468. Decoding the Why

Summary

Podcast Summary: The Brainy Business | Episode 468: Decoding the Why

Title: Decoding the Why
Host: Melina Palmer
Guest: Nate Andorsky
Release Date: February 4, 2025
Duration: 42 minutes

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Introduction

In Episode 468 of The Brainy Business podcast, host Melina Palmer delves into the intricate motivations behind consumer behavior with guest Nate Andorsky, author of Decoding the Why. Nate, a seasoned entrepreneur and behavioral science expert, shares his insights on how understanding the psychological drivers of human decision-making can transform business strategies and enhance sales conversions.

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Background of Nate Andorsky

[00:33 - 02:29]

Melina Palmer introduces Nate Andorsky, highlighting his extensive experience in integrating behavioral science with technology to aid innovative companies and nonprofits. Nate's journey into behavioral science was sparked by reading Nudge, which led him to co-found Creative Science. His work emphasizes leveraging psychological factors to build effective digital strategies, earning recognition from platforms like Forbes, Inc., and Huffington Post.

Notable Quote:

"The key to unlocking the potential of technology lies within our understanding of the psychological factors that drive human decision making." — Nate Andorsky ([03:02])

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Understanding Behavioral Economics in Business

[02:47 - 06:15]

Nate elaborates on his transition from product design in the tech space to behavioral science. He emphasizes the importance of concepts like the paradox of choice and social norming in product design but points out that many companies overlook deeper behavioral science principles. This realization propelled him to explore how behavioral science can be systematically integrated into business strategies to influence user behavior effectively.

Notable Quote:

"You're not just making the product really easy to use, you're really understanding what drives behavior." — Nate Andorsky ([05:12])

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Case Studies and Practical Applications

A. Online Education Platform

[06:15 - 14:16]

Nate discusses a case study from his book involving an online learning platform, Talented. The platform struggled with user engagement post-signup. Traditional incentives like badges and monetary rewards failed to sustain user commitment. Nate introduced a cohort model where early adopters were publicly recognized, leveraging social norming to motivate others. This intervention significantly increased user participation by establishing a new behavioral norm within the cohort.

Notable Quote:

"Anybody who hasn't started, it's a nice kind of a nudge, clearly, to help them to feel like, oh, yeah, I signed up for this for a reason." — Melina Palmer ([14:00])

B. Medical School Enrollment Process

[14:16 - 19:09]

Another example involves optimizing the enrollment process for a medical school. Nate implemented the endowment effect by allowing prospective students to personalize their enrollment experience, fostering a sense of ownership. Additionally, leveraging similarity bias, he tailored narratives to match demographic segments, enhancing trust and relatability. These strategies improved conversion rates by aligning the enrollment process with the psychological drivers of prospective students.

Notable Quote:

"If you flip the gift array around, have the normal page layout and then just have monthly already selected, you're not using all these different colors to try to nudge people." — Nate Andorsky ([36:13])

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Strategies to Uncover the "Why" in Your Business

[22:13 - 27:51]

Nate provides a structured approach for businesses to decode their customers' motivations:

1. Define a Specific Problem: Focus on a clear, actionable problem statement rather than a broad objective.

2. Deep Dive into Behavioral Science: Gain foundational knowledge through literature like Nudge and understand key behavioral theories.

3. Conduct Hypothesis Testing: Develop and test hypotheses through A/B testing, surveys, or pilot programs to identify effective interventions.

4. Iterate and Optimize: Use the data from tests to refine strategies continuously.

Nate emphasizes practical testing methods, such as using email campaigns and landing pages for controlled experiments to measure the impact of behavioral interventions.

Notable Quote:

"If you have a savings app and only 20% of the people who click on the sign-up button actually enroll, focus on understanding why that 80% aren’t converting." — Nate Andorsky ([22:55])

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Segmentation and Personalization

[27:51 - 32:15]

The conversation shifts to the importance of segmentation in applying behavioral strategies. Nate explains that different user segments may respond uniquely to various nudges. By tailoring interventions to specific demographics and behavioral patterns, businesses can achieve higher effectiveness. For instance, using similarity bias to present users with relatable role models or customizing messages based on past behaviors enhances engagement and conversion rates.

Notable Quote:

"Nudges are contextual and can perform differently for different segments. It's a huge opportunity if you can start to figure that out." — Nate Andorsky ([28:07])

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Evaluating Behavioral Interventions

[32:15 - 38:44]

Melina and Nate discuss practical examples of evaluating behavioral interventions, such as optimizing donation pages for nonprofits. Nate critiques a specific donation form, highlighting issues with the ordering of gift options and color usage that may confuse donors. He suggests alternative strategies, like reversing the gift array and emphasizing social proof, to enhance donation rates.

They also explore the concept of pseudo set framing and its effectiveness in encouraging recurring donations by creating a perception of near completion, thereby motivating donors to finalize their commitment.

