I stumbled onto an interesting post last week remarking on the tediousness of navigating a new 30,000 item grocery store and figuring out where everything is.
Decision fatigue is a real thing, and--if I'm any evidence--it's one of the reasons I hate going to new grocery stores. We got a new Wegmans in our part of New Jersey recently, and as much as I love that grocery store chain (this is something perhaps only people from Upstate New York can truly understand), I don't want to change to a new store.
Why? Because it's incredibly time-consuming, annoying, and vaguely stressful to "learn" a new store.
Hmmmm. Maybe that's part of the game.
An important idea in marketing is the concept of stickiness: the idea that it's not enough just to win a customer. You have to keep that customer, keep them coming back.
In the corporate world, companies will do all kinds of things to keep customers sticky. They'll use periodic discounting, branding, associative advertising and all kind of other techniques to keep our buying behavior as habitual as possible. In my old Wall Street career, every company would brag about how sticky their customers were, while laughing about how easily they could manipulate and play their suppliers off each other. In other words, their customers were always sticky, but whenever they themselves were customers, they weren't sticky at all. Always manipulating, never manipulated.
The point here is that sticky customer is a manipulated customer. There's a lesson in there for us as consumers.
Well, I now realize, with my typical window-licking slowness, that the complexity of a big store is yet another factor that makes us into sticky customers. Customers do not want to have to learn an entirely new grocery store. They don't want to spend time wandering around looking for items, and waste weeks--or even months--of grocery store trips acclimating to a new product geography. Just like buying a given consumer product or even a given brand is largely a habit-based decision, going to the same store and knowing where everything is likewise is based on habit, and it keeps us going to the same store. It keeps us sticky. And it keeps us coming back.
Except that truly empowered consumers don't want to be sticky! We want to be brand disloyal, able to switch stores and brands based on our needs, not theirs. We want companies to compete for our consumer dollars, and we want to buy our items when we see the prices we desire to pay.
But I haven't figured out a solution to the "big store" problem, not yet.
READ NEXT: When Things Don't Make Sense
AND: Using Your Sophistication and Great Taste Against You
*********************
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
Tuesday, April 30, 2019
Tuesday, April 23, 2019
Worrying About All the Wrong Things
The average consumer is 15 times more likely to drown in the bathtub than to die of pesticide-related causes, and they are 1,500 times more likely to die in a car wreck than die of pesticide-related causes. But people still get in their car and drive.
--Jayson Lusk
It's interesting to think through examples where we as humans are both risk-blind and probability-blind. We fear flying and would rather drive, despite overwhelming evidence that the risk of the latter vastly exceeds the risk of the former. In my case, even though I know the relative risks of flying versus driving, I'd still rather drive.
Our minds evolved to their modern form perhaps half a million to a million years ago, long before statistics and probability were conceived as a way of looking at reality, and long before our day-to-day reality became as complex as it currently is. And once you have any familiarity with domains of behavioral finance or the psychology of human decision-making, you quickly absorb the disturbing truth that the decision making process of our own brains is obscure and opaque to us. We don't even understand ourselves.
Back to flying for a second. When you think about what flying really entails--basically waiting in a line to use a kiosk, followed by waiting in another line to get into another line to line up for a shoeless, beltless and semi-dehumanizing kabuki theater of body scans, luggage x-rays, and getting yelled at, followed by another long wait, followed by another line, followed by multiple hours in a cramped seat inside an aluminum tube breathing in other peoples' germs--all of a sudden a long drive doesn't seem so bad. Even when we know all the statistics. Thus it's completely understandable that our brains tell us to avoid the entire experience of flying.
I enjoyed writing that last paragraph, but it pretty much ruined flying for me for a while.
Now, on to pesticides. One thing that's extremely compelling to our hindbrains about PESTICIDE RISK!!1!! is its vividness. It brings to mind rhetorically powerful books like Rachel Carson's Silent Spring, spunky activists like Erin Brockovich, and infamous pollution disasters like the 1970s-era Love Canal. All you have to do is juxtapose these stories with a few reports of babies with birth defects, or young women with cancer (even better if you have photos), and you can easily hack readers' amygdalae.
And of course not only do we fear multi-syllabic chemicals and pesticides, and we fear even more so the idea that we might actually be eating them.
But then again: How sedentary or active are you? Do you make sure to sleep properly? Do you use seat belts? How many (surprisingly toxic) acetominophen or ibuprofen pills do you take in a given week? How much sugar do you consume in a given week? How much alcohol? And to go "meta" for a moment: How much time do you spend worrying about things that seem worrisome... but aren't?
These would all be questions worth considering long before worrying about pesticides.
Don't get me wrong: I'm not telling you to go out and drink a glass of Roundup. I'm certainly not saying pesticides aren't bad. I'm just asking readers with critical thinking skills to think through what's worth worrying about.
