4. PROBLEM FRAMING SOLUTION SPACE
“The Branch is too slow.”
“Make them work faster.”
Hire more staff
Upgrade the infrastructure /
machines
“The wait is annoying.”
“Make the wait feel shorter.”
Provide Sudoku puzzles behind
tokens
Show real-time update of queue
shortening (wetransfer, airlines)
5. CONTEXT IN WHICH
WE CONSUME THINGS
IS JUST AS IMPORTANT
TO THE VALUE AS
THE OBJECTIVE
CHARACTERISTIC OF
THE THING ITSELF…
8. LOOK FOR THINGS WHICH
ARE OBJECTIVELY SIMILAR,
BUT SUBJECTIVELY DIFFERENT
– OR VICE VERSA.
Source: Decoded: The Science Behind Why We Buy – Phil Barden
18. AND SOME OF THESE THEORIES
APPLY BECAUSE WE HUMAN BEINGS
ARE NOT AS LOGICAL AS WE WOULD
LIKE TO BELIEVE.
WE ARE COMPLETELY IRRATIONAL!
19.
20.
21.
22. HOW DO WE FEEL WHEN WE ARE AT THE
END OF A QUEUE?
23. HOW DO WE FEEL NOW?
YOU’RE STILL AT NO. 10 NOT MOVED FURTHER
BUT YOU DON’T FEEL MISERABLE ANYMORE.
24.
25. WE THINK WE ARE MUCH MORE
RATIONAL THAN WE ARE. AND WE THINK
WE MAKE OUR DECISION BECAUSE WE
HAVE GOOD REASONS TO MAKE THEM.
EVEN WHEN ITS THE OTHER WAY
AROUND. WE BELIEVE IN THE REASONS,
BECAUSE WE HAVE ALREADY MADE THE
DECISION.
26. THE ESSENTIAL DIFFERENCE BETWEEN
EMOTION AND REASON IS THAT…
EMOTION LEADS TO ACTION, WHILE
REASON LEADS TO CONCLUSIONS.
27. COCA-COLA AND THE POLAR BEAR STORY
SENSATION TRANSFERENCE CAN CHANGE
THE WAY WE EXPERIENCE THE PRODUCT.
32. A CASE TO PROVE
HOW WE TASTE
IMAGES.
ASK THEM WHICH ONE THEY PREFER.
THEY WILL THINK THE TWO DRINKS ARE QUITE DIFFERENT.
33. WE TASTE, WHAT WE EXPECT TO TASTE.
BRIAN WANSINK EXPERIMENT
Seated in a dark room, subjects were told they would be tasting
strawberry yogurt but instead offered chocolate yogurt
34. THESE BEHAVIORS CAN BE WELL
EXPLAINED THROUGH
DANIEL KAHNEMAN’S THEORY OF
HOW OUR BRAIN FUNCTIONS
46. 80% OF OUR DECISIONS &
SUBSEQUENT BEHAVIOR IS
DRIVEN BY COGNITIVE
EMOTIONAL PROCESSES THAT
ARE INACCESSIBLE TO
INTROSPECTION.
47. ONLY 20% OF THE BRAIN IS
DEDICATED TO THE
RATIONAL AND CONSCIOUS
PART OF THE BRAIN
48. IF YOU WANT TO
STUDY THE LION,
YOU DON’T GO
TO THE ZOO.
YOU GO TO THE
JUNGLES.
49. CUSTOMERS DON’T KNOW WHAT THEY FEEL,
DON’T SAY WHAT THEY KNOW,
AND DON’T DO WHAT THEY SAY.
MARKET RESEARCH IS THREE STEPS
REMOVED FROM REAL BEHAVIOR.
- David Ogilvy
50. WHAT PEOPLE SAY REALITY IPSO FACTO…
They don’t want to stalk
their friends
There is little in this world
they want more than to
keep up with and judge
their friends.
Mark Zuckerberg, cofounder
of Facebook is worth
US$ 72.3 bln
They don’t want to buy
products that are produced
in sweatshops.
They will buy nice,
“reasonably priced”
products.
Phil Knight, cofounder of
Nike is worth US$ 29.1 bln
They have no interest in
reading about bondage,
dominance and
sadomasochism.
