And in the End They Pay…

On the 26^th of September (2014) I will be speaking at the Design For Conversion conference in Amsterdam.

Usually, when one thinks of conversion and design, the first thoughts are linked to doing things that will increase the number (proportion) of people who buy stuff from a website. Well, that’s a very rough and simplistic view.

Rightfully, the focus is on the user interface, more specifically on how to design the user interface in such a way that more people will buy, convert etc.  

After a lot of effort, sketches, (A/B) tests etc. dedicated to optimizing the user interface, there is a thought that is implied: And in the end they (users) pay.

My presentation at the Design For Conversion conference will be dedicated to the final, and usually ignored, part, namely payments. More specifically, I will talk about the pain of paying and what are the factors that influence it.

It’s quite intuitive that the amount paid is an element of the level of pain of paying one experiences. Simply put, the more one pays, the higher the level of pain of paying one experiences. However, there are more elements that influence it and I’ll talk about (all of) them.

Shhhh………… (This is still a secret for now)

On the 25^th of September (one day before the conference) I’ll be giving a very cool workshop (4.5h): Design Payments. The topic is, naturally, how the pain of paying can be influenced. There will be some (more detailed) theory from Psychology of Money and some very cool case studies on influencing the level of pain of paying to be solved by participants.

In order to pre-register for the Design Payments workshop, send me an e-mail at Nicolae (at) Naumof (dot) com …

Oh… there are only 10 seats available for the Design Payments workshop and “first come, first served”.

P.S. We can provide (free) Ibuprofen to counter the pain of paying for the workshop :) 

With Each Failure You Are Closer to Success: You Are an Idiot, but at Least You Are Happy

If you believe that with each failure / rejection you are one step closer to success, you are an idiot, but a hopeful and occasionally happy one.

You probably learned that one in ten sales calls / businesses (put anything here) succeeds. Moreover, the Motivational Guru / Witch / voodoo priest you gave money to told you that if you failed / didn’t make the sale, you should not worry too much because now, after a failure, you are closer to a success.

Isn’t this cute!?  It makes sense, right? If one in ten attempts is successful, then if you failed, you are closer to the successful attempt.

NO! If you believe this bullshit you deserve your fate of paying crooks to sell you illusions.

Saying that one in ten attempts is successful is a way of framing information in such a way that your lazy brain kind of gets it. What that piece of information means is that when doing something there is an overall 0.1 probability of success. This, however, doesn’t mean that each and every tenth attempt is successful.

Let’s turn things around a bit. Assuming you need a surgery, the doctor tells you that there is a 99% chance that the surgery will be successful and you’ll make a full recovery. This sounds really nice, right?

What if the doctor will tell you that until now the team operated successfully 99 patients and you are lucky number 100? Does this mean that for sure you will die during the surgery?

It is exactly the same logic as in “with each failure you are closer to success”.

Playing the lottery each and every week for one year gives you a slightly better chance of winning once than if you would have played only once a year; though, even playing each and every week offers still a very low chance of winning.

Just to give you a numerical view: playing the lottery once gives you a chance of 1 in 16.000.000 (sixteen million) of winning. Playing it each week for one year gives you a chance of 52 in 16.000.000 of winning once. Not much of a difference, actually (numbers are approximations for the Romanian main lottery).

However, if you played the lottery last week and didn’t win, your chances of winning the lottery this week are not any better than they were last week or the week before that or even winning it next week.

With each failure you are at best as far away from a success as before. If there is no causality involved, after a failure your chances of success are the same as before. If, however, there is causality, your chances of success are even slimmer.

Assuming that it is true that overall there is a 10% chance of success in an endeavour (read sales call if you can’t think in abstract terms), the information tells us something about a large and diverse population. It does not refer to YOU. It may very well be that you are special (most likely not in a good way). An overall 10% chance of success does not necessarily mean that YOU have 10% chance of succeeding. Sometimes there are good reasons why one fails. It might very well be that your sales pitch/ business plan or whatever is bad, flawed or it simply sucks. Trying over and over the same thing that is flawed (or just sucks) does not increase your chance of success more than playing the lottery weekly does increase one’s chance of winning it.

If anything, the fact that you have failed several times should tell you that it’s likely that there is something wrong with what you’re doing.

With every additional failure you are, in fact, further from success!

But, if you believe that trying over and over again will bring you success, that perseverance is a virtue and that all you need is to keep yourself motivated and eventually you will succeed, then you will think that I’m the idiot and not you.

Ignorance is bliss! Luckily, Stupidity comes with ignorance as a bonus feature.

P.S. I’m even a bigger idiot because I’m trying to explain these phenomena instead of telling you what you want to hear and selling you illusions for only 9.99$/€.

