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Hidden Psychology Behind Every Purchase | MichaelAaron Flicker · Harder Than Life

• 0:00
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• 1:08
  We are logical. We can act rationally. But it takes a lot of calories. Meaning, if you use your brain too much, you could starve yourself. You just blew my mind. If you can narrow down and be an expert at just one thing...
• 1:25
  Instead of a snowball's list of things, you're going to do better. Jerry Morrell comes up with the idea. They call it Five Guys. We're only going to do hamburgers and fries. And to this day, they now have $1.6 billion in sales. They've got 1,800 stores. They don't do anything other than hamburgers and fries. And that's based in human psychology. Grease is a strategy. Unbelievable.
• 1:52
  All right, harder to life nation. Today's guest is the guy brands call when they want to hack your brain without getting canceled. Michael Aaron Flicker is a behavioral science strategist, entrepreneur, and the co-author of Hacking the Human Mind. He's worked with billion-dollar brands like Coca-Cola and Pfizer to help them influence your decisions before you even realize it.
• 2:13
  In this episode, we talk about why you trust expensive brands, why Spotify Raft is psychological warfare, and how you can use these same tactics to grow your own business. Let's get into it with Michael Allen Flicker. Kelly, thanks so much for having me on the show. Glad to be with you.
• 2:30
  My friend, I am excited. I did all kinds of research and I was, like I said, before we hit record, I'm like, oh, there's so many questions I have. But before we get started, I just want to, I want to understand what these best brands know about your brain that you don't.
• 2:49
  I would tell you that brands have come to believe that humans make decisions much less rationally than we as buyers believe. We think that we stack up all the options, that we look across what's good for us, what is most economical for us, and then we make a logical, rational choice. And the world's best brands, the ones that we look at in the book, the ones that we love to talk about.
• 3:18
  have an insight that maybe it's a little less rational. And they're using that to help them sell us more product. And hopefully by learning about it, we can help everybody know more and do better. So I own an AIIT cybersecurity firm, and I known for years that they were tracking all of this. I'm reminded of that movie,
• 3:42
  uh tom cruise when he when he runs through this minority report how are those jeans the minority report and is it how are your jeans and people like still don't realize that you are the product in social media you are since it's free your data is the product actually and they're mining it and they're watching everything that you're doing so they can market to you i yesterday i just said i needed to hire somebody
• 4:08
  At my company and my whole feed was with agencies that not hired, but that were actually the product of what I was trying. It was wild, Michael. So tell us how you influence this and why it makes so much money and how it works.
• 4:25
  What was surprising to me as I got into the field of behavioral science is that these insights about human psychology are not new things. The way we take advantage of them, whether we use cell phones for listening, as you're talking about, or whether we use AI to combine lots of big data, the ideas...
• 4:46
  that we're taking advantage of, these insights into human psychology are truly part of our evolutionary process, meaning tens of thousands of years of development have created these biases. And so studies that we look at, even from 100 years ago, when we replicate them today...
• 5:07
  we get very similar results. It's really almost mind bending. And so while a lot's changed around us, our brains are much slower to adapt. Our brains are much slower to move forward. And so in a lot of ways, what we learned on the planes in a hunter gatherer societies, if something's big running at you, you should run. If something has a lot of people around it, you're going to look. Those basic evolutionary facts
• 5:37
  affect the way that we live in today's modern world and they affect the way we buy. So if we know that, then we can use those insights to make better purchase decisions and to make better brands. So why does marketing that makes sense, quote unquote, makes sense, never usually work?
• 5:57
  What I would say is that marketing fails most of the time when the people that love the brand, that love the product, talk as if they were talking to someone else who cared as much. And what we know about marketing and advertising, it's a weak force. It's a weak force. It's very directionally possible to move someone. And so the biggest mistake most modern marketers make is they talk
• 6:24
  as if anyone else knew what they were saying or as if anyone cared. And our job is to break it down so that it's as simple as possible to communicate. That's going to be more effective. I got to hire you to come to my office. Yesterday, we were doing a marketing campaign on a product that we call Elevate. And they released all this advertising calling it Elevate. And I'm like, looking at it, I said, you realize it doesn't say what it does, right? Yeah.
• 6:51
  They're like reading it like, oh, they were so close to it. They didn't realize that all people want is what am I going to get from this? Sell benefits, people. That's marketing. What are you going to save me time, money, or less headaches? That's what we want to hear. What are you going to do for me? Yeah. You've called behavioral science a cheat code for small brands. How can someone like me and my company use this without a big agency budget?
• 7:20
  So what we want to do is we wanted two things. Number one, to be successful with behavioral science, we want to teach brands and businesses to adapt a test and learn mentality. Meaning we're going to learn some principles of behavioral science and we want to test them in our business.
• 7:39
  See what works for us and do more of that. And what doesn't work for us, do less of that. So number one, we want to adapt a test and learn mantra inside of our companies. And number two, we want to steal ideas that other people spend a lot of money to learn and use them for ourselves. Because if we have big brands like Apple, like Amazon, like Kraft Macaroni and Cheese...
