A 15-Pound Penguin Beat 1,000 Pounds of Free Energy
More than six times as many people entered for a cute prize, and one winner refused cash to keep it.
Nudge Podcast · #63: Rory Sutherland | Why counter-intuitive thinking winsThe customer had a choice: take 200 pounds off the energy bill, or keep a little penguin that glowed in the dark. The customer kept the penguin.
The penguin was a nightlight, a cute little bird worth about 15 pounds. An energy company had offered it as a prize in a promotion, and this customer liked it so much that a refund could not pry it away.
A year earlier, the same company had tried to be sensible. It dangled a year without a power bill, a prize valued at more than 1,000 pounds. It was a serious prize with serious value, and it drew 67,000 entries, a modest number for a company of its size.
People do not always want what is worth the most. They want what they like, and what they like is often lovable rather than logical.
So the next year, the company stopped being sensible. Guided by the thinking of Rory Sutherland, vice chairman of advertising firm Ogilvy UK and author of the book Alchemy, it swapped a year of free power for the cheap penguin nightlight. On paper, it should have flopped.
It did the opposite. More than 360,000 people entered, over six times as many as had entered for the free energy. This customer went with feeling over arithmetic.
The sillier offer can pull harder than the sensible one. A spreadsheet can tell you that 1,000 pounds is worth more than 15 pounds. It cannot tell you how a child will feel seeing a little penguin glow in a dark hallway, or how a parent will feel watching that happen.
The customer turned down the 200-pound refund and kept the penguin.
Questions people ask
Why would anyone prefer a 15-pound toy to 1,000 pounds worth of free energy?
Cash is easy to compare, and a year of free energy is abstract until the bills arrive. A small glowing penguin is concrete, cute, and easy to picture in a child's bedroom, so it creates an emotional pull that a number on a bill does not.
Do other promotions show the same effect?
In this promotion it did, with more than 360,000 entries for the penguin against 67,000 for free energy. More broadly, marketers often find a specific, visual prize pulls well because people can picture owning it, but the source measures only this case.
Who is Rory Sutherland?
He is vice chairman of Ogilvy UK, a large British advertising agency, and the author of Alchemy, a book about irrational human behavior. He argues that business wins by being less wrong about psychology than competitors, not by being perfectly logical.