Car Wash Psychology, Mental Models, And The Power Of Habit

Car Wash Psychology, Mental Models, And The Power Of Habit

Getting back from a 33 hour drive across the country left me exhausted.  But I had one thing left to do before resting.

I had to wash my truck…

From the salty and sticky humidity of South Florida.  Through the rain, snow, and ice of Tennessee and Kentucky.  Then the dry wind of Iowa and South Dakota.  And all the bugs and dirt between.  My truck was a disaster after a 33 hour drive through nine states.

Why did I have to wash my truck when I got home?

Because several weeks before this I’d read a psychology and marketing case study about car washes. And I wanted to see if it was true or not.

Exhausted from the three-day drive across country. I waited at the car wash and marveled at the surprising beautiful March day in Western South Dakota.

Instead of negative wind chills. High wind. And blizzards that are common at that time of year here. I came home to a cloudless sunny sky. And 70 degree temperatures.

It was a perfect day to wash my truck. But after getting it into the car wash bay I worried that I’d made a mistake.


Because of marketing, psychology, and habit.

But we will get back to this later…

Building Worldly Wisdom and A Latticework of Mental Models

Why am I talking about marketing, psychology, and habit on a value investing blog?

As a contrarian deep value investor, I’m always looking for ways to gain legal advantages over other investors.  Most of the time this involves working hard.  But sometimes it also requires the ability to think well.

To think better I study a lot of topics.  And follow Charlie Munger’s teachings about gaining Worldly Wisdom.  And building a latticework of mental models.

One of the areas I’ve spent a huge amount of time studying is human psychology. Trying to figure out  why we do what we do.  And what makes us tick to become a better investor.

How To Get People To Buy Things

I know a lot about how to analyze businesses for potential investment.  So when I got hired by the investment newsletter I was not only excited to write an investment newsletter.  But I also looked forward to learning about the investment newsletter business.  And everything associated with it including psychology and marketing.

If I wasn’t at work.  At the beach.  Sleeping.  Or working at home.  I was reading anything I could about marketing and how to improve my writing.  But for this post I want to talk about some of the things I learned about marketing…

Marketers Rule The World

Did you know that shampoo doesn’t have to foam to clean your hair?  What was Listerine used for before marketers got involved?  Did you know that Febreze was a failure until marketers used psychology and habit to market it?  And does your car get cleaner when you upgrade to the “Super Wash.”

I will answer these questions below.  And also answer how marketers use psychology to get us to develop habits.  And buy products.


Below is a marketing case study from Procter & Gamble brand Herbal Essences.  Which before marketers revamped it was floundering.  Emphasis is mine.

I also changed some of the wording to shorten things.  For the full transcript go to this link.

When Procter & Gamble acquired hair-care company Clairol in 2001, it inherited a floundering shampoo brand. By 2004, Herbal Essences was in a “long-term decline,” reports Chairman and CEO A.G. Lafley.

Marketed to all women the line had gone stale, with little distinction from the many competitors it shared on the drugstore shelf.

By 2006, Lafley and P&G’s beauty business chief, Susan Arnold, knew something had to be done with the tired brand.

To find the right new, smaller target market for the brand, Arnold and her team turned to marketers.

There, the team came up with a new target audience for the brand—Generation Y. “In the case of Gen Y, there really wasn’t another hair-care brand that was really meeting their needs,” says Lafley. “The question was: ‘Can Herbal do it?'”

Arnold’s team bet yes. They redesigned the packaging of the product to “fit” this more tailored market: The shampoo and conditioner bottles are curved so that they literally fit together on the shelf. The nesting shape not only helped Herbal Essences stand out from others on the shelf but also encouraged more young women to buy both products, driving up conditioner sales.

To appeal to Millennials, the team also updated the language on the packaging. The ho-hum “dandruff” reference gave way to “no flaking away.” Names for different hair styles were changed to more youthful phrases such as “totally twisted” or “drama clean.” “We totally reframed the proposition,” says Lafley.

