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.

What business are you in?

If I asked you what business you are in, what would you say?  Consulting, retail, manufacture, accounting, health...Well you're wrong, kind of. You see I think you are in the business of behavioural change because everyday you are influencing people to do something.  Buy, sell, read, write, talk, type, click, swipe, walk, run, turn up.  Each of us everyday has the task of influencing others to move from one state to another, and that's why behavioural economics is such an opportunity; it's a playbook on what you need to do.


Lessons from the fitness industry
Let's take some guidance then from one of the most challenging behavioural changes that we can make - getting ourselves or others into shape. The difficulty has always been sustaining the change once initial enthusiasm has worn off, and this is due to the potency of the outcome (looking better, feeling better) not being as forceful as the immediate attraction of other choices (lazing on the couch, staying in bed or eating the wrong foods).  After all, you can experience the benefits of the chocolate now, but the benefits of not eating the chocolate are distant and ambiguous. 


Given this challenge it is therefore no surprise that a range of websites and Apps have been developed to help people sustain the behavioural change of a healthier lifestyle.

GymPact App

One that garnered a lot of attention last year was GymPact because it charges you if you don't follow through on your commitment.  The concept is that our desire to avoid a penalty will be enough to push us towards fronting up at the gym when we would otherwise have been able to talk ourselves out of it. The App is clever because it creates activities in the short term to keep us on track as we inch toward to longer term benefit.

Another site that works for any type of personal commitment is StickK. Here you are required to make public your commitment contract and even put money on the line that goes to a recipient of your choice if you fail.  

A more recent example is SlimKicker.  I first heard about the concept last year when it's creator got in touch to discuss how behavioural economics could be incorporated to help keep people motivated and accountable.  


According to SlimKicker developer Christine Chu, the site is designed to maintain motivation and emotional engagement by rewarding and reinforcing progress.

"I think the main problem with being healthy is motivation. It's an abstract, overwhelming goal. I think the best way to counter this is to turn it into winnable games and small victories.

 So... my app makes living healthy, and fitness into a RPG game, where users earn points, and "level up' as they accomplish their health goals.

Everytime they add something healthy like veggies to their diet, they earn points. Everytime they complete a workout, they earn points. As they achieve more and more, they'll level up and unlock badges, and discounts/coupons to  rewards like spas, health foods, etc."

A few of the clever elements of SlimKicker include;

• Levels - people move through different fitness levels, collecting points and rewards along the way which breaks the task of 'getting fit' down to goals that are attainable. (Overcoming behavioural short-term bias.)
• Progress -  Throughout each level the user can see how far they have come and have to go. (Using behavioural principle of completion to secure continuation once started.)
• Inspiration feed - a sense of community has been created through users sharing how they are feeling about their successes and slip ups. (Uses social norming to influence behaviour.)

By far my favourite part of SlimKicker is the Challenges section. You can sign up to participate in challenge (for instance, no snacks after dinner) and be rewarded with points upon completion.  What's great about this is that you can see at a glance "who's in" and how many others are giving the challenge a go.

SlimKicker's Challenge

There are some areas of SlimKicker that can be further improved, for instance showing how many points are needed to complete a level, clearly stating that the website is free to join and explaining
how the site is financially supported but I think they are doing a great job of tackling behavioural change.

Applications for your business
Getting people to exercise and eat healthier is really no different to the challenge of getting people to buy something today when the benefit is not immediate.  Examples include building a house, securing investors for your proposal, ordering something online where you have to await delivery, signing up for a course, contracting a consultant and paying insurance. You need to overcome the pain of now whilst keeping your customer's 'eye on the prize'.

• Make the benefit vivid:  Draw it, mock it up, make a model...do something that ensures the customer can see what they are working towards.
• Use milestones: stage the process so that your customer feels like things are progressing.  Think of it like FedEx parcel tracking where your customer can see how far the parcel has travelled and how far it has to go.
• Keep the connection: communicate with your customer throughout the process so they feel comfortable that things are progressing.  I ordered a new iPhone cover through a Kickstarter project in December last year for expected delivery in January. Today I received project update number 18 advising me where they were up to in production, so whilst it's a long time to wait, I have been taken on their journey throughout thanks to their frequent and transparent communications.

