The power of psychological hacks and other business insights

"The next revolution will be psychological, not technical", said Rory Sutherland at an event last week. Dan Martin reports on why the vice chairman of global creative agency Ogilvy thinks entrepreneurs need to embrace the psychology of their customers' thoughts and behaviour.

Rory Sutherland was a panelist at Accelerate 2016, the closing event for the three-week long International Festival for Business in Liverpool last Friday. During a jam packed 45 minute session, experts took questions from the audience on anything business-related. It was Sutherland's comments about "psychological hacks" that most intrigued me.

Asked to relate his top tip for business success, he said the best piece of advice he has ever given was to the owner of cafe struggling to compete against several other nearby coffee shops: "Put your chairs and tables on the street, even when it's raining."

For people walking past, Sutherland explained, the furniture outside the shop will indicate it's open. "It's an unconscious decision but those kind of simple, unconscious actions can transform a business", he said.

Another example is Uber, the hugely successful taxi booking app. Customers register, book a cab and their account is automatically charged after a journey with no actual money changing hands. Users can also track where the taxi is using a real time map on their phone.

This all plays to the psychology of humans, Sutherland said. "It feels like a service rather than a payment and humans would rather wait for 10 minutes knowing where their cab is than for a stressful five minutes not knowing."

Sutherland's third example was vacuum cleaner brand Dyson. "It works works because seeing the dirt accumulate is pleasing to humans," he quipped.

What psychological hacks can you use in your business?

Other stand-out quotes from the panel session:

Wayne Hemingway, fashion designer:

"The natural thing about any dynamic business is to make loads of mistakes. As long as you're not hurting anyone or doing anything that kills the business, you should enjoy getting things wrong. You're never going to do anything impactful in terms of getting things right if you don't do things wrong."

Jude Kelly, artistic director, Southbank Centre:

"The nature of an entrepreneur is to want to jump a fence that looks too high to jump."

Heather Townsend, networking expert:

"I believe in commercial karma. Treat people well and your business will do well."

Brian Henderson, PwC:

"If something feels too risky, consult the young people in your business and reverse mentor."