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Tag : Behavioral Economics

Faster. Better. Easier.

Google launched into a market already dominated by NetScape.

Google had a behavioral strategy – get people to make Googling a habit.

There were three pillars:

1) Easier results.
2) Faster results.
3) Better results.

The first is the one most would miss.

Behavioral science tells us that most marketing strategies overemphasize motivation. Moderately motivated people are more likely to do what’s easy than highly motivated people are to do what’s hard.

Ease beats motivation. That explains the fate of most New Year’s Resolutions.

Google’s competition had gone in for massive cross-selling and indexing.
Yahoo and Netscape’s homepages were cluttered with links.

Behavioral economists confirm what direct marketers long knew – choice depresses response.

Why, because simple is easier, and ease is the single most important factor in designing for behavior change.

Google had a simple search bar, a logo and that’s it.
Faster is easier.

And, the distance in time between action and reward increases effectiveness geometrically.
That’s why Google uses a little of its precious homepage real estate – to tell you exactly how many nanoseconds it took to get your result.

Learn more about behavior change marketing, free: http://ow.ly/3txx30nhBN0

The Rhinoceros and the Unicorn

THE RHINOCEROS AND THE UNICORN - an excerpt from The Change Agent's Cookbook

Did you ever wonder where unicorns come from?

No one has ever seen one, because they only exist as an idea or a myth. So, where did the myth come from?

Imagine a time before photography, videography, TV, film, Instagram, all of it… a time when information was passed mouth to ear and walked on foot.

In 400 B.C.E., the historian Ctesias wrote about the one-horned creature for the first time in Greek literature. He was probably referring to the Indian rhinoceros, but readers imagined unicorns.

People hear about a rhinoceros and they imagine a unicorn.

That’s the short of it.

Author and essayist, Adam Gopnik, uses the story of the rhinoceros and the unicorn to explain the difference between modern liberalism (a rhinoceros) and other political philosophies (libertarianism, communism, anarcho-syndicalism, etc.) which he likens to unicorns.

Unicorns are ideal. They have a sort of mythic perfection. We love to think about unicorns. We like to believe in unicorns.

On the other hand, a rhinoceros is an awkward thing. It’s basically a pig with a horn on its head. It’s funny to look at and is politely ignored by proponents of Intelligent Design.

The rhinoceros is a compromise. The rhinoceros is also a perfectly successful animal.

We like our ideals ideal. We like our goals and objectives that way too. We want to build our businesses to some ideal template, some golden form of a business.

Often one hears talk of the leader of successful challenger in a category spoken of in unicorn-like terms.

“Why aren’t we more like Netflix? Google? Apple? Wieden? Droga? RGA? BFG? CPB? DDB? etc.…?”

Tech disrupters with billion dollar-plus valuations are even known as “unicorns.”

They are not. They are rhinoceroses.

Everything successful is an evolved compromise. So, instead of trying to force people into inhuman ideals, why don’t we try to build our organizations from splendid compromises. Why don’t we use the parts well, respecting each one as a successful animal?

Yes, the result may be funny to look at, a bit awkward and ungainly, but it will also be real and more likely successful. And it will be human too.

Why don’t we try to build rhinoceroses rather than unicorns?

Behavior Change Marketing is a rhinoceros, not a unicorn. It isn’t an impossible idea, nor does it claim to be a pure and new thing in the world. It isn’t merely academic and philosophical.

Behavior Change Marketing integrates perspectives and learning from a range of disciplines.

It recognizes that Behavioral Economics is nice old Behavioral Science with some great PR.

We accept the gifts of Behavioral Economics, but we equally welcome that longer heritage of concepts and learnings from Behavioral Science more broadly.

Our long experience in the trenches of direct and digital marketing have taught us that the single best funded program of behavioral economics experiments and their results are mostly lost to us. Lost because their very existence constituted the protected trade secrets of the companies that ran them.

These hundreds of thousands of A/B split tests, multi-cell tests and other experiments form priceless expertise carried around in the heads of venerable brand response wizards, are sometimes set down in writing but always through the distorting lens of hagiographic self-promotion, agency promotion or awards entries.

The knowledge is legend, and much of it is lost to science. That said, we will take all of it we can get, and we will work to see our clients and the broader world get as much benefit from this Fort Knox of intellectual property as we can.