It's easy to think we are  simply in whatever business we spruik on our business card or website, but always remember we are behavioural change experts and it is up to us to support our customers going from one state to another.  What better guide than Behavioural Economics?


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.

PPS A short presentation I have put together on why every business should know about behavioural economics is available on this website and has been viewed over 1,200 times since being posted.

"From-To" image from http://www.rachel-levy.com/wp-includes/wp-content/uploads/From_To.jpg

The Top 10 Slap Down: Why you need Behavioural Economics

Strap yourself in for my top ten reasons why you need to know about Behavioural Economics.  More slap down than count down, prepare to be insulted!

You need Behavioural Economics because...

1. You're arrogant
You think other people succeed because of the situation but you succeed because you're ace.  But when things go wrong, it's the situation for you but a deep personal flaw in others.  After all, you never cut people off in traffic, but get cut off all the time.   (a.k.a. Actor Observer bias)

2. You're lazy
When you don't know what to do, you do nothing.  Inertia is your friend and default is your home. The easiest position is to stay with what you know. That's why you haven't changed banks...car insurance...partners yet.  (a.k.a Status Quo)

3. You take short cuts
Who can be bothered with all that thinking? Do what you've done before or just make some assumptions.  If you remember seeing that brand advertised, then it must be reputable.  If one product is more expensive than another, it must be better.  You'll order wine from the middle of the price range because you don't want to look stingy.  (a.k.a. Heuristics or Rules of Thumb)


4. You delude yourself
You love your thinking so much that whenever you look for evidence to support your point of view you can find it easily. (a.k.a Confirmation bias)

But when someone else puts forward an idea, it always seems to have more down sides. (a.k.a. Not Invented Here Bias).

5. You're a sheep
When you don't know what to do you follow what other people are doing.  Ever lined up in a queue without knowing what it was for?  Gone to a restaurant because it always seemed busy? Bought ill-fitting fashion?  An SUV?  (a.k.a Herding)

6. You're scared
Losing is scarier than winning. Bird in the hand and all that.  Safer to do nothing (as per point 2) or demand over the top guarantees before you'll make a move.  Stayed in a job too long?  Held on to an investment even though it was tanking?  Gone to a petrol station out of your way because you want to  save $2 with your shopper docket? (a.k.a. Loss aversion)

7. You're superficial
You operate most of the time at a superficial, top of mind level.  Listing 3-5 reasons you like or dislike something is easy because but beyond that gets tricky. It causes you a bit of mental anguish because you start to second guess your 'gut' feeling.  (a.k.a. Availability bias)

And you want rewards NOW!  Just like Veronica Salt in Willy Wonka (I want it now Daddy!) you hate to wait because you are not very good at imagining what the future will be.  (a.k.a. Short term bias)

8. You're not in control of your own mind
You set the alarm and then hit snooze. You intend to go to the gym but stay glued to the couch watching the Big Bang Theory.  You know superannuation is important but somehow can't find 10 minutes to read the brochure.  You are constantly fighting with yourself as your mind processes intent and actual behaviour.  This inner turmoil exhausts you so you revert to short-cuts (see point 3) and status quo (see point 2). (a.k.a. System 1 and System 2 thinking)

9. You fall for obvious tricks
You buy the yogurt that is 97% fat free instead of the yogurt that has 3% fat.  You pay for broadband plans with data quantities you will never reach.  You buy the shirt because it is marked down to half price.  You know you know that you are being tricked by the way something is communicated, but you can't help falling for it.  (a.k.a. Framing)

So that is you.  But don't worry, it's you and me and everyone else because we are beautifully complex, emotional and cognitive beings and being irrational is what we do.  The important lesson for anyone in business is that you need strategies and systems geared around this irrationality so you can best meet the needs of your market.  It's pretty clear that many businesses have not yet come to terms with the opportunity Behavioural Economics presents, so it's your chance to shake off your status quo bias, squash your fear of losing and instead grab on to a field that can deliver significant competitive advantage.

