In his talk at UX London, vice chairman of Ogilvy, Rory Sutherland, discusses how neo-classical economics is mis-informing businesses in their product development and marketing.
Psychology > Economics
- Finding patterns in human behaviour is most important thing for a UXer. Second is to improve product’s UX based on those findings
- Neo-classical economics mis-informs businesses. Psychology does a better job.
- Example: Product A is better than product B in price, number of features, looks. Either: customers go for A; customers question whether B is better quality, Customers don’t do anything because of lack of trust
- Value of product perceived by users is not worked out on individual basis, customers use their past experiences and environment to make judgements
- Businesses push progress faster than academia because you don’t have to be right, just less wrong than the competition. Academia is hung up on the why, and what is right.
- People only knew how aspirin worked in last few years, but have been using it for decades.
- Traditionally, human study has been : Mathematics > Physics > Chemistry > Biology > Psychology > Economics
- Each study is built on that of the preceding one
- Economics try and study human behaviour as follows: Mathematics > Economics > Physics > Chemistry > Biology > Psychology
Find behavioural patterns
- There aren’t hard and fast rules in marketing, just patterns of customer behaviour.
- If you intervene at right time and right place you can cause positive butterfly effect
- Business execs lean more towards attempting big changes, which costs time and money.
- Scale of intervention is not often proportionate to the change brought about
- Changing trivial things is often more influential
- Neo-classical economics has lots of wrong assumptions. We should analyse our competitors’ incorrect adoption of these wrong assumptions and exploit those as weaknesses
- Amazon Prime doesn’t make sense in Economics circles. They ask why Amazon doesn’t just offer next-day delivery on all items for free (as the price paid by customer is negligible)
- Prime increases purchases on Amazon because of the false sense of saving – “beating the system”
- Psychologists understand that Amazon customers wouldn’t buy more if everyone got free next-day delivery
Examples of patterns/traits
- Brain is not a monolithic thing. Parts of brain work well together, other parts work against each other.
- Evolution proves that copying others in your species increases likeliness of survival.
- Satisficing: Mix of satisfy and suffice. Finding an acceptable threshold. Feel something is okay, and not catastrophic.
- McDonalds uses satisficing: food and environment is globally consistent. Customers don’t seek the best burger ever, just the same burger they had last time. Familiarity.
- Vocal part of brain thinks it’s the oval office, when in fact it’s the press office. Just used for communicating.
- Unconscious/subconscious is the oval office, making all decisions.
- Design for the oval office, not the press office
- We should design choices and experiences to work with evolutionary psychology
- Why is tomato juice so popular when flying, compared to orange juice? Developed into a social norm
- Moist lavatory paper is perceived as weird in west, because the social norm is dry paper
- Restaurant in London is full at lunchtimes, which is rare for Indian restaurant. Why? Because they put table and chairs outside. Signals to people on lunch that they’re open. Hidden intelligence of unconscious
- Unconscious inference – “making assumptions and conclusions from incomplete data, based on previous experiences”
- $300m button. “Skip to continue” link meant 90% of customers who went on with user journey ended up entering their detail and paying
- Path dependency. Users will make decisions based on conditions of path. Example, ask for data capture at last possible moment.
- Elimination of uncertainty. Uber lets you track the taxi location that’s on route to you. No longer uncertain when waiting to be picked up.
- Antibiotics are coloured 12 blue, 6 white. Patients told to have white after blue. Increases likeliness that medication course is completed by patient.
- Text by Mastercard to confirm payment encourages them to make another payment. Feedback creates assurances and in turn repeat behaviour.