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 :)

Follow me on Twitter

Behavioral Design: Tricks, Cheats and True Value Interventions. The Wide Array of Behavioral Science Applied in Service Design

For quite some time now I have been involved in bringing behavioral science into practice and the beauty of this (still emerging) field is its diversity. In essence, behavioral science is about understanding how we really think (make judgments and decisions) and what influences what we do. The practical applications of behavioral science are hugely diverse: it is applied in public policy, in marketing and connected fields such as advertising, market research retail design etc., in product and service design, in the financial sector etc. Recently I was invited to take part in a workshop on applying behavioral science in fisheries.

So it’s not exactly farfetched to claim that Behavioral Science can be applied in any field where there is a human component.

There is, however, another dimension of diversity in applications of behavioral science other than the area of application. This is the depth of incorporating behavioral science into an activity.

Tricks

Not seldom I was asked to present some “cool tricks” of behavioral science that can be used in field X. I’m seriously against seeing the applications of behavioral science as “tricks” and usually respond with the following phrase:

“Tricks is what is done in the red lights district in Amsterdam. I am applying (behavioral) science, which is a bit different…”

Although I am against seeing applied behavioral science as a “bag of tricks”, the reality is that many companies and organizations want just a magical silver bullet to solve (almost) all their problems and to brag about how they are “trendy” and “at the cutting edge of best practices”.

The truth is that, quite often, applying patches (read “tricks”) is the only thing that can be done … at least at the moment.

One very good example is that of traffic fines. Thanks to the Behavioral Insights Team (UK) aka. The Nudge Unit, there is some solid knowledge on what can be done to increase the rate of people paying their traffic fines. Simple changes such as replacing “amount owed: …” with “you owe …” leads to an increase in the voluntary compliance (read actually pay the fine).

This approach, however, doesn’t go very deep into solving the real problem which is traffic safety. But more on that later.

When faced with “tricks”, people say:
“That’s cool”

Cheats

Behavioral science can sometimes be used to create cheats so that a company (organization) gets X Euros extra from the clients’ pockets (bank account).

This is not illegitimate. After all, in a market economy, companies try to maximize what they sell. And for all people who are uncomfortable with this, they should know that once you are in a shop, on a website etc. the organization that owns it will try to do anything possible (and legal) to squeeze as much cash out of you as it can.  

Coming back to behavioral cheats, they refer to applications of behavioral science that are aimed at harnessing the ambiguity people face more often than they are willing to admit and at exploiting some of our cognitive shortcomings.

Here are some general examples of behavioral Cheats.

The use of anchoring effects in retail settings such as during a sales promotion, one client can buy maximum 8 items (when people don’t usually buy more than 2).

Diffusing the scent of freshly cooked food in supermarkets so that clients get hungry and buy more (of everything, not just food items).

The use of scarcity in on-line retailing such as “We have only one room left” (by the way The Dutch advertising standards authority concluded that booking.com is misleading by using this phrase. Details here)

The use of default opt-ins for buying travel insurance along with a flight ticket (yes, it’s about Ryanair)… this practice was banned by the EU Regulation, thankfully.

These behaviorally informed cheats are, for sure, controversial and to some extent subject of public and regulatory scrutiny. However, most of them are no illegal and they are simply part of the arsenal of XXIst century marketing.

When faced with “cheats”, people say:
“They tricked me (again)”

True Value Interventions

Cheats and (sometimes) Tricks are quite often controversial and they give applied behavioral science a not so nice image. However, Behavioral Science is a real gold-mine for creating true value, especially when combined with service design.

Mixing behavioral science with service design involves the use of Tricks and occasionally Cheats, but it goes far beyond applying some patches here and there.

When used in developing products and services (may them be public services), behavioral science will lead to the creation of true value. Let’s go back to traffic safety. The use of some behaviorally informed tricks to increase voluntary compliance in paying traffic fines is more than welcomed. Whether we like it or not, fines are part of the game of traffic safety. The application of behavioral science in this area can go further. One possible path is to increase the pain of paying associated with paying fines by making the payment more salient. This, however, is a superficial application of behavioral insights since it doesn’t go beyond the use of “sticks”.

Another path of applying behavioral science in traffic safety is applying a Nudge approach to slowing down drivers in risk areas. One way of doing so is the use of speed cameras which display the speed of a car and showing a happy or a sad face depending on whether the driver is going below or above the speed limit.

