Better the devil you know
Last week the latest series of the Apprentice came to an end. Lord Sugar, former proprieter of Alan M Sugar Trading and other such jewels in the crown of British industry, pointed his finger and uttered the words: “You’re hired.”
The biggest shock wasn’t his Lordship opting to invest in Dr Leah’s chain of cosmetic clinics though, but arguably the front-runner who fell the preceding week – one Neil Clough.
For those of you who gracefully chose not to watch, Neil looked like he was contender number one. He had it all – the nous, the ambition, the motivational speeches, even the ability to refer to himself in the third person. But he lacked one essential thing, the business plan.
His grand idea was to break into the online estate agency market – despite it already being dominated by a whopping market leader. And for all the feedback, boy would Neil Clough not listen. The result, a teary eyed Alan had nothing else to do but fire him. Because despite the barrow boy exterior, our Alan knows his stuff.
Breaking into any new market is tough, especially when there’s an 800 pound gorilla to be reckoned with – and especially when you’re a humble start-up.
Even if you’ve got something different and more compelling to offer, chances are it’s going to take some pretty hefty, or very smart, marketing activity to steal market share.
Why we fear what we don’t know
The thing is human psychology is not in your favour. The vast majority of us have a predilection for the brands we know and trust.
Why? The scientific explanation may come from a social psychologist called Robert Zajonc – who through his research demonstrated a phenomenon called the ‘mere exposure effect’.
Essentially, he proved that people tend to develop a preference for things simply because they are familiar with them.
He observed that when we’re exposed to a novel stimulus – initially it elicits a fear and avoidance response. Think about it, back in the days we were roaming around the jungle, you’d have to be mighty wary of something you hadn’t experienced before – or risk losing your own pointy finger.
But Zajonc showed that with repeated exposure, the novel stimulus causes less fear. So much so that after repeated exposure, we even begin to react fondly to the stimulus. Better the devil you know, you could say.
Importantly, what Zajonc acknowledged was that this takes place in a split second without us even knowing – what he calls conscious cognition.
So everyday, despite our best intentions to try the new café up the road, give that new agency a go or chat to the new people who’ve just moved in up the street, we decide to put it off for another day for fear of losing our fingers.
Okay, a little extreme but you know where we’re coming from. It makes sense though doesn’t it?
The brands we know, for all their faults, mean less risk. And the bigger the brand, the less the risk – making it harder for an unknown upstart to tempt us away.
Sir Alan knew that. Neil Clough didn’t. But that’s why Sir Alan’s sitting on a rather substantial fortune.
That said, do all have-a-go start-ups fail? Definitely not. But that’s for another blog post, another day.