has been triggered. The only… actually, the physical world has more of a capability of triggering these effects than the digital world, because you’re engaged on more senses than just multimedia, which is just audio/visual. Sometimes, the click is involved and so on. But for the most part, you don’t smell anything, you don’t taste anything, there isn’t a multi-sensory experiential marketing journey that you go through. Like in my book, I explained the experience of walking into a Cinnabon, right? Or walking by a Cinnabon more specifically, in the mall. You know what a Cinnabon smells like, number one. That’s the first sense that you’re hit with.

Drew McLellan:

Oh for sure. Right, right.

Dan Russell:

Right? And that’s called olfactory marketing. So not many people know this, but the new car smell comes out of an aerosol can. The sound of a Coke can is engineered. The smell of Abercrombie and Fitch and Subway are all engineered. All those things are very carefully designed. So you’re walking by Cinnabon and you smell that, that’s on purpose. And so you turn and smell it. Our taste is 80% smell. So our brains are automatically going into mouthwatering. Pavlov’s dog sort of mode. We see Cinnabon’s logo. We see the buns in the oven. We might hear the sound of them loading them into the wire mesh tray. All of these overwhelming, totally multisensory, immersive feelings and signals are being sent to us.

Drew McLellan:

In a nanosecond.

Dan Russell:

In a nanosecond, yes.

Drew McLellan:

Yeah. Right.

Dan Russell:

And we’re processing all of it. And so we’re finding ourselves salivating. We’re just wanting to check off that last sense, which is tastes. Give me the-

Drew McLellan:

The last 20%, right.

Dan Russell:

Exactly.

Drew McLellan:

Yeah.

Dan Russell:

So that is… I mean, a lot of people go for… in terms of physical marketing, sometimes it’s tempting to think, “Oh, well, direct mail or the guy’s swinging the sign on the street.” But in a lot of cases, if there’s a listener that works with somebody in a physical store, this stuff, these multi-sensory marketing strategies will change the game and make it so that… and it’s very much on the branding side because this takes a little bit of time to build up, but it changes everything. If I asked you what a Subway smells like, you know what a Subway smells like, even if you don’t like Subway.

Drew McLellan:

Right. That’s right.

Dan Russell:

That’s one example of these neuro tactics working on a more practical example. Specifically, with direct mailers, I found that… I mean, the one that I go to most often is personalization. I just got something in the mail the other day that had my name written on the front of the envelope in big bold letters, not in the address section, but was like, “Dan, we have this sort of offer for you.: And it just causes me to have like a split second more attention.

Drew McLellan:

For sure.

Dan Russell:

I always throw them away anyway, but the open rate-

Drew McLellan:

Always?

Dan Russell:

Oh, I shouldn’t say always, no. Not always. But if I can tell that I’m not going to be interested, then-

Drew McLellan:

Yeah. Right, of course.

Dan Russell:

… it goes in the trash.

Drew McLellan:

I mean, but it gave you the millisecond to decide, right?

Dan Russell:

Exactly.

Drew McLellan:

As opposed to just ending up in the wastebasket.

Dan Russell:

Which is a good point.

Drew McLellan:

Right.

Dan Russell:

Yeah. It’s a good point. I mean, that’s what people fight for in digital anyway, right? It’s that extra split-second consideration next to the overt value pack envelope.

Drew McLellan:

Yep.

Dan Russell:

So yeah, absolutely. These tactics work in person and in physical form just as well, if not better than digital.

Drew McLellan:

Yeah. It makes sense though, that part of why they worked even better in the physical world is because you have more resources. You have more senses. You have-

Dan Russell:

Right.

Drew McLellan:

You have more ways to-

Dan Russell:

You have the weight of the envelope in your hand.

Drew McLellan:

… get to the buyer.

Dan Russell:

Yes.

Drew McLellan:

Yeah. Yeah. Okay. Of all of the ones that you studied, what are the ones that you think, “Boy, if an agency is not using some of these, for and with their clients, they’re missing out?” What are some of the ones that we should know about?

Dan Russell:

Yeah. So the ones that I always hit first are actually, I think most of them are in Robert Cialdini’s Influence book, because those have been the little hinges that swing big doors for us. Authority, scarcity, liking, which is controlled by a couple of other effects in terms of reputation and personalization and so on. The endowed progress effect, we’ve used a lot for multi-step customer journeys, progress, indication. The Zeigarnik effect as well. We’ve used that in multiple cases. Social proof is another huge one. We always, if we’re building a page, there better be testimonials on it. If not, you’re already behind your competition and people are expecting it and they’re not seeing it.

Drew McLellan:

Right.

Dan Russell:

So those are the sort of best practices.

Drew McLellan:

So social proof is basically just endorsements from people who look and sound a lot like me.

Dan Russell:

Exactly. Yes. And the only difference between social proof and authority, it’s the same thing, except for people that are elevated in status and reputation in an industry.

Drew McLellan:

Okay. So social proof is Biff from Montana, who is talking about the same attributes that I would care about in buying this thing, talks about how great it is. Authority would be somebody who is known in the space, right?

Dan Russell:

Yep.