Further Reading:
1) Jayson Lusk is the author of The Food Police, a book well worth reading and discussed here at Casual Kitchen in multiple posts.
2) Risk Savvy by Gerd Giggerenzer
3) For better risk awareness in the healthcare industry, see H. Gilbert Welch's excellent book Less Medicine, More Health.
4) Thinking, Fast and Slow by Daniel Kahneman
*************************
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
--Jayson Lusk
It's interesting to think through examples where we as humans are both risk-blind and probability-blind. We fear flying and would rather drive, despite overwhelming evidence that the risk of the latter vastly exceeds the risk of the former. In my case, even though I know the relative risks of flying versus driving, I'd still rather drive.
Our minds evolved to their modern form perhaps half a million to a million years ago, long before statistics and probability were conceived as a way of looking at reality, and long before our day-to-day reality became as complex as it currently is. And once you have any familiarity with domains of behavioral finance or the psychology of human decision-making, you quickly absorb the disturbing truth that the decision making process of our own brains is obscure and opaque to us. We don't even understand ourselves.
Back to flying for a second. When you think about what flying really entails--basically waiting in a line to use a kiosk, followed by waiting in another line to get into another line to line up for a shoeless, beltless and semi-dehumanizing kabuki theater of body scans, luggage x-rays, and getting yelled at, followed by another long wait, followed by another line, followed by multiple hours in a cramped seat inside an aluminum tube breathing in other peoples' germs--all of a sudden a long drive doesn't seem so bad. Even when we know all the statistics. Thus it's completely understandable that our brains tell us to avoid the entire experience of flying.
I enjoyed writing that last paragraph, but it pretty much ruined flying for me for a while.
Now, on to pesticides. One thing that's extremely compelling to our hindbrains about PESTICIDE RISK!!1!! is its vividness. It brings to mind rhetorically powerful books like Rachel Carson's Silent Spring, spunky activists like Erin Brockovich, and infamous pollution disasters like the 1970s-era Love Canal. All you have to do is juxtapose these stories with a few reports of babies with birth defects, or young women with cancer (even better if you have photos), and you can easily hack readers' amygdalae.
And of course not only do we fear multi-syllabic chemicals and pesticides, and we fear even more so the idea that we might actually be eating them.
But then again: How sedentary or active are you? Do you make sure to sleep properly? Do you use seat belts? How many (surprisingly toxic) acetominophen or ibuprofen pills do you take in a given week? How much sugar do you consume in a given week? How much alcohol? And to go "meta" for a moment: How much time do you spend worrying about things that seem worrisome... but aren't?
These would all be questions worth considering long before worrying about pesticides.
Don't get me wrong: I'm not telling you to go out and drink a glass of Roundup. I'm certainly not saying pesticides aren't bad. I'm just asking readers with critical thinking skills to think through what's worth worrying about.
Further Reading:
1) Jayson Lusk is the author of The Food Police, a book well worth reading and discussed here at Casual Kitchen in multiple posts.
2) Risk Savvy by Gerd Giggerenzer
3) For better risk awareness in the healthcare industry, see H. Gilbert Welch's excellent book Less Medicine, More Health.
4) Thinking, Fast and Slow by Daniel Kahneman
*************************
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
Tuesday, April 16, 2019
Forgetting Forgettable Brands
Readers, take a look at these photos of a can of Chock Full O' Nuts brand coffee, front and back:
This was a well-known coffee brand to anyone growing up prior to the 1970s or early 80s. Millennials, however, have never heard of this brand. And Gen Z will need trigger warnings before they learn what coffee is.
Imagine if you were CEO of the consumer products company that bought this brand[1] right before an entire generational turnover in coffee buyers, and, to your horror, that next generation of coffee consumers had absolutely no institutional memory of your brand of coffee. So much so that they needed to be told that this is coffee.
Also, keep in mind: we're in the OMG PEANUT! era, which explains why this company feels the need to inform us this product "contains no nuts."
Worse still, because it doesn't cost twice as much and say "fair trade" or "sustainable" somewhere on the label, earnest young consumers will assume this coffee was either harvested by slaves, packaged by a company that literally hates the planet, or both.
At the end of the day, this is a can of unremarkable commodity arabica coffee, little different from any of the other brands sitting on the shelf next to it--including the much lower-priced store brand. Readers here at CK know this and are quick to use this to their advantage, buying this commodity coffee when on sale at significant discounts, and not buying it when not.
But to a consumer products company--or to an investor in a consumer products company--this is an unmitigated disaster. New consumers don't even know what this product is. The brand has no value to them.
Keep this in mind, as both a consumer and an investor, as you navigate the consumer products landscape.
[1] The (current) owner of Chock Full O' Nuts coffee is the Massimo Zanetti Beverage Group, a privately-owned Italian company that owns several coffee brands including Hill Bros, Chase and Sanborn and others.
