You have the product that you know customers will want, the price is right, you have distribution, and the advertising achieved that all-important top quartile result. So where are all the sales? A simple Behavioural Economics framework may have the answer.
Public policy in recent years has gotten the behavioural economics religion. While it shares much of the same research as consumer behaviour, being aligned with economics its desire is to create rules that we can use to predict behaviour. With this mindset, the infamous UK Behavioural Insights Team (the Nudge Unit) put together a simple framework to use when trying to improve compliance without resorting to regulations and taxation. They call this framework the EAST framework: Easy, Attractive, Social and Timely.
While the framework is not meant to be exhaustive of behavioural insights on compliance and nudging decisions in desirable ways, it provides a simple tool for looking at how to improve outcomes and also offers a framework that you can also use in ideation sessions.
The EAST framework is something I also apply to research design to improve response rates and reliability of results.
E is for Easy; that’s how we like it
Easy is too easy to get wrong. Yet it is possibly one of the biggest sources of competitive advantage. When designing a new product we often underestimate the impact of the small hurdles we place in the buyer or consumer’s way. Every step we ask someone to complete is a step they are unlikely to take.
When discussing the success of iTunes and iPhone, and Apple products in general Steve Jobs places a strong emphasis on how they make things easier for consumers. Buying music legally or downloading illegally was a lengthy process that involved many decisions. Steve Jobs knew that people would pay for an easy process.
We can improve ease by reducing the number of steps, decision uncertainty, outcome risk, physical or mental effort. An added benefit is that an easier process is often a faster process.
Some examples of where ease was used to transform behaviour are as follows:
- Caltrate with the launch of soft chews to overcome swallowing difficulty
- The development of tap and go on debit and credit cards to increase use for low-value purchases
- Government policy introduction of portable phone numbers to increase Telco competition
- Increased medicine compliance with calendar packs such as the Webster-pak and the contraceptive pill
A frequently cited example of the impact of improving ease in behavioural economics is changing the default settings in when completing a transaction. For example, having an opt-out rather than an opt-in for organ donation dramatically increases donations.
A reason that making things easier increases our likelihood to do something is that we are cognitive misers. Thinking takes time and effort which we are loathed to give away.
A is for Attractive; that sparks our curiosity
Making something attractive is not about making it pretty; it is about making something distinctive in a relevant way. Attractiveness can cover our physical senses as well as mental responses such as emotion and curiosity. For example, we are attracted to visual information because we can process is faster than text. This insight has transformed infographics into a standard tool for journalists wanting to show complex statistics and has given rise to data journalism (see The Age Data Point section).
The Australian International Design Awards which have run for over 50 years shows that having a distinctive and relevant design can transform the way people use a product and businesses fortunes. Good design also applies to services. When working on the designs for the early Optus World stores, attractiveness was a key goal. My research helped create an environment that got attention, kept customers engaged through play and discovery, and become a tangible way to remember the brand.
Some examples of where attractiveness was used to help drive changes in behaviour include the following:
- Reader’s Digest use of personalised mail packs revolutionised direct marketing
- Optus and Foxtel used redesigned set-top boxes to increase cable TV installations
- Apple’s redesign of the PC, MP3 players and phones transformed these categories over and over again
- Data visualisation has helped drive the use of big data analysis
Think of attractiveness not as aesthetics but as a way to drive our curiosity.
S is for Social; for no one is an island
‘Nine out of ten mothers who use X prefer X’ is such a common claim that you may think no person would believe it. Well, they do. Nine out of ten times I’ve tested this claim, it works. Ok, that was a made-up statistic; the claim may have come in the top group even more times. What makes this claim work is our use of others to guide our own behaviour. This drive is particularly strong when we are dealing with uncertainty. The 9/10 claim works to reduce concern that a product would not work as claimed for people like us.
Our use of social cues abounds. In an experiment looking at how we use our initial observations of others to decide what actions to take, Francesca Gino (Harvard Business School) found subjects’ choices were strongly affected by what they saw others do. If the first six people chose a particular action, 80% followed. However, if the first person chose the alternative, only 30% did not follow.
Some examples of using social cues to change behaviour include the following:
Red Cross Blood Bank showing frequent donors and branch comparison on screens while you donate to increase donations. Competitive behaviour is a social behaviour.
A restaurant positioning their patrons and staff having the meal breaks near the window is used to increase the perception of their popularity.
Gyms promoting new year membership take advantage of people using perceptions of social norms to drive sales.
T is for Timely; for context gives meaning
Events operating close in time are also bundled together to create a context we use to make decisions. By making an offer in the right time context we can dramatically change behaviour. This use of context may be by placing your desired action near or far from another action, depending on how we want people to view the association. Product bundling is a classic way to use time to increase uptake and reduce costs.
Some examples of using social cues to change behaviour include the following:
MyPlates sells personalised number plates when people register or buy a car.
Financial planners sell life insurance when reviewing your superannuation when you are making death-related decisions.
Buying groceries online reduces impulse purchases as we split our current state from our future state.
Cross-selling car accessories when going through the paperwork of buying a car.
The EAST framework from behavioural economics provides a simple tool to drive improved effectiveness. By using its framework you can look at what aspects of your offer process that you can modify; nudging behaviour in the way that you want rather than frustrating the buyer. Here are some simple questions to ask when using the EAST in your decision making or your next workshop.
How can you make buying, using and repurchasing your product easier?
What can you do to inspire curiosity by making your product more attractive?
How can you communicate social?
How can you leverage time context?
For the keen . . .
- Francesca Gino, Erin L. Krupka, and Roberto A. Weber (2012) “License to Cheat: Voluntary Regulation and Ethical Behavior, Harvard Business School, Working Papers http://hbswk.hbs.edu/item/7098.html
- DesignGov. Australian federal governments use of EAST framework “Anatomy of a nudge: applying behavioural economics” http://design.gov.au/2013/05/03/anatomy-of-a-nudge-applying-behavioural-insights/
- Behavioural Insights Team, UK Cabinet Office see blog posts http://blogs.cabinetoffice.gov.uk/behavioural-insights-team/