Three barriers that stand in the way of people taking action according to behavioural economics; they are too lazy (System 1), too scared (loss aversion) or too overwhelmed (paradox of choice). Sample slides from a presentation to the BE Network Sydney by Behavioural Specialist Bri Williams, the first person in Australia to establish a consultancy dedicated to the application of behavioural economics to business and personal effectiveness.

1. Too lazy,
too overwhelmed,

2. • 3 flawed assumptions about behaviour
• The role Behavioural Economics plays
• Identifying 3 main barriers to action
Tonight

3. Behaviour
change expert
Regardless of role, this is what
you need to be

4. We’ve designed
businesses for a
decision-maker that
doesn’t exist

5. Stated preference Observed preference
Vivian Zurlo & Candice Dunn,
Mumbrella Retail Marketing Summit 18 Feb 2016
Say Do

6. 1. Say v Do Gap

7. 2. We are rational

8. Wansink, Van Ittersum & Painter, 2006
3. We underestimate the environment

9. "Corporate Head" (1990) by Terry Allen

10. Please, not another
insight!

11. Self-reported behaviour
Observed behaviour
FuturePast
Where BE fits

12. Self-reported behaviour
Observed behaviour
What I
intend to
do
Why I did
what I did
FuturePast
12
34
Where BE fits

13. Self-reported behaviour
Observed behaviour
What I
have done
What I
intend to
do
Why I did
what I did
FuturePast
12
34
Where BE fits

14. Self-reported behaviour
What I am
likely to do
What I
have done
What I
intend to
do
Why I did
what I did
FuturePast
12
34
Behavioural
Economics!
Observed behaviour
Where BE fits

15. Behavioural
Economics
has a
Sticky Date
problem

16. http://www.weekendnotes.com/im/003/02/sticky-date-
pudding-salted-caramel-onyx-dessert-lo1.jpg

17. http://blog.lemonpi.net/tag/daring-bakers/

18. A framework to
change behaviour

19. B
1. Current behaviour 2. Desired behaviour
A B
Williams Behavioural Change Model

20. B
1. Current behaviour 2. Desired behaviour
A B
No interest in what
you are suggesting
Interested but
overwhelmed by
options
Don’t want to
think about it
Don’t know
what to do
Don’t want to
commit
Apathy
Paralysis
Anxiety
Interested but
worried about
proceeding
3 main barriers to change

21. Dealing with Apathy

23. System 1
• Auto-pilot
• Fast thinking
• Intuitive
• Persistent
System 2
• Pilot
• Slow thinking• Rational
• Intermittent
“Hits snooze”
“Sets the alarm”

25. Disfluency

26. 8.2 mins15.1mins
Song and Schwartz 2008
Arial 12ptBrush 12pt
1.8x as long

27. Distraction

28. ENGAGE
1. Make it easy
2. Make it difficult
3. Create a pain point
4. Design the environment
5. Mirror the body
6. Get Now Me on board
7. What others do
8. Framing
To overcome
Apathy we
need to…

29. Red Tomato pizza
Make it easy

30. Pleasureabletroublemakers.com
Make it difficult

31. wired.com/2006/12/smoking_room_pa/
Design the
environment

32. Apple.com
Framing

33. Coulter, Choi & Monroe 2012
Framing

34. For you…
How might you be;
• Making it hard for customers?
• Distracting them?
How can you;
• Make it easier or more interesting?

35. Dealing with Paralysis

37. Paradox of
choice
We desire the
freedom to choose
but can get
overwhelmed by it

40. CLARIFY
1. What others do
2. Defaults
3. Relativity
4. Display
5. Constrain
6. Loss Aversion
To overcome
Paralysis we
need to…

41. Framing

42. Rodway, Schepman & Lambert 2012
Display

43. For you…
How might you be;
• Confusing customers?
• Making it hard for them to choose?
How might you be able to;
• Help customers choose?

44. Dealing with Anxiety

45. 186 kms/hr
152 kms/hr

46. Loss Aversion
We are more
motivated to avoid
loss than seek gain

47. ✗ Money ✓Providing benefit
✗ Time
✗ Effort
✗ Credibility
1.5 – 2.5 x

48. Too soon

49. Too little

50. MITIGATE
1. Nothing to fear
• Certainty
• Norms
• Acceptance
• Minimise commitment
• Minimise pain of paying
• Returns & guarantees
2. Something to fear
• Norms
• Rejection
• Scarcity
• Framing & design
To overcome
Anxiety we
need to…

51. Nothing to fear

52. Nothing to fear

53. Nothing to fear

54. Something to fear

55. Something to fear

56. Something to fear

57. $4,000 at end
Fryer, Levitt, List & Sadoff 2012
$4,000 upfront
2-3x higher
gains
Something to fear

58. For you…
Why might customers be;
• Anxious about doing business with you?
How might you be able to;
• Reduce anxiety about proceeding?
• Use fear to get them to act?

59. 1. Current behaviour 2. Desired behaviour
Anxiety
Paralysis
Apathy
A B
Engage
Clarify
Mitigate
Designing to change behaviour

61. Get in touch
Bri Williams
bri@peoplepatterns.com.au
0408 392 173
@peoplepatterns
www.peoplepatterns.com.au