Proposal

Want to predict behavior? Start in the mind.Digital psychology and persuasion architecture5 September 2016

#2 things to talk about today

Employing psychology in the art of digital persuasion

The fundamental shift in digital channel engagement, how bots are arriving in the scene and what that might mean1

#I am not a psychologist but we do employ them.2

Change in user behaviour dominant platforms are changing, from browser and brands own apps to a mix led by messaging apps, many of which are part of social platforms

#Change in user behavior dominant platforms are changing, from browser and brands own apps to a mix led by messaging apps, many of which are part of social platforms 3

What is digital psychology?Brain thingsBehaviorDigital

#So what is digital psychology? The application of traditional psychological concepts to explain and predict individual attitudes and behaviour as it relates to digital technologies.

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What is digital psychology?

Brain thingsBehaviorDigitalAttitudesEmotionsMotivationsValues

#It is about

AttitudesEmotionsMotivationsValues

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#Psychology has many applications, these are obviously not specific to digital, but how they are addressed through digital can be unique.

Theres four applications of psychology to digital

Changing behaviour through campaigns and digital transformationImproving relationships through product and service designImproving design through optimising user experienceInfluencing decisions through persuasive design: by looking at how to deliver choices, and how we deliver messages.

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#Since we have 10 minutes, Ill focus on the last application influencing decisions.7

Designing Choice

#So how does psychology make businesses smarter about how to give people choice.

So lets start with an experiment.

If you reach under your chair you will find an envelope with $5000 in it

Oh my mistake that was the last conference/webinar! . Lets just imagine I gave you two thousand dollars for a holiday where would you go. 8

What if I gave you four options?

#You have to choose one place to go, would you like it from this selection?9

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What about this selection of 12 destinations?

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#What about this selection of 12 destinations.

If you are like most people, you would want 12 options, not 4. I would want 12 options rather than 4 to choose from.

And I dont really have to tell you why you want 12 options. But I can tell you why thats actually worse for you.

Hicks law tells us the more choices you have, the longer it will take to make make a decision. Other studies tell us that the more choices you have, the less likely you are to be satisfied with your choice in the end. More on that, later. 11

If you are like most people, you would want 12 options, not 4. I would want 12 options rather than 4 to choose from. And I dont really have to tell you why you want 12 options. But I can tell you why thats actually worse for you.Hicks law tells us the more choices you have, the longer it will take to make make a decision. Other studies tell us that the more choices you have, the less likely you are to be satisfied with your choice in the end12

#Is choicekey in digital?

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Choice helps in motivation

#So before I tell you why more choices are worse, Im not saying choice is not important.

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Too many decisionsDecision are mentally tiringPeople want to make the right decisionThe harder the decision, the more frustrating the experienceLeads to bad choices or no choice

#So why is it bad to have too many choices?

The decision making process is cognitively challenging because people have to evaluate and compare

Our attention span and memory doesnt allow for us to do that the human memory can only hold about 7 items

Leads to confused user, unsatisfied with the process, who dont know what to choose.

They want to make the right decision, pick the one that meets their needs best.

2 studies from Stanford University showed that the higher number of funds in a retirement plan, the less likely people would participate in their retirement fund. They also found that people make worse investment decisions the more options there were in the investment plans.

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#In another study of either 6 or 24 jam choices, researchers found that when choosing jam out of 24 jams, more people reported experiencing regret over their choice.

Other studies have shown that when fear of regret is too high, people wont make a choice at all.

Indeed, in the 6 choice condition, 48% purchased jams in the end, versus in the 24 jam condition, only 12% did.

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In another study of either 6 or 24 jam choices, researchers found that when choosing jam out of 24 jams, more people reported experiencing regret over their choice.

Other studies have shown that when fear of regret is too high, people wont make a choice at all.

Indeed, in the 6 choice condition, 48% purchased jams in the end, versus in the 24 jam condition, only 12% did.

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Simplifying decisionsSara Lee reduced its number of products by more than half and achieved a reduction of inventory of almost 40 percent while improving on-time deliveriesProcter & Gamble reduced Head and Shoulder shampoos from 26 to 15 and saw an increase in sales by 10%Amazon chooses for you things that they think you will like

#These are just some examples of companies that limited consumer choice for the better.

Amazon is a good example- they have many products, but how do they use their digital platforms to help reduce choice?

With so many choices, what they do is become excellent curators. They give you recommendations and create easier categories to reduce the pain of choosing.

So how can we use this knowledge?

--------------------------------------Statistics from http://www.greenbiz.com/blog/2011/07/13/sustainability-lessons-jam-less-choice-greener-choicehttp://www.strategy-business.com/article/00046?pg=all

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Give them an easy comparison

Economist increased their $125 subscriptions by 52% by providing a third choice.

68%32%16%0%84%

BEFOREAFTERStudies have looked at introducing a third choice that is similar but just different enough to make the other option look awesome. The Economist financial magazine cleverly increased sales of its most expensive option by 52% by introducing a bad option, but this bad option provided an apples to apples comparison to help make a decision in favor of the more expensive option.

