In today's conversation, I am joined by Dr. Dan Willingham, a memory expert with a Ph.D. in Cognitive Psychology from Harvard. Dan’s new book Outsmart Your Brain (which we discuss today) will change your life. While the book is catered to K-16 learners (for example, it includes chapters on “how to take notes,” “how to listen to a lecture,” “how to read hard books,” and “how to take tests”) trust me when I say this book is for you and everyone you know. It is fascinating and will help you with any presentation you may give or meeting you will be in moving forward. Trust me, you’re gonna love this.

A little more about Dan: His work has appeared in the Washington Post, The New York Times, and many other publications, and he is the author of several books – his writing has appeared in 18 languages! In 2017 he was appointed by President Obama to serve as a Member of the National Board for Education Sciences.

Whether you want to be a better learner yourself or if you have kids (including college students) in your life whom you want to help be successful, this episode and book are for you. I can't wait to dive into this one because there is so much great stuff.

Show Notes:

• [00:43] In today's conversation, I am joined by Dr. Dan Willingham. Dan earned his Ph.D. in Cognitive Psychology from Harvard University in 1990.
• [03:03] Dan shares about himself, his background, and the work he does.  He was trained as a cognitive psychologist.  
• [04:04] He shares his transition from basic researcher to applied researcher. 
• [07:02] Often, we assume people know that thing that we know so we miss key things when presenting. That means they don’t get value from your talk. 
• [08:41] There are things we know we should do that we find difficult to implement. Sometimes we really don’t know what is optimal to do. We tend to do things in the moment that we feel are working and are not that difficult. (But often, the harder/counterintuitive thing will make a much bigger impact.)
• [11:16] Does cramming work? Dan says, “kind of.” It depends on what your goals are. If you do not care about remembering something in the long term then crowding it all in right before you need to perform is actually fine. 
• [12:50] The only way to ensure that you remember things in the long term is if your learning happens over time rather than all crammed together. 
• [15:42] If you are trying to master a new skill or a new topic and you feel like you need to wait to start until you have more than small bits of time, don’t wait! The data shows this is actually optimal for learning and retention. 
• [18:2326] Creating that consistent study or work habit by time and not by task is very important. 
• [21:04] We all procrastinate. It is a natural tendency. 
• [22:37] The key thing is you have to give yourself permission to stop if you want to. 
• [24:26] The night of sleep is important in consolidating the memories that were formed during the day. If you don’t get much sleep or you get low-quality sleep you are tampering with the learning that you put so much time into the previous day. 
• [25:40] Your intention or your desire to learn contributes nothing to whether or not you will learn something. There are lots of things we want to remember but don’t. 
• [27:26] Memory loves meaning. That is the main way we remember. 
• [29:05] You draw memory out the same way that it went in. 
• [30:53] Memories are going to be queued by thoughts or by things in the environment later. The way you are going to be able to draw memories out most successfully is when the queue is a good match for the way you thought about the memory at the time you were trying to remember it. 
• [32:51] When you are storing something away, think to yourself, “How am I likely later to try and remember this?” and make that part of the way it becomes retrievable. 
• [35:48] How do you organize 94 tips in one book? He chose to sort them by task. It is organized by things you would do that entail learning (how to read hard books, how to take notes, etc). 
• [38:45] When there is a hierarchical organization in speeches you are expected to make connections among the different things that you are hearing. Because it is not a narrative it is difficult to make those connections. 
• [41:45] You want to reframe to highlight what you enjoy instead of what is making you procrastinate. Looking at it in this way helps you overcome that. 
• [44:43] Allocate time to different tasks to help you get to the tasks that you tend to procrastinate on. Do the hard task first. 
• [46:40] It is not that what you are doing now is ineffective. It is that it can be slightly tweaked to be significantly more effective. 
• [48:31] What’s the simplest tip in the book? Some data shows that chewing gum helps you to focus for 20 minutes. Give it a try if you like gum!
• [50:328] Melina’s closing thoughts
• [51:39] In understanding how your own brain is wired to learn as well as others, and then how to "outsmart it" every step of the way is pure gold.

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
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• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• Outsmart Your Brain, by Dan Willingham
• Good Habits, Bad Habits, by Wendy Wood
• Tiny Habits, by BJ Fogg
• You Are Not So Smart, by David McRaney
• A More Beautiful Question, by Warren Berger

Connect with Dan: 

• Dan’s Website
• Dan on Twitter

Top Recommended Next Episode: An Overview of Memory Bias (ep 280)

Already Heard That One? Try These: 

• How To Change, an interview Dr. Katy Milkman (ep 151)
• Overview of Personal Biases (ep 45)
• Dunning-Kruger Effect (ep 266)
• Habits (ep 21)
• Stressed and Overcommitted? Tips to Tackle Planning Fallacy, a behavioral economics foundations episode (ep 114)
• Framing (ep 16)
• Temptation Bundling (ep 136)
• Herding (ep 19)
• Time Discounting (ep 51)
• Good Habits, Bad Habits: An Interview with Wendy Wood (ep 127)
• Bikeshedding: Why The Simplest Tasks Can Keep You Stuck (A Behavioral Economics Foundations Episode) (ep 99)

Other Important Links: 

Brainy Bites - Melina’s LinkedIn Newsletter

Memory is a funny thing. We like to think we have these perfect pictures of what really happened in our minds waiting to be retrieved in pristine condition, but that’s not at all how it works. It turns out we have all sorts of biases that, well, bias our memories. And that is important to know in our interactions with other people in life and business. 

The truth is: you can remember something completely different from someone else, and neither of you has to be wrong. Let me say that again, even if you remember something that is completely different than someone else, it doesn’t mean that either of you is wrong. Our brains screen for different information than what someone else might be screening for (focusing illusion and confirmation bias). That subconscious filter is sifting through a lot of stuff, and what mattered to you and what you remember is never the full picture. This episode, which originally came out in early 2019, is a quick run through of a bunch of memory biases (part of the 8-part “All the Biases”  series). 

So, why was memory important to refresh today? It is because of the guest I am delighted to introduce you to this coming Friday, Dan Willingham, a memory expert whose book Outsmart Your Brain will change your life (and that of every learner you know). Outsmart Your Brain has chapters on “how to take notes,” “how to listen to a lecture,” “how to read hard books,” “how to take tests,” and more. It is fascinating and will help you with any presentation you may give or meeting you will be in moving forward. Trust me, you’re gonna love that conversation and Dan’s book, so be sure to subscribe to The Brainy Business podcast now (before you forget). (Haha, memory joke!)

