441. Cracking Consumer Codes: Hunter Thurman of Alpha-Diver on Pricing Psychology

Welcome to episode 441 of the Brainy Business Understanding the Psychology of why People Buy. In today's episode, I'm excited to introduce you to Hunter Thurman, president of Alpha Diver. Ready? Let's get started.

You are listening to the Brainy Business podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer.

Hello.

Hello, everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. In today's conversation, I'm joined by Hunter Thurman. Hunter is president of Alpha Diver, the market research and consulting firm that applies neuroscience to more deeply understand marketplace behavior. He says that in 2011, after a decade in the insights industry, he grew dissatisfied that traditional market research was merely compiling the what and lacking the why.

So he started Alpha Diver with the.

Vision of applying behavioral science to more deeply understand human behavior. Gathering leading minds in the worlds of neuroscience and psychology, he quickly discovered the wealth of insight that was sitting untapped within academia. Their team has built a framework of durable, predictable factors that underlie behavior. And they're proud to work with the world's leading brands and the Wall street analyst community to continually measure and database and predict consumer behavior. Today, we're digging deep on some specific insights they have unlocked around pricing with their BEV50 report and others. You don't want to miss this. Really quickly, before we get into the conversation, I want to be sure you know that there are links in the show, notes for my top related past episodes and books, ways to get in touch with Hunter and myself, and more. It's all within the app you're listening to and atthe brainy business.com441 now let's jump right in. Hunter Thurman, welcome to the Brainy Business podcast.

Great to be here. Thanks for having me.

Of course. I'm so excited to have you here and to be really talking about this amazing aspects of pricing and some of these insights that you have gained. Before we jump into all of that, I hold back a little bit and want to have an opportunity for everyone who doesn't yet know you. Can you share a little bit about yourself and the work that you do?

Yeah, yeah, absolutely. Well, I'm based in Cincinnati. I've been here for my whole professional life. I'm from Santa Fe, New Mexico, which is kind of a unusual place to have grown up. But as my wife says, I'm a born again Midwesterner and I've been here in Cincy for the last 20 plus years in the insights and strategy consulting domain at Alpha Diver, which is our company, the company that I started in 2011. Really what we do is we measure and diagnose what drives interest and action out in the marketplace, what makes people pay attention to things, want things, and then what makes them actually buy things and adopt things into their lifestyle, which I know is our topics near and dear to your heart. And so when I'm not doing my consulting work, I have four kids. My oldest is a senior in high school this year. So in this whole wild new phase of life. And so they're very active in, in sports and keep my wife and I very busy. And that. That tends to. Those two domains tend to. Tend to be most of my time these days.

Oh yes, we, it's, you know, so this will come out later, but we're recording this early September. So we've got, you know, first day of middle school tomorrow for the oldest here and then the, you know, another that's still in elementary. And then My youngest, my 3 year old just went back to daycare today after being home for the summer. And so we're throwing a party today. Like, love him so much. He's the best. And it'll be nice to have a little bit of time to get more work done during the day.

Everybody thrives in their routines, you know, and some mess those routines up.

Yes, for sure. Yes. He's been very. He is definitely his mother's son in that he talks constantly and loves to be singing and for whatever reason this whole summer he's been super hooked on singing Jingle Bells the entire. In its entirety from like dashing through the snow at full volume and like running in circles around the house. So that's so quiet today.

Yeah, that's a very specific lane of parental torture.

I mean, legitimately and like this is, you know, peek behind the curtain for the audience here and we'll get to the good stuff in a second. But legitimately for like three straight hours, just Jingle Bells at full volume. So impressive.

I don't know, for lack of a better word, that is impressive.

Yeah, I. So anyway, he's, he is his own person and he. It'll be, it'll be interesting to see what teachers say about him being back.

And what he's gonna sing at Christmas. Is it gonna be like yacht rock or like what's he gonna go?

Yeah, right. I think we're gonna be totally. Yeah. Finding some new summer based songs that he'll he'll have moved on to by the time we get to, to the holidays. So anyway, we did, we had our little personal anecdotes there for kids and things. So as you said, you know, looking at this work into, you know, what interests people, what draws their attention, why they actually buy. Of course that's like all we talk about here. But. And while we'd say, so what, what are the answers? What are those things? Which of course, you know, it, it depends. There are different things we need to look at. But what can you share from your work of some general things? You found some interesting stuff over the years, you know, for what draws attention and whatnot.

