Fundamental attribution error is another example of a behavioral economics concept with a really terrible name. Similar to my choice to call “hyperbolic time discounting” the “I’ll start Monday effect” fundamental attribution error is one where I think we can benefit from a simpler name, I like to call this the “Pot / Kettle Phenomenon.” You may be able to tell from that name a little bit about how this concept works, but here’s the simple explanation and then we will get into the details. If you have ever heard the phrase, “that’s like the pot calling the kettle black” we are basically talking about fundamental attribution error – when you use different criteria to think about yourself and how you are acting than you use to think about and judge others. Today, I explain this concept and share examples that bring it to life. I also give you an actionable five step plan to change the way you react to others and have less instances of this phenomenon.  I’ve received an overwhelmingly positive response from listeners about last week’s episode about coronavirus and why our brains react the way they do in pandemics. If you’re still wondering why people are hoarding toilet paper, this episode will help explain why.  If you’re interested in joining the BE Thoughtful Revolution, you can get a 7 day free trial and a 50% discount using the code HALFOFF learn more here.   Show Notes: [04:38] FUNDAMENTAL ATTRIBUTION ERROR is another example of a behavioral economics concept with a really terrible name. I prefer to call this the “Pot / Kettle Phenomenon.” [05:16] “That’s like the pot calling the kettle black” is basically talking about fundamental attribution error. It's using different criteria to think about yourself and how you are acting as opposed to how you would think about others and how they act. [06:16] How do you feel about someone who cuts you off in traffic? How do you feel about yourself when you cut someone else off in traffic? When thinking about yourself, you know you are a good person and this one act doesn’t carry over into your interpretation of your entire personality. [07:39] When you hear the story of someone else who you may have labeled as “bad,” you'll have empathy for them when you understand their story - like the Wicked Witch of the West.  [08:26] Why can't we stop ourselves from doing this and realize how often it impacts our personal and business relationships? [08:39] Even when we know about the rules our brain uses to make sense of our surroundings, it doesn’t mean we can just change them. [09:43] You have to use your conscious processing over the top of the thing your subconscious wants you to believe. [10:01] Your brain is biased to think of you (itself) as different and better than others…especially people who are not like you. You don’t have to let that immediate reaction form a lasting impression of someone else. [11:01] In the workplace, think about someone who shows up late to your meeting…what is your immediate thought about them? You likely think, “Ugh, he is so rude and disrespectful” this can then combine with the focusing illusion, so that you only notice times where the person in question is doing things that are rude and disrespectful. [12:16] INTRINSIC VS EXTRINSIC The big difference between the way we see others and how we see ourselves is the intrinsic story compared to the extrinsic story. [12:42] If someone’s personality or their disposition led to the lateness, it is intrinsic or internal attribution. If it was due to the situational factors, it would be external. [14:37] Steps to change the way you react to others: 1)  Decide you want to work on this and understand why it’s important to you. 2)  Choose an initial group or person to start the process with. 3)  Reframe your in-group 4)  Consciously adjust to extrinsic attributes for a decent number of total interactions (30 days is a good rule of thumb for people you see often) 5)  Move to the next group [16:26] If you have been passed up for a promotion or been told you aren’t a team player or feel like everyone is out to get you… fundamental attribution error could be a culprit. [16:44] Fixing your mindset in regards to the way you think about others is about your choice. You can’t change them or their responses to situations. [19:43] In the “in-group” perspective shift, it will take a little time at first where you have to consciously remind yourself to not have an “us versus them” mentality. [22:58] Resist the urge to use the same “good thing about them” every time. [24:21] Once you have completed the process with the first group you can move on to the next one. And the good news is, this should get easier over time. Unlike other goals which need to be limited, this can combine and add other groups where you start to use these techniques whenever you are ready. It is a positive snowball. [26:00] I want to talk a little about the flip side of the Pot / Kettle Phenomenon. It's important to look at your own behavior the way others do. Try to stop writing an extrinsic story for why it is ok. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram Join the BE Thoughtful Revolution Use code HALFOFF by March 31, 2020 and take advantage of a 7 day free trial Fundamental Attribution Error 91. Coronavirus and How the Human Brain Responds to Pandemics 51. Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode 45. Overview of Personal Biases 46. Biases Toward Others – Including Groups Thinking, Fast and Slow 89. Focusing Illusion: Why Thinking About Something Makes It Seem More Important Than It Is (A Behavioral Economics Foundations Episode) 67. How to Get (and Stay) Motivated 70. How to Set, Achieve & Exceed Brainy Goals 76. The Brainy Benefits of Gratitude Here's Why Rushing to Back-to-Back Meetings Is Hurting Your Reputation Why Learning To Embrace Criticism Should Be Your Top Resolution This Year

Coronavirus (or COVID-19) is everywhere on the news, and everyone's talking about it. The statistics and status of outbreaks are changing rapidly, and there is uncertainty around the virus. I can't answer all of the questions surrounding this issue…(no one can at this point) but I  hope this episode will help you understand a little bit more about how the human brain responds to pandemics. I'm going to talk about how the way our brains work affects our reactions in situations like this.  We'll start with an example of framing. What do you think of when you hear a “state of emergency” is declared? I live in Washington where we had the first coronavirus death and the first state of emergency declared in the US. California is the second state to have declared a state of emergency. “State of emergency” is a name that doesn’t help contain public fear. I understand why it's called this and why it's important to declare it…but…talk about a framing issue.  I also talk about the focusing illusion and how focusing on something makes it seem more significant. I'll cover several other concepts that apply to what goes through our minds in times of uncertainty, danger, fear, and panic. I'll also cover opportunities to make the most of things and lots and lots of informative links to help you educate yourself about the current situation.  It is important to note that the information about coronavirus specifically is changing rapidly – what I put in my notes and record today will not be accurate by the time this goes live on March 13 and after. Also, there is no judgment or criticism of choices any person or country or entity has made. The intention of this episode is to explain how our brains are wired to work during times of uncertainty, like the coronavirus pandemic.  Show Notes: [02:54] I've been reading a lot about coronavirus lately, and it's a big deal. I live in Washington state where we had the first recorded coronavirus death in the US. [03:32] Declaring a state of emergency is definitely a framing issue. When the brain hears this, it doesn't take it lightly. It wonders what the emergency means and creates more panic than is helpful. [03:58] The human brain has a lot of capacity to process information: when given something new and unknown it will run rampant. [04:15] Our brains will over analyze and freak out a little bit. Focusing on something will make it feel more important or significant. This is the focusing illusion. [04:36] Our counterfactual and prefactual thinking will also ramp up and go into overdrive. [04:59] A lack of control is a breeding ground for fear and a brain bonanza. [05:19] New or unknown things are scary, because we can't categorize them using the concept of relativity. We have nothing to compare it to. [06:17] Probability neglect is where we drastically overestimate our own personal risk in a situation. [07:21] We also have a zero risk bias where we would rather eliminate all the risk we can. [08:37] Our inability to properly understand probabilities and aversion to risk AND need for control AND penchant for the status quo all combine in the worst possible way when we are confronted with an unknown, highly contagious disease. [09:05] Availability bias is when our brains believe what we hear most often to be true. [10:47] I want to make sure everyone knows that I know we are talking about real humans – each of those numbers represents a person: mother, father, sister, brother, friend. I do not take this lightly as I share the details throughout the episode. [13:20] Why don't we hear about (or get as scared by) the flu-related deaths that happen every year? It's because we've all had the flu, and it's a known entity.  [14:02] Our availability bias says that flu is annoying, but it's not that big of a deal. [14:37] The recommendations to stop the threat of coronavirus are the exact same recommendations to stop influenza. [15:18] Availability bias is a huge culprit in the reaction to the coronavirus. The focus is on the scary stuff. [16:32] The unknown variables of the coronavirus are what make it really scary to the brain. [17:47] We need to maintain these better habits that will keep us healthier and happier well into the future. [18:02] Why is it so difficult to change habits? We are used to habits. We have subconscious rules stuck in our brain.  [20:30] Changing habits takes diligence at the beginning, and continued effort to maintain. Conscious processing can only do so much work at the same time.  [21:44] Before you react, stop and ask if your behavior is rational or if you need this. Take a moment to breathe and focus. [22:36] One other problem we have when it comes to changing behavior, is our brain’s natural risk thermostat. Essentially, when we do one thing good, we feel justified slacking on something else. [23:52] If we can all do only one thing well to fight the spread of viruses, because that one thing has a bunch of hidden steps, we should be focusing on the one thing that is proven to be most effective. [24:20] No one wants to be diagnosed with coronavirus. The mentality of staying home and not getting tested for fear of what others will think is a combination of herding and an ostrich or head in the sand type of response. [26:11] If people don't self-quarantine or get tested when they get sick, there will be more outbreaks. It's our brains natural reaction to avoid risk, but it's best to get tested. [27:47] One person making a rash and extreme decision can cause a huge chain reaction that is difficult to stop. [30:13] When we feel a lack of control, of uncertainty, like we do when a novel virus is spreading around the world, we get scared and the brain looks for something to do and control. [31:29] This is an opportunity to revisit the way you have always done things. [32:59] What can you be doing today, while people aren’t traveling and the status quo is already disrupted, to look at your offering and find opportunities to make your company better?   Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram Coronavirus and Its Global Sweep Stokes Fear Over Facts. Experts Say It's Unlikely to Produce 'Apocalyptic Scenario' Am I Going to Get the Coronavirus and Die? Psychology of Viral Pandemic: What We Need to Know and Do How Bad Will the Coronavirus Outbreak Get? Here Are 6 Key Factors Coronavirus Disease 2019 (COVID-19) Situation Summary What Role Did Rumour Play in Australia's Toilet Paper Frenzy? 'I Never Really Felt Unwell' - Coronavirus Patient Why We Can’t Think Straight About the Coronavirus (and What to Do About It) 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode 14. Scarcity: Why We Think Less Available Means More Value: A Behavioral Economics Foundations Episode 21. Habits: 95% Of Decisions Are Habitual – Which Side Is Your Business On?: A Behavioral Economics Foundations Episode 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode 89. Focusing Illusion: Why Thinking About Something Makes It Seem More Important Than It Is (A Behavioral Economics Foundations Episode) 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) 71. Prefactual Thinking: How to Turn “What If” Into “Why Not” – Behavioral Economics Foundations 12. Relativity: The Brain Can’t Value One-Off Items: A Behavioral Economics Foundations Episode The Cognitive Bias That Makes Us Panic About Coronavirus 15: Availability: Why People Are More Likely To Get Flood Insurance Right After a Flood: A Behavioral Economics Foundations Episode Live Coronavirus Data Flu Shot Better Than Last Year, Despite Tough Season for Kids Influenza (Seasonal) Changing Behaviour to Slow Coronavirus Spread Is Easier Said Than Done Behavioural Strategies for Reducing Covid-19 Transmission in the General Population Handwashing Can Stop a Virus—So Why Don’t We Do It? Hand Hygiene: Why, How & When? Even as Behavioural Researchers We Couldn’t Resist the Urge to Buy Toilet Paper 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode 51. Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode About HR Answers Remote Work / Telecommute Sample Policy & Employee Agreement 90. Habit Weekly: A Discussion With Creator Samuel Salzer COVID-19: Implications for Business

I am very excited to introduce you to Samuel Salzer, founder of the super awesome resource Habit Weekly. He provides content via a newsletter and LinkedIn every week with lots of great updates in the behavioral world. There are links for job openings in behavioral science around the globe, upcoming conferences, top podcasts and articles of the week – it is a really fantastic resource I recommend everyone subscribe to. Today, we discuss how Samuel became interested in behavioral science and his interest in habit formation. We also talk about not creating content for the sake of creating content. Samuel discovered firsthand that if you create what people actually want, they will ask you for more. This is so applicable in business. Find out what people actually want and give it to them. Put good stuff out into the world and people will want to engage with you.  Show Notes: [03:03] Samuel has always been an entrepreneur and started his first business when he was 16. [03:51] He moved from Sweden to Australia to study accounting and economics. He also started doing research on behavioral economics. [04:34] This opened his eyes to the nuance of human decision-making. [05:35] He also wanted to use this knowledge to help his mother establish a meditation habit. [06:38] He started studying the science of habit formation, behavioral science, and psychology.  [07:37] Samuel is his first test subject, and he does his share of self-experimentation.  [08:44] He helps clients create behavior change for good. [09:31] You are succeeding if you create value for your customers and a solution for their problem. [10:55] Samuel likes to focus on the underlying principles of what he is trying to do. [12:29] Samuel likes the concept of friction: both decreasing and increasing it.  [13:16] There are moments when it's beneficial to increase friction. You can strategically increase friction to eliminate negative habits. [16:20] Samuel is fascinated by habits and how they are formed. There are also ways to boost behaviors. Such as loss aversion or framing behaviors to make them more motivating. [17:07] Habits can have a trigger and a reward or consequence. There can be a negative (or positive) consequence after a behavior. [20:25] We often have habits or things we do that are designed to remove a negative.  [22:53] The concept of "eating the frog" or doing the hard thing first. [25:43] Samuel started sharing links on LinkedIn. This eventually evolved into Habit Weekly. It's now a mailing list that sends content related to behavioral design on a weekly basis. [28:04] You know you found something that people really want if they are reaching out to you asking you to create a mailing list. [30:09] Samuel works to make sure that anyone interested in behavioral design has the best resources throughout the week. [33:26] Accurate research and due diligence are very important to Samuel. [34:02] Samuel is excited about the future of behavioral design. In his opinion, the field is in the adolescent stage. The mature stage will be more about the process. [36:44] He's excited about being able to take all the tools and components and using them together to accomplish great things.  [39:46] Samuel's super power or wish would be to see the world through other people's eyes. That's part of what has drawn him into his work. A good book or movie can show the world from another person's perspective. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram The Brain Science Behind Your Shopping Decisions (watch Melina’s TV interview!) Habit Weekly Samuel Salzer Samuel Salzer on LinkedIn Samuel Salzer on Twitter Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time 81. How to Finally Change Your Behavior (So it Sticks) 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode 72. Friction – What It Is And How To Reduce It, with Roger Dooley 51. Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode 58. Partitioning: Why We Eat More Cheetos From A Party-Sized Bag Than A Fun Size: A Behavioral Economics Foundations Episode 32. The Overwhelmed Brain and Its Impact on Decision Making 34. Optimism Bias: The Good And The Bad Of Those Rose-Colored Glasses: A Behavioral Economics Foundations Episode 85. What is BrainyTab? An Interview with the Founders Radu and Raluca Judele 23. Reciprocity: Give A Little, Get A Lot: A Behavioral Economics Foundations Episode 30. Booms and Busts

In a previous episode, I talked about a study on happiness which found that when asked if people thought they would be happier if they were to suddenly be a paraplegic or suddenly win the lottery, most everyone believes they would be happier winning the lottery and significantly less so to lose the use of their limbs. In actuality, these two groups of people – paraplegics and lottery winners, are essentially just as happy as anyone else. Why would this be and why would people predict it incorrectly? It has everything to do with the focusing illusion. When people only focus on one piece of a giant puzzle that piece ends up with far too much weight. Losing the use of your legs or winning the lottery is just one small piece of an entire life. There are so many factors that play into happiness, and while these pieces are significant and impactful in many ways, they don’t tend to have an impact on overall happiness like we think they would. This episode is all about the focusing effect and how these principles can be used in your business and your life. I talk about focusing on that one thing and making it incredibly clear to your target market. I also talk about asking yourself what people should focus on when thinking about your brand and what would motivate your ideal customer to take action. Show Notes: [04:44] A study about happiness that illustrates the focusing illusion. [05:47] Kahneman did a test back in 1998 to find out if Californians or Midwesterners were happier with their lives. [06:24] If you said Californians, you would be wrong. A focusing illusion bias puts more weight on things like sunshine and a seemingly laid back lifestyle. People adapt to their surroundings. [07:06] “Nothing in life is quite as important as you think it is while you are thinking about it.” - Daniel Kahneman [07:53] Focusing on something, not surprisingly, puts a whole bunch of attention on it. [08:59] Think about decluttering and how you would feel getting rid of something you might need. The focusing illusion is combining with counterfactual and prefactual thinking to maintain your status quo bias and keep you stuck. [09:54] When you are asked to think about how happy someone would be or how angry something would make you or how satisfied you are or would be…your brain will focus WAY too much on a few key aspects and answer in a way that is just not in alignment with reality. [10:47] Social proof. People are more likely to take action based on the thoughts and actions of others. They are also likely to weigh a few key items as the most important indicators of their happiness. [12:32] Our brains are split up into two processing systems: the subconscious is super busy filtering through 11 million bits of data per second, while the conscious can only handle 40 bits per second. Your brain will sort through all of the data to validate what you're focused on. [13:20] Anything you want to believe (or that all important first impression) will be supported by the focusing illusion. [13:36]  Another example by Kahneman from Thinking, Fast and Slow using the halo effect. [15:25] Initial traits in a list changed the very meaning of the traits that appear later. The sequence in which we observe characteristics of a person is often determined by chance. Sequence matters, however, because the Halo effect increases the weight of 1st impressions. [16:40] When you are focusing on something, a particular aspect, you build it up in your mind and it changes your perception, expectation, experience, and memory of an experience. [17:20] There's a high likelihood that you will create bias in questions asked on surveys - hire an expert. [18:08] Focusing on finding examples to back up your brain’s earlier perceptions is confirmation bias. [19:17] It's good to take a step back and ask yourself if your bias may be guiding your interactions. [19:48] I share the story that was inspiration for this episode. [22:02] Live that truth and focus on that now. Your brain will focus on what you want it to. [23:34] Think about your approach to a project – what you focus on, the way you do things (or the way the company does things). [24:31] The problem that is facing you may not be as big of a deal as it seems – and something you aren’t even aware of could create a much bigger impact if you took the time to look for it. [25:36] A story about a detergent company fixing an obvious pain point and communicating it in their advertising. [26:32] Find the one or two points of value and talk about those…all the other features and benefits are extra. [27:12] Focus on that one thing and make it incredibly clear to your target market. [28:12] The mindstate guides the focusing effect and what the subconscious is looking for. Narrowing your messaging makes it more likely to resonate because it aligns with the brain of your customer. The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (ends March 1, 2020). Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram 88. Marketing to Mindstates: A Discussion With Author, Will Leach Mountain Clarity Would You Be Happier If You Were Richer?  A Focusing Illusion Does Living in California Make People Happy? A Focusing Illusion in Judgments of Life Satisfaction 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) 71. Prefactual Thinking: How to Turn “What If” Into “Why Not” – Behavioral Economics Foundations 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode 83. How to Organize Your Brain with Behavioral Economics 87. Social Proof: How to Use Herding to Boost Engagement and Sales Thinking, Fast and Slow (note this is on page 82) 76. The Brainy Benefits of Gratitude

