99% won’t.

99% of people will never use behavioural economics. 

That’s ok. I am writing for the 1%. Those who are frustrated with the status quo; who are looking to be better; who know they are missing something but just haven’t put their finger on what.

I’m writing for the people who were like me 10 years ago. I was in a corporate job and feeling like life was harder than it needed to be.  Days were wasted in circular meetings, research didn’t provide usable answers, customers said one thing and did another, revenue was plummeting. I knew I was missing something. That we were missing something.

Then I read about behavioural economics. Then I started using it. Then I started helping others use it.

The only urgency is what you are missing every single day

The world won’t stop spinning if you don’t use behavioural economics. A bit like ageing, it will only be when you look back at a time when you didn’t have these skills that you’ll realise how much time you’ve wasted on the wrong things.

There’s no real urgency here. Of course you can wait until another day when you are, you know, less busy, more ready, have the perfect project, the perfect time…

All you are really missing is how to better work with and through other people.

How important is that to you?

Working with and through others in a better way. Every. Single. Day.

Your meetings, phone calls, projects, proposals, emails. Most of us send and receive around 130 emails a day by the way. Imagine if those emails got the desired response every time? If they advanced your work rather than bogged you down?

So here’s my hope. If you are part of the 1% who is aware enough to know you are missing something, and that that something is important, please, stop just reading and start doing. I’ll help you. Starting with this.

I’ve designed a free resource for you to identify where to focus your attention. It will give you immediate tips on what to do and how to get support.

Go on. Start. Complete your free behavioural audit.

Reasons customers leave, reasons they stay

We all know customer retention is a big deal. Acquiring a customer is significantly more expensive than retaining one – five to 25 times more expensive has been cited – but you probably already know that?

With the end of year approaching it’s a chance to learn what really makes customers stay or leave, and how to get ahead of retention issues in 2018.

Reasons customers stay

In general, customers stay if you are delivering what they want and they are given no reason to change. But there are some misnomers around why customers stay which I’d like to clear up.


Customers will stay if you can offer them something so unique that they have no alternative. If you are the only business who can fly people to Mars, then they will stick with you. For the rest of us, there are usually offers against which we compete. The trick is to remind your customer about what makes you unique because while your competitor might do something similar, they don’t do it exactly the same.


I used to work for a company that repeatedly had scores of 80-85% satisfaction for its online sites, and yet usage of the site was in free fall. How could this be? People say the experience is satisfactory and yet they are turning their backs on it?

When I asked our analytics team for an explanation, all they could say is there is no correlation between satisfaction and usage. Great! So why bother with satisfaction at all then?

In my experience it is more useful to think of satisfaction as a way to reduce the likelihood of leaving rather than increase the chances they’ll be retained. In other words, a customer who is dissatisfied will almost certainly leave but just because a customer is satisfied does not mean they will stay.


As I’ve written beforeloyalty is a loaded term and can set you up for failure. While customers like to be appreciated for their repeat business, what they cite as “loyalty” – it is very rare that a business actually wins the customer’s true loyalty. You know, the type of loyalty where they will eschew any alternative even if it’s better, cheaper or more convenient because they can’t bear the thought of being separated from you? My point is, don’t think your customers are loyal. That’s not why they stay, that’s why they say they stay.

Sunk cost

Now we’re getting closer to the mark. Customers tend to stay if they have already sunk too much into the relationship to warrant changing – there’s too much at stake to leave. That might mean you are in a complex field where they had to do a lot of thinking and jump through a lot of hoops to do business with you, or the costs of walking away cannot be recouped. In other words, the barriers to exit are significant. Which brings us to the most likely reason customers stay.


Our natural state is to leave things as they are. Called Status Quo Bias, all things being equal, customers will seek to stick with where they are and what they know rather than seek change. After all, life is busy and there are plenty of other things to think about. This is no surprise to many businesses that prey on customer inertia. In the health insurance sector, for example, 48% of people said they were thinking about switching but only 14% did. Similarly, 44% cited a desire to change their mortgage but only 28% bothered.