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
This was a well-known coffee brand to anyone growing up prior to the 1970s or early 80s. Millennials, however, have never heard of this brand. And Gen Z will need trigger warnings before they learn what coffee is.
Imagine if you were CEO of the consumer products company that bought this brand[1] right before an entire generational turnover in coffee buyers, and, to your horror, that next generation of coffee consumers had absolutely no institutional memory of your brand of coffee. So much so that they needed to be told that this is coffee.
Also, keep in mind: we're in the OMG PEANUT! era, which explains why this company feels the need to inform us this product "contains no nuts."
Worse still, because it doesn't cost twice as much and say "fair trade" or "sustainable" somewhere on the label, earnest young consumers will assume this coffee was either harvested by slaves, packaged by a company that literally hates the planet, or both.
At the end of the day, this is a can of unremarkable commodity arabica coffee, little different from any of the other brands sitting on the shelf next to it--including the much lower-priced store brand. Readers here at CK know this and are quick to use this to their advantage, buying this commodity coffee when on sale at significant discounts, and not buying it when not.
But to a consumer products company--or to an investor in a consumer products company--this is an unmitigated disaster. New consumers don't even know what this product is. The brand has no value to them.
Keep this in mind, as both a consumer and an investor, as you navigate the consumer products landscape.
[1] The (current) owner of Chock Full O' Nuts coffee is the Massimo Zanetti Beverage Group, a privately-owned Italian company that owns several coffee brands including Hill Bros, Chase and Sanborn and others.
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
Tuesday, April 9, 2019
Frugality and Tradeoffs
Is frugality always worth it? Is it always worth it to trade your time to save money?
And at what point does frugality simply become not worth it?
One of the interesting ironies of frugality is if you get really good at it, you get to a point where you don't have to do it any more. You'll have plenty of money left over because you're using that money as efficiently as possible.
Which then leaves you with a new decision layer: what types of frugality are worth it relative to the tradeoffs in time required?
Grocery shopping gives us an excellent example of this decision layer: A competent frugalista will reduce his or her grocery bill to a point where it takes up a smaller and smaller portion of the household budget. Then, all of a sudden, it stops being worth it to invest an extra 25 minutes driving to another grocery store to buy a couple of cheaper items there. The few bucks you save stops being worth it.
Now, granted, some frugality skills become automatic and thus require no effort. Like buying lower cost unbranded or store brand items. After all, the less expensive product is right there, buying it requires no extra effort. Further, some frugality techniques may remain worthwhile because they offer sustained payoffs. Examples here would be a one-time phone call every few years to renegotiate a cellphone or cable bill, or a quick call to tweak coverage on an insurance bill. That phone call could save you hundreds of dollars a year for years.
And then there are big-ticket frugality decisions that always stay worth it. Replacing a high fee mutual fund with a near-zero fee index fund is a prime example here. This single decision can save you tens or even hundreds of thousands of dollars over the course of an investing career, and the savings differential grows as your assets grow.
In our home we are grappling with this new decision layer too, and I finding I'm retaining the frugality habits I do automatically and habitually, the ones that come naturally to me and don't require any thinking or extra cognitive energy. And then I try to maintain any frugality habit that saves me both money and time, so I can entirely sidestep the money/time tradeoff above. And this often involves avoiding shopping and avoiding buying things entirely, and re-allocating that time to things I'd much rather do. It's another one of frugality's rich ironies.
One last thought. What happens to readers who "get" the value of frugality, learn and then master it… and then master it so well that they don't really need to be frugal any more?
They stop reading blog posts about frugality! It's an interesting second-order question for frugality and budget bloggers to think about.
**************************
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
And at what point does frugality simply become not worth it?
One of the interesting ironies of frugality is if you get really good at it, you get to a point where you don't have to do it any more. You'll have plenty of money left over because you're using that money as efficiently as possible.
Which then leaves you with a new decision layer: what types of frugality are worth it relative to the tradeoffs in time required?
Grocery shopping gives us an excellent example of this decision layer: A competent frugalista will reduce his or her grocery bill to a point where it takes up a smaller and smaller portion of the household budget. Then, all of a sudden, it stops being worth it to invest an extra 25 minutes driving to another grocery store to buy a couple of cheaper items there. The few bucks you save stops being worth it.
Now, granted, some frugality skills become automatic and thus require no effort. Like buying lower cost unbranded or store brand items. After all, the less expensive product is right there, buying it requires no extra effort. Further, some frugality techniques may remain worthwhile because they offer sustained payoffs. Examples here would be a one-time phone call every few years to renegotiate a cellphone or cable bill, or a quick call to tweak coverage on an insurance bill. That phone call could save you hundreds of dollars a year for years.
