How much do you think you’d need to spend to uplift sales by 9.1%, increase dwell-time by 11 minutes or increase sales by $300 million dollars a year? The answer is - significantly less than you might imagine.
Opinion piece by James Odene, recently published in Propel Hospitality's Opinion segment.
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All of the above were achieved by the application of behavioural science; a field built over decades with robust research on how people make decisions (purchase or otherwise).
As author of ‘The Choice Factory’ Richard Shotton remarks;
“Whether you're trying to get customers to switch from a competitor, to buy a greater range of products or to pay a premium, businesses need to understand behaviour change. Behavioural science - the study of how to effectively change behaviour - should therefore be a topic all businesses are interested in.”
Now, I don’t profess to having access to a stash of secrets that will instantly give any business a boost to the tune of $300 million dollars, but it’s fair to say that it’s probably more likely that it would be both easier and (significantly) cheaper with a good understanding of behavioural science to achieve such a thing.
So, how were the above three examples achieved? The first two, by changing the in-store music (easy) and the final, so-called ‘$300 million dollar button’ was just a slight change in the customer purchase journey on a website (namely switching at which point a user had to make an account to the end of the process, simple). In each case, the people behind the decisions knew enough about behavioural science to hypothesise the likely customer behaviour and optimise accordingly.
I have been fascinated by behavioural science for nearly 10 years now and could wax lyrical about its abilities to boost a business. But if I were to throw a challenge to the practice, it would be that it’s yet to formalise itself into a digestible process or model, making it a little hard work to pick up for those who are yet to use it’s invaluable insights.
Let me try and ease the burden.
How to start using behavioural science instantly
For some, even the word ‘science’ causes their eyes to glaze over. But bear with me. The practise of behavioural science has been active for decades, and through the accumulation of studies on how people behave in given circumstances, scientists have begun to formulate a set of likely ‘rules’, ‘procedures’ or ‘prototypical responses’. To give these their fancy titles, they’re called ‘biases’ (the way a person may be biased towards one decision over another) or ‘heuristics’ (simple rule-of-thumb decisions). Still with me? Let’s press on.
Put in the simplest of terms.; the list of biases and heuristics can be thought of as your shopping list of insights that at any point you could pick up and start trying.
A simple example
‘The Peak-End Rule’ is one such bias.
Through research, behavioural scientists have determined that people are more likely to evaluate and remember an experience, not as a whole, but by the sum of its most stand-out moments (the ‘peaks’) and the final moment (the ‘end’), and that these moments can be entirely subjective.
This insight tells us that instead of working tirelessly to elevate the entire objective experience (expensive and hard to achieve), it would be as (if not more) effective to work on adding a few positive subjective peaks (say, colouring for adults left at the tables and a surprising playlist only played in the bathrooms), and an uplifting end (imagine leaving a restaurant and seeing a big button with the word ‘compliments to the chef’ written on which when pressed gave you a boost (as gratitude makes you feel good) and perhaps played a sound in the kitchen to boost the mood of the team and positively boost productivity - you’d remember that, right?).
These are just some ideas that a business could implement the Peak-End Rule. The point is - comparative to other actions you could choose to improve the entire objective customer experience (more staff, ‘higher quality’ food, building renovations, new furniture) - by instead changing the subjective customer experience (how they feel about it), it is decidedly cheaper, easier to implement and could deliver significantly more return on investment. This is where the true, business transformational power of understanding behavioural science lies - knowing how to change the subjective experience of a customer (cheaper and easier) than meddling with the objective customer experience (more expensive and likely lower ROI). It is also worth knowing that behavioural science can help in so many areas that people don’t even think to try it, such as encouraging people to take the stairs, order more wine, or boost staff morale or reduce crime… the list goes on.
Your call to action
At a time where hospitality is fighting to survive, simple and highly effective changes brought about by understanding behavioural science could provide you with invaluable uplift. And the best way to get started is to simply read our list of biases, choose one or two biases that you think could help you improve or optimise a certain challenge you’re facing, and put them into action! Remember, when dealing with people, it’s always a matter of averages and likelihoods (not certainties), so each time you implement something, just watch for the result. If it worked, bingo! Scale it up. If not, no problem, tweak it, or try something else.
Here’s a good one to get you started; The Von Restorff Effect states that things which stand out and are distinctive are more likely to drive better recall and therefore be top-of-mind. This could be transformational for a hospitality business. So what could you do right now that’s easy and cheap to make your business more distinctive? (I still quite fancy my idea of a compliment button).
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We've recently taken on all of the hard work ourselves and created an easy to digest 'Top 10 Charts of Behavioural Science' for you to enjoy. It covers ten of the most relevant biases and simple ways to start putting them to use!