Monday, December 10, 2012

Reducing no-shows: How to write effective appointment reminder messages

A service I really appreciate is when the business with whom I have an appointment sends me a text message to confirm.  For professional service businesses that charge by appointment like hairdressers, physiotherapists, dentists and beauticians, it makes great business sense to do this.  Not only do you reduce the risk of 'no shows', you demonstrate your commitment to providing customer service.

So how can you make sure that the message you send your customers is as effective as possible?

Let me illustrate with real examples from two of my service providers; my osteopath and my hairdresser.

On the left, the message from my osteopath is perfectly sensible. It explains the reason for the message, date and time.  No surprises here. And they helpfully provide a phone number if I need to change the appointment.

But now look to the right to see how my hairdresser showcases a behaviourally effective text message using three elements;
1. My name - Using names is a great way of personalising the message and the obligation that is contained within it.  It's the equivalent of eyeballing me to get me engaged and now my personal integrity is on the line if I don't turn up.
2. My action required - Asking me to reply 'yes' to the appointment forces me to take action, reinforcing the agreement to turn up at that time.  The osteopath's message on the other hand was passive; there is no confirmation that I have received the message let alone that I have recommitted to the appointment.
3. Fail safe contact - It seems like s small thing, but including the area code with the phone number means that if I am interstate and need to contact them the connection will work, removing a potential hurdle.  This week I received appointment reminders from a business intended for someone else. Whilst they provided a phone number, I had no idea which State they were from so I couldn't (be bothered to) let them know of their mistake.

Reminder messages are no doubt a great technique to use; short, sharp communications that keep both parties committed to the appointment.  As the examples showcase, in the space of only twenty words you can make decisions that will materially benefit the effectiveness of your message, your business and your customer, so get texting.

PS Why not join like minded colleagues by signing up to the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

Monday, December 3, 2012

The bowls club got their signage right...

A sign I spotted on the weekend which is a great example of behaviourally effective language.

"Free coaching and equipment" immediately reduces potential anxiety amongst people who might be curious about lawn bowling but uncertain about how to get started.

Monday, November 26, 2012

What mangoes at the market teach us about buying behaviour

As an infrequent visitor to the fruit and veggie market I can find it quite overwhelming.  Stall after stall of similar stock, vendors shouting their deals and a strange mix of market aficionados weaving through crowds with their trolleys and bags, and novices, bumping into things as we try to ingest all the information and walk at the same time.  It reminds me of most online retailers - overwhelming those new to the website and designing for those who are already competent. So what can we learn from the behavioural techniques used by grocers to get people to buy?

1. Use a lead item that is desirable
Influencing buyers to select their stall over another is a major hurdle that grocers need to deal with. All stock looks the same, so price becomes a key criterion (sound familiar to online retailers?). Smart grocers therefore lure shoppers with a lead item, promoting a desirable product at a price that is easy for the buyer to understand. At the moment, mangoes seem to be the carrot (so to speak).

Grocer A: 3 mangoes for $5
Grocer B: 2 mangoes for $5 

No question that Grocer A is likely to generate more business because the relative value is easy to understand and whilst s/he may take a hit on profits from mangoes, this grocer has won the chance to sell more items to the buyer.  In colloquial terms, losing the battle to win the war.

What if you are Grocer B?  Should you change your offer?  What's interesting is that Grocer A's offer is powerful because it is contrasted with Grocer B; if that wasn't available it would be harder for the buyer to assess its merits.  Grocer B has a number of options;

  • Match the offer
  • Choose another lead item (eg nectarines)
  • Use a different pricing structure (eg promote $2.50 per mango or 'get two mangoes and a third one free' so that it is more difficult for buyers to do a direct comparison)
  • Bundle the offer (eg two mangoes and a punnet of strawberries for $5)

2. Simplify the value assessment
Note that both grocers have used a whole dollar amount ($5) rather than complex number (eg $4.99) in this case.  Why?  In an environment in which there are hundreds of prices displayed, and most per kilogram ($6.99/kg, $3.99, $4.99...) the whole number alleviates the buyer's burden of calculating value, effectively saying "you don't have to strain your brain, it's great value".  In behavioural terms, the whole number relaxes the buyer and increases confidence that they can successfully manage the transaction.  

I've also seen this technique used at Coles, where a discounted item is promoted using a whole rather than complex number. For example, yogurt that is normally $6.24 may be marked down to $4 rather than $3.99.  