Oh. I almost forgot.


10. You need completion
You see a gap and you need to fill it.  A list of 10 with only 9 items becomes annoyingly distressing.  Failing to finish means you miss out on the entirety of the experience, so you go through with it even if there is no point.  (a.k.a. Completion)

Happy irrationality.

PS If you like my blog, I'd love you to consider supporting my fundraising trek of the Larapinta trail. Every bit helps so to find out more, visithttps://www.gofundraise.com.au/page/BriforICV Thank you!

Getting your bills paid: The persuasive power of a smiley face

Bills. We all get them and all businesses send them so let's look at what you can do to encourage on-time payment using the lessons of Behavioural Economics.  After all, I'm sure you've got better things to do than chase late paying customers?

1. Use social norming to persuade 
In the US a utility provider trialled a number of different strategies on utility bills to encourage a reduction in energy consumption.  First they included a comparison of your usage to that of your neighbourhood. People who had above-average consumption felt shamed enough to reign in their consumption - good news!  But those who had had below average consumption suddenly realised they could relax a bit, which saw their energy consumption rise toward the average.  Bad news.

What was happening here?  People are powerfully persuaded by what others are doing, both right and wrong.  Whilst this trial was effective in curbing the energy-hog behaviours, it didn't work with the lighter-users.

So the utility provider went back to the drawing board. Realising the influential power of what other's are doing, they tried another tactic. To the usage comparisons they added one small feature on the bills of the below-average energy users: a smiley face.  Those who were using less energy than their neighbours were now being acknowledged for their positive efforts, and through this, persuaded to continue.  Don't under-estimate the power of :)

When it comes to on-time bill payment, you can use the same logic.  Imagine a bar graph in the corner of your bill which compared average days to finalise the account along the lines of the following;

For notorious late payer XYZ Co this could help influence their behaviour towards the average.

On the other hand, so that early payer ABC Co doesn't get sloppy, you would include a reinforcing smiley face on their account.

2. Use on-time payment discount rather than late payment penalty

The telecommunications provider I am with threatens a $15 penalty for late payment.  My utilities provider on the other hand, offers me a 5% discount for paying on time.  Which do you think is more positively regarded by me as a customer?  The on-time discount offer is a much more constructive method of persuading people to pay their bills by the due date, and this is thanks to the impact of loss aversion.  In this case, it is painful to forgo the discount offered so I make sure I pay on-time. If I don't, I am to blame. In the late-fee example, I still may pay on time but that is because I hate the policy.  If I get charged the fee, the company is to blame.

Make your bills work harder so you don't have to

Chasing over due bills is a time sucking, painful task for businesses.  Using your billing paperwork to influence the bill payer will hopefully alleviate some of your pain. Happy billing.

PS If you like my blog, I'd love you to consider supporting my fundraising trek of the Larapinta trail. Every bit helps so to find out more, visithttps://www.gofundraise.com.au/page/BriforICV Thank you!

Maximising sign-up pages with help from Behavioural Economics

Aviary.com sign-up page

Like any internet user, you’ve probably encountered dozens of sign-up or user registration pages during your online travels, asking you to provide contact and other information in exchange for access to a website’s content or functionality. And because sign-ups are so common, you may have become blind to the elements of what makes a good vs bad process when you come to create one for your business. Well, I think it’s time to look at optimising your website’s sign-up and we will do that using tips from Behavioural Economics.

Conflicting objectives

As a business, you want to know as much as possible about your website users and regard the sign-up process as your best opportunity to gather intelligence. As a website user, you want a simple, fast, non-invasive sign-up process that gives you access to promised content or functionality. So therein lies the point of tension when designing a sign-up process; conflicting objectives.

