28 August 2013

See Human Behavior in 4D – Webinar Recording

On 27th of August 2013 I gave this webinar on what drives and influences human behavior.

Here’s what Rashid Chohan from Neuro Business Consulting (US) who attended the webinar said in the feed-back quiz:

The insights about behaviors was summarized very succinctly and presented in a very "logical" way. This made is easy to understand, which is remarkable for such a complex (and emotional) topic!

Thank you.

Enjoy the video!

Don’t forget to visit my website www.naumof.com

26 August 2013

Sneak Preview on Designing Decisions – Training on Choice Architecture

Earlier this year I gave demo of the Training on ChoiceArchitecture – Designing Decisions.

Here are two sneak previews from the presentation…

The filming is not professional, so please excuse the experimentation with the camera :)

Here's the first sneak preview video on
What is Choice Architecture:

Here's the second sneak preview video on
how and why Choice Architecture works:

20 August 2013

Case Study on Choice Architecture Applied in a Real-Life Business Setting (video)

This is a case study on the application of Choice Architecture in a real life business setting. 

See how an on-line service provider uses elements of Choice Architecture to guide the choices of their users.

The following video is a a small piece of the Designing Decisions Training program from Pikant & Naumof

Do you want to learn to design choice environments? 

13 August 2013

Take Nudging Seriously! Think Twice Before Starting to Nudge

The past five years have seen a boom in media coverage and application in practice of insights from behavioral sciences, particularly from behavioral economics. Books such as Nudge: Improving Decisions About Health, Wealth and Happiness by Richard H Thaler and Cass R Sunstein, Predictably Irrational: The Hidden Forces that Shape Our Decisions by Dan Ariely and Thinking, Fast and Slow by Daniel Kahneman have contributed significantly to the popularization of behavioral sciences and their application in practice.

The UK government has established a “Nudge unit” which has the task of applying insights from behavioral sciences into public policies. Apparently the US government is on the path of creating a similar unit.

Businesses, particularly marketing departments, are stepping up the application of this knowledge with the aim of increasing sales and profits. NGOs use the findings in behavioral sciences to increase the amounts collected in fundraising endeavors.

The truth is that applying knowledge from behavioral sciences or nudging is highly attractive and appealing. One reason for this is that nudging promises large outcomes with small inputs (changes, investments etc.). The second and most important reason is that Nudging is simply cool.

Let’s focus a bit on what makes nudging so cool. My best (educated) guess is that coolness is the result of the surprise we experience when learning about findings in behavioral sciences. When we learn that simply changing the default option in a form leads to huge differences in behaviors such as enrollment in different programs we are amazed. This is because this finding goes against the popular intuitions we hold. When we learn that diffusing a certain smell in a shop leads to increase in sales and in the customers’ evaluations of the service and the merchandise we experience the same high level of surprise; again because we don’t consider that what we smell should make any difference in our decisions and evaluations.

Knowledge from behavioral sciences is appealing and surprising because we couldn’t think it was possible that a small change in the context to make such a big difference in the behavior (outcome).

Knowledge from behavioral and decision sciences is so cool that we all want to use it, we want to be in the shoes of those researchers and after all, who wouldn’t want to increase sales, donations or make their job easier by applying some cool tricks?

Nudging Seems Easy

Because small changes in the environment can lead to huge changes in the behavior, nudging seams easy. Although you couldn’t think that changing the structure of a form can have huge impact in the number of people enrolling in a program, now that you know, it makes all the sense in the world. Moreover, it seems so easy to do… after all, how hard can it be to change a form?

It goes similar with using scent in a shop. Once you know that diffusing the scent of chocolate in a book store leads to an increase in sales of romantic books, it seems so easy to just place some chocolates near the counter or buy some aerosols with chocolate smell and place them around your shop.

After reading one of the books I mentioned earlier or after viewing some interesting videos with behavioral economics specialists we are aware of many “tricks” or tools that can be used and there is a huge temptation to start applying them. However, the question is which one? Should we simply pick up the one we found the most interesting? Should we just do anything that comes to mind?

The main reason why Nudging seems easy is because individuals are exposed to information on what works. People who want to start nudging often discard the context in which it worked – such as book store – and most of the times the wannabe nudger knows close to zero on the psychological mechanisms that underlie the alteration of behavior. Simply put, one knows that something works, but doesn’t really understand why and often discards the differences between the contexts in which the finding was made and the one in which (s)he has to apply the finding.

