How Marketing Psychology + AI Will Boost Your Results Faster and Easier with Bas Wouters, Founder of the Online Influence Institute | Ep. 402

0:00Today's episode is brought to you by Customer.io. You have customer data, but turning it into personalized marketing at scale? That's the hard part. Customer.io connects the dots. Feed it your data, start sending messages that actually feel personal. Learn more at Customer.io slash TMM. We are back with another episode of the Mark Millenials. And today we have Bass Walters on the podcast. He's a globally recognized expert in the field of persuasion and behavior design. As the award-winning and international best-selling author of Online Influence, he founded Online Influence Institute. He personally trained by the top behavioral scientists in the world.

0:45So think Daniel Kahneman, Robert Cialdini, BJ Fogg, and companies like Disney, Alliance, Booking.com, call upon Ba's expertise. And he has trained and coached thousands of professionals worldwide to increase their online success with small changes that lead to big outcomes. Now he designed a highly trained persuasive AI agents, and he is more on track to achieve his mission to help all people and companies to boost their results by helping them apply 100 plus years of behavioral and marketing psychology faster and easier. Please welcome Baz Walters to the podcast. Welcome to the Marketing Millennials, the No BS Marketing Podcast.

1:32I'm Daniel Murray and join me for unfiltered conversations with the brains behind marketing's coolest companies. The one request I tell our guests, stories or it didn't happen. Get ready to turn the f*** up. We are back with another episode of the Marketing Millennials podcast. I am here with Boz. We're going to talk about one of the most interesting topics going on in marketing right now, which is actually two of the most interesting topics of marketing right now, but they intersect together, which is psychology, which everybody knows is one of the fundamentals of marketing. And then the intersection of what's trending right now, which is going to be something that's table stakes in a few years is AI.

2:23So we're going to talk about the intersection of psychology and AI. Baz is leading the charge on doing this with his institute, and we're going to talk about all that stuff today. But I'll give Baz a little – let him do a little intro of what he's up to right now, and then we'll get into the podcast. Well, thanks, Daniel. Always amazing to be here with you, first of all. Yeah, my name, Baz Wouters, and I'm the founder of Online Influence Institute, also author of the book Online Influence, where we describe a proven system based on behavioral psychology, how you can boost your conversion. So to get more leads, more sales, more newsletter opt-ins, more email open rates, and more results in the end.

3:10And nowadays, like you just said, AI is not only a trending topic in my mind, it's a must use. Because if your competitor can go 100 times faster as you, eventually you will lose to them, and that's not what you want. So what we are doing is how can we train AI on a really high standard level that they can apply, analyze and apply behavioral psychology to bring those results. And that's amazing because I think I talk about this all the time on this podcast, but behavioral science is, and I said this at the beginning, is foundationally one of the most, if you use it, it works. It's proven to work.

3:54You've done that with Online Influence. You've done that working with Cialdini and using his principles. But I want to go into the podcast today, and I know what's on a lot of people's mind is they're trying to increase conversions, but a lot of marketers aren't able to increase spend right now. So what is the biggest mistake marketers make when trying to improve in performance? Well, I love that question. And in my mind, it's as follows. Most marketers, if they need more results, let's take, I want more leads. The instinctual action is increase your ad spend or we're going to optimize something.

4:39But then they optimize the campaign or they optimize the creative or maybe even the ICP or the target audience. But what they never optimize is how the brain actually makes decisions. How do you optimize all your messages so more people do what you want them to do? And I think that's at this moment the most common mistake in marketing. And then, I mean, say that simply for everybody too, is like if you don't understand how decisions are made, you're basically optimizing noise. So that is something that you should take into mind. I love that. I think everybody's doing those three things when they think about a campaign and they're not thinking about behavioral science as much.

5:29But what does the research show about how people actually make decisions? Because I know you do this a lot with your Online Influence Institute. Yeah, definitely I dive into that. And what we're also going to give the listeners, not only theoretical stuff today, I will also bring proven case studies with where simple changes made a big difference. So I'm also going to show them the proof of what we're doing. Now back to your question, what does research shows how the brain actually makes decisions? And probably some of the listeners heard about him. I want to talk about Daniel Kahneman. Daniel Kahneman is a behavioral scientist.

