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 bri@peoplepatterns.com.au 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.


Image credit: http://www.rgbstock.com/photo/mfeb7f2/Doors+4

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.


Image credit: http://www.rgbstock.com/photo/meZ98Fc/Broken+Chain

Money jars of the mind

Does the money you put aside for bills have the same value as money you spend on fun and entertainment?  Behavioural Economics would say no because we tend to think differently about money depending on its context.  It's called "mental accounting", and whilst it has nothing to do with the mental health of your CPA it is very important to know about if you are running a business.


How ING Direct are using mental accounting
ING Direct in the US have cleverly designed savings accounts that can be split out into mental bank accounts.  ING customers can create as many sub-account buckets as they want and call them by a nickname (for example 'Trip to Australia', 'New car', 'Rainy Day' and so on).  According to the article in The New York Times, ING have introduced the tool to help people reach their savings goals but this is really about good business because in order to acquire funds through personal savings accounts ING (and all banks) have to overcome some behavioural blockers.

ING Direct My Savings Goal

Behavioural blockers
To get us to save more, banks have to overcome our

1. tendency to think short-term (ie I'll buy smaller items now rather than save towards a bigger goal) 
2. laziness (ie it's too hard to save so I won't bother) and
3. 'bunny in the headlights' inertia when overwhelmed by choice (ie I get confused by which bank and which accounts I should have so I'll just stick to what I have)

Behavioural enablers

ING's new savings site overcomes the behavioural blockers by using the following techniques;

• Vividness - we are more likely to act if we can readily comprehend the outcome.  By graphically representing the savings goal and allowing the customer to use personal and meaningful descriptors for the sub-accounts, ING are helping make the savings goals come alive.  Just think how much more likely you are to save towards "ski trip $2000", "emergency fund $500" and "new car $25,000" than leaving it all lumped into a generic account.
• Hedonic framing - we get a bigger buzz out of separate gains than a single one of equal value.  By splitting the accounts into specific goals, ING is improving the customer's willingness to save because there is simply more opportunity to attain success.
• Hyperbolic discounting - our impatience means we tend to like gains that we get now more than waiting for larger gains later.  This means we risk whittling away at smaller balances rather than building towards the larger target that might feel too far away. By breaking the goals into specific accounts, we can concentrate on a mix of shorter and longer term objectives and control our impatience without jeopardising the collective savings target. 

Business applications of mental accounting

There is an opportunity for every business to map out the 'mental accounting' that applies to their industry in order to look for behavioural blockers and enablers.  In short, it's about making the purchase decision easy for your customer.  Your customer will more readily spend money with you if they feel comfortable about justifying it to the bank manager in their head, so using the same principles that ING are using to motivate spending rather than saving, consider making the benefits of purchase to the customer vivid, encourage payment by credit rather than cash because it separates the pain of cost from the joy of purchase and if your product or service delivers a longer term payoff, bring some of the benefits forward to ensure the customer gets gains in the shorter term.

Images
ING from http://www.mybanktracker.com/bank-news/2012/05/17/ing-direct-tool-helps-set-savings-goals/
Money jar from http://totalwealthcoaching.com/wp/wp-content/uploads/2009/03/moneyjars1.jpg

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!

Time we reimagined time?

We have cars to expedite travel, microwaves to speed food preparation, computers to process information, the Internet to provide immediate answers, and smartphones to make answers portable and immediate. So where's the abundant leisure time promised by technology? 

Time and all that it represents is on my mind because last week I watched a "busy families" focus group through the two way mirror.  Given the segment, it was no surprise that claims of being 'time poor' came up as the short-hand label for the state in which they found themselves, so this got me thinking about why we become victims to time. It is as if time is controlling us and we are left powerless to change. And as a marketer, this is why promises of 'time saving', 'convenience', 'simplicity' and 'freedom' are so often trotted out to our stressed and harassed audience.  Buy this and you will be able to live the life you want!

   

So time seems to be one of the most important concepts of the modern age, at least in developed nations, and yet we often do not reconsider what time means. Till now.  Enter two product concepts that caught my eye because both are reimaginings of the very representation of time - the clock.

Progress
The first is the Progress Clock by Brett M Westervelt that uses the behavioural principle of loss aversion as a call to action. As Brett explains,

"Many clocks are circular, conveying the sense that time starts over, or completely digital, giving the current time but not much more. Time is in fact fleeting, and once this day (hour, minute) is gone, it's gone. The Progress Clock is an attempt to help the user not so much focus on the exact time, but on how much time is left; with the hope of inspiring people to take advantage of any given moment."