P&G made Herbal Essences more relaxed and more quirky, all in the language of young women.

Marketers used psychology and habit to turn this floundering line into a billion dollar plus brand.  And Herbal Essences parent Clariol now controls an estimated 39% of the entire hair care market.

For further information on the revival of Herbal Essences look at this infographic.

Oh and to answer the above question…  The chemical sodium lauryl sulfate was added to shampoo to foam and bubble.  It’s not necessary in shampoo.  And it doesn’t affect how well the shampoo cleans your hair.

Shampoo makers added the foaming agent for marketing and psychology purposes. To help sell product and build habit.

I will explain this more later.

Oh and the foaming ingredient is also what irritates your skin and eyes.  So thank marketers for your dry skin.  And eye pain when washing your hair.

Listerine The Antiseptic

Did you know Listerine was a deodorant and after shave.  A brand of cigarettes.  And used to treat gonorrhea and cuts before becoming a mouth wash?

Below is one of the ads used to promote Listerine after it launched..

But by focusing on cuts, scratches, and gonorrhea Listerine was a failure.

Then marketers got involved.  Made bad breath a terrible thing.  And launched a $317 million brand as of 2013

Until that time, bad breath was not conventionally considered such a catastrophe. But Listerine changed that. As the advertising scholar James B. Twitchell writes, “Listerine did not make mouthwash as much as it made halitosis.” In just seven years, the company’s revenues rose from $115,000 to more than $8 million. From Wikipedia

Instead of saying Listerine will help keep your cuts from becoming infected.  Marketers found out that Listerine also helped get rid of bad breath.  And they used the second ad above to illustrate the point.

Listerine marketers made having bad breath a terrible thing.  Up to that point this wasn’t awful.

In the second ad above marketers said that if you have bad breath you won’t get married.  But if you use Listerine on a regular basis – making it a habit – not only will you get rid of bad breath.  But it will also help you get the guy or girl of your dreams.

So marketers used psychology and habit to help get rid of smelly hair and breath.  What other smells have marketers helped us get rid of?

Febreze The Failure

The below quoted area is from Wikipedia.  Emphasis is mine.

The product, initially marketed as a way to get rid of unpleasant smells, sold poorly until P&G realised that people become accustomed to smells in their own homes, and stop noticing them even when they are overpowering (like the smell of several cats in a single household).

The marketing then switched to linking it to pleasant smells and good cleaning habits instead, which resulted in a massive increase in sales.

Only after the product became well established in the marketplace did the marketing go back to emphasising odor elimination properties as well.

They have advertised it so that people use it for cleaning, and for designing the house air.

Febreze was a failure when it launched.  Even after Procter and Gamble – one of the best product launch companies in the world – spent millions of dollars to promote it.

Febreze didn’t become the huge success it is until P&G figured out how to market it to us.  And they’ve done a great job… Febreze is now a billion dollar plus brand.

For more information on how marketers used psychology and habit to change Febreze from a flop to a billion dollar brand go here.

Now let’s get back to the story at the beginning of this post…

Car Wash Psychology

So why was I so eager to get my car washed when I got home from my 33 hour cross-country trip.  And how did marketers make me think I’d made a mistake when selecting my car wash?

A few weeks before my trip I was reading about marketing and psychology to improve my knowledge in those areas.  And came across a case study about the car wash industry.

The case study detailed how car washes get us to upgrade to the higher end washes so they make more money.  But the thing that struck me like a brick was that the different color bubbles in the car wash don’t do anything to clean or wax your car.

The colored bubbles only make us think they wash better

The car washes add colors to the bubbles of the higher end washes to make us think they are doing something.  It’s a clever way marketers – in this case the car wash – affects our psychology to get us to upgrade.  But it also builds habits as well.  And habits are what marketers use to get us to buy stuff.

The Power Of Habit

The Power of Habit is an amazing book.  And I agree with Mr. Pink above.

It’s changed the way I think about how I parent.  My investment processes.  Psychology.  And how I do everything in my life.  In short I cannot recommend that you read this book enough.

