Pain (of Paying) at Design for Conversion Amsterdam September 26th

Last Friday (September 26^th) I made the participants at the last Design for Conversion conference suffer! Starting low with a gentle flick, I’ve encouraged the members of the audience to inflict pain on each-other. We’ve reached the level of “slap on the wrist” in only a few minutes.

Luckily for them, this was not a Stanley Milgram experiment so we stopped and hugged to wash away any negative emotions.

This brief and apparently absurd exercise was meant to help me present the phenomenon of Pain of Paying and how it can be used in designing payments. 

And to make the presentation even more fun, I’ve used Jars and Beer to illustrate mental accounting and its implications in the level of pain of paying we experience when making purchases that involve more than one payment. Thank you Liviu Taloi for the help :)

Judging by the feedback I received and by the (low) number of people avoiding me after the talk, I believe the audience liked it, even enjoyed it.

Thank you and congratulations Arjan Haring and Chemel Benali for a very nice event.

P.S. I had the honour of announcing the winner of the DfC competition ;) 

Ask Simple Questions – The Beauty of Raspberry Tart

I got old again and this year it so happed that I’m spending my birthday in Bucharest – the city I called home for about 21 years. Being here, I remembered one of my previous visits to my favourite restaurant – La Casa (if you ever go to Bucharest, it’s a must go… the special thing about this place is that it has nothing special – everything is as it should be).

After having dinner, the waiter came and asked:

“Would you like some raspberry tart?”

We answered “Yes”, even if we didn’t plan to have desert and we were quite full.

There is a special kind of beauty in the waiter’s question, and not the intrinsic beauty of raspberry tart :)

Usually waiters ask “would you like some desert”. And usually the answer is “No”. The thing is that “desert” is a rather abstract term, it has few (no) visual associations (desert can be anything from fruit salad to raspberry tart and to chocolate cake) and it has almost zero emotional load. Moreover, when asking someone: “Would you like some desert?” the respondent realizes that if he answers “yes”, he’ll have to make a subsequent choice between delicious things.

  

Making a choice is often difficult, so when asked “would you like some desert?” the client of the restaurant will go with the default option which is “No”. Just to be clear, one portion of food for dinner in Romania is usually enough to feed two French-men and beer and wine are relatively cheap, so we drink a lot.

However, when asking “would you like some raspberry tart?”, the client immediately imagines the tart which looks delicious. Moreover, raspberry tart can and usually has emotional associations. Now it is less likely that he will refuse it.

This approach could be used in an area in which Romania lags behind most EU countries (not that it doesn’t lag at most things) – namely bank-card payments. Most people in urban areas have bankcards, yet quite few use them for payments – most people withdraw cash from ATMs and use it.

A very simple nudge would be for the cashier (or whoever takes the money) to simply ask “would you like to pay by bankcard?”. This can be used in on-line shops as well, considering that about two thirds of online purchases are done with cash (yes, that is possible – people pay the delivery guy).

It will not bring miracles, but it will be a step forward. And a very beautiful one!

A simple question can lead to beautiful results.  

I’m off to “La Casa” http://www.restaurantcasa.ro/ to enjoy my first real beer in 6 months. Happy birthday to me :)

The Most Difficult and Easiest Questions in the Application and Theory in Behavioural Science Test

About a month ago I started working on the Application and Theory in Behavioural Science Test (AT BeST). It went through the first round of testing (yes, testing the test) when the difficulty of the questions was assessed.

According to the corrected difficulty score, which I computed using a secret formula, this is the easiest question of the test:

   In an experiment the group of participants who receive a neutral stimulus or no stimulus at all is called:

a. The control group.

b. The treatment group.

c. The spare group.

d. The backup group.

The most difficult question was the following:

   Which theory acknowledges the existence of the two systems of thinking, but claims that System 1 is the one that makes rational / optimal decisions whereas system 2 is the one prone to error:

a. Developmental Theory

b. Fuzzy Trace Theory

c. Theory of Reasoned Action

d. Dual-System of Reasoning Theory

In fact, there was no correct answer given to this question…

All the other 99 questions progress smoothly between the two

Thank you to all the volunteer testers: Eric, Chris, Gerhard, Richard, Nandu, Baki, Sarah, Niels, Paul, Peter, Michiel, Nancy, Richard, Eline, Eveline, Arjan and Robin.

Congratulations to Robin who is the Top Scorer up to date!

Work continues and soon I’ll need someone who can do the technical (IT) work. Any volunteers?

Paving the Cow-Paths: The Demise of Idealism and the Pathway to Pragmatism

In my recent visit to London, I attended a presentation given by Dr. Dan Lockton at the Behavioural Economics drinks. The topic of the presentation was “Paving the Cow-Paths” or simply put, helping people do what they want how they naturally do it.