And then there are big-ticket frugality decisions that always stay worth it. Replacing a high fee mutual fund with a near-zero fee index fund is a prime example here. This single decision can save you tens or even hundreds of thousands of dollars over the course of an investing career, and the savings differential grows as your assets grow.
In our home we are grappling with this new decision layer too, and I finding I'm retaining the frugality habits I do automatically and habitually, the ones that come naturally to me and don't require any thinking or extra cognitive energy. And then I try to maintain any frugality habit that saves me both money and time, so I can entirely sidestep the money/time tradeoff above. And this often involves avoiding shopping and avoiding buying things entirely, and re-allocating that time to things I'd much rather do. It's another one of frugality's rich ironies.
One last thought. What happens to readers who "get" the value of frugality, learn and then master it… and then master it so well that they don't really need to be frugal any more?
They stop reading blog posts about frugality! It's an interesting second-order question for frugality and budget bloggers to think about.
**************************
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
Tuesday, April 2, 2019
Triggered to Pay Extra
There's a new field of battle in the chess game between consumers vs the companies who sell to us. Have you noticed how easily consumers fall for words like:
Sustainable
Ethical
Green
Baby-Friendly
Chemical-Free
These words are magical. All you have to do is wave a few of them in front of consumers and they instantly say "Ooh, ooh! Can I pay extra?"
We're teaching a brand new generation of consumers to respond autonomically to any premium-priced product containing any of these words.
So what company then wouldn't use these words? Words are free! You can as many of them as you want, in any order, anywhere on the package, and you can trigger a meaningful percentage of consumers to pay more for product. Often significantly more.
This reminds me of the post I wrote years ago about a bar of extra ethical chocolate I received, which used a lot of these types of words, along with photos of smiling females meant to represent definitely-not-exploited members of a Bolivia-based cocoa harvest cooperative.
What was shallow and deeply cynical about this chocolate was that you could easily see from the label that most of the ingredients came from totally different countries from where this cooperative was, and worse, all the high-value, highly profitable work--the making of the chocolate itself--was done in Switzerland, thousands of miles away. For all we know the smiling, definitely-not-exploited laborer on the package could have been a stock photo.
With all this in mind, an empowered consumer therefore has to consider a few things. Such as:
1) If a company uses a word on a label, does that make it true?
2) What do these words really mean? ("Chemical-free" would be a good place to start.)
3) Are these words really any different from vacuous marketing words from prior generations, like "heart-healthy" or one of my personal favorites: "a good source of seven vitamins and minerals"?
4) Have you ever seen a product with marketing copy that said "Unsustainable" or "Unethical" or "Baby-Unfriendly"?
And finally:
5) What price premium are you willing to pay for words? Will you pay double? Triple? Quadruple? Where is your limit?
Readers, what do you think?
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!
Sustainable
Ethical
Green
Baby-Friendly
Chemical-Free
These words are magical. All you have to do is wave a few of them in front of consumers and they instantly say "Ooh, ooh! Can I pay extra?"
We're teaching a brand new generation of consumers to respond autonomically to any premium-priced product containing any of these words.
So what company then wouldn't use these words? Words are free! You can as many of them as you want, in any order, anywhere on the package, and you can trigger a meaningful percentage of consumers to pay more for product. Often significantly more.
This reminds me of the post I wrote years ago about a bar of extra ethical chocolate I received, which used a lot of these types of words, along with photos of smiling females meant to represent definitely-not-exploited members of a Bolivia-based cocoa harvest cooperative.
What was shallow and deeply cynical about this chocolate was that you could easily see from the label that most of the ingredients came from totally different countries from where this cooperative was, and worse, all the high-value, highly profitable work--the making of the chocolate itself--was done in Switzerland, thousands of miles away. For all we know the smiling, definitely-not-exploited laborer on the package could have been a stock photo.
With all this in mind, an empowered consumer therefore has to consider a few things. Such as:
1) If a company uses a word on a label, does that make it true?
2) What do these words really mean? ("Chemical-free" would be a good place to start.)
3) Are these words really any different from vacuous marketing words from prior generations, like "heart-healthy" or one of my personal favorites: "a good source of seven vitamins and minerals"?
4) Have you ever seen a product with marketing copy that said "Unsustainable" or "Unethical" or "Baby-Unfriendly"?
And finally:
5) What price premium are you willing to pay for words? Will you pay double? Triple? Quadruple? Where is your limit?
Readers, what do you think?
You can help support the work I do here at Casual Kitchen by visiting Amazon via any link on this site. Amazon pays a small commission to me based on whatever purchase you make on that visit, and it's at no extra cost to you. Thank you!
And, if you are interested at all in cryptocurrencies, yet another way you can help support my work here is to use this link to open up your own cryptocurrency account at Coinbase. I will receive a small affiliate commission with each opened account. Once again, thank you for your support!