Nudging seems easy ONLY POST FACTUM  

Once you know it works it looks easy, but it is damn hard to think of what would work before the fact and before testing. Most researchers publish scientific papers on what works. Books and mass-media give attention to what works. But behind all these things that work, there are many more things that didn’t work. A researcher can’t publish in a respectable scientific journal a paper which includes five failed experiments, even if she spent half a year on a project that proved to give insignificant results.

Remember that the surprise we experience when hearing about the effectiveness of behavioral interventions (nudges) comes from the fact that we couldn’t think it was possible! Now that you want to design such nudges, you have to think of something that previously was unthinkable. That’s not so easy, is it?

If you want, things are similar with the difference between explaining and predicting. Explaining why something happened is infinitely easier than predicting the same event. Think for a few seconds about the recession and banking crisis of 2008-2009. There were countless people who showed up on TV or in the newspapers explaining in detail how and why it happened. At the same time, very few of these people were able to predict the same events.

Let me give you an example from my own backyard. In October I’ll give a training session on choice architecture and during the first day the ten participants will learn about the established psychological effects on choice such as the compromise effect, loss aversion, the status-quo bias etc. They will also see illustrations of these effects put in practice. In the second day, during the first hour the participants will see three case studies on how these effects are used. Probably the most appealing case study will be the one on how Linked In structured its offer for paid accounts.

I’m sure that these case studies will be very interesting and things will make all the sense in the world. However, after this first hour, participants will get to work on, first, analyzing a choice set used by an on-line service provider. This I expect to go quite smooth since they will only have to recognize the effects described in the first day and presented at work in the first hour… But the fun begins only when the participants will have to construct from scratch choice environments aimed at increasing donations for a charity, increasing sales of high margin products for a company that sells through a catalog and to help a museum increase its ticket sales for tours outside the main exhibition.

Applying choice architecture in an effective manner is far more difficult than seeing it already applied. It will be a bit tough, but so is the work of creating behavioral interventions (nudges) from scratch.

How to make the creation of nudges easier?

I have to be honest with you and say that there aren’t five easy steps to success. Creating behavioral interventions or nudges is hard and requires a lot of knowledge, work and testing.  

What will help for sure is to understand how and why these nudges work. Behind the examples you see published in academic journals or in mass media there are some rules. Learn and get an in depth understanding of these rules.  My advice is to ask at least twice: why?

If you know that playing classical music in a restaurant leads to an increase in sales in value, but not in volume – people go more for the premium products, ask WHY?

The answer is that mental constructs associated with high-class become more salient. After getting this answer, you should ask again WHY? And then you should get the answer that people associate classical music with high-class and that the music acts as prime (priming tool).

This is only one illustration of getting an in depth understanding on how nudges work.

Don’t go head on

Even if nudging seems easy and effective, you should think hard and look for the right intervention to use. The kind of in depth knowledge I’ve illustrated above is needed to create effective interventions. If you go head on and apply something that you find cool, there is a big chance that it will not work. 

Behavioral interventions are science, not magic!

After you have designed one or two carefully selected nudges, you should test if they work and my advice is to run experiments. This is not easy and requires accuracy and patience. Don’t make comparisons between before and after. There can be many reasons for why before was different than after and some of them are unrelated to the nudge.

Should you not apply knowledge from behavioral sciences?

I believe that businesses, governments and NGOs should apply knowledge from behavioral sciences. However, my main argument is that in order to create effective interventions one needs to work professionally. There is a high risk of “nudge” becoming just another buzz word used by people who don’t really understand its meaning.

Work with real professionals who understand in depth how behavioral interventions work. Stay away from people who promise fast miracles. Work with specialists who can give you pertinent answers to at least two “Why” questions. Work with those who do / advise experimentation in the sense of running controlled randomized experiments to measure the effectiveness of the intervention.

Take Nudging Seriously!