Business objectives

Let’s start with why you as a business are creating a sign-up for your website.  Most typically it’s to introduce different service level (eg free vs paid access) or develop an ongoing relationship between you and the end-user (eg creating a subscriber or marketing list).  So your objectives and techniques when devising the sign-up would likely be;

• Data quality – ensure data entered by user is accurate through requirements such as retyping their email twice, sending a confirmation/activation email before finalising access, and using tools like Captcha that require human rather than system generated input
• Completeness and consistency – ensure the content you receive from all users is consistent and complete by making fields mandatory and using drop-down lists and/or rules (for instance auto generated postcode from suburb selected)
• Profiling – capture as much personal information as possible from each user to create a rich data list by asking multiple questions

User’s objectives

A website user has the objective of getting access to whatever’s been promised by the business as quickly and easily as possible.  A user is likely to want;

• Simplicity – an easy to understand process
• Efficiency – a sign-up that requires few steps and can happen all in one screen
• Privacy – to disclose as little as possible to the business and have an understanding about why the information they share is required and for what purpose it will be used

Finding the balance

It is your task to get the balance right between your business objectives and those of your users.  Too much your way and you’ll fail to get users to sign-up for your services. If you have a high abandonment rate on the sign-up page it is likely your design is flawed from the user’s perspective.

Too much the way of the user and you risk data quality issues (which may lead to a bad user experience if they don’t then get the service they thought they signed-up for) and short-changing the benefits you should generate from this activity (for instance, not being able to promote yourself to these ‘warm’ leads).   If you have good rates of sign-up but lots of email bounce backs for instance, you may need to strengthen your user input quality checks.

Tips for structuring your sign-ups

In your endeavour to find the balance, take comfort in knowing that when a user is signing-up with you it means they want something you are offering, so you have already started to form a relationship with them.  Whilst you should of course work with your legal team on ensuring you meet all legal and regulatory requirements, here are tips for securing that goodwill through your sign-up process.

1. Other people trust us

We humans tend to follow what others are doing.  In behavioural terms, we herd which means we take great comfort in being part of a crowd. That’s why a restaurant with a queue out the door will continue to attract diners whilst the empty restaurant across the road watches on.  For your sign-up process, consider promoting how many people have signed-up with you already because this will provide comfort to the user that you have been trusted by others to manage their information.  For example, “join over 3,000 subscribers to our newsletter…:.

If you are just starting out and you don’t feel the number is compelling, or if it is commercially sensitive, consider including a couple of testimonials from people who have done business with you in order to provide assurance.

2. Capitalise on our laziness

It’s true, we are inherently lazy. Sure, we might go to the gym and frolic at the beach but un-checking a box in a sign-up?  No way.  We are prone to status-quo bias which means we typically leave things on their default settings.  If your sign-up defaults to a box that is ticked, it is more likely to stay ticked than not. Likewise, an un-ticked box is more likely to stay that way; a suggested amount to donate is more likely to be donated that any other amount, and so on.  Consider what you really want the user to do and make it easy for them to agree to that.   A pre-ticked statement that “I would like to receive relevant offers…” will get a higher conversion that if you require the user to tick the box themselves.

3. Don’t be greedy

We hate to feel that we are losing more than we are gaining, and in fact are more likely to act to avoid loss than seek out gain.  Think about this in terms of the job market – we stay in jobs we may have outgrown because we are more frightened of losing income, benefits and security than finding our dream job.  This is called loss aversion and is important when designing sign-ups because your user will be mentally tabulating what information they are giving up for the service they will gain.  If they strike a question they feel is too invasive, they are likely to abandon the process. 

How can you manage this?  Don’t ask for too much.  What’s too much?  You need to think about what data you actually need to provision your service and what your user will deem reasonable.  One of the biggest blunders is to ask for a date of birth from your user when that has nothing to do with your service. Sure, it helps you know the age profile of your user base, but you are significantly limiting the likelihood of people signing up with you by posing one of the most personal of questions.  If age profiling is important to you, having optional age bracket questions (eg are you 25-34, 35-44 etc) is a less invasive way to go.

  

4. Keep it simple and get it done

You may have heard that Amazon has successfully patented its One-Click online ordering process, where users can place an order with a single click.  Why has this been such an important innovation? Ultimate simplicity for the end-user who wants to get things done quickly and easily.  In behavioural terms, this taps into our impulsivity by removing any procedural barriers.