Another path of applying behavioral science in traffic safety is creating a behaviorally informed incentive system for young (male) drivers to be prudent. This would consist of returning a part of the (quite high) insurance premium if they don’t have traffic penalties (including accidents) within a certain year. Moreover, this refund can take the form of emotionally valuable products such as a Metallica concert ticket (though I’m not sure than today’s youth appreciate Metallica). At least for this author, a Metallica concert ticket is more valuable than 100 Euros (even if that is the price of the ticket).

Behavioral science can be applied in private sector services as well. Not long ago I was asked by a bank to suggest some behaviorally informed interventions to help the bank’s clients better manage their budget. In The Netherlands most essential expenses (rent / mortgage, health insurance, utilities etc.) are fixed monthly payments done through direct debit on the first day of each month. However, most people receive their salaries around the 25^th of the month. My suggestion was to reframe the information on the clients’ account balance between the day of receiving the salary and the day of monthly fixed payments. So instead of seeing on the 26^th a balance of 2050 €, the client would see 1150 € + 900 € for your fixed monthly expenses.   

Another suggestion for clients who have more serious issues with managing their budget (and subsequently meeting their loan reimbursements) was to design a “self-control support” mechanism. One feature was for each client to set some categories where they would like to cut down expenses (say liquor) and whenever the person would enter a liquor-shop their phone to display a moral reminder such as “your daughter needs new sport shoes for school”. (Yes, it is technically possible to do this, at least in The Netherlands).

To some (naïve) eyes, the examples above may not seem more than just tricks and cheats, but there is a huge difference. Although reframing the information about one’s bank account balance or using moral reminders to avoid impulse purchases seem trivial and even farfetched, they are neither tricks nor cheats. The behavioral science insights are incorporated at the service/ product design level and they are centered on a problem that needs to be dealt with.

When faced with “True Value Interventions”, people say:
“What a cool feature. I’m glad they did that! ”

To summarize this already too long post:

When faced with “tricks”, people say: “That’s cool”

When faced with “cheats”, people say: “They tricked me (again)”

When faced with “True Value Interventions”, people say: “What a cool feature. I’m glad they did that! ”

Of course, there is a good chance that a lot of people will not even notice the Tricks, Cheats and True Value interventions. After all, fish don’t notice the water…

Get in touch with me to
Fuse Behavioral Science with Service Design

Randomness and the Value of Someone’s Word

I “benefited” from a relatively conservative bringing up and learned that someone’s worth can be determined by how they keep their word. Even now, I believe that my word is the most valuable asset I have and keep it.

I usually keep my word and this implies that I am quite prudent in what I say I can and cannot do…

However, I find that what I have learned and grew up to believe is wrong.

In a world with high levels of unpredictability (randomness) someone’s word is worthless. Even if the person says something in good faith, chances are that what (s)he said will not happen.

As far as I can see, the “way to go” is to say a lot, preferably make some very vague claims and make sure that the costs are passed on to someone else. Just by chance there will be some positive outcomes... 

Lining Up Behavior with Attitudes = Failure - Learnings from TEN – Five years of Applied Behavioral Science in Public Policy Conference

On the 27^th of June the Five years of Applied Behavioral Science in Public Policy Conference took place at Roskilde University. Apart from some quite nice Danish weather, there were a superb line-up of speakers and some very juicy talks.

Three pieces of information caught my attention. First, “(young and naïve) Fish don’t Notice the Water”. This metaphor used by Cass Sunstein, illustrates in a very beautiful manner how, most often, we are blind to the context and its influences on what we do, what and how we think and feel.

The second piece of information that stuck with me came from Richard Thaler who supported the use of behavioral science insights and Randomized Control Trials in any endeavor of public policy, even in quite sensitive areas such as safety regulation. His argument was that the costs (risks) are very small compared with the benefits brought by the results of the RCT.

The third learning came from a study ran by the Behavioral Insights Team and presented by Owain Service (Managing Director of The Behavioural Insights Team). It concerned an effort to increase the number of UK citizens to register as organ donors by explicit consent. The BIT used 7 behaviorally informed messages plus the control (existing and non-altered one) and ran what they say is the largest randomized control trial in public policy.

What was particularly interesting for me was that the message “if you support organ donation, please register as an organ donor” did (slightly) worse than the control message – “please register as an organ donor”.

Apparently trying to match behavior with positive attitudes (almost everyone supports organ donation) is doomed to fail, or at least lead to worse results than simply doing nothing.

