Feb
24

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Four reasons why you buy your regular morning coffee

Carwash pass

Have you ever wondered what goes on in your brain when you buy something? Why did you choose the leading brand mayonnaise over the supermarket own brand? Why did you buy the expensive shampoo?  Why do you still buy your morning coffee at your regular shop in town rather than trying the coffee at the café that just opened next to your office?

Phil Barden is the man who can help you answer these questions. At a recent conference Phil captivated us with scientific insights from psychology, neuroscience and behavioral economics that explain our decision-making, with a particular emphasis on why we buy what we buy.

Phil’s experience is from a corporate marketing environment, yet his insights as to why people make decisions are equally relevant for our fundraising and campaigning organisations. After all, isn’t our job to help people make decisions about how to support the causes they care about?

The autopilot and pilot

Phil explained about two systems that are used for decision-making based on Thinking Fast and Slow by Daniel Kahneman. (see my blog on thinking fast and slow for a little more background)

  1. System 1 is the autopilot: it is fast, automatic, intuitive and geared for action –  it is an implicit process.
  2. System 2 is the pilot: it is slow, rational, controlled and geared for thinking – an explicit process requiring effort.

Your autopilot allows you to act without really thinking. For example a strong brand (like Starbucks) is processed in system 1 – you know what the brand is, you don’t even have to think about it. The brand acts like a short-cut, which might explain why, if you are in a new place and want a coffee you might choose to go to Starbucks rather than try somewhere new. To be successful in influencing purchasing decisions you must be aware of how both systems work together and how to appeal to both, but with particular focus on activating the system 1 autopilot.

Net value = reward – pain

According to Phil, when we buy something it involves a decision between reward (a psychological ‘value’) and pain (price): the brain offsets the two to create a ‘net value’. The higher the net value the more likely we are to purchase. Value and cost are relative and therefore can be influenced by the context that we are in.

For example in experiments, more products are sold from price lists that do not have pound signs. This is because the monetary symbol triggers pain. Remove the pound sign and you reduce the pain and increase the net value. It’s incredible that such a small change in how an item is presented could have such an impact on the decisions that people make. I wonder what would happen if you tested this with your next direct mail campaign? If you removed the pound sign when you ask for a donation, would it make a difference to results?

Perpetual Fluency

‘Perceptual fluency’ is the autopilot ability to process something that is familiar more quickly that something that is not. This can be incredibly subtle, like in the case of an advert for a cake. A picture of the cake with the fork on the right hand side, when tested, sold more than the exact same picture with the fork on the left. This is because most people are right-handed and therefore the right-handed placement of the fork requires less effort to process. How many of these subtle nudges are you being influenced by all the time? Why did you really pick the own brand mayonnaise, or the more expensive shampoo, or your regular morning coffee? If you applied these subtle nuances to your marketing and communications, I wonder if it would make a difference to your results?

Process Endowment

Finally we learned about the importance of triggering ‘process endowment’. This is how starting someone on a process towards a goal influences purchasing decisions. In an experiment*, a car wash company issued two types of loyalty cards. An 8-stamp card and a 10-stamp card with 2 stamps pre-stamped. When a customer completed a card they received a free car wash.  Both cards required 8 purchases to complete the card. Yet sales from the customers with a pre-stamped card were 79% higher than those who started with the un-stamped card. Framing the task as partially completed lead to faster completion and greater commitment.  Cafes often have a system where you collect stamps for a free drink. Do you have one? Is it pre-stamped?

Carwash pass

Copyright Phil Barden

You already know and use a lot of these techniques in your fundraising, for example seeding online fundraising pages with donations before you ask your wider networks to support them. Perhaps you have never labeled it ‘behavioral science’ before – just common sense.

That said, in an increasingly tough environment, if we more rigorously applied the techniques that Phil has evidenced to work in the corporate world to our fundraising, could it provide a greater opportunity for us to help more people give time and money to the causes that they care about?

Phil is the author of Decoded – The Science Behind Why We Buy and it is packed with evidence-based practical examples about why people make decisions, that you could apply to your fundraising. It is well worth a read.

*Nunes JC, Dreze X. 2006. The endowed progress effect: how artificial advancement increases effort. Journal of Consumer Research. 32:504–12

Jan
30

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Two years and twenty-eight days

innovation and ideasIt is two years and twenty-eight days since I left the relative security of a full-time permanent job to be a free range human.

It is only now when I look back, reflect and take stock, that I realise how much I have learned in this time. More importantly it has made me realise that no matter how old we are, what job we do or our personal circumstances we should never stop learning. Each of us has a choice about what we do and how we learn, it is our responsibility to look out for and then seize the opportunities that we are presented with.

There are three key things that I have learned over the last two years and twenty-eight days that I thought might be useful to share. I have a suspicion that you might have learned them already, but sometimes in our busy lives being reminded of how far we have come, and the knowledge and expertise we have gathered along the way, is no bad thing.

1. The importance of your networks

Human beings are social animals and in my experience, the best ideas and our richest work is when we work in collaboration with other people. If new ideas are a combination of old ideas put together or connected in new ways, involving others brings different perspectives and many more new idea connections. It also makes things more fun. The first day that I sat down to work at my desk at home on my own was the moment I truly realised that my team, my peers and my networks were absolutely key to any success. Since then I have worked hard to nurture and add as much value as I can to my networks.  I have learned how other people inspire creative thinking, help to develop fresh ideas, act as a sounding board and are your most critical friends and the voices of caution. They also nudge you to challenge yourself, push you out of you comfort zone and stay around to pick you up when you fall. The time spent making and nurturing diverse networks is critical to your development, the development of others and the quality of work for everyone involved.

2. Focus on areas where you can make the most impact

It’s very easy to try to be all things to all people but you can very easily end up spreading yourself too thin and being average at lots of things. Who wants that? When I first left the security of an organisation, I tried to be everywhere: online, at conferences, in meetings and social gatherings for fear of missing something. I found myself exhausted and struggling to concentrate on any one task for a significant period of time. The moment that I took a step back (with the help of some critical friends in my network) and regrouped, I was able to focus on the areas that I enjoyed most, areas where I had an opportunity to excel and areas where I could make the most impact. With focus it made it easier to say no to activities that before I had felt that I ought to do and spend dedicated time developing my core innovation work.

3. You have to look after you

I help individuals and organisations to think differently in order that they can achieve better results. I often work with teams to develop their culture and physical environment to deliver better creativity and innovation. Key to this is having room to gather insight, time to think and ponder and space for creative thinking and exploration of ideas.

For a while I was helping other people do this, for example insisting they take a lunch break and step out of the office to think, yet I wasn’t doing it myself. I don’t think you should expect others to do something that you are not prepared to do yourself, so I have learned to take my own advice. When you love what you do, as the majority of the fundraisers I work with do, it’s easy to want to work at it all the time. But the reality is that you can’t even hope to be top of your game unless you look after you and take some time out to think, relax and recuperate.

Like I said, I suspect that you are reading this and nodding in agreement. But sometimes when you are busy balancing work and life and hopes and dreams it’s easy to forget the basics. So every now and then its good to take stock and make sure you are on track.

This blog is about my experiences and learning from making the switch from working for one organisation to freelancing with many, but I think you could also apply the same principles to your fundraising work with great effect.

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