For Amazon, One-Click removes the risk of the customer re-thinking their purchase or getting distracted, or a step of the online ordering process falling over.  For your sign-up, the fewer steps the better if you want to capture the user’s impulse to do business with you. Unless vital to your data quality, limit the need for confirmation activation emails that interrupt the user as they sign-up and can leave them open to distraction.  Tell the user how few steps they will go through and how far through they are to keep momentum (for example “three simple steps…” ,“you’re almost there”, and “all done!” are ways to encourage the user to finish the sign-up).

Examples of sign-ups for you to consider

Nearly every website you visit can become a lesson in what you should and should not do. Here are some to get you thinking:

www.amazon.com: One-click is a transactional rather than sign-up example, but worth noting its simplicity.

www.pininterest.com: Generating lots of buzz at the moment by using exclusivity and our need for acceptance to create desire to join. You request and invite and then have to wait a day or so to be accepted. This uses herding in an in-crowd/out-crowd way.

www.delicious.com: simple 3 content requirement – username, password and email; checks availability in real-time to remove duplicates; tells user what pressing a button will do; uses Captcha but keeps it simple; pre-ticks agreement to terms

www.yellowpagesoffers.com.au: nice and easy for the user but requires user to click on email confirmation to get started to ensure data quality.

www.groupon.com: Three step process where the first is to confirm your city.  The default city is St John’s which given status quo bias would result in a skew of registrations to this location.  The site cues the user as to how far through the process they are, and given the first step is so easy, this would encourage people to continue. Step 2 is an email address which is not validated, and whilst step 3 seems at first to be the deals page, they instead insert a cheeky popup as an extra profiling tool which asks you as “one last thing” to include your gender and postcode. It is at this point you are required to agree to terms of use.  This is a clever way of using our tendency to want to complete things once we’ve been engaged in them to finalise the process. In other words, you feel like you’re almost there, so you are happy to knock off the last couple of data questions.

www.gmail.com:  an example of sign-up skewed to the business rather than user needs. For instance, asking for date of birth without explaining why (I believe Google say it’s to ensure only people over a certain age can create an account, but they could instead ask the user whether they are over the age restriction.)  Also, presenting terms and conditions in a format that is highly legalistic and reduces user likelihood of bothering to read let alone understand them.

www.facebook.com: simple and easy to find sign-up which is no surprise given its their core business to grow users!  Facebook asks for your date of birth and explains why – they don’t do the same for gender when it could be argued that this is not relevant.  They verify email extensions before allowing registration, but when a registration fails, do not tell the user why.

www.mashable.com: at the extreme end of simplicity, just enter your email to subscribe.  However, there’s no safeguard against email address typos and no profiling captured by the business.  Whilst you are visiting, check-out a Mashable article that contains nine further examples of sign-up pages.

Sign-up pages serve a key customer relationship function in your business, so it’s important to get the balance right between your needs and those of your users. My final piece of advice is to think first and foremost as the end-user, pare back your requirements to maximise user take-up and at every stage assure them that what they are giving you will give them more in return. Happy signing-up.

This is a longer form version of an article written by Bri Williams that first appeared for www.Ideabank.com.

PS If you like my blog, I'd love you to consider supporting my fundraising trek of the Larapinta trail. Every bit helps so to find out more, visithttps://www.gofundraise.com.au/page/BriforICV Thank you!

Why more choice = less choosing

A cafe in Melbourne has been carving out niche in a very competitive market by offering the choice of only black, white or filter coffee. No cappuccino, latte or other variant, they have adopted the findings of behavioural studies where less has proven to be more when it comes to a consumer making a decision to purchase. From ordering a coffee to selecting a jar of jam or superannuation policy, customers are better at taking action when they have fewer choices.  So how do you as a business balance having a sufficient range of products to attract customers who haven't decided what they want with not overwhelming them with the choices you offer?  In other words, how do you give them freedom to choose without paralysing their choice?



