Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life by Rory Sutherland

  • Author: Rory Sutherland
  • Get the book: Amazon
  • Rating: 9/10

High-level summary

With the rise of data, marketers have become more and more focused on using it to come up with ideas for campaigns. They think that, if they just find the right data, their campaigns are certain to work. We’re think making campaigns logical will make more people buy.

But some things just aren’t logical. Red Bull is incredibly popular even though the majority of people hate the taste and toothpaste with stripes sells better, even though it doesn’t do anything.

Alchemy talks about how not everything that works makes sense and not everything that makes sense, works. It urges people to think about more than just the logical and focus on the emotional.

Notes & Highlights

  • “It only takes a very small change in context to make a gift an insult rather than a blessing; returning a present to the person who has given it to you, for example, is one of the rudest things you can do.”
  • Not everything that makes sense works, and not everything that works makes sense.
  • ‘A vote to leave the EU might result in rising labour costs’ – by a highly astute businessman who was so enraptured with models of economic efficiency that he was clearly unaware most voters would understand a ‘rise in labour costs’ as meaning a ‘pay rise’.
  • Big data all comes from the same place – the past.
  • Irrational people are much more powerful than rational people, because their threats are so much more convincing.
  • Being slightly bonkers can be a good negotiating strategy: being rational means you are predictable, and being predictable makes you weak.
  • Our politics seems to be context-dependent. For instance, ostensibly right-wing people will engage – at a local level – in behaviour that is effectively socialist. A Pall Mall club in London is typically full of rich, right-wing people, yet everyone pays equal membership fees, even though they use the club in wildly different ways. Goldman Sachs, as the author and philosopher Nassim Nicholas Taleb points out, is surprisingly socialistic internally: people distribute their gains among a partnership. However, no one there proposes a profit share with JP Morgan; in one context people are happy to share and redistribute wealth, but in another, they definitely aren’t.
  • The fatal issue is that logic always gets you to exactly the same place as your competitors.
  • There are five main reasons why we have evolved to behave in seemingly illogical ways, and they conveniently all begin with the letter S. They are: Signalling, Subconscious hacking, Satisficing and Psychophysics.
  • Robert Trivers gives an extraordinary example of a case where an animal having conscious access to its own actions may be damaging to its evolutionary fitness. When a hare is being chased, it zigzags in a random pattern in an attempt to shake off the pursuer. This technique will be more reliable if it is genuinely random and not conscious, as it is better for the hare to have no foreknowledge of where it is going to jump next: if it knew where it was going to jump next, its posture might reveal clues to its pursuer. Over time, dogs would learn to anticipate these cues – with fatal consequences.
  • For a business to be truly customer-focused, it needs to ignore what people say. Instead it needs to concentrate on what people feel.”
  • The scientific establishment has been right to be sceptical about e-cigarettes – we still do not know for sure what the long-term consequences of this technology might be. But the invention of a delivery device for nicotine that recreates much of the feeling of smoking without the carcinogens which accompany burning tobacco is clearly a significant idea, and something that should be given open-minded consideration. However, from the first moment this technology appeared, the opposition was out in force. Many countries banned the devices immediately, and the World Health Organization and anti-smoking groups worldwide clamoured for their use to be banned wherever smoking was banned. Weirder still, they were also banned in many Middle Eastern countries which have almost no prohibitions on smoking. The question being asked seemed to be, ‘Yes I know it works in practice, but does it work in theory?’.
  • It’s easy to achieve massive improvements in perception at a fraction of the cost of equivalent improvements in reality. Logic tends to rule out magical improvements of this kind, but psycho-logic doesn’t.
  • As I have already said, if you want to annoy your more rational colleagues, begin a meeting by asking a childish question to which the answer seems self-evident – the fact that sensible people never ask questions of this kind is exactly why you need to ask them.
  • In general, people are impressed by any visible extra effort that goes into a product: if you simply say ‘this washing powder is better than our old powder’, it is a hollow claim. However, if you replace the powder with a gel, a tablet or some other form, the cost and effort which have gone into the change make it more plausible to the purchaser there may have been some real innovation in the new contents.