• 8:01
  If they've seen it work and they invest millions, tens of millions, hundreds of millions of dollars, what's the way we can take from that and use in our own businesses? So we want to find the right things to learn from these big brands and use them in our businesses. And if you take the right things and you test and learn with them, you've got a pretty good formula to improve your brand. So wise people learn from other people, right? Yeah.
• 8:27
  Yes. So let's dig into some of these. You mentioned a couple of them, but I'm going to pick one in particular that we all know, Red Bull. Red Bull sells tiny cans at high prices and it works. What's the science behind pricing or behind price signaling power? Red Bull, amazing story. They create the category of energy drinks, but when they decide to create their product, they're taking it from Vietnam. They're bringing it to America.
• 8:57
  is it going to just be seen as a soda? And can we charge what we want to charge if we're seen as a soda? So they brilliantly decided to launch not in a standard 12 ounce soda can. They did a skinnier, taller can. And right away, they broke being able to compare it. Because when you look at it on the shelf, it doesn't look like other sodas and it's not priced like other sodas. So as humans, when we walk down an aisle,
• 9:26
  We're really looking to compare. And when you shop at a shelf, you're really deselecting more than you're selecting. You're looking at the shelf and you're saying, well, that's too many colors. That's too expensive. That doesn't meet my needs. I don't want a store brand. Aha, there it is in the middle. So what Red Bull really did well here was they said, let's not allow ourselves to be compared to soda.
• 9:51
  Let's build our own category. And then instead of charging a dollar for a soda, we can charge $2.50 for a Red Bull. And they really broke the price comparison rule by doing that. You see, Stephen, we can do that. We got to be different. I like that.
• 10:06
  I love that thing. I don't want to be compared to anybody else. That's right. In your book that you co-authored, Hacking the Human Mind, you talk about Kraft Macaroni and Cheese, Starbucks, Snickers, Apple, Amazon Prime, Haagen-Dazs. We've talked a little bit about Red Bull, Guinness, Liquid Death. We got to get into that. Facebook. Tons of household names. But the second one I want to talk about
• 10:29
  is Spotify. Sure. And Spotify wrapped that everybody can't wait. Your year in review, the wrapped, it goes viral every year.
• 10:39
  But you say it's not just clever marketing. It's neuroscience. That's right. What's actually going on and why can't why do we just can't wait? And then we share it like it's crack. Yeah. I'm going to bring three ideas and principles to life about Spotify rap. We'll go through each of them quickly, but hopefully they connect with everybody listening in a slightly different way. Number one.
• 11:01
  You're a music fan. You listen to Spotify because you love the songs. You love the recommendation engine. And what do they do in Spotify rap that's so surprising? They hit you with numbers. You see your year of listening quantitatively happening.
• 11:17
  how you were the top 1% of Bruce Springsteen listeners. You listened to 750 hours. You're seeing my juicy roots here of Bon Jovi. And by doing that, they're tapping into an insight that was made very famous by Linda Chang and Katie Milkman. They looked at 21 experiments across 23,000 people and,
• 11:40
  And what they said, what they saw, was that when people are trying to evaluate trade-offs, what's good and what's bad, qualitative information is not as good as quantitative information. So number one...
• 11:55
  They use numbers, and that appeals to our preference for concrete data, and it stirs curiosity amongst music lovers. Number two, they do social comparison. So they say, hey, you're a Bruce Springsteen fan. You're the top 1% of fans. Well, that tells me something. I'm better than 99% of other people. And that...
• 12:19
  natural inclination to want to be in a social hierarchy, to want to be above somebody else. They so brilliantly do it because if you are listening to one of four people listening to new age jazz, you still could be at the top of something. So social comparison number two. Number three in this one, see how it hits you, Kelly. The nostalgia effect.
• 12:40
  There's a powerful emotion that happens when you look at the numbers, but you hear your favorite music. Because as you're going through Spotify rap, your mind is remembering little time capsules from your year when you heard these songs, when it mattered to you.
• 12:57
  And it's that emotional connection that triggers what you're talking about, which is the desire to share. Because yes, you're sharing because you want to show your social hierarchy. You want to show that you were in the top percent of listeners. Yes, you're sharing because the numbers are interesting, but you're really emotionally connected to Spotify rap because it connects you to another time and place. We always say comparison is the thief of joy. And, but yet we still compare ourselves. And then my good friend, John Acuff says,
• 13:26
  that we have soundtracks in our mind. We have soundtracks in our mind that set us back to exactly where we were at that individual time. So I'd imagine that's like anchoring. So it's brilliant. You use both of human tendencies. There's your behavioral science, human tendencies, and,
• 13:46
  to put to promote the product then what do we do we share it all over social media and we do their advertising for them both the artist and the and spotify unbelievable have you done any research on how people grab on and gravitate to podcasts because you see some of these that are absolutely great and like
• 14:09
  Rogan, Rogan can just start off and have this entire thing. We'll have a conversation just like two buddies just said, and it's viral. And then I'll have your beautifulness on and we'll get hundreds of thousands, but we won't get millions. Not yet. We will. What's the behavioral science behind that?
