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    Modern Wisdom

    Richard Shotton - 8 Fascinating Psychological Biases

    Mon Feb 20 2023
    behavioral sciencehuman behaviordecision-makinginfluencerewardsfrictionhabit formationfresh start effectproduct qualityengaging contentYouTube optimizationrhyming phrasesprecise numbersmemorable experienceseffective communicationalcohol and truthfulnessperfection and negative reviews

    Description

    This episode explores the fascinating field of behavioral science and its applications in understanding human behavior and influencing decision-making. From the impact of fresh starts and habit formation to the power of rewards and friction, each chapter delves into key insights backed by research studies. Discover how businesses can optimize product quality, create engaging content, and enhance believability through precise numbers and rhyming phrases. Explore the influence of alcohol on truthfulness, the role of negative reviews in driving conversions, and the importance of creating memorable experiences. Join Richard and the host as they discuss these topics and more in this thought-provoking episode.

    Insights

    Behavioral science provides valuable insights into human behavior

    By studying how people actually behave, behavioral science offers practical solutions for entrepreneurs, marketers, and anyone seeking to influence others.

    Fresh starts and habit formation play a significant role in behavior change

    Identifying moments when habits can be broken and new behaviors can be adopted is crucial for effectively influencing behavior.

    Rewards and friction are powerful tools for behavior change

    Variable schedule rewards and reducing friction can significantly impact decision-making and product perception.

    Defaults and effort can nudge behavior in desired directions

    Changing default options and making behaviors easy or difficult can shape decision-making and encourage desired actions.

    Enhancing perceived product quality is key to influencing preferences

    Adding visible effort, creating positive expectations, and using signals of quality can enhance consumers' perception of product value.

    Creating memorable content is essential for engagement

    Optimizing YouTube thumbnails, titles, and content can significantly impact click-through rates and watch time.

    Rhyming phrases and precise numbers enhance believability

    Using rhyming phrases in advertising and presenting precise numbers can increase credibility and make information more memorable.

    Creating memorable experiences and effective communication is crucial

    Translating abstract benefits into concrete visualizable language, leveraging stories, and focusing on creating a vibe can enhance engagement and impact.

    Alcohol influences truthfulness and deception

    Alcohol reduces the ability to lie and enhances truth detection, while also promoting bonding through shared experiences.

    Perfection and negative reviews have unique effects on consumer behavior

    Perfection can deter consumers, while negative reviews can appeal to specific audiences and improve conversions.

    Chapters

    1. Introduction to Behavioral Science
    2. Understanding Human Behavior
    3. Influencing Behavior through Rewards and Friction
    4. Nudging Behavior with Defaults and Effort
    5. Enhancing Perceived Product Quality
    6. Influencing Expectations and Believability
    7. Creating Memorable and Engaging Content
    8. Optimizing YouTube Content for Engagement
    9. The Power of Rhyming Phrases and Precise Numbers
    10. Creating Memorable Experiences and Effective Communication
    11. Enhancing Believability and Truthfulness
    12. The Influence of Alcohol and Deception
    13. The Impact of Perfection and Negative Reviews
    Summary
    Transcript

    Introduction to Behavioral Science

    00:00 - 08:37

    • The human brain isn't designed to be rational.
    • Behavioral science, also known as social psychology, is the study of how people actually behave.
    • Anyone who is an entrepreneur, marketer, or trying to influence others should be interested in behavioral science.
    • Behavioral science is based on experiments and has genuine credibility.
    • There are tens of thousands of behavioral science studies that can help solve various challenges.
    • Elegant business theories like purpose driving business growth or trust being a key factor often lack evidence to support them.
    • A study by Louis Cheskin showed that people's perception of taste is influenced by the color and look of food.
    • Direct questioning of consumers can be misleading, so observing behavior provides more accurate insights.
    • Revealed preferences often differ from stated preferences, such as in mating preferences.