Companies are getting more savvy about using behavioral economics not only to sell products, but to help consumers make better choices. Will Leach has taken the concepts of behavioral economics and social sciences to the next level with his book Marketing to Mindstates: The Practical Guide to Applying Behavior Design to Research and Marketing. I am very excited to talk with him today. He is the founder of the behavioral consultancy TriggerPoint. Previous to starting his business, Will led behavioral science methods at PepsiCo, and he has won numerous awards for his innovative work in behavioral economics. When reading Will’s book, I knew within the first few pages that he needed to come on the podcast. This is even before I realized that he got his master’s from Texas A&M University (I talked about the Texas A&M Human Behavior Lab in episode 33 where I interviewed Dr. Marco Palma.) Will and I had a lot of fun talking about the lab and team down there before we jumped into the interview. Will was at A&M before the lab was built, but we have both seen it in person thanks to Dr. Palma.  Will does such a great job of breaking down a really complex area of marketing into a formula that any business can follow – from global corporations like PepsiCo to small businesses. One area I know non-marketers (and even many marketing teams to be honest) struggle with is determining their target market and really narrowing it down and then knowing how to properly communicate with them. Will and I talk about his and the concept of the 18 different mindstates and nine motivations. He also shares his step by step process to help you determine which is the best for your company. This is an innovative and mind opening interview. Show Notes: [03:46] For Will, behavioral economics was the classic “I didn't know it existed until I stumbled upon it.” [03:56] Will joined the military right out of high school. He then studied classical economics. [04:16] He discovered marketing research through a graduate program and fell in love with it. It wasn't just looking at economics, it was looking at why people do what they do. [04:39] While working at PepsiCo, he discovered behavioral economics and behavioral science. In 2009, PepsiCo invested $20 million in a laboratory to study the neurological impacts of messaging. [05:08] Will was lucky enough to get to run behavioral science experiments, and he loved it so much he started his own business and wrote a book about it. [05:55] His favorite project was working on a brand new snack. It was a healthy baked hummus chip. The brand called Wicked Crisps was designed using purely behavioral sciences. The target market was the owner's daughter (or millennial moms). Will helped design the name, logo, tagline, bag, and website. Behavioral science was behind everything that they designed from fonts to benefits. [11:58] Will studied economics. He didn't want to just talk about theory. He wanted a practical book.  [13:02] He conveys specific models through story.  [14:01] He also dug into motivational psychology and goal theory. He looked at all six social sciences and found patterns. [16:25] Will thinks of mindstates as moments in time when we are being influenced. We aren't always consistent with our beliefs and attitudes. Our environment changes us. [18:20] His book is about moments in time and why a certain archetype may behave outside of the norm for them. Applying mindstates can help understand beliefs and values and impacts of the environment on these moments.  [20:57] Companies now look at how to help customers make better choices. Making their whole life better gives the company permission to sell them more. Brands are getting smarting and taking a holistic approach. [24:46] Will is the most excited about the idea of getting the mindstates out for everyone to use. They want to get more and more people to understand that there is science behind our decisions. There are also emotions around our decisions and just understanding a few small rules is a huge benefit. [25:57] We can sell more with behavioral economics. We can also reduce anxiety levels and create a better society.  [26:30] Will is getting more excited about the education side and using these concepts to help understand and overcome biases. [27:02] He uses goal theory to help understand what people are trying to accomplish. Helping people reach their goals can create a better society. [29:39] The nine motivations are achievement, autonomy, belonging, competence, empowerment, engagement, esteem, nurturance, and security. Then find optimistic and cautious examples. [30:28]  When guys are asked why they want to lose weight and get healthy the answer is usually so they can walk their daughter down the wedding aisle. [31:20] One reason why a dad would want to do this is nurturance. So a goal is “walk my daughter down the aisle” and the motivation is “nurturance.” [32:09] Promotion (or using an optimistic lens) is seeking to maximize losing weight. It's about maximizing gains. [32:45] A prevention lens focuses on eliminating doing bad things. [33:10] These details matter when you frame your benefits. They are either using cautious nurturance or maximizing nurturance.  [36:36] Be clear and stand for one thing. Take a stand and own it, and you will benefit tremendously. [38:33] The Hero and the Outlaw does a good law job of outlining archetypes. The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (ends March 1, 2020). Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram Marketing to Mindstates: The Practical Guide to Applying Behavior Design to Research and Marketing 33. Inside the Texas A&M Human Behavior Lab 43. A Guide for You to Create a Brainy Brand 61. Color Theory: When It Comes To Color, This 1 Thing Matters More Than Anything Else 78. How to Become Indistractible, Interview With Author Nir Eyal 75. The Littery – Interview with CEO Michael Manniche 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode 86. Peloton: A Behavioral Economics Analysis StoryBrand The Hero and the Outlaw: Building Extraordinary Brands Through the Power of Archetypes @Trigger_pointer on Twitter Marketing to Mindstates on Facebook Marketing to Mindstates on Instagram William Leach on LinkedIn Marketing to Mindstates on Twitter TriggerPoint Will Leach BE Thoughtful Revolution Membership Group Wicked Crisps The Seven Basic Plots: Why We Tell Stories E. Tory Higgins

Social proof was introduced by Robert Cialdini in his book Influence. It’s one of the six principles of persuasion (accompanied by reciprocity, scarcity, authority, consistency, and liking). I talked about social proof in last week's episode on Peloton. I talked about the infamous ad that made Peloton have a dramatic drop in market value, but I also talked about all of the things they were doing right and how they were using availability, priming, stacking and bundling offers, money back guarantees, reciprocity, choice architecture, herding and…of course…social proof.  I’ve heard from many of you who are actually considering getting a Peloton after that episode. That wasn’t my intention, but something I love to hear because we have been so happy with ours (and it is an example of the third type of social proof - users). Herding and social proof are closely related. When social proof is present, we are more likely to herd. We also look for social proof because it helps us validate our decisions. I’ll talk about the six types of social proof which are expert, celebrity, user, wisdom of the crowd, wisdom of friends, and certification. I’ll show how our biased brains are susceptible to social proof, ways it shows up, and how easily it can be implemented in any business – and why it is important to incorporate it. Show Notes: [02:28] Social proof is closely related to herding. [02:39] The concept of social proof was first introduced by Robert Cialdini. Cialdini’s 1984 book Influence: The Psychology of Persuasion introduced the concept of social proof as one of the six principles of persuasion (the others are reciprocity, scarcity, authority, consistency and liking). [03:34] Social proof and herding feels a bit like a chicken and the egg situation. We are a herding species, we look for social proof to validate our decisions and be accepted by the group, but when social proof is present…we are more likely to herd. Which came first? [04:31] Having a lot of other people (or the right people) who have made the same choice in the past (regardless of whether or not it is a good one) is the social proof we need to nudge us into making the same choice. [05:01] You may be using social proof in your business or have seen it used in other businesses. Now you have scientific proof that these methods work. [05:19] The six types of social proof are: expert, celebrity, user, wisdom of the crowd, wisdom of friends, and certification. [05:52] Expert social proof would be when someone who is an expert in the industry recommends or speaks on behalf of a product or service. An expert extends a halo effect to the organization who brought them there. [06:37] Be aware of authority bias. People are conditioned to believe those who are in authority. [07:55] In your business, consider who an expert is on a topic, and how you might be able to bring them in to interact with your audience. [08:35] Experts lend credibility and the value of social proof to a brand – they make people feel comfortable about working with you. [08:59] Celebrity: There is a clear value in having a celebrity talk about your product. [10:01] You need to reach the right people in a way that will encourage them to take action. [11:12] Microinfluencers can impact your business by reaching the people who are likely to buy. [11:50] Just because a celebrity is easy to get, doesn’t’ mean they are a good fit for you or your brand. It is important to be discerning and make sure there is alignment. [12:08] The perceived personality of the celebrity carries over onto the perceived personality of the brand. [12:45] Have a user talk about your product. You could also stack this with a celebrity who used your product. [13:16] Incorporating users includes reviews and testimonials. [13:30] People are more likely to be influenced by those who they consider to be like themselves. This is the herding piece in action, along with our personal biases toward our own in-group. [15:25] Cialdini's towel example shows how incredibly powerful social proof can be. [15:46] A genuine user talking about the product is influential. When you can help people to see that others like them have found value from your business, it is a win. [16:42] I find key moments to mention that I have clients and people do work with me. It helps people to see that others like them work with me. [18:26] For testimonials: you do not need to write out the complete testimonial OR put the name of the person who provided it. [21:51] Understand why you are using the testimonial and why it matters to the person making the decision, and only use the important pieces. [24:16] Wisdom of the crowd is when someone follows you on Twitter and you look at their profile and decide whether to follow back based on the number of followers they have. [25:24] If you have a lot of past customers or clients, or downloads of a podcast, or subscribers to your YouTube channel or whatever it is…that is worth sharing. Showing those numbers (even off to the side) will be noticed. [27:20] Having a Starbucks “on every corner” is a version of social proof as well – “it must be popular if there are so many”. [28:33] Wisdom of your friends, when someone is closely affiliated – someone you actually know like and trust, their opinion goes further. [28:51] One really easy thing to do is to do Facebook ads to friends of people who like your page already – then when the potential liker sees the ad it will say something like “Melina Palmer and 4 other friends like this page” which will make that person more likely to consider liking the page too. [31:13] Another way to trigger the wisdom of friends is by asking people to share photos of themselves using your product. [31:45] Certification is someone else with credibility giving you their stamp of approval.  This form of social proof helps people to feel comfortable with making a decision because it shows someone else did a considerable amount of due diligence. [33:02] Earned media is when you or your business gets featured on the news or a local magazine. [33:44] Being on a show like Shark Tank raises awareness even if they don't get a deal. [34:58] Showing that other people have already been there and liked that is really valuable in getting more customers for your business. Sprinkle these in all over your messaging. [36:21] There are so many ways to incorporate social proof into your business. It's possible to overdo it, but you would really have to say it a lot. Remember your customers brains are busy so you need to put it out there several times. The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (limit 50). Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram 86. Peloton: A Behavioral Economics Analysis 83. How to Organize Your Brain with Behavioral Economics 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode 23. Reciprocity: Give A Little, Get A Lot: A Behavioral Economics Foundations Episode Principles of Persuasion The Psychology of Marketing: 18 Ways to Use Social Proof to Boost Your Results The Open Psychology Journal 45. Overview of Personal Biases 18. Priming: Why You Should Never Have A Difficult Conversation With Someone Holding An Iced Coffee: A Behavioral Economics Foundations Episode 6. How To Sell From The Stage 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode 14. Scarcity: Why We Think Less Available Means More Value: A Behavioral Economics Foundations Episode Here's How to Send a LinkedIn Connection Request to Someone You Haven't Met Before Without Sounding Like Spam 20 Examples of Social Proof in Action in 2020

Last year on the show, there were behavioral economics analyses of Apple Card, Costco and Starbucks and this is the first time in 2020 we will be digging into a specific company. I’ll talk about the infamous Peloton ad that made the company’s market value drop $1.5 billion in three days: what happened in the ad and why it went wrong. Then I’ll explain what could have been done better and the behavioral economics concepts that back it up. I also talk about my own personal experience with Peloton. I recently got one and I’m loving it. You’ll learn about the behavioral economics of financing options, the 30 day money back guarantee, as well as how they use the concepts of social proof, herding, reciprocity, and more in very smart ways. If you don’t have a Peloton, you’ll learn a little more about equipment, subscription, and app options. I also talk about some of the really cool things they are doing that align well with behavioral economics – including sharing a bunch of concepts I see in their set up, and we will wrap up with tips for your business based on successes from Peloton.  As a note, I don’t do any work with Peloton and don’t know if they are working with anyone in behavioral economics or if they are familiar with any of these concepts or doing any of this intentionally. The stuff I talk about in this episode are my own thoughts and observations, not from any conversations I have had with anyone at Peloton. If you work there or know someone who does that would like to Connect, please email [email protected]  Show Notes: [03:28] Peloton is a fitness company that sells equipment and features live streaming videos on a screen attached to the equipment. [03:52] According to Peloton’s website, there now have more than 1.6 million members. They state over 55 million workouts completed in 2019, and in their last fiscal year (which ended in June 2019) the company made $915 million dollars. [04:21] They also have a 94% 12-month retention rate. [04:48] Over the Christmas holidays, they featured an ad about a woman who receives a Peloton from her husband as a gift. We then get to watch her video blog of her entire year riding the bike and she says she didn't realize how much it would change her. [05:38] The internet hated this commercial. There was all kinds of backlash about the husband giving her an exercise bike and how it was sexist. It had negative coverage in all the publications. [06:10] According to Business Insider, Peloton lost 1.5 billion dollars in three days after the release of the ad. [06:33] In my opinion, the ad wasn't as bad as it was made out to be on social media. The real problem is mixed messaging (something many companies struggle with). [07:03] The ads that Peloton makes are clearly directed towards wealthy people. They also only have very fit people in their ads (which is fine if this is a clearly defined niche). [07:34] The other side of their brand is being a community opportunity for everyone to be able to have access to amazing fitness regardless of whether you have access (or time to go) to a gym. [07:49] If you say you are for everyone – a community of all kinds of people coming together to support each other…the ads should reflect that. [08:03] If you are truly only for wealthy people, you should say that. [08:27] There is no reason that any business can’t target a high income or high net worth group of individuals. Just make sure that the messaging is clear. [09:15] I think they do want to be inclusive – especially after having the bike for a month now. Their website is “One Peloton” and they share that messaging throughout all the workouts and interactions. They are very focused on their community. [09:24] my recommendations: First the ad needed a teeny tiny back story where everyone knew that the wife actually wanted a Peloton. [10:04] You cannot assume everyone who watches your ad or sees your message is coming from the same place as you. [10:32] When you don’t provide the proper context in the backstory, people will fill it in with their own story, which could be loaded with negatives (especially when you’re talking about health, diet and fitness). [10:45] Take a step back and look at your message from many perspectives and look for what people would disagree with. [11:17] A noticeable difference in the protagonist from the beginning to the end would have made a big difference.  [12:42] If you are going with the inclusive message, it should have closed with a very quick line like “One of the many stories of Peloton” which could then trim down to say “One Peloton”. [14:22] Peloton has enough content for a ton of advertising if they take the time to find it within their community. [14:46] Understand your market niche and who you are speaking to. When this is grey you can get into trouble. [14:54] Bring people along with you in your story, you can’t assume they know the right context. It is important to share key elements to ensure the right message is being conveyed. [15:19] Don’t overlook your community when creating ads and messages. You have a huge amount of people who love you and your brand and would be honored to be featured while singing your praises. Ask for stories. [15:45] Even though Peloton went down 1.5 billion in value it doesn't mean that will last forever. [16:18] Even though it wasn't the greatest way to go viral more people probably know about Peloton now. [16:34] Availability bias is when you start to see something everywhere and then it gets more weight in the brain. [18:06] The availability bias and the ad being everywhere pushed Peloton through the subconscious filter and got you to consider it. [18:50] One of the reasons it was easy to join Peloton was in the framing of the offer. Their equipment is expensive, but they have a 30 day trial with a money back guarantee and a 0% financing option where you can pay for the equipment over three years. [19:37] They have a 94% stay rate from people after 12 months, so their main hurdle is to get that bike or treadmill into your home. [20:22] You can be part of the community by paying a monthly membership fee to access the content. [21:14] There isn't a discount for people who bought the bigger thing (equipment) from Peloton - they actually pay more each month. [21:39] It's important to note that you don't have to discount when you bundle things together or have repeat customers. [23:11] The access to content, free trial and 0% financing are all examples of reciprocity. You pay each month to have access, but there is so much value it feels like a gift to have these great instructors, stats and details. [24:11] Choice architecture (specifically structuring complex choices) is in play with over 20 new classes going live daily and more than 10,000 already on demand. [25:02] You can easily search and filter for what you're looking for based on what matters to use such as type of class or instructor. [26:26] Sometimes it's good that people have to search a little to get to what they're looking for (the subconscious is always scanning). [29:56] Peloton uses concepts of herding and social proof to really enhance the community experience. You get all the goodness of being a part of a community without any of the awkwardness. [32:40] The instructors walk you through what numbers to focus on (in their case “resistance and cadence”) and there is an overall output that ranks you on the leaderboard. Limiting the areas of focus is a framing benefit. [34:37] Social proof is kind of like herding, in that it shows other people are there and liking the course. With Peloton, they do a FANTASTIC job of incorporating social proof and making you feel like part of a gigantic community. [37:20] They shout out milestones throughout the class, starting high and working their way down. This helps with anchoring, another important concept for Peloton. [38:25] Anchors are set in tandem with the social proof by announcing those in the live class who hit milestones. When they shout you out, they say, “I see you”. [40:07] Another way they use anchoring is in tandem with commitments and precommitments – which help form good habits. [41:34] These anchors help boost the amount you might have worked out otherwise, and committing in advance makes you much more likely to form a habit and reach a goal. [42:16] Peloton wants and needs people to change their behavior; to use the app and equipment consistently so they continue to find value and pay the subscriptions. [43:58] These little nudges make a big difference and help to show why Peloton is a smart company making (mostly) good choices. [45:07] If you have a peloton and want to connect there, please follow me – as I said, my name is “BEthoughtful” all as one word…so it shouldn’t be too hard to find me. I look forward to seeing you there. [45:30] SUMMARY OF TIPS: Know who you are speaking to and make sure your branding is aligned with that target market. Narrowing your focus is good and will help you better align with your right people. [45:34] Context is important in any story you are trying to tell. You can’t assume people know the story or have the same background as you have when you came up with the story. Take the time to understand which details are important and show them in the right order. [46:00] Use the stories from your community. [46:17] It’s ok to have complex offerings with a lot of choices, but you need to make the structure of those really easy for people who are using your product or service. [47:11] Anchoring is always important. Start with big numbers to help others see what is possible and set your anchors. [47:29] Social proof – saying things like “I see you” and helping people feel  there is a bigger community present is critical for an online space if you want people to feel connected. [48:18] Giving things away can trigger reciprocity and make people want to get more from you. [48:30] It's ok to not have discounts for people who are buying other stuff from your company. The BE Thoughtful Revolution membership group is live! Use the code LAUNCH to lock in your rate and save 60% (limit 50). Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] 73. Starbucks: A Behavioral Economics Analysis 47. A Behavioral Economics Analysis of Costco 42. Apple Card: A Behavioral Economics Analysis The real lesson your credit union should learn from Peloton’s ad flop (it’s not what you think) The Gift That Gives Back | Peloton Bike Commercial Peloton Investor Relations Peloton's nightmare before Christmas: $1.5 billion vanished from its market value in 3 days amid holiday ad backlash 15: Availability: Why People Are More Likely To Get Flood Insurance Right After a Flood: A Behavioral Economics Foundations Episode 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode 84. How to Stack and Bundle Products and Services So They Are Most Appealing to Potential Customers 77. How to Raise Your Prices 23. Reciprocity: Give A Little, Get A Lot: A Behavioral Economics Foundations Episode 41. Structuring Complex Choices: The “S” in NUDGES: A Behavioral Economics Foundations Episode 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode 11. Anchoring & Adjustment: The 1 Word That Increased Sales 38%: A Behavioral Economics Foundations Episode 21. Habits: 95% Of Decisions Are Habitual – Which Side Is Your Business On?: A Behavioral Economics Foundations Episode 67. How to Get (and Stay) Motivated The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram  

As students of behavioral economics know even when we are aware of our biases, they still exist. Our brains and subconscious act on autopilot and incorporate biases into our decision making process without us even realizing it. If that’s the case, how can we make our decisions more rational? Improving our awareness of these biases can help us at least understand how we are being influenced. From there, we can determine opportunities to step back and take a second look at the information at hand.  Behavioral economics is a broad subject with a lot of variations of biases and principles. Fortunately, BrainyTab is a tool to help learn about and reinforce some of those biases. I’m excited to have Radu and Raluca Judele on the show today to discuss BrainyTab. Radu and Raluca wanted to create a tool to shine a light on those cognitive biases. They started researching and came up with a browser extension called MyCognitiveBias which has now evolved into BrainyTab. I couldn’t resist learning more about a tool set up to share behavioral economics with the world. That’s why Radu and Raluca are here today to introduce the extension to you and talk about why they came up with it, how it has helped them, and why it can help you. It’s free for everyone, and you can download it from their website. The tabs introduce about 530 concepts, and they are constantly adding new material including relatable, real-life examples. They also have a fun contest where users can get a chance to win $100 worth of books from Amazon.  Show Notes: [03:32] Radu was nervous to reach out to The Brainy Business (I’m so glad he did!) He and Raluca wanted to work on a project together. BrainyTab is phase 2. Phase 1 was an extension called MyCognitiveBias which was inspired by the cognitive bias codex.  [04:38] A browser extension seemed like a reasonable way to remind users of cognitive bias. [04:51] Raluca did the research. They built the extension together.  [05:11] They started thinking about things that were connected to cognitive biases that could improve decision-making. The next step was adding Mental Models. The also thought people should be more aware of Dark Patterns.  [06:21] They have received tons of positive feedback. They are focused on growth and what steps to take next. [08:01] They were hoping for 100 users for MyCognitiveBias, but ended up with 3000.  [09:04] BrainyTab teaches you a new tidbit each time you open a new browser tab, it will show a random cognitive bias, mental model, or dark pattern. If you like to reinforce one concept over and over (instead of a new one each time) that is an option as well. It also has a bookmark manager. [11:13] Melina had access to the beta version.  [12:33] Repetition and loss aversion are some of their favorite principles. We are aware of our bias, yet the reminder helps.  [14:01] BrainyTab helps bring awareness to things that exist and identify why our brains are doing something.  [17:31] Radu is a marketer, and he has worked in hospitality. As an observer of people he noticed patterns. When he started marketing, he became aware of behavioral economics.  [19:17] Raluca had a mini-stroke about 18 months ago. It was stress related and a game-changer for her. She now enjoys her research and what she is doing. In many ways, working on BrainyTab helped retrain her brain and reduce stress. [21:09] Understanding the patterns helps her control stress and emotions.  [24:42] They have around 530 concepts on their tabs. They want to make the information relatable and add real-life examples.  [27:31] We aren't as rational as we would like to be. Setting a goal ahead of time and removing emotion such as selling a stock at a certain number is a mental model.  [29:21] It's Melina's mission to help as many people as possible understand how our brains work and how that applies to our lives. BrainyTab is such an obvious connection point. Melina is excited to help build out the content and sources for BrainyTab (Radu and Raluca are not behavioral economists) to make it more robust).  [30:26] Radu and Raluca are having a contest to give free books to users.  The BE Thoughtful Revolution membership group is live, and we are digging into live weekly calls in the Brainy Mindset Course next week! Use the code LAUNCH to lock in your rate and save 60% (limit 50). Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: BrainyTab BrainyTab on Twitter Radu Judele on Twitter Episode 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode Episode 45. Overview of Personal Biases Episode 60. Surprise and Delight Episode 61. Color Theory: When It Comes To Color, This 1 Thing Matters More Than Anything Else Episode 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) Episode 80. Celebrate! It’s More Important Than You Think Cognitive Bias Cheat Sheet The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram BE Thoughtful Revolution Membership Use code LAUNCH to save $60 a month (limit 50). The Brainy Mindset Course Use the code BRAINY50OFF to take $50 off your registration and join us to tackle mindset!

