Too lazy, too scared, too overwhelmed
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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.
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Too lazy, too scared, 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
- 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
- 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
- 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
- 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?
- 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?
- 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
- 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