Notable Quote:

"If you frame things as part of a set, even if those actions are completely arbitrary, we're more likely to complete the set." — Nate Andorsky ([31:56])

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Final Thoughts and Practical Advice

[38:44 - 42:36]

As the episode wraps up, Melina reiterates the importance of focusing on specific behavioral insights to drive business success. She encourages listeners to apply the discussed strategies to their own businesses, emphasizing the significance of micro-level understanding and iterative testing.

Nate provides contact information for further engagement, inviting listeners to connect via LinkedIn or his company website, CreativeScience.co.com, and to purchase his book, Decoding the Why, on Amazon.

Notable Quote:

"If you want to understand the why behind something, focus on a very specific and clear problem. Our brains work in micro moments." — Melina Palmer ([40:00])

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Conclusion

Episode 468 of The Brainy Business offers a deep dive into the psychological underpinnings of consumer behavior through the lens of behavioral economics. Nate Andorsky's expertise provides actionable insights for businesses seeking to enhance their strategies by understanding the "why" behind their customers' actions. From practical case studies to strategic frameworks, this episode equips listeners with the tools necessary to decode and influence consumer behavior effectively.

Further Resources:

• Book: Decoding the Why by Nate Andorsky
• Website: CreativeScience.co.com
• LinkedIn: Nate Andorsky
• Podcast Show Notes: The Brainy Business Episode 468

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Connect with Melina Palmer:

• LinkedIn: Melina Palmer
• Website: TheBrainyBusiness.com

Stay Tuned:
Join Melina Palmer next Friday for a new episode featuring Bob Gerard, Learning Ingenuity Lead at Accenture.

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Thank you for listening to The Brainy Business podcast. For more free resources, virtual strategy sessions, and workshops to make your business more brain-friendly, visit thebrainybusiness.com.

Transcript

[Melina Palmer]

Welcome to episode 468 of the Brainy Business Understanding the Psychology of why People Buy. Today's episode is all about decoding the why with Nate Andorsky. Ready? Let's get started.

You are listening to the Brainy Business Podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain friendly. Now, here's your host, Melina Palmer.

Hello. Hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. It's pretty common for people to tell you that you need to find your why or showcase your customers why. We know that it matters and we know that things will flow easier when we showcase that why. But that doesn't mean it's easy. That's why so many people skip this step. It's hard, but there are some steps you can follow to understand the why better so you can use it to your advantage in business. My guest on today's Refreshed episode, which originally aired in October of 2020, is Nate Andorsky, author of Decoding the why, which we will of course be discussing in our conversation. Nate is an entrepreneur who uses behavioral science to build digital strategies and technology for today's most innovative companies and non profits. He believes the key to unlocking the potential of technology lies within our understanding of the psychological factors that drive human decision making. By combining scientific findings with outside of the box thinking, he helps turn human understanding into business advantages. He is a frequent international speaker, has been featured in Forbes Inc. And Huffington Post, and his team's work has earned accolades from fast company and topnonprofits.com since our conversation, he has founded a company called Patent355 which helps B2B SaaS companies leverage behavioral science and data driven insights to reach their next level of growth. Now don't forget, links for my top related past episodes and books are waiting for you in the show notes for this episode which are found within the app you're listening to and at the brainy business.com 468 all right, let's talk about decoding the why. Nate Andorski, welcome to the Brainy Business Podcast.

[Nate Andorsky]

Thanks for having me. I'm really excited to be here.

[Unknown]

Yeah, absolutely. So I would love I always like to start off by having our guests just tell a little bit about, you know, who you are and specifically kind of what drew you to the field of behavioral economics. Behavioral science, definitely.

[Nate Andorsky]

So my name is Nate Endorski. As you just said, I am the co founder And CEO of a company called Creative Science. And we use behavioral science to build technology and strategies for today's most innovative companies. I've always been been fascinated with the.

[Unknown]

Way that we make decisions.

[Nate Andorsky]

When I actually took the plunge into behavioral science was when I came across a book called Nudge. And after reading that, I think that really sparked my interest in really getting deeper into behavioral science. And just a short background on myself. I have a. I'm sort of from the entrepreneurship tech space. So I have been helping build and design products for a very long time. And what got me interested is when I read Nudge, I noticed that at a very high level, a lot of the concepts that they talk about, if you build tech products, you're familiar with them. Right. So like, you know, paradox of choice and social norming. But what I noticed was it went a lot deeper. It went a lot deeper than just some of these ideas that, you know, as a product designer. And I thought to myself that there must be companies that are integrating behavioral science into product design. And I looked and there really weren't. And that was the beginning of my plunge into behavioral science.

[Unknown]

So for those who don't have a background in creating tech products, where you say, and as far as this, so the knowledge of how they're using, you know, paradox of choice and social norms and some of the things that you were seeing in the gaps, do you have any examples of maybe a project that you had worked on or things that were maybe common trends or that were maybe inadvertently using some of those behavioral science tactics that are maybe more advanced now that you can share and see what your insights were?

Yeah, I mean, a few of them were.

[Nate Andorsky]

I wouldn't even say they were that advanced. There's definitely this idea of paradox of choice choice architecture, so how a certain page or app is laid out, the fundamental principles is reduce friction, add fuel, just make the thing really easy to use. Don't present too much information to the user at once. Provide little nudges or cues on what.