Yeah, so I, as I said, I started this company in 2011, which, you know, I was kind of at the, I guess what I kind of felt like then was kind of the midpoint of my career. And I really, you know, in, in, in back then it wasn't, you know, 13 or 14 years ago. Behavioral science really was a pretty new concept in, in marketing. Now, you know, consumer psych. I remember in undergrad, consumer psychology was one of the courses I took. So, you know, you know, and I've many of my colleagues say, look, we're all psychologists, this is what we do. But that, that the idea of really applying, you know, decision science, behavioral science, behavioral economics into this work was, was relatively novel. But what drew me to it, you know, when I discovered it and started working with some of the people that, that I still work with to this day, is that, you know, I got very frustrated that I didn't really understand. You know, I felt like, I just felt like something was missing. I'm like, you know, we're asking people why they do what they do. We're observing them, we're using, you know, at that time, mobile ethnography and things were very in vogue. But it just felt very unsatisfying. And so the more I discovered, I have this really interesting kind of origin story where I met our director of research here, Siggy Hale, who is a neuroscientist by doctorate and deep in psychology. It was this very interesting first discussion where somebody had said, hey, you should talk to this person. I was like a neuroscientist. I'm not really interested in that. I didn't think I was. And I kind of said, well. Or he said, you know, what do you do? And I said, well, we basically help companies figure out what will interest and drive consumer behavior. He kind of went, and they spend money on that. Yeah, they do. You know, companies are interested in why people buy things and retailers and the like. And I said, well, what are you doing? He said, well, that's exactly what we do. We study human behavior and we figure out why they do things. And so as this week kind of laughed that it was like our peanut butter and chocolate moment where we kind of ran into each other. We're like, wow, we're both doing the exact same things, but with total ignorance in my case, towards what was going on in academia, in his case, what was going on in industry. And so we joined up and for the past many years have been developing a means by which we can study that. And probably not probably, in about 2018, we started building this database. And so we've got these longitudinal data now that, fortunately for us, predate, you know, certain events that happened around 2020, such as the pandemic. And we look at these longitudinal data and, I mean, what we're quantifying is the concepts that you talk about. You know, I tweeted this the other day, or put it on LinkedIn. Your point that, you know, here's the truth about pricing. It's not about the price. All the things that, you know, and I think that's where, where we've gotten along, you and I have gone along. Well, is, is. It's. That's what we're studying. We're studying the irrational components of human behavior. And to your point about context and it depends. Yes, I mean, absolutely. You know, there, there's different scenarios, but the other side of it, and another thing that Siggy told me early in our relationship is, you know, human beings are pretty predictable. We actually, if we're attacked walking on a hiking trail, you can be pretty sure you know what the person's going to do. You know, it's not. Human behavior is not as much of a mystery. And that's very satisfying to someone like me who wants to have an explanation and a process by which to uncover things. And, you know, as we've. As we've built this database and mined it, there are just some really, there's always interesting things going on, but there's particularly interesting things about the irrational reaction to the inflationary pricing environment that everyone's obsessing over lately. And I'm looking forward to talking about some of that stuff relative to some of the points in your book.

Yeah. And so for everyone who's thinking, wow, Siggy sounds so interesting. Good news. He's been on the show before as well, so you can check out his episode. And we actually, in that episode, we talked More about neurodiversity and embracing all types of brains within an organization. It was really fun and fascinating conversation that I enjoyed with him. And we are going in a very different direction in our conversation today, which is I kind of led into we're really focusing on pricing. And you had reached out to me because of, you know, some reports that y' all were working on. And specifically, you know, I know you look at, you know, snacks and, and beverages and a lot of these types of fast moving consumer goods products. Can you share? I guess we'll let you do the pitch of kind of what you found and we'll dig deep on the, on the Bev side too.

Yeah, yeah. So that's, we've, as I said, we've been building this database and a couple years ago we started creating these reports that we call, you mentioned the BEV 50, which is the top 50 beverage brands. Then there's the snack 50, the quick 50 which is QSR and then the tipsy 50 alcohol beverage. And what we're doing is looking over, you know, longitudinally looking at those, what's driving those brands, what's driving, as I've said, interest in action. Where do these brands sit? And a really fascinating piece came out relative to pricing on the BEV50. The nice thing about beverage obviously is that it's fluid ounces, they're all the same format. So we were able to do some, you know, with snack, you can't really do a pricing analysis. But with beverage, we looked at, you know, these top 50 beverage brands which include everything from like Coke and Pepsi to like two that have been really headline grabbing this past year are Poppy and Olipop. These sort of, you know, they actually at one point were kombucha. They're kind of kombucha based, but they're positioned as kind of healthier beverages, digestive health beverages. And everyone's trying to figure out like, well, why have they grown like a thousand percent and what's next. So there's this really nice diversity of types of brands. And when everybody's talking about pricing and trying to figure out pricing and as you know, and as you talk about in your book, the assumption that most of the industry makes is that it's linear. You know, if the price goes up a certain amount, consumption will decrease by that same amount. But when we ran this analysis and we, we find that there's these different, there's these different quadrants of this interest in action map. But in one quadrant is what we call the exploration. That's the high trial, high interest brands, Poppy and Olipop and many others sit there. Then there's what we call the routine quadrant, which is the everyday usage. That's where Coke, Pepsi, Sprite, Dr. Pepper, you know, stalwart brands are. And what was really interesting is when you look at these, where these brands sit, the ones that were in this high exploration quadrant on average are 13 cents an ounce. Okay. So you know, just going to Walmart, roughly like pack sizes, they're about 13 cents an ounce. And you know, Poppy and Ollie Pop, if you walk into a store, they're like 379 for a can. They're expensive. So I mean, you know, not to put subjectivity on it, but that's pretty expensive, you know, for a beverage. Then you look at the high routine, Coke, Pepsi, Sprite, et cetera, they're 8 cents an ounce. So I think that's 62% less. They're cheaper. But then when we, as I said, we have this unique measure that we're not asking people to explain things. We're using basically psychological measures, non conscious measures. When you look at what they think is more expensive and I don't mean like they don't know the price. What I mean is they're concerned about the price. Consumers in general, this is all US gen pop data, we dig into it, but looking at just the, you know, Americans, US Consumers, there's more concern with the high routine beverages at 8 cents an ounce than more price concern than there is at the ones that are 13 cents an ounce. So it's just this direct, you know, it's totally inverted. The ones that cost a lot less are perceived as their price being less of an, more of an issue than the ones that cost a lot more. It's just such, you know, damning data evidence that, you know, to your point, the price is not the price it depends on, then there's some very clear reasons why that's the case. But right off the top that stat is it just caught my attention immediately when, when it came out.

