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Three Cardinal Sins against Customer-Centricity in Finance

By | All, Finance & Money, SUE Amsterdam & Behavioural Design Academy originals

Last week, I was attending a keynote presentation by the CEO of one of the biggest Belgian banks. He was presenting the story of the digital transformation of his bank and he brought it as if it was a visionary story. And although the man certainly had excellent presentation skills, I somehow got annoyed with his storyline. Probably in the first place because it felt like 2007 was back with cliché-slides as “Shift Happens”, “The Consumer is in Control” and “Remember Altavista? Look at what Google Did!”. But the second reason for my annoyance had to do with something more profound. He was preaching the “customer-first”-mantra, while in reality, his story had absolutely nothing to do with customer-first. It was very obviously “Bank-First”, under the disguise of “we want to make it more simple for the customer to buy more stuff”.

In my view, his keynote sinned against three cardinal sins of customer-centric innovation. And I want to argue that you can find these three cardinal sins in every digital transformation pitch by gurus, consultants and managers. So what I want to do is to put the spotlight on each of these three sins and I want to use the next blog post to suggest how you can transform these cardinal sins into decisive action.

Cardinal Sin 1: The customer as consumer at the heart of the strategy

At the heart of all these digital transformation keynotes sits the demanding, narcissistic customer. This customer is said to be spoiled by the speed and simplicity of Google, the absurd logistics of Amazon and the mobile interface-perfection of Apple and Facebook. What follows is that all these corporations assume that it’s exactly this demanding and spoiled attitude what makes this customer so different from the good old days. The CEO shared an example in his keynote of how his bank redesigned a front-office and back-office process to allow a customer to open an account in a couple of minutes on his smartphone. The bank would reward this customer with € 5, allowing him to walk into a Starbucks and buy a coffee just minutes after opening his account.

The problem with this example is that the banker looks at his customer with a “consumer”-frame in his mind. But when you look at the customer as a moody, demanding, click-trigger happy cowboy, and you build your processes and services around this persona, you’re doomed to lose the battle. Because the real challenges where every digital transformation project should focus on, are the challenges and problems that the human behind the customer is facing. And those problems are on an entirely different level: An incapability to build wealth, or to become financially independent. 95% of the people are financially illiterate and could really use some help to construct financial buffers, make smarter investments, generate passive income, etc. Thát’s the real design-briefing for which financial institutions need to develop intelligent answers. A better interface just a simple hygiene-factor for which they do need to catch up. To design your entire digital infrastructure around a spoiled persona is, to put it mildly, incomplete. And to put it more bluntly: out of touch with the real world.

Cardinal Sin 2: Evil KPI’s

Every time you hear Mark Zuckerberg doing an interview, he keeps insisting that the interest of the Facebook-community is central to everything the company does. In a recent interview on Reid Hofmann’s Masters of Scale-podcast, he says: “Our mission at Facebook is to discover where our community wants us to go.” With this mission in mind, Facebook employees conduct hundreds of experiments each day. Mark Zuckerberg is convinced that the world will be a better place if Facebook discovers what people want.

The only problem with this mantra is that Facebook has become a public company in 2012. And once a company goes public, its primal reason for existence is to create shareholder value. And the number one metric to create shareholder value is “engagement”: when as many people as possible, return to Facebook as many times as possible to serve them as many ads as possible.

Facebook-scientists, Facebook-algorithms and the Facebook-AI work really hard to generate a maximum amount of “engagement”, which, frankly, is newspeak for addiction: 1) The company has perfected the way notifications trigger little dopamine-shots in the brain in order to get people to return to the platform over and over again. Nir Eyal describes this addictive design in the book Hooked. 2) The algorithms and the Facebook-AI also know that the best way to get people more engaged is by fueling outrage. Nothing fuels better engagement than extreme content. The reason why a relatively small Russian troll-farm could have such a significant impact on the US-elections is that they correctly understood that outrage is the fuel that drives the Facebook-algoritms.

The point I’m making is this: Although Facebook’s rhetoric may be full of storytelling on “connecting” and “creating a better, more open world”, it’s business metric drives the behaviour of the company in a different direction. To maximize “time-on-device” and “engagement” to generate as many opportunities as possible to serve ads to people, has, in reality, led Facebook, its employees, its algorithms and its Artificial Intelligence to steer on more evil KPI’s like Facebook-addiction, craving for constant social recognition and political polarization.