This show is all about how to stack products and services to make them the most appealing to your potential customers. Those of you who've heard me speak, have heard me talk about this before (especially in relation to The Truth About Pricing) and the concepts of anchoring, adjustment, and relativity. I share examples of how certain numbers can get stuck in our subconscious and in comparison to the real price, we feel that we are getting a bargain.  I also talk about how infomercials use several combined behavioral economics techniques in their presentations. To show how I practice what I preach, you’ll learn about the pricing strategies for the new BE Thoughtful Revolution Membership group. I also give you an actionable example of how you can increase your prices by 10% and feel great about it. As always, this episode is packed with real world information and examples that correlate with behavioral principles you can use in your life and business.   I've had listeners asking about a membership group for a while now, and the BE Thoughtful Revolution Membership Group is now open. I’m so excited about this membership and all of the benefits it has to offer.  Members get direct access to me for all of your behavioral economics questions in our dedicated Facebook Community. This is where I'll be doing live Q&As, training, and all sorts of other stuff.   You’ll also get access to The Brainy Courses. The Brainy Mindset Course and Brainy Pricing Course are $399 each. (That’s a combined value of $800.) You’ll also get exclusive content from The Brainy Business, and members get special discounts on workshops, products, and strategy sessions and will be the first to know when new stuff is coming out. The membership is $99 a month, but the first 50 people to sign up with code LAUNCH get 60% off and will only pay $39 a month. Lock in that price before it’s gone! CLICK HERE FOR YOUR FREE DOWNLOAD Show Notes: [05:36] Stacking and bundling products and services. Anchoring, adjustment, and relativity are the real concepts at play in this process. [06:43] Anchoring and adjustment is about our brains being swayed by numbers. [07:11] The Snickers study I share all the time is part of this concept of anchoring.  [07:28] The brain latches onto the number and will move up or down from there. [08:15] When an item is limited, people will actually buy more. This is all because of anchoring, and even unrelated numbers can have an impact on this. [09:03] If you throw in a larger number in your description, it makes the price seem smaller. [09:43] The brain kind of glosses over what it hears at any given time because there is a lot going on, but it hears a number and latches onto it for a while. [10:01] Think of these concepts in examples of infomercials. Your brain likely didn’t have any preset number for what it thought that random item was worth or what you would pay for it. [12:26] If you ever discount something, or offer a special, make sure you talk about the higher number first. [12:47] When I introduced the group, I talked about the benefits to you first, like “people have been asking for it” which is a combination of herding and priming. [13:08] I mentioned you would get access to the Brainy Mindset Course and Brainy Pricing Course, which are both $399 for a combined value of $800. [14:01] After sharing the value just in the courses being at $800, I shared the regular rate of the group, which is just 99 a month. And THEN I said that the first 50 people could use a code to claim their spot at only $39 a month. (That order was intentional, and it matters) [14:38] You need to spell it out to people in the right order - and know that saying things are “priceless” doesn’t help your anchoring case. [15:21] Instead of saying something is priceless, find a way to quantify that value. [16:09] Relativity is where the second number feels lower or higher based on how it compares relative to the first number. [17:16] The way numbers are shared via framing, relativity and anchoring make all the difference in how the customer reacts.  [17:36] When you have multiple options available and want to showcase one of them. You don't want to show the least expensive thing first and work your way up. Always start big and work your way down. [18:36] Find the best product that you want to sell and has the most value for clients. Create a high anchor to present before that. Add 10% to the amount that you're going to charge. [25:17] You could also create a totally different third product. You don't have to though. [26:29] You can use the third option when you are selling physical objects like sofas.  [28:18] This can make the best option seem like the obvious best choice. It helps customers to feel good about the investment.  [29:29] The context and relativity all matters and makes a difference. It takes a little work on the front end to make sure you are presenting the options in the right order to help the customer make their best choice. [30:38] Bundles are great tools and can be oh so useful. Often, bundles are provided with a discount and that is prônant where your mind goes first, but it isn’t required. [31:29] If you make it easy for a customer to find everything they need with one or two clicks, you can charge a premium for that.  Convenience has value. [33:47] “We offer three courses, the first one is $500 and it is on XYZ, there is also a $600 course on ABC and an $800 course on being awesome. Which would you like to start with?” In that case, you are leading them to the $500 course, because it became the anchor. [36:26] If you want the bundle to be the best choice and a clear best offer, you can have a discount included. Start by defining the main thing and build everything around making that look as good as possible. [36:55] The way you talk about it, the framing, shifts based on what you want to showcase and what most people should pick. [37:52] You can build your offering to be anything you want it to be and if you understand the value and can properly communicate it, you will find people to buy what you are selling. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Join the BE Thoughtful Revolution Membership today! Use code LAUNCH to save $60 a month Links and Resources: 83. How to Organize Your Brain with Behavioral Economics BE Thoughtful Revolution Membership Use code LAUNCH to save $60 a month.  5. The Truth About Pricing 11. Anchoring & Adjustment: The 1 Word That Increased Sales 38%: A Behavioral Economics Foundations Episode 12. Relativity: The Brain Can’t Value One-Off Items: A Behavioral Economics Foundations Episode 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode 23. Reciprocity: Give A Little, Get A Lot: A Behavioral Economics Foundations Episode 14. Scarcity: Why We Think Less Available Means More Value: A Behavioral Economics Foundations Episode 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode 18. Priming: Why You Should Never Have A Difficult Conversation With Someone Holding An Iced Coffee: A Behavioral Economics Foundations Episode 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode Why You Should Overestimate the True Value of Your Products Mommy Income Master Your Mindset Free Mini-Course The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram

Clutter has a negative impact on your brain. It can lead to disorganization, overwhelm, increased stress, and even health issues. That’s why organizing your brain and your surroundings is so important. This episode is about the benefits of organization in your life and how it can lead to positive outcomes such as weight loss, decreased stress, increased productivity, and clearing the way to smash through your goals. The benefits of an organized brain are really amazing, and I want to help you get there.  This episode walks through a bunch of tips and some of my favorite tools I use to keep organized. This includes a couple of great books that can help eliminate clutter from your physical and digital life, as well as the tools and systems I use to manage all existing commitments while building and scaling The Brainy Business. Tools discussed include: Focus mode on Word, Time Timer, Gmail’s Snooze feature, GANTT charts and how I use Trello to get it all done in an organized and sane way.  Before diving in, I want to tell you about a really cool article that was posted recently on Bloomberg. It’s called Top Jobs for the Next Decade Are Behavioral Scientist, Data Analyst. This is great news for the field, and I am totally not surprised as so many people have been reaching out with questions about getting degrees in behavioral economics or how they can pursue work in the field. More people are also finding the podcast and asking about working together. Look for an upcoming episode with my recommendations and resources for exploring this fascinating and growing field. If you have specific questions you would like included, hit me up on social media.  CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [01:49] If you want to be featured on the show – leave a review of the podcast in the app you listen to, and I may talk about you and your business in an upcoming episode. [02:25] This episode is going to cover a lot of resources and things you can consider as you work to organize your brain. If you are already on The Brainy Business list, you get direct links to everything related to each episode…as well as access to the super secret subscriber page with all the freebies. [03:44] Bloomberg recently came out with an article called Top Jobs for the Next Decade Are Behavioral Scientist, Data Analyst. So awesome! [04:05] So many people have been reaching out and asking questions about getting degrees in behavioral economics or how to pursue work in behavioral science. [05:14] When your brain is overwhelmed…which happens a lot quicker than you would think…worse decisions are made. An example would be the chocolate cake study. [06:15] Essentially, when the brain gets overwhelmed – even by a few extra digits – it makes worse decisions. [07:20] Your conscious brain’s 40 bits are bogged down with that big number. More things that would normally be handled by the conscious brain are now in the realm of the reward seeking subconscious brain. [07:44] Clutter also increases stress, makes it harder to focus, increases the likelihood you will procrastinate, costs time and money, and can keep you stuck in the past. [09:19] We are loss averse as a species, we don’t like to get rid of things. We want them “just in case” and the brain will make reasons for why it needs that extra stuff around. [09:48] If the “things” (physical, mental, emotional, digital) surrounding you aren’t well organized and are getting out of hand it is keeping you from reaching your goals. This is why the first step in the Brainy Mindset Course is to work on clutter. [10:10] Even if you aren’t consciously paying attention to the clutter, your brain knows it is there and it creates distraction. [11:02] The reverse is that the brain loves organization. Think about when you go on vacation or are looking at awesomely organized spaces. [13:10] Americans waste 9 million hours per day collectively looking for misplaced stuff – 30 minutes per person per day on miscellaneous stuff from keys to remotes to shoes and socks. [13:34] Clutter leads to procrastination, weight gain, stress…all kinds of things keeping you from your goals. [14:31] THE LIFE CHANGING MAGIC OF TIDYING UP by Marie Kondo. When people clear up the clutter in one area of their life they make huge shifts in other areas of their life. [16:08] You go throughout your house and make a huge single pile of everything in the category. You start with clothes – everything you own in one giant pile. Does it spark joy? [19:45] INDISTRACTABLE by Nir Eyal has great tips for eliminating digital clutter. [20:43] NO MORE NOTIFICATIONS - Changing the notifications on your phone is easy and SO freeing. It only takes a few seconds and can help you take control of your life, living in an organized style on your own terms. [22:32] You can also turn off email notifications.  [25:13] The next tool I’ve learned to love is “FOCUS MODE” from Word. If you need to write a lot of content…like me…you spend a lot of time in word and it is easy to get distracted. Focus blacks out everything except the document you are working on. [26:27] Your brain is constantly pulling focus and looking at other stuff. If you remove it from your sight, you really just…stop thinking about it. [28:26] Another thing I use to keep focused and productive is the TIME TIMER.  [29:33] Let’s say I want to commit to writing, instead of saying “I am going to sit and write…no distractions this time!” I say, I am going to write for 20 minutes. And set the timer…that feels easier to focus. [32:35] The SNOOZE function for Gmail. I don’t know if other email clients have this…but if they do you should absolutely use it if you can. The Snooze function allows me to determine when I want to tackle an item, and move it so it is out of my inbox and will only come back in at the set time. [35:20] If you’ve snoozed something more than twice, ask yourself, “Why am I not doing this? Does it really matter?” [36:06] A GANTT CHART is essentially a visual tracking system that lets you sort through your tasks and see what is upcoming. A GANTT chart is helpful because it allows you to see what is coming up and where you might have overlap. [38:10] Narrowing your goals, removing the clutter around them and then aligning your to dos with something like a GANTT chart can really help you. Splitting the big goal into its smallest components is one of the most critical steps [39:10] The BE Thoughtful notebooks will really help with this when they come out soon! FILL THIS OUT to get notified first. [39:20] Trello is awesome and it has totally changed the way I approach my days, my life, my clutter and my business. Take heed: there is a LOT of effort up front effort required to set it up properly so it does everything you want it to. It's very customizable, which is great, but it could quickly become a time suck if you aren’t ready for it.  [40:44] Remembering all the junk you have to do for routine tasks is keeping you stuck. Trello can help turn that into a process that reminds you of the next step so you don’t have to. [45:45] For those of you already signed up for the Brainy Mindset Course – I’ll be walking you through my boards and can create templates and things for you that are shared. It’s so valuable. The Brainy Mindset Course is starting now. Use the code BRAINY50OFF to take $50 off your registration and join us to tackle mindset! Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Susie Barolo on Twitter Top Jobs for Next Decade Are Behavioral Scientist, Data Analyst The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram Episode 32. The Overwhelmed Brain and Its Impact on Decision Making How Clutter Can Affect Your Health 5 Reasons to Clear the Clutter Out of Your Life How Clutter Affects Your Brain (and What You Can Do About It) 7 Ways Clutter Is Ruining Your Life 9. Loss Aversion: Why Getting New Stuff Is Not The Same: A Behavioral Economics Foundations Episode The Brainy Mindset Course Use the code BRAINY50OFF to take $50 off your registration and join us to tackle mindset! How Much Time Do You Spend Looking For Lost Possessions? The Life Changing Magic of Tidying Up by Marie Kondo Episode 78. How to Become Indistractible, Interview With Author Nir Eyal 3 Ways You Can Limit Everyday Distractions 51 Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode Time Timer Audible Countdown Timer Trello

I don’t know about you…but I am having a hard time believing that it’s 2020 already. 2019 was such an amazing year with so many milestones for The Brainy Business. This episode will be digging into the top content from 2019. Links to all of the articles and episodes are below along with a link to the post with the full list. My subscribers will receive all of these links along with over 40 freebies I’ve given away (if you want to be on the list, download any freebie -- including the Master Your Mindset mini-course -- and you’ll be automatically added).  I want to take a moment to thank you all for listening, subscribing, sharing, connecting on social media, and reaching out to let me know your wins and the behavioral economics concepts you have applied in your own businesses. These are some of my favorite messages to get – I truly love hearing from you. I’ve received messages from all over the world, including Poland, Romania, Spain, South Africa, India, Italy, Ireland, and more.  Wherever you are, if you love the podcast and behavioral economics, please do reach out through your favorite social app to let me know who you are. I love connecting with each of you, and it really is me responding. I’ll kick off this show with sharing the top countries that have downloaded the podcast and then move on to the top shows and articles, and I might throw in a few surprises along the way.  CLICK HERE FOR YOUR FREE DOWNLOAD Show Notes: [00:59] I talk about many milestones in this celebration episode 80. Celebrate! It’s More Important Than You Think. [01:39] You can also find everything here The Best of The Brainy Business: 2019. [03:58] The top countries downloading The Brainy Business begin with the US and are then followed by the UK, Canada and Australia.  [04:23] India has pushed past Germany to claim the number 5 spot. Brazil is still number 7 and Mexico retained its number 8 spot. The Netherlands has made its way into the top 10 claiming the number 9 spot, and South Africa rounds out the list.  [04:43] Ireland came in at number 11. [05:12] The top 10 states in reverse order begins with North Carolina at number 10, followed by Colorado, then Georgia, Virginia and Florida at number 6. The state with the fifth most downloads is Illinois, number 4 is New York, then Texas at number 3, Washington is number 2, and California is number 1. [07:07] The top 10 downloads were found by doing a sort of all the downloads of the podcast. [07:53] We begin the countdown with 51. Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode. [08:05] I also call this the “I’ll start Monday” effect, because it is the concept behind all our new diets, exercise plans, failed resolutions…as well as efforts to save more money, quit smoking and generally change behavior. [09:01] Changing behavior doesn’t have to be as hard as we make it out to be, and understanding time discounting is a big way to help combat that. [09:34] Two of the top 10 were analyses of businesses, including episode 42. Apple Card: A Behavioral Economics Analysis at number 9 and episode 73. Starbucks: A Behavioral Economics Analysis at number 5. [09:38] I used real world examples and talk about what top companies do in business that outline various concepts from behavioral economics and how you could use the same concepts in your own business. [10:33] Number 8 on the list was episode 59 on the Pain of Paying: Why The First Item In A Purchase Is The Hardest: A Behavioral Economics Foundations Episode. [10:44] This episode was part of a series that talked about partitioning as well, and how adding little barriers can impact behavior. [11:14] Getting someone to buy one thing is the hardest part, but once they have bought something it is easier to add on more items. This is why loss leaders are effective. [12:11] While we are talking about paying for things, I want to give a little shout out for The Truth About Pricing, episode 5, which was a top downloaded episode of all time, but didn’t quite make the top 10 in 2019. [13:11] The next episode is 62. Game Theory: Life And Business Are A Game…Do You Know The Rules?: A Behavioral Economics Foundations Episode. This was a really fun episode and so important for understanding negotiations and communication with anyone you know. [13:30] The big tip I will give from this is to understand the difference between playing to win…and playing not to lose. They are not the same thing and result in vastly different outcomes. [14:18] Next, we have episode 45, which was an Overview of Personal Biases, part of the 8-part series on all the biases, and episode 50 on Selective Attention Biases made the top 10 as well, it was actually the third most downloaded episode of the year. [15:23] Next is episode 61 on Color Theory: When It Comes To Color, This 1 Thing Matters More Than Anything Else. This was a topic a lot of listeners asked for and something that comes up so much in branding and marketing discussions. Colors absolutely do matter, but it might not be in the way you think. [16:42] The number two episode of all time is Episode 2 – The Top 5 Wording Mistakes Businesses Make this also has a related presentation which I gave several times in 2019. [17:05] The categories to avoid are: too literal, too much, too vague, too confusing and too boring. [18:02] Before I get to the most downloaded episode of all time and in 2019, a little shout out to episode 3, Do Lead Magnets Work and Do You Need One? Which was the 6th most downloaded episode of all time, but didn’t make the 2019 list. [19:06] The most downloaded episode of 2019, and the podcast in general, is the very first one, – Unlocking the Secrets of the Brain. [20:04] In this first episode of the podcast, I talk about behavioral economics in general, a little about my background and why I started the podcast, and how the brain works. [23:07] I want to give a little shout out for the content I created for CUinsight for all the credit union folks listening. My article 1 Word That Increased Sales by 38 Percent made their top 10 list for 2019 - woohoo!  [23:54] I wrote 27 articles for Inc last year, and expect to create a bunch more in 2020! [24:37] Number 11 on the most read articles on Inc is about counterfactual and prefactual thinking and How to Break the Negative Cycle of ‘What If’ Thinking. [24:53] I share a simple tip of incorporating the language of “next time, I’ll” into your life. [25:04] The importance of word choice also came up in the number 10 article, Why Rami Malek’s Choice of Self-Talk May Have Led to His Academy Award. [25:38] The next article is 3 Ways You Can Limit Everyday Distractions, which is based on insights from Nir Eyal’s book Indistractable. [26:32] The next article is Here’s How to Send a LinkedIn Connection Request to Someone You Haven’t Met Before Without Sounding Like Spam. It has some easy tips using their own algorithms to help you reach out in a way that makes people want to engage. [26:53]  The last release of the year has had a lot of traction already. These 5 Simple Concepts of Behavioral Economics Can Drastically Improve Your Marketing Efforts. This article is a summary of the top recommendations I give to my clients on how to include behavioral economics in their businesses. [27:28] Next, is called These Small Tweaks to Your Daily Routine Will Eliminate Unnecessary Mistakes and I was inspired to write it while I was traveling in London working with a client. [29:00] Number 5 is The Font Size on Your Price Tags Could Be Reducing Your Sales by 28 Percent. Here’s How to Fix It. The tips apply beyond physical price tags and are important for showcasing prices in any format (website, brochure, etc). [29:45] Effortlessly Increase Creative Ideas With These 4 Simple Brain Hacks is about priming and associations in the brain. [30:24] The third most read article is another new post from late December, called, Why You Should Ditch Your Flimsy, Paper Business Cards Right Now – this also gets into priming and brain associations, and is essentially outlining how the senses impact the way people think about your brand. [33:05] The second most read article on Inc is the first one I wrote for them! It’s called, 1 Simple Brain Trick That Can Help You Overcome Self-Doubt Forever This is very much in the mindset genre, and something I will work on with you in the Mindset Course. [35:52] The top content of 2019 with the most read article I wrote for Inc, which is called, A Starbucks Barista Asked Me This 1 Simple Question, and Using It May Be a Great Way to Boost Your Sales. [36:11] This article is about framing, and breaking free of the way we have always done things. [37:12] Asking a slightly different question can move the interaction in a much different direction. The Brainy Mindset Course starts soon! Use the code BRAINY50OFF to take $50 off your registration and join us to tackle mindset! Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 80. Celebrate! It’s More Important Than You Think The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram Social Bee Podcast Episode 96 – the Psychology of Why People Buy – With Melina Palmer. Business Bros – Episode 167 – Melina Palmer (The Brainy Business) The Best of The Brainy Business: 2019 The Brainy Business In The News Episode 81. How to Finally Change Your Behavior (So it Sticks) Episode  14. Scarcity: Why We Think Less Available Means More Value: A Behavioral Economics Foundations Episode Episode 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode Episode 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode The Brainy Courses Episode 11. Anchoring & Adjustment: The 1 Word That Increased Sales 38%: A Behavioral Economics Foundations Episode The Brainy Business Podcast Episodes Episode 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) Episode 71. Prefactual Thinking: How to Turn “What If” Into “Why Not” – Behavioral Economics Foundations Episode 78. How to Become Indistractible, Interview With Author Nir Eyal Episode 18. Priming: Why You Should Never Have A Difficult Conversation With Someone Holding An Iced Coffee: A Behavioral Economics Foundations Episode The Brainy Mindset Course Use the code BRAINY50OFF to take $50 off your registration and join us to tackle mindset!

