Who is using behavioural economics?

A question I am often asked is "who is using behavioural economics?".  The question is not surprising given we tend look to what others are doing to help decide what we should do, so rather than publish my client list I thought I'd provide a brief run down on some businesses who have been publicly acknowledged to have utilised strategies from the behavioural economics playbook.  




Lloyds and Barclays banks

With the guidance of Procter research, the bank call centers were behaviourally tweaked through scripting and call pathways. Result?  Sales increase of 20%, satisfaction up 7%, conversion growth of almost 12% and staff confidence up nearly 18%. More on Procter's trial 

Westpac NZ

Used the behavioural insight that we spend on impulse to create a new App that allows impulsive saving.  Unfortunately the money still needs to be yours, but you can't have everything!  More on Westpac's App

IKEA
Always an adventure to shop in this monolithic retailer, the floor plan is crafted to disorient and stimulate purchase by weakening your sense of externally anchored prices.   More on Ikea


Hyundai
Overcoming our dislike of risk and ambiguity when buying a car extends to what the re-sale value is likely to be. Hyundai tell their customers so that their fear of the unknown is eliminated.  More on Hyundai 

Domino's Pizza

Is a 2-for-1 offer better at driving behaviour than a free bottle of soft drink?  Domino's in the UK have engaged their media agency to use behavioural economics in the planning process to optimise customer incentives. More on Domino's

Birmingham Airport

Turned an airport website from a cost centre to profit centre by simplifying the decision making process for customers. As a result, traffic and conversion for Parking, Travel and Newsletter sign ups were all impressively improved.  More on Birmingham Airport

Google

Celebrated for their use of behavioural economics to influence healthier eating by staff.  How? Healthier foods were easier to get to, smaller plates were provided and food choices were colour coded to indicate their nutritional credentials.  More on Google's cafeteria

US Cellular
Holes punched in the wall of an outlet by an angry customer triggered an overhaul of US Cellular's customer loyalty program using behavioural economics. More on US Cellular via Tibco (video)

Amp Financial Advisors

Teamed with the great Dan Ariely of Duke University (and author of the best selling "Predictably Irrational"), Amp's App for financial advisors used behavioural economics in its design to gain an average 76% conversion. More on Amp

But that's not all.  Given marketing is really about behavioural change, behavioural economics is also being utilised extensively by advertising agencies. Some of the leading agencies include Ogilvy UK, M&C Saatchi, BBDO, Draft FCB and Naked Communications.

From this quick run down you can see that behavioural economics has been applied across various industries and for a range of purposes; interface design, customer service, sales conversion and customer engagement, so the field offers great flexibility and delivers great results.  Sounds like a great opportunity for your business!

Find out more by emailing bri@peoplepatterns.com.au.

22 Minutes now available as an e-book

I'm rapt that my book "22 Minutes to a Better Business; How Behavioural Economics can help you tackle everyday business issues" is now available as an e-book. Great for those who want immediate access and to avoid shipping! Check it out...

http://www.blurb.com/bookstore/detail/2227484

22 Minutes to a Better Business, my new book

I have been following what I can of the 'normalisation' Behavioural Economics. By that I mean, how businesses are applying the lessons learnt in the lab about our propensity as consumers to not always act rationally.  To my surprise, I have discovered that there seems to be a gap between the theory, or more precisely, the findings, and instruction on how they may be applied to common business issues.

Headcount pressures, budgets cuts, whether to increase prices/change your service mix/introduce a new fee, closing the sale, losing market share, staff productivity...these are the key issues with which every business grapples.  So where's the guidebook?

Welcome to "22 Minutes to a Better Business: How Behavioural Economics can help you tackle everyday business issues".  I wrote this short book because I believe that Behavioural Economics can deliver better business outcomes for no additional outlay - it's about what we do today, just better.  In the book I cover 18 common business issues, outline the behavioural principles at play, and provide a short case study to illustrate the point. 

And why have I called the book 22 Minutes to a Better Business?  Well, I figure if a show like Two and a Half Men can hold the attention of so many for a run-time of 22 minutes, then that should be my objective too.  I'm asking for you to skip one episode of a sitcom re-run and read this quick dip into Behavioural Economics applied to common business issues...surely you have nothing to lose?

Here's an example of issue number 14; A business that is trapped in an incremental change cycle when it needs to do more.
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Issue #14 Deck chairs: Incremental change when more is needed

It's the talk in the corridors. Why aren't we doing more?!  What can you do to get your business leaping rather than tip-toeing forward? As the saying goes, are you moving deck chairs around on the Titanic?

Behavioural Principles to Apply

Not Invented Here Bias - it is our nature to shun ideas from others because we may not understand them.

Commitment - it's difficult to let go even when things aren't working due to our aversion to loss. You need to cast an eye to where the current course is taking you. Restating your desired future will help you reset your short-term plans.

Group think - odd man out. If theirs is a dissenting view, people will tend to doubt themselves, relent and  go with the pack. Galvanize your allies and raise your voice if you want change.

Short term and status quo bias - making short-term targets through cost cutting or expedient deals can be attractive. If your business doesn't reward longer-term projects then you will need to appeal to non financial reasons like legacy and ego to  secure support.

Case studies

Unfortunately, most businesses tip toe.  Sony fell into this category when they failed to see the rise of MP3 technology.  Yellow Pages have likewise taken too long to move to digital from print.  But it is too easy to judge these businesses in retrospect - at the time the people involved are swayed by the status quo.  It is hard to shape the future, particularly when you are the incumbent.

Pilots are trained to challenge if they see their co-pilot going off course. But in business, fear of "career limiting moves" can stymie dissention.  Train to challenge the status-quo; make it an expectation.

The crew at Intel tackled there need for change by asking "If we got kicked out and a new CEO came on board, what would they do?". When in doubt, think like an outsider and give yourself the same latitude.  Throw off your aversion to loss, your status quo bias, and think like Richard ("I love tackling lazy industries") Branson. 
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How can you get a copy of 22 Minutes? The book is available to purchase on Blurb.com, and is priced at cost until midnight 30 June 2011, after which I will be introducing retail pricing. A preview is available below.  I am also providing a softcopy to the first 50 people who mention 22 Minutes when they connect with me through LinkedIn, so jump to it! 

Most importantly, please spread the word because 22 Minutes to a Better Business is there to be shared.  I hope you enjoy.

Book preview

22 minutes to a better business by Bri Williams | Make Your Own Book