3. Gain commitment
The mangoes not only attract the buyer but commit them to transacting with the vendor.  In other words, once the mangoes are in the basket, it becomes hard for the buyer to recant and take their business elsewhere. A couple of things are happening here.

  • They have sunk the cost of their time and effort in queuing up and going through the process of sale.  Having committed to doing this with one vendor, the desirability of doing it with another (particularly when the upside is difficult to discern) diminishes.
  • We like to think we are good at making good decisions. The buyer has given themselves a tick of approval for buying the mangoes, and therefore is likely to seek to build on that by continuing to shop in the same stall. 

New vs existing customers
As I mentioned, I am a relative newbie to the market and so my attention is soaked up just trying to navigate the environment. I look for simple price cues because my cognitive load is already high.

Experienced market goers on the other hand are familiar with the environment and so have greater capacity to discriminate between vendors, concentrating on micro rather than macro detail.  As such, these buyers are more likely move between stalls, visiting Grocer A for mangoes and Grocer B for potatoes for example.  

It's pretty clear then that each vendor needs to devise different strategies for new and existing buyers. Where lead items may attract new custom, factors like customer service, stock range and quality become central to retention. The same goes for all types of businesses; online and off.  

Lessons from the market
Next time you visit a market, think of it as an analogy for your business.  How are you enticing new buyers?  Are you making your offer easy to understand?  What's your competitive positioning?  How do you gain commitment on a small scale so that it turns into something bigger?  Take a moment to reflect on the behavioural state your buyer is in - are they new or existing? - and how you guide them through the experience of purchase.  Are they overwhelmed and looking at the macro level or familiar and more discriminating on micro detail?  Most of all, put yourself in the shoes of your buyer and from there you'll be able to shape an effective behavioural strategy.

PS Why not join like minded colleagues by signing up to the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

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Monday, November 19, 2012

Excel in behaviour, not just numbers: Why Behavioural economics is important for finance professionals

I've been lucky enough to tour around the country with the CPA Congress in the past few weeks to talk about the application of Behavioural Economics to finance.  Being a past beano, I know only too well that 1. businesses live and die by the numbers and 2. it's really not about the numbers - it's about the behaviour surrounding the numbers.  I might think 6/10 great, you might think 6/10 is bad; the number is objective but the interpretation is subjective.  That's why it's so important for finance professionals to understand behaviour if they want to significantly impact their business and their customers.

Here are three quick behavioural techniques for finance professionals.

1. Know when to fold 'em
As a finance professional you encounter this behaviour all too often. It may be a client who just won't sell bad shares, a client who simply can't be convinced to move to better performing options, or a stakeholder who refuses to close down a project that has no hope of generating a return. The numbers don't lie, but rational analysis is not what's holding your customer back.

We hate to acknowledge failure.  Selling shares that have tanked smacks us in the face with our bad decision so we prefer to avoid recognising the loss and instead sell good performers so we can feel like we've aced it!

As a finance professional, your task is to soften the blow by distancing ego from outcome.  For instance, if the time has come to sell a bad investment, try talking about broad market forces rather than individual judgment. Gotta know when to fold 'em.

2. Why one dollar isn't the same as another dollar

When Hungry Jacks ran a $2 Groupon deal for a $6.95 meal package they received over 120,000 downloads in three hours.  When ATMs started to carry a warning about a $2 fee for 'foreign' bank transactions, activity plummeted from 50% to 40%.  If $2 can change behaviour, imagine what larger amounts can do! 

If you've ever wondered why some people like prefer to get their health rebate returned as a lump sum whereas others take it as a discount off their premium, or why we stress about utility bills going up but happily buy more clothes than we need, it's called 'mental accounting' and it impacts how we spend and save money.  For finance professionals, you need to tease out how your customer is thinking about money so that you can influence their behaviour.

3. Information blinkers
If you've ever found that your client or stakeholder seems only to hear information that supports their position and ignores anything that is contradictory, then you have been introduced to information biases.  Known by names such as Confirmation Bias, Hindsight Bias and Clustering Illusion, we unconsciously use these filters to distort, accept or reject information so that it gels with our view of the world and alleviates anxiety about whether things make sense.

As a finance professional, know that your customer will be blinkered by their filter system. It's not that they don't understand necessarily, it's that you need to find a way of meshing your perspective with theirs.  Thankfully, behavioural economics provides clues on how to do this.