Yeah. And I mean it stands to reason, right. As we go to think about, you know, if it's my everyday purchase, it's a thing I think about more. Right. So I'm aware may, you know, we may think that people are watching us closer. That could be part of it if it's part of that regular routine buying process, but also the sort of problem here. So there's for the Cokes and Pepsis and whatever of the world, right. You want to be that ongoing continual purchase spot Right. You want to be. And. And on one side, it may even feel like so a poppy or something would say, hey, we want to become your Coke. Right. But do you want to give up the amount that you're getting per ounce and how much are you trying to sell? Like, are you an everyday drink? Are you an every so often sort of a drink? And if you're about this innovative trying it place, you're gonna lose that if you shift into another quadrant. So having the awareness of what your brand is about. And I know we talked about. And for everyone who has read the truth about pricing, I talk about knowing whether you're a quality brand or a value brand. Right. So knowing that those innovative space poppies more in that quality. Very different approach to, you know, to why people would buy them. So know, what advice would you have for a company if they're realizing, oh no, we're, you know, we want to make a change. You know, it's. The grass feels greener, but it's not necessarily always greener. Right?

Yeah. Well, I mean, the first thing is exactly what you said. It's recognizing that all brands and all categories, even in something like beverage, are not in the same place. They don't. They're not. Know one of the. I mentioned that human beings are, are predictable. And one of one of our favorite sayings around here is like, look, I'll give, I'll explain psychology to you. People will always seek the carrot and avoid the stick. You know, if you think about the old analogy of a carrot on stick, we will always do it. I mean, it's, you know, we will move towards pleasure and move away from pain. Understanding for your business's situation what constitutes the carrot and what constitutes the perceived stick. And knowing that it's not the same for everybody. You know, the price of beverage is a totally relativistic concept and so many executives misconstrue that it's just totally black and white. It's like, no price is price. It's tangible. We can see it. It's dollars and cents. When you get into the reality of consumer decision criteria, it's just not the case. Case at all. So recognizing that and, you know, your book should just be required reading in all these organizations. The price is not about, you know, it's. Everybody's wrestling with it. You know, we provide counsel to everybody from C Suites to, you know, insights leaders to Wall street analysts. Everybody's wrestling with it. And yet it's still rel. You know, I kind of feel like if you said you Know the price is not the price. People here. Yeah, I get that. I kind of get that. It's like, well no, hold still for a minute. The price is not the price. And so to your question on where, you know where they sit, I think you're right to a degree on the whole like Coke and Pepsi, you use it every day. But you said, you know, you pay attention to it more. I think you're right in that you feel it more. You know, it's more of a line item. But what we find. So at a point in my career, everybody, and it was kind of the early days of behavioral science, everybody was talking about habit forming. We've all the industries move away from that because habit's kind of a bad, like kind of a four letter word. But there was a point in my career where like every agency, you know, the head, the homepage said we're experts in habit formation. Meaning you want to create routinization habituation. To your point where I don't just drink a poppy because it's novel and I want to try it, I drink it every day like that. That is and was an aspiration. What you find is that when brands get in that high habituation, I mean there's a reason that our brains form habit and it's to basically not have to pay so much attention. And so what we find is brands that achieve and it's a place most want to be, you know, big power brand. When you're in that high routine space, they're actually thinking about you less. The brain is attributing less attention. It's just automated behavior. And that's just kind of psychology 101. But what we see in our data is that then when a pricing, you know, the headlines are awash with pricing and consumers are being compelled to like look at this, it's more disruptive. So things that are, you know, you're highly habituated in, you have a stronger emotional response to it. And in fact, you know, some of the other stuff we see is like they're matter at them. You know, you look at like what McDonald's has been going through really in the media, everyone's mad at McDonald's over the product. Everyone, you know, people on TikTok, some are mad at McDonald's over the pricing. It's like an emotional thing. Those brands that people have a high degree of routinization habituation. There's a very, there's like an emotional contract that they've made with the brand. And when the pricing comes up, you Know, they're compelled to look at it. They have a much more emotional response. So the point is there's all different levers and the money, you know, so, okay, you know, Coke and Pepsi, if they were 5 cents an ounce, there were 3 cents an ounce. Like, there's no number that they can get to because the equation that a consumer is using is totally different. And it's actually much more emotional in that for those highly routinized brands than it is for the. For the smaller brands.