Of all the reasons customers stay, laziness is the most likely. That doesn’t mean you should take your customers for granted, but it does mean you should help them not have to reconsider you. How? Don’t make them angry, frustrated, embarrassed or annoyed.

Reasons customers leave

Perhaps most obviously, your customers will leave if they get better value elsewhere. Value may include a component of price, but also things like service levels, convenience, range and status. Your goal should be to communicate your value in such a way that alternatives look undesirable.

The other reasons people leave, which I alluded to earlier, are they are annoyed by things like a performance decrease (e.g. failing SEO rankings), service level change (e.g. from face-to-face account manager to call centre) or a price or fee increase.

Unfortunately, these pieces of ‘bad news’ are inevitable. The good news is you can communicate them in a way to reduce their likelihood of triggering churn.

Here are some tips when relating unfavourable news to your customer.

  • Use an ambiguous subject line – Avoid hitting them with the bad news in the subject line. Instead, encourage them to read the message in full so you can provide context for the bad news
  • Anchor pricing/fees – Customers never like price rises, so be sure to use the behavioural technique of anchoring so they have a reference point that contextualises your value. Say you are an accountant, for instance. Before talking about your fee, first remind them of the balance of their asset portfolio, anchoring them to the larger number.
  • Avoid inflammatory language – Without obfuscating, communicate the bad news with softer words like ‘change’ or ‘adjustment’ rather than inflammatory words like ‘increase’
  • Externalise – Where relevant, link the bad news to factors beyond your control. For example, citing changes in financial markets over a period of time. But don’t externalise without also minimising the impact on them.
  • Minimise impact – Customers will be more likely to tolerate bad news if they feel you are impacted too. Help them understand what steps you have undertaken to minimise the impact on them so you signal your commitment to their needs

This article also appeared in Smartcompany.

Better isn’t always the answer

There have been some epic product battles waged over the years. VHS vs. Beta, DVDs vs. Blu-ray, iOs vs. Android, Marvel vs. DC comics, 50 vs. 60 Hertz power in California, and even wide vs. narrow railway gauges in Australia. The better product won in many case, but not all. That got me wondering, why isn’t having a superior product a guarantee of success?

Better isn’t always enough

There’s been quiet battle playing out in the offices of eye doctors across the world. Which eye chart to use?

The Snellen vision acuity chart was developed in 1862 by Dutch ophthalmologist Herman Snellen, and is the chart most widely used by vision specialists.  It starts at the top with one large letter that is then followed by smaller, longer rows of letters that fan out making the shape of a pyramid.

Popular though it is, the Snellen chart has a significant flaw. To pass one row and move to the next, the person being tested has to name the majority of letters correctly. However, the further down the chart you go, the more letters you have to read which changes the odds.  If you read one line and get 3/5 you would be scored 20/20. If you read that same line and get only 2/5, you’d be scored 20/25.

For this and related reasons, an alternative vision testing chart was devised in Australia in 1976. The LogMAR chart looks like an upside-down pyramid, with five letters on every line. Despite being widely agreed to be more precise and standardised, the LogMAR chart has not been able to topple the entrenched Snellen test. Why?

Path to success is the path of least resistance

For all its faults the Snellen chart reigns supreme because it has two significant benefits for its users; size and simplicity.

First, compared with the LogMAR chart the Snellen chart is much smaller, taking up less wall space. Second and more importantly, it is easy for eye specialists to memorise. This means they can focus on their patient rather than cross checking their answers on the chart, and be more efficient in their work.

In short, Snellen is remains the dominant chart because it’s size and simplicity requires less effort on the part of its users. Habits have formed around the chart’s use that are resistant to change. An alternative chart would not only have to offer better technical results but unpick the entrenched behaviours of its users in order to win the battle. Bing faces much the same challenge when trying to pry people away from Google.

Implications for you

As the eye chart anecdote demonstrates, the battle most businesses face is with status quo. To win new customers or get them to take new actions you have to overcome their inertia, and you can only do so by addressing three key behavioural barriers; laziness, confusion and fear.

