SCARF, why innovation fails, why psychology outlasts technology.
Summary:
Last year I completed the MAD//Masters programme on behavioural science and marketing with Rory Sutherland. I have decided to write three articles about the key topics (for me) that every marketer and founder should use in their marketing strategy.
Part 1 was about perception. Part 2 was about the tools: data, creativity, MINDSPACE.
This is Part 3 and it covers:
SCARF, why innovation fails, why psychology outlasts technology and what I took from the whole thing.
Five things that determine whether someone trusts you
The SCARF model was developed by neuroscientist David Rock. It maps five psychological dimensions that determine, at a level below conscious reasoning, whether someone moves toward or away from an experience.
Status. Certainty. Autonomy. Relatedness. Fairness.
Status. British Airways letting Gold Card holders board first costs nothing: someone has to go first. What it costs is deciding that it matters and saying it out loud. Calling someone by name, acknowledging how long they’ve been a customer, giving them access before others: these things register and produce loyalty.
Certainty. Rory’s father spent eight years going to the bank instead of using an ATM because he assumed there was a fee. Nobody ever told him there wasn’t. When people don’t know what happens next, the brain defaults to worst-case assumptions. A call to say your engineer is on the way. An order confirmation email. These are certainty signals.
Autonomy. People are significantly more satisfied with the same outcome if they chose it. A restaurant that asks “would you prefer the window table or the corner?” makes customers happier than one that just seats them. Same tables. Different experience. Giving people choices, even small, low-stakes ones, changes how they feel about what they get.
Relatedness. A customer who writes a complaint letter beginning “I have been a customer of yours for twelve years” is not being dramatic. They’re saying ”You knew me. You should act like it.” When brands violate this, charging loyal customers more than new ones, failing to recognise someone who has been there for years, etc, the damage is disproportionate to the actual transgression.
Fairness. The insurance industry charges existing customers more than new ones and hopes nobody notices. Some do. They don’t just leave quietly; they tell people. A perceived unfairness produces lasting damage, even over amounts that are trivial. The ego damage outlasts the financial one.
The lesson?
Take any customer journey. Run it through all five. There will almost always be at least two things being damaged, and at least two missed opportunities to create loyalty.
Why innovation keeps going wrong
90% of new product launches fail.
Most of the time, the approach is top-down: analyse the market, find the undersupplied segment, build something for it.
The problem is that this produces products designed for how analysts describe the market and not for how human beings feel about it.
Value isn’t created in a product strategy document. It lives in the customer’s existing relationship with something they already love.
Psychology has a longer shelf life than technology
A technological advantage lasts roughly 18 months. Then a competitor catches up. Or an algorithm changes. Or the platform shifts.
An insight into deep human psychology (if it’s genuine, well-understood, and applied consistently) lasts decades.
The underlying hardware hasn’t changed in 20,000 years.
Status was as important on the savanna as it is in a subscription loyalty programme. Certainty felt the same to a prehistoric human as it does to someone waiting on hold for 40 minutes. Fairness violations produced disproportionate rage in both settings.
Luxury brands have survived longer, at higher margins, and through more disruption than almost any other category. Because they understood something unchanging about what people need, and kept finding new ways to deliver it.
The expression of the need changes with every generation. The need itself doesn’t.
What marketers get wrong and right
Rory ended the lessons by turning on his own profession.
Marketers chase trends, they love a buzzword. They cluster in London and think that’s the real world. They speak a language (brand purpose, consumer journey, iconography, etc) that sounds like complete nonsense to most people outside marketing. And they’re (we are) usually wired for novelty, which makes them bad at understanding people who just want to fit in. Hard to argue with any of it.
What are marketers getting right?
Value is not created in the factory, the spreadsheet, or the algorithm. Instead, it’s created in the mind of the customer.
Competition happens at the level of perception, meaning, association, and feeling. A business that understands this will grow faster, adapt more readily, and create more durable value than one that doesn’t.
What we’ve learned
The biggest gap: we spend too much time thinking about reality problems: what to improve, add, or make clearer.
The problem, most of the time, is perception: what people experience, what they expect, what they compare you to, and what the interaction with your brand makes them feel.
I call it: the behavioural gap. Shifting our thinking from optimising reality to understanding perception. And that gap (between what your brand is and how it is experienced) is almost always fixable, if we know where to look.