Right. Well, and what's interesting, I think, with beverage in particular is. And you look at something like Coke, right. Or, you know, Pepsi, whatever. But like, you go to. We went to a movie recently and went to get, you know, popcorn and whatnot. And my husband decided to get a Coke Zero. And we were gonna go through and they have the fountain drinks and they have the Coke Freestyle machines, which I think are such an amazing and fantastic innovation in and of themselves, which we usually use. But there was kind of a line for it. And so he said, okay, I'll just grab a bottle, one of the. What are they, like 20 or 21 ounce, like the regular sized bottle of Coke Zero, and go to ring it up. And you would think, because we know how much that would cost in a grocery store or whatever, if you go pick one up, that it might be, you know, a $50 or maybe 2:50.

Right.

As we go. And I believe it was 5:79 or like 5:35 or something for this, like, little like regular bottle. And you go, okay, well, I mean, I guess because like, we're here and that's what we have to do. But it's the same. You go to a sporting event or all these different environments and they have so many different sizes. People don't anchor on that price per ounce in the way that you think they do. Right. It's also when we think about things like calories and how our brains convert information. I love this study that was done once because it's easy to tell people there's a lot of sugar in those things and you have to exercise to burn it off or whatever. And we know, like, sort of know how many calories are in the drink, but it doesn't compute to what I have to do to burn the thing off. There were ads that were done in just convenience stores that said drinking this and it was like a. Some type of bottle of soda or whatever equals running for 50 minutes.

Yeah.

And wow, shocker. People bought less soda right when you. But we're not doing those Mental calculations. And in the same way, when, if a brand is focused on the price per ounce, right. 8 cents, 13 cents. I can almost guarantee if you go ask people how much, you know, a Coke or whatever, anything is per ounce, they will not have an accurate number for you. Right? Yeah, we're desensitized to. When you look at the grocery store price, it's completely different to what we pay at the movie theater. And I accept it. I'm not going to the movies all the time. So I say, all right, fine, like, I guess that's what this costs here. And I just move along. But again, they aren't selling them for that much in the grocery store because there would be a concern, but just continuing to decrease, like you say, if they go to 7 cents and then Pepsi goes to 6 and like, that's a, That's a losing game.

Absolutely. And it won't change the behavior. You know, that's one of the, the often cited sort of behavioral economics anecdotes. It's, you know, this is Coca Cola. It cost 1.50 at the grocery store, 535 at the, you know, at the movie theater, $8 at the football stadium, and, you know, $20 on an airplane. You know, it's like, it shows the importance of context. But, you know, and those are sort of like, clever. And to your point, it's like, okay, I don't go to the movies that often. But where it gets trickier is when you're like, no, we're talking Walmart, like, Walmart aisle, you know, and it's this game of, you know, not even yards and inches, you know, perceptual millimeters that, that these teams and these executives are trying to navigate. And the real unlock is it's like, yes, there's context like that, like the actual physical context, like a movie theater, but then there's the mental context, what's going on between their ears. And that's really at the core of what, you know, our program and where I see so much value from this stuff. And I thought it was so interesting, your discussion the other day with Anthony Damsis on financial. You know, you guys were talking about people making sound financial decisions. And he had this just fascinating data back. You know, he had a lot of data facts about how perception, you know, perception drives so much. The, the sort of headline I took away being like, am I rich? What do you think? You know, somebody that thinks they're rich, it's more important than being rich. And, you know, he was saying that at $3 million net worth. There was this drop off of people thinking they're rich and it's just this crazy, you know, it doesn't make rational sense. One of the things that we measure in our database. So as long as I've been in marketing, so since, you know, 2019 and late 90s, there's been this like when people do research, they look at consumers and they go, okay, how much money do you make? You know, under 20,000 increments of 10,000, up to 100,000 or more. For the last 20 some years it's like, oh, 100,000 or more. That's the well off people, that's the rich people, they have high income and all these assumptions, you know, are made about it. But one of the things that we use in our measures, we ask how much money they have, they make. But then we do this. There's literally this visual of a ladder and we say, where do you think you are on this ladder? The socioeconomic status. We don't say money money. We say, you know, social standing, like where do you think you are relative to other people in the country generally? And it's really interesting. We see that the highest income, in aggregate, the highest income groups have one very particular mindset that they, they tend towards, they tend to make a lot of decisions around using social context. Like the wisdom of the tribe, the wisdom of others. They rate themselves the lowest on the ladder. So if a marketer saw the data, they go, oh, they're the 100,000 plus households. They're, you know, they're going to make decisions, they're going to be our consumer for premium products. They're not going to trade down to store brands. They think they're the worst off. And you know, Anthony, and you made those great points and we see that so much. We've seen it in our Snack50 study. There's been mostly in the snack world, the bev world's been a little more immune to it just because of the structure of it. But in the snacking space it's been all about private label people. The narrative is there's less money to go around. So people are quote trading down to private label. And I, the assumption is still that somebody walks up to the shelf and says, you know, I'm going, I want the national brand, I want Tostitos, but I have to belt, you know, tighten my belt. So I will trade down and get the lesser. Your point? I'm going to go from a quality brand to a value brand and I'm going to make that Choice. The fact is the wealthiest households are the ones that are switching. So that, you know, to that assumption they don't think they're, they're that well off or they are well off because they think that way. You know, you can get into the anthropology of all of it, but the point is all these assumptions that marketers make, they're like, oh, you know, Gen Z, the lowest income adult kind of households will change behavior the fastest. In most cases we see the opposite. So even your perception of yourself and your income has huge bearing on this. In addition to what you just described a few minutes ago of your perception of the price of the actual thing you're buying. And it, it creates kind of a conundrum, but there is a system to it, there is a pattern that can be followed. Many are still kind of willfully ignorant, ignoring it though at their peril.