This brings me back to the banker. His “digital transformation with the customer at the center” eventually also steers on traditional banking-KPI’s of selling as many products and triggering as many transactions as possible. Of course, there’s nothing wrong with this. The bank needs to make a living. However, if they would also steer on real customer-centric KPI’s, I guess they would be much more successful. If they were to focus on maximizing spending power, maximizing investment capacity or capacity to loan, maximizing interest,… they would easily be able to come up with tons of new services for which their customers would never want to switch to another bank again.

Cardinal Sin 3: An inadequate understanding of the good life.

Behind all these digital transformation stories I never hear the philosophical question whether all these changes are actually meaningful. If the goal of all these digital transformation projects is to help a spoiled consumer to buy everything faster and more frictionless, then the vision they have on humanity is incredibly limited. You can read in it the fulfilment of the ultimate corporate wet dream of reducing every human to a consumer.

Today, this reductionist consumerist vision leads to two crises of epic proportion. Of course, there’s first and foremost the ecological crisis. The speed with which our consumption behaviour is exhausting the earth and its vital resources is not sustainable. Read Kate Raworth’s “Doughnut Economics” or watch her Ted-talk.

But next to this ecological crisis we are also in the middle of a more profound psychological crisis. The more gratification we can buy, the less we seem to enjoy. The more we pursue impulses and individual greed, the emptier our existence appears to become. This crisis of meaning could well become the biggest crisis of the 21st century. It is funny in that context to observe that all those “Silicon Valley”-bobos are utterly obsessed with Stoic philosophy. Because they no longer know how to enjoy, they go back to the answers formulated two millennia ago.

In his keynote, the banker does not say a word about how the derailed banking world wants to play a meaningful role again in the lives its customers. We know what happened in 2008 with the money people entrusted to the banks. That turned out to be nothing more than casino money for speculation to increase the profits of the banks and the bonuses of the bankers. The fantastic challenges for the banks are nevertheless obvious: Helping freelancers to make ends meet. Protecting the middle class from loss of wealth and poverty in their old age (which is something the Dutch Rabobank is actively working on for example). Investing in projects that promote public prosperity. Boosting general well-being. Helping people to make their capital work for them. Looking for new ways to let the abundance of capital in the market find their way to entrepreneurs. Managing an aging population. Speeding up urbanization. Financing sustainability,…

There are so many opportunities to use digital transformation to become truly indispensable in the economy. So many possibilities to become incredibly relevant, once you put the human behind the customer at the center of your digital transformation. Simply start with replacing this spoiled persona at the heart of your transformation story with the citizen who has more and more difficulties to live a carefree life in increasingly difficult times.

 

Tom De Bruyne
Co-Founder SUE Amsterdam and the Behavioural Design Academy.

 

Cover image by April under Creative Commons License.

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Lose weight using behavioural design

By | All, Food, Health & Fitness, Personal Development, SUE Amsterdam & Behavioural Design Academy originals

Lose weight using behavioural design

One of my favorite authors – Nir Eyal – once said: “Never trust a behavioural designer who’s out of shape.” The reason is that being (or getting) in shape or losing weight is all about showing (or stopping) a particular behaviour. And the secret weapon to successfully losing some extra weight is applying some behavioural design principles on yourself. So, if you want to light up your life and shed some extra you, you simply need to unlock the power of behavioural psychology.

Did I say simply? Yes, I did! The uplifting news is: You can quickly learn how to lose weight by using some simple behavioural design tricks, which you can use to effectively influence your behaviour (and I’m going to share The Golden Tip with you in a moment). Doesn’t that lift some weight off your shoulders already? Or, your bum. Or your belly. Or your second chin. Wherever you’d like. I’m all for it.

The Golden Tip

Okay, I understand you are hungry for The Golden Tip now. I can appreciate this appetite for knowledge. I need to make one more pun about eating before I move on, or are am I overfeeding you with puns already? I get it, so here you go. The Golden Rule is:

Ability eats Motivation for Breakfast

Let me explain what this means and what kind of substantial impact it can have on you realizing your goal to shed some weight. According to BJ Fogg – a Stanford professor who has studied human behaviour for years – there are two dimensions of behaviour: Motivation and Ability. For years we all only used motivation in trying to nudge our behaviour. But, most of the times it is much more effective to work on the ability axis. In plain English, making the desired behaviour easier or the undesired behaviour harder to do.