Behavioral Design Trick for Human Resources - Job Descriptions and Recruitment Adds

Looking for a job is not an easy task even in times of economic growth. Sometimes, finding a job is a full time job in itself, only without pay.

There are people who are willing to relocate in order to find a job that suits them well and, in Europe, this implies dealing with linguistic diversity. Most (working age) Europeans speak at least one more language than their mother tongue (usually English, German or French), but this is not a full proof quality in an area of huge linguistic diversity.

Somehow, in all job descriptions, in the “requirements” section, the languages one is required to be proficient in are placed at the end of the list.

A job seeker goes through the job description and at one point focuses on the requirements to see if she fits the profile. She sees things like “master level education”, “five years’ work experience in a similar position” and “good knowledge of MS office” 

she thinks 

“Got it”; “Got it : )“, “Got that too : ) : ) :)”; “This looks nice! I really think I have a good chance of getting the job”.

After all these positive thoughts and (usually futile) hope, our job seeker sees on the last bullet point of required skills: “Working proficiency in Norwegian / Hebrew / Estonian etc.”

Why can’t these language requirements be placed at the beginning of the list? After all being proficient in Czech or Norwegian is a very tough selection criterion!

But in the end, who cares about the feelings of job seekers?   

The Future of Applied Behavioural Science Will NOT Be About Behavioural Science

It’s been quite some time since behavioural science and its applications have reached mainstream media or at least have left the academic environment. There are books, NGOs, governmental organizations and private companies who apply the insights of behavioural science (or at least claim to do so).

Naturally there is a question on the future of applied behavioural science and I dare make a prediction (which I usually restrain myself).

My prediction is that

The future of Applied Behavioural Science will not be about Behavioural Science.

Now, don’t jump off your seat and don’t close this page. It will make sense very soon!

In order to get a very good understanding of this (possible and very probable) future we need to take a look to the past; not that of behavioural science, but of construction – the act of building.

One thousand years ago people were building houses, castles, monuments, cathedrals etc. We assume (wrongly) that those edifices were built using the same principles as the ones used today: designing, sketching, computing dimensions and using information on the resistance of various materials etc. In a nutshell these could be summarized in what we know today as (Newtonian) Physics and (Euclidian) Geometry.

The reality is, however, a bit different. One thousand years ago, there were very few people who had formal knowledge of Euclidian geometry and Newtonian physics simply didn’t exist. Most of the building done at the time was based on knowledge acquired through vicarious learning (stumbling upon something that works) and through trial and error.

Coming back to applied behavioural science, the situation is quite similar. Formal knowledge in the field is relatively new in historical terms (approx. 50 years), but what can be seen as applications of behavioural science date long before the formal knowledge existed. Advertisers, sales people and others stumbled upon things that work (such as social proof, anchoring etc.) and used them in practice long before researchers studied these phenomena.   

At one point in history, builders got acquainted with formal knowledge of Euclidian geometry and Newtonian Physics and found these insights extremely useful for their work – building. Many of the builders incorporated this knowledge from geometry and physics into their work and, I guess, some of them communicated things like:

Hey! I’m a special builder because I use Euclidian Geometry and Newtonian Physics in my work!

Now (in 2014) we are in a similar stage with applied behavioural science. Various companies, organizations, individuals (including myself) etc. say that they are special because they use behavioural science.

But, in a few (my guess 5) years the novelty and wow-factor of (applied) behavioural science will fade away. Exactly as the novelty and wow-factor of using geometry and physics in building vanished centuries ago.

The future will bring behavioural science into the “implied” area of various activities. I guess nowadays you expect the builder of your house to know geometry and (basic) physics and would not contract someone who doesn’t.

The future of applied behavioural science will be about doing things much better and not about applying scientific knowledge. Applying the insights of behavioural science will be implied.

The key issue is to identify the areas where behavioural science can really make a difference and get a head-start. We already know that it can be used in public policy (design) – see the Behavioural Insights Team, in public space design – see the activity of the Danish Nudging Network, in market research – see BrainJuicer and Invivo-BVA, marketing communication – See Ogilvy and overall service design (yes, me).

The value of the applications of behavioural science resides in the increased efficiency and effectiveness it brings to already existing activities. For example, public policy existed long before the BIT existed, while market research was a mature field when BrainJuicer entered the market.

The value of behavioural science applied in the above mentioned fields resides in higher effectiveness of the money spent from the public budget and, respectively, in better predictive value of market research endeavours.

If we (behavioural science enthusiasts) are to survive the future, we need to pick out a field where the application of behavioural science will lead to an increase of efficiency, effectiveness and quality.

I go for (Behavioural) Service Design. Where do you go?   