• 14:28
  You know, there's a few things going on, I think, with podcasts that really make them psychologically interesting. One, there's something really interesting about this insight called the pratfall effect. And here's the pratfall effect we talk about in a Guinness episode. If you look at somebody who is perfect and they make no mistakes...
• 14:53
  And then you look at somebody who's great, but they admit a small blunder. The study done in the 1960s was a test case. They record someone taking a test. They get 92% of their questions correct. And afterwards, they spill a little water on themselves. Yeah.
• 15:09
  Then they show that same clip, 92%, perfect score, and they cut the part that was the blunder, the spilling water on themselves. When they asked them to rate the likability of the person taking the test, the person who spilled the water 45% more likable.
• 15:25
  I think podcasts give us access to personalities in a much more authentic and believable way. You and I are not on cable TV, network news. There's a humanity between us that makes us a little bit more fallible. Not much, Kelly. You're pretty infallible, but a little more fallible and a little bit more endearing.
• 15:47
  And I think people want for that. They want that and it increases likability. And I think the rawness of the discussions on podcasts are just generally more sticky. People come back for them more. And I can't think of anything more raw than Joe Rogan's podcast.
• 16:05
  I remember when I first discovered podcasts during the pandemic and I'm like, what are, why would I want to listen to? And then I, now I'll you'll see. It's funny. Cause I'll watch my Spotify wrapped and each year it just dwindles. Cause I listened to less and less music and more and more podcasts.
• 16:25
  Or now that since they put audio books in there, I listen to that. I just am constantly feeding my mind because I love this kind of information. When I had the opportunity to bring you on, I'm like, bring them on. I want to ask so many questions. We're going to go through some branding and then I'm going to throw some politics because if behavioral science works in marketing, it must be working in politics, but we want to be very...
• 16:45
  Careful because I don't want to start a proverbial snowstorm or so to speak. So you've also said that features can actually hurt a product. Why do most brands still lead with more instead of less than?
• 17:02
  So I think it starts with the marketer. The marketer comes in, they believe in a brand, they love the brand. They've got a million things to say about the brand. And they think that everybody wants to hear their million things. But what we know, what the data, what the studies show us, that if you can narrow down and be an expert at just one thing,
• 17:21
  Instead of a snowball's list of things, you're going to do better. So the story that we use that we think is so provocative, set your mind to this, Kelly. It's 1986. You've got a gentleman named Jerry Morrell and his four sons. They're on the Maryland boardwalk. And the oldest of the four sons is saying, Dad, I don't know if I want to go to college. What if I started my own company? And Jerry and the oldest son are talking, and he says, well, you got to pick a company that's going to work. Yeah.
• 17:50
  And as they're on the boardwalk, they notice there's only one food stand that is packed with people. And it's a little French fry shop called Thrashers Fries. And they're talking about, well, why are all the other food stands that also sell fries not packed like Thrashers? And Jerry Morrell comes up with the idea. You know what? It must be because they're expert at just one thing. And their fries must be so much better. So let's create a brand. They call it Five Guys. And let's create...
• 18:18
  we're only going to do hamburgers and fries. And to this day, they now have 1.6 billion in sales. They've got 1800 stores. They don't do chicken. They don't do ice cream. They don't do anything other than hamburgers and fries. And that's based in human psychology. If they think, if people believe that you are doing one thing, they just innately believe that you must be the expert at it.
• 18:42
  And there's a bunch of academic studies behind it. We don't have to get into it. But really, it's true that if you focus on just one thing and being an expert at one thing, that is more believable than giving a whole list of why you're good at a bunch of stuff.
• 18:55
  That's the In-N-Out Burger story. Yeah, same thing. I've heard that. Why doesn't it sell chicken? Because they're a burger place. It's a lot of grease, though, too. You ever see the outside of the In-N-Out Burger bag? Holy cow. Not In-N-Out Burger. I'm sorry. Five Guys. My daughter loves Five Guys. It's just cultural. And I look at it, and I'm like, oh. And it's so good. Yeah.
• 19:14
  I want to hear another behavioral insight from Kelly from five guys. Fascinating. Yes. They, when they give you the reason there's so much grease on the bags, there's a reason. There's a reason on the inside. When you order your fries, they will fill a soda cup full of fries for you, but they always overfill.
• 19:36
  The soda cup. So fries are falling out of it. It gives the impression that you're getting a better value for your money, even though they priced it for those extra fries. They're just giving you a small container. And the bag looks greasy and more delicious. And inside, when you open the bag, the fries are overflowing. It gives you more satisfaction when you buy. And they've talked about this is a strategy that they use.
• 20:00
  You just blew my mind. Like, Greece is a strategy. This is why I wanted to have you on. So it sounds like everything is a strategy. Even when they tank it, it's a strategy. I think maybe if it works. Yeah, you're right. Well, we're not going to talk about the Budweiser can issue. So we'll stay away from that one. What's the behavioral reason people think expensive equals better, even when it's not?
