Friday, January 4, 2013

Join me at my new website

Hi and thanks for visiting my blog site. After serving me well for a couple of years, this site has now been retired.

From January 2013 you can find me and my articles at a new website, will also take you there.

The new site provides more information about my services and how behavioural science can maximise the conversion of your activities.  As well as offering sign up to my free newsletter you will also find special offers and free resources. I look forward to you dropping by.

If you have any questions in the meantime please drop me a line at

Regards, Bri

Monday, December 10, 2012

Reducing no-shows: How to write effective appointment reminder messages

A service I really appreciate is when the business with whom I have an appointment sends me a text message to confirm.  For professional service businesses that charge by appointment like hairdressers, physiotherapists, dentists and beauticians, it makes great business sense to do this.  Not only do you reduce the risk of 'no shows', you demonstrate your commitment to providing customer service.

So how can you make sure that the message you send your customers is as effective as possible?

Let me illustrate with real examples from two of my service providers; my osteopath and my hairdresser.

On the left, the message from my osteopath is perfectly sensible. It explains the reason for the message, date and time.  No surprises here. And they helpfully provide a phone number if I need to change the appointment.

But now look to the right to see how my hairdresser showcases a behaviourally effective text message using three elements;
1. My name - Using names is a great way of personalising the message and the obligation that is contained within it.  It's the equivalent of eyeballing me to get me engaged and now my personal integrity is on the line if I don't turn up.
2. My action required - Asking me to reply 'yes' to the appointment forces me to take action, reinforcing the agreement to turn up at that time.  The osteopath's message on the other hand was passive; there is no confirmation that I have received the message let alone that I have recommitted to the appointment.
3. Fail safe contact - It seems like s small thing, but including the area code with the phone number means that if I am interstate and need to contact them the connection will work, removing a potential hurdle.  This week I received appointment reminders from a business intended for someone else. Whilst they provided a phone number, I had no idea which State they were from so I couldn't (be bothered to) let them know of their mistake.

Reminder messages are no doubt a great technique to use; short, sharp communications that keep both parties committed to the appointment.  As the examples showcase, in the space of only twenty words you can make decisions that will materially benefit the effectiveness of your message, your business and your customer, so get texting.

PS 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.

Monday, December 3, 2012

The bowls club got their signage right...

A sign I spotted on the weekend which is a great example of behaviourally effective language.

"Free coaching and equipment" immediately reduces potential anxiety amongst people who might be curious about lawn bowling but uncertain about how to get started.

Monday, November 26, 2012

What mangoes at the market teach us about buying behaviour

As an infrequent visitor to the fruit and veggie market I can find it quite overwhelming.  Stall after stall of similar stock, vendors shouting their deals and a strange mix of market aficionados weaving through crowds with their trolleys and bags, and novices, bumping into things as we try to ingest all the information and walk at the same time.  It reminds me of most online retailers - overwhelming those new to the website and designing for those who are already competent. So what can we learn from the behavioural techniques used by grocers to get people to buy?

1. Use a lead item that is desirable
Influencing buyers to select their stall over another is a major hurdle that grocers need to deal with. All stock looks the same, so price becomes a key criterion (sound familiar to online retailers?). Smart grocers therefore lure shoppers with a lead item, promoting a desirable product at a price that is easy for the buyer to understand. At the moment, mangoes seem to be the carrot (so to speak).

Grocer A: 3 mangoes for $5
Grocer B: 2 mangoes for $5 

No question that Grocer A is likely to generate more business because the relative value is easy to understand and whilst s/he may take a hit on profits from mangoes, this grocer has won the chance to sell more items to the buyer.  In colloquial terms, losing the battle to win the war.

What if you are Grocer B?  Should you change your offer?  What's interesting is that Grocer A's offer is powerful because it is contrasted with Grocer B; if that wasn't available it would be harder for the buyer to assess its merits.  Grocer B has a number of options;

  • Match the offer
  • Choose another lead item (eg nectarines)
  • Use a different pricing structure (eg promote $2.50 per mango or 'get two mangoes and a third one free' so that it is more difficult for buyers to do a direct comparison)
  • Bundle the offer (eg two mangoes and a punnet of strawberries for $5)

2. Simplify the value assessment
Note that both grocers have used a whole dollar amount ($5) rather than complex number (eg $4.99) in this case.  Why?  In an environment in which there are hundreds of prices displayed, and most per kilogram ($6.99/kg, $3.99, $4.99...) the whole number alleviates the buyer's burden of calculating value, effectively saying "you don't have to strain your brain, it's great value".  In behavioural terms, the whole number relaxes the buyer and increases confidence that they can successfully manage the transaction.  

I've also seen this technique used at Coles, where a discounted item is promoted using a whole rather than complex number. For example, yogurt that is normally $6.24 may be marked down to $4 rather than $3.99.  

3. Gain commitment
The mangoes not only attract the buyer but commit them to transacting with the vendor.  In other words, once the mangoes are in the basket, it becomes hard for the buyer to recant and take their business elsewhere. A couple of things are happening here.

