Putting B__S__ into business: My new webinars

I'm pleased to announce my two new webinars on the use of B__S__ (Behavioural Science) in business.  Join me from from the comfort of your office whilst chewing on a sandwich to learn about what influences buyer behaviour.  I guarantee you will learn things you will use for the rest of your life.

Getting Your Buyers to Buy 

How Behavioural Science can get customers to take action

Thursday 11 October 12.30 - 1.30pm

Designed for small business owners and managers, you'll learn

• The three behavioural reasons people don't take action
• Common mistakes businesses are making
• Behavioural techniques to influence action
• How businesses are applying these techniques to gain advantage

Click for more detail

Take Marketing ROI to the Next Level

How Behavioural Science can improve marketing conversion

Friday 19 October 11.30 - 12.30pm

Designed for marketing managers, you'll learn

• What behavioural economics is 
• The four layers of buyer behaviour
• Common mistakes marketers are making
• Behavioural techniques to influence action
• How businesses are applying these techniques to gain advantage

Click for more detail

Recordings of both webinars are also available to purchase.

If you want to hear about my future seminars, webinars and other adventures, why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

A beer lesson in "Consumption design" for behavioural influence

Some great examples have popped up recently of how the behaviour of buyers can be influenced by the physical experience that goes with consumption -  let's call it 'consumption design'. 

Too speedy on the beer-y? It might be the glass
Hey, there's an excuse for guzzling that beer...the glass is curved!  Researchers at the University of Bristol (and by the way, kudos for pitching that to the research board!) found that people tend to drink more quickly out of curved glasses because it is harder to gauge how much has been consumed.

No Big Gulp for the Big Apple 
In a controversial move, New York city's Board of Health has banned super-sized (16oz/470ml) soft-drink containers. Detractors see it as an encroaching on personal liberty (and stifling vendors) whereas advocates claim it will help fight obesity.  The behavioural science clearly demonstrates that when provided a larger serving, we consume more so the decision is grounded in fact; it's the matter of whether government should have the right to determine the size of the serve that remains contentious. 

Stop getting chip-faced
I've mentioned this one before, but ever found yourself chomping through more chips than you intended?  Researchers looking into self-control dyed chips red before inserting them at set intervals in the Pringles-like tubular packet.  Without impacting the taste of the chip they found that when people were cued by a visual 'stop' signal, they ate less.  Maybe we need every third Tim Tam to be red?

The lesson from these examples?  "Consumption design" is a reminder that every element of your product experience will impact consumption.  It takes things a bit further than product design and means that your role doesn't end at the production line - think about how and where your product will be experienced and design according to the behaviour you want to facilitate.  

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

Image: http://www.rgbstock.com/photo/mgysJNS

Assimilate or disintegrate: How your buyers respond to new information

Last week the Federal Minister for Health Tanya Plibersek condemned Imperial Tobacco's move to introduce a form of stylised plain packaging ahead of the mandatory and uniform olive green, unbranded version.  It is no surprise that the tobacco companies are trying everything to secure their product in market, and so putting the ethics of tobacco products to one side, let's consider a key behavioural lesson from this industry as it reacts to change. 

Assimilate or disintegrate
When faced with new information, we seek to assimilate it with our existing view of the world, much like fitting a piece of a jigsaw puzzle.   We are motivated to maintain our internal narrative - how we explain the world to ourselves - and will actively seek to resolve what is known as cognitive dissonance; the unpleasant sense that something just doesn't fit right.  What do we do to alleviate this feeling? Distort, refute or ignore the new information.  Anyone who has been in a meeting when a stakeholder has flat out rejected new facts/research will know what dissonance looks like..it's officially known as "Information Avoidance".  In fact, just follow how the political parties respond to the release of studies to see reactions to dissonance writ large.

In adjusting its packaging ahead of the government changes, Imperial Tobacco were seeking to bridge the old and new worlds for its consumers with the hope of softening the reaction.  They were assimilating the changes - on their terms - so that their consumers would be less likely to reject the new information.

For your business, consider how any new information - new product or service, pricing, conditions -  will likely be received by your market.  How are you helping to bridge the gap between old and new so that the change will be assimilated rather than disintegrated?

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

Behavioural lessons from one of the best websites

My heart began to race.  It was the last one and I knew there were four other interested buyers.  No time to muck around, I better go in for the kill. Where's my credit card?

Welcome friends to the world of booking accommodation online, a goldmine of examples of behavioural economics applied to the customer experience.