They want to read about
BDSM between a young
college graduate and a
business magnate.
50 Shades of Grey has sold
over 150 mln copies.
E L James is worth
US$ 100 mln
56. ‘You’ll see I wear only gray or
blue suits. I’m trying to pare
down decisions. I don’t want to
make decisions about what I’m
eating or wearing. Because I
have too many other decisions
to make.’ The simple act of
making decisions degrades
one’s ability to make further
decisions.
62. “The more choices you make through the day,
the harder each one becomes for your brain,
and eventually it looks for shortcuts…
One shortcut is to become restless…
the other is the ultimate energy saver:
do nothing!”
~ John Tierney
63. Six jars of jam on display Twenty four jars of jam on display
Source: Sheena Iyenger and Mark Lepper 2000. – Journal of Personality and Social Psychology
WHICH SAMPLE WOULD
ATTRACT MORE PEOPLE?
64. 40% stop & taste 1-2 types of jams 60% stop & taste 1-2 types of jams
Source: Sheena Iyenger and Mark Lepper 2000. – Journal of Personality and Social Psychology
Six jars of jam on display Twenty four jars of jam on display
WHICH SAMPLE WOULD
ATTRACT MORE PEOPLE?
65. 40% stop & taste 1-2 types of jams
BUT
31% of those who stop, purchase
60% stop & taste 1-2 types of jams
BUT ONLY
3% of those who stop, purchase
Source: Sheena Iyenger and Mark Lepper 2000. – Journal of Personality and Social Psychology
WHICH OF THOSE PEOPLE WOULD
ACTUALLY BUY?
Six jars of jam on display Twenty four jars of jam on display
66. 12 2
Source: Sheena Iyenger and Mark Lepper 2000. – Journal of Personality and Social Psychology
40% stop & taste 1-2 types of jams
BUT
31% of those who stop, purchase
60% stop & taste 1-2 types of jams
BUT ONLY
3% of those who stop, purchase
Six jars of jam on display Twenty four jars of jam on display
WHICH OF THOSE PEOPLE WOULD
ACTUALLY BUY?
67. SO HOW DO MARKETERS TACKLE
THIS DILEMMA OF CONSUMERS’
INABILITY TO MAKE DECISIONS?
68. THEN NOW
iPhone 5: 16GB, 32GB, 64GB iPhone 7: 32GB, 128GB, 256GB
• Price decoys
- From AED 2199
- From AED 2599
- From AED 3099
• High reference price
• Obscure the reference price
so there’s no point of
comparison
69.
70. THE DECOY EFFECT
The decoy effect is a phenomenon where consumers
change preference for one of two items when a third
is introduced.
71. THE DECOY EFFECT
The decoy effect is a phenomenon where consumers
change preference for one of two items when a third
is introduced.
72. CENTRE-STAGE
EFFECT
It is the belief that consumers will prefer the
middle product when presented with a line of
items.
73. FRAMING EFFECT
The framing effect is an example of cognitive bias, in
which people react to a particular choice in different
ways depending on how it is presented; e.g. as a loss
or as a gain.
It is a way to describe or label a product in order to
get customers to focus on the value instead of the
price.
74. BANDWAGON
EFFECT
A psychological phenomenon whereby people do
something primarily because other people are doing it,
regardless of their own beliefs, which they may ignore
or override
75. ANOTHER KEY TO CHANGE
BEHAVIOR IS CRAFTING A
CLEVER CHOICE
ARCHITECTURE.
79. PROBLEM:
NEED TO REDUCE VIOLENCE
AND CALM PEOPLE POST A
NIGHT CLUB VISIT
SOLUTION:
GIVE THEM EACH A LOLLIPOP
80. PROBLEM:
A VILLAGE IN KENT HAD LITTER
PROBLEM ON THE STREETS CAUSED
BY CHILDREN
SOLUTION:
WRITE THE NAME OF THE CHILD ON
THE CANDY AND HAND IT OUT.
