Don't Listen To Your Customers - Do This Instead | Kristen Berman | TEDxBerlin

this is one of my favorite charts in social science some companies have close to 50% of their employees saving for retirement but some have over 90 percent employees on the right will be sipping mimosas on the beach in their retirement communities well employees on the Left will likely be hanging out in their cubicles well into their 70s so what explains the difference between these two types of companies that could lead to such a massive gap raise your hand if you think it's level of Education raise your hand if you think it's income raise your hand if you think it's age it turns out it has nothing to do with the usual suspects let me ensure you - Carla Carla makes under thirty thousand dollars a year she works at a retail clothing shop she has an eight-year-old son and things are tight but Carla is saving for retirement she is on the right this secret for Carla and others like her is the form that she fills out when she first gets hired in this chart employees on the right are automatically enrolled into retirement savings it was the default they did nothing and they start saving people on the Left had to fill out a form themselves they also did nothing but instead they didn't start saving I'm a behavioral scientist I've worked for the last decade in Silicon Valley helping hundreds of companies build products that change behavior for good when we ask people why are you saving for retirement over 80 percent say because I care about my future it sounds great it's just flat-out wrong could you imagine answering an interview question with because it was the default of course not and only 6% of people do as a behavioral scientist I study the gap between what people say they will do and what they actually do most organizations today design products by talking to customers they ask some questions with interviews they do surveys they do focus groups and it sounds logical right the problem is it's not working financial providers should help us with overspending but our bank accounts aren't growing health care providers should help us with overeating but our waste lines are definitely growing social media should help us connect but we are lonelier than ever today I'm gonna give you a sneak peek into my work we'll unpack why we study what people do and not what they say we'll go into how to actually understand behavior and build solutions that help people be happier healthier and wealthier traditionally companies ask three types of questions to understand you their customer they ask you about the past what have you done they ask you about the future what will you do and they ask you why you do something but can we trust the answers to these questions maybe less than you think let's take each one and figure out if it could be misleading us so first the past what have you done so imagine you work at a hospital and want to avoid the unnecessary spread of infection increasing hand-washing is a proven solution so if you ask people to report their past hand-washing behavior can you trust what they say so let's try this how many of you forgot to wash your hands the last time you went to the bathroom please raise your hands and avoid your neighbors face so are you telling the truth well we put cameras in the bathroom to figure out who could be lying just kidding but it is easy to see that you may lie when asked this question in public but even in a private survey people say they forget to wash their hands only one in a hundred times they go to the toilet people tend to underreport questions about the past behavior for two reasons first it's just not socially acceptable to tell the truth so do you text and drive of course not do you eat chocolate in the morning before work I have never done that do you forget to wash your hands nope people often answer what they think everybody else will answer we could never fix hand-washing if we built solutions based on those answers and second we just forget you've likely been to the bathroom 2,500 times do you really remember the 2470 first time we cannot report accurately if we do not remember so let's take the second type of question questions that ask us about the future what will you do so imagine you're a healthcare organization that helps people with high blood pressure or hypertension patients that fail to take their medication on a daily basis have three times higher risk of dying of stroke compared to patients who take it properly so as an organization you may want to ask people if they need help remembering to take the life-saving medication in our study 58% of people said that they don't need any help to take this medication they think if taking the medication is important of course I will do it sadly hypertension adherence is famously low 50% of people stop taking it entirely within the first year how could people get this so wrong they say they don't need any help but clearly they do when asking people about their future behavior they are imagining an ideal self in the future I am a perfect person in the future of course I will take my life-saving medication they forget that in the present moment life is happening you have to take your kid to work early or there's a work fire-drill going on people cannot predict their future accurately because they cannot forecast all of the other things going on in their environment and how they will react let's take another example so a large company in Los Angeles wanted to encourage their employees to eat healthier in surveys 60 percent of people say that they would take an apple if it was put out so the company began putting out free apples in their cafeteria and what happened nobody took the apples so the company called us to unpack what was going on first we observed their lunch hour so sure enough apples were prominently displayed but after two hours no apples were taken but after one look at their cafeteria we figured out what was going on the apples were competing with the fries when asking people questions about their future behavior organizations assume that our responses represent strong preferences sure we like apples but if the environment isn't conducive to taking apples they're not cut up or the next to the greasy fries then we won't take the Apple interview questions are asked in a vacuum as if the environment of decision making has no effect on our behavior so unless we could replicate the exact environment of decision making we cannot trust people to tell us what they will or they won't do what about the third type of question questions that ask us why we do something these types of questions are the most misleading this is the Carla why are you saving for retirement question when asked people say that they are saving for retirement because they care about their future and it's true they do care about their future but that is completely unrelated to why they are saving or not saving they choose to save because it was the easiest option at the time it was the default we act as if we are highly rational people and this is reflected in how we answer questions I thought about this deeply and I considered all the options and I made the best decision for me it's unlikely we'd say something like I was just too lazy to uncheck that box or I did whatever else is doing or I actually have no idea and yet these statements are closer to the truth so if we want to figure out why somebody does what they do we cannot ask them but if we can't trust people to tell us the truth how do organizations understand behavior and build solutions that help people so the answer is behavioral design behavioral design uses insights from the field of behavioral science to inform design decisions behavioral design is a three-step process first we do a behavioral diagnosis this is a literal map of every single step every single action somebody must take to get to the desired outcome and then we identify the psychological biases at play when making a decision this could be social norms or loss aversion or optimism bias these biases affect our decision-making and third we study what people do and not what they say this is a real-world experiment we've done behavioral design with companies like Google Aetna PayPal and many others let's take an example so student loan debt is crushing us college students however two million students we're eligible to apply for free financial aid and did not apply when you ask students why didn't you apply they say lack of information about financial aid eligibility however when Harvard researchers didn't experiment they found that giving students information about financial aid eligibility had no effect on behavior change this is a domain in which asking people questions will surely lead you astray our team was tasked with increasing applications and we used behavioral design the first step we did a behavioral diagnosis and found out that it was over 20 steps and close to an hour for students to complete this application second we identified that cognitive overload was the bias most present in student decision-making weighing back-and-forth the option to apply or not apply created this cognitive overload that pushed the decision off until tomorrow tomorrow came the student still have decided and the deadline passed and finally we ran an experiment to reduce cognitive overload for half the student population we texted them that they could apply and a deadline for the other half we texted them letting them know that filling out the financial aid form was now a part of the enrollment process we didn't force students to apply but we removed the decision deadlock by making it part of the standard process for people who did not apply the prior year our experiment tripled the likelihood that a student would apply for financial aid if this is rolled out an additional two hundred and thirty thousand more students may apply and get financial aid this is behavioral design from diagnosis to identifying bias to experimentation we create meaningful behavior change because instead of asking people why didn't you apply we watch what they do and shape the environment to lead to the best outcome the stakes are high so people want to eat healthy they want to save for retirement they want to take their pills but they don't because in nearly every domain solutions are still being built based on interviews surveys and focus groups we need to move from relying on asking people questions and move to studying what they actually do this is behavioral design this is the future for organizations that want to make us happier healthier and wealthier thank you [Applause]

Channel: TEDx Talks

Views: 124,215

Keywords: TEDxTalks, English, Design, Behavorial economics, Business, Economics

Id: 2gxnr3r1YVU

Length: 15min 30sec (930 seconds)

Published: Mon Jul 29 2019