There are plenty more of tips for finance professionals from behavioural science, and what I love is that human behaviour doesn't have to be a mystery anymore.  Think of behavioural economics as an audit process with 'behavioural standards' in place of accounting standards and you have a ready made toolkit for influencing your customers.  At last you can excel in influence as well as numbers!

Interested in finding out more?  I am running a series of fast track webinars for finance professionals on topics like those mentioned. Click here for details.

PS Why not join like minded colleagues by signing up to the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

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Monday, November 12, 2012

Opportunity knocks: getting your buyer to answer

In the past week I've had two door knockers - those poor souls who have to go door to door to peddle their wares - attempt to win my business.  One succeeded and one failed, and here's why.

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

PS Did you know I can audit your website or marketing materials for behavioural effectiveness?  Just email to find out how.

PPS Why not join like minded colleagues by signing up to the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

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Friday, November 9, 2012

Doodles demystifying buyer behaviour

The behaviour of clients, customers or stakeholders can often be perplexing - a challenge when you have to work out how to influence them!

Don't worry, the answer is closer than you think.  In fact, your buyers are a bit like a smartphone...

This slide pack includes three doodles to demystify buyer behaviour.  Email me to find out more about converting buyer behaviour into better business results.  Enjoy!

Wednesday, November 7, 2012

Announcing new behavioural techniques webinar series for finance professionals

As someone who has worked in finance, I know only too well that the numbers don't always speak for themselves.  

In fact, now more than ever finance professionals have to influence their customers and stakeholders to take action and that means knowing how to influence behaviour.  

That's why I've created 5 self-contained webinars for finance professionals. Learn to how to navigate the maze of human behaviour using techniques from behavioural science that will make a difference to how decisions get made, and make a difference to your career success.


Structured over 5 self-contained sessions, the Buyer Behaviour coaching for finance professionals is perfect for people who specialise in influencing financial decisions, want to gain advantage for your business and who need the flexibility of a program that works around your business demands.

By the end of each webinar you will be ready to apply new behavioural techniques in your business.

Each webinar is self-contained which means you can choose to attend one, multiple or all sessions.  What a great way to get CPD hours!

Topics in brief
  1. Walking away: Why we hold on too long to bad investments Fri 30 Nov 2012 
  2. Mental accounting: why money means different things in different contexts  Fri 7 Dec 2012
  3. Information biases: why we have a blinkered view of information Fri 14 Dec 2012
  4. Number psychology: why presentation matters  Fri 11 Jan 2013
  5. Calculating gains: Why gains that are short-term and separate are more persuasive than those longer-term and combined  Fri 18 Jan 2013 
More information about each session is included below.

How the sessions work
Scheduling: webinars are 30 minutes and will run on the stated date. Recordings of each session will be available to registered participants.

 Content:  Each session will include;
  •  Definitions of key behavioural principle(s)
  • Illustration of principles in action
  • Time for question and answers
Flexible pricing
Pay as you go:  The webinars are available on a pay-as-you-go basis at $125 (incl gst) per session.  ***November special: Book before 29th November and pay only $50 (incl GST) per session.  Quote promo code "November" in the registration form***

Request your seat
Registrations are now open and limited to 25 participants.
  1. Walking away:  Fri 30 Nov 2012  Book now
  2. Mental accountingFri 7 Dec 2012 Book now
  3. Information biases:  Fri 14 Dec 2012 Book now
  4. Number psychology:  Fri 11 Jan 2013 Book now
  5. Calculating gains:  Fri 18 Jan 2013 Book now

Details of sessions
Session 1. Walking away: Why we hold on too long to bad investments 
Friday 30 Nov 2012   11am - 11.30am 
We are all prone to hold on to something too long.  Suits that don't fit anymore, shoes that hurt to walk in, and of course investments that we should have ditched long ago.

As a finance professional you encounter this behaviour all too often. It may be a client who just won't sell bad shares, a client who simply can't be convinced to move to better performing options, or a stakeholder who refuses to close down a project that has no hope of generating a return. The numbers don't lie, but rational analysis is not what's holding your customer back.

In this webinar, we'll use behavioural economics to unmask the secrets of why people hold on too long to bad investments and what you can do to break through. 