Let's look at just three of the techniques used by one of the best exponents, Booking.com.

Sample listing from Booking.com

Create a sense of urgency
No surprise, but part of getting customer commitment is a sense of urgency.  Urgency comes from our fear of missing out, so this is how Booking.com use it;  

• Notice that the number of rooms left is displayed next to the City View room deal. Trust me, when it gets down to 1 you jump pretty quickly.  Chances are you will even stop looking for reviews in your rush to secure the room - the overall rating will do.

Create a sense of normalcy
As much as we deny we are persuaded by what others do, we are.  Being a normal part of the 'herd' is core to our functioning, so here's how Booking.com use it;

• There are 6 other people looking at this hotel - good, because it means I have great taste. But worrying that there are six people looking and only three of the city rooms available!  Urgency strikes again.
• Last booking - others have trusted this hotel enough to book
• Guest reviews - whilst the impartiality of reviews may be questioned, they do carry psychological weight because they are ostensibly written by people like us

Create a sense of value
We need to make estimations of value whenever we are looking to buy.  If the business doesn't control how its price is contextualised we will rely on whatever's in our head - dangerous for any business.  You must therefore anchor the prices relative to others. For example, carry more expensive options to encourage sale of the cheaper option, and always list your original price along with its marked down amount.  Booking.com;

• Notes that the price for the City View room has been marked down, and obviously so.  No good just showing your 'sale price' if you don't also show the original because your customer may not understand how great a deal this is.

I've booked a lot of accommodation over the years and whilst there are many sites - Lastminute.com.au, Expedia.com, Wotif.com amongst them, I keep being drawn back to Booking.com for its interface and communication of information.  Let me know if you agree that it is one of the best, and whether you have used similar behavioural techniques in your business.

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

Just make a decision will you!!! Overcoming decision quicksand to get the sale

You've been dealing with this customer for what seems like an eternity.  On paper, the decision is an easy one, some might say trivial, and yet they can't seem to make up their mind.  You are going around in circles, with them demanding more and more information and as a consequence, them getting more and more confused.  Oh no!  You are in "decision quicksand"!

When you make something unexpectedly difficult, you get quicksand
In their study "Decision Quicksand: How Trivial Choices Suck Us in" (2012) Aner Sela and Jonah Berger examined why trivial choices suck us in.  In short, the study looked at the association between difficulty and importance and found that if a choice was unexpectedly difficult, then it's perceived importance increased. What had been trivial has now been elevated into a decision worthy of time and effort.  And what better way of churning up time and effort than seeking out more options, sadly taking us further away from being able to make a choice.

Using quicksand in your business
You can use quicksand in two ways in your business.

Strategy 1. Intentionally make it hard
If you want to increase the perceived importance of a choice, make it more difficult.  Provide more options, use complicated language, complex processes and protracted explanations.  In Daniel Kahneman's language, you will be engaging "System 2" thinking which tends to interrupt an otherwise low engagement decision.  Why would you want to?  To force consideration of your product when you are not the preferred incumbent.

A word of warning though, an unimportant decision that is difficult might increase the time involved but it will likely decrease satisfaction.  Makes sense doesn't it?  We end up resenting being stuck on something that we think we should have easily dealt with.  For those who monitor customer satisfaction, it may be worth looking at how your customers perceive difficulty relative to importance because where effort is greater than reward, satisfaction will suffer.

Strategy 2. Simplify
More commonly, you will want to make the decision process for your customer as easy as possible. Fewer options, simple language, easy to follow processes and straight forward explanations.  Here "System 1" thinking will be most likely ruling the roost meaning your customer will be on 'auto pilot' and go with the flow.  Your job of course is to set up the flow!

Getting out of quicksand
So what do you do with the customer is stuck in decision quicksand? Go back to the basics of what they first talked about and why they contacted you. Fight their urge to get more information by concentrating on framing their decision using simple pros and cons.  Something along the lines of...

"Let's go back to when you first walked in.  As I see it you have two choices in what we've talked about, A or A-.  Now A has xyz whereas A- has 123. From what you've described to me, A- is really what you are looking for.  Does that seem right?  OK. That is a great decision, let's sort out (next steps)".

Knowing that decision quicksand can affect us all should help you come to terms with customers who seem to be frustrating you on purpose.  Take the view that they are not being deliberately difficult and instead look at how you set up the decision for them.  After all, you're the choice architect here!