[Unknown]

Types of decisions the user should make.

[Nate Andorsky]

So a lot of status quo and default facts and such. So those types of things. And then also you'll see a lot with, with tech products, whether it's done intentionally or unintentionally is social normie and Right. So is doing this thing. So there's inherent bias that I have to do that thing too. So those types of things I had seen, but we hadn't really seen. You talk about commitment devices, for example.

[Unknown]

And you know, trying to get people.

[Nate Andorsky]

To opt into savings Accounts.

[Unknown]

Right. If, if you don't have a background.

[Nate Andorsky]

In behavioral science, you would never think to ask somebody to make a commitment to opt into a savings account 30 days from now. So it was those types of ideas that start to come to light when you really understand the behavioral science because you're not just making the product really easy to use, you're really understanding what drives behavior.

[Unknown]

Right?

[Melina Palmer]

Yeah.

[Unknown]

And that's, that is such a simple thing where. But it makes that huge difference in the pre commitment piece, like you said, we were just talking about before we hit record, where to say, hey, are you ready to sign up for this checking account right now? And go, no, like I don't want to do that right now. I'm really busy. Like, oh, so how about in two weeks? Or like you said 30 days and you say, oh yeah, sure, I can do that. Thanks to our time discounting brain, we think we're going to like that idea later.

[Nate Andorsky]

Right? Exactly.

[Unknown]

But then when the time comes and it's on the calendar, you say, well I did make an appointment and I wanted to be the type of person that does this thing, so I guess better go do that.

Exactly, exactly.

So I'm also interested where you say that you work with at Creative Science, the today's most innovative companies is the line that you use. And I know that often we can't say specific names of companies and maybe you have some examples that you can, especially from. You know, I think working on your book gives you some permissions to share stories that maybe wouldn't have been able to share before. But can you tell us a little bit about what that means and the type of work that you just really love to do?

[Nate Andorsky]

Yeah. So what I really enjoy, there's four spaces that I really like to work in. The first is the nonprofit social impact space, Consumer Finance, Health and then Ed Tech. Those are the four verticals that we typically focus in and those are really what excites me. And typically we come in contact with the company when they said I am having a challenge. I've tried optimizing the user experience of the design and I'm still facing issues. Right. So imagine that you have an online learning platform and people are signing up only to stop using your platform a week or two weeks into their course and you kind of can't figure out why. That's a perfect use case for behavioral science where we come in and say, listen, the user experience, the design of the application is really important, but first we really need to understand what is the behavior we're Trying to drive. How do we drive that and then bring that all up into a beautiful user experience.

[Unknown]

Yeah, that's such a big issue these days now that everything is virtual and so many people had to shift experiences into this virtual space. And you assume that, well, I've created the course so it exists and now everyone wants it and they're going to do it exactly the way that I thought through it, and it's going to be perfect. And then maybe you get them to sign up, but then nothing happens. And more likely, probably they don't even go and sign up. I'm assuming with a title of a book called Decoding the why that you are taking several steps back into the process to help them understand what they're actually helping people to do. Like why anyone cares about this thing and how you can kind of tap into that early so that they have that reduce friction and add fuel. So if you make it easy and you kind of light that passionate side with the why, that they're going to move forward and actually do the thing.

[Nate Andorsky]

Yeah, exactly. And the title of the book comes from the terminology we use at Creative Science. So a lot of times what we say is, when we're talking to clients is most clients will collect what we refer to as say data. And say data basically is anything your users are telling you. So it could be interviews, focus groups, surveys. And typically what they do is when their product is not working the way they want, they just go ask their users, what do you want us to build that would increase the likelihood that you would use the product? They often find is they do what their users tell them, they build the thing, and then the users don't actually do it. And the other bucket of data they collect is what we refer to as due data. And that's basically analytics. Right. So any KPIs you're seeing, any usage on your app, and what often happens is the say data and the due data don't line up. People say one thing, do another thing. Like fundamental principle of behavioral science. So we come in and we say, well, it's because you don't understand the why data. Right. What's actually driving user behavior? So, like the example that I gave about the online education platform is a way to sort of like start to pull the purse strings.

[Unknown]

There is.

[Nate Andorsky]

First we would say, okay, well what's going on here? Right?

[Unknown]

Well, there could be a number of.

[Nate Andorsky]

Different things, but one of the things we maybe look into is there's this idea of future self. Right. And there's a lot of Research around how we think about ourselves today is in first person, but how we think about ourselves in the future is in third person. There's research that suggests the way that we think about ourselves in the future is actually as a stranger. So whatever happened to that person is as inconsequential as it happened to a stranger. So we know that this is like this big disconnect, right? Then the question starts to become, well, how do I close the gap there? Right. There's a number of different ideas and concepts that you could begin to test. But like, one of them would maybe make a pre commitment to your future self in a week that you'll complete these classes or, you know, use some sort of social norming theory. So we'll, we'll do a pretty big like lit review and start to understand what else has been done specifically in the space, but specifically as it relates to that type of scenario, and then begin to test and iterate different concepts and interventions, et cetera. And through that we can then basically say to them and decode the why given the why data. These are the cognitive biases that are a driving your user's behavior. And then these are also the solutions that you can use to help them.

