The greatest trick a brand ever pulled

De Beers: Do you feel hoodwinked?

A simple psychological principle known as anchoring has resulted in some incredible sleight of hand tactics by brands – and as Richard Shotton and Amy Rushton show, the results are extraordinary

The most quoted line from the film The Usual Suspects is uttered by Kevin Spacey’s character, Roger ‘Verbal’ Kint. He memorably says about the elusive villain Keyser Söze, “The greatest trick the devil ever pulled was convincing the world he didn’t exist”.

It was only years after first seeing the film that the relevance to marketing finally struck me: the greatest trick marketers can ever pull is convincing the world that choice doesn’t exist. That a particular brand is the only option. The natural choice.

Few brands manage this sleight of hand, but those that succeed reap extraordinary results. One such example is the diamond brand, De Beers. Diamond rings are now the unthinking selection for millions of romantics about to propose. But that sense of naturalness is a marketing myth.

In the early part of the twentieth century many engagement rings didn’t have precious stones. Those that did were as likely to have rubies, sapphires or emeralds as diamonds. That changed with a concerted De Beers marketing drive, perhaps the most effective ad campaign ever.

It made diamonds the natural choice for romantics by linking the durability of the stone with the eternal nature of true love. This was summarised in the 1947 tagline, “A diamond is forever”, written by Frances Gerety of the ad agency, N. W. Ayer.

A beautiful piece of copy. But, as Rory Sutherland has said, it’s only the second-best line that De Beers coined. Even better was the copy persuading consumers to pay exorbitant sums for diamonds. De Beers told consumers that the appropriate budget for a ring was a month’s salary.

Surely, this ploy was laughable. Why listen to someone with a vested interest in you spending heavily? But the tactic worked because of a psychological principle called anchoring.

This is the idea that if you communicate a number, however spurious, it influences the thought process of the listener. The evidence dates back to 1974 and one of the most cited papers in the history of behavioural science: “Judgement under Uncertainty”.

The academic evidence

The paper, published in Science, and authored by Daniel Kahneman and Amos Tversky, included a novel experiment. The academics had participants spin a wheel of fortune and once it stopped they posed a question: “What proportion of African states are members of the United Nations?”

But as in all psychology experiments there was a twist: the wheel of fortune was rigged. It only stopped at two numbers: 10 or 65. This arbitrary number acted as an anchor in the experiment. When the wheel came to rest at 10, participants guessed that 25% of African states were members, whereas when it stopped at 65 they estimated 45%. The initial anchor significantly affected their judgement.

The academics believed that anchoring worked, not because the arbitrary number was deemed relevant, but because participants inadvertently used it as the starting point for their deliberations.

The students who saw the number 10 recognised that it was too low but they adjusted upwards from there. As the students were uncertain about the composition of UN member states they had a broad range of reasonable answers. As they moved upwards from the anchor they hit the lower edge of that range and decided upon that as their answer.

Those who had seen 65 on the wheel similarly knew it wasn’t accurate – but they began their calculations from a higher point and, adjusting from there, hit the upper edge of the range of reasonable answers.

Applications from dining to diamonds

The principle of anchoring affects commercial decisions too. After all, we’re often uncertain about the value of brands. Restaurants, for example, apply the tactic by placing an expensive dish at the top of a menu, not with the aim of selling it, but of setting an anchor which makes everything else look cheap by comparison.

Even painkillers have been known to capitalise upon anchoring. In the 1960s Alka-Seltzer struggled with stagnant sales so they began encouraging people to take two pills, not one. Without a solid rationale, they couldn’t make that claim directly so they created a new anchor through a famous jingle that emphasised two tablets being used: “plink, plink, fizz, fizz”.

Then, finally, there’s De Beers. The anchor they set was a month’s salary. Ring buyers recognised this was too much but it served as a starting place for their deliberations. They adjusted from this anchor but, like those guessing about UN membership, they didn’t adjust down enough. The results were exceptional. Not only were diamonds the default choice, people were prepared to spend lavishly. De Beers US diamond sales rose from $23m in 1939 to $2.1bn in 1979. Even accounting for inflation that’s a nineteen-fold increase.

Not bad for a simple psychological principle.

Richard Shotton is deputy head of evidence, Manning Gottlieb OMD
Amy Rushton is a client account manager, Manning Gottlieb OMD