The Brainy Business | Understanding the Psychology of Why People Buy

Latest Episodes:

96. How to Make it Easy to Do Business With You With Nikki Rausch Apr 17, 2020

Show notes

I am very excited to bring back Nikki Rausch, from Sales Maven and one of my very favorite people on earth. You have heard Nikki's name on the show before, and even her voice a couple of times – she is the first repeat guest ever on the show…but last time she was here she was doing the interviewing when the brainy pricing course first launched. Now, I'm asking the questions and we are having more of a comfortable conversation about ways to make it easy for people to do business with you.

I've had the joy of knowing Nikki for over 5 years now (almost 10? I've lost count!). We were in the same networking group and always got along. When I started doing freelance work while still in a corporate space, Nikki was one of my early clients – she hired me to edit her second book! I'm actually mentioned in the acknowledgements for her book Buying Signals, (though my last name is different). That book is awesome by the way, as is her third book The Selling Staircase.

Nikki and I don't study exactly the same thing, but her background in neuro-linguistic programming (NLP) has a lot of similarities to behavioral economics. It is understanding and speaking better to the brain's natural tendencies…so it is no wonder we get along so well.

We have an amazing conversation about making it easy for your potential clients to do business with you. Nikki shares tips that are aligned with the principles of NLP that can really make a difference when dealing with clients and potential clients. We talk about how to make it easy for your customer to take the next step, how to make the email about them, and scheduling with the client in mind.

Show Notes:

[04:43] Nikki is a sales coach, trainer and speaker; her company is Sales Maven. She is also an author and a podcaster with a background in sales and NLP.
[05:17] Neuro-linguistic programming (NLP) is the study of communication and the way we process things in our brains. The programming part is about habits and patterns. Nikki has about 1,200 hours in training (compared to the 200 most others in the field have).
[08:31] Many of us inadvertently communicate in a way that makes it difficult for customers to buy.
[09:18] The easier you make it for someone to take that next step, the more likely they are to follow through.
[11:02] Every time you put up a roadblock, you risk the chance of losing that potential client.
[12:47] The answer to "tell me when you're available" … is "never."
[14:18] You can use the three times technique. Ask if the potential client would like to chat and then give them three ranges of times. A range could be anytime between 9:00 and 3:00 or 8:00 and 8:30. Then follow up with, "Please choose what's best for you. If you prefer something else…"
[17:24] Scheduling links are common, but it needs to be framed in a way that doesn't turn off your potential client. Make it easy for them. Don't use "I" statements. Make it for the readers benefit. "Please choose the time that's best for you." Not "These are the times that work for me."
[24:27] Make "you" statements and ask questions. "Would you be open to meeting to talk?"
[25:30] In a hurry? Don't send that email. It's worth it to slow down and think about how it will be received.
[30:10] "What questions come to mind to you?" This phrase sounds better than "does that make sense?" (Melina's personal mission is to remove this phrase from use.) "If" statements can be too much too.
[33:31] "Do you have questions?" also isn't an effective phrase. Try "What questions come to mind so far?" instead.
[37:18] Let people know what you want instead of having a "go fish" mentality. Have a clear next step when you want someone to take action. Schedule a time to circle back.
[45:10] You can find Nikki and her podcast on the Sales Maven. You can also download Closing the Sale for free.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

95. Hate Being on Camera? Understand Your Brain's Biases To Change Your Mind Apr 10, 2020

Show notes

There used to be a time when people who were camera shy could mostly avoid being in photos or on video. For better or worse...those days are long gone. A lot of us hate seeing ourselves on camera, and today I'm going to talk about why. Our brains are actually programmed to hate seeing ourselves on camera because of specific biases. I'm going to talk about those biases, how they affect our brain, and give some tips to overcome those biases.

In a world of selfies, Instastories and YouTube…it's hard to not be on camera these days. With the coronavirus pandemic (which I covered in episode 91), the world has been flocking to Zoom, which before the end of February had already added more active users than in all of 2019. In the coronavirus episode, I touched on why the brain is wired to react the way it does during a novel and frightening situation like this, and why we all feel inclined to hoard lots of supplies like toilet paper even when we know that is a bit irrational.

Today's episode gets into concepts like familiarity bias, confirmation bias, and comparisons that are working to make our brains hate seeing and hearing ourselves from the outside looking in. I talk about what we see and hear and what others see and hear. I explain how these biases affect us. I also share my own experiences with these biases, and share seven tips you can use to convince your brain that being on camera, audio, and video isn't that bad after all.

CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes:

[04:32] Not too long ago, any of us who wanted to could pretty much avoid cameras – either video or photos.
[08:13] I get it. AND I want to help everyone understand some of the things going on in all our brains that make us less than excited about seeing ourselves on video (or listening to our own voices on a recording) to make it a little easier to do that next one.
[08:23] There are a couple of mind tricks conspiring against seeing yourself on camera, including confirmation bias, familiarity bias, and the comparison effect (essentially relativity), and the focusing illusion.
[08:55] FAMILIARITY BIAS This is one of those things that is so obvious when you hear it, but not something that people are usually connecting the dots on themselves.
[09:19] We see everyone head on, and they see us head-on. The only way we see ourselves is a reflection in the mirror. We actually see the opposite of what everyone else sees.
[10:23] This is why our familiarity bias kicks in when we see our image in a photo, and we think that something is off.
[10:56] Studies have actually shown people two images – head on and mirror image – to see what people preferred, and it confirmed that friends and partners…everyone else, prefers the "straight on" image of us, and we all prefer our mirror images.
[11:13] People could never explain why they didn't like one and why they preferred the mirror image. The conscious can't explain it…but the subconscious knows what it is used to looking at.
[11:47] Until you train your brain to see your "real face" more, it will not be familiar and it will feel off. This means putting in the effort to be in more pictures and on video and watching yourself.
[12:11] Some smart systems like Zoom actually let you choose if you want to be looking at and recording your "real" face or your "mirror image."
(Bonus side note not in the episode - I did a run through of a training using GoToMeeting the day after recording this and saw myself in NOT mirror image for the first time in a while...my brain's immediate reaction was that it was awful! But I was able to use the tips from the episode to get past it and not make it awkward.)
[12:42] Help train your brain to get used to the good stuff of the true you. Our brains dial in WAY too closely on things when we are thinking about them.
[13:22] You will be focusing on yourself in a way no one else does. So you have two options. First: train yourself to watch the general image and try not to narrow in on one specific item.
[14:21] The second option is to know that the focusing illusion will still be happening because your brain is wired to focus on stuff. Focusing on the good stuff will make you happier and smile more.
[15:26] Zoom also has a "touch up my appearance" option that gives you a smoothed out look and can be the edge you need to feel more comfortable.
[16:50] We actually hear ourselves differently than everyone else, because our voices are reverberating around inside our heads while we speak. Your perception of yourself is biased.
[18:26] CONFIRMATION BIAS Familiarity bias combines with confirmation bias to really reinforce the bad stuff deeper into your brain.
[19:26] We remember the feedback that aligns with our self esteem more than we remember anything that doesn't align with it.
[20:42] Your subconscious is making 99% of the decisions and evaluating tons of information every second to screen out what fits its rules and what doesn't.
[22:24] You need to embrace the new positive just make it plausible enough that your brain will believe it.
[23:39] COMPARISON EFFECT for our purposes this is essentially relativity.
[23:56] The context (the environment you were just in) will impact the way your brain perceives the next item.
[26:14] If video is important to your business, invest in making yourself look as good as possible. This will benefit your personal brand and make it easier to see yourself. Here are those 7 tips:
[29:51] #1 Try to focus on good stuff you like about yourself instead of the stuff that makes you cringe.
[30:02] #2 People are programmed to like you more when they see you the way they are used to seeing you. People like authenticity.
[30:34] #3 Reframe your focus to a positive.
[30:50] #4 Be okay with mess ups. They will happen.
[31:49] #5 Imagine the audience is laughing at the right spots and loving every minute.
[33:21] #6 Decide to get over it. Find positive things to focus on and see yourself better.
[34:33] #7 Do as much video as you can as often as possible.
[35:13] It's time for a new challenge. I'll be going live every day between now, April 10 and May 15 when episode 100 goes out. Will you join me? Find me on social and use #BeThoughtful

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

94. Behavioral Economics Testing In A Real Business: Interview with Dr. Sudy Majd Apr 03, 2020

Show notes

I am very excited to introduce you to Dr. Sudy Majd, a behavioral scientist applying concepts from behavioral economics in business. Sudy has always been interested in how people behave. Right out of college, she worked for a consulting firm that enabled her to travel all over the world to study consumer behavior. She then got a PhD in Psychology at Columbia where she focused on consumer decision making. She is now a consultant and on the advisory board of startup Candid™.

In today's episode, we talk about a couple of specific projects she did on behalf of Candid™, a company that helps people straighten their teeth with clear aligners without ever having to go into an office. Sudy has been bringing behavioral science out of the lab and academia, and testing things within a real business. She shares how applying behavioral economics principles in a real business setting had unexpected results, and she discovered that the business questions were more complex than she realized.

This is that concept of "finding the right answer to the wrong question" you hear me talk about on the show often, and the value of "questionstorming" – which I teach to many of my clients and with the group of members in the BE Thoughtful Revolution.

CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes:

[02:23] Dr. Sudy Majd has been interested in how people behave for most of her career. Right out of college, She worked for a consulting firm that enabled her to travel all over the world and observe how people behave to make recommendations to increase sales.
[03:03] She then got a PhD in Psychology at Columbia where she focused on consumer decision making.
[03:16] This gave her insight into why people make decisions and how to influence those decisions.
[03:27] She then started working at tech startup Candid™. She also works with other clients to help incorporate behavioral science into their businesses.
[04:08] Sudy shares a story of how consumer behavior ended up being different than she expected it to be.
[05:02] Many Candid™ customers didn't return their kits with impressions and photos, so that wouldn't result in a sale.
[05:43] They added cards that incorporated behavioral science into the copy, and the return rate became worse (hindsight helps, I offer up a reason it may not have been successful).
[07:45] Humans have a lot of conflicting things going on in their lives, one card wasn't enough to push them over the edge.
[09:21] They decided to identify psychological traits of customers who were and weren't returning their kits.
[10:52] They implemented feedback loops with penalties or rewards. This was a different way of framing the message with loss aversion and incentives. This also included nudging, time discounting, and herding (links to past episodes below).
[12:05] The penalty framing worked the best. These customers converted worse but were cheaper to acquire.
[14:19] Marketing is to get people interested enough to take the next step.
[16:30] They always incorporated customer feedback to figure out why something was happening.
[18:17] Have the user see themselves in your brand and use their language to describe the product.
[21:18] Sudy thinks the future of behavioral science is testing it in actual businesses. She loves discovering how the physical design of retail spaces influence how people behave.
[22:41] She would also like to incorporate behavioral science theories into big data applications.
[26:25] Having something that doesn't work teaches you as much as something that does work.
[29:17] Testing is key to the growth and success of any business. Keep trying and improving.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

93. Normalcy Bias: Why We Love To Know What's Coming And How It Keeps Us Stuck (a Behavioral Economics Foundations Episode) Mar 27, 2020

Show notes

Have you ever wondered why it's blindly accepted to just do things the same way they've always been done? Have you noticed how a new business can completely disrupt an industry by doing things totally different? Sometimes they put established companies out of business, even though the original business could have implemented the same strategies before the disruptor. A big reason this happens is normalcy bias.

Normalcy bias is where the brain believes that everything will be normal and waits for things to be normal again in a time of crisis. This principle not only applies to business, but it very much applies to some of the reasons many people weren't prepared for the coronavirus pandemic even though it had been on the news weeks before the shutdown. This normalcy bias episode is directly influenced by episode 91. Coronavirus and How the Human Brain Responds to Pandemics.

If you have not yet listened to that episode…I highly recommend it. There is so much going on right now with new announcements every day of countries taking new and very important precautions to stop the spread of this disease. That episode talks about why the brain is wired to react the way it does during a novel and frightening situation like this, and why we all feel inclined to hoard lots of supplies like toilet paper even when we know that is a bit irrational.

Normalcy bias is very much tied in with the situation we all find ourselves in as coronavirus is changing our entire world. It is also a bias that you can overcome to benefit your business. It's also something we are talking about in the BE Thoughtful Revolution.

If you're interested in joining the BE Thoughtful Revolution, you can get a 7 day free trial and a 50% discount using the code HALFOFF through March 31, 2020.

Show Notes:

[03:39] Normalcy bias is the tendency for the brain to believe that everything will be normal – and to wait for things to be normal again in times of crisis or change. This impacts both sides of change.
[04:20] It's easy to assume that things will stay the same and remain normal. This combines with availability bias and time discounting.
[05:09] We have a hard time preparing for something before it happens.
[05:48] Disruptors are able to infiltrate because those in the industry are too close, and their normalcy bias is telling them that things will always be the same.
[06:09] Disruptors can see things differently, because they aren't subject to the same constraints of the brain.
[07:29] Progressive's head of marketing "fires himself" every 12 to 18 months to reset as if he just got hired.
[10:03] Normalcy bias makes it so we all don't properly prepare for or anticipate a big change. The other side of this, is that once change is thrust upon us, while we are in the midst of it…we cling to "normal" more than ever.
[10:28] The brain grieves for what used to be, what it was used to, and its inclination is to ride out the storm until things are normal again.
[11:12] Our brains love the status quo and what they are used to.
[12:02] An example of the finance industry, status quo, and Apple Card.
[14:29] The desire to wait and see…to weather the storm when you are in the midst of change…is normalcy bias keeping you stuck. If you aren't careful, it can cause you to miss the boat and your business could be in serious trouble.
[15:47] My brain is constantly wanting to say that this is a temporary setback. I can't rely on that being the case. My business model needs to adapt to the possibility that there may only be a few conferences in the coming months.
[16:44] This is the time to look at other opportunities: what can be done virtually?
[17:33] I also need to make sure that I am investing time and energy into what is the best fit for the market. What do people want, and need and where does that coincide with my expertise?
[18:29] Having too much reliance on any particular product line, client, or type of service is always something that should be reviewed.
[19:07] If you are listening to this episode right when it comes out or shortly thereafter, coronavirus is presenting the opportunity for you to practice getting out of your own normalcy bias and looking at your business differently.
[20:04] If you aren't already a member of the BE Thoughtful Revolution, please do join us now. You can take advantage of a 7 day free trial if you join by March 31, 2020 and use the code HALFOFF to get a 50% discount.
[20:41] Normalcy bias is constantly impacting you in life and business. Now is the time your brain wants you to wait and see…and I'm here to tell you that strategy will not suit your business well.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

92. Fundamental Attribution Error: Why the Pot Insists on Calling the Kettle Black (a Behavioral Economics Foundations Episode) Mar 20, 2020

Show notes

Fundamental attribution error is another example of a behavioral economics concept with a really terrible name. Similar to my choice to call "hyperbolic time discounting" the "I'll start Monday effect" fundamental attribution error is one where I think we can benefit from a simpler name, I like to call this the "Pot / Kettle Phenomenon." You may be able to tell from that name a little bit about how this concept works, but here's the simple explanation and then we will get into the details.