• 20:29
  Pricing is a badge of quality. And folks assume that if you can command a high price, it must be better for you. We talk about costly signaling and pricing as a badge of quality for Red Bull. But there's lots of examples in the world of trying to break category convention and really price yourself higher. An amazing example of this is if you've ever seen Nespresso.
• 20:57
  Nespresso coffee pods. When they first invented and were ready to sell Nespresso in America, they had a problem. Each one of those little coffee pods was going to cost almost a dollar for one pull of coffee. And they said...
• 21:14
  Well, a drip coffee is five cents. If we get compared to five cents, we got a real problem. So what they did was they, in all their advertising, they said, look how good of a value Nespresso is at a dollar compared to going out to Starbucks for $5 or for $6. So they broke the convention. They broke the comparison and they did a really good job having people compare a dollar for Nespresso compared to $5 for Starbucks. Nevermind the fact that you really could be comparing it to five cents for drip coffee.
• 21:44
  Your story is remarkable. I happen to know about it. I didn't start off with it. Before we go into some other leading brands that I just, I'm fascinated by this. I love to hear this. I want to still get to Apple and the Snickers, but you started this company when you were 14 years old. Yes. How did you walk us through this? How did you, how did your mind get to this?
• 22:04
  It was the mid-1990s, and it was a moment in time, much like today with AI, where everybody thought that high school kids knew more about the internet than anybody else. It was a moment in time where kids could do things way outpacing where normally they would be allowed to play.
• 22:24
  And I grew up with a kid across the street from me. He played with Legos. He built Lego universes. And when the first personal computers came into our homes, he was on the computer more than anything else. We decided to build a company doing internet programming.
• 22:42
  computer programming on the internet before anyone was doing that because their parents said, you got to stop playing video games, go get a job. And you know, like it was a chance for us to really get out there and try it. We did this throughout high school. We paid for ourselves to go to college and we've been doing it ever since. It's been a really nice, it's been a really- And it's still the same company and you still own it. It's all, that's what I was-
• 23:03
  Yes. Just fascinated by. And you're still with your business partner, right? So he, when we graduated, I'm not with him anymore, but he has a lovely story. When we graduated college, we said, we may do this company for the rest of our lives. What did we always want to try that we never got a chance to do? He wanted to work for a big tech company as a computer programmer. He applied to Microsoft, Google, and Adobe. He got into all three. He went to Microsoft in 2005. He's still there today. Yeah.
• 23:31
  So he's had an amazing career as a Microsoft computer engineer. He's done a great job. I wanted to work in the White House, but I couldn't because at the time I didn't agree with the president. So I went and I did a stint in the U.S. Senate.
• 23:46
  And I can tell you, Kelly, I didn't make it very long. I was an entrepreneur at heart. And so back into the business, I was full time. But the big evolution for us at Xenocide in 2018, I realized something. We were professional services companies. We had clients. People pay us to help do their marketing, help do their websites, their digital marketing, their brand strategy. And I realized that for me...
• 24:13
  I wanted to create my own things. I didn't just want to work for others. I wanted to create my own things. And so I started creating my own brands in the world. And in 2022, we evolved Xenosci from one company into nine. I'm the CEO, owner of all of them. We use the money that we make in one company to invest and create the next company. So we have nine companies. I own them all. We have no debt. We have no investors, but it's still the same idea. How can we help people? How can we create good things in the world?
• 24:41
  So we make everything from compression socks to healthier for you soda to marketing strategies and ad campaigns. We do it all. If I weren't doing IT or this, I would be in politics. But I'm like you. I have to feel like I'm contributing.
• 25:00
  And it feels like the system is broken. Our political system is broken. Not the people. I'm not into this red, blue. I think the system itself is just tainted. How else can you have Nancy Pelosi go in already a millionaire and come out almost a billionaire? And it's, you know, seven. I think I saw the article this week. 1,700% return her and her husband got on their stocks.
• 25:27
  When that happens, I just think no taxation without representation. I just, I just think that something's a little off and we can talk about that. But how are they used since we talked about politics, let's talk about it. How they using behavioral sciences to manipulate us in politics and create something that probably really isn't true. That the red and the blue are, this are absolutely hate each other. They're friends in real life. Yeah.
• 25:54
  You know, let's start in Europe and I'll bring it to America. In Europe, behavioral science is seen as a critical part of making healthier, better functioning countries. The United Kingdom famously created their nudge unit in 2012 to help nudge people towards better behaviors, whether that's healthier lifestyles, you know, more compliance with paying your taxes, better recycling. Yeah.
• 26:21
  In Europe, there's a belief that if we can help guide folks towards better actions, we'll do better. Now let's cross the Atlantic.
• 26:33
  In America, that sense of guiding someone is met with a lot of what it's more than hesitation. It's met with a sense of defensiveness. Well, if you're guiding me some way, what's the other side of it? Why are you wanting me to do this? And I think it's I think we live in a time where there's a lot of mistrust. And I think that come from, Michael.