Drew McLellan:

Or is famous-

Dan Russell:

Or a brand that’s known in the space.

Drew McLellan:

… famous in some way or a brand is actually endorsing the product or service.

Dan Russell:

Correct.

Drew McLellan:

So what about authority in terms of the brand’s authority? So there’s authority in that Bob Smith, who’s a super famous naturalist, says this is the best zoo on the planet. And what about if Bob actually works at the zoo or is talking on behalf of the zoo? So how is authority different when the source is the authority, as opposed to an authority endorsing as a third party?

Dan Russell:

That’s a really good question. I don’t have the data to back it up, so I’ll just answer anecdotally. The brand supporting another brand is typically more appropriate than a brand supporting a person. There is sort of a mismatch there. And this is just me answering intuitively. This would be a great experiment to run. So like if Patagonia came out and said, “Dan is great at his job,” that would be different than the CEO of Patagonia saying, “Dan is great at his job.” Is that getting close to-

Drew McLellan:

No.

Dan Russell:

… to an answer?

Drew McLellan:

Interesting, but not what I… Let me try asking my question again. So as you know, at AMI, one of the things that we talk to agencies about is taking a position of authority. So they’re a subject matter expert, kind of like you are a subject matter expert around this whole, how do you use the scientific method to sell more stuff, right?

Dan Russell:

Yep.

Drew McLellan:

Properly and ethically.

Dan Russell:

Yep.

Drew McLellan:

So you talking about the scientific method and using your authority, I’m assuming is an effect. I afford you more confidence because you are a known authority in the space. So that’s different than Biff from Montana saying the socks don’t chafe his feet, right, what I’m saying?

Dan Russell:

Oh yeah. Absolutely. Yeah. Yeah, you own that space around you and that is… and authority has many different elements. If you end up reading the research, you can sort of see what creates that stack of authority. But yeah, you’re absolutely right.

Drew McLellan:

Okay. So you said authority, you said… we talked a little bit about anchoring already. You talked about social proof. What was one of the other ones that you mentioned?

Dan Russell:

So there was a scarcity.

Drew McLellan:

Yep. So do people not see through that, the, “You have to buy it by today or it’s going up in price or-”

Dan Russell:

That is the million-dollar question.

Drew McLellan:

Right.

Dan Russell:

So it has to be authentic scarcity. There’s not… people see through the, “This offer’s going away in five minutes.” That’s not to say that it’s not used and that’s not to say that it’s even not effective. But in the long run, when you have brand considerations to keep in mind, authentic scarcity is the best way to go. So an example of authentic scarcity was if I’m hosting a workshop and I say, “We have 10 spots for this workshop.” And I close the cart down at 10 spots, that’s scarcity. And I send out emails, letting people know we have five spots left, four spots left, three spots left. That’s authentic scarcity because it’s like a stadium saying that it’s sold out on tickets for a show.

So that’s quantity scarcity, there’s also time scarcity, which is, “We’re hosting this workshop on October 11th and ticket sales cut off on the 8th.” So on the days leading up to the eighth, we start sending more emails, sending more texts, posting more ads, more social media posts, all that things shut on the 8th. So that’s time scarcity. Where things get a little bit gray is with evergreen world. And when you have a course or some sort of offer that says, “Oh, this is a one-time-only offer,” right? That’s a big funnel step, the OTO, one-time-only. That is ethical. That is appropriate as long as it’s true.

Drew McLellan:

Right, right.

Dan Russell:

Right? You can’t reset the timer every time somebody refreshes the page. And me knowing what I know, I know that if I go on somebody’s website and I see an OTO offer, and I say, “No.” But then I decide later, “Oh, I want that,” I just go in and I sign up again and I see the same OTO.

Drew McLellan:

Right.

Dan Russell:

I know that, but other people don’t know that. So that’s where you get into the gray area of whether or not you want to use these tools. And so I leave that up to the listener to decide.

Drew McLellan:

Yeah, it was interesting. I was on the United website the other day, and they’ve added a new thing where they list all their prices for other different flights. And then they tell you like, “Four seats left at this price.” And my first thought was, “Does that mean all the prices are higher? Or are you just saying that this price at this moment is the price, but it could be cheaper tomorrow,” right?

Dan Russell:

Right. Right. Right.

Drew McLellan:

Yeah.

Dan Russell:

That’s interesting wording.

Drew McLellan:

Yeah.

Dan Russell:

You are right.

Drew McLellan:

But it did make me go, “Oh, there’s only three seats left at that price. Maybe, I better pick my seat.”

Dan Russell:

Yeah. It could be double the price tomorrow. It could be double the price.

Drew McLellan:

Right. But I thought it was interesting that they also don’t tell you that the price is necessarily higher. They just imply, right? So maybe-

Dan Russell:

Yep. But that achieves the intended effect, which is that what I have now-

Drew McLellan:

It makes you think.

Dan Russell:

… what I have now, I might not have later.

Drew McLellan:

Yeah. Right. Well, so that’s an interesting, again, a play on scarcity, right? Is that it’s in my hand today, so am I willing to let it go? Yeah.

Dan Russell:

Mm-hmm (affirmative).