8 August 2013

Are You a Jerk? Of Course Not … Character and Situations | What Drives Human Behavior (webinar)

If you have a driver’s license and drive on public roads for sure you have encountered at least one situation when someone cut you off. Similarly while shopping in a supermarket when approaching slowly the cash register at least once it has happened to you that someone came in a hurry and just went in front of you just as you approached the cue. If these things have never happened to you (which makes you an outlier) for sure you were in a situation in which a complete stranger had done something that has mildly affected you in a negative way. Someone cutting you off on a street or getting in front of you in line at a supermarket are annoying things, but not really bad.

Most likely your reaction towards the person who caused you this discomfort was something like “this guy is a jerk” or “he’s an idiot”. Your natural reaction is to attribute the (bad) behavior on the person’s character or, how psychologists like to call it, personality.

Now let’s make a thought exercise. Imagine that you are on your lunch break and right after it you have a very important meeting with your boss (or a client) and it is absolutely vital that you are on time in the office. At the same time you need to get something from the supermarket for your sick spouse and you went during the lunch break to buy it. You have 5 minutes to go through the cash register cue and get back to your office. You see that the cue is not long and you are happy that you’ll make it in time. As you approach the cash register you see a middle aged lady approaching the line with a shopping cart full of stuff. Naturally you step your pace and get in line just in front of her. Does this sound plausible? Most likely it does.

Did you do anything wrong? Of course not! The lady throws you an angry look and says simply “JERK”. Now you are surprised because (in your mind) you did nothing wrong. You were in a hurry to get to your very important meeting in time. Plus you know that the lady would have needed at least 15 minutes to place all her stuff on the counter, to complain to the cashier that prices have gone up, to search for her wallet, count the money, count the change twice and so on.

Taking a step back and looking to both situations – someone getting in front of YOU in the line and YOU getting in front of the lady with a lot of stuff in her shopping cart, we realize that they are extremely similar.  The only real difference is the perspective. In the first situation you would call the person who got in front of you a “jerk” but when you are called a “jerk” you are at least surprised. Are you really a “jerk”? For sure you don’t consider yourself a “jerk”…

What is happening is that when you are the one doing the unpleasant deed, you become aware of other factors that have influenced your behavior apart from your personality. You KNOW that you are in a hurry. The lady in front of whom you got in line DOESN'T KNOW that you are in a hurry.

When judging someone else’s actions (or behaviors as psychologists like to say) humans infer that the action is a product of the personality (character) and ONLY of the personality of the person who does the action.

When judging our own actions, we become aware of other forces that have influenced our behavior such as contextual factors. The key learning is that someone’s behavior is the product of more factors than just personality (or character). 

What are the other forces that drive human behavior?

Join Me at the Webinar: See Human Behavior in 4D and Get the Gist of the Drivers of Human Behavior

During the webinar See Human Behavior in 4D by Pikant & Naumof you will Learn about the forces that influence human behavior, may it be related to purchases, work, social life etc.

You will be introduced to the Four Dimensions Model of Human Behavior and you will be acquainted with examples of how factors other than personality influence human behavior. In addition you will learn the role of personality in behavior. 

Watch the The Pikant &Naumof webinar See Human Behavior in 4D recording  ​

6 August 2013

See Human Behavior in 4D

If you work in marketing, human resources, sales, management, pricing, product design etc. you have to work for and with clients, customers, employees, colleagues, target groups, candidates, prospects, users etc.

Regardless how you call them, you have to work for and with Humans! 

For professionals in areas such as marketing, sales, human resources, management etc. the core of the job is to understand, predict and influence human behavior, or at least a very small part of it. Quite often, endeavors aimed at understanding or influencing the behavior of people, clients, customers etc. are based on assumptions that are not fully accurate.

The general assumption is that human behavior is the result of the interaction between cold-reasoned judgment and the personality or character of the individual. Quite often we believe that our customers, colleagues or simply people around us are very similar to Mr. Spok from the StarTrek series. We believe that people are some sort of reasoning machines. To some extent this is true, in the sense that humans are capable of wonderful reasoning. Looking at the modern world we live in, we should acknowledge that the buildings we live and work in, the bridges we cross to get from here to there and the myriad of high-tech tools we use every day are the product of cold-rational reasoning.