Progress Clock by Brett Westervelt

The clock is effectively asking, are you making the most of each moment every day?  Unlike an hourglass where time is eroded as sand buckles to the relentlessness of gravity, this clock forces you to consider what you will do with the time you have left in this unique and precious day.  Confronting, isn't it?

The Present
The other is a clock called "The Present" that takes 12 months to complete its cycle. Designed by creative firm m ss ng p eces to keep people in the present by focussing on seasons rather than moments, Fast Company suggests that "...our obsession with small increments of time often keeps us from focusing on the bigger picture. The clock takes a year to complete a single cycle...Different colors represent changes in seasons--the winter solstice (top) is marked by pure white, pure green represents the shift into spring, pure yellow marks sun, and red marks the autumn equinox."  In a sense, The Present deliberately disorients our convention of measuring time in seconds, minutes and hours and as a result racing to complete tasks that are able to measured in such small units, to instead concentrate on creating experiences of real and substantial value.

The Present by m ss ng p eces

 So we have two different reimaginings of the measurement of time, both with the aim of helping us make more of now. The Progress Clock confronts us with how much time is left on the clock at this moment, and The Present focuses us on now in the context of the cycle of life.

Behavioural principles
Both clocks are being used to explore the behavioural principles of;

• loss aversion, where we spend time doing the dishes and managing the routine because we are fearful of the chaos that may ensue if we trade the known for the unknown
• status quo bias, where our current state is what we are used to and hard to break away from
• framing, where convention is that time is displayed a certain, in-exhaustive way that perhaps frames our tendency to be wasteful. 

Will owning either of these clocks help busy families to make more of the present moment?  Probably not because both require contemplation and ultimately, reconsideration of the decisions that are creating the situation of time pressure.  And who has time for that?  But as marketers, can we use what these clocks are attempting to do to move beyond the usual rhetoric of 'time saving'? I hope so because it is important to our market.  Let me know your thoughts.

Keeping abreast of customer lapse

A reminder to us all that a serious message can sometimes be best conveyed using humour; say hello to the "Your Man Reminder" app that has been released by Rethink Breast Cancer to encourage women to check their breasts regularly.

The genius is that the reminder is not a dull outlook alarm or exclamation on the calendar, it's your choice of "hot guy" that will talk you through the process.

According to Rethink Breast Cancer, "Your Man Reminder App includes the following fun features:

• Customize – Update the App to fit your personal liking, with features that let you chose your man, his pose and more.
• Hot Messages – You’ll love the attention your man gives to you, with messages like “Any guy would be lucky to have you” and “Give your breasts some TLC.” 
• Reminders - Tailor your calendar schedule with settings for weekly, monthly or surprise reminders directed by a sexy man of your choice.
• Education - The App includes a special “signs and symptoms” tab to hone in on the importance of early detection. 
• Get Checked – Use a variety of scheduling options such as doctors’ appointments and many more."

There are two key lessons from the Your Man Reminder app.  First, the app is an evocative example of how to overcome inertia by creating an entertaining, enjoyable experience.  And the same technique can be applied to any subject.  Car tyres, taxation, health checks, superannuation...the opportunity is to link typically dull but necessary tasks with something fun or unusual. 
Perhaps a slightly less fun example, but the "Change your clock, change your smoke alarm battery" campaign has proven to be an effectuive way in Australia of triggering a low awareness need (battery replacement) with an event (daylight savings) to overcome inertia. 

For your business, this can make a difference to your cash flow by minimising the risk of customer lapse. Imagine the positive impacts for a car mechanic who gets people to turn up for their annual service rather than procrastinating for 14-18 months (over three years that can mean securing one additional service)? Or a dentist that has clients returning every 6 months rather than every 3 years? 

The second lesson from Rethink Breast Cancer is in how they have structured their donation section to take advantage of our tendency to accept status quo.  Note how the donation is defaulted to monthly rather than once off which would improve their chances of that option being accepted.  They could have taken this a step further and defaulted the amount to $20 rather than $10 to encourage higher donations through our tendency to accept the default terms.  Further, they could have also applied the behavioural principle of herding to influence the amount donated. To take advantage of this they could have shown that the average donation was, for instance $25 (as long as it was truthful of course), and kept a running count of how many people made a donation.  Seeing how many others had donated and what they had spent would have been very persuasive.