6:11He won the Medal of Freedom Award, or he got the Medal of Freedom Award, but he also won the Nobel Prize. He won that in 2002, and that's already interesting because he's a behavioral psychologist, scientist. So you would say he won the Nobel Prize on psychology, right? That Nobel Prize doesn't exist. So he couldn't win it. He won the Nobel Prize for economics. So what could a behavioral scientist proof that had such a huge impact on economy that they gave him the Nobel Prize. And that's exactly the answer is exactly your question. How do people actually make decisions? And his findings were, in our brain, when it comes to decision making, are actually two brains.

6:55He called them system one and system two. And system one, you could see, is a fast computer. It's built for everyday decisions and it works on what they call a psychology, heuristics and biases, but let's call them shortcuts. For example, if something is more expensive, it must be better. If everybody doing so, it must be a good idea to do so as well. And therefore, it can handle a lot of decisions. The thing is, it's error prone because most of the time these shortcuts are right. Most of the time when something is more expensive, it is better. Most of the time when everybody is doing so or tell you to do, it is a good idea to do so, but not always.

7:43Luckily for us, we have system two. It's a slow computer. It's basically a rational brain. And the thing is, it costs us effort. And human beings don't like to put a lot of effort in their thinking and decision making, but system two is able to compare all the options and then pick the best one for us. So it's a reliable system. Now old economics always said the human being is a rational creature. So you would argue in that case, if it really comes to it, we would make decisions with system two. Daniel Kahneman proved them wrong. In 2002, about 90 % of all our decisions were made with system one.

8:30Nowadays, research already shows it's 95 and it's even an uptaking trend, what is already seen to 98 because of all the information overload we have. We cannot simply use our slow computer. We have to rely on that fast computer based on shortcuts. What is the biggest lesson now when we are designing campaigns, we intend to use our full brain power, system two. But system two intends to come up with messages or solutions that will trigger system two in the other person's mind. That's why we see so many rational arguments and rational factual messages to persuade people. But as Daniel Kahneman himself says, system one runs the show, that's the one you want to move.

9:19So we need a system, we need a way of thinking with system two our full brain power but through that way of thinking we come up with ideas and solutions that will trigger system one in the other person's mind and therefore we get much more yeses and i i think what you also what you're saying too is you the system one you have to have that but everybody's going to end up just even with bigger decision justify with logic but But most of the time, people start with that emotional hook of, like you said, price high, or I want to be like my friend, or I'm liking, or this person's an influencer, I trust in them.

10:07and then they start saying, okay, but what does the research say? For me, for example, with a baby, I make a decision to say, oh, my baby needs, let's say, utensils to eat his food. My rational brain says, oh, an influencer is using it. I want to buy that. But my assistant one says an influencer is using it. I want to buy that because an influencer. My system two would be, let me go check if it's BPA-free, is it blah, blah, blah. But if it ends up being both, then I'm going to make that decision because the influencer initially influenced me on that. Yeah, I love what you say. You say some interesting things.

10:53First of all, and I hear this, well, when it comes to a big decision or a decision where we think about a lot of time, we use system two. And then I'm mainly here if they make the equation B2C versus B2B. Well, in B2B, the world works completely different because we really make big decisions and therefore we use system two. I would argue against that. In system two, we make well-taught decisions, or in other words, it has a longer cycle to make the decision. So indeed, we collect facts with system two. but as it comes to the moment of decision making let's say you need to lease thousand new cars and you can choose let's call some brands BMW, Audi and Mercedes.

11:42Now high-end cars you need to lease for your entire big team your executive team. Now you collect all the facts they're almost always almost similar. Then the decision trigger the moment at the decision is well I like that guy at the BMW dealer or my CEO tells me he likes BMW. At that moment, the actual moment of decision making, system one takes over and eventually one of these shortcuts drives the decision. So that it took time to come to a decision doesn't automatically qualify that as a very rational decision at the moment you make a decision. Yeah, I totally agree. Or the biggest one with with cars is uh you you know rationally that a honda or a toyota is a financially smart decision but that everybody in my neighborhood is driving a bmw audi and so and i wanted i don't want to be the odd one out and drive a honda so i want to keep up with the joneses and and buy a bmw even know that's not the most rational decision for me to make it's the most emotional decision because i want to i'm programmed to make that decision but i want to go deeper into the marketing side of it so if system one runs the brain emotional behavioral system how do we actually design marketing that triggers it intentionally yeah great question and indeed now you come to a more systematic approach because for some people it sounds like some magician show but actually it's hardcore science and then I like to quote BJ Fogg, Brian Jeffrey Fogg, he's a Stanford University professor, founder of the behavioral lab at Stanford University but he was also the coach of the founders of Instagram.