Show Notes:

• [00:39] Today’s episode is all about memory biases. Memory is a funny thing.
• [01:16] You can remember something completely different from someone else, and neither of you has to be wrong.
• [03:41] Today’s episode is going to be divided into three sections: general memory stuff, false memories, and tips on how you can use these biases to help you remember things better. 
• [04:45] Our memories are basically inaccurate renditions our brains tell us and every time we access them we change them a little. So the more you think about something the less and less it is like the original version. (Frustrating, but true.)
• [06:26] Your customers, coworkers, friends, and family all have these same biases, so hopefully learning more about all your brains will help in all sorts of interactions in the future. 
• [07:20] You are the hero of your own story and no one will remember your story as well as you do (but of course even you don’t remember your story correctly). The emotions tied to bad memories will fade quicker than the emotions tied to positive events. 
• [10:08] A few well planned surprise and delight moments throughout a relationship can create good peaks (and remember the most recent end holds the most weight). 
• [12:38] A false memory is when we accidentally think something we imagined really happened and misattribute it as a memory.  
• [14:15] Our brains are powerful, but they are easily manipulated too. 
• [15:39] The opposite of a false memory is called cryptomnesia when a real memory is mistaken as imagination because there is not a proper experience of it being a memory. 
• [17:21] We do tend to remember the efforts we had to put in as much higher than they were and toils more difficult as they were in reality. 
• [19:12] Don’t feel like you need to remember everything about everything. Instead, remember important things that can’t be easily looked up, and don’t gunk up your brain with all the trivial information.
• [20:45] If you want to be able to remember things better and with easier recall, it is best to have repeated exposure over a long span of time instead of trying to cram it all in at the last minute.
• [22:14] Try to commit things to memory in the context they belong to or multiple contexts so they are less isolated. The mood we are in is also tied to the context.
• [24:13] If you want to remember things, write them down. 
• [25:51] Visual images are often recalled by our visual subconscious faster and easier than words because of the picture superiority effect.
• [27:38] We all put so much effort into making things as easy as possible to read and process but in reality due to processing difficulty, stuff that takes longer to read and process is easier to remember. 
• [28:43] We are provided with lists of things all the time and the way those things are presented absolutely impacts memory.  
• [30:15] Due to the next in line effect you are less likely to remember the words people spoke just before you because you were distracted with what you wanted to say. Being a good listener is key to building relationships in life and business. 
• [31:40] Melina’s closing thoughts

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn More and Support The Brainy Business:

Get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• Outsmart Your Brain, by Dan Willingham
• What Your Customer Wants and Can't Tell You, by Melina Palmer
• You Have More Influence Than You Think, by Vanessa Bohns
• You Are Not So Smart, by David McRaney 
• Unleash Your Primal Brain, by Tim Ash

Top Recommended Next Episode: Confirmation Bias (ep 260)

Already Heard That One? Try These: 

• Costco (ep 47)
• Apple Card (ep 42)
• Overview of Personal Biases (ep 45)
• The Overwhelmed Brain and Its Impact on Decision Making (ep 32)
• The Focusing Illusion (ep 89)
• Surprise & Delight (ep 276)
• The Peak End Rule (ep 97)
• Time Discounting (ep 51)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter 
• COGNITION Chapter 6: MEMORY DISTORTIONS Fundamentals of Cognitive Psychology
• of-joke-stealing-and-plagiarism.html"> The Science of ‘Accidental’ Joke-Stealing and Plagiarism

In today's conversation, I am joined by McDonald’s Lauren Kemp and Stephen Springfield from the Aspen Center for Consumer Science. Last fall I saw them give a talk at IIEX Behavior on how they used behavioral science to create an "irrational" loyalty program at Mcdonald's. It was instantly clear they had to be on the show to talk about this project, its insights, and what you can learn from it.

It is such a great case study showing how real people inside organizations (and in this case, working with a great consultant), can create a program that infuses behavioral insights in a smart way -- that is often counterintuitive – to find a win-win for the company and its customers. 

You'll also hear tips from Lauren about how she did her literature review and lots of other great insights. And, do know that while we joke about not loving the term "irrational" as it is popularly used in behavioral science, if there was ever a program that proved a lot of the choices people make aren’t exactly rational this would be it. You'll see what I mean as they dig in on the story in the episode…

Show Notes:

• [00:46] In today's conversation, I am joined by Lauren Kemp and Stephen Springfield, whom I first saw while they were giving a presentation at Greenbook’s IIEX Behavior last fall.
• [03:44] Lauren shares about herself and her background. She works in consumer insights at McDonald’s on the US team.
• [04:41] Stephen shares about himself and his background. Stephen is the Founder and Principal at Aspen Center for Consumer Science. 
• [06:43] Novelty and the magic of the irrational attracted Stephen to behavioral science and behavioral economics. 
• [07:35] Behavioral science isn’t really about the irrational and the crazy cool stuff. It is about the scientific process applied to understanding behavior.  
• [10:35] Irrationality is where all the profit is.
• [13:05] Lauren started her career with an internship at Brain Juicer. They were pioneers in the behavioral economic space. McDonald’s was one of her main clients there. 
• [15:17] McDonald’s global team created the loyalty program so the individual markets had some space to make the program work in their specific market. 
• [17:17] She started with a literature review since loyalty programs were not new to the industry. She wanted to learn what was most important for a loyalty program and how they could design theirs to be successful. 
• [19:45] Top tips for doing your own literature review? Definitely start by bookmarking Google Scholar. 
• [22:11] The program needed to entice customers to engage with the program. They wanted it to be consumer centric. 
• [24:16] They knew it was very important for the program to be transparent enough and easy to understand. Consumers don’t like it when they feel they are being tricked or it is clouded. Transparency is so huge in our culture today.
• [25:57] They found that the value of a loyalty program is engagement with the program itself – not the reward that you get. The reward you get is transactional. 
• [28:27] Lauren spent a week or two on her literature review process and Stephen’s team did some additional research. 
• [30:39] It is important to invest the time in research, but it probably doesn’t need to take as long as you think. 
• [33:21] There is an aspect of irrationality and that is where the profit is.  You have to find a way to offer something of value that is not completely transactional. 
• [36:23] They wanted to find which items would drive trips because the point of the loyalty program is to get to people to visit more often. 
• [37:58] They tested five different point levels from 1 point to 10,000 points. They found that 100 points per dollar was easy and worked best. 
• [40:03] The goal is to get somebody to purchase something now with an eye toward achieving something later. Mental budgeting and being able to do the math towards a simple reward was a game changer. 
• [43:05] They continued coming back to the goal and objective: getting consumers to come to McDonald’s because they had rewards, and they want to accumulate more rewards, and at some point they would like to redeem those rewards. 
• [44:56] They found there was some linearity with the value of the item and the trip driving behavior, but there were also outliers drove trips.  
• [46:46] If there are products on the loyalty menu that are a lower cost to produce that would still drive engagement from a customer perspective and trips are a huge win. 
• [49:16] Consumers can’t tell you what they would do and why they would do it. 
• [51:35] Key Insight: The thing that drives that behavior doesn’t have to be the most expensive thing. 
• [53:18] Science isn’t really interested as much in truth as things that are reliably predictive. 
• [56:07] Melina’s closing thoughts
• [57:18] It doesn’t need to take eons to incorporate good behavioral science research into your projects. 