Yeah, let's do some sort of what if scenarios. And so if we have a company that is a market leader, habitualized routine type of a brand, what sort of advice would you give them of things they should be looking at? Where might they want to focus their attention if they want to move around to be, you know, bettering their brand and knowing. This is like the most vague question I've ever asked, but it's intentional as we kind of look at this and it can be Bev or something else at whatever feels easy for you. But if you have that type of person coming in and saying, man, we are really just feeling like we're getting hammered on pricing and we're not really sure where we should go, but we are the market leader habituize brand, what should they look at?

Yeah, I mean if I could walk into like you know, and we do in some cases, but in this, in this hypothetical, if you're going to walk into the CEO's office, the C suite, I'd want you to walk in first and go, the price is not the price. Right. And then I walk in. I don't want to walk in and go but so what is the cost? You know, it's not necessarily the price. What is the perceived cost? And one of the things that we see like so there are a lot of billion dollar brands on the snack 50 that are in the exact scenario you just described. They're like we're losing volume to store brands. I call them store brands because it's not just a private label, it's not generic. They're brands in their own right. So you know, remember Molina who just told you it's not the price, it's not the money. They're not switching because the money, one of the things we see in our data. So if, if I were advising one of those, you know, a company or a brand in that situation, it's that you've got to look at why they are exploring these other brands. And you know, a big point that I made in the snack 50, another misconception is that it's like, well, they traded down, they bought the, you know, the store brand, and now we lost them. They're not. And when we look at the consumer sentiment, they're. They're in an exploration mode. They're not going, oh, I love potato chips, now I'll buy the cheaper potato potato chips. You know, good on me. They're looking at, should I be doing this? It's a high trial. And trial psychology is very different than routine psychology. And so the levers that those companies have to pull, the ones that most are pulling is the money they're cutting price. And per the example in the Bev, that ain't the problem. That's not the stick that consumers perceive. So a couple things that we see are that there's a huge social component. So those people that are higher income that are trying the store brands and evaluating them, they use a lot of social context in their decision making. I'm being. You talk about generalities, I'm being very, I'm generalizing. But when you look at it and go, okay, so I don't need to make, you know, Tostitos or my big brand cheaper. I need to make it more socially endorsed. I'm not saying it's like, okay, there, you know, now you have this simple solution. But you know what the problem problem is. And you know, you know, if you think about promotion structures, don't do promotions that make it cheaper, do promotions that let people see each other, you know, do a TikTok challenge or whatever. So the point is, it's like their stick is, do people like me use this? Have my peers agreed that this is something that's endorsed still in this moment? You know, as you said early September 2024, that's still a huge issue for these people brands because people are still in this mode of trying it out, and if they start seeing it and it becomes tribally endorsed and that's the equation that they're using, then the big brands really are in trouble. And it's got nothing to do with the money. So understand that, you know, a, it's not the price, B, it is something else. Whether it's a social thing, an experiential thing. You know there's only. So there's only a handful of thing other perceived cost it could be shorten the right stick. Don't just follow you know the market out the window with quote pricing.