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

(Image from http://www.gsbhealthandsafetysigns.co.uk/danger-quicksand-sign.html)

Special aisle for blokes? Rethinking the shopping behaviours of your market

A great little story grabbed my attention the other day.  A supermarket in New York had set up "Man Isle", an aisle dedicated to the shopping needs and behaviours of men.

According to the Business Insider, Westside Market created the section containing chips, beer, razors, condoms and beef jerky based on two things; more men were shopping and there were common goods that the guys were shopping for.

What can we take from this?

1. Reduce pain points for an under serviced market segment
Structuring their supermarket around the buyer's experience was a great way of reducing pain points and encouraging habituation.  The signifiant pain point? Overwhelming choice. The Man Isle reduces choices to a minimum and positions complementary items (eg beer and chips) together.  The lesson is always to look at your business from your customer's perspective and ensure you make doing business with you as easy as possible.

2. Target a Profitable segment
Westside had researched the trend toward male shopping and determined the segment was worth targeting. This is important - it's only worth customising the experience if you expect to gain a return on your investment through market share, volumes or margin.  Part of the consideration should of course be any impacts on the rest of your market. For instance, if Westside had been very aggressive in its targeting of male shoppers it may have inadvertently disenfranchised female shoppers, so striking a balance in how it catered for different shoppers was vital.

3. Give it a try
The team at Westside created the aisle on the basis of insight, observation and throwing a list of ideas together.  They knew what they liked shopping for, so that was the basis of how they stocked the aisle and they are willing to test and learn on the basis of market response. We can sometimes forget that our own expectations of customer service are a great source of knowledge for how our customers like to be treated - after all, we are all consumers, and that the main thing holding us back from growth is fear of failure.

Westside have differentiated themselves by rethinking how their business can better serve customers.  I hope you can too.

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.

(Image from http://www.businessinsider.com/inside-the-man-isle-2012-7?op=1)

Don't underestimate the impact of fees on consumer behaviour

Imagine you are at an ATM withdrawing cash. Before you do, a message comes up reminding you that there will be a $2 fee for accessing your money through an ATM that is not part of your bank's network.  Do you proceed or do you cancel the transaction?

If you were an economist with the Reserve Bank of Australia (RBA), you would have predicted that most would proceed with the transaction. After all, it's only $2.  We lose that behind the couch.

Well, much to the chagrin of RBA financial wizards, they didn't count on the impact of consumer 'irrationality'.  Instead of consumers banking like they had in the past, when the fee for a foreign ATM withdrawal was buried in terms and conditions and you only found out when you looked at your account statement, consumers have turned away from using these ATMs. 

What can you learn from the behavioural economics of ATM fees?

Red rag to a bull
People are more likely to adapt to a new price if they are not constantly reminded of it - it's like a red rag to a bull.  In this case, there was no choice for the ATM owners - the communication of the fee was mandatory, but in your business you may have more flexibility.  If you can, parcel the fee in with the price point and/or change once and not every time the customer pays.

I'm buying the good not the service
In previous posts I've talked about delivery fees.  For instance, order through Amazon and you pay less for the book but get hit with shipping.  Order through Book Depository and you pay more for the book but shipping is 'free' (ie included).  

People hate service fees so much because they decouple the value of the good from the service in getting it to them. Why? Because you retain the product not the service. Your opportunity is to gain  advantage by offering to wipe the cost of service (ie offer "free delivery" or "free installation") because 'free' is extremely persuasive and 'free' on a hated cost of service even more so.

Choose your number 
Was the fact that the fee is $2 the issue?  I think it did have something to do with it.  A lower fee structure, say 50 cents or 90 cents and more customers would have proceeded with their transactions  because dollars and cents are psychologically different.  If I told you that you are entitled to a $2 discount after you've purchased $30 worth of groceries does that hold more or less appeal than me offering you 4 cents off a litre of petrol (which works out about $2 a tank if you are lucky)?  Judging by our slavish devotion to petrol vouchers, 4 cents is extremely persuasive.  As a business you therefore need to consider the number context of the fee or discount you are using.

The big lesson out of the RBA experience is that people's irrationality should not be underestimated. Where something looks inconsequential on paper, it can have dramatic behavioural impacts. Your job is to make sure irrationality works in your favour, and behavioural economics is your guide to knowing how. 

To find out more about what happened with $2 ATM fees, read Peter Martin's article "Banks' $2 fee has big effect"in The Age. 

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of top news from the behavioural sciences and other nuggets of goodness from me. Click here to sign-up.


(Image from http://www.bikyamasr.com/69294/india-launches-first-talking-atm-for-blind/)