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• Marketing to Mindstates, by Will Leach
• The Life Saving Skill of Story, by Michelle Auerbach
• Predictably Irrational, by Dan Ariely
• Choice Hacking, by Jennifer Clinehens
• The Paradox of Choice, by Barry Schwartz

Connect with Lauren & Stephen: 

• Lauren on LinkedIn
• Stephen on Twitter
• Stephen on LinkedIn

Top Recommended Next Episode: Questionstorming at KIND / Mars with Beatrix Daros (ep 215)

Already Heard That One? Try These: 

• Anthropology, Market Research & Behavioral Economics with Priscilla McKinney (ep 196)
• Marketing to Mindstates: A Discussion With Author, Will Leach (ep 88)
• The Power of Story, an Interview with Dr. Michelle Auerbach (ep 145)
• Dan Ariely Interview: Discussing Shapa, the Numberless Scale (ep 101)
• The Science of Cool, with Dr. Troy Campbell (ep 169)
• Nudging for Good at Walmart with Sarah Wilson (ep 206)
• Starbucks: A Behavioral Economics Analysis
• The Most Important Step in Applying Behavioral Economics: Understanding the Problem (ep 126)
• The Pain of Paying (ep 59)
• Framing (ep 16)
• Surprise and Delight (ep 276)
• Where CX and Behavioral Science Meet, interview with Jennifer Clinehens, author of Choice Hacking (ep 141)
• Paradox of Choice (ep 171)
• Unlocking the Power of Numbers (ep 17)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter
• Aspen Center for Consumer Science

As a Seattle girl, I love me some Starbucks so it is fun to refresh this episode which was one of the first (and most popular) behavioral economics analysis episodes I’ve ever done. It is currently the 11th most downloaded episode of the show of all time, and with 277 episodes to date, that is a pretty big deal! If you aren’t familiar with this format, it is an episode where I talk about a well-known company and their practices to share what concepts from behavioral economics and behavioral science in their work so you can see what you might want to emulate and what isn’t a good fit for you in your company. 

So, why this episode from late 2019, and why now? Well, it is because of the loyalty program and this coming Friday’s episode where I am joined by Lauren Kemp and Stephen Springfield to talk about how they created an “irrational” loyalty program at McDonald's during the pandemic. It is a fascinating story with lots of insights for you to learn.

Today, I chose to share an episode that showcased another loyalty program doing a lot of smart things that are different from the traditional punch card approach to loyalty. (And, good news, there is a lot more to this episode that I know you’re gonna love.) So grab a coffee, and settle in…

Show Notes:

• [00:40] Today’s episode is a behavioral economics analysis of Starbucks.
• [04:01] In this episode we are going to dig into their Star Rewards program, featured drinks, and products, the coveted red cups, their personality, overall brand choices, their logo, locations, social media, and pricing. 
• [04:23] Without the original brand and pricing, Starbucks would be just another coffee shop.
• [05:57] One of the big aspects Starbucks had to overcome was the pricing anchor. 
• [08:41] Howard Schultz and Starbucks took a step back. They got out of their own way and created a new category which ended up changing the conversation about coffee around the world. Asking good questions can help you get there. 
• [10:19] Price is never about the price. It is all about all the things that come before the price that matters more than the price itself.
• [12:02] The first big drink Starbucks made famous was the Frappuccino. There is a lot of effort that goes into turning these things into multibillion dollar industries.  This created a brand within a brand. 
• [14:27] Most everyone knows that the original PSL started at Starbucks. Pumpkin spice lattes are one of the seasonal drinks Starbucks brings out each year. They are only available for a few weeks or months until they are gone. This is scarcity in action. 
• [17:39] Starbucks changed the game. They created something different and managed to hold a big piece of the market even when imitators arose in every area. 
• [18:28] Starbucks is constantly testing and they are not afraid to have something really popular only available sometimes. 
• [19:24] Making and keeping a tradition alive is something Starbucks does amazingly well. The red cup first debuted in the 1997 holiday season and has been a staple ever since.  
• [20:19] When you become a lifestyle brand you bear the responsibility of being a big part of peoples’ lives. Your choices reflect theirs and when you do something out of character, they will tell you about it. This is both good and bad. 
• [22:30] Consistency is key and until you define what you are and are not you can’t be whatever it is consistently. When you have your own filters and know what you are about you can shout them from the rooftops and your tribe will resonate with them. 
• [24:49] The value of a brand is more than money and bottom-line sales. It is about the overall experience with the brand at its core. 
• [27:13] Find what people are already talking about and loving and see how you can be part of that conversation. 
• [28:39] The Star Rewards model is built to create habits for users and increase visits. It also encourages users to try new items and has limited-time offers, and customized preferences with an opportunity to get bonus stars. 
• [29:48] Being willing to test, experiment, and learn is something Starbucks does really well. Essentially Star Rewards is a huge testing ground of live field environments. 
• [32:15] Star Rewards is super easy and built-in. You have loss aversion and reciprocity built into the promotions. 
• [33:50] Star Rewards is a smart balance of loss aversion, scarcity, relativity, habits and more all executed through a series of experiments to see what is bringing the most value to the company and its customers. 
• [34:59] Scarcity is a powerful tool when used correctly, especially when properly paired with loss aversion to help people choose your product. 
• [36:31] Melina’s closing thoughts
• [38:39] There is a lot of value and loyalty that comes from delightful, unexpected experiences and a less formal program is perfect for that.