The Jam study
Cited in nearly every book about choice and consumer decision making is a 2000 study by Iyengar and Lepper called "When Choice is Demotivating: Can One Desire Too Much of a Good Thing?" where they tested the purchase rates of a jam tasting booth. When 24 jams were offered, 6/10 people stopped to taste compared with only 4/10 when only 6 jams were available. However, where 30% of people who tasted from the six jams went on to purchase, only 3% of the tasters from the wider choice did so.  Why?  It became too hard to decide which jam to buy, so they didn't buy any! Behaviourally, the customers became concerned that a choice of one jam would cause them regret that they didn't choose another, and the vast number of options meant that their odds of "getting it right" (ie having a regret-free purchase) were extremely limited.

Your Customer's need state
Customers in 'tyre-kicking' mode, where they are seeking information but have not reached a decision are the ones who want maximum choice. They're in research-mode, so want to taste 24 jams.

Customers in ready-to-buy mode want to narrow their options and feel in control of their choice. They're in buy-mode and want to select from 6 jams.

So when someone walks into your store of visits your website, how do you know their need state and how many jams to present?


I think there are three areas to consider; reducing your range, asking your customer and chunking the choices down.


1. Reducing your range 
Like the Melbourne cafe, you can make a smaller range one of your business differentiators. In many ways, Apple has done this by keeping their range tight.  Of course the risk with a limited range is that your appeal may be niche rather than broad, but if you celebrate rather than apologise for this, it can certainly work.  A word of warming, look out for product-creep if this is your business model where the extensions to your range end up confusing the market about what you do. Starbucks in the US fell into this trap by stepping too far away from just making coffee.


2. Asking your customer if they are ready to buy or want to learn more
In a face-to-face situation, you can ask questions to understand which need state they are in.  You can then refine the 24 jams to 6 through your sales process.

Online, you can create pathways on your site to direct customers to what they need.  "Ready to buy" vs "Learn more" has been used on many sites to guide the customer to what they need.


3. Chunking the choices down
I think the most pragmatic option is chunking.  Chunking down choices by categorising your goods is the key to both generating the interest amongst your target market and converting to sales.  But every shop does this to a greater or lesser degree, right?  It's called visual merchandising.

Remember though, the primary aim of the chunking should be to eliminate any anticipated regret your customer may have in choosing one product over another, so grouping your goods so that undesirable options can be discarded from consideration very quickly.

In store chunking
For your customer, the benefit of in-store shopping is that they can see the scale and range by scanning the room.  The risk is that they become overwhelmed. In the jam example, all the jams were jammed in together (pun intended), with similar labels and packaging.  Yes, it meant customers could find where the jams were in the store, but once in front of the wall-of-jam, they couldn't eliminate the ones they didn't like.  I find the toothpaste aisle like this too.

In store, you are best to leave visual space between different groups within a category.

Fast food restaurants chunk a vast number of menu items into categories like combo meals, chicken, beef and so on by presenting them in sections on the menu board.

In the jam example, the tasting booth could have all 24 jams lined up but chunked into sub category (red, black, orange). These same categories could then have been represented in the aisle with each category of jam presented with strongly differentiated colour labels to make them easy to spot.

Online chunking 
In an online space, you have more options about how you chunk choices but beware, this can create an overwhelming choice of chunks! The most effective way of influencing the choice your customer will take is by cueing which option has been the most popular.  Why? Because when in doubt, people tend to follow what others have done (behaviourally known as herding).  Contrast these examples from Optus, which helpfully includes a "best seller" label and Telstra, which ineffectively chunks by technology type.

Optus mobile options

Telstra mobile options

Balancing freedom to choose with making a choice
Every business would love to only carry products that people buy (a.k.a. inventory nirvana).  Realistically, we have to make decisions about which products people are most likely to buy and to help them make the choice to do so.  The key message is that providing more choice is unlikely to generate more value for your business, and rather than spending time expanding options for your customers, you are better directing your energy towards helping them have a regret-free experience.  Happy choosing.

PS If you like my blog, I'd love you to consider supporting my fundraising trek of the Larapinta trail. Every bit helps so to find out more, visithttps://www.gofundraise.com.au/page/BriforICV Thank you!


