#14/25: Brainfluence

Tipps

Try to minimize pain

Bundling helps, e.g. car sales
Less transactions, e.g. flat rates
Don’t show money, e.g. menu 12 instead of $12

Higher price paid can lead to higher satisfaction, esp. for premium products
$499 works better than $500 because of precision

$500 could be $499 to $599
$499 could be $499.00 to $499.99

Don’t offer too many choices

Help the customer choose
Recommendation engines, sorting, reviews
Avoid similar choices

Familiary breeds likability

Repeat your offerings in a consistent way

Customers can sense passion – include this in your employee search process
Compare people not products
Pictures of babies get attention
People will look at where the person in a picture is looking
A model’s eyes that are visible and dilated are more attractive to men
Be specific – include photos of actual people
Loyality program works because of points

Illusion of progress works great

Tell people what to think of you

“You can trust us to do the job for you”
Trust score jumped up 33%
People thought company is more caring, has a higher quality and a fairer price

Smile to people – in person & on the phone
Start with a small favor first then it’s easier to get a bigger one done
Stories work
People love their own name and birth date
Expectation will shape the real experience
A tiny positive surprise can improve one’s outlook
Don’t argue with a customer about who’s right – offer a sincere apology and offer solutions
Use scarcity
Avoid the lower right corner in screen designs

Observations

Scents can affect behavior and consumer perceptions. One experiment showed that nightclub patrons danced longer when the venue was scented with orange, peppermint, and seawater. […]
A test in a casino found that people gambled 45 percent more money in a slot machine when a pleasant scent was introduced into the area.

To beat these ingrained consumer perceptions, Nestle first launched upscale coffee shops in major cities for the primary purpose of creating the high-intensity sensory experience people expect […]
The second thing they did was modify the home espresso-making system to release more aroma. This is brilliant and, I can testify, often overlooked strategy.

A classical sound track caused a 233 percent jump in bank goer’s perception of the bank as “inspiring”, compared with their perception when no music was playing.

Researchers found that scent enhances a product’s distinctiveness. They had subjects evaluate pencils that were unscented, had a common scent (pine), or had an uncommon scent (tea tree). They found that the subjects remembered the scented pencils to a much higher degree than the unscented pencils, and this differential increased over time.

The researchers found that guys studying bikini-clad girls make worse decisions when presented with a monetary offer.
To begin with, this effect seems to be a short-term one that would be most effective at the point of purchase. The ideal selling situation, no doubt, would be to have bikini-clad babe selling to the guys in person.

Researchers at Northwestern University and the University of California, Berkeley, led by Hal Ersner-Hershfield found that having subjects visualize historical alternatives made them more patriotic. Similarly, reflecting on the shaky origins of a company made its employees more positive about the firm.
[…]
But, if you avoid the ham-fisted approach and are subtle in introducing alternative scenarios, you will produce the desired positive boost in loyalty and emotion without alienating the other person.

Assuming your product or service is purchased frequently enough, offer your customers a loyalty program. They do work. In addition, keep your customers engaged by letting them monitor their progress and, if possible, reminding them about the program if they haven’t bought in a while.
Beyond the loyalty effect, merely exposing customers to point values at the time of purchase can amplify the effectiveness of the loyalty program. Want to encourage sampling of a new produce or drive upgrades? Try something along the lines of, “1000 extra Rewards Points with every purchase”. Note that bigger numbers may seem more important to consumers, so a little pint inflation could be a good thing.

In Blink, Malcom Galdwell notes that most people who suffer an injury due to doctor negligence don’t use. Based on extensive interviews of injured patients, it turns out that patients who sue have often felt like they were rushed, ignored, or otherwise treated poorly by their physician.
This belief, in turn, is based on the quantity of time spent and the quality of that interactions.

In marketing situations you can still stay honest by using targeted pitches. For example, “As an owner of a Platinum Class suit, you showed you are an individual who can recognize sophisticated styling and superb quality …”

Those seated in hard chairs judged their negotiating partner to be less emotional. Most significantly, the “buyers” in soft chairs increased their offer by nearly 40 percent more than those in hard chairs. In short, not only did a hard chair change the buyers’ perception of their negotiating partners, it made them harder bargainers.

If you want to convey a positive message, use real numbers, not percentages.
Good: 90 percent of our customers rate our services as “excellent”
Better: 9 out of 10 customers rate our service as “excellent”

It turns out that the way companies respond to bad online reviews makes a difference too. A Harris survey showed that 18 percent of those who posted a negative review of the merchant and received a reply ultimately became loyal customers and bought more.
In addition, nearly 70 percent of those consumers receiving replies reversed the negative content either by deleting the bad review or posting a second positive one.