If you have ever heard the phrase, "that's like the pot calling the kettle black" we are basically talking about fundamental attribution error – when you use different criteria to think about yourself and how you are acting than you use to think about and judge others. Today, I explain this concept and share examples that bring it to life. I also give you an actionable five step plan to change the way you react to others and have less instances of this phenomenon.

I've received an overwhelmingly positive response from listeners about last week's episode about coronavirus and why our brains react the way they do in pandemics. If you're still wondering why people are hoarding toilet paper, this episode will help explain why.

If you're interested in joining the BE Thoughtful Revolution, you can get a 7 day free trial and a 50% discount using the code HALFOFF learn more here.

Show Notes:

[04:38] FUNDAMENTAL ATTRIBUTION ERROR is another example of a behavioral economics concept with a really terrible name. I prefer to call this the "Pot / Kettle Phenomenon."
[05:16] "That's like the pot calling the kettle black" is basically talking about fundamental attribution error. It's using different criteria to think about yourself and how you are acting as opposed to how you would think about others and how they act.
[06:16] How do you feel about someone who cuts you off in traffic? How do you feel about yourself when you cut someone else off in traffic? When thinking about yourself, you know you are a good person and this one act doesn't carry over into your interpretation of your entire personality.
[07:39] When you hear the story of someone else who you may have labeled as "bad," you'll have empathy for them when you understand their story - like the Wicked Witch of the West.
[08:26] Why can't we stop ourselves from doing this and realize how often it impacts our personal and business relationships?
[08:39] Even when we know about the rules our brain uses to make sense of our surroundings, it doesn't mean we can just change them.
[09:43] You have to use your conscious processing over the top of the thing your subconscious wants you to believe.
[10:01] Your brain is biased to think of you (itself) as different and better than others…especially people who are not like you. You don't have to let that immediate reaction form a lasting impression of someone else.
[11:01] In the workplace, think about someone who shows up late to your meeting…what is your immediate thought about them? You likely think, "Ugh, he is so rude and disrespectful" this can then combine with the focusing illusion, so that you only notice times where the person in question is doing things that are rude and disrespectful.
[12:16] INTRINSIC VS EXTRINSIC The big difference between the way we see others and how we see ourselves is the intrinsic story compared to the extrinsic story.
[12:42] If someone's personality or their disposition led to the lateness, it is intrinsic or internal attribution. If it was due to the situational factors, it would be external.
[14:37] Steps to change the way you react to others:
- 1) Decide you want to work on this and understand why it's important to you.
- 2) Choose an initial group or person to start the process with.
- 3) Reframe your in-group
- 4) Consciously adjust to extrinsic attributes for a decent number of total interactions (30 days is a good rule of thumb for people you see often)
- 5) Move to the next group
[16:26] If you have been passed up for a promotion or been told you aren't a team player or feel like everyone is out to get you… fundamental attribution error could be a culprit.
[16:44] Fixing your mindset in regards to the way you think about others is about your choice. You can't change them or their responses to situations.
[19:43] In the "in-group" perspective shift, it will take a little time at first where you have to consciously remind yourself to not have an "us versus them" mentality.
[22:58] Resist the urge to use the same "good thing about them" every time.
[24:21] Once you have completed the process with the first group you can move on to the next one. And the good news is, this should get easier over time. Unlike other goals which need to be limited, this can combine and add other groups where you start to use these techniques whenever you are ready. It is a positive snowball.
[26:00] I want to talk a little about the flip side of the Pot / Kettle Phenomenon. It's important to look at your own behavior the way others do. Try to stop writing an extrinsic story for why it is ok.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

91. Coronavirus and How the Human Brain Responds to Pandemics Mar 13, 2020

Show notes

Coronavirus (or COVID-19) is everywhere on the news, and everyone's talking about it. The statistics and status of outbreaks are changing rapidly, and there is uncertainty around the virus. I can't answer all of the questions surrounding this issue…(no one can at this point) but I hope this episode will help you understand a little bit more about how the human brain responds to pandemics. I'm going to talk about how the way our brains work affects our reactions in situations like this.

We'll start with an example of framing. What do you think of when you hear a "state of emergency" is declared? I live in Washington where we had the first coronavirus death and the first state of emergency declared in the US. California is the second state to have declared a state of emergency. "State of emergency" is a name that doesn't help contain public fear. I understand why it's called this and why it's important to declare it…but…talk about a framing issue.

I also talk about the focusing illusion and how focusing on something makes it seem more significant. I'll cover several other concepts that apply to what goes through our minds in times of uncertainty, danger, fear, and panic. I'll also cover opportunities to make the most of things and lots and lots of informative links to help you educate yourself about the current situation.