Session 2. Mental accounting: why money means different things in different contexts    
11am - 11.30am Fri 7 Dec 2012

When Hungry Jacks ran a $2 Groupon deal for a $6.95 meal package they received over 120,000 downloads in three hours.  When ATMs started to carry a warning about a $2 fee for 'foreign' bank transactions, activity plummeted from 50% to 40%.  If $2 can change behaviour, imagine what larger amounts can do! 

If you've ever wondered why some people like rebates whilst others prefer discounts, why money for utility bills is treated differently to money for entertainment, then this webinar is perfect for you.  Learn why 'mental accounting' matters and what it means for you when you are influencing your customers or stakeholders to take action.

Click here to register for Session 2

Session 3. Information biases: why we have a blinkered view of information 
Fri 14 Dec 2012  11am - 11.30am 

Ever found that your client or stakeholder seems only to hear information that supports their position and ignores anything that is contradictory?  We are all prone to Information Biases; filters that distort, accept or reject information according to our view.

As a finance professional, the challenge is how to understand and deal with these biases so that your client or stakeholder makes the most appropriate decision. Join me for this important webinar and learn how to address biases.

Click here to register for Session 3

Session 4. Number psychology: why presentation matters 
Fri 11 Jan 2013  11am - 11.30am 

A number is a number, right?  Well, no.  After all, we prefer 97% fat free yogurt rather than yogurt with 3% fat!  How you present a number can have dramatic ramifications for how your audience receives it, so rather than leaving it to chance, why not learn the techniques to use when sharing information?

Join me for this webinar on number psychology where you will learn about framing and anchoring numbers to maximise your communication.

Session 5. Calculating gains: Why gains that are short-term and separate are more persuasive than those longer-term and combined  
Fri 18 Jan 2013   11am - 11.30am 

Seems strange doesn't it?  When people receive two smaller gains rather than one gain of the same amount, they are more satisfied.  Time horizons and frequency of reward can have significant impacts on your customer or stakeholder's behaviour.  If you are in the business of convincing people to buy financial products like shares, annuities or superannuation, or advising your workplace on how best to incentivise staff then these concepts become hugely significant. 

Join me for this webinar to understand the behaviour of gains.

More information
If you have any questions or would like more information, simply email

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Monday, November 5, 2012

The Behavioural Economics of Melbourne Cup Day

You have spent hours hunting for the right frock, shoes, bag and hat. You've been primped, plucked and spray tanned, waxed and blow dried.  You have dieted, exercised and cleansed. You've been up since the early hours, battled traffic snarls and endless queues. And now here you are.  Standing in the car park which has been claimed by heels rather than wheels, crammed in amongst sweaty strangers, sipping sour bubbles and nibbling soggy sandwiches. Ahhh, Melbourne Cup Day...proof irrefutable that we are not entirely rational beings.

In celebration of the famous Melbourne Cup, let's take a sneaky peek at the behavioural economics at play.

Overconfidence bias: 
We can be too confident in our abilities which leads to risk taking.
"I've studied the form and of course I know more than the Bookies."  

Illusion of control: We think we can control events that we can't.
"My horse always/never wins."

Actor-observer bias: 
We attribute our own positive behaviour to our character, and the behaviour of others to the situation.
"When I get drunk it's the mix of wine and bubbles that did it; when you get drunk it's because you drank too much!" or "When I win it's because I am super talented in selecting winners; when you win it's luck."

Endowment effect: 
Don't get too excited guys, endowment is about us overvaluing what we own.
"Sure I randomly drew that horse out of the hat, but it's mine and you can't have it."

Restraint bias: 
We underestimate our ability to avoid temptation.
"It's ok, I'll only have a couple of drinks."  

Remembering self: 
Our memories of an experience rather than the experience itself is what persuades us.
I remember the fun of previous Cup days rather than the reality of sore feet, sun burn and expense.

Mental accounting: 
Money is allocated to different 'mental' bank accounts.
I paid for my outfit out of a different 'mental account' than my power bill. Any money I win will be 'free' money to be used on fun stuff.

Focusing illusion:
Whatever we focus on has more importance at that moment than any other time.
"What, there's a race after the Cup??"

Clustering illusion:
We see patterns where none exist.
"The jockey is wearing my lucky colours."

Hindsight bias:
We knew it all along.
"I knew it was going to win!  I just didn't get around to placing a bet."

Sunk cost fallacy:
Once resources have been invested, we find it hard to walk away.
"I better just finish this last drink. Can't let it go to waste" or "Of course I'll wear that fascinator again!"