In honor of the new year, today’s episode is about how to make behavioral change that sticks. Welcome to 2020 everyone! 2019 was an amazing year here at The Brainy Business, with 52 episodes released, more than 100,000 downloads in 150 countries, a brand new column on Inc.com (which already has 27 articles posted), a white paper on savings behaviors, two courses launched, and lots of engagement with all of you on social media. Next week, I’ll dig into all of my top content from 2019. Today, is all about behavior change and narrowing your focus, so you can accomplish what matters most. If you are trying to do too many things at once, you will stay stuck. And, your brain actually wants that. I also talk about the Moment In Time or the Fresh Start Effect (like beginning your new goal or exercise program at the beginning of the year). I also talk about Temptation Bundling, which is combining something you should do (but often neglect) with something you really want to do) to help motivate you. This episode will help you name and claim your goal whether you are using fresh starts or temptation bundling (or ideally both!) to get going. CLICK HERE FOR YOUR FREE DOWNLOAD Show Notes: [06:45] The first thing to do, and something I have been preaching to you for months, is to narrow your focus. [07:09] The brain can’t handle too many priorities. If you are trying to do too many things at once, you will stay stuck. [07:19] The human brain likes predictability, it builds your world based on what has happened in the past and it likes to know where its next reward is coming from. [07:51] If you don’t take the time to prioritize what really matters, your brain can keep hiding and keeping you stuck. [08:24] Would you rather look back 10 years from now and say, “I made a little bit of progress on a lot of things…but never really completed what I wanted to” or “I completed one thing at a time and built on each success”? [09:23]  Now that you understand the importance of limiting your priorities and goals to no more than three, we can talk about how you can set yourself up for the most success for actually achieving what you have set as your priorities. [09:46] There are many ways to tackle goals, and I'm going to share two of my favorites in this episode. [10:54] You can and should throw everything you can at your goals including the tactics of "moments in time" and "temptation bundling." [11:15] The "moment in time" is also known as the first start effect. This is exactly what you get at the beginning of the year (or decade in this case). [11:36] We humans are wired to look at new moments in time as a fresh start. This is a form of mental accounting. These time breaks allow you to look at yourself fresh. [12:27] We also create a new and distinct version of ourselves along with these fresh starts. [15:04] One thing that the fresh start does is it prompts you to stop and, essentially, look up.  [15:39] Fresh starts are the opportunity to stop and look around to reevaluate what you’ve been doing and decide if it's time for a change. [16:11] Anything and every day can be a fresh start. [19:00] Any moment is an opportunity to be better than you were the moment before – an opportunity to reinforce those three goals you are focused on. [21:51] Having an opportunity to step out of the everyday work and realign your priorities and make sure that you are still on track is a benefit to every business and individual. [22:33] This practice can help you to reinvigorate your dedication to your life and commitments, to see what is working and what needs to change. It keeps you tuned in with yourself and your goals. [22:45] Schedule quarterly appointments with yourself. [23:22] If you are someone who sells products or services that align with being better or positive change…you should know when people are most likely to be looking for you and your offerings. [23:40] At your office, align talking about change at times when people are already aligned for change like a holiday or New Year. [24:37] While milestone dates can be beneficial for forming new habits…they also are a key point where you might BREAK habits – for better or worse. [25:14] You can control this. Awareness is key. [26:11] I've talked about bundling tasks and habit stacking in the goals episode. [26:39] Temptation bundling is another way to motivate yourself to have positive behavioral change. You can combine doing something you really want to do with something that you know you should do. [27:19] The only time you get to do the reward is when you are doing the thing that you should do. [29:33] Two thirds of people would prefer to have their possessions locked up to keep them on track. Committing your goal to someone else means you are much more likely to keep it.  [31:09] The thing for you to do is think about what you wish you could do – or something where you tend to get distracted from your goals…and combine it so you can ONLY do it when it is helping you achieve your goal. [32:19] Combining the knowledge of these two methods: temptation bundling and fresh starts, are a great recipe for achieving those goals and resolutions in 2020 and throughout the whole new decade. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Master Your Mindset FREE mini-course The Brainy Mindset Course The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram Articles by Melina Palmer on Inc. The Brainy Business In The News The Brainy Business Courses The Best of The Brainy Business: 2019 Episode 50. Selective Attention Biases Episode 51. Time Discounting: The I’ll Start Monday Effect – My Favorite Concept!: A Behavioral Economics Foundations Episode Episode 73. Starbucks: A Behavioral Economics Analysis Episode 42. Apple Card: A Behavioral Economics Analysis 1 Simple Brain Trick That Can Help You Overcome Self-Doubt Forever A Starbucks Barista Asked Me This 1 Simple Question, and Using It May Be a Great Way to Boost Your Sales Why You Should Ditch Your Flimsy, Paper Business Cards Right Now Episode 29. Resolutions and Keeping Commitments Episode 70. How to Set, Achieve & Exceed Brainy Goals Episode 67. How to Get (and Stay) Motivated Katherine L. Milkman Grit: The Power of Passion and Perseverance Creating Enduring Behavior Change The Fresh Start Effect: Temporal Landmarks Motivate Aspirational Behavior Episode 56. Mental Accounting: How To Make Your Money Math Work For You: A Behavioral Economics Foundations Episode Episode 34. Optimism Bias: The Good And The Bad Of Those Rose-Colored Glasses: A Behavioral Economics Foundations Episode 376: CEO Day – Vision Casting 377: CEO Day – Strategic Planning Holding the Hunger Games Hostage at the Gym: An Evaluation of Temptation Bundling

Merry and happy holidays to you all – whatever you celebrate or don’t, wherever you are in the world…I hope you are surrounded by joy, friends, family and everything else good as we close out 2019. Can you believe it’s almost the end of another year? We’ve hit a milestone here on the podcast with 80 completed episodes. So much to celebrate – and as you’ll learn today, it's very important to celebrate…everything. Yes, everything. Big, small, momentus or seemingly mundane…celebration is great for our brains! This is based on a lot of the foundations I shared with you in The Brainy Benefits of Gratitude.  Being grateful breeds happiness. It also makes people more creative and even sleep better. Being grateful makes the people around you happier, you perform better in life and work, and have better memory retention and better relationships. It’s an all around great thing. Celebrating is very similar to that. Celebrating allows you to slow down – be thoughtful – and reflect on the great things you have done. On the achievement in front of you.  Many of us achievers who want to achieve big things in this world, and I’m guessing that’s you if you have chosen to listen to this podcast, we tend to keep our eyes on the prize. We haven’t “made it” yet, and so every milestone along the way is just a check mark on the road to greatness. But it needs to be more than that. We need to celebrate the big and small accomplishments and the things that we are so very grateful for. In this episode, I kick things off by sharing some of the Brainy things that I am grateful for and celebrating.  Show Notes: [04:07] Our brains choose to do what has felt good in the past. Our experiences are shaped by our actions…not the other way around. [04:31] When we celebrate and mark things in our memory as achievements that make us feel good our brain will look for more of those achievements to boost ourselves up and create a more positive outlook on life. [04:42] “Celebrations are the punctuation marks that make sense of the passage of time; without them, there are no beginnings and no endings. Life becomes an endless series of Wednesdays.” David Campbell [05:24] I love celebrating and have always been able to find the silver linings as a default. [05:58] If you have employees, celebrate them at their annual review. I encourage my employees to keep track of wins when they came in. This makes a huge list of accomplishments to begin the annual review. [07:19] The BE Thoughtful Notebook is coming out in 2020! Want one? Get on the waitlist.  [08:03] This was an amazing year with a lot of great things to celebrate. [08:19] Highlights include: The Brainy Business blew past 100,000 downloads with listeners in over 150 countries. I launched two courses that both made money on their first time out, and we already have people signing up for the 2020 courses.  [09:44] I was offered and started a column with Inc.com; went to visit Texas A&M and started doing research with them (so cool), I spoke to audiences around the country and led workshops abroad. I completed my masters in behavioral economics with a published white paper through the Filene Research Institute and walked at a graduation ceremony. I got to go back to Rome and show my husband where I used to live and we wrapped up our visits to all 50 states. There were amazing partnerships and connections and possible working relationships slated for 2020...so many cool projects underway! [10:11] All this amidst a much more balanced family life and bringing some exercise back into the mix, running a 5k in New York with my husband on Thanksgiving, and seeing the Macy’s parade in person! [10:38] What can you celebrate from 2019? Celebrate those little wins too. It's not all about the big stuff. Share with me on social media. [12:08] My dad is a captain for American Airlines. He has flown there for nearly 35 years. His last flight will be on December 19th, and I'll be on it. [13:43] Dad, I don’t know if you will hear this – I guess this is a test of who really listens to the podcast – ha! – but I am so proud of you and honored to be able to celebrate with you. Congratulations. [14:02] I want to wrap up the year and this mini episode (80 episodes of The Brainy Business podcast!) by saying, thank you to you. Thanks for listening. Thanks for making this year amazing. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: The BIG Brainy Bundle ending SOON! Use the code BRAINY100OFF by December 31st to get all three pieces (a $1200 value) for just $599. I can’t wait to have you join us in 2020. Master Your Mindset FREE mini-course Episode 76. The Brainy Benefits of Gratitude Episode 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode Why You Should Celebrate Everything Throw a Party! Why It’s So Important to Celebrate 3 Reasons Celebrating Your Many Accomplishments Is Critical to Your Success 3 Reasons Why It’s Important to Celebrate Yourself Every Day Episode 79. Why Our Brains Love Nostalgia & Traditions (And How To Incorporate Them Into Your Business Strategy) Episode 78. How to Become Indistractible, Interview With Author Nir Eyal BE Thoughtful Notebook The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram

Holidays are a time filled with traditions and reflecting upon the past, remembering the good ol’ days or reliving your childhood…while creating new memories with (and for) those around you. This episode is all about nostalgia and traditions, and it fits in perfectly with the holiday theme. As we dive into the topic of nostalgia, I’ll explain nostalgia’s Swiss origins in the 1680s and the root of the concept. I talk about how it’s not negative or pain inducing, but it can be triggered by a sad or tragic event.  There are a lot of benefits of nostalgia and thinking about the good ol’ days. It can help increase self-esteem, feelings of belonging, growth on a psychological level, and even make people act more charitably. It can also be a powerful technique for marketing and advertising.  People are most likely to become nostalgic at major transitions in life. This is why a midlife crisis is a time where people buy the car they always wanted when they were in high school, or go back to visit their childhood home. Marketing or advertising for these sorts of things at the right time can trigger nostalgia and action in a buyer of a certain age. I’ll be talking about all that and why our brains love nostalgia and tradition while also giving a few tips about how to use this in your business – whether it’s at the holidays or any other time of year. Show Notes: [02:22] The concept of nostalgia was first introduced in the 1680s. Being far from home caused Swiss soldiers to have all kinds of symptoms. [02:40] The root is from the concepts of “return home” and “pain.” [02:55] Everyone can feel nostalgia, and it's not negative in and of itself. [03:11] A sad event may cause us to think about the good old days. There are actually many benefits of nostalgia. It can help increase self-esteem, and feelings of belonging, and encourage psychological growth. It even helps us to remember that our lives can have meaning and value. [03:44] It's also a powerful technique for advertising and marketing. [04:00] Our bodies are made up of constantly changing atoms. Our makeups change every five years.  [05:23] Sometimes what feels like a tradition is actually an assumption from the observer. [05:49] Ask a question. If you've always done something a certain way ask why. (Even if it doesn’t appear broken...ask.) [06:09] Nostalgia helps us remember our lives have meaning and value. Most of our best memories are from the ages of 10 to 30. This span is called the reminiscence bump. [06:26] This period of time is important, because it's heavily linked to the time that we form a sense of ourselves. [08:45] Children are quite sensitive to effort, and with good reason. Actions speak louder than words. [09:17] Children can differentiate between fantasy and history, evaluate the strength of evidence and prefer claims with scientific framing. Children in many cultures are less likely than adults to appeal to supernatural explanations for unlikely events. [10:09] Feelings of nostalgia are most likely to come up whenever you feel sad or lonely. Nostalgia – remembering important people in your life or key moments – can help you to feel better about yourself. [10:51] People are also most likely to become nostalgic at major transitions in life. This is why a midlife crisis is a time where people buy the car they always wanted when they were in high school, or go back to visit their childhood home. Marketing or advertising for these sorts of things at the right time can trigger nostalgia and action in a buyer of a certain age. [11:16] Finding a trigger that can make someone feel nostalgic can make them feel better and more endeared toward your product. Incorporating all of the senses is also important. [13:03] Studies have shown nostalgia physically warms you up! [13:21] Our brains are also wired to make memories much better than they actually were. Our nostalgic brains build memories up to be better than anything that could possibly be. [14:33] Our brains are nostalgic and brands can and should use this in advertising and marketing when it makes sense to do so. The right memories need to be chosen and triggered properly. Get as close as possible to the context and emotion. [16:32] When you feel nostalgic, ask why that experience meant so much to you. [17:03] The brain does things based on what has felt good in the past. [17:44] There are four key elements of a traditional ritual. This includes 1) a strictly defined time and place, 2) a set of features that are repeated year after year, 3) another set of features that are different from year to year, 4) and a lot of symbols. [18:42] It's psychologically important for the event to contain a lot of sensory information. [19:53] Having enjoyed a happy set of childhood traditions makes parents more likely to give you support and enact effective rituals for their children. It has actually been shown to create more mentally strong kids. [20:34] Traditions have been passed down through story or ritual in cultures all around the world for a reason. They teach us morals and what is important. [22:24] Brands like Macy's have holiday traditions, and there are even traditions in the brand of food we buy. [25:22] I have loved learning about some of your traditions over the last couple of weeks – and not surprisingly, this is something people love to share about because…we love our traditions! [26:08] What is your favorite holiday tradition and why is it important to you? Will you tell me about it on social media? [26:28] For your business, it is a good time to ask, is there something you can do to be part of a tradition at the holidays or any other time of year? How can you be part of a ritual?   Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: The BIG Brainy Bundle ending SOON! Use the code BRAINY100OFF by December 31st to get all three pieces (a $1200 value) for just $599. I can’t wait to have you join us in 2020. Master Your Mindset FREE mini-course Why Do We Feel Nostalgia? - Clay Routledge Why Do We Feel Nostalgia? Why Children Really Believe in Santa – the Surprising Psychology Behind Tradition Why Do We Experience Nostalgia? Episode 24. Vision Does Not Happen In The Eyes, But In The Brain – On The Sense of Sight: A Behavioral Economics Foundations Episode Episode 25. Why Burnt Popcorn Has Derailed So Many Meetings – On The Sense Of Smell: A Behavioral Economics Foundations Episode Episode 26. Why You Actually Taste With Your Nose – On The Sense Of Taste: A Behavioral Economics Foundations Episode Episode 27. Did You Hear That? – On The Sense of Hearing: A Behavioral Economics Foundations Episode Episode 28. Why Picking Something Up Makes People More Likely To Buy – On The Sense Of Touch: A Behavioral Economics Foundations Episode Why Do I Get Nostalgic? That bittersweet longing for the past can have an important impact on the present. Advertising to Bilinguals: Does the Language of Advertising Influence the Nature of Thoughts? Episode 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) Episode 78. How to Become Indistractible, Interview With Author Nir Eyal Why We Love Traditions, According To Science Episode 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode Episode 73. Starbucks: A Behavioral Economics Analysis The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram

I am so beyond excited to introduce you to Nir Eyal, author of the fantastic new book Indistractable, which I have mentioned a couple times on the podcast already because..well...I haven’t been able to contain myself! I also wrote about some of my learnings from his book in an article from my Inc. column. Nir is awesome, and he was so engaging to talk to. His writing has been featured in Fast Company, Entrepreneur, Forbes, TechCrunch, The Harvard Business Review, Psychology Today, Time and The Huffington Post to name a few. You may have heard of his first book, Hooked, which became an international phenomenon, loved by everyone from Silicon Valley and beyond. He’s taught at Stanford and sold a couple tech companies…I could list the accolades for ages, but I think you get the idea. Nir is awesome and I can’t wait for you to meet him as we talk about brains, goals and being Indistractable. So without further ado, Nir, welcome to The Brainy Business podcast! CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [03:10] Nir calls himself a behavioral designer. He uses consumer psychology and behavioral economics to change customer behavior through the technology that we use. As well as helping people shape their own behavior by understanding their cognitive characteristics. [03:41] His first book Hooked was all about how to build habit-forming products and create habits. Indistractable is about how to break habits and how to make sure we can get the best out of these technologies without letting them get the best of us.  [04:24] Nir writes because he wants to know the answer. With Hooked, he wanted to uncover the techniques that tech companies use to make their product so habit forming. He wanted to allow other industries to use these techniques to help form healthy habits.  [05:40] He wrote Indistractable, because the products can be so well made it's hard to stop ourselves from using them. That was the situation he was in.  [06:40] He was using an activity book with his daughter. There was a super power question, and he missed his daughter's answer, because he was looking at his phone. She actually left and went outside to play.  [07:41] He decided to read everything that was written about this problem. The answer in all the books was to get rid of the tech. So he did. And...he discovered that he still got distracted.  [08:35] This is when he realized the problem was much deeper than the technology. The technology was a proximal cause or symptom of a larger dysfunction. [09:48] He decided to find an answer that actually worked. We can find ways to get the best of these tech tools without letting them get the best of us. [11:07] The opposite of distraction is traction. [12:53] The best place to understand distraction is to learn its opposite. Traction is an action that pulls you towards what you want to do. A distraction pulls you away from what you want to do. [15:03] Tech tools aren't bad if you use them on your schedule. We can turn anything into traction as long as we make time for it. [16:42] Nir wanted to get down to the root cause of identifying distraction and knowing what to do about it. [17:11] Find out what prompts towards traction or distraction. What are the triggers?  [18:14] Our most common triggers start from within. The real disease is that we are uncomfortable with our emotions, so we let ourselves be distracted. [19:23] Why do we do what we do? Our brain gets us to act by spurring discomfort.  [20:25] Motivation is spurred by a desire to avoid discomfort. [21:11] We use distraction as psychological pacification. Time management is pain management unless we learn tactics to cope with discomfort. The first step is to master these internal triggers. [22:50] People can become addicted to anything from exercise to news. It's not about the behavior. It's about what we are escaping from.  [27:46] We were not designed by evolution to be happy all the time. Constantly striving and craving is what helped our species to progress. [28:21] We need to channel our uncomfortable sensations towards traction (not distraction). [29:50] Step two to becoming indistractable consists of three steps reimagine the task, reimagine the trigger, and reimagine our temperament. [36:23] Our brain craves simple answers which always get us into trouble. That's what's happening with the boogey man of distraction.  [39:04] Gum sales have gone down since the iPhone has come out. We don't need gum to distract ourselves. [40:01] If it's something you are serving instead of it serving you...it's time to disconnect.  [41:06] Step number three is to hack back the external triggers. Turn off phone notifications. Hack back the open floor plan office.  [42:31] Every copy of Nir's book comes with a sign you can put on your monitor that says that you are currently indistractable.  [44:09] Nir's wife wears a concentration crown to let her daughter know that she is working.  [44:48] The fourth step is to prevent distraction with pacts or commitments to stay on track.  [46:05] Find one thing that you can do to start the journey to become Indistractable. [48:00] The antidote to impulsiveness is forethought.  Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: The BIG Brainy Bundle pick the Big Brainy Bundle and use the code BRAINY100OFF by December 31st to get all three pieces (a $1200 value) for just $599. I can’t wait to have you join us in 2020. Master Your Mindset FREE mini-course Indistractable: How to Control Your Attention and Choose Your Life 3 Ways You Can Limit Everyday Distractions How This Year's Nobel Prize Winning Research in Economics Can Help Your Business Episode 15: Availability: Why People Are More Likely To Get Flood Insurance Right After a Flood: A Behavioral Economics Foundations Episode Episode 21. Habits: 95% Of Decisions Are Habitual – Which Side Is Your Business On?: A Behavioral Economics Foundations Episode Episode 22. The Power of Habit Episode 70. How to Set, Achieve & Exceed Brainy Goals Episode 13. Adjusting Your Mindset: Tips To Overcome Imposter Syndrome And More: A Behavioral Economics Foundations Episode Episode 67. How to Get (and Stay) Motivated Episode 29. Resolutions and Keeping Commitments Episode 27. Did You Hear That? – On The Sense of Hearing: A Behavioral Economics Foundations Episode Nir & Far Indistractable Nir Eyal on Twitter