It is important to note that the information about coronavirus specifically is changing rapidly – what I put in my notes and record today will not be accurate by the time this goes live on March 13 and after. Also, there is no judgment or criticism of choices any person or country or entity has made. The intention of this episode is to explain how our brains are wired to work during times of uncertainty, like the coronavirus pandemic.

Show Notes:

[02:54] I've been reading a lot about coronavirus lately, and it's a big deal. I live in Washington state where we had the first recorded coronavirus death in the US.
[03:32] Declaring a state of emergency is definitely a framing issue. When the brain hears this, it doesn't take it lightly. It wonders what the emergency means and creates more panic than is helpful.
[03:58] The human brain has a lot of capacity to process information: when given something new and unknown it will run rampant.
[04:15] Our brains will over analyze and freak out a little bit. Focusing on something will make it feel more important or significant. This is the focusing illusion.
[04:36] Our counterfactual and prefactual thinking will also ramp up and go into overdrive.
[04:59] A lack of control is a breeding ground for fear and a brain bonanza.
[05:19] New or unknown things are scary, because we can't categorize them using the concept of relativity. We have nothing to compare it to.
[06:17] Probability neglect is where we drastically overestimate our own personal risk in a situation.
[07:21] We also have a zero risk bias where we would rather eliminate all the risk we can.
[08:37] Our inability to properly understand probabilities and aversion to risk AND need for control AND penchant for the status quo all combine in the worst possible way when we are confronted with an unknown, highly contagious disease.
[09:05] Availability bias is when our brains believe what we hear most often to be true.
[10:47] I want to make sure everyone knows that I know we are talking about real humans – each of those numbers represents a person: mother, father, sister, brother, friend. I do not take this lightly as I share the details throughout the episode.
[13:20] Why don't we hear about (or get as scared by) the flu-related deaths that happen every year? It's because we've all had the flu, and it's a known entity.
[14:02] Our availability bias says that flu is annoying, but it's not that big of a deal.
[14:37] The recommendations to stop the threat of coronavirus are the exact same recommendations to stop influenza.
[15:18] Availability bias is a huge culprit in the reaction to the coronavirus. The focus is on the scary stuff.
[16:32] The unknown variables of the coronavirus are what make it really scary to the brain.
[17:47] We need to maintain these better habits that will keep us healthier and happier well into the future.
[18:02] Why is it so difficult to change habits? We are used to habits. We have subconscious rules stuck in our brain.
[20:30] Changing habits takes diligence at the beginning, and continued effort to maintain. Conscious processing can only do so much work at the same time.
[21:44] Before you react, stop and ask if your behavior is rational or if you need this. Take a moment to breathe and focus.
[22:36] One other problem we have when it comes to changing behavior, is our brain's natural risk thermostat. Essentially, when we do one thing good, we feel justified slacking on something else.
[23:52] If we can all do only one thing well to fight the spread of viruses, because that one thing has a bunch of hidden steps, we should be focusing on the one thing that is proven to be most effective.
[24:20] No one wants to be diagnosed with coronavirus. The mentality of staying home and not getting tested for fear of what others will think is a combination of herding and an ostrich or head in the sand type of response.
[26:11] If people don't self-quarantine or get tested when they get sick, there will be more outbreaks. It's our brains natural reaction to avoid risk, but it's best to get tested.
[27:47] One person making a rash and extreme decision can cause a huge chain reaction that is difficult to stop.
[30:13] When we feel a lack of control, of uncertainty, like we do when a novel virus is spreading around the world, we get scared and the brain looks for something to do and control.
[31:29] This is an opportunity to revisit the way you have always done things.
[32:59] What can you be doing today, while people aren't traveling and the status quo is already disrupted, to look at your offering and find opportunities to make your company better?

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

90. Habit Weekly: A Discussion With Creator Samuel Salzer Mar 06, 2020

Show notes

I am very excited to introduce you to Samuel Salzer, founder of the super awesome resource Habit Weekly. He provides content via a newsletter and LinkedIn every week with lots of great updates in the behavioral world. There are links for job openings in behavioral science around the globe, upcoming conferences, top podcasts and articles of the week – it is a really fantastic resource I recommend everyone subscribe to.

Today, we discuss how Samuel became interested in behavioral science and his interest in habit formation. We also talk about not creating content for the sake of creating content. Samuel discovered firsthand that if you create what people actually want, they will ask you for more. This is so applicable in business. Find out what people actually want and give it to them. Put good stuff out into the world and people will want to engage with you.