Dan’s presentation made me think about what does “paving the cow-paths” actually mean from a broader point of view. At micro-level things are relatively simple. If people do something in a certain way, help them do it. The pictures below (taken from Dan’s website - Source ) illustrate very well the concept.

At a macro-level, however, things aren’t all that straightforward. Whether paving the cow-paths is a good idea or not is not entirely clear and it depends on the context. Moreover, paving the cow-paths implies giving up on idealism and embracing pragmatism.

Here’s an example: assuming that my book is sold by two shops. Shop A pays me royalties of 70% of the price of sales. Shop B gives me 100% of the price in royalties. Assuming both shops sell the book for the same price, my interest is to get as many sales as possible through shop B. However, Shop A(mazon) is more popular with the potential clients. Essentially I have two options. First, I can direct all my promotion effort to get sales through shop B and let whoever wants to buy from shop A to do so. Second, I could pave the cow-path and direct my promotion effort to encouraging people to buy from shop A, thus hoping that the higher volume of sales generated would compensate the lower percentage in royalties I get from each sale.

In the example above the decision of whether to pave the cow path or not is relatively uncontroversial and could be made through a simple computation. However, there are other situations in which paving the cow path is a lot more controversial.

Let’s take traffic and speeding as examples. Imagine that there are two roads, both within city borders, both two lanes per way wide and on both roads the speed limit is 50 km/h. On both roads there are many (the wide majority of) drivers drive above the speed limit, say 80 km/h. There is, however, a difference. One road is in the city centre, while the other is somewhere at the outskirts between two abandoned industrial sights.

The last piece of information, essentially refers to the potential dangers of speeding on the road in question. On the road in the middle of the city, speeding is a lot more dangerous than on the one between two abandoned factories (where there is little pedestrian traffic).

On both of them people drive faster than the speed limit (assumingly because they are in a hurry) and if we would apply blindly the paving the cow path principle, the speed limit should be increased on both roads.

Obviously, raising the speed limit in the centre of the city is not necessarily a good idea since this would only encourage people to drive faster than 50 km/h and this, in turn, is a cause for accidents. On the other hand, trying to get people to slow down to 50 km/h through traffic cameras, police, fines, speed bumpers etc. will be very annoying and a bit absurd when it comes to the road in the abandoned industrial area. Whereas it makes sense to slow down drivers (through any means) in a crowded area, it makes no sense to do the same in an area where the dangers of speeding are very low.

The example above brings into discussion the “no harm” principle of paving the cow-paths. Basically, if we would raise the speed limit from 50 to 80 km/h on the road between two abandoned factories, while keeping and enforcing the 50 km/h speed limit on the road in the city centre, we would pave the cow-path where actual behaviour that deviates from the desired behaviour brings no harm.

Except for some advocates of speeding or firm believers of applying indiscriminate treatment in all cases, the decision to pave the cow-path on one road and not on the other would bring little controversy. In fact, I believe, that many people would be happy with it.

Paving the cow-paths can be applied in more controversial areas of social life such as legalizing or decriminalizing soft-drugs. Whereas most countries strive for the ideal of a drug free society, some countries have decriminalized to some extent soft-drugs such as marijuana. For example, in The Netherlands consumption and possession of small quantities of the drug are not offences. Moreover, there is a trade system through which one can purchase the drug legally.

Essentially, the Dutch government paved the cow-path for consumption of marijuana. It provided a regulated system for trade and consumption, thus allowing people who want to use the drug to do so legally. The outcome was a decrease in crime related to drug trafficking.

A couple of years back, there was an initiative to restrict the selling of marijuana to tourists. Decriminalizing the use of the drug transformed The Netherlands and particularly Amsterdam in a drug tourism destination. Moreover, the country’s southern provinces became a supply spot for Belgian and French users of the drug. After considerable debate, the three southern provinces bordering Belgium implemented the policy of not allowing the sale of marijuana to non-residents (tourists). The outcome, unfortunately was the occurrence of street trafficking and related crime.

The city council of Amsterdam opposed implementing this policy for the same reason. Although most people in Amsterdam are not delighted by drug-tourism, they acknowledge that restricting the access of tourists to the coffee-shops (where marijuana is sold) will only increase crime in the city.

Basically, the Netherlands accepted that it can’t be a drug-free society. It chose to pave the cow-path for the consumption of marijuana and to focus the law-enforcement’s resources towards tackling the trafficking and use of more dangerous drugs.

Whether this is a good approach for all societies remains to be answered. It works reasonably well for the Netherlands.

Paving the cow-paths implies giving up on ideals such as drug-free society and not speeding within city-borders. It is the path-way towards pragmatism and tackling the issues that generate the most problems. In the end, ideal situations might very well be utopic. Paving cow-paths can be a solution to minimizing undesired behaviour and freeing up resources that can be directed to more serious issues. 

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?