    Understanding Human Behavior

    08:09 - 16:01

    • Women tend to prefer men who are taller, better educated, and wealthier than them.
    • People may give misleading answers when asked about their preferences due to social pressures and lack of self-awareness.
    • Data analysis shows that people's actual behavior differs from what they say they believe.
    • Search data on platforms like Google and Facebook can provide more accurate insights into people's genuine preferences.
    • Habit formation plays a significant role in decision-making, as people often rely on heuristics or repeat past behaviors.
    • To change someone's behavior, it is important to identify moments when habits can be broken and new behaviors can be adopted.
    • The fresh start effect suggests that people are more open to change at the beginning of new time periods such as the start of the year, month, week, or after birthdays and holidays.
    • Timing communications to align with these moments can maximize the effectiveness of campaigns or initiatives.
    • Spotify successfully tapped into the fresh start effect by launching their 'Discover Weekly' playlist feature on a Monday.

    Influencing Behavior through Rewards and Friction

    22:59 - 30:39

    • A man gets away with a scam by exploiting security flaws in a competition run by McDonald's
    • Social media platforms use the variable schedule reward system to keep users engaged
    • A speed camera lottery in Sweden successfully reduces average speeds, but some people try to game the system
    • Daniel Coleman argues that making behavior change easy is more effective than increasing motivation
    • An experiment shows that reducing friction significantly increases sign-up rates for a service
    • Experts underestimate the impact of friction and overestimate the importance of motivation in behavior change
    • Businesses often misallocate resources by focusing too much on motivation and not enough on ease of access
    • Example from running nightclubs shows the importance of removing barriers to attendance

    Nudging Behavior with Defaults and Effort

    30:22 - 37:51

    • Changing the default option from opting in to opting out significantly increased enrollment rates in company pension schemes.
    • A small increase in pension contribution tied to a raise resulted in higher uptake compared to suggesting workers contribute more next year.
    • Present preference bias or hyperbolic discount rate explains why people value immediate pleasure more than future pleasure.
    • Setting up a scheme where individuals agree to put money into their pension in the future led to significant increases in contributions.
    • Removing friction is generally effective for behavior change, but adding a small amount of friction can enhance perceived product value.
    • The IKEA effect suggests that people appreciate products more when they put effort into assembling them.

    Enhancing Perceived Product Quality

    37:22 - 45:23

    • Adding a small delay and visible effort can improve perceived product quality.
    • A study showed that a travel comparison site with a small delay and a loading bar was rated as better by users.
    • Making customers go through a bit of effort boosts their perception of quality.
    • If consumers can see the efforts a brand has gone to, they appreciate it more.
    • The illusion of effort can be used to proxy for product quality.
    • Transparency is important in showing the efforts made by service providers or brands.
    • Displaying signals of effort, such as artisanal flour in restaurant windows, can create positive expectations about food or drink products.

    Influencing Expectations and Believability

    44:55 - 52:34

    • Setting up positive expectations about food or drink is crucial
    • Price, presentation, description, and brand influence expectations
    • People tend to rate expensive wine higher in taste
    • Study shows people struggle to differentiate between red and white wine
    • Gusto food box model provides variety and surprise with variable schedule reward
    • Cooking from scratch feels more rewarding than instant meals
    • The generation effect suggests that self-generated information is more memorable

    Creating Memorable and Engaging Content

    52:08 - 1:00:19

    • When people have to generate the answer themselves, it makes information more memorable (generation effect).
    • Creating a balance of ease and difficulty in advertising helps make it memorable.
    • The Economist ad used the generation effect by setting up a puzzle for viewers to solve.
    • The ad conveyed a slightly mean message with charm, making it effective.
    • Posing statements as questions can boost credibility and believability.
    • The success of posing questions depends on the brand's prestige.
    • Creative use of social proof can be seen in Red Bull's strategy of placing crushed Red Bull cans in nightclub litter bins.
    • Optimizing YouTube thumbnails and titles is important for click-through rate and watch time.