Right. All my clients in this space. I mean I talk about this with all sorts of clients and I think for FMCG particularly looking at I talk about social proof and herding and social norms and like what are people doing on social media? Who is the celebrity that loves the thing? Like who do they want to be like like what's the showing that other people like me like this and that you want those name brands in those ways I think or even for one.

Of the private label.

Right. If they want to be you know having the you know Kirkland Signature whatever for Costco or. Or anything else. Right. Like those. Like you said so many of those brands Target is one that comes to mind. Some of their names that are. People don't even realize as much that it doesn't. It's not a step down from the big guys. This is the target brand. Right. And we trust Target because that's the brand we are connected to or Costco with Kirkland Signature or whatever that happens to be. And so those social norms and social proof the hurting aspect is so so key to people wanting to choose you. I'm curious on the the so you're saying it's the so we've got the habit side and then we've got the trying some stuff side and when we were you're talking about that the brands that came to mind and I was thinking about you know so do we put in some different things you can try but that's still safe and within our umbrella. And so Oreos does such an amazing. And I think people talk about Oreo a lot where they have so many different types of Oreo and similarly you know where lays has done different flavors on their chips or you have different sizes or you were talking about Tostitos and doing something like Scoops or doing the bite sized rounds or like other things that you get into that it's. You get some of that trial out of the way but you're still in brand. Is that a direction you would recommend people go to and or do you have thoughts on that or anything else? Yeah, yeah.

I'd say yes. But you know, so yes. Oreo is a great example. I hear it you know on a weekly basis. It's hard though if you're you know Bud Light or You know, or some other, you know, category to kind of mimic that. And it's almost like they've carved out that, you know, crazy program where it's like, you know, Sour Patch Kid Oreos and, you know, it's this whole program, program that, that the brand is built around. Everybody can't just kind of ape that partly because, you know, you can't get 30 facings for most brands to kind of have the bandwidth. So I think conceptually, yes, many look at it and go, oh, that should, that would be an innovation strategy. The. But that, that I, I think I would advocate for is, don't worry, it doesn't literally have to be a lot of different things. Understand kind of of that point I made earlier, what's going on in the consumer and in the shopper's mind. And you can pull a lot of those levers with the same bag of Tostitos. You don't have to launch a new sku of it to drive interest. And what I mean by that is, like, understand if it is a really social, if there's a really social, you know, and herding opportunity, that's a very different marketing problem than people are buying cheaper things because they're cheaper. And so, I mean, just recognizing that, then good creative agencies, good creative executives ought to be able to come up with all sorts of things that make, since we were using Tostitos, you know, make Tostitos, quote, more valuable. Do promotions where you get to go to a concert and bring some of your friends. You know, do a TikTok challenge, you know, where you show the craziest way you've served, you know, your party. Take those examples, those tactics, you know, as off the, off the cuff that they are. They may be good or bad ideas, but the point is they're aimed at what's actually driving consumer decisions. In that case, the social component. There. There are lots of brands that find themselves wanting so that that social, like you talk, you use the word herding and social like belonging. There's another driver of behavior that's social dominance. You know, want to look like a boss. I don't want to be a good member of the group. I want to be the head of the group. And if you can diagnose that, there's, you know, and that's, that's what we do day in and day out is say, oh, well, here's the audience that you're trying to get. Here's what's driving their decisions. And it's not throwing a good party, it's throwing A party that everyone will think is the best, most unique baller party of the summer. Okay, well, if you understand that, then you aim your marketing at that and that that will move the needle. So, you know, those are ways you do it. You don't have to make fancy, expensive Tostitos. You know, in a gold package. You could, that could be one way you serve that social dominance. There's lots of ways then using your media and your programs and working with your retailers to do that. But I mean, look, most brands don't get that far. They're just, there's many are doing it as we speak. They're so focused on this price thing, you know, in this kind of chicken little routine that they're missing that no amount of price reduction actually will change the behavior because it's not what's going on in the person's mind. And if you ask someone that, you and I both know this, they'll say, well, I buy what's cheaper? Why'd you buy that? They don't say, oh, I bought good. And gather at Target because of tribal fealty. It's back of the brain stuff. So understanding what really is driving what's really hindering the people. It sounds obvious, but that's the first step. And then it's not that hard to address it. And usually all roads don't lead to lower margins and lower prices. Price.