So hopefully those clever Canadians at Rethink Breast Cancer have inspired you to use behavioural strategies to tackle business objectives. I am certainly looking forward to seeing more apps like the one they have created. 

For more information on the app (and the guys) check out the clip on YouTube www.youtube.com/watch?v=VsyE2rCW71o

The app is available http://itunes.apple.com/us/app/your-man-reminder/id467911146?mt=8

Why we hide behind big, boring reports

I recently read an interesting piece called "Tell Me Something I Don't Know-Why MR is Comprehensive, Accurate, and Often Boring‏" in which the author Yi Kang laments the dull and contrived nature of most market research.  

"Turns out that big, thick tomes of information do serve a purpose – making people feel good. In a recent survey, business executives were most confident in a decision being “well thought out” when the supporting research was “comprehensive” and “accurate."

But when asked if the supporting research made a difference in the business decision (not feeling good but having impact). A very different picture emerged. “Making a difference” requires market research to do at least one of two things: say something new or say something contrarian."

I think Yi is spot on for a couple of key behavioural reasons;


Status quo bias – comfort in sticking to what we know, and
Loss aversion – being more fearful of losing what we have than risking a gain


There’s a lot of comfort in a big, professional document because that implies safety, thoroughness and, frankly, that someone else has done the thinking so we don’t have to.  (It also helps to justify the expense on the research because quantity still trumps quality a lot of the time in perception management).


Of course it's not just market research that taps into our desire for credibility.  Just think about the business documents and spreadsheets we slave over that your boss may not even read. Executive summaries are there for a reason after all.


The other interesting thing we can draw from behavioural economics is the “not invented here” bias that we are subject to – in this case it explains why a lot of those research findings don’t go anywhere. To get traction, the stakeholders need to be part of the insights generation phase, otherwise the outputs are likely to be filed away in a drawer.


So what's the answer?  How about we take some chances and throw away the templated documents, the proforma Powerpoint presentations, the phone book sized research reports and instead throw some reflections up on a whiteboard to discuss, challenge, laugh about, but ultimately get stimulated enough to take action?  Getting your researchers to evoke insights rather than yawns? Sounds good to me.

Image from http://jameswoodward.files.wordpress.com/2008/08/piles_of_paper_small.jpg?w=200&h=239

McDonald's coffee guy; why complainers are hot

Bad coffee. For Melburnians, it is one of the sins along with disinterest in the weather and the absence of black clothing.  And so, McDonalds has launched its attempt to win custom back from people disgruntled by their burnt beans and insipid froth. Complaints, or more likely, declining sales have pushed McDonalds to admit it was dishing out bad product. 

Have you come across the TV ad?  It centers on a gentleman seen arguing with a bus driver. The scene is set that this fellow lives for complaining.  And yet, there he later sits enjoying a McDonalds brew without complaint.

What I find interesting about the ad is the portrayal of complainers.  This guy is a world weary, grey skinned, relatively unattractive man. Whilst McDonalds could have snaffled Hugh Jackman or a Cleo bachelor to play the role, that would have confused the message. McDonalds are inferring that complaints are an ugly behaviour, and that complainers are unattractive.

This is an interesting heuristic that is entrenched in most businesses.  The link between "complaints = problem = negative = cost = seek to eliminate" is extremely strong.  And this is where a fear of social media rears its head.  As long as you see complaints as a negative thing to be reduced, you are cutting yourself off from the best market feedback you can get.

 I know, I know.  You are going to say that customers are your priority, you take them seriously and you even monitor satisfaction.  But I would guess that the governing bias is still that when a complaint is received, it is seen as a problem for your business, not an opportunity.  Why?  Two principles from Behavioural Economics are at play.

Not Invented Here Bias - we have a tendency to shun the ideas of others. Working as a product manager, I certainly fall into the trap of thinking I know more than my customers...and I do, but about what the widget should do, not how that customer is experiencing it.  My subjective view must not blind me to the relatively objective view offered by the customer.

Status quo bias - it's more comfortable for us in the status quo.  A complaint might mean we have to step out of our rut and life might get more challenging. But here's the thing. Status quo is a misnomer in any market; you cannot stay stagnant because the world is not, and the complaints you receive are the market's way of telling you to get moving.

So here's my challenge to us all. When you next receive a complaint, I want you to imagine the person has the charm and looks of Hugh Jackman rather than the washed-out McDonalds man.  And I want you to take a deep breath, relax your shoulders, and absorb the gift of real-life market feedback.