[Unknown]

Achieve the goals they want to achieve.

So to put some tangible meat on those bones for the audience that's listening here, if we. So that's kind of that framework of how it works. Do you have an example that talks about, you know, how you go one to A to B, right?

[Nate Andorsky]

Yeah. So there's actually a really good example in the book. It's a company called Talented, and basically it's an online learning platform. The concept is employers can sign up.

[Unknown]

For the platform, give it to their.

[Nate Andorsky]

Employees, and the idea is to help them improve skills. So typically it's types of trades.

[Unknown]

You would learn a new skill and.

[Nate Andorsky]

Then you're supposed to take a photo or a video of you actually performing that skill. Right? Because the whole idea is the sooner that you actually put your skill into practice, you have a better chance at learning it. And when I was interviewing the founder of the company, he had tried all these different things because people were learning the new skills, but no one was actually following through and actually implementing them. And he tried giving them badges and rewards. He also tried giving them a monetary incentive. But one of the things that that did was it triggered mental accounting. So one of the things that he.

[Unknown]

Looked at was, well, if you want.

[Nate Andorsky]

To change user behavior, some of the ideas around that is like, you have to change the environment, you have to change the norms. So one of the concepts he eventually came up with was he would put people into these cohort models. So there'd be. When people started the program, they'd get into a cohort of about 50 other people. And he always found, without fail, that right out the gate, there was always.

[Unknown]

One or two people who were off.

[Nate Andorsky]

To, like, a really quick start. They read the content, they implemented the skill, and he would just send a simple message to the rest of the cohort. He would say, congratulations, Jane and John, you're off to a really fast start. You've already completed one of the lessons and implemented it, et cetera.

[Melina Palmer]

And.

[Nate Andorsky]

And what this did was anybody who hadn't started, started to see that the social norm. The norm was to actually start right away and began to catch up. And it was the most effective intervention he had tried, where I think a.

[Unknown]

Lot of people, if you don't really.

[Nate Andorsky]

Think about the behavioral science, might just say, well, what's his gamified experience? But he really understood, like, how to drive behavior, and he found a lot of success in this cohort model.

[Unknown]

Yeah, I love that. And, you know, that social proof piece is so, so powerful. And being able to showcase the way that our brains get triggered in that, I think, is so interesting. Like, you said that the social norm, it felt like, was to get started early. And that's. That's how our brain interprets that these. These are two people that just happen to be chosen, but everyone else must be moving. And you kind of ignore the fact that you don't know what happened for the other 47 people in your group of 50 people. Right. You just assume that you're the only one that hasn't done anything yet. And maybe 25 of the people got off to a good start. Maybe it was only those two. I don't know. And I'm sure that varies from group to group. But for anybody who hasn't done it yet, it's a nice kind of a nudge, clearly, to help them to feel like, oh, yeah, I signed up for.

[Melina Palmer]

This for a reason.

[Unknown]

I mean, I'm here to do something. I better go ahead and move forward. And then you have a great gamified experience that they want to keep doing, and you get the, you know, the habit built. But just to get that initial push over the edge makes a big difference.

Exactly, Exactly.

Do you have a favorite project that you've worked on that you don't get to talk about very often, or maybe something that didn't make the book? I always there are so many things and conversations and interviews. And I know we had talked before about all the people that you chatted with before getting the book written. And I know there's like a hundred things you want to include, but you only get to put in 25 or whatever that works. So is there anything that comes to mind that you just either loved working on or loved learning about that you thought was such a cool example? That's fun to share.

[Nate Andorsky]

Yeah.

[Unknown]

We were actually working with a medical school on their application registration enrollment process. And one of the things that we looked in there was this whole idea of future self. Right. So you're asking somebody to make a commitment today that has a long term potential, uncertain payout. And they had kind of ran into an issue of they didn't have a lot of any other ideas to test. Right. So we started to look into this whole idea of, you know, your. Your current self versus your future self, but also interventions to help kind of close that gap. And we looked at two different things. Was, was one leveraging the endowment effect, Right. So getting students to sort of help build their experience as they enrolled and applied to these medical schools. Right. Because you take more ownership over something if you have a hand in building it, which was a really interesting concept that we began to test. The other one was also just similarity bias. So one of the great things about digital is that you can make experiences really dynamic. Right. So if, if I see somebody that sounds like, looks like me and acts like me that has done something, I'm more likely to trust that person. Right. So leveraging similarity bias, there's a lot of interesting things we've begun to test and they prove pretty successful. Where you land on the site and kind of based on who you are and your demographic information, you'll start to see stories, narratives from other students, but the students match up depending on who you are. Right. So that was really interesting. We also had done a little bit of work around trying to get individuals to apply for an education master's program. And one of the things we have looked at around there is like creating sort of nostalgia. Right. So we had some sort of creative and ad copy that said, you know, it was like a picture of theoretically you, when you were young, you know, looking up to a role model and like asking them to recall who they wanted to be when they grew up. This idea, if I wanted to be a teacher, like, who's your hero? Right. So we had sort of used some of these concepts and ideas to kind of trigger that emotional side of reconnecting to sort of like your childhood dream. So that was some of the interesting work that we did that actually did not.