Let me give you an example. You can be very motivated to lose some weight. Most of us truly do. But most of us also don’t. It often takes the perseverance of a top athlete to stay focused and determined on that goal. Now, I ain’t no Olympic qualifier just yet, and my guess is most of you aren’t either. So, my motivation often goes down the drain, and I often switch to unwanted behaviour, like eating that bag of crisps that happens to be lying there. Or, drink that one (okay four) glasses of wine if you’re with friends. Or heating up that microwave meal after working late. No judgment here, we’ve all been there.

You can’t help your motivation from dropping now and then. But if it happens, ability is your secret weapon to success.

The secret weapon to success

But the key to successfully sticking to your weight loss plan lies exactly here. You can’t help your motivation from dropping now and then. But if it happens, ability is your secret weapon to success. By making your unwanted behaviour hard to do or your wanted behaviour easier to do, you’ll succeed. That’s behavioural design.

It may seem like an open door now, but the best ability intervention is not buying the unhealthy stuff: Don’t have any (not any) in your house, so if your motivation breaks you simply can’t eat something bad for you (making the undesired behaviour harder). Another intervention: Do food prepping. Make a healthy snack staple that will last a week, let’s say a healthy banana cake. If you get the 4 o’clock craving, you have that banana cake ready (making the desired behaviour easier). Bye, bye crisps. Something else: Put a toothbrush and toothpaste on your desk. If you get a snack attack, brush your teeth. See if you like to destroy your sweet minty breezy breath with some sugar or fat now. You won’t (making the undesired behaviour less enjoying aka harder).

These are just some examples of behavioural design by making behaviour harder or examples of making it easier. But I hope you get my point. Motivation is excellent, but the number one secret weapon for losing weight is ability.

Maybe you can come up with some more smart ability ideas yourself. I’d honestly love to hear them. Please post them on our Facebook page so that everyone can take advantage of them. I’ll put a healthy banana cake recipe on there too. To get you started.

How you can start right away

To wrap it up, the things you could do right away:

– Remove all unhealthy food from your house
– Make that banana cake or have someone make it for you
– Get yourself a toothbrush and toothpaste to put on your desk
– Analyse your behaviour: When does your motivation crack and where. And try to come up with some ability interventions for those moments (and please share them with us, ’cause we’re fellow crackers, you’re not alone in this)

Good luck!

Astrid

PS If you know someone who’s struggling to lose some weight, please share this article with him or her.

Astrid is the founder of SUE Amsterdam and The Behavioural Design Academy. Our mission is to unlock the power of behavioural psychology to nudge people into making positive choices in work, life, and play.

In two days of high-end master classes, we train people in unlocking the powerful principles of behavioural psychology and teach them our Behavioural Design Method™ that translates this knowledge into actionable skills to influence personal behaviour or the behaviour of customers, employees, family members or the general public.

Cover photo by Steve Rotman under creative commons license.

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Chief Behavioural Officer: It’s the new ‘must-have’ role

By | All, HR & Organisation, Marketing & Branding

Step by step, behavioural economics, and psychological science have expanded their reach to become an established part of the business, policymaking, and regulation – for anyone seriously interested in both understanding and changing behaviour. And within marketing and market research, behavioural economics has become a required area of expertise and competency. We are now witnessing the next big step – the creation of the role of the Chief Behavioural Officer (CBO). This move will ensure that behavioural science has a voice at the highest level inside companies and institutions, a clear demonstration of the impact and value it is generating.

In this article, we look at how, within the last decade, this has become the new reality. We identify two main drivers and examine how behavioural science is increasingly being factored into everyday business, policy decisions, and common practice. First, though, we take a closer look at the trend of the CBO role and in-house behavioural insight teams.

Read the whole article

Author: Crawford Hollingworth
Published by: The Marketing Society UK
Date: 1 December 2014

 

Cover image by Thomas Angermann under Creative Commons License.

—————
Master the method and tools to change behaviour in our two-day masterclasses at the Behavioural Design Academy.
Create, prototype and test your marketing challenges in 5 days with SUE’s Behavioural Design Sprints.
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