Nudge

The £500 million marketing mistake

Mar 18, 2024

Discover the marketing blunder that cost a CEO £500m overnight, leading to bankruptcy fears and a company rebrand. Learn about the power of vulnerability in persuasion from Queen Elizabeth I's success to Gerald Ratner's failure. Explore how disclosing weaknesses can impact brand reputation and the importance of balancing positivity and negativity in marketing strategies.

19:19

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Episode notes

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Quick takeaways

Highlighting flaws alongside strengths boosts likability and persuasion.

Expressing doubt in persuasive appeals can enhance persuasiveness, especially for those with strong beliefs.

Deep dives

The Pratful Effect: Flaunting Flaws Increases Likability

Highlighting flaws can increase likability, known as the Pratful Effect. Research shows that revealing a flaw alongside a strength boosts likability. For instance, an experiment with Quiz contestants revealing clumsiness increased likability. Expressing doubt in persuasive appeals also enhances persuasiveness, especially for those with strong beliefs.

Introduction

2min

The Power of Flaws and Doubts in Persuasion

6min

The Impact of Gerald Ratner's Speech on Ratner's Jewelry Company

2min

The Pratfall Effect in Business

7min

Balancing Positivity and Negativity in Marketing

1min

In 1991, CEO of one of the UK’s largest high street brands lost £500m in value overnight. He almost caused his company to go bankrupt, which ultimately led to his dismissal and a complete company rebrand. In today’s episode of Nudge, I share his story, explaining the psychology behind why this happened and some messaging advice that every marketer needs to know.

Episode 70 of Nudge: https://tinyurl.com/vk2cxcuc

Classic VW ad: https://tinyurl.com/52t4xny2

Avis "Try harder": https://tinyurl.com/4k93t3zv

Ratner’s speech in full: https://youtu.be/Nj9BZz71yQE?si=Rf4Z0jkeofH4bQtk

The Wasp (1984) book reviews: https://tinyurl.com/2mxhk6wf