[Nate Andorsky]

Did not make it in the book.

[Unknown]

Because we were actually doing it as.

[Nate Andorsky]

I was writing the book.

[Unknown]

Oh, those are the hard ones, right Where. And maybe some of them you even start. It's like you get. You started that you think, I know I'm doing the book, so I'm going to get this project because it's gonna be awesome. And then just. It doesn't finish in time.

Exactly.

I know data takes. Takes far too long to come into us sometimes I think, but I do. I really like the priming piece that comes in there. You know, as far as you're talking about, ask. So asking that really smart question in advance, knowing that you're wanting to. So knowing you want to use nostalgia and this. Maybe it's a mirror neuron thing, maybe it's something else. But this nostalgia piece and the in group bias stuff is what's going to help someone get some of that social proof. Like they're all these little things that you know what you want to be that's going to be most likely to trigger the behaviors that you're hoping are going to help somebody to fulfill that dream and overcome the present bias future self situation. Right. So when you know that that's what you need to trigger, you can ask a really smart question up front and you don't have to ask a ton of things and then go follow up with them and like dig through all of their content of getting someone that's actually going to fill out this horrifically long form and you hope maybe there's a good nugget that you can use to sell them on. And like this, this traditional logical model, right. Where we think I need all the possible information and then I. And sift through and find it. Whereas if you know that actually finding what their dream was and giving them a little glimpse of that dream and by asking just that simple question that doesn't feel invasive because people ask that all the time. You know, what did you want to be when you grew up? Then it gets you into just a very different mindset when then you start to talk about like capitalizing on your dreams of today sort of a thing and you can make sure that the imagery matches.

Yeah.

Did you have any? Well, I feel like for one, I need to ask Nate, what did you want to be when you grew up?

[Nate Andorsky]

I. What.

[Unknown]

I actually wanted to be a doctor for a while when I grew up. But I think that's because I come from a family of medical professionals, so I just. Most relevant thing. And then I actually, when I was in high school, I started my first business. And then from that then on, I was like, I don't want to be a doctor. I want to be an entrepreneur.

Nice, nice, nice.

What about you?

So all through school, life in school and whatnot, I was 100%, no questions asked, gonna be that sort of like, triple threat. Singer, actor, dancer. And had been planning to get a degree in musical theater. And toward the end of high school and was having all my applications to be filling out to apply to the, you know, Juilliards of the world. And I was in my. One of my choir classes and looking around and realizing everybody I knew that got actual degrees in music ended up corralling high school choirs.

Yeah, yeah.

And having that moment of, I can still sing even if I don't get a degree in it. But, yeah, in that. Deciding that, you know, maybe I wanted to look into something else. And then I floundered around for a while. I looked at being pre med. I was pre law. Like, I was looking into film school. I'm a shiny object person, so.

Interesting.

[Melina Palmer]

Yep.

[Unknown]

Ended up in marketing, and it all worked out.

[Nate Andorsky]

So that's great.

[Unknown]

That's awesome.

Yep. And now back around, full circle that I do teach now through Texas A and M University, as the audience knows. But I think it's a little bit different than what could have been. So.

Well, you could. You could still burst out into song during one of your classes if you wanted to, right?

I can. You know, I've actually done. So I used to. When I used to volunteer for a company, a nonprofit called Washington Business Week, and we used to joke and call it that it was nerd camp. And so I would go out and they would have groups of high school kids that you would bring together, several hundred of them, and then they got separated into companies. And I would always mention, very intentionally, I do this with a lot of presentations anyway, still. But I will say at the beginning that I sing, you know, and, like, doing that dream of, like, what you wanted to do, what you were going to be about. And I would always say that, you know, that I was a singer. And then when you do questions at the end, would say if anyone ever asked me to sing. I always wanted to, like, honor that with doing it where, you know, you ask for the thing that you want. But I would never do it without being asked. But, yes, I have sung at a speaking engagement more than once.

That's awesome. That's awesome.

All right, so that was a random tangent. Let's come back around to you and your cool stuff.

Cool.

So what else? I guess if you were going to give some advice to the people listening within their business and if they're trying to get into that why data, which, you know, I think people are familiar with some of that terminology became very popular by, you know, Simon Sinek. Start with why. Got it. I get it when you talk about it, but what do I do to actually help uncover the why in my business? Like how would you start with a company or advise somebody to figure out their whys for their customers to be more effective?

Yeah. So I think the first thing is you got to just focus on a very specific problem. Right. So I think you're just like, I want to understand the why. Like it's really hard because you're not driving towards an action or like a problem statement. So I would understand like a really clear problem statement. Right. So the problem I'm having is I have a savings app and you know, I am only 20% of the people who click on the sign up button actually enroll in the savings plan. Right. And then I would start to really understand. I mean you have to have some sort of knowledge of behavioral science.