    Optimizing YouTube Content for Engagement

    1:00:04 - 1:07:12

    • CTR (click through rate) and watch time are important metrics for YouTube videos.
    • Thumbnail and titling optimization can significantly impact CTR and watch time.
    • Mr. Beast spends between $10,000 and $30,000 on each thumbnail with hundreds of options.
    • The average number of characters in the top video of the suggested feed is 44.
    • Using powerful or aggressive words in titles can increase click rates.
    • Fast-paced editing with quick cuts is effective for retaining viewer attention.
    • MrBeast's recent video employed a new tempo of cuts within the edit to engage viewers.
    • Behavioral science insights can be applied to optimize YouTube content for better performance.
    • YouTube is the second largest search engine in the world, making it a high-volume platform.
    • The illusion of control influences behavior by creating a sense of agency and value.
    • Offering choices, even if meaningless, can increase perceived value and engagement.
    • Phrases that rhyme are more believable according to a study on pseudo proverbs.

    The Power of Rhyming Phrases and Precise Numbers

    1:06:45 - 1:14:46

    • Rhyming phrases are more believable and memorable in advertising.
    • Despite the effectiveness of rhyming phrases, their use in advertising has declined over the years.
    • The complexity of advertising models may be a reason for the decline in the use of rhyming phrases.
    • There is a tension between creating effective solutions and justifying high fees in service industries.
    • An example of reducing complaints by manipulating occupied waits was implemented at an airport.
    • Having more options on Google Maps for different routes could improve user experience.
    • Transport providers often optimize for shortening travel time, but there are other factors that can make a journey more pleasant.

    Creating Memorable Experiences and Effective Communication

    1:14:17 - 1:22:38

    • Transport providers optimize for shortening travel time, but there are other factors that make a journey more pleasant.
    • A study by Ian Begg found that concrete words are more memorable than abstract words.
    • Vision is the most powerful sense, and visualizable language makes information sticky and memorable.
    • Apple's success with iPods was due to translating abstract benefits into concrete visualizable language.
    • Perceptual fluency suggests that imagining using a product increases purchase intent.
    • Stories are more relatable and impactful than statistics.
    • Podcasts should focus on creating a vibe and conveying what can't be summarized in books or articles.

    Enhancing Believability and Truthfulness

    1:22:09 - 1:29:19

    • A study showed that releasing data online bypassing journals and peer review can allow for reassessment of information.
    • People tend to remember the vibe or feeling associated with an experience rather than specific details.
    • Stories are more memorable because they contain concrete visualizable elements.
    • Precise numbers in claims are perceived as more accurate and believable than round numbers.
    • Using precise numbers enhances credibility in published articles or statements.
    • Alcohol switches off the prefrontal cortex, making lying more difficult and truth detection more accurate.
    • Drinking together is a cultural technology that enhances bonding by promoting truthfulness.

    The Influence of Alcohol and Deception

    1:28:52 - 1:36:33

    • Alcohol is a cultural technology that reduces the ability to lie and enhances truth detection.
    • Alcohol can make people reveal their secrets.
    • There is an argument that deceiving oneself is the best way to deceive others.
    • Hares use random movements when being chased by predators to avoid giving away their direction.
    • Precise prices are perceived as more fairly marked up than round prices.
    • Uber's real-world test showed that people were more likely to accept a surge price with a precise value.
    • A large number of perfect reviews can be seen as suspicious, leading to decreased likelihood of purchase.

    The Impact of Perfection and Negative Reviews

    1:36:21 - 1:39:17

    • Perfection can be alarming for people and may deter them from making a purchase.
    • Many podcasts have high ratings, typically around 4.7 to 4.9 out of 5.
    • Andrew Huberman, a popular podcaster, has a perfect rating on both Spotify and Apple Podcasts.
    • Negative reviews can actually improve conversions by appealing to a specific audience.
    • Behavioral science experiments offer unique insights that competitors may not consider.
    • The book 'The Illusion of Choice' can be found on Amazon or other online bookstores.
    • Richard tweets from @ourshot and his company website is astro10.co.uk
    • Richard and the host are looking forward to discussing eight and a half biases in the future.
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