Yeah, you mentioned the golden bag, which. So to me, I think another thing that I like to talk about with clients and as far as options are where can you put in some surprise and delight? Right? So we think about this being the, the Wonka option, right? So there is a, a golden ticket. There's a special experience, you know, Pepsi points or, you know, all the things that you can be putting in there or, you know, Pokemon getting the shiny stuff. I've got a bunch of Funkos behind me and like they have Funko sodas where you can get the, the chase or like you're, you're getting the, the surprising thing, like maybe I'll get it. The anticipation and whatnot. That, that's a really cool way to be increasing buys. And I also like things, you know, we look at that social sharing piece. I found it so interesting. I love walking through the grocery store. I'm assuming it's the same thing for you, right? Where you go, oh, that's interesting. I wonder why they're doing this. But I love that Cheerios has all the. Where it'll say, you know, mom and mama and grandma and Poppy and like the sister brother, the people you're buying the box of Cheerios for are the way that they're customizing and like you said, cheating. Cheerios has a lot of shelf space for all their different stuff in the same way that Oreo does. And so they have different things to play with. But you maybe want to buy a few boxes to give to to people because you were thinking about them, right? You. And that's like sharing that love with Cheerios. That being, you know. But it's again, it's not about Cheerios per se. Right. It's about right means to give someone. To give someone that. So that was just something I was thinking of while you were. Were talk. While I am sure you have lots of thoughts on that, I do have one additional question. I want to get in here too before we have to go and I know we'll talk again. There'll be more options for this. So if you have a brand that's come into you, they have a great product and they're getting ready to launch themselves in the market. And I'm sure they're thinking they want to be the next Coca Cola. Right. If it's beverage or whatever in their category. What sort of recommendations we talked about the one that's the routine purchase and some advice we might give to them. If you have a brand new, the newest chips or candy or soda or whatever else alcohol, they're ready to go and they're saying, where do we go? What should we focus on? And what are these mental levers we want to be pulling? What, what advice would you give them?

Yeah, I mean, I'll give you the perfect example that, that, that we've talked about already, which is Poppy and Olipop. So there's been so much discussion in the media about poppy and Olipop because they've grown like a thousand percent. I mean, both of them are just like setting the world on fire. Most of the articles I read talk about, well, they're lower calorie, they have functional benefits and people want that. They want to have a healthier soda that's still refreshing and provide some benefits. And that's why, you know, and if you ask people, they probably tell them that, that, you know, in a focus group like, well, it's a little healthier. And they, you know, I've done a lot of focus groups in my career. You know, people kind of look up and go, yeah, it's healthier. They have these alibis. When we measure people that are really attached to poppy and Olipop, the People that are like grabbing it and like liking it have really high interest in it. They don't associate either brand with a rational driver. So we're get. We're not asking them why they drink it. We're using these very unique measures that show us their psychology. Both of the brands are much more associated with what we call the experience driver. It's what you describe. It's the what will it feel like? It's the sensory experience, both of those brands. And Poppy more so. And Poppy performs a little bit better than Olipop. They're all about the feels. And so, you know, as I said, I think in a recent webcast, it's the feels, not the facts. And I'm not saying that's always the case. Like Celsius a couple years ago at energy drink was doing really well. Well, it was aligned with the rational. People were drinking it because of like stats and numbers. But if I were somebody long, and I've said this on, on podcasts in the past, that like, look, next year there's going to be 10 of those, but 25 of those beverages, you know, digestive health, 23 of them are going to come out with a functional 10 grams of inulin fiber. Oh, 10 grams. Poppy's only got seven. We'll do great. You're pushing on the wrong lever. You're sweetening the wrong carrot. People aren't consuming them because they make sense. They're consuming them and they're saying, what will this feel like? What will the experience be like? So, you know, you've got to diagnose what actually is driving someone's behavior. If, and it's probably not rational and really leaning into that. And then even functional beverage, the experience, the feels that, you know, using imagery, talking about, you know, the like. If you're talking about digestive health, it's a very different marketing objective to say 10 grams of inulin fiber fact than to say, here's what it's going to feel like. Here's what your stomach and your digestive, you know, here's what it's going to feel like. That's what will actually trigger. It's a little tricky when you get into digestive health, but that's what will actually trigger more behavior. And that's what upstart brands, those are what, that's always what separates the, you know, the wheat from the chaff. Terms of what endures.

Yeah, well, so we talked about the buy in on habit getting the routine. We talked about. And so that routine, habit psychology. We have the innovation Try it. I'm kind of curious side and see how I feel about this. Which you only go try it so many times before we've done it. And then I either like it or I'm out. Right. So brands have to watch that if they're too innovative. Do you want to try it? I did it the one time and I never have to buy, you know, Birdie Bots every flavor beans again because yuck, I don't want to end up with the gross one bean Boozled. Right. That's what they call those, I think. Like, I don't want to end up with those, you know, too many times. Is there another category or a space that brands should be thinking about? You talked about a quadrant. So are there kind of four things to be looking at?