Peck and Shu found that touching an object immediately improved both the level of perceived ownership and positive emotion.

It turns out that reciprocity strategy can work better; give visitors the info they want and then ask for their information. Italian researchers found that twice as many visitors gave up their contact data if they were able to access the information first.

Peck and Shu concluded, “Online retailers who can encourage ownership imagery among potential buyers may be able to increase both perceived ownership and valuation. In the no-touch environment, ownership imagery was powerful in increasing both the feeling of ownership and the amount a consumer was willing to pay”

Brainfluence is such a great book, it’s nearly unbelievable. I would recommend this book to everyone who’s interested in marketing, customer service or just plain psychology. It’s a nice read, the chapters are short and backed by data. Awesome book & recommendation!

#10/25: Mean genes

I picked Mean genes up because a book about behavioral economics recommended it. Let’s see what we can learn from it.

Money / Food

The !Kung San’s behavior provides the clue to resolving the paradox between Americans’ chronic undersaving and the strong evolutionary pressure to prepare for lean times. In a world without refrigerators or banks, preparing for hard times means eating enough food to store some fat on your body.

Many of us would survive, albeit unpleasantly, for more than two months without a single morsel of food.

In this context our genes work quite well. We consume as much as we can and are prepared for hard times. Luckily, however, is that they aren’t so common anymore in the developed world.

Can people really change such firmly entrenched behaviors? Absolutely. The truth is, they’re not even that firmly entrenched.

One method for limiting overspending is to pay in cash rather than with debit. However, the cure to limit overeating is not not eating enough.

The authors describe an experiment in a Biodome where people weren’t allowed to eat enough. This are the results:

On their sparse diets, the Biodomers also argued constantly, go into ugly food spats, and frequently squabbled over dinner portions. After leaving what they dubbed “the hunger dome”, one of the eight said, “If we ever all start talking to each other, that would be a major accomplishment.”

You probably experienced something like that if you are hungry. You are less happy, tense and short-tempered. How about our ancestors?

Of these types, who has the biggest surplus of energy stored in their thighs and buttocks when food is scarce? Who weathers the famine with calories left over for reproducing? Who is most likely to be your ancestor? Fatties, fatties, and fatties again.

What can you do to lose weight?

As expected, some of the new drugs work and others fail, but here’s the strangest finding: people in the placebo groups always lose weight. […] But here’s the trick: while those who take the placebo aren’t using drugs, they are keeping track of their weight and are more aware of what they eat than usual.

Just like in business: You can’t control what you don’t measure. And even just measuring something helps making it more prevalent. You can see the same behavior if people start looking at their energy consumption.

Laziness is good for most animals. To understand this, we have to leave our couches and think like wild primates. Energy in the form of food is hard to obtain, and once gotten, not to be squandered.

Let’s rejoin our mice who hate running. While it’s hard to get them to jog frivolously, they do love a good run under the right conditions. For example, if they are hungry, they spend a good part of the day running. Why? Well, among other things they are looking for food.

Laziness is good because you don’t have to burn energy but using energy is good if this gets you more food.

The subjects were also asked to keep diaries of all their eating on the days around the cookie-fest. Those in the Nutrasweet group [fake sweetener] ate more than those who ate the sugar cookies. So much more, in fact, that the total caloric intake of the two groups was identical. Moreover, those in the Nutrasweet group preferentially ate more sugar.

This is an interesting observation. It seems that, at least for sugar, we eat at much as we need.

Drugs

Isabella’s messed-up enzyme is called aldehyde dehydrogenase, and fully half of Asian people have the same genetic mistake. But hold on. Perhaps we ought to call this mistake a molecular godsend. In a study of thirteen hundred alcoholics in Japan, guess how many were fast-flushers? Not one.

Is addiction in our genes?

While genes have thus been shown to play a role in smoking, drinking, and the use of other drugs, we have clear evidence that genetic factors are not the whole story. Identical twins show similar — but not identical — propensities for drug use. IF a person has a problem with alcohol, and identical twin is 25% – 40% more likely than a fraternal twin to exhibit the same behavior.

Not completely, but the best strategy is not to try drugs. Especially, if you have a family history of addiction, you should avoid them as best as you can.

There’s a drug named Anatabuse which helps fight alcoholism. Does it work?