Equally we recognize that the first design thinkers were not denizens of Silicon Valley in the early 2000s, that design thinking was not an invention but at best a rediscovery. If you want to read an excellent compendium of astonishing design thinking, read the Federalist Papers, Hamilton, Jay and Madison’s case study and pitch presentation of their brilliant and flawed rhinocerian creation, the U.S. Constitution.

No, design thinking has been with us a long, long, time. In fact, it took science to get us off the trail of design thinking. Science limited its scope. For example, economics focused on rational homo economicus rather than irrational human beings, and behaviorism focused on observable behavior and demeaned cognition. In dealing with shadows of human beings rather than the whole, scientific thinking led to flat, rational, poor design and communication.

Design thinking was a rediscovery, an attempt to make whole again, to bring in empathy, humanity, uncertainty and chaotic reality. Behavior Change Marketing integrates design thinking as well.

The field of Positive Psychology has seen enormous growth in influence over the past two decades. Today, nations consider Gross National Happiness along with Gross National Product and Subjective Wellbeing is measured by the U.N. to balance their scorecard in evaluating the progress of nations.

And Evolutionary Psychology has helped us to understand the important of signaling, including self-signaling, which challenges the logical, simple, rational and largely incorrect view of human motivation.

The Modern Era loves Unicorns. We love the mythic simplicity. We want to believe that class struggle along drives history and that the future is knowable. A mechanical view of the Universe and envy of natural sciences supported a culture of simple certainty. But, today we understand that even our physics doesn’t operate that way. That, at the best, there is probability. That even if you know everything about the present, you cannot predict the future with any certainty. Randomness is a feature of every system.

So, we are building a Rhinoceros, and we couldn’t be more proud. If you’re building a Rhinoceros too, maybe we could help.

What’s Behavior Change Marketing?

We can help people change their decisions and habits in ways that empower and delight them.

We combine the findings of behavioral economics, mobile clinical interventions, persuasion design, direct marketing, CRM, and decades of A/B split testing and optimizations into an integrated practice of behavior change marketing.

This video of our Chief recapping his time at the Yale Behavioral Economics Intensive dives into the topic in greater detail:

Want to learn even more about Behavior Change Marketing? These articles are a great place to start:

Behavior Change Science Update: Moral Reframing

What’s different about the one-in-a-thousand organization that thrives and outperforms? That builds a brand and inspires a movement?

Inspiring Action Brand of the Month: Duolingo

If you and your team are trying to build an inspiring action brand, or know anyone else who may find this helpful, feel free to share this amongst them. If you want to join the conversation yourself, reach out to us on twitter, we’d love to hear from you.

 

Inspiring Action Brand of the Month: Duolingo

Photo from Business Insider

After he sold his second company to Google, Luis von Ahn received a phone call.

It was Bill Gates.

The richest man in the world, and co-founder of Microsoft, was personally recruiting the young computer scientist to join his team.

But for von Ahn, joining a world-changing company wasn’t enough. Like Gates, he needed to create his own.

So, the Guatemalan-born web wizard —who has become famous for combining humans and computers to solve large-scale problems that neither can solve alone — founded Duolingo, a free, science-based language education platform that is now the most popular way to learn languages online. And while von Ahn’s portfolio consists of several successful ventures, Duolingo is likely to be his masterpiece.

Von Ahn’s passion has always been rooted in the world of academia. A graduate of Duke University, who later received his Ph.D. in Computer Science from Carnegie Mellon, where he now serves as a professor, he knows the education system all too well.

Both sides of it.

He’s seen the prestige of the world’s most elite universities, and the wealth that feeds them. He’s also experienced the resources, or the lack thereof, of the schools in a developing country. This side, sadly, is much more prevalent globally, and it’s the problem von Ahn has made his life work to solve.

In countries like Guatemala, education does not bring equality to social classes, as some may think. It does the opposite. Those with money can buy themselves an education, while those without it can barely read and write. This system sets up career barriers that are almost always insurmountable, and only widens the divide between the upper and lower classes.

By launching Duolingo, von Ahn was taking a seat at the intersection of technology and human behavior, inspired to create a product that could change outcomes in more permanent and integral ways to tackle the global-scale problem of language learning.

The mission was simple: make language education free and accessible to everyone all over the world.

Why language?