“How do I raise my prices?” is a question I hear all the time. You all know that pricing is my jam. In fact, I’ve even created a Brainy Pricing Course that has a module on raising prices. In a recent questionstorming session with my current Brainy Mindset Course group, they asked to focus on getting past mindset blocks about raising prices. That is one of many reasons this episode seemed particularly fitting right now. It is all about raising your prices and learning to get past your own mindset blocks that have always tripped you up in the past (so you can move past them next time).  If you are wondering if you can raise your prices...the answer is probably yes. As I’ve said many times, it’s not really about the price. It’s about what comes before the price and the framing of that price. I’ll get into the importance of understanding your why and the context of the price too. I talk about scarcity and how it can actually validate a higher price. I talk about why it’s okay if raising your prices is scary. It is for everyone. It’s how you raise the price and why that matters. I also share a secret tip to convey your price to your clients with confidence just like you were telling them the time or the weather.  This episode should help give you the tools and encouragement to confidently make a pricing strategy plan. If you do want more pricing help, I have an awesome year end special where you can get the Briany Pricing Course plus the Virtual Workshop Bundle, and you get the Brainy Mindset Course completely free! The BIG BRAINY BUNDLE is a $1200 value for $699, and if you use the code BRAINY100OFF you can get the whole thing for just $599, or 50% off – but that deal is only through December 31 so don’t wait. Show Notes: [04:13] If you wonder if you could or can increase your prices or raise your rates…the answer is probably yes. [04:28] Pricing isn't about the price. It's about everything that comes before. If you can't raise your rates the block is often internal. [05:28] When you are working in massive volumes, small changes that are not going to be noticed much by consumers can have a huge impact on the bottom line. [05:53] Another way to look at profitability and prices is to understand what your costs are and how it all ties into the baseline question of why you want to increase the price. [06:48] Before you go through the process of raising your prices, it's important to know that you definitely could do it. [07:09] The next phase is: should you raise your prices and discovering what you are trying to accomplish. [07:18] The reason you want to raise the price is important to understand as you tackle the fears you have about raising prices. [07:36] Someone in the service industry may want to raise their prices because they're too busy. The brain will try to scare you and ask “what if I lose clients?” The answer is, it's okay to lose people because you're trying to reduce your workload. [08:28] The increase in revenue should make up for the people who leave. [08:58] Scarcity helps validate a higher price, so don't always be available. [09:08] Another reason to raise your prices is if you're not making enough profit. You need to sit down and understand your whole strategy behind pricing before you make the adjustment. [10:15] When raising your prices, know that nothing is for everyone and it's okay not to be a fit for someone anymore. [10:52] Don't tell them they can't afford you. It's their job to decide they don't want to work with you anymore. [11:10] People get more value from things that they pay more for. [11:48] Think about jeans and framing. We believe are expensive jeans are better than our cheap jeans. [12:27] Once you know you want to raise your prices and why, don't over explain and draw attention to the fact that you are doing so. [14:21] Apologies aren't necessary when raising your prices. Most people will pay the price, and some people will move on. [16:52] Some of my favorite questions to ask clients: What would happen if you charged 10 times more? What would make people happy to pay 10 times more? [18:18] If your campaign is all about price people will notice. [19:14] You can also charge new clients the new rate and phase in the new pricing for existing clients. [21:02] This can also be a chance to let a few problem clients go. Think through what you will do when people ask for discounts or threaten to leave.  [22:33] Look at the competition and understand what others charge, but don't let it dominate your space. [23:10] Have a plan and understand some people won't want to pay your new rates. That's okay. They're not your people anymore. [26:00] You need to understand what is on the shelf next to your product. Consider the context of the price and what people will compare it to.  [27:08] Consider search terms your ideal client will use, where your more expensive item can be showcased as the best choice.  [28:32] High anchors can make something look more affordable. [29:01] Everyone hates raising prices. It's scary. Something as simple as how you present your price on a sticker can impact the sales. [30:19] Just because raising your price is scary that doesn't mean that it's wrong. [31:07] It isn’t about you – it is about the customer and what value you provide for them, which is done through proper strategy and framing as you set and raise prices. [31:31] You need to say this new price so many times that your brain automatically thinks of the new price as the right number and you can say it as if you are saying the weather or time of day. [32:31] Confidence is the number one important thing when talking about pricing. Use a confident and friendly tone and ask for the sale every time. [34:22] If you want to raise your prices, you absolutely can. You always can, and it is best to have a plan to make sure you are doing it for the right reasons and you know how you will react if you do get questions or pushback. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: The BIG Brainy Bundle use the code BRAINY100OFF by December 31st to get all three pieces for just $599 (50% off!) I can’t wait to have you join us in 2020. Master Your Mindset FREE mini-course Episode 43. A Guide for You to Create a Brainy Brand Episode 47. A Behavioral Economics Analysis of Costco The $40,000 Olive: How Entrepreneurs Can Spend Time Saving Money [email protected] Episode 16. Framing: How You Say Things Matter More Than What You’re Saying: A Behavioral Economics Foundations Episode Episode 11. Anchoring & Adjustment: The 1 Word That Increased Sales 38%: A Behavioral Economics Foundations Episode Choosing a Pricing Strategy for Your Small Business Is Daunting. Here's How to Choose the Right One The Font Size on Your Price Tags Could Be Reducing Your Sales by 28 Percent. Here's How to Fix It Episode 19. Herding: Come On And Listen…Everyone Else Is Doing It: A Behavioral Economics Foundations Episode Episode 31. Mirror Neurons: A Fascinating Discovery From A Monkey, A Hot Day, And An Ice Cream Cone: A Behavioral Economics Foundations Episode

Happy Thanksgiving! This episode is coming out the day after Thanksgiving, also known as Black Friday – a day of crazy deals and holiday shopping (which I have written a few articles about recently on my Inc column) including, Why Black Friday Is the Perfect Holiday Sale According to Neuroscience, Why Year End Is Actually a Bad Time to Send Gifts to Clients, and Why Offering a Deal at the Holidays Isn’t Right for Every Business and Should Always Be Done Thoughtfully. I’ve also been thoughtful about a year-end deal from The Brainy Business - and we’re having one! In honor of this episode, it will be called the Gratitude Discount (details below). Last year at this time, episode 23 was all about reciprocity and the benefits that come from giving gifts. While today’s episode is about gratefulness, there is a reason I brought up last year’s reciprocity episode to kick us off today. Gratefulness and reciprocity have an important thing in common…a tie that can bond them together…which is a feeling of happiness and joy.  Doing things for others, giving things away, can help you to feel happier. And, as you learned in that episode on reciprocity, people want to give something in return; they can feel good from receiving AND from giving. It creates a nice virtuous cycle that I like to extend beyond the holiday season…though this is the perfect time of year to talk about this sort of thing. Reciprocity is the act of helping someone else to be a little happier. Giving away things, even in business, needs to be genuinely about that thing and not what you will get back. This episode explores how our brain filters for gratitude and how those principles can be applied in life and business.  Show Notes: [02:07] Check out episode 23 on reciprocity (fab favorite!).  [03:25] Gratefulness and giving can help us feel happier. [04:17] Giving away things, even in business, needs to be genuinely about that thing and not what you will get back. [05:13] Dan Gilbert shares what really makes us happy in his TED Talk. He found our brains systematically misjudge what will make us happy.  [06:29] Studies found that a year after winning the lottery or becoming a paraplegic people had the same happiness levels.  [07:11] People don't know what will make them happy. One of the most important things the human brain does is allow us to synthesize the future. [07:55] Natural happiness is a product of getting what you want. Synthetic happiness is what we get when we DON’T get what we wanted. [08:35] Synthetic happiness – not getting what you want but still being happy about where you are – is just as enduring and every bit as real to the brain as if you got exactly what you wanted (or thought you wanted). [08:57] We really and truly do create our own reality, and understanding how your brain looks at these situations can help you to be happier through a filter of gratitude. [10:30] Our brains reinforce our decisions.  [11:27] You can be grateful and appreciate things and have them make you happier even if you don’t remember going through the process before. [11:55] There is such a thing as too much choice. “Freedom to choose is the opposite of happiness.”  [14:31] Not getting what you want can make you just as happy – or happier – than if you had gotten what you set out for. Synthesized happiness is the same as natural happiness. [14:59] Lots of choice and opportunity to ruminate are a recipe for unhappiness. [15:16] Gratefulness comes before happiness. Gratitude is tied to happiness and helps people feel more positive emotions. [16:42] The benefits of gratitude filtering can impact all areas of life in a positive way. [17:34] When you are “filtering for gratitude” as I call it, you are resetting the way your subconscious is looking at the world around you – encouraging it to find good things happening so you will have something to write about at the end of the day or week. [18:08] Students who hand wrote a letter of gratitude had a huge boost in their happiness. [19:27] Our brains pay attention to what we write down, and it allows us to slow down and be thoughtful. [20:26] The BE Thoughtful Notebook will be released in early 2020. Get on the list! [21:01] Gratitude can also improve relationships. Sharing the good makes it easier to share the bad.  [22:11] Do you want to be happier? Do you want to sleep better and be more creative? Do you want to make those around you happier, and increase performance on the job and off? Do you want better relationships and memory retention? [22:27] Then it's time to filter for gratitude and start writing down what you are grateful for. [22:49] The year end deal! Claim your spot and get discount pricing before it goes up at the end of the year!  [26:09] If you get the pricing course and workshop bundle before the end of the year, which is only $699…you get the Brainy Mindset Course FREE! Use code BRAINY100OFF to get it for $599! Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Here's Why Black Friday Is the Perfect Sale, According to Neuroscience Holidays Can Be the Worst Time to Send Client Gifts, According to Research. Here's What to Do Instead Does Your Business Need to Offer Holiday Deals? Contrary to Popular Belief, Maybe Not Episode 23. Behavioral Economics Foundations: Reciprocity Daniel Gilbert The Surprising Science of Happiness Dan Gilbert TED2004 Stumbling on Happiness Episode 75. The Littery – Interview with CEO Michael Manniche Episode 9. Behavioral Economics Foundations: Loss Aversion What Does It Take To Be Grateful? In Praise of Gratitude 5 Reasons Writing by Hand Is Good for the Brain and for Well-Being 4 Benefits of Writing By Hand for National Handwriting Day Three Ways That Handwriting With A Pen Positively Affects Your Brain 9 Incredible Ways Writing By Hand Benefits Our Bodies And Brains How Arianna Huffington, Tony Robbins and Oprah Winfrey Use Gratitude as a Strategy for Success Successful People Do This at the Beginning of the Day—Do You? BE Thoughtful Notebook Gratitude Discount Claim your spot and get discount pricing before it goes up at the end of the year! Get the pricing course and workshop bundle before the end of the year for $699 and get the Brainy Mindset Course FREE! Use code BRAINY100OFF to get an additional $100 off and get it all for $599!

Litter is found just about everywhere you find people. Discarded wrappers and dropped pieces of paper aren’t meant to be cluttering up our parks, running trails, and sidewalks. Yet, litter is everywhere. It’s a problem that hasn’t been solved. Today’s guest is someone who looked at this problem and used intuition and research to create a solution.  I am so excited to have Michael Manniche, CEO and founder of The Littery as my guest. When I learned about The Littery in a post on LinkedIn, I knew instantly it was a perfect example of behavioral economics being used to create a business to help the planet and people from all countries living on it by turning litter…into lottery tickets. In today’s interview, Michael shares how he first invented the name (it contains the problem and the solution). Michael has always felt that litter is totally unnecessary. He also understood that litter was a behavioral problem. The solution would need to be something strong enough to change that behavior. He then shares his research and how he has built a business model that pays people prize money to stop littering. This is a great example of how behavioral economics can be used in business and in making the world better.  Show Notes: [03:27] The problem and the solution are in name The Littery. (“litter” + “lottery”) [04:07] Michael has always felt that litter is totally unnecessary. [04:52] He wanted to find a motivation strong enough to change the bad behavior of littering.  [05:48] Lotteries have been around for over four thousand years and all over the world.  [07:44] Michael had a theory that a lottery incentive could stop littering. He did a test in his home country of Sweden and the results were better than he expected.  [09:14] It's actually incredibly easy to change behavior with the right driver or motivation.  [11:31] To test the concept, Michael went to a movie theater. They had students measure litter on the floor, in bins, and for correct sorting.  [14:07] Patrons were offered an opportunity to win €5000 or free movie tickets if they put their trash in the correct place.  [15:41] After one month, across four locations, the litter in the bin was now 100% and correctly sorted!  [19:35] The success of the test encouraged Michael to leave his job, get investors, and start his company. [20:29] You put an app on your phone. When you open a smart bin and throw something in, you get a digital lottery ticket sent to your phone.  [21:38] It's also a goal to sort recyclables correctly. There is a camera in the bin that checks the sorting process. You don't get a ticket if things aren't sorted correctly.  [23:33] The AI and image recognition was more difficult than Michael thought it would be. The lighting and things have to be exactly the same as it would look inside of a bin.  [30:02] He incorporated in Latvia (and moved to Sweden to support his dream), because he had Latvian investors.  [31:02] The next phase will be piloted in the Paris area. In the future they will use the city litter contract money to purchase the bins and pay the lottery prize money.  [32:47] The business model depends on procured contracts. Having a new solution is a challenge for procurement. This stage they are also raising funds to help finance the pilot programs.  [34:52] Some partners include a large waste management company and Coca-Cola.  [35:33] 10% of earnings will go to charity. Winners can also donate to their charity of choice.  [41:01] Optimism bias and framing comes into play when you think about how picking up trash can give you a chance to win a lottery.  [42:14] Now, when Michael looks at a cigarette butt on the ground, he sees a lottery ticket. Hopefully everyone will have that same opinion soon. [44:31] Humans want to behave as the norm. We are also prone to enjoy competition. Michael has incorporated many of these things into the app.  [46:35] If anybody wants to invest reach out to Michael.  [49:02] Michael is learning that behavioral science is super intriguing.  [50:35] Using incentives to influence the larger group is the plan.  [51:41] “When litter hits the bins everybody wins.” Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: The Littery Behavioral Economics Group Episode 16. Behavioral Economics Foundations: Framing Episode 36. Behavioral Economics Foundations: The N in NUDGES – iNcentives Episode 39. Behavioral Economics Foundations: The E in NUDGES – Expect Error Episode 34. Behavioral Economics Foundations: Optimism Bias Episode 23. Behavioral Economics Foundations: Reciprocity Episode 21. Behavioral Economics Foundations: Habits Episode 19. Behavioral Economics Foundations: Herding Episode 8. What is Value? Episode 9. Behavioral Economics Foundations: Loss Aversion

It’s that time of year when everything starts to speed up. We all have so much to do for our businesses and personal lives...how can we get it all done? This is the perfect time to talk about your brain on time pressure as we head into Black Friday and Cyber Monday deals and limited time offers at every turn.  You may be considering if you should do a year end sale or offer in your business, or maybe you love taking advantage of the deals—or want to know why you can’t stop yourself from a deal sometime. Whatever the background, we all can learn about our brains on time pressure. And it isn’t just buying decisions that are impacted by this, which I will get into during the episode. You also have other impacts within your work and personal life where your precious commodity of time is limited and impacting your performance.  Think about it. If you had all the time in the world to make a decision…what would you do? How would you go about it? I discuss time pressure and how it impacts you as a consumer. Then I will discuss some ways to think about using time pressure in your promotions and offerings, and finally, some ways to think about how it impacts your actions in life and business. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [03:46] If you had all the time in the world to make a decision, what would you do? [03:59] You would ideally be able to evaluate every important feature and aspect against each other, and devise a system for ranking values. [04:39] Trying to consider every facet and every decision means you never actually make a decision. [05:01] We need to structure our decisions properly and only consider what matters. The subconscious brain has to make a lot of those decisions because the conscious is too slow. [05:47] The subconscious is heavily influenced by rules and concepts of personal biases and that doesn't always lead to the best results in life and business. [06:03] Limited quantities, opportunities and time are all closely tied to value in the brain. [06:44] When there is plenty of time available, we might be calmer and the conscious has some time to think and process. But time pressure? Move over conscious! You’re too slow and I got this down. [07:06] Studies have found people are less creative when they are under time constraints. They also defer making choices at all and if forced to make a choice, it's not the best one.  [07:25] Time pressure is a form of stress. [08:24] How time pressure affects you as a consumer. People buy more during the holidays. [09:34] When the brain is overwhelmed, the subconscious takes over and that can negatively impact your decisions. [09:48] Studies show that the things the brain focuses on when making decisions shift and can actually reverse when time pressure is applied. [10:03] When there is plenty of time available, people become risk-averse. When pressure is applied, we become loss averse and FOMO takes over. [10:17] Time pressure can encourage people to buy an extra item or get something “just in case” especially when paired with a discount or benefit of some kind. [10:42] Have a plan and a list if you have regrets about overspending after time discounted shopping. [11:19] Make a list of everyone you want to shop for. List of dollar amount you want to spend on each person. Run this against your total budget for the holiday to make sure you are in alignment and make any necessary edits. [12:12] Having a list makes it easier to hold yourself accountable to a plan. [13:44] It's good to set up rules when you are in a cold state so you are prepared when you get into the hot state. [15:28] Having any check in point and taking a moment to breathe can help you determine if this thing you are interested in is truly a great deal for YOU at this moment. [16:16] Making promos and offers. It's important for most businesses to have promotions and offers at some time or another. [16:28] Some ways you can incorporate time pressure in your offers is to have a discount or sale or gift that is only available until a certain date or time. [17:04] Countdowns are very effective in showcasing a deadline and the time pressure. [18:03] Another way you can look at time pressure is with a limited quantity. [19:03] Look around at what makes YOU want to act. When have you bought something you didn’t realize you were ready for? [20:33] It's best to test and find out what works for your business. Time pressure can almost always be effective when used properly. [20:59] Don't feel like you have to do a Black Friday offer just because everyone else does. [21:53] If it doesn’t work for your business…don’t do it! [22:20] Actions you take in life and business and how they are impacted by time pressure. [22:51] The worst case and best case scenario become the new normal and that impacts your decision. [23:12] When you have lots of time to get something done, you have a status quo of all the important things to look at and do. You make a list and work through it and have risk accounted for. [23:24] When there is time pressure, your brain looks at the biggest extremes – the worst thing that could happen if you don’t act and the best thing that could happen if you do. [24:03] Time pressure may get you to finally act and get things done…but are they of high quality and what you would have actually wanted done? [24:23] Studies have found that time pressure causes people to be less creative, less accurate, and for some people can cause them to freeze and revert to making no decision at all. [26:23] Do you have any big things that are constantly moving to tomorrow or next week on the to do list? Constantly putting the important things off is a mindset block we work through in the Brainy Mindset Course.  [26:47] You don’t need to be under constant pressure to get things done. If you know what your brain is doing, why it is putting those blocks out for you and why they are actually holding you back, you can find time to alleviate that pressure. [27:55] Start by narrowing down your goals. Put in time budgets and deadlines based on what is truly in your day. [29:56] Planning and breaking it down into micro-tasks or mini goals can help you to accomplish the big stuff because it gets you out of time pressure. [30:09] Sometimes, time pressure and deadlines can be helpful, but it is best when you are setting those time limits yourself. [30:26] Thoughtful time blocking and time pressure can help you move forward and make progress. [30:59] Set rules for yourself and remember to say that you DON’T do the thing instead of CAN’T do the thing. Studies have found that the way you frame your self talk is really important. [31:28] Take a step back and take time to evaluate what's really going on. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Judgment and Decision Making Under Time Pressure Decision Making Under Time Pressure: A Model for Information Systems Research This Is Your Brain 'On Sale' Decisions under Time Pressure: How Time Constraint Affects Risky Decision Making Searching for a Better Deal: on the Influence of Group Decision Making, Time Pressure and Gender in a Search Experiment The Effects of Time Pressure and Completeness of Information on Decision Making Episode 32. The Overwhelmed Brain and Its Impact on Decision Making Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 16. Behavioral Economics Foundations: Framing Episode 63. How To Set Up Your Own Experiments Holidays Can Be the Worst Time to Send Client Gifts, According to Research. Here's What to Do Instead Episode 70. How to Set, Achieve & Exceed Brainy Goals Master Your Mindset Free Brainy Course Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture Episode 45. Overview of Personal Biases Episode 14. Behavioral Economics Foundations: Scarcity Episode 8. What is Value? Episode 19. Behavioral Economics Foundations: Herding