[Nate Andorsky]

Right.

[Unknown]

Is begin to understand. And if you haven't read the books of nudge, etc. I would read those to get a baseline understanding of what behavioral science is, what are some of the more prominent theories. And then the next step I would say is like do a really deep dive into the literature review. Right. There's a lot of academic research in regards to what drives human behavior around, like how people think about money and accounting. And we talked about time discounting and like start to hypothesize some of the things that could be going on. Look at interventions that have been used before and then begin to randomize and test those different ideas and concepts and see which ones perform and which ones don't perform. And based on the ones, and I'm obviously simplifying this, but based on the.

[Nate Andorsky]

Ones that do perform, you can start.

[Unknown]

To say, okay, one of the things that you know is the why behind my users is this idea of time discounting. And I found that actually if I ask them to make a commitment in 30 days rather than now, that increases the conversion rates by 3%. Like you can start to then sort of validate like the types of conduct biases that are, that are driving users behavior.

Yeah. And do you typically, if you were working on a project, are you in the multiple A B tests of sort of the Netflix model or running a bunch of simulations in something else. All kind of concurrent user groups that you're, you know, testing otherwise or a hybrid.

It's kind of a hybrid. It's case by case scan of the client, right. So some clients are like, great, take this and you can go ahead and just test it on our live instance. Right. Which is the best case scenario. We'll do a B test, split test, randomizing.

[Nate Andorsky]

Right.

[Unknown]

We have used Amazon MTurk before. We've used some other tools to kind of test beforehand. One of the challenges is oftentimes it's not representative of their customer base.

[Nate Andorsky]

Right.

[Unknown]

So you can kind of only move the needle so far. The other really good place honestly to test is emails. And the reason the emails are really good place to test is because you can measure an outcome. There's something for them to click on the email. And it's really easy to modify a email to represent a theory. Right? So for example, the finance stuff I was talking about, like, one of the things you could do is you could just literally send out a blast email that says, you know, commit to signing up for our Savings app in 30 days with like a call to action button. And you can use that as a test to say, oh, does this content, this idea, even though it's not fully implemented yet, does that at least have to give you some indication that there's something to dig for more here?

[Nate Andorsky]

So emails have actually been a really.

[Unknown]

Great way to test. And also just landing pages also.

Right.

And then there's some more sophisticated tools like Google Optimize and Mixpanel where you can actually, they make it really easy, they make it easy to split, test the user experience.

And then you can see, you know, if one of these concepts has some serious legs where the other is like, I mean, it worked okay, maybe something is terrible and makes it worse, but right then you're able to kind of see what's resonating with your, with your user group instead of just people that happen to find it, you know, where they might not be within the right mindset and demographic of who you're talking to, depending on, you know, the field of people. When you're looking at even just something like helping people to save more. And I know there are a lot of financial institutions that listen to the show, so if you were doing that save more thing, it feels like if you have, I think especially a cursory knowledge in behavioral sciences that you would say, you know, the motivation to save, you Know, it's time. Discounting is all that it is. And we just need to overcome that. And there's nothing else that we need to deal with. We just need to help them see their, you know, the present, you know, self. Doing the future thing.

[Melina Palmer]

Cool.

[Unknown]

We, we made it. But, you know, understanding their background. There is the nostalgia piece, there's the, you know, why are they not saving? Is there some fear that's tied in? Are they in, you know, some other difficult mental place where they're, you know, overwhelmed because they, do they not understand how to budget? Do they, you know, that knowing the group you're talking to can make a really big difference in the nudges that implement. And so how do you. Have you done much? Or do you have a great story about maybe some segmentation where you found kind of distinct groups within a larger context of an application or something that you've been working on?

Yeah, and it's a really good question and one that we're constantly figuring out and iterating on is like a lot of these nudges, like you said, are contextual and they can perform differently for different segments. Typically we start pretty broad like nudges, you know.

[Nate Andorsky]

Right.

[Unknown]

So like, similarity bias is an example of like, does similarity bias work? Okay, great. It does. Now let's look at like how we can leverage similarity bias in various segments. Right. And begin to test against those segments. And we're in the process right now. One client of doing a lot of that segmentation. We haven't been able to do as much as I'd like, just because it does get really complex with so many moving parts. But I think it's a huge opportunity. It's a little bit of a lift. But if you can start to figure that out, there is a lot of gain to be had there.