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Five Books Related to Behavioral Science that You Probably Missed

When it comes to books on (applied) behaviroal science, titles 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 capture the headlines and are top of mind.

There are, however, some other great books on or related to behavioral science that somehow fall under the radar. Here are five of them

First:

Priceless: The Myth of Fair Value (and How to Take Advantage of It) by William Poundstone

William Poundstone is a journalist, not a behavioral scientist. Although I became allergic to books written by non-academics, I have to admit that Priceless is The Best Book on Behavioral Science I read so far. Yes! It is better than the all famous Thinking Fast and Slow, at least in my opinion.

William Poundstone does a great job in summarizing a huge array of academic research in Behavioral Science and writes in a very human-accessible way. Now, Priceless is not popular science, it’s not a book to read while sitting on the toilet. It keeps science intact and links it to real life situations.

Second and third are two books that go together very well.

The Rational Animal: How Evolution Made Us Smarter Than We Think by Douglas T. Kenrick and Vladas Griskevicius

Spent: Sex, Evolution, and Consumer Behavior by Geoffrey Miller

These two books bring the evolutionary psychology perspective to human behaviour. Although they don’t have huge practical value, their beauty comes from giving very nice explanations for what is often seen as irrational behaviour. These two books simply cast a new light on human behaviour and remind us that, in the end, we are all products of evolution (natural and sexual selection).

Fourth,

Fooled by Randomness: The Hidden Role of Chance in Life and in the Markets by Nassim Nicholas Taleb

N.N. Taleb is known mostly for The Black Swan and recently for Antifragile. Fooled by randomness is Taleb’s first book and to be honest it is much more humane than The Black Swan. Although a bit old, Fooled by Randomness is a wonderful read.

The book is not necessarily about behavioral science, but it gives great illustrations of cognitive biases in everyday life.

Fifth,

Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit Banerjee and Esther Duflo

Poor Economics is a great collection of (potential solutions) for alleviating poverty and includes many Nudge like approaches. Although it is more economics than behavioral, this book gives a very practical approach to the use of findings from behavioral science.

Bonus,

I couldn’t make a reading list without including

It Makes (No) Sense: Between the Joy of Gaining and the Fear of Losingby Nicolae Naumof (me)

Naturally I’m biased when evaluating this book, but I do recommend it because it is one of the very few books which explains (in depth) the psychological mechanisms that are behind the main findings from behavioral science. 

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Being Second Best Sucks ... Orange Fever in The Netherlands

The 2014 Football World Cup is now over. Germany won the trophy after winning over Argentina in the final.

Here, in The Netherlands, we had about one month of “Orange (Oranje) Fever” (see pics below) with everything, except the grass, being orange. Considering that The Netherlands is a small country with less than 17 million people, I dare to say that the National Football team did very well at both this World Cup and the previous one (South Africa 2010).

Four years ago, Oranje were second best (losing the final to Spain), while this year they were third best after winning over Brazil in the “small final”. Thank you Oranje!

Judging by the reactions of the Dutch players after being second in 2010 and third in 2014, the conclusion is that being third is better than being second best.

The conclusion stands even if we focus only on the games this year. The Dutch were quite happy after getting the third place in the World cup, while the Argentinians were devastated after getting the second place. The Argentinian captain, the famous Lionel Messi was truly upset even if he was awarded the golden ball trophy for the best player of the tournament.

If we would be thinking with our feet in cold water (system 2), I guess it would be quite obvious that being second is better than being third. But emotions aren’t all that straightforward.

In a (now famous) study by Medvec, VictoriaHusted; Madey, Scott F.; Gilovich, Thomas published in the Journal of Personalityand Social Psychology in 1995, the researchers found that at the 1992 Olympics in Barcelona the bronze medals winners were happier than the silver medallists.

The authors attribute this to counterfactual thinking or, in simpler words, “What could have been”. Silver medallists think that they could have won the gold while the bronze medallists are happy to just get a medal.

In the Football World Cup the effect is even more pronounced since the silver medallists (this year Argentina, four years ago Oranje) get their medals after losing the final; whereas the bronze medallists get their medals after winning the last game (“small final”).

Thank you again Oranje and maybe in 2018 you will be even happier than now (after winning third place).

Orange Fever Pics  

Yes! I had Orange Fever as well

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Emotional Re-framing the Danish Way

A while back I wrote a blogposton Emotional Re-framing which, in a nutshell, means re-framing a piece of information in such a way that its emotional load and valence is changed. Subsequently this leads to a change in judgment.

During my recent visit to Copenhagen (which in Danish means “Merchants’ Harbor”) I came across a very nice example of emotional re-framing. 

The guide from the canal tour told us that a long time ago, the “New Harbor” was populated by Sailor Friendly Women … 

You can figure out what that stands for :)

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