Six months ago, I did my behavioral economics analysis of Costco, which has zoomed into the 11th most downloaded episode of this podcast. My analysis of Apple Card is right above it, so we can say they share the 10th spot. Today, I’m doing another behavioral analysis of a business: Starbucks.  It’s not a coincidence that we are getting into Starbucks right around the holiday season. They have definitely done some things very right when it comes to the holidays…and I will touch on the controversy they’ve seen as well. In the episode we will talk about featured drinks, red cups, nostalgia, pricing strategy, scarcity…and a whole lot more. If you’ve been listening for a while, you know I love Starbucks. Not just for their chai tea lattes and marshmallow dream bars, or because I live in Seattle…but because of the amazing things they have done as a company to shape the world we live in today. Starbucks is a dynamic and large company with a plethora of examples I could have chosen to talk about today.  There isn’t time for everything. Instead, I have picked some of my favorite pieces for the episode – ones I think you will find valuable and interesting and be able to apply to your own business (whatever that may be). Whether you work for a global business like Starbucks, are a solopreneur or an academic or somewhere in between…you can learn from the smart things the company has done and how they have understood human behavior. In the episode, we will dig into their star rewards program, as well as featured drinks and products – from PSL to the Unicorn Frappuccino, as well as the coveted red cups (which just launched a couple days ago by the time this comes out), the personality and overall brand choices in their logo, locations and on social media and, of course, pricing. Show Notes: [04:31] Without the original brand and pricing, Starbucks would be just another coffee shop. [05:04] It really is an amazing feat when you think about the commoditized industry Starbucks was facing before it launched its first store. [06:04] One of the big aspects Starbucks had to overcome was the pricing anchor. The first number you hear (or a standard price) is the anchor, and the brain adjusts from that to determine what is reasonable. [07:02] The way we act is driven by our subconscious, and when you ask a logical question to the conscious, it doesn’t answer in a way that reflects true behavior. [07:19] To justify a higher price, Starbucks needed to invent a new category. [07:59] This wasn’t just about coffee – it was creating community…a “third place” – an experience that was something more.  [08:21] Functional fixedness: when all you have is a hammer, everything looks like a nail. [08:48] When you look at what everyone else is doing, herding will keep you stuck. [09:01] Howard Schultz and Starbucks took a step back, got out of their own way, and created a new category which changed the conversation about coffee. [09:12] Asking good questions can help you get there. [10:01] Ask questions that aren’t about what everyone else is doing. Don't get stuck in the herding or the anchors. Instead, it is about looking to what could be, and asking “How might we?” or “Why?” [10:07] For your business, look at all the things you do because everyone else does. Is that serving you well? What would make your customers excited? Delighted? [10:29] Price is never about price. It's about all the things that come to for the price. Starbucks is a fantastic example of that. [10:56] Studies about wine show that people get more enjoyment from drinking wine that is more expensive. [11:37] When you can break free from the herd and make it about something more, your business can reap benefits beyond what you even imagine. [12:13] Starbucks changed the game with all of their drink options. The first drink they made famous was the Frappuccino. [13:38] The brain gets what it expects. If you expect Frappuccinos to be delicious and you get something similar by a different name, it won't be as good. [14:46] Starbucks started the original pumpkin spice latte or PSL. The limited nature triggers scarcity and loss aversion. [15:53] For scarcity to be a value in your business, you actually have to take something away. [18:43] Starbucks is constantly testing, and they're not afraid to have something popular only available for a limited time. [19:20] The new thing that started this week is the red cups. Keeping traditions alive is something that Starbucks does amazingly well. [20:03] For many, the red cup has become part of a tradition on holidays. When you become a lifestyle brand, you bear the responsibility of becoming a part of peoples’ lives. [21:34] Starbucks had a set of filters that every brand aspect had to pass through. These included being handcrafted, artistic, sophisticated, human, and enduring. [23:46] Taking the time to stop and evaluate what is really going on is important. [25:11] When you think about the value of the brand, it's about the overall experience with the brand at its core. [26:33] Your business should learn to watch the trends. What is going on that is cool and interesting and that everyone is talking about, and how would it look if you were to incorporate that into your offering? [28:00] Star rewards are one of the smartest things Starbucks could have done for their business. In many ways, this built upon the wildly popular “treat receipt” where you can get a discount when you buy a second item after 2pm or 3pm. [29:06] The star rewards model is built to create habits for users and increase visits. [34:03] Star rewards are a smart balance of loss aversion, scarcity, relativity, habits, and more. All executed through a series of experiments to see what is bringing the most value to the company and its customers. [34:42] Don't get sucked into your brain’s natural tendency to herd. Just because everyone else is doing something one way, doesn’t mean it is RIGHT to do so. [34:59] Take a step back and think bigger. Look to the future and the possibilities. [35:11] Scarcity is a powerful tool when used correctly. Especially when paired with loss aversion to help people choose your product. [36:05] Making your brand a habit is about more than caffeine and sugar. Starbucks puts effort into getting more customers to choose them more often for more things. [37:59] Next week, we are digging into the concept of time pressure. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 47. A Behavioral Economics Analysis of Costco Episode 42. Apple Card: A Behavioral Economics Analysis A Starbucks Barista Asked Me This 1 Simple Question, and Using It May Be a Great Way to Boost Your Sales Every Starbucks Growth Strategy Is Working 30 Interesting Starbucks Facts and Statistics (2019) | By the Numbers Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment How Starbucks Transformed Coffee From A Commodity Into A $4 Splurge Episode 53. An Overview of Lazy Brain Biases Episode 19. Behavioral Economics Foundations: Herding Episode 4. Questions or Answers Episode 5. The Truth About Pricing Starbucks Didn't Invent the Frappuccino. Here's Who Did. Starbucks Has Made An Insane Amount Of Money From PSL Sales Starbucks Red Cups 2019: When Do Christmas Holiday Drinks Start Going on Sale? A Brief History of Starbucks’ Holiday Cup Controversies Episode 43. A Guide for You to Create a Brainy Brand Episode 44. Rebrand, Refresh or Reinforce? Starbucks Will Be Selling Fewer Limited-Time-Only Drinks That Can Be Super Hard To Make Episode 15: Behavioral Economics Foundations: Availability Episode 27. Behavioral Economics Foundations: The Sense of Hearing and Sound Episode 21. Behavioral Economics Foundations: Habits Episode 63. How To Set Up Your Own Experiments Episode 12. Behavioral Economics Foundations: Relativity Episode 23. Behavioral Economics Foundations: Reciprocity SPAM® Pumpkin Spice Master Your Mindset Free Mini Course

Roger Dooley is here to talk about his new book Friction. Roger is the founder of the Neuromarketing Science website, host of the Brainfluence podcast, a Forbes contributor, and the author of Friction, Brainfluence, and The Persuasion Slide. FRICTION―The Untapped Force That Can Be Your Most Powerful Advantage is about making customer’s lives easier by removing friction.  Roger is the perfect guest for me to have on this show because neuromarketing and behavioral economics are similar in many ways, and throughout the book Roger gives examples and shares concepts of behavioral economics: including relativity, nudges, framing and more. It’s a great book, and a perfect interview topic for this show.  If you’re a regular listener, you’ve heard me talk about Richard Thaler (the Nobel Prize winner and co-author of Nudge). Here is his review of Friction. “What do Amazon, Apple Google and Netflix have in common? They made life easier for their consumers by removing what Dooley calls friction. Reading this book will arm any manager with a mental can of WD-40.” CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [04:08] The book Friction intentionally has a slightly gritty cover to convey a sense of friction.  [05:35] Roger began his career as an engineer, but he was always interested in psychology and advertising. [06:03] When he was about 30, he was in charge of strategic planning for a Fortune 1000 company. This is also the time he chose the bailout and become an entrepreneur. [06:14] He co-founded a catalog marketing company at the very early days of home computers. Over the years, his businesses have evolved and become more digital oriented. [06:45] About 15 years ago, Roger noticed neuroscience and marketing beginning to come together. That's when he started his website about neuroscience marketing. He now has over 1100 blog posts on the topic. [07:48] Books, his podcast, and his website give Roger the opportunity to explore how neuroscience and marketing come together. [09:20] There has been a recent increase in business interest in behavioral science. Even Neilson has about 20 neuroscientists on board.  [12:50] 95% of the time businesses have too much friction in their processes.  [13:08] An example of when adding friction helps is a retirement plan that requires a form instead of a phone call for withdrawals.  [13:50] Amazon reduced friction with one-click ordering. They actually patented it. Steve Jobs paid Amazon $1 million to use one-click in iTunes.  [16:19] Friction is any unnecessary effort required to complete a task. [22:05] Total cost, time, and effort need to be looked at when creating ways to reduce risk. Many burdens are for stuff that isn't important.  [23:20] Where there is high trust, there is low friction.  [24:08] Expense reporting can create extra paperwork. Some processes can have unintended consequences and waste time and effort.  [27:40] Think how things can be made easier and how many people will be affected.  [29:20] A more difficult form can be a screen. This is a time when more friction may be better.  [31:15] To increase phone leads, eliminating the web form didn't work, instead the form had to made longer and less friendly to increase phone leads.  [32:25] BYAF (but you are free) technique. Letting someone know they are free not to do something relieves the pressure and helps them comply with the request.  [34:56] Buffer took all of the friction out of scheduling social sharing. They even used to have curated content.  [38:09] Never say “actually” when answering a support question, because it seems to correct the person. [40:36] Loyal customers are more valuable than new customers. What drives loyalty is low effort experiences. High effort experience doesn't inspire loyalty.  [44:23] Eliminating processes can also be an option. To board a cruise ship people had to go through a check-in process and fill out a health form. This useless process was eliminated.  [48:38] Open your eyes and look for things that take longer than they should. Is there something you can do to reduce the effort your customer has to take to do business with you? Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: FRICTION―The Untapped Force That Can Be Your Most Powerful Advantage Episode 12. Behavioral Economics Foundations: Relativity Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture Episode 16. Behavioral Economics Foundations: Framing Episode 32. The Overwhelmed Brain and Its Impact on Decision Making Episode 28. Behavioral Economics Foundations: The Sense of Touch Episode 63. How To Set Up Your Own Experiments Episode 60. Surprise and Delight Roger Dooley Roger Dooley on LinkedIn Roger Dooley on Twitter Neuromarketing Nudge Conversion Sciences Buffer Hootsuite

You may remember episode 68 on counterfactual thinking (why we ‘what if’ and ‘if only’). That episode and the Inc.com article I wrote on how to break the negative cycle of 'what if' thinking were incredibly well received. That episode talked about the different types of counterfactuals – upward or downward, omission or commission, and usual or extreme. Today, I’m going to build on that and talk about the difference between a prefactual and a counterfactual. I’ll explain how they can work differently to help you achieve goals (building on last week’s episode as well). Goals are so important at this time of year. As the year is ending, you’re looking back at what you have done, what you could have done, and also looking forward at what you can do in the future. This is all counter and prefactual thinking in action, and as I’ve already said, they can be a huge aid in reaching goals…or a massive hinderance. Understanding how they work is a big step toward being able to use them to your advantage, and that’s really the point of this episode. Before we jump in, I want to remind everyone that the cart for the Brainy Mindset Course is now open! Claim your spot by November 1st. The first of our six weekly live training sessions begins on November 5th. There are also lots of worksheets and a dedicated Facebook community where I will also be answering your questions. It’s going to be amazing, and we already have some fantastic people signed up and interacting in the group and getting a jump on things. Another amazing thing is that it’s only $199 for the entire six week course, which will give you all the steps to tackle mindset including live support with me walking through it with you every step of the way. To make things extra sweet for you podcast listeners, there is an extra bonus of 25% off. This brings the total down to only $149 if you use the code BRAINY50OFF at checkout. Sign up now!  Show Notes: [06:05] Counterfactuals are looking back at something that has already happened, and essentially undoing it in some way in your mind. [06:19] Ruminating isn’t the same as a counterfactual. Memory reflection itself isn’t enough…you need to change what happened or could have happened in your brain for it to be a counterfactual thought. [06:39] Prefactuals are when you look to the future, and think about what could be. Like counterfactuals, this can either be negative positive. [06:49] If you look to the future in a negative way, it has been called “defensive pessimism” and may involve anticipation of regret and building strategies to avoid that. [07:27] When you think about what could happen or how you might succeed in the future, studies show you can actually have great benefits in all sorts of tasks. [08:25] The brain does get benefit from dwelling and dread. [08:51] Your brain loves dopamine and it drives it to do all sorts of things. Anticipation is at the core of prefactual thinking. [09:48] The treat for the brain is in the pre-buildup or the prefactual. [10:31] I decided to send a Gratitude Discount to people on my mailing list for my Brainy Course, unfortunately there was an email mistake and about a dozen people received %firstname% instead of their name.  [13:06] I could dwell on this for hours in the counterfactual/prefactual world.  [14:37] Counterfactuals tend to focus on things that we really have no control over. [14:57]  Prefactuals are more likely to focus on things in your realm of control. [15:33] Instead of just predicting the possible future outcome, you want to identify a specific circumstance. [16:19] My 10/10/80 A/B test gave me a chance to think a little about what could happen (prefactual) and because I didn’t dwell too much on what might have been (counterfactual) I could take steps to actually make it better. [18:46] I also used the power of prefactual thought to prevent this from happening again. [19:41] One key to using counterfactuals and prefactuals for your benefit, is to look for the learning opportunity. [21:30]  When something goes wrong the inclination is to make a giant alert on the website, but you can't always do that because it will overwhelm the brain and make it so nothing else is noticed and draw attention to it. [22:15] If something goes wrong, and only affects 2% of the audience, there is no need for a massive alert to everyone. (It can actually make things worse.) [22:55] Knowing the true impact is really important before you send out that apology. Don't let prefactual and counterfactual thoughts blow things way out of proportion. [23:31] First – take a deep breath, pause for a moment to assess the situation. Then ask some questions. How many people were impacted? What really happened? Is it fixed already? If not, when will it be fixed? What can we do now to make it better? [23:47] Then take the actions that you know need to be taken. [24:09] Write out what you could do to make this situation and others like it better in the future. [24:23] Breathe, assess, questions, actions, reflection. [25:22] One study I really liked was looking at how counterfactuals and prefactuals impacted performance in a balancing task compared to a control group. [26:05] Three groups completed balancing tasks, one group used a prefactual prompt, another used a counterfactual prompt and the last was the control group. [26:37] The control group stayed the same. Positive structured prefactual/counterfactual thinking did 5-6 times better.  [26:55] Studies have also found that people perform better on a task after doing prefactual thinking even if they have no prior experience. [27:15] Role playing and visualization techniques are so important (and why they play a big piece in mindset work). [27:23] Planning for the future is how you shape it into what you want it to be. Moving out of negative counter and prefactuals into the positive space is such a useful and versatile skill for everyone. [27:53] Use the “Next time I’ll” language to program this thinking in your mind.  [28:35] You will get there faster and easier if you structure your counterfactuals and prefactuals to the positive. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) How to Break the Negative Cycle of 'What If' Thinking The Brainy Courses Use the code BRAINY50OFF Episode 2. The Top 5 Wording Mistakes Businesses Make Episode 63. How To Set Up Your Own Experiments Improving Physical Task Performance with Counterfactual and Prefactual Thinking When Thinking It Means Doing It: Prefactual Thought In Self-handicapping Behavior Fixing Your Brain: A Guide to Balancing Neurotransmitters

How do successful people get things done? A lot of it has to do with setting and achieving goals. A topic that isn’t always as easy as it sounds. Today’s episode is about setting, reaching and exceeding brainy goals. We all have goals, and are all optimistic that we’ll achieve them “someday,” but the truth is if you don’t set your goals up correctly, there is a good chance life will move too fast, and you won’t achieve what you’re capable of. (I’ve linked to episodes on time discounting and optimism bias that help explain why our brains are fine with “someday”.) Everywhere you look, you’ll find advice on goal setting and tips and tools to help you achieve what you want. Success can be as simple as taking (and adhering to) the following three steps to set and achieve your brainy goals. All you have to do is 1) define your goals limiting them to no more than three. Then 2) break those large goals into small steps that will get you there, and 3) say NO to everything else, so you can focus on what really matters. Sounds easy right? Not so fast. Our brains are wired to rebel against this simple process. (Especially, step three.) Saying NO is the hardest part, and where most humans get hung up. We want to do a little of this and a little of that…multitask…not limit ourselves. You’ve likely heard some of these tips before, but I’m adding the extra (and very important) layer of explaining WHY your brain doesn’t want to adhere to the plan to help you fight it when it rebels against you. This show will explain the way our brains react to these steps, and if you want someone to walk through the steps with you the Brainy Mindset Course (cart opens next week!) can do that. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [04:23] We all have goals, but if we don't set them up correctly, there's a good chance we won't achieve them. [04:48] The three tips for setting and achieving brainy goals are: 1) define your goals, 2) break it down into smaller steps, and 3) say no to everything else. [05:22] Saying no to everything else is the hardest one for humans to do. [05:37] In a few weeks, I'm going to have author Nir Eyal on the show to talk about his new book Indistractable. [05:51] One of my favorite insights from his book is that you can’t call something a distraction unless you know what it is distracting you FROM. [06:07] The opposite of distraction is traction. [07:26] When it comes to goals, you need to limit them. You cannot have 85 goals or even 10 or 5, because you can’t achieve them. It’s too much for your brain to handle. [08:53] To limit your goals, you first need to list out every goal you would like to accomplish in the next 5, 10, or 50 years. (Use the free worksheet in from the Master Your Mindset mini-course...link below.) These are the things that you want done when they read them at your eulogy. [09:09] List out everything you want to do and then think about how they might combine together and into an overarching goal. [09:40] Now that everything's listed, pick three goals. [10:51] Setting these goals can take some time but don't get caught in perfectionism or analysis paralysis. These are mindset blocks. [11:13] Keeping you stuck is a tactic used by your brain to delay change. [11:42] Your inclination is to have the top three be the most important, but still let goals 4-15 take up mental energy and be out in the world as things you are interested in. But they can't. [12:16] Items 4-15 are a distraction that you should avoid at all costs. [13:02] It's important to declare and OWN those top goals so everyone in your life knows what is most important and is on board. [19:17] Setting three goals and then sticking to them is really hard. [19:50] Once you know what the top three are, the next step is to break each big goal into small steps to get there. [20:54] When it comes to the big overarching goal all of these other things are little steps to get there. [21:55] Break the big lifetime goal into sub goals for the year. [22:25] With tiny habits, you break your big goal into the smallest possible component, something that would be impossible to say no to. [24:06] You can also use habit stacking to accomplish the small steps. [24:46] Now that you have your goals, how tiny can you make the steps to reaching them? [25:06] Every goal is reached in lots of small steps. It’s a sum of all the effort to get there, not the end result, and if you don’t plan for them, they won’t get done and you won’t challenge the status quo your brain loves and you won’t reach your goals. [26:04] The subconscious brain is the filter that determines what your conscious gets to focus on. You need to be incredibly particular about what it sees all day to help guide the filter. [29:21] Use reminders on your phone – set an alarm that repeats your mantra back to you or that you read. Put sticky notes on your bathroom mirror, or paint a picture that reminds you of the goal. (Master Your Mindset free mini-course has tips and a worksheet to help you with this) [30:11] Determine what three things are important to you and shout them from the rooftops and put every single egg in their baskets. That is how you set, achieve, and exceed brainy goals.    Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.   Links and Resources: [email protected] Join the October 24 webinar for a discount on the Brainy Mindset Course Episode 29. Resolutions and Keeping Commitments Episode 67. How to Get (and Stay) Motivated Episode 69. Management Mess To Leadership Success, an Interview with Scott Miller, Management Mess to Leadership Success Master Your Mindset Free Mini-Course Brainy Courses Episode 51. Behavioral Economics Foundations: Time Discounting Episode 54. Biases Toward Novelty and Stories Indistractable: How to Control Your Attention and Choose Your Life 3 Ways You Can Limit Everyday Distractions Friction: Passion Brands in the Age of Disruption  

After a year of doing this podcast, I’ve noticed trends in the topics I’ve been requested to do. My Human Behavior Lab interview with Dr. Palma was very popular. People also know that I read and do a lot of research, so I get a lot of requests for book recommendations. Today, I’m incorporating a new segment to the podcast where I interview authors who have written great books about or incorporating concepts from brain science. When I find a fit for the audience, I’ll have the author on the show, so that we can really dig into the lessons and how they apply to business.  Today’s episode features a great discussion with Scott Miller, Executive Vice President of Thought Leadership at FranklinCovey, and author of the new book, Management Mess to Leadership Success. Scott is the host of the On Leadership podcast and Great Life, Great Career on iHeartRadio. He is also a fellow columnist on Inc.com. I’m super excited to share our conversation with you.  Show Notes: [06:22] Scott's book sold 20,000 copies in the first 6 weeks. (Wow!) [07:25] Scott is Executive Vice President of Thought Leadership at FranklinCovey. They are the world's most prominent leadership development firm and have been in business for over 40 years. [07:42] Their influence is built upon a variety of thought leadership books including The 7 Habits of Highly Effective People by Stephen Covey. They do a lot of consulting around leadership development, productivity, and executing strategy. [08:07] Out of the hundreds and hundreds of business leadership books written every year, Scott never had one that spoke squarely to him, so he wrote his own. [08:30] He wrote a very vulnerable and relatable book that challenges conventional wisdom. He talks about the 30 challenges that every leader faces not only in business but in life. [09:01] His book is raw. He lays out his messes and his successes. It's also short and digestible, which is part of the reason it's done so well in the four months since the launch.  [12:13] Scott's philosophy is that we all have messes, but let's not wallow in them or make excuses for them. It's hard to improve if you don't acknowledge your mess. [14:01] The 11th challenge is Check Your Paradigms. One of Dr. Covey's gifts to the world was understanding your paradigms or belief systems. Leaders don't always have the full picture. Their lens is tinted by what they believe to be true. [16:21] Stereotyping and brain bias is an issue for everyone. They serve us in some ways, but we also need to know how they impact us.  [17:48] Challenge two is to Think Abundantly. Having an abundance mindset means you believe that there is enough to go around. [22:00] Being loyal to the absent. Defending those who are absent obtains the trust of those who are present. [22:49] Great leaders don't speak about people when they're absent any differently than they would if they are present. [26:18] Challenge 23 and 24 are about setting wildly important goals (WIGs). WIGs are like BHAGs (big hairy audacious goals). Leaders need to be very articulate about elevating some goals over others.  [27:36] Properly defining goals is also super important. You can influence lead measures but not lag measures.  [28:37] Align your actions with the goals. To accomplish a wildly important goal, you either have to learn something new or do something different. [32:40] Most people confuse opinion and emotions with facts. [34:39] Assume good intent and declare your intent.  [36:10] Leadership in organizations has been positioned as it's easier if you just keep doing what you've been doing. Leadership is hard and it's not for everyone. Acknowledging and understanding your messes can make you a genius maker. [37:13] Leadership is a combination of confidence and vulnerability. [40:57] Scott is giving up some things on B level like his radio show to do more things at A level.  [41:45] The tips in Scott's book align well with the concepts of this podcast even if the terminology is different - I’ve linked to some relevant episodes and other items we discussed below. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.   Links and Resources: [email protected] Management Mess to Leadership Success: 30 Challenges to Become the Leader You Would Follow Everyone Deserves a Great Manager: The 6 Critical Practices for Leading a Team On Leadership with Scott Miller Scott Miller on Twitter Scott Miller on LinkedIn The 7 Habits of Highly Effective People Episode 42. Apple Card: A Behavioral Economics Analysis Episode 47. A Behavioral Economics Analysis of Costco Episode 33. Inside the Texas A&M Human Behavior Lab Episode 23. Behavioral Economics Foundations: Reciprocity Episode 45. Overview of Personal Biases Episode 46. Biases Toward Others – Including Groups Episode 14. Behavioral Economics Foundations: Scarcity Episode 68. Counterfactual Thinking: Why We ‘What If’ And ‘If Only’ (A Behavioral Economics Foundations Episode) Emotional Agility: Get Unstuck, Embrace Change, and Thrive in Work and Life Susan David Ted Talk The Gift and Power of Emotional Courage Multipliers, Revised and Updated: How the Best Leaders Make Everyone Smarter Master Your Mindset Free Mini-Course Good to Great  Built to Last How the Mighty Fall