Anatabuse seems perfectly designed to foil alcoholism. Most studies conclude, however, that it is of minimal help in treating alcoholism. How can that be? Take a look in the user’s bedroom or garbage or toilet. Stories abound of alcoholics who flush their daily pill down the toilet or “”cheek” it, only to deposit it later.

Again. Even with medicine helping fight addiction, the addiction is hard to fight.

Gambling

Imagine two types of humans, those who cowered in their caves and those who explored new areas. While many of the risk-takers died, those who gambled and won populated the entire globe.

Not only were our ancestors risk-takers, it also has an other effect:

Risky behavior stimulates the dopamine reward systems. Some people are born with systems that muffle the buzz they get from taking risks. […]

Our overconfidence even allows people to believe they might win the lottery. By creating such unrealistic beliefs, our genes goad us into taking greater risks than we might otherwise choose.

A common use of this information is the following:

Publisher’s Clearinghouse struggled for many years until it decided that instead of rewarding many entrants with medium-sized prizes, it would offer great prizes with tiny odds. As one executive recounts, “People don’t care about the odds, only the prizes.”

Happiness

When it comes to happiness, the most common story is that happy children grow up to be happy adolescents who then become happy adults. The best way to ensure that we’ll be surrounded by upbeat people in the future is to be friends with happy people now.

As you enter the crowded scene, you must choose one of two lines. The first choice is an hour’s wait in a short line that movies slowly. [..] The second choice is an hour’s wait in a long line that moves quickly. […]
Which line would you prefer? For most people, the second line is much better.

Today, most super markets and other places with waiting lines implement this strategy. People like making progress.

We can start by recognizing the quirky ways our brain creates happiness and then capitalize on that knowledge. There are three important features of our genetic system. First, absolute levels have little effect on happiness. Second, we love making progress. Third, expectations play a central role.

Expectations are indeed important. For example, wine tastes are influenced by expectations. The same works for Cola vs. Pepsi. The best you can do is under-promise and over-deliver. Technically, you should read the lowest ratings of a movie only, then you won’t be disappointed or maybe even astonished how good the movie was.

Mean genes was okay. It’s written as a popular science book and lacks deeper insights. Furthermore, there are no notes in the book, only on their website. It’s a nice read but that’s it.

#110/111: Real Education

And an other book on education – mostly higher education but also K12. The book consists of two parts. In the first part he talks about the status of education in the US and in the second part he presents his recommendations.

A common dream of lots of American people is that everybody can be a superstar. They think that everybody should go to college and that schools are so bad that it’s not surprising that some people lag behind. Is that so?

Murray takes an interesting approach but not so surprising knowing his background. He takes the theory of intelligence, i.e. g in connection with multiple intelligences and talks about abilities. Most of you are somewhere below in an ability, maybe bodily-kinesthetic or musical. That’s pretty OK, but not everybody have to become a athlete or musician. However, if we talk about two other abilities: logical-mathematical and linguistic – lots of people think that everybody can become above average in them and there’s the first problem. (I will address possible solutions later)

The second problem, which is related to the first problem, is that too many people go to college. It is estimated that only 10-15% of the people have to ability to achieve B- or better in a classical liberal arts education, i.e. languages, maths, science, philosophy, history and psychology. Today, about 90% of all high school graduates want to go to college and 70% enroll.

The third problem has to do with the top 10%. These are often not challenged by school and college or miss important things besides their professional education. Murray says that these people learn to be nice but not to be good.

What could be done? The first and second problem are related and the answer is choice and individual learning. Murray gave an example of someone who had great dexterity (top 5%) but otherwise was in about the top 30% overall. He could either become a electrician with a median income of about $44k or a manager with a median income of about $88k. At first, the choice seem clear but he probably will be a superb electrician but a below average manager. And now a 25 percentile manager is making about $34k and a top electrician more than $90k. Furthermore, in economic stressful times a bad manager will rather lay off than a great electrician.

But how does this student find the alternative that he could be an electrician? Charles Murray got different parts of the solution.

The first is to discover and focus on abilities and strengths in school. If you realize that some people got strengths and not everyone is the same then you can start and cultivate them. Together with this discovery there’s a need for individual learning, that is students who are fast should go as fast as they want. There should be more flexibility in learning. I talked about all this stuff previously.

The last part is the stronger introduction of certifications instead of general college degrees. A favorite example of certifications proponents is the CPA which is acknowledge in the whole US and got a great deal of information about the ability of accountants. I personally think that certifications detached from college degrees are indeed some possibility for the future because knowledge will become more rapidly outdated and jobs will become more and more specialized.

