Dec 11, 2020
Today I am very pleased to
introduce you to Dr. Henry Stott, cofounder of Dectech, a
behavioral science consultancy in the UK. As you’ll hear on
the show today, Dectech works with all sorts of companies and
industries, from banks to insurance and food delivery. They use
randomized controlled trials and other techniques to help companies
understand behavior and properly apply it within their
Dectech is not new to the space.
It was founded nearly two decades ago in 2002, so they have lots of
background and foundations they build upon.
During our conversation, Henry
and I talk about all sorts of concepts, like nudges, anchoring,
relativity, framing, habits, and more—and all those past episodes
are linked for you in the show notes, as well as the book
The Mind is Flat
written by Henry’s cofounder of
Dectech, Dr. Nick Chater.
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- [00:40] I am very pleased to introduce you to
Dr. Henry Stott, cofounder of Dectech, a behavioral science
consultancy in the UK.
- [02:43] Dr. Stott started Dectech about 20
years ago with his cofounder, Dr. Nick Chater. They have spent the
last 20 years refining their view on how you harness those methods
to more accurately predict how consumers and other people will
behave in novel situations.
- [03:54] There are two classes of problems. The
first class of problems is a precedent problem when you are trying
to forecast the future.
- [04:46] The second class of problems is harder
(and often more valuable) where there has never been anything like
it before. These are the types of problems they have set out to
- [06:06] Dr. Stott shares about the Deliveroo
project. The question was whether they were going to launch a
subscription product or not.
- [09:04] Pricing is not about price. The
way you present everything before you get to the price matters more
than the number.
- [10:34] Designing the proposition so it fits
snuggly into what people want is the first objective. A lot
of people fail to do that. They often have to drop the price
because they haven’t added value.
- [12:06] A lot of the designs of features and
propositions are driven by an excessive fixation with competitors
and an excessive self-confidence of the
- [14:36] Looking to competitors when determining
your pricing is a mistake.
- [16:58] At least half of the judgment is made
up of the movement of prices within a store as opposed to
contrasting across stores.
- [17:40] People are much more sensitive to the
order of things than the size of the
- [19:54] When you are able to feel like you are
part of the process waiting can feel less
- [22:51] Sometimes a time delay can be a good
- [23:36] Dr. Stott shares about the Lloyd’s Bank
case study and the customer journey optimization
- [24:31] They were looking to design a home
insurance renewal process that worked best for the customers and
- [25:37] They also tested a “name your price”
condition, but it ended up not being very popular (which is good to
know because it would have been very expensive to set up and would
have been a waste of time and money).
- [28:28] In experiments, Dectech runs as many as
20 variances. Sometimes they are all run together and other times
they build on each other.
- [29:33] The best approach is to immerse
customers in a decision-making environment that is as close as
possible to the environment they would naturally
- [32:01] You can get quite close to replicating
the kind of mindset people will be in using an online decision
environment. These trials have to be run entirely virtually
just because of the number of participants.
- [33:20] More and more commerce is taking place
online, so virtual testing and formats like this will be
increasingly relevant. The pandemic has accelerated this
- [35:05] Small changes can have profound effects
on the economics of your business.
- [36:29] Before you start testing, think of the
best ideas and try to innovate.
- [38:34] Something novel or fun is often one of
the best outcomes in the experiment.
- [40:43] I love all the work Dectech is doing,
it’s really fascinating stuff, and you will be hearing about them
again in an upcoming episode featuring Dr. Benny
Thanks for listening. Don’t
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