I love the concept of counterfactual thinking. In fact, it was one of my favorite things to read about in school – I find it to be fascinating in many ways, but perhaps it’s because it relates to something we all do, all the time, and don’t really stop to think about why. And more importantly – we don’t stop to think about if it is doing us harm or good, and how we might control this natural state of the brain. Counterfactual thinking is a fancy way to say “what if..” or “if only...” Maybe you have memories of your childhood or choices you made, and then think that with a little more discipline (or focus or effort or training) you could have been an actor or doctor or run that marathon.  We all have regrets on actions taken or not taken, and these are represented in our brains via counterfactual thinking. This may seem like a hurdle to overcome, but it is actually central to being a human being – our emotions and the way we think - and can be a VERY good thing (listen to learn the 1 important step to shift from vicious cycle to goal-achieving awesomeness). Studies have found counterfactual thinking happens across all cultures and as early as 2 years old. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [02:42] Counterfactual thinking is a fancy way to say "what if" or "if only." [04:05] Counterfactual thinking can be very useful for setting and accomplishing goals.  [04:20] There are different types of counterfactuals, and they do different things. When you are thinking about a better alternative it is called an upward counterfactual, and those with worse alternatives are downward counterfactuals. [04:57] Upward counterfactual are tied very closely with regret. Anticipated regret (or prefactuals) will be the focus of a future episode. Regret and counterfactual thinking really go hand in hand. [05:17] The first theoretical explanation of counterfactual thinking came from Kahneman and Miller back in 1986, and was called norm theory. [05:39] When looking at counterfactuals consider if they are omissions or commissions, ruminations or undoings, usual or extreme, actions of ourselves or others, and if they cause negative impact or how they can be used for good. [06:29] An omission is when you wish you had acted. A commission is wishing you had not taken an action.  [07:10] A rumination is where you think about what happened, but you don’t have any thoughts about how things might have been different. Undoing is where the counterfactual “if only” or “what if” comes into play – what might have been if you had or hadn’t done something. [08:40] Usual or extreme: the way you do your counterfactual thinking will be different if it was coming in through the same door as you always do versus coming in a way you never do. [11:24] Ourselves or others. Whose actions the counterfactuals are targeted at. We tend to focus our counterfactual thoughts on ourselves – what we coulda shoulda woulda done – more often than we look at others. [12:24] Distress and anxiety. While there is a healthy side to counterfactuals, when used in excess it can be really damaging to the psyche. [14:25] Thinking and counterfactualizing doesn't change what happened. [16:02] Putting too much into ‘what if’ and counterfactual thinking can often make a mountain out of a molehill. It can be unhealthy and cause you more harm than simply letting it go and moving on would do. [16:12] Your conscious brain can only focus on so much and the brain gets what it expects. [18:16] A study was published in 1995 in Personality and Social Psychology Bulletin on counterfactual thinking and undoing traumatic life events. [20:58] A study found that 80% of those that lost loved ones in a car accident had ruminative thoughts of the event, and 59% said they had thought about the events leading up to the accident within the past month. [21:49] Over half of the respondents were actively undoing the event in their heads – having counterfactual thoughts – within the last month, for an event from 4-7 years earlier. [22:20] 69% focused on a usual activity. 28% focused on an exceptional activity. [23:34] 41% of those undoing reported wishing that they had done something. 31% reported wishing that they had not acted as they did. 17% reported both. [24:24] 55% focused on their own behavior, while the other 45% were focused on the behavior of the deceased. Not one person reported trying to undo the other driver’s behavior (even though in most cases that person was legally responsible for the accident). [26:29] The person thinking about the process is more likely to undo the actions of the focal actor – themselves or the person they knew. [27:26] If you go through counterfactual “if only” and “what if” sort of thinking…remember that just because your brain is only focusing on you…it doesn’t mean it is right or the only option. [28:39] Undoing may, at least partially, be a distress-driven cognitive process. [31:09] The more you continue to focus on undoing, the more you will have continued distress. [32:28] Highly distressed people come to undo more frequently, thus perpetuating their distress. [33:06] The only item that led to increased levels of distress was the frequency that someone was going through the process of undoing. [33:55] Your mood and focus is created by your own brain. And while it is perfectly normal to partake in counterfactual thinking, too much can be harmful.  [34:30] Counterfactual thinking is a critical way we regulate our behavior and how we are able to reach our goals. [34:50] When you fail to reach a goal, you are more likely to have counterfactual thoughts. [35:23] Instead of having counterfactual thoughts, decide what you could do better next time. [37:47] You need to allow yourself to move on and not let it take over everything else in your life and work.  [38:57] Next time you get into a counterfactual spin…think about how someone else might think you’re the luckiest guy or gal in the world! [40:17] Whether you are naturally a silver lining person or not…acting as if you were is often enough to trick your brain into starting to think that way. DON’T FORGET to sign up for the Free Master Your Mindset Mini Course now to tackle mindset issues and be on the waiting list for the full course, on sale October 24! Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.   Links and Resources: The Functional Theory of Counterfactual Thinking Norm Theory: Comparing Reality to Its Alternatives The Undoing of Traumatic Life Events Episode 62. Behavioral Economics Foundations: Game Theory Fierce Conversations: Achieving Success at Work and in Life One Conversation at a Time Episode 4. Questions or Answers Episode 12. Behavioral Economics Foundations: Relativity Free Master Your Mindset Mini Course

Motivation is definitely a key piece of the mindset puzzle, so it’s no wonder its been taking up brain space for me recently. My Instagram followers already know I’ve been working on getting back into running. In this episode, I get vulnerable and share with you my very personal relationship with running. It revolves around a limiting belief that was created in my mind, as well as mindset and motivation issues.  I also talk about the two types of motivation. Motivation can either be intrinsic or extrinsic. Essentially, that means it either comes from your own self (intrinsic) or from an outside source (extrinsic). I also talk about apps and other things that can help you with motivation (or you can use to motivate employees or customers in your business). In fact, this is where today’s topic came from. While on a run I was thinking about the apps I use and how their pricing could be better aligned with motivation and the way the brain actually works. Hopefully, you’ll walk away with motivation inspiration and pricing insights for your business. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [04:03] Motivation is definitely a key piece of the mindset puzzle. [05:01] I'm going to get vulnerable and share a story about my relationship with running. [06:14] Unfortunately, words from a misguided ballet teacher helped cement a limiting belief in my mind that I couldn't run. [08:27] I wanted to run again and tried, but I still had mindset blocks. In 2013, an executive coach helped me to break through my mindset blocks.  [10:36] I had overcome my running mental demons, but was then hit by two cars on the freeway. This led to new mindset and motivation struggles. [12:09] In August, I decided to apply all of my mindset learning and make a change. I started Couch to 5k all over again from the beginning. [13:30] Running gives me clarity. The spark for this episode came from my thoughts around the running apps that I used and how their pricing could be better aligned with motivation and the way the brain actually works. [13:59] Motivation can either be intrinsic or extrinsic. Essentially, that means it either comes from your own self (intrinsic) or from an outside source (extrinsic). [15:12] Thinking about something from a fresh, new angle will allow you to shake off the cobwebs and old rules to refresh your motivation. [16:16] A lot of people get hung up on is sales calls or some other version of drumming up new business. [16:28] the act of making the call is scary – that’s fear talking. You are intrinsically dwelling and keeping the whole conversation inside your own head. [17:02] You could make a commitment to a friend that you will both make a certain number of sales calls by the end of the week. [18:10] Loss aversion and other brain motivators can help you get over the mindset block and into motivation territory.  [18:29] When you are feeling a lack of motivation or want to motivate yourself, think about the mindset block that is keeping you stuck. [19:25] Understanding your priorities so you can say no to things that are outside the goals is key to getting (and staying) motivated. [20:37] Couch to 5k is a free app, but you have to pay to upgrade to get some bonus features. [22:19] One thing I think this app really lacks is it stops tracking when their prescribed course is done. [22:42] They are conditioning me to not want to put in any extra effort or push myself beyond their 30 minutes because there is no benefit to doing so. [25:04] Also, I am pushed outside the app to get my pace, which decreases the value of the sell and makes me less likely to pay. [26:56] If ZenLabs and Couch to 5k was my client, I would recommend that the monthly payment include access to all the apps and benefits.  [27:34] If it does not include all the apps, I recommend the extrinsic motivation / loss aversion model. [29:30] If you don’t plan (which conditions for the importance of mental preparation around fitness) you pay if you miss. Lazy Jar does exactly this. [30:10] This is like stickK which I believe was the first app to use brain science for motivation in this way. This app was created by behavioral economists and has helped people reach all sorts of goals. [31:18] Runkeeper allows you to store your running data. You get tons of free stats. You also get badges, and it does gps tracking. [33:31] I can pay up to track how similar runs get better or worse.  [34:32] Little pulls from an account on a regular basis could be a motivational tactic as well. [34:53] Runkeeper is definitely catered to the one time annual payment (which I believe is opposite of Couch to 5k). [35:33] Isn’t it funny how the big price disparity makes one thing look like a better value?  How one small shift makes it look completely different? [36:10] If you have a business with subscription models that depend on regular usage and enjoyment…the goal is really to keep motivation up. [37:55] My 3 tips: 1) Limit your goals. Having too many goals is a recipe for motivation failure. Get your total goals down to 3 max. [38:18] 2) Flip the script (reframe). Look at the mind block and ask if its intrinsic or extrinsic and then switch to the other. [39:11] 3) Look at the small steps. Start by thinking big and then putting together small action steps to get there. [40:00] If social media is a priority, you can break it up into small steps. Once something becomes a habit, you can incorporate more things. [40:55] Keeping motivated doesn’t have to be as elusive as it might seem. It’s all about understanding the brain and how to work with its rules around mindset to achieve your big dreams. [42:11] Sign up for the free Master Your Mindset mini-course to get a jump on conquering your mindset AND get on the waiting list for the full mindset course. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Your Sales Maven Episode 66. Ultimate Pricing Confidence with Special Guest Interviewer Nikki Rausch Master Your Mindset - Free Jenn Bays on Instagram The Brainy Business on Instagram Couch to 5k Episode 21. Behavioral Economics Foundations: Habits Episode 22. The Power of Habit Peter Myers on Twitter Runkeeper Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 29. Resolutions and Keeping Commitments The Brainy Business on Facebook The Brainy Business on Twitter Episode 65. Can Behavioral Economics Increase Savings? Episode 16. Behavioral Economics Foundations: Framing Episode 51. Behavioral Economics Foundations: Time Discounting Episode 34. Behavioral Economics Foundations: Optimism Bias Lazy Jar stickK Episode 8. What is Value? Episode 12. Behavioral Economics Foundations: Relativity The Brainy Business Courses

The Brainy Business Pricing Course is now live. For a fun twist on today's episode, I am interviewed by my good friend and client: the amazing Nikki Rausch of Your Sales Maven. Nikki helps entrepreneurs learn to sell easily and authentically, and we all know that sales and pricing go hand in hand. I gave Nikki a walk through of the course, and she has been along for the ride while I’ve created it.  We talk about the course, what it entails, why it was the perfect first topic to kick off the Brainy Courses, and the positive impact brain-friendly pricing can have on your business. Nikki is the perfect person to interview me about this, because she understands the questions a potential student would be interested in. Nikki is also the author of new book The Selling Staircase: Mastering the Art of Relationship Selling and an all-around awesome friend and client.  Pricing Course Workshop Bundle Save $100 with code BRAINY100OFF  Pricing Course Only Save $50 with code BRAINY50OFF Master Your Mindset Free Mini Course CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [04:42] Nikki calls herself a super fan. She is excited about the course. [06:48] I put pricing first, because it's the thing I get asked about the most. Price is such a huge factor and having the right price makes such an impact.  [08:49] This course is about all of the stuff you need to think about when creating a pricing strategy. We don’t talk about specific prices until the very last module. [09:58] There seems to be a huge gap in all of the ways to think about the numbers. The course helps to understand numbers in a more robust way and factor in things that matter (like time).  [11:10] There is also a step by step walk through on how to raise prices. That discusses what to talk about now before raising your price (and how to change the language/plan for current and new customers). [12:10] There also scripts for presenting the price depending on the platform.  [13:50] I also review and explain specific framing examples using real-life ads and email subject lines from companies.  [15:32] The Brainy Pricing Course has comprehensive worksheets to guide through all the steps and possible situations.  [18:38] I structured the courses and workshops to be evergreen and updated when new relevant content comes out. Purchasers can revisit the course over and over.  [21:35] The workshop component helps put a deadline in place to complete the work and it's an avenue to get questions answered and overcome hurdles that may come up. [25:07] The workshop emulates a mastermind hot seat format. There is so much extra value from hearing other people's experiences. [26:58] You can purchase the course and then add the workshop, but you will save $100 purchasing both at once.  [28:55] Having the ability to set the right price and be confident about it is like the course paying for itself. [31:41] The course has 10 modules. You can also get the mindset module for free (Master Your Mindset mini-course) to see what a full course might be like.  [35:26] You can find all the courses in the Brainy Business Member Vault. You can also save by buying the bundle, and use the above discount codes for an even better value.  [37:24] This course is an investment you make in yourself and in your business. If you follow the steps, I guarantee it will more than pay for itself. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Your Sales Maven The Selling Staircase: Mastering the Art of Relationship Selling Pricing Course Workshop Bundle Save $100 with code BRAINY100OFF  Pricing Course Only Save $50 with code BRAINY50OFF Master Your Mindset Free Mini Course

I’m so excited to finally talk to you about my study on behavioral economics and increasing savings rates. In my master’s program, I was required to do my own study and submit it to at least one location for publication. I already had a relationship with the Filene Research Institute, so I decided to reach out to them before choosing the focus of my project. Their top choices were helping people save money and increase loyalty. A group of researchers from Duke University did an experiment in Kenya to try and find ways to increase savings. After six months, the surprising results were that a using a gold coin to mark off weeks of savings outranked sentimental reminders and matching funds. I loved these findings and wanted to see if this could be replicated if modified for the US. My white paper is now published, and I finally get to talk about the study and share it with you. I was privileged to have a conversation with Dan Ariely which helped me narrow down my three main concepts for the study which are time discounting, reciprocity, and a physical manifestation of savings. I hope you enjoy the results. Before I begin, I also want to remind you that the Brainy Pricing Course is now live. This 10-module course will walk you through mindset, priming (and finding your scent of the cookies), framing, anchoring, and relativity for pricing as well as knowing your numbers, notes on discounts and how to raise prices. Brainy Courses are a little different because they include a workshop component. Here’s all of the info along with money saving discount codes.  Pricing Course Workshop Bundle Save $100 with code BRAINY100OFF  Pricing Course Only Save $50 with code BRAINY50OFF CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [06:19] Publication wasn't a requirement for graduation, the study just needed to be submitted. [07:27] The study done in Kenya on savings behavior stuck with me. [08:17] The gold coin was the condition that did the best. It even did better on its own than when paired with matching funds. [08:32] Finding a way to encourage saving without matching funds is like the holy grail. [09:05] I was interested to see how this would translate in the United States. [09:20] Problem number one was replicating the gold coin in the US. [09:53] The coin was a constant reminder to save. This needed to be replicated at least in premise. [11:17] The three main concepts I wanted to focus on were time discounting, reciprocity, and a physical manifestation of saving. [12:02] We started with 240 members, who were narrowed down based on a few factors, including age, income, and time with the credit union.  [12:36] Filene requested we look at loyalty scores as well. [12:48] One item we used to narrow down the list was if they had completed a Net Promoter Score survey in the six months or so before the study began. [13:41] The 240 members were randomly assigned to one of three groups. The control group received no communication at all.  [15:05] We tracked savings until the Monday before Black Friday so we wouldn’t end up with totally skewed numbers when people went shopping after Thanksgiving. [15:29] I also had the previous year's data for comparison. [16:31] It was decided to not have the members precommit to wanting to save or sign up for a program. [17:50] Two of the groups groups received communication from the credit union talking about the importance of saving and this new information they found on helping people to save. (The other group was control.) [18:29] About a week before the planned study, the two non control groups received a letter with very similar text. One group also received a refrigerator magnet. [21:23] The magnet group’s letter also had an image of the magnet in the corner. All envelopes were the same. [21:44] After 12 weeks, the 160 individuals all received an email reminding them of the importance of saving, and letting them know it was never too late to start or pick up where they left off. [21:52] And after the 24 weeks were over, they received an email thanking them for participating, encouraging continued saving, and everyone – all 240 members – received an email with an NPS survey to see if the loyalty numbers were different after 24 weeks. [22:55] Making the future self more tangible today is important in combating time discounting. [24:15] Even though I was only using three main concepts, these others still had to be considered and incorporated for the best chances of adoption. [24:53] The hypotheses of the study were that the magnet group would save more than either of the other two groups and that the magnet group would have a higher increase in loyalty score than the other two groups. [26:14] Physical representation is the magnet itself, which was specifically designed to be a reminder of money and savings. The letter only group was encouraged to make their own note and place it somewhere to be a reminder of savings and goals. [26:37] Time discounting is represented in the verbiage on the magnet, “I care about my future self” and that same verbiage was included in the letters and emails for both groups. [26:50]  Reciprocity was in both the “gift” of the magnet, which was called out specifically in the language on the letter for that group, and the less physical gift of tips to save money and have a happier, more financially secure life. [28:22] The hypotheses were that the magnet group would save more and have a bigger change in their loyalty scores over the 24 weeks. And they did! [29:16] The control group savings went up 1.42%. The letter only group went up by 1.35%. The magnet group went up by 4.51%. [30:07] The most significant jump in loyalty score was by the magnet group. They went up to 9.2. [30:49] The main thing to learn from this study is that the magnet group went up in both categories, and while we cannot say with 100% certainty it is because of the nudges, there aren’t any other explanations that readily explain what else might have happened. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 63. How To Set Up Your Own Experiments Episode 64. How To Make Concepts Tangible Pricing Course Workshop Bundle Save $100 with code BRAINY100OFF  Pricing Course Only Save $50 with code BRAINY50OFF Can Behavioral Economics Increase Savings and Member Loyalty? PDF to the Study How to Help the Poor to Save a Bit: Evidence from a Field Experiment in Kenya Episode 51. Behavioral Economics Foundations: Time Discounting Episode 23. Behavioral Economics Foundations: Reciprocity Point West Credit Union What Is Net Promoter? Episode 18. Behavioral Economics Foundations: Priming Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment Episode 16. Behavioral Economics Foundations: Framing Episode 19. Behavioral Economics Foundations: Herding Episode 31. Mirror Neurons Episode 61. Color Theory Episode 54. Biases Toward Novelty and Stories Texas A&M Human Behavior Lab The Chicago School of Professional Psychology

The physical representation of concepts is an important tool to use in your business. Things like colors and shapes can be recalled by our brains and associated with other non related things. This topic is really an amalgamation of other concepts, but it’s still a valuable tool to understand and use when communicating about your business. This episode gives examples of making concepts tangible, and their practical applications in business.  This topic is the last main concept from my research paper that I announced last week. I also gave tips on running experiments like: keep it small, be thoughtful, and test often. I am super excited about next week, because I’ll finally be sharing my study on on increasing savings behavior and its results.  And...speaking of exciting, the Brainy Pricing Course goes live Monday, September 9! Learn all about it and save with special discount codes below: Pricing Course Workshop Bundle Save $100 with code BRAINY100OFF  Pricing Course Only Save $50 with code BRAINY50OFF CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [04:59] This isn't really a topic you can easily look up. It's more of an accepted premise. The physical representation of concepts is an amalgamation of various other concepts. [05:35] The brain works on associations.  [07:47] Colors and shapes bring a physical presence that can be recalled easier than words. Your brain has been trained to recognize this physical representation of the concept of street signs (as explained here). [08:56] Logos are physical representations of the concept of a business. [09:27] The physical manifestation of the brand makes the business more real in your mind because there is a logo to relate to. [10:21] This is not exactly the same as anthropomorphism, which is when animals or objects are given human-like tendencies; it can be a similar concept because it helps you relate to the item in question. [10:52] Abstract concepts are everywhere in business, and they can easily cause miscommunication in conversations or messaging. Providing a physical reference point makes everything feel more real.  [15:16] I did not want to get rid of my DVDs during a decluttering session. The reason why was because the physical, tangible, representation – the box and the item itself – was tied to my emotional center and triggered loss aversion. [16:06] Where could you inject physical form we're only concepts exist in your business today? [16:48] How Progressive took the concept of insurance and made it tangible. [18:41] When you take something from conceptual to tangible, it makes it easier for the brain to categorize, relate, and remember. [19:19] Pictures, logos, and icons make your business and its features feel real. [19:29] Physical representation can help remind you of associations that you have made previously or that are important to you. [19:56] Physical items are a constant reminder to your brain. [21:57] You can make physical items that remind people of your business without having your name plastered all over them, that will be subtle reminders of you and your business. [22:04] A strong brand is able to live through the lack of words and evoke feelings – they leave an impression even without their name. [23:31] What could your business do to be a constant association and reminder in the brains of your customers? [25:01] I share a credit union concept where the idea of using logos on items could have gone very wrong. Keep in mind that small associations matter. [25:53] For your business, consider the emotions you want to convey – the things you want people to think when they consider your brand. Or, when they might be most likely to need your brand. What can you provide that will help them and remind them of you? [27:10] You can also create visuals around what you want to do to help achieve your goals. What you surround yourself with has a HUGE impact on your approach to life, business and your success. This is priming in action. [27:32] I want to help you surround yourself with the right physical representation of the concepts you care about to help you be successful. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 62. Behavioral Economics Foundations: Game Theory Episode 23. Behavioral Economics Foundations: Reciprocity Episode 51. Behavioral Economics Foundations: Time Discounting Pricing Course Workshop Bundle Save $100 with code BRAINY100OFF Pricing Course Only Save $50 with code BRAINY50OFF Master Your Mindset Free Course Getting to the Top of Mind: How Reminders Increase Saving 9. Behavioral Economics Foundations: Loss Aversion Progressive TV Commercial For Name Your Price Tool Progressive TV Commercial 'The Box' Jogger Commercial | Allstate Mayhem Episode 12. Behavioral Economics Foundations: Relativity The Brainy Business on Facebook The Brainy Business on Twitter The Brainy Business on Instagram The Brainy Business on YouTube Episode 61. Color Theory Episode 18. Behavioral Economics Foundations: Priming