13:43One of the two guys was a student of him and first they built a different app which wasn't really successful. Then BJ started to work with them. And well, you could call it a success if you sell it a year later for a billion dollars to back then Facebook. So what BJ Fogg built is the Fogg behavioral model. And that explains how behavior occurs. And it shows we need three factors. The first one, if I ask you to do something, first factor is motivation. You wonder, how much do I like to do that? The second one is ability, how easy for you is to do it. And then he draws an action line and then comes the third and very critical component, a prompt.

14:32Nowadays, the word prompt we always use in connection to AI. But a prompt is something that asks for behavior. This glass of water prompts me to drink from it. That's in BJ's world. Even thoughts are prompts. Just a quick sidestep, online, a form prompts you to fill it in. An ad prompts you to click on it. Your batch app symbol on your phone on an app prompts you to open the app. So that's something that asks for the desired behavior. Now, what is interesting, if I prompt you or I ask you to do something, and you don't really want to, your motivation is low, it's also hard to do, you won't do it but in all other cases you will for example if it's hard but you are super motivated your favorite band comes to town and you really want tickets you go to the website it's frozen all the time because everybody is by want to buy tickets you keep on going until you have your tickets that's right away the biggest mistake people make in marketing using this model, we have a motivational bias.

15:43Because motivation for the same thing will come and go during the same thing. Let me give an example. If I wake you up in the morning and say, Daniel, let's go out for a big meal in the sunshine, have some drinks, whatever, you're probably not so motivated to say yes. But maybe after a hard week of work and I ask the same request, you might say yes to that. So it's the same request on the same day, different answer. Now look at the second one. We don't really want to, but it's so easy to do, we also do it. And I always give this example. When I went to university, I had to travel by train. And I'm an old man.

16:30So back then, people were shoving a free newspaper almost in your hand. their goal was read the newspaper. As a student, I have to admit, I was not so motivated to read the news. I rather slept in the train. But every morning, it was easier to take the newspaper than to refuse it. They almost shoved it in my hand. So what happened? Every morning, I was having a newspaper in the train, started reading the news. Not because I wanted so much, but they made it so easy for me. So recent research also shows and confirms that if you focus on ability, it's easier for everybody in every stage of the client journey.

17:17And it's the most successful approach to let more people do what you want them to do. So three components, we need to winning. bj fox says b is map behavior is motivation ability and a prompt at the same moment if you do problem solving you go backwards you look is there a prompt if nothing asks for the behavior nothing will occur no button in the screen nobody will click on it then make things easier for your visitors to do and then boost motivation at the right moment and that's what we're going to dive into today. One thing I asked Baz for before we go into the next topic is I told him that if he comes on this podcast, he has to give something free away to our audience so they can apply what we're talking about today.

18:10And we like tactical things in this podcast. And I know you have something that's free that they could go today and use for themselves. What is something that they could go right now and and see if they can start applying something today in their marketing yeah that's thanks for bringing that up if you're if every listener goes to online influence.com they not i wanted to give something special they're not just going to get something for just for free downloadable they get personal attention with a free optimization plan we look at their web page ad funnel, whatever they want to give us. We analyze it with 35 of the best performing principles that I also wrote in my book, Online Influence.

18:57And we give them the top five low-hanging fruit, easiest to upgrade, wins plus KPI predictions. You're sitting on a gold mine of customer data, and it's doing nothing for you. That's not a data problem that's a tools problem customer.io connects your data to every channel you already use sms email push in app then it uses ai to build workflows that used to take weeks every message feels like it's written for that customer not blasted at them 8 000 plus brands already made the switch learn more at customer.io slash tmf i mean there's a no-brainer for people to go use that today so go use it i mean any everybody's marketing has something to improve and we're talking about that too and we just talked about at the beginning of this podcast how the low-hanging fruit of a lot of our marketing is not like optimizing conversion it's not it's creative is is the behavioral science part of and then optimizing for the mind so go check that out but i want to go back into what we're talking about is there um some concrete examples that people could start applying immediately.

20:16Maybe you could start with an example of designing a winning prompt for the marketers listening. Yeah, great. And to add on the optimization plan, previously we did those plans for Disney, Booking.com, Coca-Cola, big companies. And we'll come to that later. But now because AI can speed things up, makes us much more efficient. We are not restricted to Fortune 500 budgets anymore. So please bring them on. Like I said, for big companies, but also for SEAT, the car manufacturer. I don't know if that's a very famous car manufacturer in the US, but it's huge in Europe, multi-billion dollar company. It's a French company.

