AI Is Scaling Mediocrity - Will Leach

0:00Hey, welcome to the CMO Whisper Show. I'm your host, Steve Olenski. Part marketing practitioner, part ad agency veteran, part journalist, I was a writer for Forbes for 10 years. I've had so many insightful conversations over the years with business leaders, to athletes, to celebrities, to of course, CMOs. The only difference now is instead of sharing those insights through written form, I'm doing it this way. My guest today is Will Leach, founder of MindState Group and a leading expert in behavioral science and decision making. Will previously led PepsiCo's behavioral science lab and has worked with brands including PepsiCo, Disney, Mars, Capital One, and 7-Eleven to better understand why customers choose and how leaders can make smarter decisions.

0:49He's also the best-selling author of Marketing to Mindstates and advises executive teams on behavioral science, AI-powered insights, and growth strategy. Will Leach, welcome to the show.

1:02Will Leach:Hey, thanks for having me on the program there, Steve. I appreciate it. You are very welcome, my friend. Great, interesting background you have. We had a really good off-the-air conversation. Listen, you've spent your career studying why people choose X, right? Right. So when you look at the marketing landscape today, what's the biggest thing that you think brands are getting wrong about customer decision making? Yeah. One of the first things that comes to mind, and it's an old adage, but it still holds true today, is that brands talk way too much about themselves and they don't focus enough on their customers.

1:34Will Leach:So I, you know, I remember the days when I was on the brand side, I was working on SunChips. And I'll never forget this. When I was on SunChips years and years and years ago, at that point, I was not really into health food. I certainly wasn't into environmentalism, but I will tell you that when you join a team and for 10 hours a day, all you were doing is talking about growing that business, creating brand affinity, making sure that we aligned our customers values. very quickly, you start taking on the persona of your brand. And what I think happens is that when you're living it every day, 10 hours a day, that brands get confused on what their real mission is, is really to align to their customer's subconscious and their customer versus trying to express what the brand can do for the customer.

2:16Will Leach:And so I think that's the number one thing they can do. I tell my students all the time, right? From the time you were born to the day that you die, the entire world, you will always be the center of it because your eyes are always going out and everything you take in is coming back to you. And I think that we as brands do the same thing. We got to remember our customers are in their own world. They're the heroes of their world and brands sometimes forget that. That's the number one thing I see that they're doing. I love, and I did not put you up to that because that is my number one pet peeve too.

2:44And it's been forever about brands talking about themselves and kind of an adjunct to that is, I did this thing years ago, kind of a half tongue in cheek going, why do brands always think with every communication they have to try and sell something? Like every single communication. It's kind of along the same lines, right?

3:01Will Leach:Performance marketing, right? Now we're held accountable to those metrics. And so the brands, I get it, CMOs and, you know, directors of marketing, they're being held accountable to short-term metrics. But those short-term metrics are great on the short run, but actually they fail you in the long run. That's why equities and brands, you know what's happening with, you know, we can make lots of stories around Nike or whatever. But yeah, I think you're exactly right. We kind of forget what our real job is to do. And I always think our real job is to create brand evangelism and attachment. If I do that well, I'll get all the top line revenue growth I need from that.

3:35Will Leach:But you got to think, you know, balance both. I think right now, so many people are focused on short-term get sales marketing that you have to focus on your company and your brand and your product. And that's unfortunate for the long-term growth of your brand. It really is. And we're going to get into brand evangelism a little later, but it just bears repeating or bear, you know, this incredible pressure that are on CMOs and marketers and really now to do more with less with AI and to hit those numbers all the while a marketer going, yeah, but I have to establish a relationship first. You're not giving me enough runway to do that, but we'll save that for part two because that could literally take up the whole rest of the show.

4:12So let me keep going. So right now we have more data, we have more technology, we have more AI than ever before, and that's not hyperbole. So my question is, are marketers actually getting better in understanding customers or are they just getting louder?

4:24Will Leach:Wow, I could argue a little bit of both. Here's what data allows you to do. It allows you to become smarter, but, and I talk to my clients, I'm an effective AI, like using artificial intelligence to become more effective as market researchers, as marketers. I think what's happening AI right now is there's this large swing to become efficient and efficiency AI. So trying to do faster creative, or cheaper, you know, all that, all that kind of stuff. Become more efficient. And that's important. I totally get it. I totally get that. The problem is, is that if you have okay and mediocre marketing, then all you've done is 10X that mediocrity.

5:05Will Leach:Now, if you use artificial intelligence to become more effective, then you scale that becomes a much different thing. So what we're focused on a lot, you know, and I think other behavioral science firms are focused on is less on efficiency, though we know that's a big part. But how do we take all that unstructured data and actually understand those deep psychological rationale and those deep psychological drivers of decision making? That makes us more effective than using artificial intelligence to apply that, to activate on that in marketing communications. Yeah, it's a really good, wow, it's a whole nother topic we could talk about as well.

