Converting browsers to buyers: Lessons from a food charity

What's the cost of your favourite meal?  $10? $25? That is the question posed by WeFeedBack as part of a clever online App that turns charitable intention into donating behaviour and which serves as a great case study for businesses wanting to turn browsers into buyers.

Meet the WeFeedBack Calculator App 

The WeFeedBack App is part of the World Food Programme's global effort to encourage donations to feed hungry and malnourished children, but instead of simply asking you to donate an amount you pluck out of thin air, they take you through a simple but evocative calculation.  Note the cost of your favourite food (say $10 for a focaccia) x the number of serves (eg 3 a week) = $30. The calculator then tells you how many children could be fed by a donation of the same value (in this example, 100).  Suddenly a donation of $30 seems embarrassingly affordable, easing my focaccia addled-conscience by offering great value for my contribution.

So let's look at the behavioural principles at play here.

• Framing - the App is contextualising one number ($30) with another larger number (100), serving to diminish the scale of the donated amount. In other words, $30 seems trivial because my brain has processed a bigger number as part of the same process.  (You see this all the time in retail where the Recommended Retail Price is left on the tag during a sale to influence your sense that the mark-down offers great value)
• Loss aversion - the App minimises any sense of loss I feel at donating money by amplifying the value generated. $30 to feed 100 kids? No downside there.  Further, it gets around the sense of sacrifice I might feel otherwise if it was asking me to forgo my focaccia. Instead, it is asking me to match the value of my favourite food, not stop buying it.
• IKEA effect - just like we value the bookcase we assembled more than one in which we played no role, we are more likely to donate through this calculator App than one in which we had no involvement in 'building' the donated value. The App involves us on a very personal basis by asking for our favourite food, not just presenting a table of commonly consumed foods.  

Lessons for business

Just as the World Food Programme is working to convert intention (give to charity) to behaviour (actually donating), businesses endeavour to convert browsers to buyers.  So what would a business version of this App look like, using similar behavioural principles?

Imagine you are a gym and trying to sell annual memberships. What if you asked people to calculate;

• The number of visits to the doctor or other health professional they had last year (say 7) by the average value of these visits (say $65).  Suddenly the calculator tells them they have spent $455 on "sickness".  Contrast this with what they would be spending on "wellness" aka gym membership a week (say $500 membership is less than $10 a week). You have framed the $10 in the context of $455 and started to build a convincing case.

How about car insurance?

• What about asking them to calculate the time spent every day in their car (say 30 minute commute x twice a day x 5 days + 3 hours on weekends = 8 hours a week).  Wow.  You spend the equivalent of 1 full work day in your car - surely it's worth insuring a day of your life?  

You get the idea. Draw a personally relevant example (my favourite food, my doctor's visits, my time in the car) and extrapolate its value to contextualise what you are asking them to spend. Get them to engage in the (must be simple) calculation to heighten their sense of ownership in the process, and make magnify their benefits to close the deal. Happy conversion.

Headcount freeze: How behavioural economics can help

Inevitably at some stage or another you won't have, or cannot have the level of team resourcing you believe you need. You catch your team muttering about "being two heads down" and morale's on the slide.  As many Australian businesses inch towards the end of financial year, deferring recruitment of staff to maximise financial results, what lessons can we draw from Behavioural Economics to improve matters?

Behavioural Principles to Apply

Social contract - it can be tempting to ask staff to work above and beyond for the good of the team, applying social norms to a work relationship. But you can't have it both ways - if you expect staff to go above and beyond, they'll expect you to protect them. Any cuts will breach the social exchange and further impact morale.

Completion - we innately seek to complete tasks. If you have to stop projects, reallocate priorities make sure you give your staff the opportunity to close-out the activity. Get them to do a final status report even if the project is pulled mid-stream because scrapping the project in front of their eyes is deeply disheartening.

Framing - due to the strong sense of "loss" of staff, you will need to reframe the team. Shake off the absence of these resources by changing the physical surrounds so that the empty desks are not a reminder. And do more team driven activities to make the sum of parts a greater whole.

Case studies

Have you ever noticed when someone leaves, parts of the job they used to do just fall away? Even when two people are doing the same job they will focus on different aspects.

In a headcount freeze scenario, you want to have the non-essential elements of the jobs people get busy doing, fall away. That means bringing to a conclusion some 'pet' projects that people invariably develop.

Now, it's easier said than done to stop a staff member working on something they enjoy, particularly when it will generate benefits for the business. You'll need to be aware of the Ikea effect (discussed by Dan Ariely in both Predictably Irrational and Upside of Irrationality), where we overvalue something because of the effort we have contributed. It means that the project that your staff member has worked so hard on will come with significant emotional attachment.

Use your knowledge of completion (our drive to see things through) to have the staff member provide a final status report even if the job is midstream so at least in their eyes, their work has been acknowledged and concluded.

This post is an extract from "22 Minutes to a Better Business, How behavioural economics can help you tackle everyday business issues", by Bri Williams.

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