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn More and Support The Brainy Business:

Get your copies of Melina’s award-winning books. 

Get the Books Mentioned on (or related to) this Episode:

• What Your Customer Wants and Can't Tell You, by Melina Palmer
• How Customers Think, by Gerald Zaltman
• Alchemy, by Rory Sutherland
• Engaged, by Amy Bucher
• Marketing to Mindstates, by Will Leach

Top Recommended Next Episode: Get Your D.O.S.E. of Brain Chemicals (ep 123)

Already Heard That One? Try These: 

• Framing (ep 16)
• Priming (ep 252)
• What is Value? (ep 234)
• Mental Accounting (ep 56)
• Partitioning (ep 254)
• Costco (ep 47)
• Apple Card (ep 42)
• Anchoring and Adjustment (ep 11)
• Herding (ep 19)
• The Truth About Pricing (ep 5)
• A Guide for You to Create a Brainy Brand (ep 43)
• Rebrand, Refresh or Reinforce? (ep 44)
• Availability (ep 15)
• The Sense of Hearing and Sound (ep 27)
• Habits (ep 256)
• How To Set Up Your Own Experiments (ep 63)
• Relativity (ep 12)
• Reciprocity (ep 238)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter 
• starbucks-barista-asked-me-this-1-simple-question-using-it-may-be-a-great-way-to-boost-your-sales.html"> A Starbucks Barista Asked Me This 1 Simple Question, and Using It May Be a Great Way to Boost Your Sales
• Every Starbucks Growth Strategy Is Working
• 30 Interesting Starbucks Facts and Statistics (2019) | By the Numbers
• How Starbucks Transformed Coffee From A Commodity Into A $4 Splurge
• Starbucks Didn’t Invent the Frappuccino. Here’s Who Did.
• Starbucks Has Made An Insane Amount Of Money From PSL Sales
• Starbucks Red Cups 2019: When Do Christmas Holiday Drinks Start Going on Sale?
• A Brief History of Starbucks’ Holiday Cup Controversies
• Starbucks Will Be Selling Fewer Limited-Time-Only Drinks That Can Be Super Hard To Make
• SPAM® Pumpkin Spice

In today's conversation, I am joined by John Sills. John is Managing Partner at the customer-led growth company, The Foundation. He’s been in front-line teams delivering the experience, innovation teams designing the propositions, and global HQ teams creating the strategy. He's been a bank manager during the financial crisis (which he says was not fun), launched a mobile app to millions of people (very fun), and regularly visits strangers’ houses to ask very personal questions (incredible fun).

He now works with companies across industries and around the world, and before joining The Foundation spent twelve years at HSBC, latterly as Head of Customer Innovation. He regularly writes on Customer Experience and Innovation, and his first book, The Human Experience, just came out and is what we are discussing today.

This was a really fun book, and it is chock-full of real life experiences from businesses (both good and bad) that you can learn from. John keeps it light, even when teaching some really important stuff, and helps us to see how we can all benefit from remembering that we are, at the end of the day, humans (and so are our employees and customers). So let's just bring a bit more human-ness back into our companies!

Show Notes:

• [00:43] In today's conversation, I am joined by John Sills. John is the managing partner at the customer lead growth company, The Foundation. 
• [03:24] John shares himself and his background.
• [05:56] You really need to want to make things better for customers. 
• [08:41] You are closer to your colleagues, business, products, and services, but your customers are really important. We often write things that make sense to us but not to our customers. 
• [11:22] Factfulness is all about helping us challenge our perspectives of the world. It is easy for us to think we are the center of the world. 
• [14:01] Nearly all of the research we have is very inside out. It is all about the company and almost none of it is about the customer and how we can be useful to them. 
• [16:10] Companies should stay close to what matters most to their customers and their lives and then work out how to be useful to them. 
• [19:42] As a CEO if you don’t go and experience the other jobs in your company yourself then you never get the visceral connection to what is really mattering for your customers. 
• [23:07] A real sense of responsibility and ownership for the customer is missing in many organizations. 
• [24:09] John shares a wonderful customer experience he had with Swiss Rails. 
• [27:27] Bad customer experiences are really expensive to provide. 
• [29:35] If you give a good experience in the first place your customers will contact you less and everything will be more efficient. 
• [30:23] Failure demand is the demand that is put on your service or organization as a result of failures you made elsewhere in your customer experience or service. 
• [32:50] As humans we are truly loyal to very few things. Very rarely are we truly loyal to companies. 
• [34:02] If you as an organization stay more useful than your competitors then people will stay with you. 
• [35:09] Organizations spend very little time keeping the experience great and essentially ignore endings or make it difficult for customers to leave. 
• [37:35] If as the leaders in an organization, you really understand what matters to people in their lives then your singular job is to understand how you can be most useful to them in their life. 
• [38:30] What is at the heart of great organizations is really understanding their customers and really staying useful to them. 
• [39:55] If you can retain that humanness in your organization and let your people be human then they will understand customers and create things that are useful. 
• [41:43] No one has time to stop and think and it is really dangerous. It feels like it is really important to check things off a to-do list instead of really getting things done well.  
• [43:18] When you don’t have the time to step back, bad customer experience abounds. 
• [44:05] When you try to make it look like you know the person you are talking to and then you miss it feels a lot more painful and annoying than if you didn’t ask enough.
• [46:43] Over the last 20 years organizations have done a great job at trying to perfect the functional customer experience, but they have done that at the expense of the emotional and human experience.
• [48:27] Just be the human you have spent all your life training to be. Speak in a human way, think about what it is like to be on the other end, and take time to understand other people. 
• [50:00] Treat people the way you want your gran to be treated and make your mum proud of the decisions you make. 
• [51:30] Melina’s closing thoughts
• [52:28] If you consider the extreme costs when you have to fix things it is often more cost effective to do it right and more human the first time. 