5:39So we'll stay there for part three. How's that? Yeah. We're creating a series here. Brain equity. Talk about a loaded topic, right? Right. And a lot of things I want to talk to you about when it comes to brand equity. But has that definition changed in the AI era or is it still basically fundamentally the same?

5:55Will Leach:I think from a human perspective, it's the same. I think that how we go about establishing brand equity has changed a lot. So there's this term called VUCA. You ever heard of VUCA? I have not. Yeah. So VUCA came from the Army War College. It's probably two decades old, but VUCA stands for volatile, uncertain, chaotic, I think, and then ambiguous. And that's the world we live in, right? And that was, you know, 20 years ago with basically establishing the reality of generals to perform in battle. Like it's a volatile, uncertain time. Well, technology has made VUCA even bigger. We are being inundated with advertising.

6:30Will Leach:I think the latest stat was that on any given day, you're looking at about 8 ,000 to 10 ,000 ads a day. Like these are not brand impressions. These are advertisements. So what happens is your mind has this thing called the VAS, the RAS, the reticular activating system. But basically what that is, it's a filter that is constantly trying to eliminate noise. And all we've done is 10x that amount of noise because now anyone can become a marketer. Anyone can. It's very cheap. It's very fast. And we can just test and control our way into what we think is good marketing. But over the course of all those tests and controls, your customers are being hit with so many messages that makes marketing equity or brand equity much, much harder to do.

7:12Will Leach:So technology is making your job harder if you're in the marketing world. But behavioral sciences makes your job, should be able to make that job a little bit easier. Because if you understand that VAS system, you understand how to get through that filter that we're talking about, then you're able to establish loyalty and equity. All of that is all brought to life through the world of behavioral sciences. So, okay, let's build on that for a second, because we know the attention is ungodly fragmented now, right? And I know we said it 10 years ago. I get it. People are rolling their eyes. But this is different.

7:43The age of AI has changed everything. So what are some things that the best brands are doing that stand out where attention is so fragmented?

7:51Will Leach:The number one thing I see brands that are successful in not just gaining attention, but then maintaining attention is using goals, goal theory. So basically the idea here is that every one of your behaviors, the vast majority of those behaviors are made at the non-conscious level, but they're always, always, always directed towards a goal. Remember we're talking, Steve, about this is why you don't want to always talk about your brand. You want to talk about your customer because when you talk to your customer's goals, especially their aspirational goals, the thing, the person they want to be on their very best day.

8:21Will Leach:if you can articulate that in a sentence, if you can articulate that in your subject line, if you can articulate that in the first four seconds of your video, right? That's about the amount of attention most people have right now, at least on social media platforms, about four seconds before they make the decision to watch or to walk away. If you can capture their goals in that moment, you're much, much, much more successful in capturing that attention, but also maintaining attention. Those brands that immediately speak to their customers' aspirational goals are gonna be the brands that are highly aligned to their customers.

8:51Will Leach:And also they're associating that equity with their customers. End outcome is what they're all wanting. That's why people buy products. It's to get the end outcome. Yep. And inherent to me in the word aspirational is emotional. Yep. It is. It's a higher level of emotional, in fact. So emotional goal could be, I want to feel successful. The aspiration could be, so that I can be the type of dad that can provide for his family. Success, emotion, that drives emotional engagement. That gets people to engage with your advertising. You want your memory, if you want your ad to be memorable, show a person that because of their success, they're a better father to their kids.

9:24Will Leach:And if that's what your customers aspire to be, they'll remember you every single time they have that, regardless whether if they're in your category or not. All right. I'm going to do a hypothetical, not a CMO, but if you were talking to a CEO, not a CMO, a CEO, one piece of advice about protecting and growing brand value over the next five years. What is it? And growing brand value? A CEO now. Yeah. I would say that the first thing I would think about would be making sure that the entire organization is aligned to your customers. I'll go back to goals. So marketing is communicating how you, you know, hopefully aspire to be the brand that they buy to reach their goals.

10:03Will Leach:Your organization, when they touch your product, when they talk to your service reps, the strategy should be all about how do we as a company help that person from the point where they are right now, to where they reach their goal, how do we intertwine into that thing? If your company has a lot more touch points, I think most CEOs think about it. Yeah, amen. I can't add to that. Okay, so we know behavioral science is really at the center of so much of your work. Give us one or two behavioral principles every marketer should understand, but a lot overlooked. Yeah, so I always tell my students, if you want to understand why people do what they do, you want to understand four different factors.

10:38Will Leach:The first thing are goals. We've talked all about that, but nursing people's goals because all of our actions are directed towards a goal of ours. But that's not enough. Like, that's great. That's good to know people's goals. But what you also need to do is how do you get people to emotionally want to reach those goals? That's something called motivational psychology. So you want to understand what motivates your customer. There's like nine core motivations that drive the vast majority of human behavior. Things like our desire for safety and security, very Maslow, right? Or our desire for autonomy and freedom.

