Libmark stephenpaton 2015

BEHAVIOURAL

BASED

MARKETING

B Y S T E P H E N PATO N, M A N AG E R R E S E A R C H & I N S I G H T S, AG L

A P R E S E N T A T I O N

F O R

Libraries of the future ??????

Transformation is hard

> Behavioural Marketing

> Stephen Paton

> 29th October, 2015

But transformation is constant

Failure is not an option

Jobs that didn’t last the distance


> Stephen Paton


AGL is constantly transforming


> Stephen Paton


Research is transforming

Focus groups & in depth interviews

Telephone>online>mobile>app based

Observational & ethnography

Co creation & social listening

Text & Big Data analytics

Gamification & crowdsourcing

Neuroscience, Facial Analysis & Bio metric response (implicit methods)

Behavioural Economics


> Stephen Paton


We live in the information age


> Stephen Paton


So it’s easy and great for us?

… but the growing volume of data can be overwhelming


> Stephen Paton


… 90% of data from the Internet of Things not collected.

Getting to the people behind the data

Big Data = Behavioural based marketing?

A glimpse – but people are programmed to see patterns,

So research can fill in the gaps,

While behavioural economics can get behind the truth.


> Stephen Paton


Decision tree


> Stephen Paton


So how do people decide?

We use satisficing and heuristics why? Our Brains process 11 million Bits of info per second. yet… We can consciously process 15-16 bps

People make surprising decisions

People are more likely to buy jam when they're presented with 6 flavors than 24.

After inspecting a house, real estate agents thought it was $14,000 more valuable when the seller listed it at $149,900 than $119,900.

When children play a fun game and then get rewarded for it, they lose interest in playing the game once the rewards are gone.

People conserve more energy when they see their neighbors' consumption rates.

If you flip a coin six times, people think Heads-Heads-Heads-Tails-Tails-Tails is less likely than Heads-Tails-Tails-Heads-Heads-Tails, even though the two are equally likely.


> Stephen Paton


How about you?

candy, sugar, bitter, good, taste,

tooth, nice, honey, soda, chocolate,

heart, cake, eat, pie


> Stephen Paton


Which words did you just see?

taste, point, sweet,


> Stephen Paton



> Stephen Paton


Thinking fast & slow – Daniel Kahneman

“We are to thinking as cats are to swimming. We can do it if we have to”

System one thinking System two thinking

Fast, automatic, frequent, emotional, stereotypic, subconscious, Slow, effortful, infrequent, logical, calculating, conscious,

Effortless Takes effort

Share with animals Defines us a human

Examples:

• Calculate 2+2

• Walk at normal pace

• Complete the phrase “fish & ..”

• Drive on an empty road

• Detect hostility in a voice

Examples:

• Calculate 7x24

• Walk at faster pace than normal

• Compare two ovens for value

• Focus on one voice in a crowded room

In control Acts when called upon

not under voluntary control (mostly) ...and easily swayed by emotions and can be as easily be wrong as be right.

You can force yourself to engage but painfully slow, is distracted and hard to engage. Require attention and are disrupted when attention is drawn away.

Who we are

Who we think we are


> Stephen Paton


How we think - system one and system two


> Stephen Paton


System 2 in action

http://youtu.be/vVVpEcrsuf4


> Stephen Paton


Key principles of behavioural economics

#3. We are hugely influenced by the context around us and use anchors,

shortcuts and rules of thumb to navigate

this context and make decisions

#1. Much of what influences our behaviour is

subconscious / below the surface

#4. We are subject to a mass

of cognitive biases, such as loss aversion,

scarcity bias, the herd instinct…

#2. We have different modes of thinking – System One which is intuitive, emotional

and System Two which is more

effortful, deliberate, reasoned


> Stephen Paton


Biases can be grouped around a simple matrix

Peak end rule

Paradox of choice

Optimism bias

Availability bias

Loss aversion

Status quo bias

Discounting the future

Decision Making Biases

Probability/Belief Biases Social Biases

Memory Biases

In group bias

Herd instinct

Fundamental Attribution Bias

Chunking

Hindsight bias

Priming


> Stephen Paton


An ever growing list

Scarcity bias

Overconfidence effect Herd mentality & conformity

Egocentric bias Choice-Supportive Bias

anchoring framing the power of the default

validity illusion Normalcy Bias Ambiguity Effect

Pseudo Certainty effect Distinction Bias Attention Bias

Availability Heuristic Restraint Bias Negative Bias

Social Proof Focusing Effect Information Bias

Reciprocity Bias Ulysses effect IKEA effect Omission Bias

Optimism Bias

Attribution Error

Loss aversion

Endowment effect Hedonic Adaptation

Mental Accounting Hyperbolic Discounting

Projection Bias Relative consumption & satisfaction (herd)

Distinction Bias Confirmation/ Expectancy Bias

Reactance

Consistency Bias Primary/ Recency Effect Projection Bias

Peak End Memory Power of now nudging


> Stephen Paton


Current thinking

1. Staff training and workshops

2. Research


> Stephen Paton


BE in action at AGL

TRADITIONAL INSIGHTS

What is the behavioral challenge?

Which BE concepts could be involved?

Select appropriate

response


> Stephen Paton


In product design


> Stephen Paton


In communications


> Stephen Paton


Identifying triggers and barriers

Barrier: No signatory, reduces Authority and behavioural motivation.

Trigger: Layout initiates much more Cognitive Ease than the existing letter – good spacing, chunking and bolding.

Barrier: Current Framing of questions could negatively Prime customer to thinking payments will change. E.g. “Could my payments change?”

Trigger: The use of colour has been proven to be a powerful Priming tool.

Barrier: MY AGL IQ lacks Salience and is Cognitively Straining.

Trigger: The personalisation increases behavioural motivation - Egocentric Bias.

Trigger: Good signposting for expected behaviour. I.e. Is there anything else to do?

Primary: Read / no action.

Secondary:

log in / register on the website.

Barrier: The behavioural narrative isn’t clear, which message do I read first?

Behavioural Objectives


> Stephen Paton


Using nudges

Social Norms & Reciprocity Bias

Leverage Social Norms to congratulate customers on their clever choice. E.g.

“8 out of 10 customers report better monthly bill budgeting when using Bill Smoothing” Well

done on a great choice.”

Framing and Anchoring

Re-frame questions to statements that Anchor payments to usage E.g.

From: “Could my payment amount change?” To: “Payments will reflect your usage”

From: “How can I make sure my payments are on track” To: “Monitor your usage”

Authority Bias

Include an Authority figure as a signatory.

Scientific experiments have shown significant

increases in behavioural effectiveness with the

right Authority.

Heuristics (Shortcuts)

Use numbers or arrows to give people mental shortcuts as to the

desired behavioural flow of the communication.


> Stephen Paton


Simple rules for applying BE concepts

The east concept

EASY

SOCIAL

TIMELY ATTRACTIVE

BEHAVIOURAL

BASED

MARKETING

B Y S T E P H E N PATO N, M A N AG E R R E S E A R C H & I N S I G H T S, AG L

A P R E S E N T A T I O N

F O R

Thank you

@stephengpaton

Libmark stephenpaton 2015

Marketing

Transcript of Libmark stephenpaton 2015