Learning from a botched loyalty program request

I was at a well known tea retailer the other week, at the register ready to pay.  "Would you like to join our loyalty program?" asked the sales assistant.

Here's how it went down...

• Assistant: "Would you like to join you loyalty program?"
• Me: (exasperated sigh to infer my purse was already groaning under the weight of loyalty program cards). "What's involved?"
• Assistant: "You just need to provide some information."
• Me: "How much information?"
• Assistant: "All of it."
• Me: "What's all of it?"
• Assistant: "Name, address, phone, email..." (she went on but I'd closed off long ago)
• Me: "And what do I get?"
• Assistant: "10% off once you reach $500."
• Me: "No thanks"

Pretty simply this assistant and/or the store's policy had botched the opportunity to engage me in their program because effort exceeded reward. The effort/reward equation is one I've flagged before as a useful distillation of what you are requiring of your buyer compared with what they receive.

Both effort and reward should be assessed on financial, psychological and social terms as well as time and physical commitment.

In this scenario I was being asked to complete a seemingly endless registration form (time & cognitive effort) for a distant and insignificant payoff (10% after $500).  Note the significance on the payoff is scaled in terms of effort.  Had I been automatically granted 10% discount on the day for nothing more than an email I would have been rapt.

Here's how it could have gone down (because as my purse attests, I have been known to join such programs);

• Assistant: "Would you like to join you loyalty program?"
• Me: (exasperated sigh to infer my purse was already groaning under the weight of loyalty program cards). "What's involved?"
• Assistant: "I just register your name and email and as a thank you I can take 10% off today's purchases"
• Me: "OK sure. My email is..." (immediate benefit, negligible effort)

From there, the company could and should send me a welcome email from which point they can establish a relationship and ask me for more personal information.

It's easy to go wrong when seeking to engage your buyer, so remember to keep effort/reward in balance and you'll see your conversion improve.

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.

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Bayside Business Network seminar: 22 Minutes to a Better Business

Monday 8th Oct 2012 6pm -7.45pm

22 Minutes to a Better Business:

How Behavioural Economics can help you tackle everyday issues

Mystified by the behaviour of your customers? Suppliers? Staff?  Don't worry, there is a way to better understand human behaviour and most importantly, influence it to improve your business. Behavioural Economics explains why we behave the way we do, providing you with a guidebook on how to tackle everyday business issues. And the best bit is that it's fun!  You get to understand why you love 4c off a litre petrol dockets and why you haven't refinanced your mortgage.   In a 60 minute presentation packed with practical examples, join me to learn new ways of tackling common business issues such as: pricing and discounts product ranging getting your customers to act And just to trick you, the seminar is called "22 Minutes to a Better Business" because that's the name of my book of the same name; the seminar itself is 1 hour chock-a-block full of great ideas.   In the meantime, you can check out my blog on the business application of Behavioural Economics via www.peoplepatterns.com.au, where you'll also find my articles for Smatrcompany and MarketingMag. I guarantee you'll learn lots and enjoy this special seminar.  I look forward to seeing you.

Seminar Presenter	Bri Williams Buying Behaviour Specialist
Company	People Patterns Pty Ltd
Seminar Date	Monday, 8 October 2012
Time	6pm to 7.45pm
Where	Milanos Brighton Beach 4 The Esplanade, Brighton Beach
Cost	Only $35 for non-members  FREE to BBN members
Bookings Essential	Secure your seat now Visit: http://www.trybooking.com/BQPI  Or Email:   info@peoplepatterns.com.au Or Call Bri on 0408 392 173

How a Freemium site got me to upgrade

I've been in the market for webinar software and came across Anymeeting.com via a search engine.  A few elements of their business model appealed as examples of behavioural techniques in play.

Freemium model
Adopting an increasingly popular model for online providers, Anymeeting offers both free and premium options for its online meetings and seminars.  The catch with the free option is that you and your participants will see advertising.  Given I will be charging for my webinars and therefore don't want advertising interfering with the experience of participants I have decided to ditch the free service in favour of a subscription.  A couple of advantages of this tiered system; buyers get to trial the service before committing to payment (building confidence and familiarity) and Anymeeting diversify their revenue model by having paid subscribers and advertisers.

Free version with ads 

Upgrade path alleviates pain point

Outcome oriented CTA

We are used to seeing language like 'upgrade to experience benefits...' on sites, but what I liked about Anymeeting was how they expressed it in their call to action (CTA).  Rather than 'upgrade now' or 'subscribe', Anymeeting have gone with "Remove ads", a simple, outcome oriented CTA.  Aside from removing any doubt as to what would happen by clicking through, this CTA also tapped into the behavioural principle of loss aversion where we are more motivated to avoid pain (poor reaction by paying audience to seeing ads) than seek gain.

Helpfully, they also provided a comparison of what your users see in both free and paid versions of the site.

Ads vs None visual

Anchoring and influencing choice
Anymeeting do their best to upgrade buyers from the time they first visit.  Notice how the three program levels are displayed, with the Pro for Meetings package deliberately shaded green to stand out.  If they wanted to minimise free option sign-ups they could have taken things further by choosing a more muted CTA for this program (eg dark grey) to shift buyer attention to the paid alternatives.