  • They have sunk the cost of their time and effort in queuing up and going through the process of sale.  Having committed to doing this with one vendor, the desirability of doing it with another (particularly when the upside is difficult to discern) diminishes.
  • We like to think we are good at making good decisions. The buyer has given themselves a tick of approval for buying the mangoes, and therefore is likely to seek to build on that by continuing to shop in the same stall. 

New vs existing customers
As I mentioned, I am a relative newbie to the market and so my attention is soaked up just trying to navigate the environment. I look for simple price cues because my cognitive load is already high.

Experienced market goers on the other hand are familiar with the environment and so have greater capacity to discriminate between vendors, concentrating on micro rather than macro detail.  As such, these buyers are more likely move between stalls, visiting Grocer A for mangoes and Grocer B for potatoes for example.  

It's pretty clear then that each vendor needs to devise different strategies for new and existing buyers. Where lead items may attract new custom, factors like customer service, stock range and quality become central to retention. The same goes for all types of businesses; online and off.  

Lessons from the market
Next time you visit a market, think of it as an analogy for your business.  How are you enticing new buyers?  Are you making your offer easy to understand?  What's your competitive positioning?  How do you gain commitment on a small scale so that it turns into something bigger?  Take a moment to reflect on the behavioural state your buyer is in - are they new or existing? - and how you guide them through the experience of purchase.  Are they overwhelmed and looking at the macro level or familiar and more discriminating on micro detail?  Most of all, put yourself in the shoes of your buyer and from there you'll be able to shape an effective behavioural strategy.

PS 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.

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Monday, November 19, 2012

Excel in behaviour, not just numbers: Why Behavioural economics is important for finance professionals

I've been lucky enough to tour around the country with the CPA Congress in the past few weeks to talk about the application of Behavioural Economics to finance.  Being a past beano, I know only too well that 1. businesses live and die by the numbers and 2. it's really not about the numbers - it's about the behaviour surrounding the numbers.  I might think 6/10 great, you might think 6/10 is bad; the number is objective but the interpretation is subjective.  That's why it's so important for finance professionals to understand behaviour if they want to significantly impact their business and their customers.

Here are three quick behavioural techniques for finance professionals.

1. Know when to fold 'em
As a finance professional you encounter this behaviour all too often. It may be a client who just won't sell bad shares, a client who simply can't be convinced to move to better performing options, or a stakeholder who refuses to close down a project that has no hope of generating a return. The numbers don't lie, but rational analysis is not what's holding your customer back.

We hate to acknowledge failure.  Selling shares that have tanked smacks us in the face with our bad decision so we prefer to avoid recognising the loss and instead sell good performers so we can feel like we've aced it!

As a finance professional, your task is to soften the blow by distancing ego from outcome.  For instance, if the time has come to sell a bad investment, try talking about broad market forces rather than individual judgment. Gotta know when to fold 'em.

2. Why one dollar isn't the same as another dollar

When Hungry Jacks ran a $2 Groupon deal for a $6.95 meal package they received over 120,000 downloads in three hours.  When ATMs started to carry a warning about a $2 fee for 'foreign' bank transactions, activity plummeted from 50% to 40%.  If $2 can change behaviour, imagine what larger amounts can do! 

If you've ever wondered why some people like prefer to get their health rebate returned as a lump sum whereas others take it as a discount off their premium, or why we stress about utility bills going up but happily buy more clothes than we need, it's called 'mental accounting' and it impacts how we spend and save money.  For finance professionals, you need to tease out how your customer is thinking about money so that you can influence their behaviour.

3. Information blinkers
If you've ever found that your client or stakeholder seems only to hear information that supports their position and ignores anything that is contradictory, then you have been introduced to information biases.  Known by names such as Confirmation Bias, Hindsight Bias and Clustering Illusion, we unconsciously use these filters to distort, accept or reject information so that it gels with our view of the world and alleviates anxiety about whether things make sense.

As a finance professional, know that your customer will be blinkered by their filter system. It's not that they don't understand necessarily, it's that you need to find a way of meshing your perspective with theirs.  Thankfully, behavioural economics provides clues on how to do this.

There are plenty more of tips for finance professionals from behavioural science, and what I love is that human behaviour doesn't have to be a mystery anymore.  Think of behavioural economics as an audit process with 'behavioural standards' in place of accounting standards and you have a ready made toolkit for influencing your customers.  At last you can excel in influence as well as numbers!

Interested in finding out more?  I am running a series of fast track webinars for finance professionals on topics like those mentioned. Click here for details.

PS 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.

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Monday, November 12, 2012

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 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.

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Friday, November 9, 2012

Doodles demystifying buyer behaviour

The behaviour of clients, customers or stakeholders can often be perplexing - a challenge when you have to work out how to influence them!

Don't worry, the answer is closer than you think.  In fact, your buyers are a bit like a smartphone...

This slide pack includes three doodles to demystify buyer behaviour.  Email me to find out more about converting buyer behaviour into better business results.  Enjoy!