Sounds like fun doesn't it?  And one for the road, 

Hedonic framing:
Separate, smaller gains over a stretch of time are more pleasurable than one large win of equal value, but smaller separate losses hurt more than a once off.  In other words, the more times we are interrupted by good or bad news, the better/worse it is.
"This is the best day of my life!" or...

No. Don't worry. Your horse always wins.  Have a good one.

PS Why not join like minded colleagues by signing up to the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

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Monday, October 29, 2012

LinkedIn lesson in engagement: keep the number fresh

LinkedIn do a lot of things well when it comes to influencing the behaviour of their market, and today I thought it worthwhile to point out one of the tricks they are using: keeping stale information fresh!

Change the number by changing how it's calculated

Every few days the number of people who have viewed my profile changes...but not necessarily because the actual number of viewers has. What do I mean?  LinkedIn cleverly update the count of viewers by changing the time period over which the viewers have been counted.  Where today I may have been viewed by '6 people over the last 3 days', tomorrow I might see that I have been viewed by '10 people over the last 7 days'.

Is this important? You betcha!  It keeps my interest because the number looks different and so I feel compelled to click through to see what's changed.  This interest keeps me engaged with LinkedIn both emotionally and transactionally, in other words, I don't just clock the number, I click through (where they then try to upgrade me to premium).

What's the behavioural technique?

This is the same tool that can be used to make mortgage payments or car finance seem less scary. For instance, you may have seen car ads like this Lexus example that diminishes the purchase price by promoting a weekly repayment instead.  

What trick are they using?  It's called Denominator Neglect, where we focus on the numerator (ie the thing that we are getting like 'viewers') rather than how it's calculated (ie over how many days).  Like a muffin, it's what's on top that counts!

Lessons for your business

Three lessons from what we've covered.1. Your buyer is most likely to be persuaded by the numerator rather than the denominator, so consider how you can best utilise this in pricing,2. Don't underestimate the benefit of putting a new spin on some otherwise unchanged statistic because it may reengage your audience and3. Make sure that you are improving the life of your buyer with any of these tactics because influence is about win/win whereas manipulation is win/lose and a fast track to failure. 

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

Monday, October 22, 2012

Why team training falls over and how behavioural economics can help

I sat in a seminar last week on team development and it's prompted me to think about how behavioural economics can be used to improve team performance.

The presenter started by sharing the characteristics of high performance teams, citing the 2012 AFL premiers the Sydney Swans as an example.  What elements of team dynamics were called out? Process, shared vision and values, playing for each other, clarity about the contribution each individual was expected to make and so on. People in the room had no trouble listing these elements, and yet we seem collectively to struggle on a day to day, hour by hour, decision by decision basis to make it happen.

Perhaps I'm jaded, but there seems to be an intractable disconnect between high performance teams and the rest of the world.  For every Sydney Swans there is a Port Adelaide. Where the Swans are the exception, the rest of us are the rule.  And in spite of team dynamics being one of the most studied and trained aspects of organisational performance, an area we spend a fortune on, we scratch our heads and mutter "if only".

So what's breaking down?

Insights are fleeting, behaviour is entrenched
There's no doubt that team profiling tools and team building sessions can improve performance. It's the sustainability of that performance that is at issue.

In a previous life when I facilitated induction days and team building events, and in other lives where I've participated, I've seen light globes go off.  People gain insights into their colleagues and the walls get broken down between right-brainers and left, between introverts and non, between instigators and concluders.  The team members see why they approach issues from a particular perspective and with that, develop an understanding of how their colleagues may see things differently.  Finally! We have a shared understanding and common language that means 'conflict' is not necessarily personal, it's simply a function of us not being empathetic.  Hurrah, at last we can be a high performance team!

But then something happens.

It's called habit.  We revert to old patterns of behaviour and as the weeks go by, we forget that Jo is a right-brain, introverted, polkadotted, instigator and we just think Jo is an idiot.

How can behavioural economics help?
The core reason that team training fails to deliver sustainable performance is down to behavioural change.  And for effective behavioural change, you need to understand human decision making and for that, there is behavioural economics.

Here is a taster of where behavioural economics can explain the breakdown of behavioural change.

