>>Charles Duhigg:
If you're familiar with this book it might
be because you read a piece in the "New York
Times" magazine about how Target was studying
shoppers' habits in order to determine if
some of their female customers were pregnant
or you might have seen a piece in Sunday in
the paper about how the Obama and the Romney
campaigns were studying voting habits in order
to try and entice low propensity voters into
the booths.
But what I want to talk to you about today
is I want to talk to you about a product that
you might not have heard about, or maybe some
of you have, named Febreze.
And I'm going to admit at the outset that
I'm going to try and trick you.
Because what I'm going to try and do is I'm
going to try and convince you that we are
living through this golden age of understanding
the science of habit formation.
We're learning more and more about how habits
work, and the same things that made Febreze
into a hit that you can use within your own
companies or within your own lives to make
the world a better place.
So you can tell me at the end if I'm actually
successful at this.
And in order to do this I first have to start
by telling about a rat.
So about a decade ago there was a woman named
Dr. Ann Graybiel at MIT who is a neurologist,
and for years she had been doing experiments
to try and get sensors into the craniums of
rats so she could measure what was going on
inside their heads as they went about their
daily business.
As you can imagine it took a long time and
a lot of rats to figure out how to do this,
but eventually she got to a point where she
could get about 150 sensors into a rat's cranium.
And she would do the same thing with every
single rat.
After the surgery she would take them and
put them in the world's simplest maze.
This maze works the same way every single
time.
There's a click, the partition moves and the
fat is free to move up and down.
Now if anyone has ever done this with a rat,
what you know is when you drop a rat in a
maze like this it looks like the world's stupidest
animal.
The rat will run up and down the center aisle
and sniff and scratch.
When it gets to the end it will actually see
the chocolate and then go the opposite direction.
This is actually one of the reasons why rats
are used in experiments is because it's considered
that if you can teach a rat something you
must be able to teach any animals anything.
So she would do this experiment, but for the
first time she was able to see what was going
on inside the rat's head.
This is a simplified neurological graph of
the first time that a rat is dropped in this
maze.
What you will notice is that its brain is
actually working hard the entire time.
So when the rat would scratch on the walls,
the scratching centers would light up, when
it would sniff, the sniffing centers would
light up.
It's actually trying to process as much information
as possible.
This is what learning looks like.
So Dr. Graybiel takes the rats, each one,
and drops them in 100, 150 times.
And as imagine, over time the rats learn how
to navigate through the maze faster and faster.
Click, the partition moves, the rat will make
a beeline to the chocolate and it actually
becomes a habit.
But what's really interesting is Dr. Graybiel
sees for the first thing what is going on
inside the rat's cranium.
As the rat gets faster and faster, as the
habit to find the chocolate becomes stronger
and stronger, the rat essentially thinks less
and less and less.
This graph at the bottom is a simplified neurological
graph of the 150th iteration of a rat running
through a maze.
And that dip you see right there is the same
dip that you would see if a rat went to sleep.
There was a scientist at Duke University a
couple of years ago who did a study to try
and figure out how much of your day was habits.
She followed a bunch of people around and
found that 40 to 45% of the actions we take
everyday aren't really behaviors.
They're actually just habits.
And if I could somehow stick 150 sensors into
your head which I would not recommend, then
when I saw you backing your car out of your
driveway or walking down the hall muttering
to yourself or making automatic decisions,
I would see your brain looking like this.
But what's interesting is if you notice there's
these two spikes in neurological activity.
When there's the click we see a burst of neurological
activity and then essentially the brain almost
goes to sleep.
Then the rat finds the chocolate and it's
if as the brain sort of wakes itself up again
to pay attention to what's going on.
This is the neurological signature of a habit.
This is what we've discovered in the last
six years.
And this is so important that it's become
enshrined in psychology and neurology as what's
known as the habit loop.
We now know that every habit has three components.
There's a cue, which is like a trigger for
an automatic behavior to start, and there's
routine which is the behavior itself, and
finally a reward.
And the reward is how your brain, and in particular
the part of your brain named the basal ganglia,
learns to remember this pattern for the future.
For centuries when people thought and talked
about habits they always focused on the routine,
on the behavior, but what we've learned is
it's actually the rewards and the cues that
shape how habits work.
That's how we influence how people behave
on the most automatic, almost subconscious
level.
Just to give you an example let me tell you
about an experiment that was done in Germany
where they took about 700 people and they
wanted to get them to exercise.
So they took one group and told them to choose
a cue, like go running at the same time everyday
or always put your clothes next to your bed.