81. Source: Eric Johnson & Daniel Goldstein
%ofdriversdonatingorgans
DEFAULTS AND DONATION DECISIONS
82. Source: Eric Johnson & Daniel Goldstein
%ofdriversdonatingorgans
DEFAULTS AND DONATION DECISIONS
83. Source: Eric Johnson & Daniel Goldstein
%ofdriversdonatingorgans
DEFAULTS AND DONATION DECISIONS
84. Source: Eric Johnson & Daniel Goldstein
%ofdriversdonatingorgans
DEFAULTS AND DONATION DECISIONS
85.
86.
87. Source: Eric Johnson & Daniel Goldstein
%ofdriversdonatingorgans
DEFAULTS AND DONATION DECISIONS
88. THINKING IS TO HUMANS, AS
SWIMMING IS TO CATS;
THEY CAN DO IT, BUT THEY’D
PREFER NOT TO.
93. SOURCES • Charlie Sorrel
• Dan Ariely
• Daniel Kahneman
• Ed Coburn
• John Tierney
• Phil Barden
• Richard Thaler & Cass Sunstein
• Rory Sutherland
• Seth Stephens-Davidowitz
• Sheena Iyenger
Hinweis der Redaktion
4 Ps of Mktg – Previously focus was pdt .. Today it seems to have shifted to Promotions
In marketing, our goal is to influence purchase decisions … and what i would like to touch upon in today’s talk is how humanbeings are irrational in their thinking and what are some of the ways some marketers leverage a clear understanding of behavioral science to influence behavior.
B Eco is a reputable scientific discipline which actually seeks to link Human Behavior, Biases, Heuristics and Tendencies to Economic behavior.
Not sure if you are aware that Google’s parent co. Alphabet runs something called X… where the aim of X is to come up with what they call as Moonshots. A moonshot is something where you change some measure of something by an order of magnitude.
You make something 10 times faster ... Make something 10 times efficient ... You make something 10 times cheaper. Those are the things they believe qualify as earth changing innovations. Greatest Innovations of the next 50yrs will come from the field of psychology more than Technology
Dr. Astro Teller is (CEO) of X, Alphabet’s moonshot factor for building audacious ideas that science and tech can bring to reality.
Having said that, in many areas we are actually running meaningful technological innovations. … At the same time, we are also running against the laws of physics. Its going to become harder and harder … but the psychological innovation is a different matter.
May be you can’t make something 10 times faster .. But you can make it 10 times enjoyable. And very easily … very quickly and at a lower risk.
Question is are you solving the right problems?
Reframing them can reveal unexpected solutions.
It is very very easy to make a brilliant product 10X worse by marketing it badly.
Lets take a Restaurant as an eg: There’s no sensible distinction to be made between the value created in a restaurant by the man who cooks the food and the man who cleans the floors.
4:30min
Great eg. of a brilliant pdt made 10x worse simply by marketing it badly. Anyone heard of Ed Sheeran?
2 Australian comedians from Melbourne > This shows imp. of Trust … no matter how good your product is .... No one will buy! So what we need to do as Marketers is look at such moonshots to drive innovation ... Not by tinkering with reality but tinkering with perception.
So as Phil Barden PUTS IT, the trick to 10X innovation is to...
Uber isnt 10x cheaper or 10x faster to arrive … but what Uber did is .... If you had a Map, you could make waiting for a Taxi ... 10x lesser irritating!
Simply because the human brain is calibrated to hate uncertainity ... We are happier waiting for a train if there’s a Dotmatrix display board on the platform ... And it says train arriving in 9 minutes and we know its coming in 9 min than to wait for 5 min in uncertainty
Not just what the brand messages are, but also where the brand is seen, used, who uses it or is perceived to use it.
EG: Evian – Hotel Mini Bars, Celebs
This is why brands like LV exercise such control over merchandising and distribution.
Anyone color blind here?
Anyone color blind here? You will get 3 seconds to answer which two squares have a lighter grey?
The inner square on the left looks lighter than the inner square on the right, but that’s because its shade is relative to the shade of the outer square.
In an absolute sense, the shades of the two inner squares are, in fact, identical.
The eye’s retina converts light and is mainly sensitive to edges and edges of edges.
OBJECTIVELY both squares are identical, but
SUBJECTIVELY there is a clear difference.
Rolls Royce goes to Boat / Pvt Jet show instead of Auto Show.
Eyes in both pictures are the same colour.
