With Advertising Week Europe hitting town (23-27 March) a hot topic is guaranteed to be behavioural economics. For those who aren’t familiar with the phrase, put simply it’s understanding the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals. It’s big news in the advertising world, where there is increasing interest in harnessing the innate behavioural traits and micro-decisions for (let’s put it bluntly) financial gain.
The Times are busy putting the concept into practice with a new approach to halting the tide of subscription attrition. By training their call centre staff (or ‘Choice Architects’ as they now like to refer to them) to use certain techniques, words and phrases based on behavioural research, they subtly influence and shift callers’ behaviour – without the reliance on financial incentives to stay. Many of these tap into the intriguingly named ‘power of peer pressure’, ‘scarcity bias’, ‘social norming’, ‘loss aversion’ and ‘preference bias’.
“I’d never fall for that” I hear you cry. Well, ever hurried to buy something online because the website tells you there are only six left at that price? It doesn’t necessarily state that the price will go up or down afterwards, but you assume it will increase, triggering your scarcity bias into action. Before you know it your virtual basket brimmeth over. Airlines are a classic example of this in practice. Want to know more? Don’t miss your chance (see what I did there?). Check out the ‘The Maddest Men of All’ podcast from the brilliant Freakonomics Radio.
So we can begin to see how the concept works in the world of buying and selling, but what about applying the same techniques to recruitment and retention of your most valuable asset – your people. A cloud-based software company called Cornerstone OnDemand are starting to do just this. They have built software that helps employers find the right employees and then track their performance. It sounds clinical, with a touch of Big Brother, but it actually brings depth, intelligence and a bit of science to the more traditional (and increasingly outdated) ways of looking at performance and motivation. Salary is a classic example where there has been an over-reliance on its importance as a ‘lever’ to boost motivation and retention. But without real understanding and measurement of its effectiveness or, importantly, what could provide more meaningful and more economical alternatives.
This could be just the start of a new dimension in a more qualitative, measurable and personalised employee/employer relationship. Harnessing and rewarding our most deep-rooted needs and behaviours to create a more fulfilling, quantifiable and cost-efficient relationship has to be a winner for everyone involved. Like many other successful businesses, why not get in contact with us now to discuss this further? I’d hate you to miss out on the benefits this could bring to your business – especially when there’s a full money-back satisfaction guarantee…