And they told them when they got home from
working out they should eat a small piece
of chocolate, which of course is counterintuitive
because we all exercise to lose weight, not
to eat chocolate.
But what they found -- and the reason why
they found this is that people who did this
exercised twice as much habitually as other
people, and the reason why is because you
might think that you want to exercise, but
your brain thinks that you are a dirty liar
and that you hate exercise.
And so in order to convince your basal ganglia
that you should actually form this habit,
you have to pair the activity with a reward
you generally enjoy like chocolate.
Over time your brain will learn the endorphins,
the endocannabinoids, the neurotransmitters
that are released by a physical activity are
a pleasurable sensation and you'll start exercising
habitually more on your own.
But as I mentioned, the reason I'm telling
you about this is because I want to talk to
you about Febreze.
Does anyone in here use Febreze?
Is anyone a Febreze customer?
So Febreze, for those of you who don't know
what it is, is this chemical that I cannot
pronounce, but the initials are HPBCD, that
was discovered about 11 years ago by Procter
& Gamble.
This guy who was a smoker was working in the
lab one day and he used this chemical and
when he got home he noticed that he didn't
smell like cigarette smoke anymore.
What he figured out is this chemical, if you
aerosolize it you can spray it on to fabric
or other things and it will draw out the molecules,
the scent molecules, and as it evaporates
the scent will essentially disappear.
This was a huge deal for Procter & Gamble
because for years consumers were saying they
wanted some product that would not just mask
bad smells, but make them disappear.
So this guy goes to his boss and says, "I
think I can make this into a product," and
they give him seven and a half million dollars
and three years later he comes up with Febreze,
this product that they're going to sell.
The executives turn around and say we need
to give this to one of our marketing teams
because we think we can make a gazillion dollars
off of this.
So they give it to this guy named Drake Stimson,
a mathematician on Wall Street.
He has a whole bunch of psychologists, consumer
psychologists working with him, and they come
up what they think is a brilliant advertising
campaign.
It's modeled around a habit loop.
The cue is going to be if you have a bad smell
in your life you will spray Febreze and it
will get rid of the bad smell and everyone's
gonna get rich.
So they make a couple of test ads because
they wanted to test this out and they actually
showed them in three markets, including here
in Scottsdale, this was one of the test markets.
Let me show you one of them.
>>> Guess what the kids call dad's easy chair?
>>> The stinky chair.
>>> I have a stinky chair problem, too.
His name is George.
>>> Now there's a way to get bad smells out
of fabrics for good.
It's called Febreze.
It's new.
And you won't believe how many places you'll
find to spray it.
>>> Febreze will clean fabrics in a way you
never could before.
>>> It's not just covering up the smell.
>>> Exactly.
Just spray Febreze.
Its patented cleaning system finds the smells
trapped in fabrics and gently cleans them
away as it dries.
>>> Once it's dry the smell is gone for good.
>>> Febreze?
Check the laundry aisle.
>>> Check this out.
>>> It's safe from dress blues to teddy bears.
Febreze cleans bad smells out of fabrics for
good.
>>> I wonder if they'll call it the sleepy
chair now.
>>Charles Duhigg: What I like about this ad
is you forget that the late '90s had a visual
esthetic until you see it in that old commercial.
So they did this ad and this ad actually won
awards before it even aired.
This was considered a model for explaining
a new technology to consumers.
You watch this thing and know what Febreze
does.
It's pretty clear.
They roll it out in the three test cities,
they send people tons and tons of free product.
Actually, Drake Stimson told me that they
were so certain they were going to knock this
out of the park that one afternoon everyone
wrote down a list of what they were going
to buy with their bonus, and he wrote down
that he was going to buy a Ferarri and a Ferarri
for his girlfriend.
It was the height of like "I'm going to be
successful."
And he never bought the Ferarri.
It totally flopped.
Febreze was actually the largest flop in Procter
& Gamble's history, a company that's been
around for over a century.
They had spent more money trying to get Febreze
into a product than anything else and nobody
brought the stuff.
In fact, they considered killing the product
altogether.
So Stimson goes in and says, Look, give us
one more chance.
We just want to figure out what's going on
here, And he gets this team and they come
out here to Scottsdale and they interviewed
customers who had gotten free bottles of the
stuff.
In particular the dime dropped for them when
they interviewed this one woman who owned
a couple of cats.
Now, I don't know if anyone in this room owns
any cats.
Go ahead, raise your hand if you own cats.
A couple of people.
You know cats have a certain scent about them,
you know, you grow to appreciate.
This woman owned a huge number of cats.