Below is author Charles Duhigg explaining in a three-minute video how we develop habits.  And how to break bad habits.

The Combined Power of Psychology, Marketing, and Habit

So now let’s get back to why I worried at the beginning of this story.

After my trip I decided to do a little experiment to see if the car wash case study I read was full of crap.  Or if it was right and car washes were using psychology and habit to get us to upgrade to stuff we didn’t need.

When I got to the car wash I picked the basic wash without the colored bubbles to see if the case study was right.  But when I got into the wash I started to worry that I’d wasted my money.

Ever since I was little everyone always told me to upgrade to the “better” car washes.  If I didn’t my car wouldn’t get clean and I would have to wash my car again.

So even though I knew that the upgraded car washes weren’t necessary after reading the case study.  And doing further research to confirm the findings.  As I sat in the car wash bay with the water and soap running over my truck.  I began to worry that I’d wasted my money when I didn’t see the colored bubbles washing my truck.

Marketers have incredible power when they combine psychology and habit when selling stuff…

Even though I knew the colored bubbles were a marketing tactic.  I still worried that I was wasting money.

So the longer I sat there the more anxious I got to see if the basic wash worked…

After I got through the air dryer I got out of my truck to see if I wasted my money or not.

With the water still beading off my red Dodge Ram 1500 I saw that the basic wash got all the salt, dirt, bugs, snow and rain water spots off my truck.  And my truck was as clean and shiny as the day I bought it.

Seeing this brought a smile to my face knowing that I learned some powerful lessons about marketing, psychology, and habit.  Built my latticework of mental models and worldly wisdom up.  And got a bit closer to achieving my goals as an investor, teacher, and entrepreneur.

Still smiling knowing I learned something valuable, I drove my clean truck home and slept for the next 16 hours.

And I’ve shared this story in the hopes that it will help you in some way too.

What quirky mental models, worldly wisdom, or aspects of psychology have you learned that blew your mind when you first saw them?

Please share below in the comments.


Want more information on how marketers use psychology to get us to buy stuff…  Go here.  It looks like an entire college level course about marketing and consumer market psychology.

And if you want to read more about Mr. Munger’s thoughts on psychology and how to think better, read his speech Psychology of Human Misjudgment.

Or watch the 76 minute talk below from YouTube.

This is the best thing I’ve ever read about psychology.  And how to become a better thinker.


Don’t forget, if you want to receive two free gifts that will help you evaluate companies faster.  Get all future blog posts. And be entered to win a hard copy of: The Snowball – Warren Buffett and the Business of Life and a $50 AMEX gift card. Sign up for the Value Investing Journey newsletter here.

The Value Investor of The NFL

The Value Investor of The NFL

(Jeff Fusco/Getty Images for Reebok)

Superbowl winning quarterback Joe Flacco of the Baltimore Ravens on the left.  Agent Joe Linta on the right above.

With the NFL draft fast approaching I’ve been looking for a story to relate the draft to investing.  But I didn’t expect to find the value investor of the NFL draft in the process.

Below are excerpts from profiling Joe Linta.  The NFL’s agent version of a value investor.

I hope you enjoy the articles and quotes below.  And enjoy the parallels between what Mr. Linta does in the NFL.  And what we do as value investors.

This quote is like looking for “hidden” gems when investing…

Joe Linta is chief advocate for the NFL draft’s marginalia—players whose names will be called on day three, or maybe not at all.

While doing this you’ll also hit the occasional home run as well…

Though he has represented more than 100 players over his 22 years as an agent, negotiated the largest contract in NFL history (Joe Flacco’s six-year, $120.6 million deal) and has three current starting quarterbacks among his clientele (Flacco, Zach Mettenberger and Brian Hoyer), Linta actively seeks out players snubbed by NFL scouting services who sometimes don’t make it through training camp.

Like looking at the OTC markets for investments…

Of Linta’s current crop of 16 prospects, most are projected to be taken in the fourth round or lower and about half won’t be drafted.