11:07Will Leach:Another one is our desire for empowerment, that we can control our environment. So there are these nine motivations. Why you want to know that as a marketer is because you can certainly create advertising that speaks to we help you reach your goals. Great. But you know how it is. People lack emotional fuel. They just lack that. You can use advertising and specifically talk about if you use my brand, you will be successful. Remember that example we gave there, Steve? You will be successful. That's the achievement motivation. So you can actually get somebody to engage with your advertising by just integrating achievement primes.

11:41Will Leach:The last part of the model that I'll talk about now would be something called regulatory fit. But when we approach our goals, we are seeking to avoid pain or maximize gains, right? It's a simplistic way of thinking about regulatory fit. But why that matters to you as a marketer is that the way you write about your features will differ. If your brand and your customers are aspiring for optimistic approaches, right? They want more gain. Your feature should be written as, you buy my brand, we are more likely to help you gain more good in your life. You could have other customers, same goal, same motivation, but if they look at the world through this kind of resistance of pain, you need to now talk to them, my goal for you, or let's say, my brand is here to help eliminate anything that could get in your way from you reaching your goals.

12:25Will Leach:Same idea, same product, but slightly different way of framing it. Your job as a marketer oftentimes is lower resistance and you can lower psychological resistance to your communications by just aligning your customers. Are they cautious when they make decisions? Are they optimistic? It's a really simple thing any marketer can do tomorrow. And you'll see nice little bumps in marketing just because it aligns with how customers think about making their or taking action. I agree with you that it's simple. So, but then I have to ask, why are so many marketing decisions still based on assumptions instead of actual behavior?

12:56Will Leach:Yeah, well, I think a lot of times what we do is, you know, behavioral and behavior costs money to figure out. And I would argue the tools are really hard as well, Right, Steve, like back in the day, the tools that you used were, I got to go interview a bunch of people that takes time, that takes money. I don't see the ROI on that very often, right? Because, you know, I see ROI on dropping coupons. I can see that ROI immediately. I don't see ROI a lot of times on research. So I think a lot of companies, even today, they don't want to spend that money because it's hard to attribute that spend onto revenues.

13:28Will Leach:But I would also say that how many companies out there are still founder led? and they grew from zero to$5 million,$50 million based upon their hunches because they knew the market so well. So I think it's kind of like they feel very successful. So why would I change that by bringing in something that I've never had to use before? So you mentioned brand evangelism earlier and I want to kind of talk about that and brand loyalty here. So you've talked, we talked about how understanding customers choose is so important. My first question is, is loyalty still enough or should brands be focused more on creating evangelists?

13:59Will Leach:Yeah, I would have told you 30, 40 years ago, loyalty was easily enough. We just don't live in that world today. There are too many choices. There's so many products out there today, and that there's ripoffs and knockoffs and things like that. that, you know, I think in the day, loyalty was very much, and even I tried to establish loyalty back in my days at PepsiCo, right? That's what we used to talk about. How do we create brand loyalty? Loyalty is oftentimes created by associating your brand with people's values, right? Maybe their standards or maybe, you know, what their values, or maybe they value transparency, or maybe they value environmentalism, whatever those values are.

14:39Will Leach:And so what we used to do is say, okay, let's go create loyalty by making sure that you know that I also feel that value. I'm also that value. Here's the problem with behavioral sciences integration into this work is that our values change all the time, Steve, all the time. We have so many values. I value strength, but I also value compassion. So if I have those two things, those two values come into conflict all the time. There's a lot of work in behavioral sciences like that. So if you're only establishing on people's values, you'll create a sense of loyalty, but frankly, values come into conflict all the time.

15:08Will Leach:I think what you want to do now is try to figure out how do I create evangelism? And it's not just necessarily a higher order level of loyalty, right? Evangelism is not connecting on somebody's values, but connecting on who they see themselves on their very best day, right? If I can establish that my brand can connect with my customers on their very best day, I can help them reach those, again, those aspirational goals that drive so much of our world, then you can create not just loyal customers, but you actually have customers who will fight on your behalf. Patagonia does this. I mean, there's always brands you could talk about these iconic brands.

15:47Will Leach:Patagonia is a great, great evangelist brand. You go out and somebody badmouths Patagonia, right? Patagonia fans or their evangelists, they will attack back. They will fight you online, telling you how great of a company Patagonia is. As great an iconic brand as Doritos, people don't fight for Doritos, man. I worked on that brand. People are not actively fighting on Doritos. There are people who are loyal to Doritos, but they're not fanatics for that. And so the way you do that is you associate your brand, not with people's values, but with their aspirations. And when you do that, not only do you get the sale, but you also get that evangelism, that advocacy that so many brands need in today's world.