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• The Human Experience, by John Sills
• Factfulness, by Hans Rosling, Anna Rosling Rönnlund, & Ola Rosling
• Choice Hacking, by Jennifer Clinehens
• The Experience Maker, by Dan Gingiss
• Ends, by Joe Macleod

Connect with John: 

• John’s Website
• John on Twitter
• John on LinkedIn

Top Recommended Next Episode: I, Human with Tomas Chamorro-Premuzic (ep 267)

Already Heard That One? Try These: 

• Herding (ep 19) 
• Overview of Personal Biases (ep 45)
• Paradox of Choice (ep 171)
• Using Behavioral Science to Tackle Addiction (and the Lessons for any Business), Interview with Richard Chataway (ep 134)
• Using Ethnography to Understand Your Customers and Staff, an interview with Felicity Heathcote-Marcz (ep 137)
• Where CX and Behavioral Science Meet, interview with Jennifer Clinehens (ep 141)
• Peak-End Rule (ep 97)
• Framing (ep 16)
• Surprise and Delight (ep 276)
• Social Proof (ep 87)
• How to Create Remarkable Experiences with Dan Gingiss (ep 185)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter
• CX Stories on Instagram
• CX Stories on Substack

Today’s episode is all about surprise and delight. Hopefully, the title concept of this episode already has you in a happy and delightful mood (that’s priming for you!) and you are ready for some fun. I love thinking about experiences and incorporating fun, delightful moments. It can be with customers or employees and in totally unexpected places (that is the best strategy) like an error page of a website or the legaleze people agree to. 

Little moments of thoughtfulness are my favorite, and they help us to have fun at work (we should!) as well as help our customers and employees to enjoy interacting with us (which will make them want to do it more). And, while I don’t need much of an excuse to talk about surprise and delight, there is a specific reason I chose to refresh this episode from 2019 today, and that is as a lead into this coming Friday’s conversation with John Sills on his new book The Human Experience. 

His book is all about creating better experiences. He features brands that are already doing an amazing job and how companies can make big leaps by remembering their humanness. Great experiences shouldn’t be surprising, but sadly they are as too often the experiences with brands are more of a pain than a pleasure. But it doesn’t have to be this way! This episode will share why delight is so critical to companies, why surprise matters, what it all has to do with loyalty and profitability and so much more. It’s a fun one and I can’t wait to share it with you Friday (if you aren’t already subscribed to the podcast, take a moment to do so now). And, in the meantime, let’s talk about surprise and delight.

Show Notes:

• [00:38] Today’s episode is all about surprise and delight.
• [02:12] Great experiences shouldn’t be surprising, but sadly they are as too often the experiences with brands are more of a pain than a pleasure.
• [04:18] If a customer has an expectation they will either be satisfied or dissatisfied by the level at which that expectation is met or not. Expectation can’t lead to delight.
• [05:15] Ideally you are living in the satisfied territory most of the time with a few delights popping up here and there. Delighting customers takes extra work and it can be expensive, though it doesn’t have to be. 
• [05:38] Delight is much more likely to drive loyalty than mere satisfaction.
• [07:31] It is important to not get stuck in the traps of false loyalty. 
• [10:13] A 5% increase in loyalty can increase your profit by as much as 85%. 
• [11:03] Loyalty is huge for businesses and delight is a big key to earning it. Loyalty isn’t the only awesome thing to come out of delighting customers. 
• [11:57] The biggest issue is that there is no standard scale for measuring delight. 
• [14:14] Customers can’t tell you what would cause them to be delighted because they have to be surprised. They can’t be expecting it or it isn’t going to hit the delight scale. 
• [17:46] Finding someone who is influential and loves your brand and then finding a way to work with them can both delight that person and their following. 
• [19:39] If your delights become standard then they become expected. Surprise is key to delight. 
• [22:33] Having a great first encounter helps set the relationship off on a good start. Having a dose of delight every now and then keeps customers happy. 
• [24:09] Empowering employees to help customers and go the extra mile can make a big difference in loyalty scores and profitability. 
• [26:02] Sometimes the most delightful “WoW” moments happen in the blink of an eye. If employees are not empowered and need to cross layers of approval these moments could be lost forever. 
• [28:27] In other businesses this could be as simple as changing the radio station on a loaner car to match the customer's vehicle when it is brought in for repairs, or knowing when a client comes to your office for a meeting drinks chai tea lattes and having one waiting on them when they arrive. Little things can make a big difference and delight your customers. 
• [30:01] Businesses always need to be watching the market to see what the status quo is and how expectations have changed to keep up with delight. 
• [32:33] Melina shares one of her favorite examples of surprise and delight. 
• [34:35] There are countless other ways your company can implement surprise and delight for your customers.  
• [36:34] Listen to customers to understand what’s important to them. 
• [38:08] Delight is not something you do one off and hope for the best. It requires time and strategy, but it is absolutely worth it. When you give a little bit to people often they want to give back. 
• [40:45] Don’t let herding make you feel like you have to send stuff at the same time as everyone else. That is precisely why you should send something at another time because no one else is. 
• [41:37] Melina’s closing thoughts
• [43:41] It is important to take a step back and look around and disassociate from the current experience. Working with a consultant can be very helpful to bring fresh eyes to the situation.  

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• What Your Customer Wants and Can't Tell You, by Melina Palmer
• How Customers Think, by Gerald Zaltman
• Alchemy, by Rory Sutherland
• Engaged, by Amy Bucher
• Choice Hacking, by Jennifer Clinehens 

Top Recommended Next Episode: Get Your D.O.S.E. of Brain Chemicals (ep 123)

Already Heard That One? Try These: 

• Framing (ep 16)
• Priming (ep 18)
• Decision Fatigue (ep 132)
• Relativity (ep 12)
• Nudges and Choice Architecture (ep 35)
• The Overwhelmed Brain and Its Impact on Decision Making (ep 32)
• The Sense of Touch (ep 28)
• How To Set Up Your Own Experiments (ep 63)
• The Pain of Paying (ep 240)
• Overview of Memory Biases (ep 48)
• Apple Card (ep 42)
• Herding (ep 19)
• How to Create Remarkable Experiences with Dan Gingiss (ep 185)
• Anthropology, Market Research & Behavioral Economics with Priscilla McKinney (ep 196)
• Choice Hacking, with Jennifer Clinehens (ep 141)
• Engaged, with Amy Bucher (ep 164)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter 
• How to Delight Your Customers
• Customer Delight: Foundations, Findings, and Managerial Insight
• Delight by Design: The Role of Hedonic versus Utilitarian Benefits
• tomato-ketchup-150-anniversary-a8946431.html"> Ed Sheeran Launches Own Heinz Tomato ‘Edchup’
• Ed Sheeran Edchup on Instagram
• Ed Sheeran on Instagram @teddysphotos
• The Good, the Bad and the Beautiful of Employee Empowerment
• Turkey Talk Line

In today's conversation, I am joined by Richard Shotton. His first book, The Choice Factory, is a best-selling book on how to apply findings from behavioral science to advertising. His new book, The Illusion of Choice: 16 ½ Psychological Biases that Influence Why We Buy, is a phenomenal add to what he has already contributed to the field of behavioral science. 