We are more motivated to avoid loss than seek gain.  The gain in this situation is that if everyone performs, we become a high performance unit.  But that's not enough on a day to day basis to keep people behaving differently.  Why?  Because of what I have to lose.  Change means I have to give up what I'm used to (loss aversion), it requires more thinking and self-control than I can afford when I'm just trying to get my work done (depletion effect), and whilst the downside of having to spend time empathising with my colleague's style of thinking is blatantly obvious - I mean, who has the time?! - the payoff - "if this stuff even works" seems both ambiguous and way off on the horizon (short-term bias).  And anyway, why should I if no one else is (social norming)?

To embed high performance you must design for it
To embed high performance, this is what you must do. Design for the behavioural change.

First, use behavioural economics to understand the reasons inhibiting change, and on the flip side, will facilitate change.  In the example above "why should I when no one else is" can instead become "I will because I see others doing it", "If this stuff even works" can instead become "I know what I need to do in small interaction to make a difference overall".

And second, ensure that you have strategies to support both the motivation to change as well as ability to change.

In other words, when the team come back to the workplace all pumped up, when motivation is at its peak, that is the time to get them to commit to new processes and policies, do the hard stuff like moving their office to be closer to their colleagues, schedule meetings they don't like having and so on.  Then, when motivation levels drop, the hard changes have already been taken care of so all that you require is the easier tasks.  Morning teas, 'thank you' post-it notes...whatever you and your team have designated as 'easy' things should be rolled out so that even if no one really feels like it, you do it anyway and before you know it, you are on the path to high performance.

So by all means, learn from the best and aspire to create a high performance team; after all, the Sydney Swans did it.  But don't leave team performance at an intellectual level, assuming team members will change their behaviour on a rational basis because you'll be wasting your money. For a team to perform differently than they have been, your task is one of behavioural change and for that, you need behavioural economics.

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.

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Thursday, October 18, 2012

22 Minutes to a Better Business: The slide pack

My slide presentation from recent seminar on how behavioural economics can be used to tackle everyday business issues.  If you are interested in hearing more, let me know

Monday, October 15, 2012

Innovative packaging bridges analogue and digital divide

How to simplify the experience of using unfamiliar technology?  This was the question resolved by Vitamins Design Consultants on behalf of Samsung who were interested in selling more smart phones to older consumers.

The answer lay in the packaging.

The roadblock to purchase
When you are unfamiliar with a piece of technology - could be a phone, oven, car, DVD player - it can inhibit your willingness to purchase.  After all, we all hate feeling like we are stupid, and not feeling capable to use something that other people obviously can is extremely off putting.

Removing the mental barrier
With this in mind, Vitamins determined that more could be done to support consumers in the initial stages of setting up and familiarising themselves with their new phone, and that this promise of support would inspire more people to purchase. 

Out of the Box
In a brilliant lateral move, Vitamins turned the packaging of the phone - the box it came in - into a storybook of what to do when.  As the user flicked through each page they were instructed to complete a stage of the set-up. For instance, the SIM card was embedded in the page with the instruction "This is your SIM card, the heart and soul of your phone, please lift it out".  

From there, the user was asked to physically slot the phone into the book, like placing a picture in a frame.  Each page took the user through the phone's interface - what to press to make a call, how to email and so on.  A perfect blend of analogue and digital!

Behavioural techniques
I love what Samsung and Vitamins did with their Out of the Box packaging because they used key behavioural insights and techniques;

  • Overcoming loss aversion - we hate to feel stupid because it reduces our sense of identity. They created something that supported even the most nervous of new users. 
  • Vividness - clear, concise steps meant that there was no confusion as to what to do in which order.
  • Completion - once started, there was no giving up but also no need to.  Simple instructions lead the user through each stage so they ended up with a fully functioning phone and the confidence to use it. Contrast this with technology that you get home, try to set up, get lost in the manual and therefore leave it sitting as a white elephant.  My multi-function printer springs to mind as an example.

Lessons for your business
A few blog posts ago I talked about "consumption design'; that part of the product experience that relates to how the product is consumed.  Vitamins have demonstrated that the product (the phone) doesn't necessarily need to be changed, but the context in which it is 'consumed' can be.  We often limit our thinking about packaging to its functional benefits ie keeping the product free of damage and/or sexy of the shelf, but we should be thinking about how packaging can be behaviourally improved to enhance consumption.  Here's to thinking out of the box!

For more on Vitamins, visit

PS Why not join the People Patterns mailing list?  Every month you'll receive a short wrap-up of behavioural tips for business. Click here for the 20 second sign-up.