PS as an aside, McDonalds is offering a free replacement coffee if you are dissatisfied with the brew.  A classic example of overcoming loss aversion by convincing customers they have nothing to lose (except of course their time).

Image from: http://static.rbi.com.au/Uploads/PressReleases/hosp/thumbnails/Images-20110602/Maccas2.jpg

End of the world as a S.M.A.R.T. goal?

In amongst Charlie Sheen's latest antics and the latest football scores, you may have noticed that the world was meant to (begin to) end yesterday, 21 May 2011.  That's why I held off posting till now.

The good news is that the 21 May was only judgement day...the end of the world is actually slated for 21 October 2011.  Five months to count down people.

The man behind this prediction is a preacher called Harold Camping who stated that on 21 May those worthy would be taken to Heaven by Jesus whilst the rest would be left to endure the end of the world over the next 5 months.  The prediction was based on some...interesting...mathematical gymnastics (see below for the calculation).

Now, rather than dwell of the religious aspects of this prediction, I thought I would instead dig into both the behavioural and goal setting aspects of this event.  What techniques did radio station owner Camping use to grow his subscriber base stimulate worship?

Behavioural principles
Loss aversion: We have an aversion to loss and will be motivated to take steps to avoid it.  In the drive for members, Harold Camping was putting the mother of all losses up for consideration - the loss of your life.

And to ensure he helped people over the line, Camping applied an old favourite marketing technique across a reputed 2000 billboards; "Judgment Day 21 May, 2011. The Bible Guarantee's it".

Anchoring: Camping used a specific date to fix people on his prediction.  The specificity of the date (and the 'complicated' calculation) gave it a marketing and media focus that it otherwise would not have gained.

Herding: Camping created two distinctive groups through this activity; the worthy and unworthy.  Appealing to the sense of pack behaviour, Camping was forcing us to decide between being a part of the Rapture or not (or indeed, between being part of his cult or not).

Status quo bias: Inertia is our default state. In order to tip people out of the status quo, Camping had to come up with something powerful and dramatic.  What better than the end of the world through earthquake and natural horror to convince us to pray?

Goal setting
The Camping prediction can also be used to illustrate one of the classic business tools - S.M.A.R.T. goals.  The theory is that you will maximise your chances of accomplishing your goal if it is specific, measurable, actionable, realistic and timebound. 

Specific: a date (21 May 2011), a name for the activity (Judgment Day), and details of what would happen to those who did not repent helped the prediction gain traction.

Measurable: Camping provided the calculation for the both Judgement Day and the End of the World.

Actionable: Having a deadline is great, but you need to know what you need to accomplish - in this case` it was to pray and listen to Camping.

Realistic: well, this can be debated. However, by quoting scripture, providing crazy date calculations and pointing to real-world events as evidence of the prediction's veracity, Camping convinced many of the realistic nature of his prediction.

Timebound: specifying the dates of judgment and end of the world certainly qualify as timebound.

The ethics of what Camping did aside, you would have to agree that if his goal was to grow his member base through stimulating consideration of his preachings, then it probably worked (albeit temporarily).  Camping's combination of behavioural principles and goal setting created world wide interest in his church and his radio stations.  And whilst this is certainly no lesson in establishing credibility or an ethical or sustainable business model, just imagine the possibilities for your business if one crazy pastor can generate behavioural change in so many. Suddenly that product launch doesn't seem so hard.



The Camping 'calculation'
From wikipedia: Camping taught that the world would end May 21, 2011^[17] using the following reasoning:

1. According to Camping, the number five equals "atonement", the number ten equals "completeness", and the number seventeen equals "heaven".
2. Christ is said to have hung on the cross on April 1, 33 AD. The time between April 1, 33 AD and April 1, 2011 is 1,978 years.
3. If 1,978 is multiplied by 365.2422 days (the number of days in a solar year, not to be confused with the lunar year), the result is 722,449. (This, however, is a rounded number; taken precisely, the figure is 722,449.0716)
4. The time between April 1 and May 21 is 51 days.
5. 51 added to 722,449 is 722,500.
6. (5 x 10 x 17)² or (atonement x completeness x heaven)² also equals 722,500.

http://www.ebiblefellowship.com/outreach/tracts/may21/

http://www.businessinsider.com/end-of-world-may-21-2011-4