The second part is about the liberal education in college. Some people think that liberal education have to wait till the college. This is pretty much arbitrary. Murray recommends that schools teach about history, science, literature, geography and economics in school, so that everybody will have a solid understanding of it.

The third problem goes in a different direction and Murray proposes that they learn especially about ethics. The main questions should be What is good? and How to live a Good life? It’s important because a part of these people will later influence the public as writers, public figures or politicians and they should understand these questions and not just be nice. The second characteristics that should be learned is humility. Lots of clever humanities students that think that they are infallible because they never reached their limits. People studying maths or natural sciences nearly always reach their limits and quite fast but there are lots of people who just rush through the humanities without much trouble.

#108/111: Punished by Rewards

This is one of the books where I just read the title and bought it. Recently, I talked with a friend about rewards and rules and we noticed that they often lead to out crawling from intrinsic motivations. He said “if I have to do something in 48 hours, I will take at least 48 hours – if I can choose my time freely, I probably will do it immediately.” You probably had similar experiences.

Some of these observations will be true. Alfie Kohen wrote lots of other books about schooling and the use of rewards, so this bit in the book is especially interesting.

His main objective is a critique of pop behaviorism, i.e. you have to give something to get something or equivalent with punishments. If I want the kids to learn about history, I have to get them grades. If I want my kids to eat healthier I have to reward them after eating. Or in business settings: If I want my employees to get three new accounts I have to pay them extra for each one. It’s so inherent in our thinking that it have to be challenged.

So what is Kohn saying about this? I read a great amount of studies and presented his findings. The first and most fundamental is that rewards often don’t work and sometimes they worsen the situation. There are some things to understand.

Firstly, rewards punish. A typical setting is some superior (teacher, boss, parent) who compliments you if you did something great. What is if your superior doesn’t compliment you? It’s basically punishment. Punishment and rewards each side of one coin. There are study that found that even compliments can be bad if they are linked to some objective. That’s important! Unexpected rewards sometimes are better than none but as long as you link it so a objective it basically become some form of punishment.

Secondly, rewards distorts your intentions. If you offer your kid a buck for each carrot she eats, she will eat more carrots because of the buck not because of the carrot. The eating of a carrot is the unpleasant thing to do to get the buck. You wanted to promote eating healthy food and instead promoted that healthy food is unpleasant.

Thirdly, rewards crowd out intrinsic motivation. There’s some kind of myth that you can add motivations, that is if you are intrinsic motivated and someone gives you money/praise/etc for doing this task that you will be even more motivated. Actually, motivation doesn’t work that way. If you are not motivated at all, then of course, extrinsic motivation motivates you to do the task. However, if you already are intrinsic motivated the extrinsic motivation can crowd your complete intrinsic motivation out and replace it with extrinsic motivation. This effect is rather famous in economics and studied in psychology.

You will probably think that extrinsic motivation isn’t good but we don’t have any alternatives. Kohn himself thinks that it’s hard because extrinsic motivators are so easy to create. Just throw some money in and you’re done. But there are alternatives which aren’t so easy to implement but have a less damaging effect.

The first one is collaboration. Work with your subordinate together to solve the problem or let him work with outer people. Alfie Kohn cites an interesting case where a mother went crazy because her child don’t wanted to go to sleep at 9pm. She tried nearly everything but she never tried to understand why her child don’t wanted to go to sleep. The same goes for pupils who come to repeatedly to late to school or unmotivated employees. Talk to them and help to solve them the problem. If you’re employee doesn’t like to work at your place then it’s probably the best for both of you that he looks for another job. It’s not the easy way but it does solve problems instead of treating symptoms.

Secondly, content is important. It’s rather easy in think about it in the schooling field. Don’t let kids learn things that are boring. For example, he talked about dates in history and I agree. The interesting thing about the Franz Ferdinand’s dead isn’t that he died on a Sunday or at June 28 but rather that this coincidence lead to the first World War. You can make probably most things interesting and you should!

The last one is choice. The more freedom you allow the more intrinsic motivated people will be. For example, he shows that for uninteresting work the best one can do is, to let people handle it the way they want. Even for interesting work this has a positive effect and the business literature begins to include it. We let people work from their home or they don’t have to be in office from 8 to 5 but rather just have to get some task done till some date. This exactly the choice which helps to increase people’s motivation.

This book got so many interesting studies in it that I recommend this book to nearly everyone but to everyone who is some form of authority: Parents, teacher, supervisors.