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Using Behavioral
Psychology to Improve
Your Website & Business
David M. Williams, CFP®
Business Enhancement Associates, LLC
We have 2 brains
Reflective
Processes and analyzes data at tremendous
depth and breadth
Resource intensive
Reflexive
...
Interaction—part 1
Interaction—part 2
Interaction—part 3
Interaction—part 4
Reflexive brain reacts to squealing tires
Surprise, tension, ceases Reflective brain
Reflective brai...
Reflexive Brain’s Modus Operandi
Always on
Watches for patterns—even where they
don’t exist
Knows loss hurts more than ...
Intuitions (Biases)
Heuristics (Rules of Thumb)
Overconfidence
Mental Accounting
Framing
Heuristics
1/n Rule
Option overload
Urgency imperative
Overconfidence
“One of the most fundamental
characteristics of human nature is to
think we’re better than we really are.”...
Overconfidence
Overestimate our chances at success.
Take risks we regret later.
“Home bias”
Illusion of control
Hinds...
Mental accounting
We value certainty and short-term gains
over waiting for a benefit.
$10 today or $11 tomorrow?
$10 in...
Framing
Our reflexive brains make judgments in
very subjective and changeable ways,
depending on the surrounding
circumst...
Framing
What is the state
of this glass?
Framing
Theater A charges $7.50 per ticket, but
gives a 33% discount for tickets from 5 to 6
pm
Theater B charges $5 per...
Framing
Doctors avoid procedures that have a
12% failure rate.
Doctors adopt procedures that have an
88% success rate.
Framing
If you can win only 67% of the time, it
sounds like slim odds.
If you can win 2 times out of 3, you’d
take a cha...
Practical Applications
Don’t give too many choices—it leads to
paralysis by analysis.
People react to a sense of urgency...
Practical Applications
Beware of putting short-term gains over
long-term gains. Determine how certain
“certainty” is.
Do...
Practical Applications
Weigh pros and cons. It’s never as bad
as it looks. It’s not that good, either.
Accentuate the po...
Practical Applications
Be aware of “only” and “just,” as our
reflexive minds diminish the object of the
term.
Confuse cl...
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Using behavioral psychology to improve your website &

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Using behavioral psychology to improve your website &

  1. 1. Using Behavioral Psychology to Improve Your Website & Business David M. Williams, CFP® Business Enhancement Associates, LLC
  2. 2. We have 2 brains Reflective Processes and analyzes data at tremendous depth and breadth Resource intensive Reflexive Intercepts input & monitors Reflective brain Applies intuition and emotion—feeds result to Reflective brain
  3. 3. Interaction—part 1
  4. 4. Interaction—part 2
  5. 5. Interaction—part 3
  6. 6. Interaction—part 4 Reflexive brain reacts to squealing tires Surprise, tension, ceases Reflective brain Reflective brain Determines no immediate danger Wants to see accident
  7. 7. Reflexive Brain’s Modus Operandi Always on Watches for patterns—even where they don’t exist Knows loss hurts more than gain feels good Uses intuition and emotion on partial input in order to react fast
  8. 8. Intuitions (Biases) Heuristics (Rules of Thumb) Overconfidence Mental Accounting Framing
  9. 9. Heuristics 1/n Rule Option overload Urgency imperative
  10. 10. Overconfidence “One of the most fundamental characteristics of human nature is to think we’re better than we really are.” Survey of 50 drivers One in four people are crazy. If you have three sane friends, it must be you.
  11. 11. Overconfidence Overestimate our chances at success. Take risks we regret later. “Home bias” Illusion of control Hindsight bias Survey regarding Nixon’s China visit.
  12. 12. Mental accounting We value certainty and short-term gains over waiting for a benefit. $10 today or $11 tomorrow? $10 in a year, or $11 in a year and a day? The reflexive brain doesn’t do math. Shopper who saved $100.
  13. 13. Framing Our reflexive brains make judgments in very subjective and changeable ways, depending on the surrounding circumstances, feelings, context or point of view.
  14. 14. Framing What is the state of this glass?
  15. 15. Framing Theater A charges $7.50 per ticket, but gives a 33% discount for tickets from 5 to 6 pm Theater B charges $5 per ticket from 5 to 6 pm, but charges a 50% primetime surcharge Which theater gets more business?
  16. 16. Framing Doctors avoid procedures that have a 12% failure rate. Doctors adopt procedures that have an 88% success rate.
  17. 17. Framing If you can win only 67% of the time, it sounds like slim odds. If you can win 2 times out of 3, you’d take a chance. We see 67% as just over half, but we can picture ourselves as a part of the 2 out of 3.
  18. 18. Practical Applications Don’t give too many choices—it leads to paralysis by analysis. People react to a sense of urgency. You are part of the odds. Only half of us are above-average. We are not above- average on as many things as we think we are. Nor is anyone else.
  19. 19. Practical Applications Beware of putting short-term gains over long-term gains. Determine how certain “certainty” is. Don’t spend to feel good. You won’t feel good when you add it up.
  20. 20. Practical Applications Weigh pros and cons. It’s never as bad as it looks. It’s not that good, either. Accentuate the positive with your customers. Percentages apply to things, but we comprehend frequencies better when risk is involved.
  21. 21. Practical Applications Be aware of “only” and “just,” as our reflexive minds diminish the object of the term. Confuse clients with odd numbers. People buy at $19.95 when $20 is too expensive. We think we pay $2.54 per gallon when we really pay $2.55, because we ignore 9/10.

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