Yeah, I mean, there's no man's land, which means you're, you know, you need to restate. They're not interested and they're not acting on you. That's you don't want to be there. But then the, this kind of upper right quadrant, we call it the promised land. It's where you have and it's very rarefied air. It's where you're driving high action, meaning you're in that routine. They've adopted you, but you're also driving interest. They're thinking about you. And very few brands end up there like, you know, QSR Chick Fil a is there. You know, I was, I don't know in the Pacific Northwest if it's got the same cachet, but geez, I mean, people, Chick Fil a fans, people eat there three times a week and it's like they've never had Chick Fil A. They're still very excited and interested. They do that in very unique ways. So, yes, what every brand is trying to get to is this promised land where you're high routine. But you keep them interested. And like in the snack, 50 Oreo does just barely get into that quadrant. It's, you know, it's hard to be, to be in there. But like an example, something that is in there right now is great value from Walmart, which is truly their value brand. People are adopting and using it and they're very interested in it. They're engaged with it. They're like, they're not just buying it because it's cheaper and making a concession. They're actually moving towards it and it's driving a lot of results, you know, for that brand. So, yes, what you're trying to do and there's very different levers to pull when you're trying to get from your, you know that I tried it once. Now how do I get adopted into lifestyle? That's a different marketing strategy than I'm getting a drink every day. How do I not lose it? How do I get them, you know, to consume more? How do I not have them trade down? It's sort of obvious when you hear me say it, but they're just very different ways and, and there's very different psychology that you're serving to drive those different things. And when it's all working in, I won't say perfection, but when it's all working like it should, brands can get into that promised land that they're part of everyday life, not only consumption wise, but emotionally and perceptually and from an attention standpoint as well.

Love it. Awesome. And it feels like it's kind of stair step, kind of like ladder into the promised land.

Right.

We're a little bit innovative and then we get a little bit more habitual and then we go up and over and up and over versus you know, we're going to go fully innovative and then become a habit magically. You know, it's a route over.

Yeah, it's a map. It's a map and you gotta, you know, with some, somebody the other day was looking at this, this map and she said, oh well this is like ways for brand strategy. And I thought that was a really good analogy that it's like, yeah, everybody's got a map and some of us are old enough to remember when you unfolded a big map and you're like, well there it all is. I have no idea how to get anywhere. Waze is like, oh, start here, do this, then do this, then do this. Don't worry about that yet. Just turn here and I'll tell you later when you need to go there. That's basically, that's exactly right. I mean it's, it's a progression and there's very specific things and you know, we then in our data program can, can track it over time. Go, all right. This brand is at this point where it needs to shift, it's vulnerable or it's got, now it's ready, you know, to take that next step. And that's been very empowering in my, in my career because otherwise topics like that are such a mystery, you know, and they are kind of everything at once is all the most important and that's not actionable for, you know, for a real life company to, to work with it.

Definitely. Well, thank you so Much for sharing these insights. And I know of course like you said you've got your Bev 50 snack 50 tipsy 50 and I forget the other one quick 50 that was what was I was mixing. Yeah. But anyway that so for people to go check those out and for those who do want to learn more about you and Alpha Diver and the work you do, you know what's their best way to connect to follow all the good stuff.

Yeah, I mean I put tons of stuff on LinkedIn. We share a lot from the 50 reporters reports on LinkedIn. So my either the Alpha Diver page or the or or follow me on LinkedIn and then our website has a lot it has links to the reports and things like that which is alpha-diver.com perfect.

And of course we will be linking in the show notes to make it easy for everyone. So Hunter, thanks again for joining me.

It was really delightful to chat with you today.

My pleasure. I enjoyed it too. Thanks for having me.

Thank you again to Hunter Thurman for joining me on the show today. What got your brain buzzing in today's conversation? For me I was immediately intrigued by the findings that Hunter and his team got in their BEV50 report. It's really fascinating to see the insights on the charts, to see where those habitual brands are and where the trying and innovating brands are and start to think about what this can mean for your company. Especially because these are the top 50 brands so you probably know most of them and can kind of visualize, visualize them and see how you think about them to get some context when you see them on those charts. I loved how their findings aligned so well with what I shared in my book the Truth About Pricing that companies need to decide if they want to be quality brands or value brands and how whether or not people buy isn't about the price but all the other things. That psychology that happens around the price matters more than the price itself. When you're in the space of fast moving consumer goods, in case you weren't familiar with that term of fmcg, we said a couple times in the episode that's what it stands for. You can be looking to become a habit, but that might not be the best strategy for every brand. And it's important to know the trade offs if you want to be more innovative and less frequent of a purchase. You can potentially charge more if you position your brand correctly.

And and of course there is that.

Promised land for the brands that truly get it right like Chick Fil, A Oreo and others. Which you can see in the reports and start to visualize again to see what your brand might be able to do to emulate those. If that's a quadrant you want to live in, there is a link for you in the show notes to make it easy to get to Alpha Divers Reports page as well as to check out my top related past episodes and books, ways to get in touch with Hunter, myself and more. It's all waiting for you in the app you're listening to and@the brainybusiness.com441.

And.

Thank you again to Hunter Thurman for joining me on the show today. It was a delight to chat with and learn from you. Join me Tuesday for another brainy episode of the Brainy Business Podcast. It's going to be a lot of fun. You don't want to to miss it. Until then, thanks again for listening and learning with me and remember to be thoughtful.

Thank you for listening to the Brainy Business Podcast. Melina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness.com.