Yeah, well, it's like one of the most effective emails and really like campaigns that we ever did when I was at the credit union is that we were digging into the data. We had a credit card product that you got rewards for dining, you know, so eating out, you get, you know, three times points or something, and then you could redeem them for other meals and stuff. And so it was a very targeted card. And instead of just doing the generic, like everyone who doesn't get a credit card can see this is the list of cards that we have and pick one that works for you and you're putting a lot of work on that card person to like assume they're even interested in another card. And then, and then, and then Right. Whereas if you look at what might be motivating to them. So you know, at that point, looking in at the data and seeing, you know, how many people that don't have a credit card with us but do have debit cards, you know, just running a quick report and say we want to send this to everybody who has used their card at a restaurant, not fast food, but an actual restaurant, at least five times in the last month, you know, and then you're able. And seeing that it was a trend, so it's not just like they were on a trip or something. And then you're able to say, you know, do you like to eat out? Yes. Do you use your debit card when you pay? Like, would you prefer to get free meals instead? Like, here you go. So it's the like, yes, yes, yes. It very much feels like me. It doesn't say, hey, Nate, we know that you ate out eight times last month. You know, you could get. Because that's creepy and weird. But even though we do know that you don't say it that way because it feels invasive, but instead we're using the information that we have to help show you something that would actually really be beneficial for you, that you can get free meals and things, something that you would like and that you can see that benefit and why you would want it. And then you go and apply for the credit card.

Yeah, no, I think it's a really good example. It actually reminds me of one study we did with. It was with a nonprofit and it was for people who had previously donated to get them to commit to a recurring giving plan. And we used in the email copy was pseudo set framing. So we had like a pie chart.

[Nate Andorsky]

And there was, there was.

[Unknown]

It was split into thirds and two of pieces of the pie chart were filled in to give the donor the perspective that they were complete. And one was become a supporter of this nonprofit and the other one was make a one time donation and then the third one was empty and that was become a sustaining supporter. And what's interesting is having that pseudo sentence segmenting for just people who had previously donated that one performed. I can't remember the exact percentage, but I remember it was statistically significant. Performed better than the actual control, which is like just a generic, you know, become a monthly donor type of thing, just everybody.

And so that's sort of in the same way of like, you know, your LinkedIn profile is 80% complete or. Yeah. And so knowing that most people don't actually do some of these other things, but that doesn't mean it's, you know, incompletion is something we feel the need to fix.

[Nate Andorsky]

Exactly.

[Unknown]

And like it was. It was a simple visual we put in the email. And it's also the idea that we. If you frame things as part of a set, even if those actions are completely arbitrary, we're more likely to complete the set. So we had shown them this thing that was almost complete but incomplete. They had to take one action to complete the set. Right.

[Nate Andorsky]

So.

[Unknown]

But it's something that you didn't have an understanding of what drives human behavior. You never would have thought to put this thing in this email. So.

Yeah. Okay, so I'm going to show you something. So a person in my membership group had posted a thing. I love when listeners or clients will see something and go, this is so strange. Molina, what do you think about it? Right. And they. They'll email it to me or post it on social media. That's one of my favorite things.

[Nate Andorsky]

Yeah.

[Unknown]

So this is one. I'm going to show it to you, Nate, and we will talk about it. And then I will put the, you know, a link or, you know, put it in the show notes for the episode so people can take a look as well and kind of follow along with it. So someone tagged me saying, you know, I saw this. We won't talk about the name of the company that's on it because I'll black. I'll blur that out. But so here is what was sent over. So it's asking for a donation, and you have the options of one time or monthly. And then they have the gift amounts, and they have some suggested amounts. They have the anchoring done. Well, that it starts, you know, at 500 and then works its way down to $20 over six different boxes. And then they have another BO with a minimum payment option. So they've done some things with color here that make it really obvious what they're pushing people toward. And I think that they're really downplaying and completely negating all the benefits that might have been worked in with the way that it would have been set up if they didn't even have the. The color, the coloring in there. So in this case, all the buttons are this bright blue except for one time, $50, and then this other box. So what do you think about this?

Okay, so there's a couple things I think here. Number one, the first thing I would say, I've seen this done before, where they actually flip around the gift array, right? So normally you see like 25:30.

[Nate Andorsky]

It kind of increases and they flip.

[Unknown]

That around so it decreases.

[Nate Andorsky]

And I think the idea here is.

[Unknown]

That they're hoping donors will just grab the first option. What this actually does, and I've seen some studies around it, is it actually can cause a drop off because it's sort of changing the norm of the.

[Nate Andorsky]

Way we typically see gift arrays. And it causes this.

[Unknown]

Like, you have to think more, right?

[Nate Andorsky]

Because you're kind of like, what's going on here? This thing is backwards.

[Unknown]

I will also say, like, the color treatment is also interesting. Like, you know, it took me a while to even figure out what the default was just because the way the colors are used. But the other thing is too is like, I've seen a lot. There was one study done where you actually would make a one time donation of like $100. And then after you made the donation, it was like, do you want to convert this to a monthly donation of $20? Right. So they, they've, they've sort of made the monthly donations feel like less in.

[Nate Andorsky]

Comparison to the one time donation. So I don't know how this performed, like, off the bat. It just, it's kind of odd, I think. But a better way to get people to nudge into monthly donors is to use like some social norming or the example that there, I would think. What are your thoughts?

[Unknown]

Yeah, I think so. So often now you've been seeing where, you know, Amazon and others default to the subscription or the monthly, or you know, even that like annualized payment is less, which I don't necessarily love a lot of those. And I think it does feel a little bit bait and switch esque sometimes. Right, exactly. So it feels a little bit more in the sludge world sometimes when those are put together. But with this too is why are they. It feels like they are setting the default of a one time $50 donation.