Question mark image from http://www.123rf.com/photo_7219624_inspired-by-colour-blind-tests-the-question-mark-is-behind-green-dots-can-you-see-it.html

Learning from LinkedIn

LinkedIn serves as a great example of behavioural principles applied to drive success.  In case you are not one of the 150 million users worldwide (or 2 million in Australia), LinkedIn is a social networking site for professionals, and much of its success I believe is due to how it engages its users.

Here are a four of the Behavioural Principles at play.

1. Herding - going where others are

When first signing up with LinkedIn your decision is reinforced by reminding you that are joining 150 million professionals in the professional community.  However, whilst it's great to see the herding principle in place, I think this is quite a passive execution and in itself, does not compel people to join.

Once joined up and networked, LinkedIn support your sense of herd connectedness through statistics on how many people you can reach through the connections of your network. Large numbers (for instance my 263 connections extrapolate to over 2.7 million) create a sense of possibility.  LinkedIn also provide stats on how many new people have joined my network in the last couple of days, showcasing how vibrant, current and desirable LinkedIn is to the broader population.

2. Completion - we like to finish once we've made a start

Once you have a profile, LinkedIn consistently give you feedback on how your profile could be even better, for example by asking for a recommendation or adding speciality skills.  But that's not all. LinkedIn measure and illustrate your degree of completion as a percentage, and for many, we can't feel entirely satisfied until we've reached 100%.

Completion is also used to help people network.  LinkedIn helpfully provide a snapshot of "People You May Know" and make it very simple to scroll through and invite them to connect.

Completion is also used effectively within the discussion sections of LinkedIn.  With the objective of getting as many members as possible exchanging ideas, LinkedIn get you started by pre-populating the discussion with your photo next to the empty text box, giving you a sense that the only thing left to do is say what's on your mind.  Easy!

3. Uniqueness - we all like to feel special

Whilst herding is great for a sense of comfort, we all like to feel that we are unique.  You can see this principle being supported within the Groups function where like-minded people exchange content. Here the people that have been deemed 'most influential' for that week are listed and ranked, encouraging them and others to continue fuelling the content exchange, which in turn keeps LinkedIn a vibrant place to visit. 

4. Status Quo Bias - we're complacent

In order to maximise the volume of networking, LinkedIn need to overcome our usual state of inertia. To prevail over inherent laziness (or for some, a fear of rejection), LinkedIn make the process of inviting someone to connect very easy by pre-populating the invitation with text so that you don't even need to think of what to write.  

Spot the behaviour

I've only touched on four of the behavioural principles demonstrated by LinkedIn so next time you use the site, look at it from a behavioural perspective.  Once your eyes are opened to what LinkedIn are doing, you will see many more tricks that you can apply to your own website. I'd love to hear about what you find, so happy linking.

PS If you like my blog, I'd love you to consider supporting my fundraising trek of the Larapinta trail. Every bit helps so to find out more, visit https://www.gofundraise.com.au/page/BriforICV Thank you!

The sweaty business of behavioural change

Imagine you are watching a focus group.  The topic is hygiene and in particular, how your gym can get people to wipe their sweat off the equipment. Low adherence to the policy has been causing complaints and some health issues around the club.  The discussion goes as expected with everyone agreeing they would feel revolted if they unknowingly use a machine that has not been wiped down, and all agreeing that they, of course, always wipe theirs off as long as it was easy to do so.  You watch as the group brainstorms some signs that can be placed to remind people of the policy and also where and how many hygiene-spray stations should be positioned in the gym. A few months after you've implemented the findings of the focus group and behaviour hasn't changed. Why?  

Awareness is not enough

This is the scenario my local gym is facing. Despite signs on every piece of gym equipment reminding clients to "Take your sweat home", "You have a towel - use it", and "Please wipe your sweat off",  and despite multiple convenient hygiene stations I reckon about one in seven people actually takes heed (and that one is, of course, virtuous me for a reason I'll come to).

So what's happening here?  Sure we all get grossed out by a stranger's sweaty trail, but when it comes to our own behaviour, could it be we don't think our sweat is offensive enough to mop up?