• 26:59
  I'd like to believe, Kelly, this is outside of behavioral science, I'd like to believe the founders created a system that was meant to go slow, that was meant to be balancing and meant to be challenged. I'd love to hear your thoughts on this. And
• 27:15
  In a world that's changed so much, that friction that was designed to be checks and balances, it doesn't serve us as well anymore. It's very hard to have government be so behind where the culture and the technology is today. But is it Winston Churchill said, democracy is the worst form of government other than all the rest? I mean, there's a problem that we have.
• 27:43
  And I'm not sure I've seen a better solution anywhere else. No, there's definitely not. We live in the best country on the planet by far. It's fractured a little bit, but it will rebound and rebalance. And I think that the questions that you're asking and the questions that we're starting to ask are the beginning of change about to happen. And if you look at the history of man...
• 28:08
  Whenever we float way too far one way, it course corrects. And, you know, you look at as quickly as World War II and Hitler, you know, when you get too far on one way, the universe corrects itself. So greed.
• 28:26
  It has an ultimate way of humbling you. We'll see how this goes, but I think we're headed towards, especially when we just come off this shutdown, I think the people are sick and tired of being sick and tired. Because how are you going to tax us and then shut everything down that our taxes pay for?
• 28:48
  Makes no sense. That's not for us. Can you say it's more about you? And that's when the whole system needs to be changing, especially with you're a smart techie guy. We know technology exists right now to get 100% voting. Blockchain exists. We can vote right now, 100%. You cannot manipulate it. And we could have everybody vote. And that would be a true vote.
• 29:12
  But oh, no, that would eliminate corruption. That would be too honest. We're going to get there. That was my rant for... Would you like to add anything to that? Yeah, I would like to add to that. My belief is that there are a lot of patriots on both sides of the aisle. I believe that the people in Washington get quickly painted. And you said first, Kelly, it's not about the people, it's about the system. I think people are really trying to...
• 29:40
  And I think that it is very hard to do anything out of big country at 350 million people as quickly as we all want. But I agree with your optimism. I think that there's positive change coming.
• 29:56
  Yeah. And I, there's some, there's some certain easy fixes like campaign finance spending, uh, term limits, just easy things that will fix it right away. I mean, explain to me how we don't have voter ID. You it's a, it's a national law that you're, you're supposed to carry ID on your person if you get pulled over, but I don't need it to vote.
• 30:18
  That's just weird. And it's on both sides. I'm not, I don't want to get involved, but I just imagine there's a lot of behavioral science going on behind the scenes of that.
• 30:30
  And I think that some of the behavioral science is really meant to try to get people to do good. Like if you feel that the standard and enormous to vote, we want more voter turnout. And so there are campaigns trying to help people be more active in politics, vote more. But then there's obviously a lot of scare tactics and a lot of things that are going on that are not where we want people spending their time.
• 30:57
  All right, we're going to switch back to small businesses because that's what I'm all about, and I love it. We're the people that...
• 31:03
  that push this country forward. And I love health. So let's talk about brands that talk about health and it makes that, and then it makes food taste worse and how wild that is. How does it even work? So this is a fascinating brand story. So let me just start with the story real quick. And then I'll tell you the behavioral science behind it. Kraft macaroni and cheese, mid 2010s knows they have to change their formula. Yeah.
• 31:31
  And they're worried that when they change their formula, it could cause sales to go down. Why? Because they're replacing some of the items in the ingredients with more natural ingredients. They're removing, it may not be yellow dye 40, but let's pretend they're removing yellow dye and they're adding turmeric. They're removing something, they're adding a natural ingredient, and they're worried that it could have a negative effect on sales. So...
• 32:00
  Here's the idea. We're going to change the ingredients and we're not going to tell anyone. And for two months, they sold a million boxes a day. They sold 50 million boxes of Kraft macaroni and cheese and no one noticed. And then they ran an ad campaign that said, congratulations, you've just participated in the world's largest taste test.
• 32:30
  And everybody, it created tons of social media buzz, tons of social interest, tons of virality. And why? Because they had this insight that if people thought Kraft macaroni and cheese was healthier for them, that it may...
• 32:45
  negatively impact sales. And there's some really interesting behavioral science behind this. Studies in university cafeterias where you have a basic vegetable, a light and low carb vegetable, a vegetable that says healthy energy boosting, and then a really indulgent vegetable called sweet sizzling plant beans and shallots. And those...
• 33:13
  that chose to go and look at all those different options, they were rating the scale of how delicious they were by 25%, the one that was described as indulgent, sizzling, hot, and sweet, scored 25% more tasty than the same basic version, even though it was the same recipe. So our expectation leads our taste.
• 33:34
  Our minds tell us what our experience is going to be. And so what we learn from this is we got to be really careful what we say and in what order if we want to, you know, to not hurt our brands when we make these types of changes.
• 33:48
  Thoughts are magical lies. How much truth is it to that the Costco brand is actually one of the expensive brands? Do you know anything about that? I know quite a bit about what they would call house brands or brands that are made by the store. I don't know about Costco's more expensive brands, but I will tell you this.