Of the 1.2 billion people in the world learning  foreign languages, 800 million of them satisfy three properties:

  • They are learning English
  • The reason they are learning English is to get a job
  • They are from low socioeconomic classes

For these individuals, learning a language can be the gateway out of poverty, but doing so can cost up to $1,000 dollars. Without the money, and no other alternative, the odds are unfairly stacked against them. To change those odds, von Ahn would first have to change behaviors.

Behavior Change Marketing

Learning a language is difficult. Everyone wants to do it, but most give up. The key is making it a habit. Duolingo could never work unless a user visited it regularly, so the success of the company hinged on it becoming a regular behavior, which also meant dislodging other long-held behaviors.

And change, according to world-renowned behavioral economist, Dan Ariely, “comes not from the inside, but the outside. If you want people to lose weight, give them a smaller plate. You have to change the environment.”

For von Ahn, the environment was technology. How could behavioral design be used to  prevent the poor retention rates of other language-learning softwares? How could he reinvent the teaching process to make it a memorable experience worth the consumers’ time?

You gamify it.

American psychologist and behaviorist, B.F. Skinner, once said, “No one really cares whether Pac-Man gobbles up all those little spots on the screen… What is reinforcing is successful play, and in a well-designed instructional program students gobble up their assignments.”

As the work of behavioral economists has shown us, consumer decision-making is not just about the availability of information. Instead, it’s about how that information is framed and delivered. By framing language-learning as a game, von Ahn was applying behavioral design to keep consumers coming back for more.

He and his team incorporated gameplaying elements to increase engagement. Like other mobile-game apps, Duolingo is friendly and fun. It uses images, video clips, and the microphone on the mobile device to not only help you learn words, but to recite and write them as well.

Behavioral science has proven that marketing efforts that activate goals have a much greater impact on consumers. Duolingo rewards right answers with “points.” Consecutive daily lessons can help the consumer build “streaks.”

“It’s like a video game, where you have to do something every day or you lose your rank,” says Gina Gotthilf, VP of Marketing and Growth for Duolingo.

The streaks give you  virtual currency that can unlock bonus skills or purchase outfits for the game’s mascot, a green owl named Duo. Von Ahn picked an Owl because owls are associated with wisdom, and chose to make it green as a joke on the company’s co-founder, Severin Hacker, who’s least favorite color is green (seriously).

An educational resource that’s actually enjoyable to use, Duolingo combines fun with function in a way that no language-learning platform has before.

A major point of differentiation amongst competitors like Rosetta Stone, other than the price, is DuoLingo’s use of Artificial Intelligence. In his research, von Ahn discovered that the hardest part of learning a new language is overcoming the fear of sounding it out in front of others. With AI chatbots, DuoLingo users can practice without pressure, preparing them for real-life conversations without the awkwardness and anxiety that come with the learning process.

The performance data also allows Duolingo to measure how effective different teaching methods are. If a person makes a mistake, or even hesitates to answer a certain question, the app registers that behavior, and will serve a new series of questions to help that person overcome that difficulty.

The Duolingo team has conducted thousands of A/B tests exploring the biases and cognitive shortcuts that affect how people absorb and process information. In doing so, they continue to build on their mastery of behavioral techniques, analyzing how millions of people learn at once, to create the most effective educational system possible, and then tailor it to each student.

For example, if Duolingo wanted to know if people learned faster when being taught plurals before adjectives, or vice versa, they would simply split the next 400,000 users into two groups and test each. Once they have their answer, they can implement it across the entire platform. This allows Duolingo to get smarter and more efficient as the company grows; and it’s working. A recent study by the City University of New York shows that 34 hours of learning a language on Duolingo is the equivalent of an entire university semester learning that same language.

Today, with over 200 million users, it is the most downloaded educational app in the world. In the United States, there are more people learning languages on Duolingo than there are in the nation’s school system.

Outside the U.S., entire countries like Costa Rica and Columbia have adopted Duolingo into every public school that has access to the internet, and the company is currently working on creating offline platforms for countries that do not have stable or reliable internet connectivity.

Von Ahn wanted to show the world that true equality  exists only when money cannot buy  better educations; and, while he’s just getting started,  he realized his impact when he received news about a familiar friend.

Bill Gates used Duolingo to learn French.

The richest man in the world and kids in developing countries – both using the same educational tool to learn.

Now that’s inspiring action.