Costly Signaling
What you say is important, but when there's a cost attached to how you say it, that makes your message much more persuasive.
In 1977, David Abbott joined Peter Mead and Adrian Vickers to launch an ad agency called AMV.
David had lost his father to lung cancer (David's dad was a heavy cigarette smoker). That's why AMV refused tobacco client$ from day 1.
David, Peter and Adrian were also dads. They had young kids. And they believed kids are too young to filter advertising. So they all agreed to refuse to work with toy manufacturers.
This signaled AMV really cared. Which was why in the early 1980s AMV won the anti-smoking account from the Health Education Authority.
In 2011, a Portuguese designer called Tiago Mesquita was looking for a new job.
So Tiago sends his resume to 700 companies, including many advertising agencies.
Only 2 call Tiago for a job interview, and none offer him a job.
Frustrated, Tiago records a video resume. Then sends it to a few agencies.
One of them, Torke, invites him for a job interview.
But Tiago knew he had to stand out from the competition.
So Tiago asks a friend to disguise as a delivery guy and deliver a BIG box at Torke.
The BIG box was delivered as registered mail to Andre Rabanea, Torke's Creative Director.
When Andre opens it, surprise surprise, Tiago pops out of the BIG box.
Then he introduces himself as the World's smallest Creative (Tiago is only 1.53 m tall). And hands Andre an assembly instructions manual on how to deal with the World's smallest creative.
Long story short, Tiago got the job. And soon became Torke's Art Director.
What do these two stories have in common? Both are real-world examples of costly signaling in action.
What you say is important, but when there's a cost attached to how you say it, that makes you way more persuasive.
Takeaways for your business:
1. The exact same message delivered in a fairly more costly way signals that you mean business. AND this makes your message more persuasive.
That's because lying would be way too hard or expensive to fake.
So the extra effort boosts the perceived value of the message you're communicating.
That's why:
- When AMV refused to work with tobacco clients and toy manufacturers they signaled they trusted their new agency was so good they could afford to say no to BIG clients.
(Important context: This was in an era when most ad agencies wouldn't even dare to say no to tobacco companie$$$ or toy manufacturer$$$).
- Tiago Mesquita could have just showed up for his job interview and do what everyone else does. But he chose to brand himself as the World's smallest creative. And by shipping himself as registered mail in a BIG box, Tiago signaled that he was the real deal.
- During centuries banks invested millions building huuuuuge, expensive buildings. And hired thousands of staff. Because they wanted to signal they trusted they had built a profitable and sustainable business that would still be around in 100 years.
- Ever wondered why the Catholic Church is so opulent and why they’ve built and covered so many Churches with so much Gold? Costly signaling is the answer. The Catholic Church wanted to send a message that they are super powerful and can survive anything.
2. Costly signaling makes print ads or TV ads way more effective than online ads. Because printing on glossy paper costs you a lot of money.
Consumers basically see it as “a sign of a marketer's confidence in a new product's success”.