• 34:08
  Generally speaking, these retail giants are looking for what categories are hot and where they can manufacture a lower cost product. And generally speaking, brands are very negative about this. Don't compete with me and take my my my shelf position away. But.
• 34:25
  There is an opportunity to use a lower price product and potentially a lower quality product to help your brand do better. So yes, I think there's a lot of psychology that goes into deciding, do I want the Crisco or the brand name cooking oil? Do I want the planters peanuts or do I want the store-bought peanuts? There's a lot of psychology and emotion behind that decision.
• 34:52
  Let's get tactical about small business. If for some reason you lost all nine of your companies and had to start over right now, but with the knowledge you have today and with AI and you had 10,000 bucks left, what would you start?
• 35:09
  I would look for a very small problem that's really annoying to people. And I would look for a very simple solution that is worth a dollar a day, worth $5 a month. I would look for the area that no big tech is going to compete in. I would look in the area that everybody, when they hear about it, is like, how can I not live without it?
• 35:37
  Um, because I think there's a lot of white space AI can allow us to do so much, but everybody wants to make the first one person, billion dollar company, the first $1 trillion, one person company. I'd be very happy to build a $1 million company that had 99% profit. Like sounds pretty good to me. Yeah. Right. I think, uh,
• 36:01
  One employee, $1 million. I'm good with that. That's the point. That's the point. So I would look in the less sexy places. I would look in the very everyday places. We talk a lot in behavioral science, Kelly, about the pain of payment. This means like in the old days, you had to reach into your wallet. First, you had to watch the cashier, write how much it's going to cost. Then you had to reach into your wallet. You had to pull out cash, give them the cash, watch them count the change, the whole thing.
• 36:29
  takes a lot of mental energy to exchange money for goods. Today, you tap your phone or you don't even tap your phone. You scan a QR code and you're able to pay. The pain of payment is wildly pushed back from the point of purchase. And in doing that, we're willing to spend more, but we have to think about the ways we can use that as a small business to make more and do better.
• 36:56
  My listeners hear me rant and rave about AI a lot, but I want to hear it from you. What are some of the ways that you're using AI efficiently that would relate to our listeners who all pretty much will own businesses? I tell everybody, email me. I will show you how to use AI. And most people are still not using it properly. So give us some cool daily rituals that Michael, you're using, as well as the companies are using, that...
• 37:23
  Any of our listeners could say, oh, I like that. I'll start with one from our soda company, Fizz District in Louisville, Kentucky. We have a concept store and we're selling healthier for you soda. Wait a minute. Hold on. I want to laugh. Louisville, Kentucky, the home of whiskey. He's selling pops. Let's see. Let's see. There you go, standing out again.
• 37:47
  We see if we can build a market there. So we have this concept. We have this concept that we got people coming in. They're buying soda. And by no means is this big data. We've got a few hundred people a day, a few thousand orders a month. But it's more than I can understand.
• 38:05
  I use a tool called Julius.ai, Julius, J-U-L-I-U-S. You know, I found it through a Google search. I load in my customer data and immediately back comes all the charts that I've pre-populated and asked for. I can see repeat visitor rate. I can see times of day. I can see how many people ordered caffeine with their soda. And it all populates with one click.
• 38:32
  That type of on-demand reporting would have taken analysts hours to do, and I probably wouldn't have gotten as beautiful charts and as cleanly as possible. So one use of AI for me, it's not big data. It's actually small data, but it's much bigger than I could go through myself.
• 38:50
  What's the behavioral methodology behind naming it Julius, you think? There might be nothing. I don't know. I just think there's a reason. There's a study from a famous behavioral scientist about Bulba and Kiki. This is fascinating. Bulba and Kiki. And across 20 different countries. You're talking about the Bonobo...
• 39:12
  animals, right? The bottom of chimpanzees? No, these are just abstract words. So these are just abstract words. They go to 20 different languages and they ask people from all over the world, what do you think of, what do you feel when you hear the word bulba and what do you think and what do you hear when you hear the word kiki? And universally,
• 39:34
  People who hear Bulba think soft, think round. They think engaging. And people who hear Kiki, they think sharp. They think a little bit off-putting. Fascinating. Not language-related. Something evolutionary about us. And so Julius, for me, has a bunch of vowels in it. It has, it ends in an S. It sounds a lot more to me like Bulba than it does like Kiki.
• 40:03
  And so I think it's much more approachable and it's much more likable. I also think Julius sounds to me like a Roman name. Yeah, sounds smart. It imparts smartness, yeah. Like steadfastness. In a world of AI where everybody is coming and going, Julius is here to stay. By the way, I don't know anybody at Julius. I just use their skill for 20 bucks a month. But I mean, I think there's a lot of smart branding behind it.
• 40:29
  Well, I'm going to go to Julius tomorrow because I am a numbers freak. Here's my advice for small businesses. Measure everything because what you measure gets better. And I'm watching people in my company, like they don't even come to meetings anymore until they have the data because I'm going to say, show me. I don't want to hear...
