Wednesday, May 4, 2011

3 business lessons from poking your tongue

Sticking my tongue out was all part of the plan.  It felt a bit uncomfortable, a bit rude, but it's once again driven home for me the importance to businesses of understanding behavioural economics.

I am fortunate enough to work with an employer who provides a range of health services, and this month was a Chinese Medicine 'Tongue and Pulse' check.  For those who haven't experienced this form of health assessment, effectively the tongue's colour, shape and texture can provide clues about the larger biological system.  It involves you poking your tongue out at the practitioner who then prescribes a course of holistic treatment.

Now not only can the Tongue poking experience, or more correctly, the opportunity provided by my employer to poke my tongue, illustrate some of the behavioural principles at play, but so too the promotion of a free Internet conference that passed my desk.  So here are three lessons about behavioural economics to apply to your business.

1. Free isn't without your customer
The 15 minute appointment was provided free to employees, and even right there, in my building. Further, it was being coordinated through a credible organisation so I had nothing to lose except 15 minutes, and the gain was a new experience that I could choose whether or not to pursue.  If you are trying to get a customer to try something new, it should go without saying that the gain should exceed any "loss", or perceived cost.  However in our excitement to wear the financial cost of delivering the "free" service to customers, we sometimes overlook the cost of free to them.  This can include time, money, status, power....anything that is important to that person.  Free + convenient + credible in this case encouraged me to make the booking. 

On the flip side of 'free', a brochure for The Internet Show was doing the rounds at work, touting 70 free educational seminars.  In this context, 'free' actually worked to denigrate the perceived quality of the conference and people flicked the brochure on to others without being stimulated to attend.  Fundamentally, the effort and time required to attend was greater than the chance of absorbing free content.

What could The Internet Show have done? Perhaps limited free tickets to the first, say 26 to register, thereby stimulating activity by tapping into our aversion to loss.  If I think something will be taken away or forfeited, it makes it harder to give up.  Otherwise, they could have provided something other than the content for free. For example, by promoting that the conference fee of $xyz would be waived for anyone who signed up by 9am or visited two exhibition booths would at least have distanced the connotations of 'free' from the perception of content quality.

2. Safety in numbers
We are a pack species, a herd, and typically like to go where others are (in a general sense, I'm not talking about a romantic beach getaway here).  When the Tongue message was circulated, it became a talking point. Are you going? Maybe. You?  We were seeking some reassurance that others thought the experience worthwhile.  In the booking system, it was encouraging to see that appointments had already gone.  If others think this is ok, I will too.  If you are setting up a booking system or trying to stimulate courage to try something new, let it be known how many have tried your service, and even book out appointments if that helps to create a sense of confidence.

The Internet Show on the other hand, had negative herding going on. The poor first impression aka thin slice with its emphasis on "free" and junky looking material, worked against this conference.  Can you turn a herd around?  Not easily would be the answer. But this is where marketing is central to identify early adopters, secure their advocacy and spread the word.  The speakers are the best place to start - getting them to use their networks and personal credibility to draw the crowd.  For your business, substitute speakers with product managers and the lesson is to get your product managers to shape the herd by lifting the profile of their products through media, speaking gigs, blogs. In a socially networked society, why not use it to shape product herds by using professional credibility?

3. Choice overload
By the conclusion of my Tongue assessment, my interest in Chinese Medicine was definitely piqued enough to seek out a local practitioner. To the search phase! I tried a range of directories and search engines, but have not yet landed on a practitioner I feel comfortable contacting. Why? The choice is overwhelming. Near work or home? Acupuncture or herbal specialist? Private health insurance or not? This directory service or that?  Choice overload is well documented, and can result too often in decision paralysis - it just gets too hard.  What would have helped? A list of practitioners provided by my initial Tongue assessor to streamline my choices.

The Internet Show fell into the choice overload trap as well. 70 seminars to select from across three content streams and two days.  I was exhausted going from one agenda to the other, and so will end up attending none. 

Keep it simple should be your mantra. Fewer choices mean better conversion.  Now, it doesn't necessarily mean paring back your product range, but it may mean communicating your range in a different way. Check out if you want to see how an online retailer has helped reduce choice by personalising the catalogue according to your tastes. 

So three illustrations of behavioural economics; free, herding and choice overload from something as simple as poking your tongue.  How have you reacted to free stuff in the past, and do you agree that we are herders?  I look forward to hearing.

Picture from

1 comment:

  1. Dear Bri,
    I find your writings about behavioural economics interesting, thought provoking and inspiring.
    As a Chinese Medicine practitioner the tongue picture on this post grabbed my attention. If you still haven't found yourself a Chinese Medicine practitioner I dare you to spend an hour of your time to poke your tongue at me for a free initial treatment where I will inspire you to change some behaviours in order for you to gain better health. You can then be the leader of the growing herd of people seeking improved health through the use of Chinese Medicine.
    Hope to see you at Gardenvale Traditional Chinese Medicine soon.
    Best Regards,
    Christina Tolstrup