[ Laughter ]
>>Charles Duhigg: In fact, she owned so many
cats that when the researchers walked into
her house one of them started gagging when
he went into the living room because the scent
of cat was so overpowering.
But what was weird is this woman is kind of
a neat freak.
Everything was fine except for the smell of
cats.
So they sit down with her and they say, "we
sent you some bottles of Febreze.
Have you used it?"
She says, "Yeah, I used it a couple of times."
And they say, "would you ever use it for the
cat scent?"
And she says, "A couple of time I've used
it for the cat scent."
And the guy who was gagging says, "what about
right now?
Would you consider using Febreze right now
for the cat scent?"
And she kind of smiles and says, "you know,
I don't like to brag, but I have the best
cats.
They hardly ever smell."
Which is of course when the team realizes
what's going on, which all of you know, which
is that if you have bad smells in your life,
you become desensitized to them.
They had built this entire advertising campaign
around bad smells, but people who have bad
smells don't know that they have bad smells,
right?
We spent our entire seventh grade year being
in fear of the fact that we smelled bad and
couldn't tell.
You were right, you smelled terrible and you
had no idea.
So as a result none of the marketing worked
because the cue was something that people
can't notice and the reward is meaningless
if you don't know that you have a problem
in the first place.
So they all go back to Cincinnati where Procter
& Gamble is based.
They go to the lab.
Now, Procter & Gamble has the largest library
of videotapes of people cleaning their homes
on earth.
This is stock footage because P&G won't let
me show any of the tapes.
They started by watching videotapes of people
vacuuming their home, and what they noticed
is this one woman in particular would start
in a corner and she would start vacuuming
backwards like this, and when she was done
she would go back to the beginning and she
would line up the wheels so they were exactly
parallel, and then come back so there were
these even grooves on the carpet.
And then when she was done with the entire
carpet, she just kind of looked at it and,
like, smiled.
And then -- I'm going to show you my favorite
photo of all time.
Because there's nothing I like more in the
morning than having some special time with
my daughter cleaning the mirrors throughout
our house.
I usually do my hair before we break out the
scrubber.
This is obviously a staged photo.
But what they actually found when they were
watching these tapes is that people had this
ritual.
When they were cleaning a mirror, they would
spray the mirror with a spray and then wipe
it like this.
And then and then look at their reflection
and smile at themselves.
But you're laughing because you've done this.
You know exactly what I'm talking about.
What they realized, but nobody had really
paid attention to before, is that cleaning
had its own habits, cleaning had its own rituals.
They figured out to sell Febreze, they could
piggyback on existing habits rather than trying
to create a new one.
They go back and come up with an entire new
market campaign that's built around a habit
loop.
This time it's when you're cleaning, at the
end of your cleaning ritual, pull out the
Febreze and spray it so that you can make
things smell as good as they look, which,
of course, there's no reward there, because
Febreze destroys scents.
So they went back into the laboratory and
they spent another $3 million inventing a
perfume that was strong enough to withstand
the chemicals of Febreze so they could pour
it into the bottles.
Then they go back to the same test markets,
and these are the ads they run.
[ Video.
]
>>> (Bell chiming.)
>>> Get your fix of freshness.
Febreze.
Anytime, anywhere, it's a breath of fresh
air.
>>> Mm.
>>> Shouldn't I be the one on the couch, doctor?
>>> No!
>>> Get your fix of freshness.
Febreze.
Anytime, anywhere, it's a breath of fresh
air.
>>Charles Duhigg: Here's what I'd submit to
you, if you came over from China and you saw
these ads and you had never met an American,
you would think that we were a country that
gets sexually aroused by smelling fabric and
that Febreze is a fetishist product that's
designed to apiece that.
Also mention one other thing.
The second ad it's clear what's going on.
She's a psychiatrist.
When they show that ad, when Procter & Gamble
shows that ad on the coasts, everyone knows
what's going on.
When they show it in the middle of the country,
it totally flops.
People have no idea what is going on in that
commercial.
[ Laughter ]
>>Charles Duhigg: Anyway, they roll these
ads out in the test markets and then they
end up going national with them.
And it's a hit.
Within the first year, Febreze sold $200 million
worth of product.
Today, Febreze is one of 13 Procter & Gamble
products that's a billion dollar a year product.
Procter & Gamble has hundreds of products.
Only some of them sell a billion dollars a
year, and Febreze is one of them.
And if you asked them why, they will tell
you because of these ads, because they created
a new -- they piggybacked on an existing habit
instead of trying to create a new one.