• 40:49
  how it feels, what you think, show me the numbers, all that matters because they don't lie. I'll tell you one, a thing just to share with everybody. Cause I did this yesterday and I was, it felt like a thousand pounds weighted off my list. We have a blind spot in our company and it has to do with marketing.
• 41:08
  And we're a tech company. And I kept saying, we're missing a creative. We're missing a creative. Someone who really understands how to be creative and convert our funnels. And so I typed into one of the AIs and I said, here's what I got going on. You're a 30-year McKenzie business analyst. Ask me as many questions as you need for context and solve this problem.
• 41:39
  and about, it took me an hour of keep going down. It literally gave me the job description for the conversion content creator.
• 41:49
  And showed me what I needed to put on Upwork. So an hour into it, I solved a problem I've had for an entire year and couldn't. All I could say out of me, and I'm a smart guy, is creative. And it was a conversion content specialist. And it's something that exists. One hour going down a rabbit hole of your favorite AI.
• 42:11
  Got it. But Kelly, don't you think it requires a state of mind of business owners to say, I'm in a learning mindset. I know I don't know everything. I want to engage with this amazing technology and learn from it and teach it and learn. It requires a curiosity.
• 42:32
  that maybe wasn't always celebrated, at least in corporate America. I think as entrepreneurs, we celebrate curiosity and creativity all the time. But don't you think it requires a little bit of that personality or of that career skill? And also, yes. And I just thought of this. It comes with as we've really put vulnerability out there. Right.
• 42:55
  You got to be vulnerable and be in leaders go first and say, I don't really have the answer. And it's okay to do that. And saying, I'm not sure, but we're going to figure it out together. That's the new world that we're coming in. Be interested more than you're interesting. God gave you two ears, two eyes and one mouth.
• 43:17
  Use them that proportionate. So it's a lot of humility and saying, I'm not sure, but we're in this together. We'll figure it out together. And I love it. But where they're going to go wrong is people thinking it does their job for them. If it can do your job.
• 43:36
  I had a Microsoft exact on. She said it's called formulaic. Anything that can be formulaic can, can you take a job? So you have to add value, but I love it. This is, I'm going to tell you, I'm going to be 50. This is the most exciting time I can ever remember because it, this is a level playing field. It's like we have a salary cap in business. It's like now, listen, I'm going to tell you right now. I hate to say it to my listeners. Michael is smarter than me.
• 44:04
  smarter than me but we're pretty level even feel now that you give me ai and and i'm gonna work work and work and prompt and prompt the prompt until i can get equal but now i got a new friend and i don't have to and that's what's cool too is because now here we are on a podcast it's the
• 44:24
  Yeah. We were talking, Kelly. Not only are we on a podcast in one of the coolest times ever, look, we're in different cities and be able to be this close to be able to exchange ideas and have these conversations. Never in the history of humanity has this been possible. Pretty cool. Yeah, it is. If you could tattoo one behavioral law on every founder's forehead, what would it be?
• 44:49
  Thinking is to humans like swimming is to cats. They can do it. They just prefer not to. Now, I can't take credit for that. That was a Nobel winning author who said that. But I think it's a pretty important thing to remember.
• 45:06
  We are logical. We can act rationally, but it takes a lot of calories. I heard somebody say, your brain is only 2% of your body's weight, but can consume up to 20% of your calories. Meaning, if you use your brain too much, you could starve yourself. And so, evolutionarily, we use our brains as little as possible.
• 45:32
  That means we are driven by more emotional, non-cognitive, subcognitive processes. And if you know them, then you can work with human nature rather than against it.
• 45:44
  I know for a fact you're right, because I, as I see myself expanding my, my neuroscience and my brain power every day, I get hungry and I am literally, I get so hungry because I have to, I'm thinking more now than I've ever thought before. And I create that space for it. And then I got a thinking partner in AI. So a lot of times I'll think of something crazy.
• 46:10
  And I can just go in and go down a rabbit hole and go, oh, it's not crazy. This is actually something. That's wild to me. Yeah. I've bounced ideas off of people and they're like, oh, that's crazy. And I don't know. Again, I'm just, I'm man crushing on this stuff because I know you like it too. And there's so much. Let's talk a little bit about loyalty because...
• 46:32
  That, as I fly one airline and I look at these loyalty rewards programs as a cult, literally. You can't get out of it once you've got into it. So what are the psychological triggers that are going on that drive that loyalty, if it even is loyalty at this point?
• 46:53
  Well, asking if it's loyalty, I think, is really a very critical question. Let me frame it for you as a sunk cost fallacy. And every word in there matters. Sunk cost, meaning I've already invested in something.
• 47:10
  And so I've already started down this path. And humans want to be consistent with their past behavior. So if I start doing something, if I change, then I must have been wrong. So generally sunk costs, whether it's paying for a gym membership that you never use, whether it's Amazon Prime, you pay $140 for the right to get...