21:02And what they did, and now talking about designing a winning prompt, you came to their web page and what they really wanted was that you downloaded the price list because they had quite a good conversion of price list downloads to test drives and from test drives to selling cars but when you came to their web page they prompt you with all kinds of things look at every model find a dealer look at our special offers design your car yourself so what we call there were a lot of competing prompts. And I like to compare system one with a child of seven. And what happens in your brain, imagine you go to a birthday party, and you're a little bit late, it's quite a big party, about 100 people go there.

21:54And you're one of the last guests. You come in, you walk through the door, and 100 people right away start talking to you. well what would happen at minimum you won't understand a word at worst you run away back home because they drive you nuts but online we do this all the time we prompt people on a single page with so many different prompts that people don't know what to do and they run away as in the a birthday metaphor. That's exactly what Seat did. So with a minimum change and a very simple change, we designed a clean sheet, clean page, where you had the model of the car they were looking for.

22:39On that page was just a single prompt, a button, download price list. The conversion before was 0.4%. Now the conversion was 8%. And to go from 0.4 to 8 is not an improvement of 7.6. They had 2 ,000 % more leads. This equaled millions of revenue because the conversion from priceless to test drive to selling cars remained almost the same. So what is the tip here that everybody can learn from Seat? Look at your web pages. and see where are you asking for multiple different things. Decide what do you want your visitors to do on this page. Remove all the competing prompts and prompt only one thing.

23:33I promise your conversions will go up. And I think we're going to put the visuals of this in the show notes so people can see how this happened. But also, I know that everybody probably listening wants a result of some sort of boost. I don't know if you're going to get 2 ,000%. But I know a lot of people have on their website now multiple prompts where they have subscribed to this. Click here to see my pricing. I want to. Here's a chatbot. I'll take it for the newsletter. Yes. Here's my first. And you're asking someone 15 things when they're getting into a store when you want to direct. The goal on a website is to direct them to where you want them to ultimately go.

24:23And if you have too many prompts, like we're calling them, which are things asking them to do stuff, they're going to have decision paradox probably and go like me when I'm at a restaurant and then think about 80 different choices out to make or run into a store and I don't know where to go. People are asking me so many questions. I just want to leave because my brain is overloaded. But I know people want these results. You have all these new client journeys basically with all these prompts and you don't finish anyone, especially not the one that you want them to do. Indeed. So that's really the tricky part.

25:04You offer so many things. people start several behaviors, but they don't do what you want them to do. And that's interesting because if people go to onlineinfluence.com and ask for this free optimization plan, like I said, it's not a PDF. We'll have two to three calls included for them to really help them. We believe you have to show your value first, and then people want to do business with you, mostly for the rest of their lives because they see the uptake you can realize but we help them to say what is the desired behavior on this particular page and then design it with all this behavioral psychology and marketing psychology to let people do exactly that so i want to go into also um do you have any example of increasing ability yeah definitely uh one or two let's see how much time we have.

26:01First one, ability, what's it all about? BJ Fogg describes an ability chain. What we want to do online is we want to reduce mental effort. So if you reduce mental effort, you increase conversions. And you just mentioned it, paradox of choice. And that's one of the principles we use, reduce options. And it might sound similar to competing prompts. The difference is competing prompts can start different behaviors. An option is just something you choose from, like time slots for a webinar, different jeans you buy in the webshop. Now, what we did here for a webshop, a huge one in China, one of the biggest, and they were selling Tupperware cups.

26:50And previously, we think as human beings, that's the paradox of choice. We want choice. We want options. But our system, one brain, cannot handle all these options. So indeed, if people have too many choices, they don't know what to choose, they choose not to choose. That's what the paradox of choice is. We think we want all these options, but in the end, we choose not to choose. So when they removed from these Tupperware drinking cups, they went down from 25 different colors to five. You almost cannot imagine the amount of sales, 77 times more sales. This is 7 ,700 % increase in sales by just reducing the amount of colors you showed for this cup.

27:43so that's the first example I like to give for the listeners is see where you give people more than five options reduce it the ideal amount of options for human beings are three can we do one more quick example which I always really love to give and it's also such an easy one to use it's it's what we call the Jenga principle and we gave it a name according to the game Jenga where you have to remove wooden blocks from the tower without the tower to collapse. We want to do that with sentences. We want to remove words without the sentence to collapse. Or in other words, say the same thing with lesser words.