Drew McLellan:

Yeah. All right. So give us one more and then I need to let you go. But one more effect that you think all marketers should be thinking about as they’re building out campaigns, or writing copy, or designing website pages, cart pages? What else do we need to be thinking about?

Dan Russell:

Well, I will say… so this is less of a neuro tactic and more of just a regular tactic. And that is the use of video. That might sound a little bit cheesy. That might sound a little bit overused, but I can’t emphasize enough how much the use of video has transformed conversions over the last year in the experiments that I’ve run and the research that I’ve looked at, that has been a big one. Now, the level beyond that is, and something that I’m actually in the midst of testing right now, is combining video with personalization. There’s a software that came out from Typeform eight or nine months ago, I think. At least that’s when I found out about it and I think it was in beta. It was called VideoAsk. And it’s a conditional… it’s like building a quiz with each step having a video response.

And so there’s a personalized video journey that you can… it’s sort of like if you’re familiar with Ryan Levesque’s ASK Method, where you collect information about the person upfront. And then that commitment will lead to them putting in their email at the end of the process. It’s sort of like that on crack, because you record all these videos for four or five different branches in the customer experience. And I’m testing that right now, in the context of lead generation, to over-deliver in the initial experience. And so that’s something that I would absolutely recommend everybody does. And try to incorporate video in creative ways that makes use of personalization and this more… I would guess you could call it dynamic customer journey, specifically with the lead generation side of things. So that’s one thing I would pay particularly close attention to.

Drew McLellan:

So do you ever run out of experiments, do you think, or will you be doing this for eons and eons?

Dan Russell:

I think there are so many ways of mixing and matching that you could just keep going. I don’t believe that there’s a perfect landing page. I don’t believe there’s a perfect direct mailer. And it’s not because there’s an abundance of optimizations, but there is an audience that is constantly changing. Not only is technology and social media platforms and so on and trends advancing and evolving, but people are getting older and there’s new people entering the market and needs are changing. So the target’s always moving and we’re always behind the target. The whole process is trying to keep your crosshairs as close to the target as possible, and keeping up. [crosstalk 00:41:11]

Drew McLellan:

Well, and you need to think about the societal changes and cultural changes. So it’s not just that the buyers are changing, but the world around them is changing and so they react differently.

Dan Russell:

Yep.

Drew McLellan:

Yeah.

Dan Russell:

Exactly.

Drew McLellan:

So if people want to keep track of your experiments, if they want to stay in touch and learn more about your work, what’s the best way for them to do that?

Dan Russell:

Best way would be to follow me on social. My Instagram is heydanrussell. And if you want to see what we’re up to at Vivid Labs, the website is teamvivid.com. And that’s where we’ve got all of our stuff.

Drew McLellan:

Dan, this was fascinating. Thanks for… thanks… oh, I know I do have one more question. So you reached out to me to ask me to be on the podcast. Did you use an effect in the email?

Dan Russell:

I did not. That was me just reaching out because I was- [crosstalk 00:42:00]

Drew McLellan:

I’m going to go- [crosstalk 00:42:00].

Dan Russell:

… you from, I believe, a mutual friend.

Drew McLellan:

I’m going to back and see if I can find that original email.

Dan Russell:

You can maybe reverse engineer it, something must have sunk in over the years.

Drew McLellan:

Well, it worked, because our email conversation was good and I knew that you would have something fascinating to talk to us about. And you absolutely-

Dan Russell:

Well, I’m happy to have shared.

Drew McLellan:

Thanks for being on the show.

Dan Russell:

Been a pleasure. Thanks for having me.

Drew McLellan:

You bet. All right, guys, this wraps up another episode. Again, as you know, and I hate to sound like a broken record, but I don’t like to do episodes that don’t give you something to play with or experiment with or think about. And Dan gave you all kinds of very tangible and practical things to start thinking about when you think about your clients. And so I would love to hear how you’ve put some of this into play, how it worked, the experiments that perhaps you’ve created around some of the things that Dan’s talking about. This is good fodder. Also, this would be a great lunch and learn episode for you to play for your staff and get them thinking differently.

So often, we’re pushing ourselves to come up with new ideas, new ways to sort of wow our clients. I think there’s some great seeds of that in this episode. And I think Dan served up some really thoughtful things for you to ponder and play with. So, I hope you do that. In the meantime, of course, I want to give a shout-out and a thanks to our friends at White Label IQ. They are the presenting sponsor of this podcast. They make it possible for me to hang out with you every week. So much gratitude to them. As you know, they do White Label PPC design and dev work. You can learn more about their work at whitelabeliq.com. So grateful to them, and also very grateful to you.

Thanks for coming back and listening. It’s always fun to hang out with you for an hour. I know how busy you are, so I’m always glad that you find the time to spend it with me. I’ll be back next week with another guest. And in the meantime, you guys know how to track me down. I’m on all the socials and you can always shoot me an email through at agencymanagementinstitute.com. I will be back next week. Thanks for listening. That’s a wrap for this week’s episode of Build A Better Agency. Visit agencymanagementinstitute.com to check out our workshops, coaching packages, and all the other ways we serve agencies just like yours. Thanks for listening. (silence)