• 47:34
  products from Amazon. There's this idea that once you start spending, you're going to continue that behavior. But we reasonably call it a fallacy because it's not rational. If you invest in something, like let's say you're a one airline guy.
• 47:51
  But what if there was another airline that had the same flight for 25% less? You're not going to take it, probably. You're going to stay with your- Oh, I would. You would. Okay. Many might not. Many would stay with where they were before, and that's not really rational. But you would say, even though you're a one airline guy, you would change if there was a cheaper flight.
• 48:14
  Michael, I'm one of the weirdest guys in the world. I don't follow like literally any pattern in life. I see. Except winning and showing up. I just certain because that's why I wanted to have you on because a lot of these fallacies that you call it or biases. I don't have them.
• 48:35
  and I know because I can spot them like if you're watching a game and McDonald's pops up it isn't because you it's brand they're just trying to catch you what's the phenomenon called where they're trying to catch you when you're hungry you're like oh there's a name for it what's it called it's trigger moment it's a trigger moment that they catch you at the moment where they can cause an action you're like a burger would be great I laugh I go that's
• 48:56
  That's clever. You know, on a Friday night at, you know, nine o'clock, you're watching the game. You're like, you know, I just, I just call it out and I don't, and I just am one of the weirds. I like value and I like things that make my life easier. Mm-hmm.
• 49:12
  I value time and ease more than anything because as a small business owner, we make a thousand decisions a day and half of them are wrong and it's okay. But you get at the end of the day, your brain is tired and you're exhausted. I don't want to make any more decisions. So whatever makes it easier for me. That's why I love AI. Yeah.
• 49:34
  Like I can get from point A to point Z in an hour. That would have taken me days. We're an EOS shop. We run a entrepreneurial operating system. And we have to sit down with our leadership team every quarter. And we do a full day planning. We used AI to bring that down to three hours, three hours. I got to buy back five people's time for six or for five hours, 25 freaking hours.
• 50:02
  I, you know, and what I do, I send everybody home. I say, go enjoy the rest of your day. Go recharge. Go be with your family. You know, so it's, it's, it's all about how can we buy back time and be more efficient and optimize optimize. I run so fast. I know that resting and recharging is so important. How old are you, Michael? I'm a 43.
• 50:24
  Yeah. 43, I changed everything in my life. Everything. I cut out alcohol. I cut out, I upped my workouts because things weren't, I just totally revamped my whole life. That's actually right when I started this brand shortly thereafter. I wrote two books.
• 50:42
  And just at 43, things were just not feeling right in my body. And I'm like, I'm going to make a change. Seven years later, it's working out. It's fun. You're going to see the things that just, you start feeling aches and pains on your body you didn't know.
• 50:58
  It's an inspiring story, Kelly, for sure. Is there anything else that you'd like us to leave us with? Kelly, I'd love for everybody to think about how they can take our conversation today and try one thing in their businesses, in their small businesses, or in whatever size business they have. It's so often you can have these interesting conversations and people listen and hopefully we were both interesting and entertaining. Yeah.
• 51:26
  But if they don't turn it into action, it's a missed opportunity. And hearing you talk about what you did from 43 to 50, my gut tells me you took every opportunity you could to take an action and see how it went. I just would love for everybody listening to this to say, I heard a lot of interesting guys. I'm going to pick one of them and try it tomorrow. Try it next week or next month. I think that would be really nice for everyone listening to join. What kind of companies do you work with?
• 51:52
  So different agencies work different things. Our agency method one only works with indulgent food and beverage brands. They are experts in that. Our company function growth works with all e-commerce brands. If there's an e-commerce challenge, they're specialists in that. And then again, we have all our own private brands. So what's one of the things, one, just let's pick one of the many things we talked about or something we didn't talk about that you're passionate about that the listeners you want to take action on.
• 52:20
  Besides go get that book, Hacking the Human Mind. That's very sweet of you. I would tell you that I have been most passionate about finding ways to help others do well so that I can do what I like more of. As owners, as investors, as people that create companies, it's so easy to think that it all rests on our shoulders. And the more that we empower others to do more...
• 52:45
  we can reap the benefit and we can do a little bit less. That is Zig Ziglar. If you want more, help everybody else get more of what they want. Brilliant. You're a brilliant man. That was a masterclass, guys. Michael Aaron Ficker just broke down how the world's best brands hack your mind and gave you the tools to do it ethically in your own business.
• 53:05
  If you're still trying to sell based on logic, you missed the whole point. Pick up Hacking the Human Mind. It's packed with insights every entrepreneur needs. And make sure to like, subscribe, and share this episode. Thank you, Michael. That was absolutely educational.
• 53:23
  Thanks for having me, Kelly. Really enjoyed the time. Please rate and share this podcast. I'm active on all social platforms and love to hear from my Segal supporters. Each and every episode is sponsored by my company, National Technology Management, the easiest and best IT company to do business with, delivering peace of mind with technology every day, even simplifying cybersecurity. Visit trustntm.com for more info. Until next week, be harder than life.