#Give them an easy comparison.

Studies have looked at introducing a third choice that is similar but just different enough to make the other option look awesome.

The Economist financial magazine cleverly increased sales of its most expensive option by 52% by introducing a bad option, but this bad option provided an apples to apples comparison to help make a decision in favor of the more expensive option.19

Make them feel confident about their choicePeople are often driven by anticipating regret when they make decisions. Fear of regret.Helping them feel that they are making a good decision and then supporting them when theyve made the decision will help reduce regret by providing expert recommendations for them and providing social proof through reviews to make users feel theyve made an informed choice.

#Secondly, make them feel confident in choosing.

People are often driven by anticipating regret when they make decisions. Fear of regret.

Helping them feel that they are making a good decision and then supporting them when theyve made the decision will help reduce regret by providing expert recommendations for them and providing social proof through reviews to make users feel theyve made an informed choice.20

Make them feel confident about their choice

#Amazon are famous for their customer reviews. 21

Make them feel confident about their choice

#Even the reviews are reviewed with the most helpful reviews highlighted. 22

Make them feel confident about their choice

#And to show they are not bias Amazon highlight the most critical reviews, so you can weigh up positive and negative reviews. 23

Rein in numbers with categories

#Third, Reign in numbers by putting them in meaningful categories.

A study conducted at Columbia University showed that it didnt matter if a store sold 331 or 664 magazines, what mattered to buyer satisfaction was the number of categories it had. Many subheadings felt like there were lots of choices but within those categories there were few magazines to choose from.

A simple example is one of our projects for Visit England which addressed what most tourists are faced with too many choices on places to go. By creating a smaller number of categories and reducing the amount of choices of the categories one can choose, people have a useful reduced list of interesting places they can consider.

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Start with easy choices first.Last but not least, If they have to make a lot of choices, start them off with simple, reduced choices and build up to the bigger ones, you dont want to tire them early on because that will make them frustrated more quickly. Even though booking systems are very complex, Virgin America revamped their booking system, providing people with simple choices at the beginning to make the process less painful.

#Last but not least, If they have to make a lot of choices, start them off with simple, reduced choices and build up to the bigger ones, you dont want to tire them early on because that will make them frustrated more quickly.

Even though booking systems are very complex, Virgin America revamped their booking system, providing people with simple choices at the beginning to make the process less painful.25

#So that is a quick dive into just one of the many ways Psychology can impact behaviour on your website. 26

Five quick takeaways:

1. Limit choices 2. Give them comparisons (3 works well)3. Use reviews to provide confidence4. Group choices in categories5. Start with easy choices first

#So the next time you think about choice be smart about the choices you give people, and help them make their choices, theyll be grateful for it and so will your bottom line.

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Question

#Anyone using bots in anyway yet?28

#To finish were just going to highlight a few interesting thoughts on bots and their impact, perhaps we can continue the conversation over some networking and drinks shortly

We are rapidly shifting into an environment where the interface to your products and services might not be your website

In markets all over the world and in particular in markets like South East Asia where mobile internet marked the arrival of the internet for most consumers for the first time,

The most time dominant platform of choice for engagement are social messaging platforms

And so we are seeing the rise of bots or smart conversational agents

enabled sometimes by artificial intelligence, or just some smart logic behind the scenes, aimed at providing the IMMEDIACY and support a user needs to make a decision, such as a purchase or other engagement29

Bot what?Bots

Standalone conversational agentsPushing boarding passesStatus updatesSearching for stuffOther automated tasksNo humans involved.Artificial intelligence

Beyond botsSmart data and learning technologySupport agents with suggested answersUse data collected on customer interactions to improvePersonalised, fast and correct

#3 interesting stats

65% of users download no new apps

3 billion people are on the top 4 largest social networks

4.1 billion are on the top 4 largest social messaging apps!

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19 million users

33 million users

#Theres literally thousands of channels, but a few that dominate

Most of these channels are places that you deploy your Bot to32

#There are some obvious first movers testing their bots in the marketplace

Skyscanner are one of the myriad of aggregators, price comparison tools in the travel space33

#They also have the same service available on Facebook Messenger34

#Another example this time disrupting the property market35

Digital government and citizen services

#In government around the world were also seeing tremendous interest in conversational agents as a way of delivering services to citizens, applying for driving licenses, passports, visas and so on

Interestingly this isnt just about the consumer or the citizen either

In Sydney were working with Australian government to support their digital innovation agenda,

At the heart of which is to connect the ideas of entrepreneurs and technologists with the right people in government to drive digital transformation

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new ideas go nowhere in government

#The most major obstacle is to overcome this long held perception37

#So weve conceived the idea of a digital concierge that will guide startup to top global technology executives, answer questions, sign post and connect users to the right people and the right information IMMEDIATELY

and available to have a conversation with via Facebook Messenger, Skype and Group Me

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Five quick takeaways:

1. They are conversational agents2. They generate meaningful data3. They can be self learning4. Use them with care and always beta test5. Human empathy and authenticity cannot be replaced

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adelphi.digital

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