28:28It costs a human being approximately 100 to 200 milliseconds to read and understand one word. So that means if you can remove 100 words from your landing page, you save a visitor 15 seconds, which is ages online. An example here, it was an example from Lottie Files. They had a perfectly clean, nice designed landing page, header, clear message, three short sentences, button, call to action. Now, when they, three sentences, rationally, you would say, well, when you like this product, what they offer, you can read three short sentences. When they changed that back to one sentence, conversion went up with 43%.

29:19So my take to the listeners, look at your pages, landing pages, ads, social posts, and see, can you say the same thing with lesser words? We also have an AI agent that can do it for you even say the same thing with lesser words reduce mental effort and increase your conversions it's funny you i mean you find you said that i mean the decision paradox is real because my wife right now um is i've been asking her for probably like three weeks like what do you want for your birthday present and like she she has all these choices but she can't decide because she doesn't want to make the wrong choice.

30:00So instead, she hasn't given me an idea for now like three weeks, and her birthday is going to be in the next couple weeks. And I don't want to get the wrong thing on my side because that's the wrong choice. But she has this decision paradox that she doesn't want to make the wrong decision, and now she's not making any decision because she doesn't want to make the wrong decision. Yeah, love the example. But I think I need to do what you said is maybe give her two choices now, I'll reduce the choices to two choices and then she'll make it. Yes, exactly. I'll try it out. I'm curious about the answer, if it works.

30:40But I also want to go into, I'm very curious with the example about boosting motivation right now. I know you have a case study where just one word was increasing sales over 300%. Yeah, that's a very interesting one. It's NYX Makeup Studio. What the original was, they had a product page with a buy button, no sentence. Then tested a small sentence underneath the buy button, and the sentence was like this. 71 beauties have viewed this product today. Conversion went up. Sales went up with 33%. Now it comes. Now we changed one word in that particular sentence. conversion went up to 100%. So going from plus 33 to plus 100, it's a 300 % increase now.

31:34What was that change from 71 beauties that have viewed this product today, it went to 71 beauties have purchased this product today. And this is magic because that's my next tip for all the listeners. How can you create these powerful sentences? And there are basically three criteria. you have to talk to your audience so to similar others what nyx it's a makeup webshop so they said beauties you want to feel beautiful of course so that was a perfect thing then what changed and up what drove the uptake of 300 was the next criteria describe what these others did described your desired behavior. NYX didn't want people to view their product.

32:27They want people to purchase their products. So when they changed that word, that drove the intake because system one thinks, oh, other people like me are doing this behavior. I need to do so as well. So always describe your desired behavior. And third criteria is exact numbers boost trust. They didn't set 70 beauties they said 71 beauties 70 it sounds like wow you could make that up system one could think 71 system one things that's super credible because it's an exact number and it moves forward much quicker also what's crazy about i think the specific example and i love that like specific Excel, but it's also crazy that system one is also very, not in the best way, not in the most logical way, but it's very good at sniffing danger.

33:22Cause that's what it was used for back in the day. So danger to them is saying, is people trying to, is people lying to me as people trying to screw me over. And like, if you put a hundred plus they in the, it's not a logical thing to think because they know you're not trying to screw them over but um you're just saying a hundred uh it's not specific enough to them so they they're like hmm this smells fishy you you're putting a hundred you could have rounded up you could have um you could have been telling a lie here and then it's like the logic brain won't even kick in to justify it because they already made the decision that that's danger and i'm going to leave exactly it's just crazy yeah right because that's logically that to me 100 wouldn't make a change because because it's not it's not the worst thing to put it's not very dangerous but i know now that a lot of marketers do that and i've seen it all the time so my my emotional brain is going to be like yep they're lying to me no no way 100 people it's probably three people that purchase this i'm leaving you start filling in even what the actual reality is and that's that's often not positive for the other side yeah yeah so i think that's that's key is like in your marketing don't let system one like don't let system one screw you before you even get to the the logic to help them sell um and you're a lot of people put so much logic that system one is going to screw them even though like 100 people we have 100 cut plus customers blah blah blah and it's like in their head they're there with no social proof nobody's putting there's no social proof and you don't put on and people are just saying wait they're lying to me i'm bouncing i'm gonna find someone who has more examples than them that are behavioral sciencey um uh but i want to I also know, as you mentioned earlier, I'm 100 % sure listeners want these results as well because I know, but I know in my, because I love behavioral science.