16:26So how do you define the difference between a loyal customer and a true brand evangelist?

16:30Will Leach:Yeah. I think loyalty oftentimes is how this brand makes me, I feel good about this brand. So that's somebody who's loyal. That person feels good about your brand. I think evangelist, you would measure that differently. I say, I feel this brand is a part of who I am, a part of my self-identity. So when a brand becomes a part of your self-identity, I'm tattooing it on myself or whatever. That's not loyalty. That's an evangelist. And so I think it's when the brand helps you express who you are as an individual. That's what evangelism. Okay. We skirted, we mentioned the two little two-letter word that's in everybody's room is AI, right and i i can't let this go without asking where does will leach think ai is creating the most value right the most value i'm going to say is in the effectiveness side of and there's not enough investment going into that space most investment that i see with artificial intelligence is making research faster cheaper easier for people or it's helping marketers develop more advertising faster and cheaper where i think the future of ai will will be is when artificial intelligence has been linked kind of with what we understand about our customers at a subconscious level.

17:37Will Leach:So the behavioral sciences side of it. I think that'll come in two different ways. One will be artificial intelligence will be used so that if you're a brand person out there, if you're a CEO of a small company or whatever, and you want to run ideas past your customer, you will just pick up your phone and you will talk to your customer, but it'll be a synthetic representation of your customer. Now we can do that today very easily, right? Lots of companies are doing that. I think where behavioral sciences comes involved is that right now you can use a large language model to, you know, express opinions that are what you would expect from your customer, right?

18:10Will Leach:You can replicate your customer's tone of voice. What I think artificial intelligence cannot do without the work of behavioral sciences is understanding how your customers think and make decisions. So behavioral science or behavioral AI is focused in that space, not just replicating your customer, but being able to deeply think like your customer, make decisions like your customer. So we talk about these things as emotionally intelligent customers so that is the first part the second part of ai is okay great so if i have this always on conversation if i can talk to a customer and ask 14 times a day do you think this is a good idea and my customer has deep intelligence on how they'll make decision my artificial intelligence customer and they can give you feedback that takes 12 decisions that you're using for your gut out of the gut and into your customer so it's giving that voice to the customer in every meeting i think that's amazingly important in today's world But then, okay, great.

18:58Will Leach:So I now know what my customer thinks. What do I do? There's a whole other branch of behavioral AI, which is how do you create messaging that taps in to the psychological mind states your customers under? So what should an advertisement look like? Well, how should my copy look? When I'm innovating, should that innovation, that idea that I came up with, how does it tap back into my customer's mind states? So there are areas that we're focused on is taking those insights and actually developing advertising. So you and I could have a conversation and say, this ad is going to work because I know how my customer decides.

19:30Will Leach:And I know that achievement is one of the core motivations. And I can show you three different things in this advertisement that's priming the achievement motivation. So I think artificial intelligence can help us do is evaluate creative more objectively based on science versus subjectively. Like, I just really feel like that's going to be a good piece of creative. I think if you bring those things together, objective and subjective opinions, you can get really great creative. Do you think brands should disclose when something is AI generated or do you don't think the customer doesn't care? So I'll tell you what, that's a great question.

20:01Will Leach:I will tell you that there's two things, thoughts coming up. First, there are certain governments that are going to make you. In Europe, it's already starting to happen. They're starting to, they're starting, laws are coming down and saying, if you generate marketing using AI, you need to disclose it. Great. Then, you know, for less than the US, that's not really the case right now. So there is this, okay, do I hide it? If I'm generating 20 ads a day, should I hide it or should I be transparent? And I think that there are pros and cons. If you hide it, frankly, a lot of times we know it intuitively, right?

20:30Will Leach:We have this inner sense, this like third eye, right? As consumers, we can tell when things are generated and it's not consciously, by the way, the models are too good. A lot of times we can't tell consciously, but subconsciously data tells us that we can generally feel when ads are not being written by a person. So then you say, okay, well, let's be transparent, because you don't want to get caught, right? Because if you get caught and you're trying to hide it, people kind of already know. And then it could come across as being, if it ever got out there, like the Coca-Cola ad, I think, last year during the Super Bowl got out there, and people had this really bad visceral reaction.

21:04Will Leach:So then your natural response would be, let's make it transparent. So, great. But if you knew that the brand that you're going to buy, They're telling you this ad was generated by AI. What does that do for your relationship? It reminds me of like this thing. It's like it's on Valentine's Day and you forgot to buy your wife roses. And so you go to like a 7-Eleven, right? So you could try to hide that, right? And the roses are pretty crappy. And there's just something off in the roses. Your wife knows this was like not great, right? Or you could be transparent and say, honey, I got your roses from 7-Eleven.