Show Notes:

[03:03] Samuel has always been an entrepreneur and started his first business when he was 16.
[03:51] He moved from Sweden to Australia to study accounting and economics. He also started doing research on behavioral economics.
[04:34] This opened his eyes to the nuance of human decision-making.
[05:35] He also wanted to use this knowledge to help his mother establish a meditation habit.
[06:38] He started studying the science of habit formation, behavioral science, and psychology.
[07:37] Samuel is his first test subject, and he does his share of self-experimentation.
[08:44] He helps clients create behavior change for good.
[09:31] You are succeeding if you create value for your customers and a solution for their problem.
[10:55] Samuel likes to focus on the underlying principles of what he is trying to do.
[12:29] Samuel likes the concept of friction: both decreasing and increasing it.
[13:16] There are moments when it's beneficial to increase friction. You can strategically increase friction to eliminate negative habits.
[16:20] Samuel is fascinated by habits and how they are formed. There are also ways to boost behaviors. Such as loss aversion or framing behaviors to make them more motivating.
[17:07] Habits can have a trigger and a reward or consequence. There can be a negative (or positive) consequence after a behavior.
[20:25] We often have habits or things we do that are designed to remove a negative.
[22:53] The concept of "eating the frog" or doing the hard thing first.
[25:43] Samuel started sharing links on LinkedIn. This eventually evolved into Habit Weekly. It's now a mailing list that sends content related to behavioral design on a weekly basis.
[28:04] You know you found something that people really want if they are reaching out to you asking you to create a mailing list.
[30:09] Samuel works to make sure that anyone interested in behavioral design has the best resources throughout the week.
[33:26] Accurate research and due diligence are very important to Samuel.
[34:02] Samuel is excited about the future of behavioral design. In his opinion, the field is in the adolescent stage. The mature stage will be more about the process.
[36:44] He's excited about being able to take all the tools and components and using them together to accomplish great things.
[39:46] Samuel's super power or wish would be to see the world through other people's eyes. That's part of what has drawn him into his work. A good book or movie can show the world from another person's perspective.

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

89. Focusing Illusion: Why Thinking About Something Makes It Seem More Important Than It Is (A Behavioral Economics Foundations Episode) Feb 28, 2020

Show notes

In a previous episode, I talked about a study on happiness which found that when asked if people thought they would be happier if they were to suddenly be a paraplegic or suddenly win the lottery, most everyone believes they would be happier winning the lottery and significantly less so to lose the use of their limbs.

In actuality, these two groups of people – paraplegics and lottery winners, are essentially just as happy as anyone else.

Why would this be and why would people predict it incorrectly? It has everything to do with the focusing illusion. When people only focus on one piece of a giant puzzle that piece ends up with far too much weight. Losing the use of your legs or winning the lottery is just one small piece of an entire life. There are so many factors that play into happiness, and while these pieces are significant and impactful in many ways, they don't tend to have an impact on overall happiness like we think they would.

This episode is all about the focusing effect and how these principles can be used in your business and your life. I talk about focusing on that one thing and making it incredibly clear to your target market. I also talk about asking yourself what people should focus on when thinking about your brand and what would motivate your ideal customer to take action.

Show Notes:

[04:44] A study about happiness that illustrates the focusing illusion.
[05:47] Kahneman did a test back in 1998 to find out if Californians or Midwesterners were happier with their lives.
[06:24] If you said Californians, you would be wrong. A focusing illusion bias puts more weight on things like sunshine and a seemingly laid back lifestyle. People adapt to their surroundings.
[07:06] "Nothing in life is quite as important as you think it is while you are thinking about it." - Daniel Kahneman
[07:53] Focusing on something, not surprisingly, puts a whole bunch of attention on it.
[08:59] Think about decluttering and how you would feel getting rid of something you might need. The focusing illusion is combining with counterfactual and prefactual thinking to maintain your status quo bias and keep you stuck.
[09:54] When you are asked to think about how happy someone would be or how angry something would make you or how satisfied you are or would be…your brain will focus WAY too much on a few key aspects and answer in a way that is just not in alignment with reality.
[10:47] Social proof. People are more likely to take action based on the thoughts and actions of others. They are also likely to weigh a few key items as the most important indicators of their happiness.
[12:32] Our brains are split up into two processing systems: the subconscious is super busy filtering through 11 million bits of data per second, while the conscious can only handle 40 bits per second. Your brain will sort through all of the data to validate what you're focused on.
[13:20] Anything you want to believe (or that all important first impression) will be supported by the focusing illusion.
[13:36] Another example by Kahneman from Thinking, Fast and Slow using the halo effect.
[15:25] Initial traits in a list changed the very meaning of the traits that appear later. The sequence in which we observe characteristics of a person is often determined by chance. Sequence matters, however, because the Halo effect increases the weight of 1st impressions.
[16:40] When you are focusing on something, a particular aspect, you build it up in your mind and it changes your perception, expectation, experience, and memory of an experience.
[17:20] There's a high likelihood that you will create bias in questions asked on surveys - hire an expert.
[18:08] Focusing on finding examples to back up your brain's earlier perceptions is confirmation bias.
[19:17] It's good to take a step back and ask yourself if your bias may be guiding your interactions.
[19:48] I share the story that was inspiration for this episode.
[22:02] Live that truth and focus on that now. Your brain will focus on what you want it to.
[23:34] Think about your approach to a project – what you focus on, the way you do things (or the way the company does things).
[24:31] The problem that is facing you may not be as big of a deal as it seems – and something you aren't even aware of could create a much bigger impact if you took the time to look for it.
[25:36] A story about a detergent company fixing an obvious pain point and communicating it in their advertising.
[26:32] Find the one or two points of value and talk about those…all the other features and benefits are extra.
[27:12] Focus on that one thing and make it incredibly clear to your target market.
[28:12] The mindstate guides the focusing effect and what the subconscious is looking for. Narrowing your messaging makes it more likely to resonate because it aligns with the brain of your customer.