Give those doctors a hand

In a case well documented by Stephen Dubner and Steven Levitt of Freakonomics fame, Cedars-Sinai Medical Centre in the US decided to tackle a slightly more important issue of hygiene; hand-washing by doctors.  Did the medical staff know the importance of washing their hands? Of course.  But almost 4/10 failed to.   And this was contributing to bacterial infections sometimes leading to patient death.  So why were the doctors not washing their hands?  Ego was thought to play a big role.  The sense that "it's not my germs that harm people - it's those of my colleagues".  And before we shrug ego off as symptom of the profession, I think that's the same factor at play in the gym. 

Cedars-Sinai's aim was to get compliance up from 65% to 90% to meet required standards. They made some progress by running an awareness campaign by email and posters, providing bottles of disinfectant, and awarding spot coffee vouchers to those who washed their hands and this got them to 8/10.  For my gym, having staff parade the equipment and reward compliant clients might help, but seems like a lot of effort!

Why Cedars-Sinai Medical Centre has become a favourite case study is what they did next which saw compliance rocket to almost 100%.  One day after a typical lunch, a number of doctors were asked to take a culture of their palm, pressing it into a petri dish.  The results were striking, with the hidden to the eye bacteria seen vividly crawling around the flesh. Revolting. In a moment of brilliance the hospital then used one of these provocative petri images as a screen saver and watched as compliance rates soared.  Suddenly there was indisputable proof that it is you, me and everyone that carries germs, and simple actions can rid our hands of their bacterial dangers.  (And yes, this is why I am so vigilant when it comes to wiping off sweat.)

What it took for behavioural change

In the case of Cedars-Sinai Medical Centre, developing an awareness campaign was not enough.  And for my gym, whilst it is great to promote the expectation of hygiene on posters, it is not enough in itself to change people who intend-but-don't to intend-and-do.  As Dan and Chip Health cover in their book "Switch: How to Change When Change is Hard", use of negative emotion (like disgust) is great when people know intellectually they need to change. 

Cedars-Sinai made the issue personally confronting, overcoming the tendency we have through what is known as the Fundamental Attribution Error to rationalise our own behaviour due to the situation (I don't have time to wash my hands, I need to get on the bike before someone takes it) but judge the behaviour of others on the basis of character (I can't believe they are so irresponsible, how can they be so lazy?).   Cedars-Sinai levelled the playing field by demonstrating that all are equally impacted by germs. 

The lessons from Behavioural Economics

Let's look back to our focus group.  After the experience of the gym, we now know that there is a gap between what people say they'll do and what they actually will.  So what are some tips from Behavioural Economics that all businesses can use to help close this gap?

Vividness - a surprising and evocative image - like a hand in a petri dish - can shock us into new thinking.  Imagine if the gym had posters of bacteria on un-sanitised equipment?  Would it risk putting people off? Not if they are committed to exercise, and it would definitely get people to cleanse their machines before and after exercise.  

Herding - it is difficult to go against the herd because you risk being socially shunned. Even amongst a group of gym strangers, the more people you see wiping their machines, the more likely others are to.  Just like night clubs who pay cool people to show up, the gym could enrol and reward some clients for modelling correct behaviour.

Heuristics - we operate by rules of thumb, and are most likely to accept a new behaviour (wiping down) if it is connected to an existing one (exercising).  Imagine if the machine would not give you your work-out results unless you wipe it down first?  Or you needed to swipe a card to start the equipment, but the swipe card would only activate if it had been swiped first at a hygiene station?

Changing behaviour at the gym, at the hospital, in your line of work is tough, but it's also the reason why we are in business. After all, business is about moving people from an intended to actual purchase.  Here's the big tip; spend more time on what influences the actual behaviour and less on what people say they will do and you'll see your results flow. Happy changing.

PS If you like my blog, I'd love you to consider supporting my fundraising trek of the Larapinta trail. Every bit helps so to find out more, visit https://www.gofundraise.com.au/page/BriforICV  Thank you!

 Image from http://talktowarren.wordpress.com/tag/patient-safety/