Majority of the population consumes and shops with their mind and their heart (emotions). . Then they look for a rational reason: what the product does and why it s superior choice… they then make an emotional decision: I like it, I prefer it …. I feel good about it.
People are 80% emotional and 20% rational.
Neurologist Donald Calne
Coca-Cola found that messing with your packaging can change the way people experience your products. “Sensation Transference,” – Louis Cheskin (1930s), a scientist, psychologist, found that design devices such as colors, logos, and materials on packaging and the product changed the way people experienced the product.
He used this knowledge to increase the sales of brands such as Marlboro and categories like margarine. He even helped Walt Disney select the colors for his characters in the movie Fantasia.
Margarine, when produced, had a white color that consumers found unattractive.
By adding an artificial yellow coloring to margarine to replicate the look of butter, Cheskin was able to show through testing that people preferred margarine equally with butter when it had the butter look.
This testing was then used in commercials to convince potential buyers that the taste was the same.
Give people a taste of Old Crow and tell them its Old Crow
Give people a taste of Old Crow again, but tell them its Jack Daniels
A great example of: ‘we taste what we expect to taste’.
Essentially the fact that these brands have different images that appeal to different kinds of people. So it isnt the whiskey they are choosing but the images associated with them
Another such eg. was Distilled water vs Tap water. And for the same water they said the taste seemed awful when they were told they are drinking tap water … as they felt they could taste chlorine etc.
In this experiment, a group of 32 people – were in pitch dark room – were told they will be tasting Strawberry Yoghurt but instead were offered Chocolate yoghurt.
Mere suggestion that they would be eating strawberry yoghurt led 19 out of 32 people to rate it as having a good strawberry taste. This proves the importance of eyesight in tasting food.
If it doesn’t look like strawberry it doesn’t taste like strawberry. Another important cue is the name of the food. If we can’t see the food, and someone tells us we are going to eat strawberry, we taste strawberry even if its really chocolate.
We choose between descriptions of options, rather than between the options themselves' - Amos Tversky
1.05 + .05
145 + 45
In an absolute sense, the shades of the two inner squares are, in fact, identical.
1:45min
3:50min
Paul Ekman says EMOTIONS: 1. Fear 2. Happiness 3. Surprise 4. Anger 5. Disgust 6. Sadness 7. Contempt
Which of these faces best expresses how you feel about this advert?
Because how you feel, is a better predictor of what you will do, than asking you what you will do.
It seems if you try and push a message into people's heads, it stops people feeling stuff. And if people stop feeling stuff, you don't get as much effect.
Because if you feel nothing, you do nothing!
If more than 80% of our drives and decisions and subsequent behavior is driven by these cognitive emotional processes that are inaccessible to introspection, the
Notion of Loss Aversion. Eg 2 sets of Monkeys ... Group 1 given 1 apple each ...and they are really happy. Group 2 given two apples each and one taken away ... and Monkeys go crazy! Thats the notion of loss aversion.
WE hate losing stuff even though it doesnt mean a lot of risk. NOLA kicks in when it comes savings too.
Reptilian Brain > Instinctual / Dinosaur Brain [Survival State] – Am I safe?
Frontal Lobes > Rational / Thinking Brain [Executive State] – What can I learn from here?
If more than 80% of our drives and decisions and subsequent behavior is driven by these cognitive emotional processes that are inaccessible to introspection, then how come any company justify the sole use of traditional techniques that tap the rational mind and throw away the remaining 80% of this vital non-conscious and typically emotional information that ultimately predicts how humans behave?
They have chosen to do so to reduce the number of daily decisions that they have to make, thus enabling them to get on with making all the rather more important decisions.
1:13min
On average, the normal person makes about 35,000 decisions every day, 226.7 of which are about food alone, according to researchers at Cornell University (Wansink and Sobal, 2007).
Decision fatigue is what happens when your brain gets overwhelmed with making decisions and determines it’s too tired to make any more
Interestingly, it’s a quantity and a quality issue. The size of a decision just dictates how quickly you get fatigued! Big complicated ones suck the energy out quickly, while lots of mundane tedious ones drip the energy out slowly like a leaky tap. But the result is the same.
your decision-making energy can be exhausted. What it means is that you’ve made so many decisions in a row that your ability to make good choices degrades over time, and it’s extremely likely that you’re now going to start making bad or rash ones without even realizing it.