The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (ends March 1, 2020).

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

88. Marketing to Mindstates: A Discussion With Author, Will Leach Feb 21, 2020

Show notes

Companies are getting more savvy about using behavioral economics not only to sell products, but to help consumers make better choices. Will Leach has taken the concepts of behavioral economics and social sciences to the next level with his book Marketing to Mindstates: The Practical Guide to Applying Behavior Design to Research and Marketing. I am very excited to talk with him today. He is the founder of the behavioral consultancy TriggerPoint. Previous to starting his business, Will led behavioral science methods at PepsiCo, and he has won numerous awards for his innovative work in behavioral economics.

When reading Will's book, I knew within the first few pages that he needed to come on the podcast. This is even before I realized that he got his master's from Texas A&M University (I talked about the Texas A&M Human Behavior Lab in episode 33 where I interviewed Dr. Marco Palma.) Will and I had a lot of fun talking about the lab and team down there before we jumped into the interview. Will was at A&M before the lab was built, but we have both seen it in person thanks to Dr. Palma.

Will does such a great job of breaking down a really complex area of marketing into a formula that any business can follow – from global corporations like PepsiCo to small businesses. One area I know non-marketers (and even many marketing teams to be honest) struggle with is determining their target market and really narrowing it down and then knowing how to properly communicate with them. Will and I talk about his and the concept of the 18 different mindstates and nine motivations. He also shares his step by step process to help you determine which is the best for your company. This is an innovative and mind opening interview.

Show Notes:

[03:46] For Will, behavioral economics was the classic "I didn't know it existed until I stumbled upon it."
[03:56] Will joined the military right out of high school. He then studied classical economics.
[04:16] He discovered marketing research through a graduate program and fell in love with it. It wasn't just looking at economics, it was looking at why people do what they do.
[04:39] While working at PepsiCo, he discovered behavioral economics and behavioral science. In 2009, PepsiCo invested $20 million in a laboratory to study the neurological impacts of messaging.
[05:08] Will was lucky enough to get to run behavioral science experiments, and he loved it so much he started his own business and wrote a book about it.
[05:55] His favorite project was working on a brand new snack. It was a healthy baked hummus chip. The brand called Wicked Crisps was designed using purely behavioral sciences. The target market was the owner's daughter (or millennial moms). Will helped design the name, logo, tagline, bag, and website. Behavioral science was behind everything that they designed from fonts to benefits.
[11:58] Will studied economics. He didn't want to just talk about theory. He wanted a practical book.
[13:02] He conveys specific models through story.
[14:01] He also dug into motivational psychology and goal theory. He looked at all six social sciences and found patterns.
[16:25] Will thinks of mindstates as moments in time when we are being influenced. We aren't always consistent with our beliefs and attitudes. Our environment changes us.
[18:20] His book is about moments in time and why a certain archetype may behave outside of the norm for them. Applying mindstates can help understand beliefs and values and impacts of the environment on these moments.
[20:57] Companies now look at how to help customers make better choices. Making their whole life better gives the company permission to sell them more. Brands are getting smarting and taking a holistic approach.
[24:46] Will is the most excited about the idea of getting the mindstates out for everyone to use. They want to get more and more people to understand that there is science behind our decisions. There are also emotions around our decisions and just understanding a few small rules is a huge benefit.
[25:57] We can sell more with behavioral economics. We can also reduce anxiety levels and create a better society.
[26:30] Will is getting more excited about the education side and using these concepts to help understand and overcome biases.
[27:02] He uses goal theory to help understand what people are trying to accomplish. Helping people reach their goals can create a better society.
[29:39] The nine motivations are achievement, autonomy, belonging, competence, empowerment, engagement, esteem, nurturance, and security. Then find optimistic and cautious examples.
[30:28] When guys are asked why they want to lose weight and get healthy the answer is usually so they can walk their daughter down the wedding aisle.
[31:20] One reason why a dad would want to do this is nurturance. So a goal is "walk my daughter down the aisle" and the motivation is "nurturance."
[32:09] Promotion (or using an optimistic lens) is seeking to maximize losing weight. It's about maximizing gains.
[32:45] A prevention lens focuses on eliminating doing bad things.
[33:10] These details matter when you frame your benefits. They are either using cautious nurturance or maximizing nurturance.
[36:36] Be clear and stand for one thing. Take a stand and own it, and you will benefit tremendously.
[38:33] The Hero and the Outlaw does a good law job of outlining archetypes.

The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (ends March 1, 2020).

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

87. Social Proof: How to Use Herding to Boost Engagement and Sales Feb 14, 2020

Show notes

Social proof was introduced by Robert Cialdini in his book Influence. It's one of the six principles of persuasion (accompanied by reciprocity, scarcity, authority, consistency, and liking). I talked about social proof in last week's episode on Peloton. I talked about the infamous ad that made Peloton have a dramatic drop in market value, but I also talked about all of the things they were doing right and how they were using availability, priming, stacking and bundling offers, money back guarantees, reciprocity, choice architecture, herding and…of course…social proof.

