What was the product offer?
Door knocker one, let's call her Sally*, represented Energy Makeovers who on behalf of the Victorian government, are installing free Embertec 'smart switches' to reduce energy consumption. Door knocker two, let's call him Bruce*, was from Fairfax, offering a free trial to The Age newspaper print edition together with a bonus copy of The Good Food Guide.
Some background on me. I don't leave my appliances on when they are not being used, so I don't really feel like I am wasting much power and I do read The Age online and buy it occasionally on the weekend. If you were segmenting me by my usage patterns, things would look shaky for Sally but encouraging for Bruce.
Then why did Sally succeed in getting me to agree to a smart switch where Bruce failed to get a paper in my hand? The behavioural approach they took.
Day and Time: Beware depletion effects
Sally called on my house around midday on Saturday, whereas Bruce came by at 6.30pm Wednesday night. This made a difference to me because by Wednesday night I had already made a lot of decisions in the course of my day. As Jonathan Levav of Stanford and Shai Danziger of Ben-Gurion University examined in their study of over one thousand parole judges, when we get mentally depleted we tend to opt for status quo. In this case, my status quo was not to have a newspaper delivered so it was easier to say no than think about saying yes.
Sally on the other hand caught me at lunchtime on Saturday - fewer complex decisions had been taken leaving more mental room to face the task of hearing the offer.
Vividness: Help me see the outcome
When Sally came to my door she had the switch in a box, ready to go. This made a difference because I could see the unit - it was real. Whilst I had never bothered to respond to direct mail or marketing flyers about the switch, here was one on my doorstep with someone ready and capable of installing it. We are enormously influenced by what happens in the immediate term and by the vividness of the what is being proposed, so having the units on hand and on display had impact.
Bruce came to my door with what looked like a script and holding a copy of The Good Food Guide. Nice try - having the book there was a good idea. But, the guide was not the core proposition, the printed newspaper was. Why on earth did Bruce not have copies of the newspaper to give out? Show me what I'm signing up for, don't distract me with 'steak knife' bonuses.
The catch of Free
Both Sally and Bruce had a 'free' product for me; a free power switch and a free trial. There is no doubt that 'free' is the most persuasive price point you have at your disposal - it can definitely change behaviour because it wipes out the economic risk on the part of the buyer. But with 'free' comes the invariable question, 'what's the catch?' which is the buyer's attempt to assess the social and psychological risk involved in the transaction.
Whilst Bruce may have been offering the newspaper for free, I was busy calculating the psychological trauma of getting out of a contract once the trial period concluded as well as the social implications of having a newspaper delivered. Bruce's offer came with a commitment that I didn't want to make.
By contrast, Sally's free switch was also free of obligation. If I didn't like it, I could remove it. The psychological and social costs of the transaction seemed low so I didn't feel that there was a hidden catch.
Treat reasons given for decision with caution
Having worked as one I couldn't help but think of the product managers back at HQ assessing the performance of their door knocking strategy.
Embertec would have been pleased because my house had one of their units installed. They didn't ask me why I agreed to the unit so I can only hope that they know the transaction was won in large part by having the product in the hands of their representative.
Fairfax would have been disappointed to have missed an opportunity to convert a digital reader. To his credit, before I closed the door Bruce asked me why I didn't want to take up the offer. I told him that I read the paper online - which is true - but I did not tell him the real reason was I couldn't be bothered with the process; that I was midway through preparing dinner, the last thing I was thinking about was a newspaper and I was mentally fatigued. When Bruce reports back to Fairfax, the results of this self reported behaviour will invariably influence the decisions they take in future even though it was not accurate. Fairfax will never know that they could have won my business if the door knocking process had been different, and for product managers that is immensely frustrating.
Lessons for your business
- Make your product or its outcome vivid so that it is real to your buyer
- Segmentation can be meaningless if you don't carefully design the behavioural interaction
- Remember that free has a psychological and social cost that you also have to manage
- Reasons cited for a decision must be treated with caution
- Place greater emphasis on observation of behaviour to identify what elements of your offer work
* Names are fictitious
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Image credit: http://www.rgbstock.com/photo/mfeb7f2/Doors+4