In fact, the campaign's been so successful
that now, a decade later, if you've seen the
ads for Febreze lately, they blindfold people
and they take them into these rooms that are
disgusting, and they can't smell anything.
For the first time, Febreze can actually admit
to people what the product does, which is,
it kills bad scents, instead of advertising
it as the most chemically advanced air freshener
on the face of the planet.
But the reason I'm telling you this story
is because you can grasp this understanding
of how habits work, I think to make the world
a better place.
To give you an example of this, let me just
tell you really quickly about Starbucks.
Starbucks has this basic problem, which is
that they sell customer service; right?
They kind of nominally sell coffee.
But what they actually sell you is someone
smiling when you walk in.
To do this, they have to hire thousands and
thousands of people who are 18 years old who
have never had a real job and get them to
deliver customer service.
What they found was that a whole bunch of
people at the beginning of the shift could
do a really good job of greeting a customer,
and at the end of the shift, they'd be exhausted
and if a customer comes in, they're rude,
they're rude back or they get drawn into workplace
drama.
This became a problem for Starbucks because
they had a couple of incidents.
Let me show you a tape of one of them.
And before I show this to you, just imagine
that you work for Starbucks; right?
You spend as much as sometimes $100 million
a year on advertising.
You work really hard.
You miss dinners with your kids.
But you believe in Starbucks.
You believe in teaching the brand, that this
is a place you can come and relax.
You come home, you turn on the television,
and this is what you see.
>>> She was a loyal customer of Starbucks,
loved the coffee, loved the service.
But that changed a few weeks ago.
This native New Yorker got steamed not by
what was inside her cup, but something written
on the outside.
That's when she called our Nina Pineda and
ordered a special brew of fully caffeinated
7 On Your Side.
>>> And then when you looked at it, what did
you think?
>>> I was shocked.
I didn't understand why.
Why would they do that?
>>> Vickie Reveron is talking about this Starbucks
cup.
On the side, a Starbucks employee wrote what
she ordered, a Carmel Frappuccino.
Instead of writing her name on the side, she
says he wrote the "B" word.
>>> It says (beep).
My name is not (beep).
It's Vickie.
[ Laughter.
]
>>Charles Duhigg: So have you ever casually
wondered what $100 million in advertising
sounds like going up in flames all at once.
It turns out it's, "My name isn't beep, it's
Vickie."
This is a huge problem for Starbucks.
Howard Schultz, who had just returned to being
the CEO of the company after being chairman,
calls together all his executives, because
they have to solve this problem.
And the way that they solve it is, they decide
that they have to increase workers' willpower.
And to do that, they have to teach them new
habits, willpower habits.
One of my favorites is, in fact, something
that they teach in their training manual called
The Latte Method.
And this is what it is.
They tell employees, when an angry customer
comes in, that's your cue.
And you use "latte," right, which they chose
because it's Starbucks.
Which is, you listen to their complaint, you
acknowledge their complaint, you thank them
for complaining, you take care of their complaint
by giving them a new cup of coffee or whatever
they want, and then you explain why this will
never happen again.
Now, I have a four-year-old at home.
I'm sure many of you have children.
If I could teach my son that when I come up
and I'm angry at him, he should listen to
Dada's complaints and acknowledge, Dada, I
understand that you're upset with me, and
thank me, Dada, for yelling at him.
If I could teach him The Latte Method, I think
this kid would go on to be president.
And, in fact, in the book that you'll get
tonight, there's actually the story of Travis
who is this kid whose mom was a prostitute,
and his dad, the first time he saw him overdosed
on heroin, he was seven years old.
And he dropped out of school, and he got a
job, actually, at McDonald's that lasted three
hours because a woman came in and he thought
she was rude to him, so he took the McNuggets
out of her box and threw it at her head.
This is a kid that, basically, life had failed
and was destined to be kind of a failure himself.
And then he started going to Starbucks, and
he learned these willpower habits.
And I actually talked to him a couple weeks
ago.
He's the manager now of two Starbucks, and
he oversees about 60 employees, about $1.2
million a year in revenue.
He just signed his first mortgage.
I guess the reason I'm telling you about this
is because I genuinely believe that the companies
you work for, if you learn this science, if
you try and share this science with your employees
or with your customers, with your families
or with your coworkers, you have this capacity
to change lives.
We understand now how habits work for the
first time.
When you teach people to diagnose the cues
and the rewards in their life, you give them
this tool to change these small patterns that
they feel powerless against otherwise, including
all of us.
And I hope that this is something that is
useful to you as you strive to make the world
a better place.
Thank you so much.
[ Applause. ]