This book (and conversation!) are both full of great examples from traditional academic research and from practical application. And, one of my favorite things that Richard does is take research and recreate it. Sometimes it replicates (and does even better than expected) and sometimes it doesn’t – whatever the results, they are shared and there are learnings for everyone involved. And, of course, that includes you. 

Does precision matter? Should you speak in abstract or concrete terms? Tune in and get ready for these amazing lessons and many more…

Show Notes:

• [00:43] In today's conversation, I am joined by Richard Shotton. Richard is the author of The Choice Factory, a best-selling book on how to apply behavioral science to advertising. 
• [02:42] Richard shares himself, his background, and the work he does in behavioral science. 
• [04:06] There are thousands of biases. He covers 25 in The Choice Factory. His new book covers 16 and ½ more. (The half chapter is around the power of precision.) 
• [06:51] Precision is powerful. Generally if someone knows the subject they speak in precision, if not they speak in generalities. 
• [09:30] The precise price tends to be seen as lower than rounded ones.  
• [11:52] If you want to change behavior, remove friction. If you want to boost appreciation of your product, you might want to add some friction. 
• [13:10] The importance of framing the question is key if you are going to use behavioral science practically.  
• [15:42] You have this huge swing in memorability based on whether terms are concrete or abstract. If we can picture a term it becomes very sticky if not it becomes forgettable. 
• [18:02] Increasingly brands talk in abstract terms. It is ineffective to use that language. If you want to communicate one of those abstract objectives you have to translate it into more concrete terminology. 
• [20:43] Academics sometimes make behavioral science more complex than it has to be. Reading modern academic papers is a chore. 
• [22:41] The evidence shows that if you communicate simply you come across as more prestigious and more intelligent. 
• [25:50] People were twice as likely to remember the rhyming than the non rhyming phrases. Alliterating phrases have a boost of believability and memorability. 
• [28:06] We have to make sure that what we do is what our clients want us to do rather than worrying about the kudos that we as individuals get. 
• [30:19] The cafe had a problem that people didn’t want to go on a Monday. So if you go on Monday you get to roll the brass dice. If you roll a six everything you have eaten is free. (Love this!)
• [33:27] If you know that this is the thing on Monday, everyone is going to order a little bit more because they might get it all for free. 
• [36:01] People are not only interested in maximizing the financial benefit of the situation. They also wanted to know that they are being treated well and not being taken advantage of.  
• [38:35] Questions are so important. Questions can give people a pause for thought and influence them more subtly. 
• [41:12] Professionals are just as influenced as consumers with the vast majority of biases. The only difference is they are even more loathe to admit it. 
• [42:43] Podcasts and books are a wonderful way of quickly understanding lots of different experiments. The ones you think are most interesting are worth finding the original paper and exploring further. 
• [44:53] Melina’s closing thoughts

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• The Choice Factory, by Richard Shotton
• The illusion of Choice, by Richard Shotton
• Alchemy, by  Rory Sutherland
• Friction, by Roger Dooley
• Sludge, by Cass Sunstein

Connect with Richard: 

• Richard’s Website
• Richard on Twitter

Top Recommended Next Episode: Friction, with Roger Dooley (ep 274)

Already Heard That One? Try These: 

• Herding (ep 19)
• Status Quo Bias (ep 142)
• The Voltage Effect with John List (ep 190)
• What Problem are You Solving? (ep 126)
• Sludge: What It Is and How to Reduce It (ep 179)
• IKEA Effect & Effort Heuristic (ep 112)
• Habits (ep 21)
• Framing (ep 16)
• The Sense of Sight (ep 24)
• Get Your D.O.S.E. of Brain Chemicals (ep 123)
• Inequity Aversion: That’s Not Fair! (ep 224)
• Unlocking the Power of Numbers (ep 17)
• Relativity (ep 12)
• Peak-End Rule (ep 97)
• Social Proof (ep 87)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter
• 150.pdf">Schindler Precision
• Dynamic Pricing in a Labor Market: Surge Pricing and Flexible Work on the Uber Platform

Today I welcome Roger Dooley to The Brainy Business podcast for a refresh of our conversation about his book Friction. Featuring this discussion was inspired by Richard Shotton's new book The Illusion of Choice, which has one chapter about “making it easy” and then another on “making it difficult” (and you’ll hear all about it on Friday). This perfectly aligns with Roger’s book, Friction, which is all about understanding the psychology of friction and how it can be used to optimize customer experiences. That made it the perfect refresh candidate for this week!

While reducing friction is often best and what most businesses need, sometimes there is also value in adding friction in the right places. For example, in What Your Employees Need and Can’t Tell You, I suggest introducing a 30 minute waiting period before sending emails can help to avoid mistakes. 

As you listen today and think about Friction, consider your own experiences — where can they be easier? Where should they be more difficult? I know that seems a bit counterintuitive now, but some thoughtful friction is really valuable in the right places. Listen in to learn how you can use friction in your own business.

Show Notes:

• [00:39] Today’s episode is all about friction, specifically, a refresh of the conversation I had with Roger Dooley on his book Friction way back in November 2019.
• [01:44] As you listen today and think about friction, consider your own experiences — where can they be easier? Where should they be more difficult?
• [04:04] The cover of Roger’s book, Friction, intentionally had a coarse / gritty texture. It was meant to convey a sense of friction. (Priming!)
• [05:35] Roger shares about himself, his background, and the work he does.  
• [07:40] The interaction of neuroscience, behavioral science, and business has always been fascinating to him. His blogging, podcast, and books have given him a chance to explore that and simplify it for people in business. 
• [09:22] There has been an increase in business interest in behavioral science.
• [11:46] Change is hard, especially when humans are involved. 
• [12:57] 95% of the time businesses have too much friction in their processes.
• [13:49] There are times when adding friction helps. In general, it is best to eliminate it. Amazon is a prime example of that. 
• [16:27] Friction is an unnecessary effort to complete a task. 
• [18:29] Amazon makes it so that 99% of the time or more you are simply using the one-click button to ship a product to your home address or office address.  That makes it a low-risk transaction. 
• [21:46] People don’t look at the cost of the processes they create. When looking at the total time, cost, and effort compared to the amount you would lose, there’s no comparison. 
• [23:29] Where there is high trust there is low friction. 
• [25:08] Often we create processes that are designed to make things easier but they don’t really work that way. 
• [27:51] How many people are going to be affected by this and how can we make things easier? 
• [30:08] In general, if you are trying to maximize leads or sales, making the process as simple as possible is the way to go. 
• [33:08] By giving them that “out” you relieve the pressure and they are more comfortable complying with the request. 
• [35:54] Buffer took all the friction out of scheduling social media. They made it simple to get started. 
• [38:34] Rather than seemingly correct the person and imply that they didn’t work at it hard enough they avoid the word “actually”.
• [40:46] Loyal customers are better and more valuable than new customers. Low-effort experiences drive loyalty. 
• [42:38] They are comparing you against their best, lowest effort customer experiences. 
• [43:57] You are endangering the loyalty of all those customers you can not handle in that instantaneous and efficient manner. 
• [46:54] Sometimes eliminating useless parts of the process is the best way.
• [48:34] As you look to decrease friction you will start to notice it all around you. 
• [50:27] Melina’s closing thoughts
• [52:41] Remember, you are a human doing business with humans inside your company and with your customers — trust and humanness and a reduction in friction can go a long way in building an amazing business.

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn More and Support The Brainy Business:

Check out Melina’s books. 

Get the Books Mentioned on (or related to) this Episode:

• Friction, by Roger Dooley
• What Your Customer Wants and Can't Tell You, by Melina Palmer
• How Customers Think, by Gerald Zaltman
• Alchemy, by Rory Sutherland
• Sludge, by Cass Sunstein 

Connect with Roger: 

• Roger’s Website
• Roger on LinkedIn
• Roger on Twitter

Top Recommended Next Episode: Sludge (ep 179)

Already Heard That One? Try These: 

• Relativity (ep 12)
• The Sense of Touch (ep 28)
• How To Set Up Your Own Experiments (ep 63)
• Surprise and Delight (ep 60)
• Framing (ep 16)
• Priming (ep 18)
• Nudges and Choice Architecture (ep 35)
• The Overwhelmed Brain and Its Impact on Decision Making (ep 32)
• Focusing Illusion (ep 89)
• Decision Fatigue (ep 132)

Other Important Links: 

Brainy Bites - Melina’s LinkedIn Newsletter

In today's conversation, I am joined by Dr. Uri Gneezy. Uri's research focus is on putting behavioral economics to work in the real world, where theory can meet application. He is looking for basic research as well as more applied approaches to topics like incentives-based interventions to increase good habits and decrease bad ones, Pay-What-You-Want pricing, and the detrimental effects of small and large incentives. In addition to the traditional laboratory and field studies, he currently works with several firms conducting experiments which use basic findings from behavioral economics to help companies achieve their traditional goals in nontraditional ways.

You may be familiar with Uri's name because he coauthored the wildly popular book, The Why Axis with John List, who was on the show last year talking about his book The Voltage Effect. 

I have a feeling you're going to really enjoy this conversation as it is about a topic people in business are thinking, talking and asking about all the time: incentives. Most specifically, Uri talks about what happens when we mix our messages (it happens a lot more often than you realize) and how that impacts behavior. There are tons of fascinating and practical examples in the book, and we will talk about a few of them today in the episode.

Show Notes:

• [00:42] In today's conversation, I am joined by Dr. Uri Gneezy. Uri’s research puts behavioral economics to work in the real world where theory can meet applications.
• [03:15] Uri shares his background and the work he does in behavioral science. He is a behavioral economist and most of his work is around how incentives really work and how they can change the world. 
• [05:19] When you give the incentives it is not just the money, reward, or recognition that you give, you are also sending a message and telling a story. If you don’t really understand how the incentive can shape or change the story you might send the wrong message. 
• [07:03] Incentives are not good, wrong, or bad. It really depends on how you use them. 
• [09:25] By changing the incentives from money to an item like a mug or pen you change the message that supports the signal that you want to send. 
• [11:45] Uri shares about research around donating blood.
• [14:01] In the late ’90s hybrid cars started to pop up. Toyota won the market with the signal they sent. 
• [16:39] Different incentives work on different people. The incentives don’t have to apply to everyone. 
• [18:25] The role of incentives should be to push the story in the direction you want. Incentives are going to change the story. 
• [21:27] Quality is much harder to control than value and sometimes it is subjective. How do you incentivize without damaging the quality?
• [24:30] We really need to be careful about the incentives we give. 
• [27:00] If we want innovation we have to make sure we don’t punish failure. 
• [29:59] If you have an incentive in place, try to think about it and see if it really sends the message that you want to send. 
• [30:51] The fact that you tried incentives and they didn’t work doesn’t mean that incentives don’t work. It means that what you tried didn’t work and it is time to try something else. 
• [33:26] You need ways to measure your incentives and how they are working. 
• [36:00] He decided to add cartoons to his book because they deliver the message better than just reading a long description and it makes it fun and less boring. 
• [38:48] The Coca-Cola story is a very good example of how the framing of the incentive can give a completely different experience. 
• [40:26] Not all incentives are created equal and you can understand more about them and predict how they will work if you understand the message they are sending. 
• [41:55] Our brains have mental accounts.  
• [44:30] If you find out what your clients care about you can use that to create your incentives. 
• [46:51] The amount of money really sends a signal but gifts send a very different signal and meaning.  
• [49:36] Make incentives simple. If you have many incentives, consolidate them. Make sure you align what you do with the message you want to give. 
• [50:52] Melina’s closing thoughts

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. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

Let’s connect:

• Melina@TheBrainyBusiness.com
• The Brainy Business® on Facebook
• The Brainy Business on Twitter
• The Brainy Business on Instagram
• The Brainy Business on LinkedIn
• Melina on LinkedIn
• The Brainy Business on Youtube
• Join the thoughtful-revolution.mn.co/share/ZPtvQYsTaB3hBvt1?utm_source=manual"> BE Thoughtful Revolution – our free behavioral economics community, and keep the conversation going!

Learn and Support The Brainy Business:

Check out and get your copies of Melina’s Books. 