Program comparison

You'll also note the use of price relativity between the Webinars program ($69.99) and the Meetings option ($17.99) which would encourage take up of the latter.





Payment terms 
The thing I didn't like?  The payment process for upgrading to a subscription defaulted to a monthly recurrent charge and was not sufficiently clear on how I could stop the payment.  Supporting the buyer at the point of payment with this type of information is important to overcome risk aversion. Sure some buyers (like me) will proceed, but dropouts become more likely and undermine the effort its taken to get them to the point of sale.  Providing money back guarantees is good, but letting the buyer know how they can escape is powerful too.

Lessons for your business
Lessons for your business?  Consider a Freemium model to get people started, rethink how your call to action can be expressed as an outcome, take the lead in how you structure the options you sell and finally, cover off last-minute payment nerves with guarantees and explanations.

(As with all my blogs I have written this piece based on my experience as a customer and have not been commissioned by Anymeeting.)
 
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.

Putting B__S__ into business: My new webinars

I'm pleased to announce my two new webinars on the use of B__S__ (Behavioural Science) in business.  Join me from from the comfort of your office whilst chewing on a sandwich to learn about what influences buyer behaviour.  I guarantee you will learn things you will use for the rest of your life.

Getting Your Buyers to Buy 

How Behavioural Science can get customers to take action

Thursday 11 October 12.30 - 1.30pm

Designed for small business owners and managers, you'll learn

• The three behavioural reasons people don't take action
• Common mistakes businesses are making
• Behavioural techniques to influence action
• How businesses are applying these techniques to gain advantage

Click for more detail

Take Marketing ROI to the Next Level

How Behavioural Science can improve marketing conversion

Friday 19 October 11.30 - 12.30pm

Designed for marketing managers, you'll learn

• What behavioural economics is 
• The four layers of buyer behaviour
• Common mistakes marketers are making
• Behavioural techniques to influence action
• How businesses are applying these techniques to gain advantage

Click for more detail

Recordings of both webinars are also available to purchase.

If you want to hear about my future seminars, webinars and other adventures, 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.

A beer lesson in "Consumption design" for behavioural influence

Some great examples have popped up recently of how the behaviour of buyers can be influenced by the physical experience that goes with consumption -  let's call it 'consumption design'. 

Too speedy on the beer-y? It might be the glass
Hey, there's an excuse for guzzling that beer...the glass is curved!  Researchers at the University of Bristol (and by the way, kudos for pitching that to the research board!) found that people tend to drink more quickly out of curved glasses because it is harder to gauge how much has been consumed.

No Big Gulp for the Big Apple 
In a controversial move, New York city's Board of Health has banned super-sized (16oz/470ml) soft-drink containers. Detractors see it as an encroaching on personal liberty (and stifling vendors) whereas advocates claim it will help fight obesity.  The behavioural science clearly demonstrates that when provided a larger serving, we consume more so the decision is grounded in fact; it's the matter of whether government should have the right to determine the size of the serve that remains contentious. 

Stop getting chip-faced
I've mentioned this one before, but ever found yourself chomping through more chips than you intended?  Researchers looking into self-control dyed chips red before inserting them at set intervals in the Pringles-like tubular packet.  Without impacting the taste of the chip they found that when people were cued by a visual 'stop' signal, they ate less.  Maybe we need every third Tim Tam to be red?

The lesson from these examples?  "Consumption design" is a reminder that every element of your product experience will impact consumption.  It takes things a bit further than product design and means that your role doesn't end at the production line - think about how and where your product will be experienced and design according to the behaviour you want to facilitate.  

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.

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Assimilate or disintegrate: How your buyers respond to new information

Last week the Federal Minister for Health Tanya Plibersek condemned Imperial Tobacco's move to introduce a form of stylised plain packaging ahead of the mandatory and uniform olive green, unbranded version.  It is no surprise that the tobacco companies are trying everything to secure their product in market, and so putting the ethics of tobacco products to one side, let's consider a key behavioural lesson from this industry as it reacts to change. 

Assimilate or disintegrate
When faced with new information, we seek to assimilate it with our existing view of the world, much like fitting a piece of a jigsaw puzzle.   We are motivated to maintain our internal narrative - how we explain the world to ourselves - and will actively seek to resolve what is known as cognitive dissonance; the unpleasant sense that something just doesn't fit right.  What do we do to alleviate this feeling? Distort, refute or ignore the new information.  Anyone who has been in a meeting when a stakeholder has flat out rejected new facts/research will know what dissonance looks like..it's officially known as "Information Avoidance".  In fact, just follow how the political parties respond to the release of studies to see reactions to dissonance writ large.

In adjusting its packaging ahead of the government changes, Imperial Tobacco were seeking to bridge the old and new worlds for its consumers with the hope of softening the reaction.  They were assimilating the changes - on their terms - so that their consumers would be less likely to reject the new information.

For your business, consider how any new information - new product or service, pricing, conditions -  will likely be received by your market.  How are you helping to bridge the gap between old and new so that the change will be assimilated rather than disintegrated?

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.

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.