Stages Of Sophistication

The $3.9-billion argument for soft, believable persuasion

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Michael Burry, the first guy to figure out how to make money from the subprime mortgage crisis, lost out in a way.

Burry saw the crisis coming. He realized he could make money from it by buying something called a credit default swap. This would pay out big time once crappy mortgage bonds failed.

Burry ran a hedge fund. He invested much of the money in his control in these credit default swaps. But this was a massive opportunity. Burry wanted to invest more. So he tried to raise money for a new fund, which would buy more credit default swaps.

Trouble was, Burry was an awkward guy, and not great at persuading. He shocked people with his predictions of catastrophe. Nobody gave him more money to invest.

Fast forward nine months. Burry’s ideas had spread around the industry. So another investor, John Paulson, attempted the exact same thing Burry had tried to do. From The Big Short:

“Paulson succeeded, by presenting it to investors not as a catastrophe almost certain to happen but as a cheap hedge against the remote possibility of catastrophe.”

This brings up a fundamental rule of persuasion. It’s perhaps the most important rule of them all:

Only tell people something that they are ready to accept.

In some situations, this can mean you don’t start with your biggest promise, your strongest proof, or your most shocking prediction. In the words of Gene Schwartz, the best thinker on this topic:

“The effectiveness of your headline is as much determined by the willingness of your audience to believe what it says, as it is by the promises it makes.”

So did Michael Burry lose out? Depends on your perspective. When it was time to cash in, Burry walked away with an estimated $100 million. John Paulson? $4 billion.

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How to sell probiotics with a lesson from Lucky Strike cigarettes

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There’s a scene in the TV show Mad Men where the main character, Don Draper, hits on a moment of advertising brilliance.

Don has been tasked with coming up with a new ad campaign for Lucky Strike cigarettes.

But he hasn’t come up with anything.

And so he’s sitting in the meeting with the client, and it’s going terribly. Since he hasn’t come up with anything, he has to hand over the reins to a junior copywriter who pitches an angle that flops.

The frustrated and disappointed clients get up to leave.

And in that moment, Don hits on his inspired idea:

“We’ve got 6 identical companies selling 6 identical products. We can say anything we want. How do you make your cigarettes?”

The owner of Lucky Strikes shrugs. “We grow it, cure it, toast it.”

“There you go,” Don says. And he writes the new (and now age-old) Lucky Strike slogan down on the board:

“It’s toasted”

Now, if you know something about direct response marketing, this might seem like a typical example of useless branding copy.

Where’s the benefit, after all?

Well, sometimes you don’t need to scream benefits, even in direct response copy.

I thought of this today while I was working on a sales page for a probiotic.

Probiotics are a huge market right now.

And many people are already aware of what probiotics do (gut health, immune system, etc).

The problem for many people at this stage is not, “How can I fix my awful bloating/indigestion/gas?”

Instead, the problem now is “How can I choose from this sea of probiotic products which all claim to reduce my awful bloating/indigestion/gas?”

It’s something that the copywriting great Gene Schwartz called the 3rd stage of market sophistication. From Gene’s book Breakthrough Advertising:

“If your market is at the stage where they’ve heard all claims, in all their extremes, then mere repetition or exaggeration won’t work any longer. What this market needs now is a new device to make all those old claims become fresh and believable to them again. In other words, A NEW MECHANISM — a new way to make the old promise work. A different process — a fresh chance — a brand-new possibility of success where only disappointment has resulted before.”

For the probiotic sales page that I’m working on, that mechanism is clear: the specific strains in the product have clinical studies showing they actually work. This sets the product apart from just about any competitor on the market right now. Applying the Lucky Strike lesson, we could sum up the sales message as:

“It’s clinically proven”

Now, in the Mad Men episode, Don winds up giving an inspiring speech about how advertising is all about happiness.

The fact is, it’s more about hope — the hope that our problems can be solved.

And if your customers are a bit confused or jaded because of other similar products on the market, then you have to give them hope that your product really is better or different than anything they’ve seen before.

John Bejakovic

P.S. If you need copywriting in the health space that can either wow with benefits or cajole with mechanisms, then you can get in touch with me here:

https://bejakovic.com/contact