Tuesday, January 24, 2012

Converting browsers to buyers: Lessons from a food charity

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

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

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

Imagine you are a gym and trying to sell annual memberships. What if you asked people to calculate;
  • The number of visits to the doctor or other health professional they had last year (say 7) by the average value of these visits (say $65).  Suddenly the calculator tells them they have spent $455 on "sickness".  Contrast this with what they would be spending on "wellness" aka gym membership a week (say $500 membership is less than $10 a week). You have framed the $10 in the context of $455 and started to build a convincing case.
How about car insurance?
  • What about asking them to calculate the time spent every day in their car (say 30 minute commute x twice a day x 5 days + 3 hours on weekends = 8 hours a week).  Wow.  You spend the equivalent of 1 full work day in your car - surely it's worth insuring a day of your life?  
You get the idea. Draw a personally relevant example (my favourite food, my doctor's visits, my time in the car) and extrapolate its value to contextualise what you are asking them to spend. Get them to engage in the (must be simple) calculation to heighten their sense of ownership in the process, and make magnify their benefits to close the deal. Happy conversion.











Friday, January 20, 2012

Behavioural Economics Twitter wrap-up (14-20 Jan 2012)


Behavioural and Behavioral Economics tweets 
Sat 14 Jan-Fri 20 Jan 2012
This post contains a summary of tweets noted in the past week that mentioned behavioural/behavioral economics. Where possible, re-tweets have been removed to condense the list.
The summary is posted weekly by People Patterns.

Tweets with Behavioural Economics mentioned


 BrainJuicer 
New post on behavioral economics up on Brain and the Juice:
 Pricing Prophets 
 I think contextual pricing is closer to behaviouraleconomics than it is to value-based pricing: think Richard...
 Victoria Gamble 
Video: 2011-12-09 Combining online and traditional qual to addressbehavioural economics (by... 
Behavioural Economics and CSR: 'Greening' the Consumer: by Matthew Guenther matthew.guenther@csr-asia.com In my ...
 nathan miller 
Great article on the hyper-reality of using satirical behaviouraleconomics in Facebook games. 
 Steve Kemish 
Forget Behavioural Economics, now it’s Ergopsychonomics (make things easier to use, more people will use them)
 BrandRepublic 
Forget Behavioural Economics, now it’s Ergopsychonomics. Chris Arnold explains. 
 thebearchitects 
 Behavioural economics in action: Websites pay users who meet new years resolutions  
 williamheath 
Alan Mitchell to debunk big data multi-channel social mediabehavioural targetting & economics  
 Liam Delaney 
Running session on behavioural economics (esp time discounting) Stirling April 20th. People in UK working on this let me know if interested
 Helmut Kazmaier 
Customer experience research & behavioural economics is no gamble, even in Vegas…  via 
 CustVox 
 research & behavioural economics is no gamble, even in Vegas…    
 Anton Rifco 
Center for behavioural economics @ NUS business school
»
 Hannah Ryder 
Now in a session on  & behavioural economics - we so need more  &  -like work applied 2 


Tweets with Behavioral Economics mentioned

 moneyscience 
RT   to the most downloaded articles on the Financial Crises, Behavioral Finance, Tra...
 WorthPoint 
Rinker on Collectibles: How Behavioral Economics Effect Our Purchases 
 Jane Man 
Now that  is famous for his blog post on Facebook's timeline and behavioral economics, he's never going to re-follow me.
 Routledge Economics 
 to the most downloaded articles on the Financial Crises, Behavioral Finance, Transport Economics & more!
 BrainJuicer 
New post on behavioral economics up on Brain and the Juice:
 INOMICS 
INOMICS announces a job opening: Post-doc position inBehavioral/Experimental Economics: ECARES, Universite Libr...
 SentientDecisionSci 
First Things First! Using a behavioral economics phenomenon to establish and maintain your brand's preference. 
 Dare Obasanjo 
Behavioral economics, brands and the Facebook timeline - 
 CAMS 
Behavioral Economics - B Venkatesh's column : Buying only what you can afford: 
 News4Retirement 
The World Congress 8th Annual Executive Forum on Rewarding Healthy Behaviors: The Behavioral Economics Forum 
 SLABBED 
Sop gets a cyber first: Behavioral finance/economics intersects with Slabbed. An Aaron Broussard/Trout Point Lodge U…
 Hede Luik 
Nudge blog · Where is behavioral economics headed in the world of marketing?  via 
 john kenny 
Thx for the shout out "Marketers and behavioral economics" RT: The Social Revolution | via Yahoo! 
 Jason Zweig 
gold mine of materials for deep learning about decision-making andbehavioral economics 
 asheshwor 
Joining the dots between economics, income, health and poverty ... |  
 Ben Burgers 
«The main reason behavioral science should be part of the policy debate is that it provides in some cases a... 
 Rick Barraza 
@ 
 behavioral economics is stronger than logic by default, unfortunately. But a lot of MSFT burnout post web 2.0, but 3.0 is starting
 Darren Choo 
We tend to study preferences rather than decision process. What heuristics is the shopper using? 
 MarketTools, Inc. 
How behavioral economics leads to better market research. 
 Ron Cornell 
HealthRally Launches - Get Paid For Getting In Shape. Behavioraleconomics, incentives & social networking 
 Kurt Cordesius 
Excellent post by Carol Cone - trends for 2012 (wellbeing,behavioral economics, collaboration, etc.)  via
 Jared Grusd 
@ 
 "jared, did u see new girl with dragon tato movie?" "No, spending my time reading books on behavioral economics and computer science"
 The Alliance 
Behavioral economics at open enrollment, encouraging smart plan choice |  
 kyanna 
talking behavioral economics at work. dang, i thought i took care of that requirement in college. this meeting better be extra credit.
 Kat Dornian 
Behavioral economics: Fascinating!
 Samuel Scott 
 Do We Really Need Behavioral Economics? YES INDEED ...  
 Matt Steichen 
Goldsmith Sibson behavioral economic health care