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The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

Nov 13, 2020

While researching for my book (which will be coming out in May 2021!) I had the joy of speaking with several dozen amazing people working in applied behavioral science and behavioral economics. People from around the world doing such cool things, wonderful research projects, and so much I’m excited to share with you. You have already been hearing from a lot of them throughout the most recent interviews on the show, and they continue into 2021.

One thing that I found from interviewing so many people about their work is that even when there are different frameworks/names for the approach/unique models for applying behavioral science, most everyone agrees on one thing: where most businesses or entities go wrong is at the very beginning. 

When you are trying to solve a problem (or want to apply behavioral economics to nudge behavior or help people make better decisions), many of the projects fail or don’t get off the ground because there isn’t enough time spent identifying the real problem. 

This first crucial step is what we are going to be talking about today, to help you as you think about applying behavioral economics in your own business, and I’ll share some of the same tips I give to my own clients and students in this process (and, also, this is a sneak peek into some of what you’ll find in my book…which I am absolutely bursting to be able to give you all the details about…but I have to wait a little longer…soon!)

Alright...let’s talk about that most important step in applying behavioral economics: Identifying the problem.

Show Notes:

  • [01:51] Today I am going to discuss the importance of understanding the problem–the first crucial step when applying behavioral economics in your own business.  
  • [02:21] Thank you to all the listeners who voted in the first-ever Habit Weekly Awards, which were announced last week. The Brainy Business won for the best YouTube Channel in behavioral science! 
  • [04:23] It is really easy to find the right answer to the wrong question. When you don't invest enough in finding the right question, you end up putting a lot of effort, time, money, and other resources into fixing something that isn’t going to actually get at the root of the behavior.
  • [05:47] I’ve talked about questionstorming several times on the show before (you all know how much I love questions!) Great questions are AMAZINGLY powerful, and in general, people don’t spend enough time asking questions.
  • [07:44] The people who change the world think longer about the problem before they start fixing them. If you want to make change happen and do amazing things, one of the best ways to do that is to spend more time thinking about problems instead of just accepting the first or second thing you think is wrong.
  • [10:07] Revisiting how The Littery proved that their incorporation of behavioral economics and working with the brain got people to willingly throw away and properly sort their garbage.
  • [11:59] Change doesn’t have to be hard. Changing the natural rules of the subconscious brain that have been developing for generations is hard. Understanding them and working with those habits can make it so seemingly insurmountable changes become easy.
  • [13:04] When you use your conscious brain to try to explain to people how they should change their habitual behavior within the subconscious, logic isn’t gonna do it. You need to understand what DOES motivate people, like a lottery, and incorporate it into the behavior so it is easy for them to change.
  • [14:34] By taking a step back and really thinking about the way the brain works and how to align with it you are able to make it so change is much easier than it seems on the surface. 
  • [16:36] Being curious and asking good questions allows me to appeal to the subconscious brain. I can learn about the situation while helping them feel valued and involved in the process. Taking those few extra moments to understand the problem makes all the difference. 
  • [17:21] Even when someone asks you explicitly for something, or you are sure you know the root of a problem, it can usually benefit from a little more thoughtfulness.
  • [18:42] When you consider the problem in a vacuum or assume the problem you see is the only true problem, you will often end up finding that right answer to the wrong question.
  • [20:13] Simple changes can make a huge difference in adoption and satisfaction when you take the time to fully evaluate and understand the problem.
  • [22:51] Give yourself permission to spend longer thinking about problems. Reflect on them, ask questions, and poke holes in them. 
  • [24:15] For now, just focus on finding one thing a day where you can challenge an existing belief or problem.
  • [24:46] Don’t forget to take advantage of the year-end sale going on now.

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