John Tierney – American Journalist, and an Author
Sheena: Prof. of Business at Columbia Business School
“We love the idea of choice, but making decisions” ~ Sheena Iyengar
Now if you do the math, people were at least six times more likely to buy a jar of jam if they encountered six than if they encountered 24.
Problem of Choice Overload / Paradox of choice
Choice is good for us, but its relationship to satisfaction appears to be more complicated than we had assumed. There is diminishing marginal utility in having alternatives; each new option subtracts a little from the feeling of well-being
Humans rarely choose things in absolute terms. We don’t have an internal value meter that tells us how much things are worth. We focus on the relative advantage of one thing over another and estimate value accordingly.
Most people don’t know what they want unless they see it in context.
Decoys, in marketing, are products, services, or price points that a business doesn't really want you to take, but rather use as a reference to make another product look better.
42999, 56490, 64500
a Realtor who shows you a home that needs a new roof, right before taking you to a higher-priced house he really wants to sell.
It's hard to tell if a $400,000 colonial is a good deal—but compared with a $380,000 home that needs work, it looks damn good.
Decoy pricing works best when you have limited products /services and are trying to steer your customers towards the one with the higher price. The way you do this is by introducing an additional option, but with less value than the higher priced one and a cost that is almost the same. The idea is that your customers will see this new option compared to the one you hope they pick and say to themselves "for only x$ more I can have more value!" and then choose accordingly.
Restaurant Menu – High priced items are there even if no one orders them … because usually they will end up ordering the 2nd most exp dish instead. > So be creating an exp dish, restarurateur lures customers into ordering 2nd most exp choice – which can be cleverly engineered to deliver higher profit margins.
Multiple studies have shown this to be the case regardless of the number of items and even when the items are identical.
To capitalize on this, companies often opt to put their most expensive product in the middle instead of listing them in the order of price.
At nearly $200 more than their other options, GoPro placed their Hero 4 Black model in the center of their product page hoping to capitalize on this effect.
In e-commerce, the most popular way to achieve this is by highlighting how much a customer will save to offset the difference in price between products.
While users will obviously see the price first, Moz does a great example of framing the prices by clearly stating how much a customer can save by purchasing annually, thereby increasing the value.
Framing also applies to discounts and studies have shown that when it comes to higher priced items, discounts are more effective when shown as a dollar
amount versus a percentage.
Ever heard the saying "if your friends were jumping off of a bridge, would you jump too?” That is the bandwagon effect in a nutshell, and if you said you'd jump, you just proved its effectiveness.
The easiest was to achieve this effect is by telling customers what the most popular option is or by showing them how many other people have chosen a certain item or service.
PhotoBucket example
Anchoring occurs when a customer forms an opinion based on the first piece of information they receive. They then use this information as a point of reference throughout the purchase and compare other figures against it to determine value. For eg, if your friend bought a computer and told you it cost $2,000 but you go to the store and see a price of $1,500, you already perceive a deal even if your friend was incorrect and he really paid $1,500.
To take advantage of this bias, sites can list their products highest to lowest in terms of price so that anything after the first item is perceived as a deal.
In this eg, it's clear Time Warner is capitalizing on anchoring by listing their prices in descending order.
Choice architecture involves: the number of choices presented and the manner in which they are described, presentation order, the presence of a default choice, and many other factors.
Large plates and large packages mean more eating; they are a form of choice architecture, and they work as major nudges.
Cinemas: Popcorn
Forget small, medium, and large—it's tall, grande, and venti
Once venti was added to the menu board, there wasn't enough room to include short. So short was cut and tall become the new small. You can still order a “small” eight-ounce drink, but you won't find it on the menu.
Organ Donation Drive: When you go to get your driver's license, you would be required to check one of two boxes
2 types of countries: 1 set – gives a lot and another gives very little … Why??
Culture? Religion?
If you see, countries we think are similar exhibit very different behavior.
It’s a cognitive illusion / decision making illusion. One of my favorite plots in social sciences.
2 types of countries: 1 set – gives a lot and another gives very little