Yeah, exactly. Yeah.

Instead of a, you know, the monthly, even just a monthly $50 would have made more sense. So I think they're underselling it. And then having this minimum payment of $5 at the bottom just really anchors it as low as you can possibly go.

[Nate Andorsky]

Yeah, exactly. And also like with monthly, like they've given you five choices, right? So they're sort of making it, you know, harder. Like I think the better way to maybe do this is first of all flip the gift array around because it's just like driving me crazy. But have the normal page laid out and then just have like kind of monthly already selected and then one of the dollar amounts already selected. So there's like a default built in, but you're not using all these different colors to try to nudge people because it also is a tad confusing and also like, I don't know where people are being driven to this from, but one of the things and this is on these donation pages is like we've.

[Unknown]

Seen from a number of different studies.

[Nate Andorsky]

Is just giving donors some insight into where their money is going, some certainty bias around that could increase conversion rates. And there's again, this might be coming from a landing page. So they might have already said that. But like, that's also another thing that kind of struck me is like there's no what am I giving to where is it going type of thing.

[Unknown]

Right? Yeah. And I think that it's in the app. So you've already said you're, you're doing the thing right. And you're, you're getting there. But right. Potentially still having a little bit of what your money means and helping to maybe do a. I like that idea of the reframe of when you can tie it into a specific item there to say $50 a month. Does this or most people choose $50 per month. So this is the default, like you said, the social proof as well as the, the benefit that would come from whatever that happens to be. I really like the suggestion that you gave of the once I've already decided I want to give and I'm going to give $100 to then ask if I want to break it up for this $20 a month. So one, I've, I've got my anchor. I was in. It was happening. I'm thinking $100 is going away. Then you bring in that time discounting present bias piece to say, well, if I can have those $80 now and then it's just going to be a few more. That seems good. And five months is long enough to get somebody hooked into the habit of having that money come out. And then you can either see, yes, that works or no, it doesn't. And I think you potentially run the risk, of course, of people that will opt out after the first month. And you lost $80 that you would have gotten from a donation, but I'm guessing that's pretty darn small due to that status quo thing.

[Nate Andorsky]

Yep, exactly.

[Unknown]

That's a lot of fun. Thank you for doing that with me. I think that was such an interesting one. That's you, the ones you look at and go, huh? Like what are you, what are we trying to do here? What's the point of that?

[Nate Andorsky]

Right?

[Unknown]

Which yeah, that's definitely not Decoding the that's I don't even know mucking up the why. So for everyone who has now had their interest very much piqued and they are ready to go get their own copy of Decoding the why and they want to learn more about you, what's the best way to get in contact with you to get the book? What should they do?

Sure. So I'm on LinkedIn Nate Andorsky. The website for my company is creativescience co.com co you can subscribe to my email newsletter. Also, if you want to purchase a copy of Decoding the why, you can just go on Amazon, type in Decoding the why and grab a copy from there. But I'm always happy to chat. So send me a note or a message on LinkedIn or shoot me an email at naterreativescience Co. And thanks so much for having me.

[Nate Andorsky]

This is great.

[Unknown]

Absolutely. Thank you for joining me. We will have links to all that stuff in the show notes to make it very easy. Maybe not the email so you don't get spammed by all the bots of the world, but you'll have the maybe we'll write that one out, but we'll definitely have the LinkedIn a link for the book and the website and everything. So thanks again Nate for joining me today and for talking a little bit about the amazing why's of behavioral science.

Awesome. Thanks for having me.

[Melina Palmer]

So what got your brain buzzing as you learned about Decoding the why today? For me, I always go back to the point that Nate made here, a common one from behavioral scientists that if you want to understand the why behind something, the first thing you need to do is to focus on a very specific and clear problem. We tend to try and make these massive Y's, but our brains work in micro moments, so that's really hard to encapsulate everything. If you want people to change their behavior, if you want to understand what's motivating them and get those shifts, you have to think smaller, know what will derail them, understand the context of the choice they're making or not making, and try to really deeply know what is going on on that micro level so you can make all the necessary adjustments and make that new behavior or that series of behaviors easier. Then you can do a more specific literature review and set up those hypotheses and little tests so you can iterate, learn and repeat. As we discussed in the conversation, emails and landing pages are great places to test because they're easier to measure and modify while you test out different theories. What behavior will you focus on and how will you test it? We would love to hear about it, so please come share it with us on social media. I'm the Brainy Biz pretty much Everywhere and Melina Palmer on LinkedIn. I have of course provided links to make it easy to contact both myself and Nate in the show notes, along with links to my top related past episodes and books like Decoding the Y and more. It's all waiting for you in the app you're listening to and atthe brainy business.com 46 thank you again to Nate Andorsky for joining me on the show today. It was a delight to chat with and learn from you. Join me Friday for a brand new episode with Bob Gerard, learning Ingenuity Lead at Accenture. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me and remember to be thoughtful.

Thank you for listening to the Brainy Business podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness.com.