However, most of human life is not guided by this type of thinking. In fact, most of human thinking is based on the so called rules of thumb or in more sophisticated terms – heuristics. When we go to buy a pair of jeans or groceries we do not engage in very elaborate thinking. We simply want jeans that fit well and look good. We want to get it over with shopping for groceries and get back home to watch the football game or play with our children. When your colleague goes to make some photocopies, very likely she has something else on her mind and presses the buttons of the photocopying machine without giving it too much thought. Her goal is to get things done and not to maximize the efficiency of using ink and paper in the office, even if the boss told everyone to be careful with the office supplies because the firm needs to cut costs.  

The second source of human behavior that is established in popular belief is the character or personality of the individual. We infer that what a person does is the reflection of her character. We believe that bad things are done by bad people whereas good things are done by good people. To a limited extent this view is correct. Indeed, there are individual differences among people and they are valid predictors of human behavior. However, these individual differences are good at predicting patterns of behavior and not instances of behavior. For example, personality traits such as conscientiousness can predict professional success which is a long term pattern of behavior. At the same time, this personality trait is not a very reliable predictor of an instance of behavior such as the quality of a presentation given in a certain day at work.

Most of daily life is not driven by cold-reasoned judgments and behavior is influenced more by contextual factors than it is by the individual’s character.

Get the Gist of the Drivers of Human Behavior

During the webinar See Human Behavior in 4D by Pikant & Naumof you will Learn about the forces that influence human behavior, may it be related to purchases, work, social life etc.

You will be introduced to the Four Dimensions Model of Human Behavior and you will be acquainted with examples of how factors other than personality influence human behavior. In addition you will learn the role of personality in behavior. 

Watch the The Pikant &Naumof webinar See Human Behavior in 4D recording  ​

The Pikant & Naumof webinar See Human Behavior in 4D will take place on: ​

August 27 2013 at 
15:00 Central European Summer Time (Amsterdam, Brussels, Berlin, Paris, Rome, Madrid, Budapest, Bern, Prague Stockholm, Copenhagen etc.) 
(that is)
14:00 British Summer Time 
09:00 for the Eastern Coast of North America (Eastern Daylight Time)   
17:00 for Moscow 

Duration: 50 minutes (40 minutes presentation & 10 minutes Q&A)

Registration for See Human Behavior in 4D webinar 

Normally a Pikant & Naumof webinar with duration of 50 minutes is worth 19 Euros per person.

Since it is the end of the summer, 90 Fully Subsidized seats are offered.

Thus, sign in early and you do not pay anything for attending this Pikant & Naumof webinar on the 27 August.   

1 August 2013

Changing the Point of View Changes Your Mind

Imagine the following situation. You feel sick and go to the doctor. After running some tests, the doctor tells you that you have a serious condition and in order to get healthy again, you have to get surgery. The doctor has to inform you about the risks the procedure comes with and he invites you in his office to discuss the issue.

The doctor tells you that the procedure has been done countless times and it has a rate of 95% success and survival.

How willing are you to have the surgery? Rate it on a scale from 1 to 10…

OK! Now clear your mind for a second … or two …

Now imagine that you went to the doctor, the diagnostic was the same and the doctor invites you in his office to discuss the risks of the surgery.

The doctor tells you that the procedure has been done countless times and it has good results, but there is a rate of 5% mortality.

How willing are you to have the surgery? Rate it on a scale from 1 to 10…  

There is a very high probability that you would be more willing in the first scenario than in the second. We all realize that 95% success rate implies a 5% failure rate and vice versa, but the way in which a piece of information is framed has a huge influence on our decisions and subsequent behaviors.

Another example comes from the food industry where some labels say 90% fat free. At the same time this means that 10% of the product is pure fat. However, we have to agree that for most people it is much more appealing to buy a 90% fat free product than to buy a product that has 10% pure fat.

These changes of perspective are based on what the reference point is. In the case of 90% fat free, the implicit reference point is 100% fat, thus making something 90% fat free is perceived as a gain.

However, if we say 10% fat, the implicit reference point is 0% fat, thus having 10% fat is perceived as a loss.

Things are similar with the surgery situation. When the doctor informs you that the procedure has a success rate of 95% the implicit reference point is a success rate smaller than 95%, thus the outcome is perceived as a gain.

However, when the doctor says that the procedure has a 5% failure (and mortality) rate, then the implicit reference point is 0% failure, thus the 5% rate is perceived as a loss.