I've heard from many of you who are actually considering getting a Peloton after that episode. That wasn't my intention, but something I love to hear because we have been so happy with ours (and it is an example of the third type of social proof - users). Herding and social proof are closely related. When social proof is present, we are more likely to herd. We also look for social proof because it helps us validate our decisions. I'll talk about the six types of social proof which are expert, celebrity, user, wisdom of the crowd, wisdom of friends, and certification. I'll show how our biased brains are susceptible to social proof, ways it shows up, and how easily it can be implemented in any business – and why it is important to incorporate it.

Show Notes:

[02:28] Social proof is closely related to herding.
[02:39] The concept of social proof was first introduced by Robert Cialdini. Cialdini's 1984 book Influence: The Psychology of Persuasion introduced the concept of social proof as one of the six principles of persuasion (the others are reciprocity, scarcity, authority, consistency and liking).
[03:34] Social proof and herding feels a bit like a chicken and the egg situation. We are a herding species, we look for social proof to validate our decisions and be accepted by the group, but when social proof is present…we are more likely to herd. Which came first?
[04:31] Having a lot of other people (or the right people) who have made the same choice in the past (regardless of whether or not it is a good one) is the social proof we need to nudge us into making the same choice.
[05:01] You may be using social proof in your business or have seen it used in other businesses. Now you have scientific proof that these methods work.
[05:19] The six types of social proof are: expert, celebrity, user, wisdom of the crowd, wisdom of friends, and certification.
[05:52] Expert social proof would be when someone who is an expert in the industry recommends or speaks on behalf of a product or service. An expert extends a halo effect to the organization who brought them there.
[06:37] Be aware of authority bias. People are conditioned to believe those who are in authority.
[07:55] In your business, consider who an expert is on a topic, and how you might be able to bring them in to interact with your audience.
[08:35] Experts lend credibility and the value of social proof to a brand – they make people feel comfortable about working with you.
[08:59] Celebrity: There is a clear value in having a celebrity talk about your product.
[10:01] You need to reach the right people in a way that will encourage them to take action.
[11:12] Microinfluencers can impact your business by reaching the people who are likely to buy.
[11:50] Just because a celebrity is easy to get, doesn't' mean they are a good fit for you or your brand. It is important to be discerning and make sure there is alignment.
[12:08] The perceived personality of the celebrity carries over onto the perceived personality of the brand.
[12:45] Have a user talk about your product. You could also stack this with a celebrity who used your product.
[13:16] Incorporating users includes reviews and testimonials.
[13:30] People are more likely to be influenced by those who they consider to be like themselves. This is the herding piece in action, along with our personal biases toward our own in-group.
[15:25] Cialdini's towel example shows how incredibly powerful social proof can be.
[15:46] A genuine user talking about the product is influential. When you can help people to see that others like them have found value from your business, it is a win.
[16:42] I find key moments to mention that I have clients and people do work with me. It helps people to see that others like them work with me.
[18:26] For testimonials: you do not need to write out the complete testimonial OR put the name of the person who provided it.
[21:51] Understand why you are using the testimonial and why it matters to the person making the decision, and only use the important pieces.
[24:16] Wisdom of the crowd is when someone follows you on Twitter and you look at their profile and decide whether to follow back based on the number of followers they have.
[25:24] If you have a lot of past customers or clients, or downloads of a podcast, or subscribers to your YouTube channel or whatever it is…that is worth sharing. Showing those numbers (even off to the side) will be noticed.
[27:20] Having a Starbucks "on every corner" is a version of social proof as well – "it must be popular if there are so many".
[28:33] Wisdom of your friends, when someone is closely affiliated – someone you actually know like and trust, their opinion goes further.
[28:51] One really easy thing to do is to do Facebook ads to friends of people who like your page already – then when the potential liker sees the ad it will say something like "Melina Palmer and 4 other friends like this page" which will make that person more likely to consider liking the page too.
[31:13] Another way to trigger the wisdom of friends is by asking people to share photos of themselves using your product.
[31:45] Certification is someone else with credibility giving you their stamp of approval. This form of social proof helps people to feel comfortable with making a decision because it shows someone else did a considerable amount of due diligence.
[33:02] Earned media is when you or your business gets featured on the news or a local magazine.
[33:44] Being on a show like Shark Tank raises awareness even if they don't get a deal.
[34:58] Showing that other people have already been there and liked that is really valuable in getting more customers for your business. Sprinkle these in all over your messaging.
[36:21] There are so many ways to incorporate social proof into your business. It's possible to overdo it, but you would really have to say it a lot. Remember your customers brains are busy so you need to put it out there several times.

The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (limit 50).

Thanks for listening. Don't forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.

Links and Resources:

Our TOPPODCAST Picks

Follow Us

Stay Connected

The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

Related Podcasts

Links

Stay Connected