The message that worked best was “if you would get an organ transplant if you needed it, please register as an organ donor”. This time it is not about attitudes, but about behavior.

Join the Behavioral Design Net • Work Group on LinkedIn

http://www.linkedin.com/groups?home=&trk=anet_ug_hm&gid=8126605

Behavioral Design Net • Work on Twitter

https://twitter.com/BEDesignNet

Yes, I took a picture with Cass Sunstein, one of my Applied Behavioral Science heroes :)

Good News! Opening Behavioral Design Net•Work

The Fusion between Behavioral Science, Service Design and Business Practice is the next path to growth.

In a highly competitive and saturated market be • coming Human Friendly is the main way to create additional value.

I invite you to contribute to the open source project Behavioral Design Net • Work

My intention is to create a space for conversation on mixing Behavioral Science with (Business) Practice, mainly Service Design.

Join the Movement

and share your thoughts, interesting articles, movies etc.

Behavioral Design Net • Work Group on LinkedIn

http://www.linkedin.com/groups?home=&trk=anet_ug_hm&gid=8126605

Behavioral Design Net • Work on Twitter

https://twitter.com/BEDesignNet

Behavioral Design Net • Work on Facebook

https://www.facebook.com/BehavioralDesignNetwork

Value Creation through Design Spiced with Behavioral Science: From Functional to Hedonic and the “Tricks of Preferences”

Hans browses around an upscale department store searching for a gift for his wife’s birthday. He looks at this and at that and, after two hours of searching, he finds something that he thinks his wife will like to receive as a gift. The price is a bit “spicy”, but it’s a gift for his wife’s birthday and there is no price for their love and (life) partnership.

Hans buys the gift and goes back home and hides it in a place he knows his wife will not look. (or at least she will not say that she found it before time).

While savouring his evening beer, Hans remembers that during his shopping trip he spotted a nice watch he would like to have. Naturally he doesn’t need a (new) watch. He has two already and he always has his mobile phone with him; in addition he spends most of his day in front of a computer. Hans realizes that, in fact, these days no one really needs a watch. However, he can’t take his mind off that watch. He only got a glimpse of it, but it was enough to realize that it was very beautiful and elegant. If he remembers right, it was the same brand as the watch his grandfather had (too) many years ago, when Hans was only a young boy.

A few days later, Hans is again in the upscale department store and just for his indulgence he goes to the watch shop to take a better look. He remembers seeing a tiny price tag and it was something like “2** Euros”. Hans goes to the shop and asks to see and try on the watch he saw a few days ago. It is truly superb and the sales-lady tells him it has a golden case, but Hans can’t fully hear what she is saying since he is absorbed by the grace and elegance of the watch. He was right. It is the same brand as his grandfather’s watch.

After a few seconds of having the watch on his wrist, Hans takes another look at the price tag. It was almost as he remembered: “2890 Euros” … he only missed one digit the first time. The sales-lady tells him that the case is solid gold and weights 19 grams. For a second, Hans realizes that he has on his wrist a watch that is worth about half of the car he and his wife have. He simply cannot afford it and he thinks that it would be insane to even consider buying it.

He gives the watch back to the sales-lady and, with a bitter smile, tells her that the watch is very beautiful, but way out of his league. She replies that there are other more affordable models and encourages him to take another look at the display. Hans spots another watch that looks similar to the golden one, though not as elegant and gracious, but still very beautiful. He asks to see it. This time Hans is careful and takes a look at the price tag first. It says “198 Euros”. Hans is relieved and tries it on. Although it is not a gold watch, it is still very beautiful and elegant and it looks great on his wrist. Moreover, this one too is the same brand as his grandfather used to have.

Hans, proudly leaves the shop with a new watch that is very beautiful, quite expensive and that he didn’t really need.  

The (not so fictional) story of Hans and the unnecessary watch holds many lessons about value creation and doing business in the XXIst century. Here are some of them:

First, a 200 Euros Watch looks like a bargain when compared to a 3000 Euros one.

Second, we buy things that we don’t need (also) because they hold emotional and or status value.

Third, context is (almost) everything! Glimpsing and getting an elegant watch makes perfect sense in an upscale department store after buying something elegant for your better half. It might not have been so, on a casual Sunday walk in the park.

Fourth, when selling status goods to men, it is better to have ladies who sell.

All of these lessons are grounded in the insights of Behavioral Science.