  • Laziness, or apathy, is when your customer simply cannot be bothered to expend the effort required to do what you are suggesting; it’s easier to stick with what they know. This is what keeps eye specialists using the Snellen chart.
  • Confusion is when your customer is interested in what you are suggesting but overwhelmed by making the decision. What’s the right thing to do?
  • Fear is when your customer is interested in doing what you are suggesting but they are anxious about committing. What will happen if it goes wrong?

As LogMAR advocates have discovered, you can’t win by simply offering a superior product. To displace the incumbent you also need to displace the ingrained behaviours around its use.

This article also appeared in Smartcompany.

This article was largely inspired by a story discussed as a mini-story in the very clever 99% Invisible podcast

Circuit breakers to re-set habits

There are some sounds you just don’t want to hear in the bathroom. One of them is the ‘plop’ of your iPhone falling into the toilet bowl.

Suddenly I was without a smartphone for 24 hours as I waited to see whether the Google-search-phone-in-rice trick would be my salvation. (It wasn’t.)

If there was an upside to this experience, it was that it served, quite literally, as a circuit breaker for my smartphone habit.

Circuit breakers in personal and business contexts

Whether they result from something we do or that happens to us, circuit breakers force us to reassess the status quo.

You can use these disruptions across both personal and business contexts to advantage.

Personal circuit breakers may include;

  • A change in season– exercising in the mornings may become more difficult/easy and you need to adjust your routine as a result
  • Moving house– empty cupboards make you feel anything is possible.  Use the opportunity to set up an environment to support healthy habits
  • Job change– you reaquaint yourself with your personal workplace habits when you have to commute to a new place, navigate a new building, meet new people and learn your new job.
  • Holiday – A change of scenery can take you away from normal habit triggers (i.e. people, places, smells, sounds) which can be a good thing (e.g. quitting smoking) or a bad thing (e.g. stopping exercise)
  • Family change– marriage, divorce, death, birth – moments of particular significance can make us reappraise how we’ve been living

In business, circuit breakers may include;

  • Bills – when your customer receives a bill they are reminded of their side of the commercial arrangement, and may scrutinise the value you provide
  • Staffing changes– when staff come and go there is often a reappraisal of the job’s function and value
  • Office move– Relocations can change the way the business is perceived (are they upgrading or downsizing?) and also cause team dynamics to be either disrupted or strengthened
  • Organisational restructure– the perennial favourite of a new boss; kicking off a restructure to ‘shake things up’
  • Losing a significant customer– time for some introspection and a reassessment of why and what you took for granted
  • Competitor activities– a new competitor or innovative move can radically alter the landscape

Once you’ve experienced a circuit breaker it is up to you whether you use it to your advantage or slide back to status quo.

Re-setting personal habits

For habits, use the opportunity to analyse the components of your behaviour – the trigger, routine and reward, and develop strategies to deal with each.

For instance, thanks to my smartphone circuit breaker I was able to analyse the habit that had formed;

  • Trigger – when I’d reached an impasse in something I was trying to nut out
  • Routine– I’d reach for my phone and scroll through emails, then LinkedIn, then Twitter
  • Reward – I’d be distracted from my brainwork while feeling productive

And then move to correcting the habit.

  • Trigger – I can’t prevent the mental state, so the trigger will always exist
  • Routine – I can make it harder for me to check my phone by keeping it out of arm’s reach, like on a docking system. (I could also remove the social media functions from my phone if I needed to up the ante)
  • Reward – I can stare out the window or squeeze a stress ball to let my brain get the breather it needs

Re-setting business behaviour

If you’ve experienced a circuit breaker in your business, you have a precious opportunity to re-set things for the better.

These five questions will help you structure your approach.

1.     What is the prevailing behaviour, of customers and staff? Is this optimal?

2.     What is the desired new behaviour? What would you like to see?

3.     How can you make undesirable behaviour more difficult?

4.     How can you make desirable new behaviour easy?

5.     How will you ensure that reward is greater than effort?

Circuit breakers are all around us. While in the past you may have called them problems, I hope you’ll now consider them opportunities to reflect and re-set.