Get the Books Mentioned on (or related to) this Episode:

• Mixed Signals, by Uri Gneezy
• The Why Axis, by Uri Gneezy and John List
• Drive, by Daniel Pink
• Quit, by Annie Duke
• Both/And Thinking, by Wendy Smith & Marianne Lewis

Connect with Uri: 

• Uri on LinkedIn
• Uri on Twitter

Top Recommended Next Episode: The Voltage Effect with John List (ep 190)

Already Heard That One? Try These: 

• Secrets of Motivation and Incentives, Tim Houlihan Interview (ep 109)
• Motivation and Incentives at Work with Kurt Nelson (ep 187)
• Incentives (ep 272)
• Social Proof (ep 87)
• Cognitive Semiotics and Metaphors with Sarah Thompson (ep 259)
• Using Semiotics in Retail with Rachel Lawes (ep 191)
• The Cobra Effect (ep 220)
• Priming (ep 18)
• Quit: The Power of Knowing When to Walk Away, with Annie Duke (ep 227)
• Both/And Thinking with Dr. Wendy Smith (ep 261)
• Framing (ep 16)
• Anchoring and Adjustment (ep 11)
• Mental Accounting (ep 56)

Other Important Links: 

Brainy Bites - Melina’s LinkedIn Newsletter

Today’s episode is all about iNcentives, specifically as they pertain to the concept of NUDGES. This episode first aired as part of a 7-part series I did on NUDGES back in 2019. Why seven parts? Well, “NUDGES” is an acronym for the six types of nudges as introduced by Thaler and Sunstein: iNcentives (which is a bit of a fudge to make it work, but we all forgive them), Understand Mapping, Defaults, Give Feedback, Expect Error and Structuring Complex Choices. That original series included one episode on each, plus an introductory episode into what nudges and choice architecture are to kick things off - so there you have it: seven episodes. 

This episode on incentives is being refreshed today to help get your brain buzzing on the idea before the wonderful Dr. Uri Gneezy is here on Friday to share about his new book (which just came out today) called Mixed Signals: How Incentives Really Work. It is all about what happens when we mix up our incentives so things don’t work as intended, and what we can do to correct those errors before they happen. 

Digging in on nudging incentives as it pertains to behavioral economics felt like the perfect way to get you ready and in the right mindset for that episode coming out on Friday. (If you haven’t already subscribed to the podcast, take a moment to do so now!)

Show Notes:

• [00:38] Today’s episode is all about iNcentives, specifically as they pertain to the concept of NUDGES. This episode first aired as part of a 7-part series I did on NUDGES back in 2019.
• [03:20] We are inundated with choices in our lives and because our brains are lazy we don’t put in all the effort required to make the best decision every time. Well structured choice architecture can influence the way someone makes a decision and the choice they make. 
• [04:37] Proper incentives can help encourage sales when you understand how they work. 
• [05:11] Good choice architects understand how to structure the nudges and architecture to do what is best for their business. 
• [06:43] Melina’s example - air conditioning!
• [09:02] In general with air conditioning, it may feel like there isn’t really a choice to be had. It looks pretty easy on the surface... 
• [10:30] While air conditioning seems like a simple choice there were actually a lot of variables to be considered.  
• [13:05] Consider who pays, who chooses, who uses, and who profits.
• [14:06] What happens when there are conflicting incentives? That is where we can really run into problems.  
• [15:47] “Do you want the wi-fi enabled one?” 
• [19:11] Look at how you can align the incentives to find the win-win-win scenario.
• [21:45] When all you look at is the cost it is easy to base your pricing off of that – but that isn’t the best way.
• [23:52] Salience (or saying something is salient) is the way an item stands out from other items.
• [25:19] Our human brains have a hard time understanding value and cost over time. 
• [27:03] Breaking down a large payment by year, month, week, or even day can make it a choice easier (or harder!) to make. Context matters.
• [29:43] Being in sales is basically being a full time choice architect. It is the burden of a salesperson and company to structure choices in a way that customers can quickly understand the value and make a choice. 
• [32:02] Paying for the car is removed from the experience of you using and driving it. 
• [34:00] Think about what you want to bring your customers’ attention to (versus what would be a negative experience if you brought their attention to it). 
• [36:23] Points, foreign currency, and tokens are not the same in our mind as “real” money.  
• [38:04] It is important to consider the questions of who uses, who choses, who pays, who profits.
• [40:44] Surge pricing may seem like a way to nudge people into using less energy, but because this isn’t salient in the moment it doesn’t do as much as it could. Here’s something else that might work better…
• [41:55] The last example of competing incentives is the US healthcare system. 
• [44:20] Improvements can always be made. 
• [46:30] Melina’s closing thoughts
• [46:35] I find incentives fascinating because there are so many layers to them. It is so important to look at the ripples of choices and incentives, all those little facets that may not come to mind but can actually be really really important when decisions are made.

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Check out and get your copies of Melina’s Books.

Get the Books Mentioned on (or related to) this Episode:

• Mixed Signals, by Uri Gneezy
• Nudge, by Richard Thaler and Cass Sunstein
• Sludge, by Cass Sunstein
• What Your Customer Wants and Can't Tell You, by Melina Palmer
• The Why Axis, by Uri Gneezy and John List

Top Recommended Next Episode: The Cobra Effect (ep 220)

Already Heard That One? Try These: 

• Motivation and Incentives at Work with Kurt Nelson (ep 187)
• Secrets of Motivation and Incentives, Tim Houlihan Interview (ep 109)
• NUDGES & Choice Architecture (ep 35)
• Understanding Mapping: The "U" in NUDGES (ep 37)
• Defaults: The "D" in NUDGES (ep 38)
• Expect Error: The "E" in NUDGES (ep 39)
• Give Feedback: The "G" in NUDGES (ep 40)
• Structuring Complex Choices: The "S" in NUDGES (ep 41)
• Loss Aversion: Why Getting New Stuff Is Not The Same (ep 9)
• Scarcity (ep 270)
• Relativity (ep 12)
• Anchoring & Adjustment (ep 11)
• The Truth About Pricing (ep 5)
• Unlocking the Power of Numbers (ep 17)
• The Overwhelmed Brain and its Impact on Decision Making (ep 32)
• What is Value? (ep 234)
• Framing (ep 16)

Other Important Links: 

• Brainy Bites - Melina’s LinkedIn Newsletter 
• Nudge: Improving Decisions About Health, Wealth, and Happiness
• Choice Architecture