How many value investors treat looking for investments…

“For me,” Linta says, “it’s like finding buried treasure.”

Uncovering great companies that no one else knows about…

He loves finding players who have fallen through the cracks, and has made a living identifying and promoting players nobody wanted.

Below is another excerpt from profiling Linta.  Emphasis is mine.

About finding our own niches and taking advantage of them…

He has found this niche of seeing guys and helping them realize their dreams when no one else really believes in them. – Emily Kaplan, Sports Illustrated

To read both profiles on the value investor of the NFL read the links throughout this post.


Don’t forget, if you want to receive two free gifts that will help you evaluate companies faster.  Get all future blog posts. And be entered to win a hard copy of: The Snowball – Warren Buffett and the Business of Life and a $50 AMEX gift card. Sign up for the Value Investing Journey newsletter here.



Famous Failures

 Famous Failures

Failure used to be my biggest fear in life.  It’s taken me years to learn that failure isn’t bad if you learn from your mistakes.  And improve for future attempts.

But no matter how much I know this, failure is still painful.

So my hope is that these Famous Failures articles will help us all learn – and continue to reinforce – taking failure in stride. To keep improving.  Learning.  And keep moving forward towards our goals.

Or as another Famous Failure said:

This weeks Famous Failures include a college reject, then drop out.  Someone who wasn’t creative and had no imagination.  Someone who was “unfit” for TV.  A divorcee and single mom on welfare.  And a failed politician who suffered from debilitating depression.

This video was made by g0ldencalf on Youtube.

How have you dealt with failure in the past?  And who would you like to see profiled in this article going forward?  Let me know in the comments below.


Don’t forget, if you want to receive two free gifts that will help you evaluate companies faster.  Get all future blog posts. And be entered to win a hard copy of: The Snowball – Warren Buffett and the Business of Life and a $50 AMEX gift card. Sign up for the Value Investing Journey newsletter here.

Giving Away A $50 Gift Card

Giving Away A $50 Gift Card

I announced on April 10th that I was giving away a hard copy of The Snowball – Warren Buffett and the Business of Life.  To anyone.  Anywhere in the world for free when this blog reached 150 subscribers.

This got us most of the way there…  But I want to push even higher.

Not only am I giving away a hard copy of The Snowball.  But I’m now also giving away a $50 American Express gift card for free.  You can use AMEX gift cards anywhere that accepts American Express cards.

The same rules still apply as before.

I will choose one of you at random.  And will ship both prizes to you for free.  Anywhere in the world.  At my cost.  All you’ll have to do if you win is send me your address.  And I will take care of the rest.

The only difference this time is the amount of subscribers required to giveaway the items.  Instead of 150 subscribers like before…

Because I’m adding to the prize pool, the subscribers needed to giveaway the prizes has risen.

Now 200 people will need to subscribe to this blog before the prizes are given away.  And at last check there were 107 subscribers to Value Investing Journey.  So we are more than half way to 200.  This number doesn’t include Press On Research subscribers.

And this isn’t all you’ll get when you subscribe either…

Not only will this enter you to win two great prizes.  But when you subscribe you’ll also get two items for free that will help you evaluate companies faster.

All you have to do to enter to win the $50 AMEX gift card.  The 960 page hardcover copy of Warren Buffett’s favorite biography.  And your two free gifts that will help you evaluate companies faster is subscribe to the blog at this link.

Last Chance For A 50% Discount

Last Chance For A 50% Discount

Today is your last chance to get a one year subscription to Press On Research for $49.  Or 50% off its normal full price of $97 per year.

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Press On Research High Def

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Since 2011 its produced $469 million in cash.  And its paid out $406 million in dividends to shareholders.  This means it’s paid out 87% of the cash it’s earned since 2011 to shareholders.

This isn’t the only great thing about the company either.  It’s also undervalued.  Has no debt.  And has competitive advantages.

And this isn’t all you’ll get when you subscribe to Press On Research

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