Established thinking (based on insights from normative Economics) would suggest that only moderately rich and snobbish people would buy expensive watches. However, Hans does not necessarily fits the profile… in fact he doesn’t fit any profile since you don’t really know anything about him.

Market research based on this “established thinking” would have asked several hundred Hanses to say how much they would be willing to pay for a watch… and the huge majority of answers would have been below 200 Euros.

Behavioral Science, however, holds many insights that are not really intuitive

and that go far beyond understanding (and manipulating) the context of purchasing.

Behavioral Science can give insights into creating value that both clients and companies need.

In a world where functionality is incorporated in most goods and services, it is very difficult to create value by being even more functional.

Moreover, Behavioral Science holds several (potential) answers to the question:

“How do we get out of the Price War?”

In a highly commoditized market and with an increasing price sensitive target audience, functionality and (low) price are very important. However, not the entire market is looking only for functionality and not the entire target audience wants only small prices.

Businesses which acknowledge that the quality (functionality) and price battlefield is not the only area of competition, can break the deadlock and generate value for both their customers and themselves.

Just before the end… you should know that a people better remember stories than anything else… this is why I wrote the story of Hans and his new (unnecessary) watch.

Here’s the main lesson you need to learn from Behavioral Science:

First We Feel and only after (if at all) We Think! 

Revealing How Behavioral Science can Increase Value when Applied in Service Design on June 19

Hurry up! Registration Ends on June 18

The Relationship between Bad Service and Confirmation Bias

At the time of writing this blog post, I am in Bucharest, the City I called “home” for 21 years. For four years, now, I live in The Netherlands.

Being a relatively young democracy and free-market Romania overall offers huge diversity ranging from exceptionally good service at more than reasonable prices to absolute crap at obscenely high prices.

One instance of bad service was my recent visit to a hair-dresser. The hair-cut I got was quite OK, though considering how I keep my hair, it would be very difficult to get something wrong. The hair-dresser story goes like this:

I went to the hair-dresser place that I used to go for quite some years before I moved from the city. I kind of remembered where it was (most communist blocks of flats look the same). I arrived at the place where I knew the hair-dresser was and found that it had closed down. I decided to walk to another one I knew was nearby (15 min walk). After less than a minute I stumble upon a hair-dresser saloon which was for both men and women.

I went inside and noticed on the right side two ladies who (I assume) were ladies hair-dressers. Both of them were lying on the chairs for customers reading some tabloids. On the left side a young man was giving a shoulders massage to an older gentleman who was sitting on a chair for clients. After about one minute of being completely ignored, I was asked by the younger man:

“What would you like / what do you want” (approximate translation from Romanian)

The question left me speechless for about 20 seconds. I simply could not answer, since I was in a hair-dresser saloon and I assumed the personnel would realize that people who enter the establishment want to get hair-cuts or make appointments for hair-cuts in the future. I am sorry that I didn’t answer with “two kilos of potatoes, please”.

The actual hair-cut experience was OK… in fact more or less what I know it is since ever. At the end I asked how much it costs. The answer was 15Lei which is about 3.75Euros.

Beyond the shock of being asked “what do you want” in a hairdresser saloon, for me as an applied psychologist this experience revealed a very interesting self-fulfilling prophecy. The four hair-dressers were doing their thing (particularly the two ladies were completely absorbed by the tabloids) because there were no clients at the time. However, their behaviour – doing their things and (almost) ignoring potential clients – is a clear cause of not having clients.

Moreover, there is the issue of price. Non-Romanians should know that Romania is a very price sensitive market (except for status goods). However, the population in large cities is very diverse and there are people who would not mind paying 20Lei (4.2 Euros) or even 30Lei (6.5 Euros) for a haircut.

Again we have a self-fulfilling prophecy. Because the saloon (needs to have) has low prices, it will have badly paid staff and will invest zero in delivering a good service. In turn this will drive away the clients who are willing to pay a premium for good service (which does not mean exceptional).

These self-fulfilling prophecies are a very interesting case of confirmation bias, which means that we look (only) for information that confirms our existing beliefs and (virtually) ignore evidence that disconfirms our beliefs. For the hair dresser that I went to, it is obvious that it is not worthy to invest a bit in delivering better service because their only clients are people who can pay very little. Moreover, to the staff it makes perfect sense to read tabloids (in close to obscene positions) and to get a massage and chat about football, thus ignoring the (potential) clients, exactly because there are few clients.

Join me for the webinar Behavioral Science for Service Design on June 19 and