Testing and experimenting is one of the best ways to find what works best for your business. This week we are talking about the benefit of experiments and some of my tips for how to do this on your own in your business, as not every experiment requires hiring a consultant to come in and run a big study. If you have been listening to the podcast for a while you probably remember me mentioning a few times that I have a research paper coming “soon” based on a project I did on behalf of the Filene Research Institute and a credit union in Portland, Oregon. I am so excited that I have approved the (potentially) final draft and that should be published any day now!  There will be a dedicated episode talking about the research in two weeks, but I wanted to give some tips about experimenting first, because it truly is so important for every organization to test things. Next week is an episode on the physical representation of concepts, which is the only main concept in the study I have not yet covered on the podcast. Then on September 13th, I’ll share all the details and findings of my research study. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [05:08] Experimenting is important for any organization. You have probably done experiments and not even realized it. [05:30] Good experiments need to be narrow and focused, because if you test too many things at once you won't know what contributed to the result. [07:09] I share a story about how I needed to continue to narrow down a research paper topic.  [08:16] The study found that advertisements for low cognition products were twice as likely to be standardized as high cognition products. Ads using pictures were more than twice as likely to be standardized as those using text. [09:08] There were so many variables and items cross referenced just for a study that looked at one month of magazine ads. [09:59] The study I ended up with, which felt incredibly small to me at the time, was actually a huge undertaking - it was a true experiment. [10:16] When there is a lot weighing on the outcome of the experiment, it's a good idea to bring in experts. There are also tests you can do on your own fairly easily, which can still have a great impact on your business. [10:41] You can be more agile and adapt quickly with small tests. [10:56] The three things to keep in mind when setting up experiments are to be thoughtful, keep it small, and test as often as you can. [11:14] Keeping it small allows you to do the test on your own and understand what contributed to the results you are seeing. [11:55] To determine what is best, separate everything into multiple mini-tests. [12:53] Make one small change and track what the results are, so you'll be learning every step of the way. [14:44] One of the studies I share the most often is the one with the end cap displays for Snickers bars. This used anchoring and adjustment and found when they said “buy 18 for your freezer” there was a 38% increase in sales. [15:36] Behavioral economics shows us that hunches about what customers will do are often wrong, because they are based on logic, not the rules of the subconscious brain. This is why everything needs to be tracked. [16:01] Some other things you could test would be how your ads (or emails or direct mailers or website pages) do when you change a number frame. You can also do tests on blog post headers, or copy on social media posts, and images you use on ads. [17:04] The second important way to focus your attention is to be thoughtful. Being thoughtful means looking outside of what you always do or what you “know” to be true. [17:45] Behavioral economics teaches that humans do not always act “rationally” or with much forethought. Take the time to plan before you jump into a test, or start testing absolutely everything. [18:45] Instead of testing everything, just test the right things. Know the problem you are trying to solve and narrow your focus. [19:15] Anything can be worth testing, but everything can be a waste of time if you don’t have a clear focus and goal. [19:36] If your company is about driving value, then all your tests should be about creating more value for your customers. [20:16] Focus on items that are driving revenue and value to your company. [21:01] The results of one test will not necessarily hold true in every situation or for every business. This is called generalizability or being generalizable - while it matters in most academic studies, it isn’t as important if you are testing for your own business (because if the results don’t apply to your competitor...who cares?) [22:05] It's also important to know whether the data you are collecting is qualitative or quantitative. Conversations with people are qualitative, number of clicks are quantitative. [24:00] If you know you will want to dig into demographics and other details, you probably need to build that into your data pull up front. Think and talk through what you actually want to know. [24:35] My final tip is to test early and often. [25:24] Small tests let you act quickly, so the more you test, the more you learn. No results still tells you something important. [26:25] Findings tell you what attracts attention or what matters to your customers, but non-findings tell you what they don’t pay attention to or care about. Remember to keep it small, be thoughtful, and test often. Remember - The Brainy Business now offers courses! Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Filene The CUInsight Experience podcast: Melina Palmer – Seeking answers (#34) Episode 4. Questions or Answers Behavioral Economics and Business 048 How Applying Behavioral Economics Can Benefit Your Business, With Melina Palmer of Brainy Business Podcast Bam Success Summit Conference Your Sales Maven Association for Consumer Research Episode 60. Surprise and Delight Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment 1 Word That Increased Sales by 38% Episode 16. Behavioral Economics Foundations: Framing Qualitative vs Quantitative

If you’ve been listening to the podcast for a while, you already know that humans aren’t rational (and, honestly, you probably know that just from being a human person too). And the base of economic theory would often incorrectly predict behavior because it assumes logical people making rational choices.  Because humans do not behave this way in practice, new theories needed to be developed which accounted for these irrational choices. And in game theory, it is exactly the same. We humans don’t always make choices that are fully rational. We try to game the system or play the odds. This episode is all about game theory and how it can help your business. We will dig into three basic games: the dictator game, the ultimatum game and the prisoner’s dilemma.  And if you haven’t checked out last week's episode, it was all about color theory and what really matters when using colors in your business and your brand.  CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [03:21] If you're wondering, Game Theory actually has a lot to do with business. [03:41] Humans aren't rational. Basic economic theory would predict behavior incorrectly, because it would assume logical people are making rational decisions. [03:45] Since humans aren't rational, new theories needed to be developed. [05:06] Downton Abbey and Survivor are great examples of game theory in action. [05:22] In behavioral game theory, we need to consider how revenge, fairness and personal gain all play into the outcomes. Three main games that are often used in game theory are the ultimatum game, the prisoner’s dilemma, and the dictator game. [05:38] We start with the dictator game. What it is and how different scenarios can impact your behavior or decision.  [08:38] The ultimatum game is similar, but the second person has an option to respond to the offer. If they reject, both get nothing. [10:18] History has a lot to play in the actions people take, and existing relationships help determine actions. [11:04] The human component – knowing you are playing against a person who is profiting from your situation – has a big impact on the way people respond. [11:57] Think about how the anchor shifts when you have power versus when you don’t. [12:33] It's important to understand who has what power in each situation when you determine what to offer and think about how they might react. [13:11] Even when money is not changing hands, the process of buying and selling is exactly the same. Other items of value can be bartered. The way people react changes based on the power or belief they have. [13:22] This is worth considering as you put offers out to people and are wondering how they may respond or act. Are you putting power in their hands that makes a generous offer seem stingy? [14:02] In your business, you aren’t limited to the lab style test – your clients know who you are and what you are offering them. [15:29] If you give something, people want to give back (reciprocity). [16:10] The last game is the prisoner's dilemma.  [17:41] The shifting anchor impacts the position someone takes. Saying something may feel like a win win (even though it often isn’t).  [19:57] The best overall strategy for the extended prisoner's dilemma is a tit-for-tat strategy in which you cooperate until someone defects then you respond in kind. [21:41] Most of us would likely plan to play fair. Do you expect the same kindness and fairness in others? How does the story you tell yourself about what they think influence your actions? How would your strategy be influenced by the look of the person?  [22:48] Game theory applies in all sorts of business situations. Obviously, this applies in negotiations with potential partners. [23:37] Humans are emotional, and it is not just in the after-the-fact stuff...the thoughts and “what ifs” before a negotiation starts can always influence actions much more than we may think. [23:57] Always have written contracts and agreements. [24:19] Negotiating terms in a cold state is so much better than not doing your due diligence. [24:38] Another example of how this impacts business is in advertising. [26:21] There are countless examples of game theory – it is truly all around us all the time. Pretty much any time you interact with another person or business or entity, game theory comes into play. [27:21] Buying in at the bottom of a recession is game theory in action. It’s all based on what you expect other people will do and how you choose to react to it – before and after the fact. [29:47] The YouTube example of United Breaks Guitars which is the ultimate customer revenge.  [32:15] When emotions take hold, it can cause people to make bad decisions that they may regret in the long run, so try and get some distance and perspective before acting…especially if you feel really betrayed and angry. [32:49] Perspective lets you look at the game in a whole different way and play by the real rules. [33:15] The last point I want to make is this: when it comes to games, many people are playing not to lose, instead of playing to win. [33:47] When you play to win – in games, life or business – you know it is a long game and have a calmer approach. You understand the rules backward and forward. This is much more effective than playing not to lose. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 61. Color Theory Take a Peek into Your Buyer's Behavior with Melina Palmer of The Brainy Business The Prisoner's Dilemma Behavioral Game Theory The Ultimatum Game- Are people rational? The Dictator Game The Psychology of Revenge (and Vengeful People) An Experimental Analysis of Ultimatum Bargaining Behavioral Game Theory: Plausible Formal Models That Predict Accurately (Behavioral) Game theory Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment Episode 7. Change Management (It’s Still Not About The Cookie) Episode 5. The Truth About Pricing Episode 8. What is Value? Episode 16. Behavioral Economics Foundations: Framing Episode 60. Surprise and Delight Episode 23. Behavioral Economics Foundations: Reciprocity The Iterated Prisoner's Dilemma and The Evolution of Cooperation Episode 54. Biases Toward Novelty and Stories Episode 46. Biases Toward Others – Including Groups Toms Warby Parker United Breaks Guitars

Last week we talked about how to surprise and delight customers, as well as the difference between satisfaction and delight and its impact on loyalty and profits. I also wrote an article that went live on Inc.com this week titled “Want to build brand loyalty? Surprise your customers—literally.”  ALSO: The presale for the Brainy Course on pricing is now live. Lock in your discount.  You’ve probably heard the basics of color theory before – that certain colors link to certain feelings or emotions in people, and so some colors are better than others for brands. There are tons of color charts out there. I’ve even linked to a few. I’ll give you the general associations in this episode, but I’m also going to explain what really matters when it comes to using colors in your branding – the common mistakes and the most important things to keep in mind. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [05:01] GENERAL COLOR MEANINGS [05:03] Red: is full of excitement and said to be youthful and bold. It is also said to make people hungry or angry, and is associated with stopping. [05:45] Orange: is said to be cheerful and have confidence. It is also fun, whimsical, childlike, friendly, spontaneous, glowing, hot, and persuasive. [06:16] Yellow: has optimism, clarity and warmth. It is also joyful, illuminating, nourishing, sunny, sweet, stimulating, innovative, energetic, hot, surprising, or can bring awareness. [06:50] Green: is said to be peaceful and associated with growth and health. It can also be calm, quiet, fresh, lush, soothing, renewal, balance, life, and fertility. [07:43] Blue: is associated with trust, dependability and strength. Some other words (again, depending on the shade) can be calm, quiet, water, clean, peaceful, reassuring, serene, transcendent, open, sophisticated, confident, tasteful, cool, credible, authoritative, classic, traditional, nautical, or professional. [08:42] Purple: is associated with creativity, imagination and wisdom. It can also be romantic, thoughtful, nostalgic, thrilling, dramatic, regal, intuitive, mysterious or visionary. [09:19] Pink: ranges from vibrant, flirtatious, attention-getting and high energy to soft, subtle, romantic, compassionate, delicate, innocent, fragile or youthful. [10:08] Grey and other neutrals: are bringing balance and calm. It is also classic, corporate, timeless, quiet, logical, reserved, basic, modest, efficient, accountable, staunch, professional, sleek, classy, mature, sophisticated, and methodical. [10:50] Brown: is earthy, rugged, outdoor, rustic and woodsy, but as you change the shade to chocolate it could be delicious, rich, robust or appetizing. [11:28] Black: is powerful, empowering, elegant, sophisticated, mysterious, bold, classic, strong, expensive, nighttime, stylish, or prestigious. [12:12] White: is positive, pure, clean, innocent, simple, airy, bright, pristine, or bridal, but it can also be seen as sterile, cold and clinical. [13:09] COMMON MISTAKES [13:11] Colors have tons of associations and meanings, and often opposite associations depending on the shade or context. [14:02] GENDER PREFERENCES [14:13] Gender does have different impacts on preference for colors, which can be important for brands. [16:06] Blue and green are universally predominant favorite colors. Orange and brown are least favorite for both genders. Purple is gender polarizing.  [16:27] BEYOND GENDER In some cultures, white is bridal, pure and innocent, but it is a funeral color for others. Black can be sophisticated or menacing. Red can be aggressive or mean luck. [19:33] THINK ABOUT BRAIN ASSOCIATIONS The associations absolutely do matter, and studies have found that appropriateness of the color to the brand persona matter quite a bit. [20:18] Think about how all the context triggers come together to support or contradict the color used in your brand, logo or other aspects of your marketing. [20:41] When people are not already familiar with a brand, the common emotions tied with the color of the logo make a big difference in the way they interpret the brand. [21:13] When starting your brand be aware of the associations with color and the emotions those colors bring up. Knowing the color associations can also help you go against the traditional theory if that is your strategy.  [23:00] When it comes to the way a designer or someone working with colors would explain the type of color, there are three important items: hue, value, and chroma. [23:51] The hue is the color itself. Purple, red, and green are all hues. [24:14] Value shows us how light or dark a color is – the level of brightness. [24:18] Chroma is the saturation of color or its vividness. [26:00] Google tested to find the perfect blue for its links.  [27:13] There are ways to use color in your business, beyond brand associations and color choice. [28:28] The thing that is most important when it comes to calls to action is to have a lot of contrast. This is known as the isolation effect or the Von Restorff effect. [29:39] You want to pick your colors based on congruency to your message and the personality, as well as the market you are targeting. [30:03] Go with contrast when picking secondary or tertiary buttons and links, so they stand out. [30:22] Know what your competitors use so you can stand out.  [31:26] Fight the urge of your herding brain and be different from the competition. [32:05] Trendy colors generally aren’t good for brands, but they can be great for for special editions etc.  [32:56] For physical items, keep in mind what your competitors are using and find colors that help you stand out on the shelf. [35:31] Color is incredibly important for brands to understand and consider when creating their materials. With a little bit of thought and consideration, you can absolutely use color to your business’ advantage. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 60. Surprise and Delight Want to Build Brand Loyalty? Surprise Your Customers--Literally The Psychology of Color The Psychology and Meaning of Colors Color Psychology: How Color Meanings Affect Your Brand When Did Girls Start Wearing Pink? The Psychology of Color in Marketing and Branding Colour Assignment There's Evidence Humans Didn't Actually See Blue Until Modern Times Exciting Red and Competent Blue: The Importance of Color in Marketing Current Research Development Impact of Color on Marketing The Interactive Effects of Colors and Products on Perceptions of Brand Logo Appropriateness Color Psychology Why Google Has 200m Reasons to Put Engineers Over Designers Which Button Color Converts the Best? 10 Proven Ways to Build a Website that Customers Will Love Episode 24. Behavioral Economics Foundations: Sense of Sight Episode 19. Behavioral Economics Foundations: Herding

First off – welcome to episode 60! How exciting – I love hitting milestones and I am excited to celebrate this one with a fun episode on surprising and delighting customers and how that differs from satisfaction. Last week we talked about the pain of paying and how it can impact the way people spend with you. It is quite possibly one of my favorite episodes to date – I really enjoyed digging through the research on that one, and I think the most telling study for you was the AOL example.  Special Announcement: The first online course from The Brainy Business is going live on September 9, and there is a one week presale starting this coming Monday, August 12! A lot of businesses are competing for your ideal customer. Plus, those same customers are becoming more selective and are more aware than ever of the many options they have. These days, it’s not enough to just get the job done or to do an ok job. If you really want to build true customer loyalty and customer engagement, you’ll need to surprise and delight your customers. This is how your business can build a loyal following and increase profits. In this episode I talk about how to do exactly that. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [06:26] Many people assume there is a linear relationship between dissatisfaction, satisfaction and delight, but it doesn’t really work that way. Satisfaction is not the opposite of dissatisfaction, and vice a versa. [07:08] The scale of customer experience actually goes from outrage, to dissatisfaction to satisfaction to delight. [07:29] When you have a surprising positive experience, it results in delight. An unexpected, surprising negative experience? That is when outrage comes into play. [08:25] In a business, you have to be aware of these all the time, including your overall experience for everyone as well as for each individual customer. Ideally, you are living in “satisfied” territory most of the time, with a few “delights” popping up here and there. [08:57] Delight is much more likely to drive loyalty than mere satisfaction, and there is a lot of research that shows loyalty is positively linked to profits and stock market price. [09:45] Once a customer becomes satisfied, they have achieved pretty much whatever level of loyalty they are going to have, but the loyalty score shoots up when delight is introduced. [12:27] Delightful experiences are much more likely to hit the emotional center of the brain and be much more likely to be remembered. This also holds true for the mirror of delight which is outrage. [13:23] One heavily cited study estimates that a 5% increase in loyalty from customers can increase profit anywhere from 25% to 85%! [14:13] Delighted and loyal customers can have a lifetime value equal to 11 “regular” customers. [14:31] Loyalty can also result in lower costs in advertising, branding and acquisition, as well as higher revenues per transaction or per customer, lower defection rates, plus an increase in brand equity. [15:22] There's no standard scale for measuring delight.  [17:08] Satisfaction is more of a cognitive process. Delight and outrage are more emotional. [20:25] The reason the Ed Sheeran Edchup promotion works is because fans know that it's authentic. Consumers can’t be expected to let you know what will delight them, because at its core they can’t be expecting them. [22:33] It's important to know your numbers, so you'll know in advance if the cost of delighting is worth it. [23:06] The next pitfall is the peril of ever-changing expectations. If the delights become standard, customers will expect them. The key to delight is surprise. [24:23] The last pitfall to be aware of is assuming that everyone has the same expectations. [26:41] Often, simply being courteous, showing empathy, and making an effort to understand the needs of the customer are enough to create a delightful experience. [29:41] Employee empowerment is still crucial in any business if you want to surprise and delight. [33:08] You can also provide unanticipated value. You can also provide novelty and entertainment – think of Disneyland or Disney World. [35:52] Reposition the business to focus on delivering solutions instead of products and services. [39:18] Seven organizational changes from the Berman paper to consider so you can better deliver delight: be aware of the need for organizational change to establish delight objectives; link customer delight to bottom-line benefits; look at world-class customer satisfaction criteria; listen to customers to ascertain what's important; empower employees so that they can go "the extra mile"; make measurement of customer delight and loyalty a priority; and link raises and bonuses to customer satisfaction scores. [41:30] Delight is not something you do one-off and hope for the best. It requires time and strategy. [43:13] If you are sending gifts to your clients and customers, don't do it in November or December, because people are expecting gifts at that time. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: [email protected] The Brainy Biz on Facebook @thebrainybiz on Twitter The Brainy Business w/Melina on Instagram Episode 59. Behavioral Economics Foundations: The Pain of Paying How to Delight Your Customers Customer Delight: Foundations, Findings, and Managerial Insight Delight by Design: The Role of Hedonic versus Utilitarian Benefits Episode 48. An Overview of Memory Biases Ed Sheeran Launches Own Heinz Tomato ‘Edchup’ Ed Sheeran Edchup on Instagram Ed Sheeran on Instagram @teddysphotos Episode 42. Apple Card: A Behavioral Economics Analysis The Good, the Bad and the Beautiful of Employee Empowerment Turkey Talk Line Episode 19. Behavioral Economics Foundations: Herding

Buying things isn’t all fun and games – and the process of paying for things can actually cause pain for many people. In fact, neuroeconomics has found that when scanning subjects’ brains in an fMRI machine while they are going through the process of buying things, there is activity in the insula, which is a pain center in the brain. In many ways, it is just like physical pain, and the emotional pain can be very real. It doesn’t impact everyone on every single purchase, and there are some times when it is more impactful, and some people it is more impactful for. In many cases in business, you want to do what you can to reduce the pain of a payment so people are more likely to go through with a purchase, but there are times when it is important to keep those pains in place…I will give examples of these and what to do when the pain can’t be reduced.  In this episode, I will let you know how this concept works including twelve different conditions where it is most likely to occur, some unexpected mechanisms that can cause pain when you wouldn’t even realize it, and (of course) tips for how to use this concept to your benefit in any type of business.​ CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [04:08] The process of paying for things can actually cause pain for many people. [06:16] Context is incredibly important when it comes to the pain felt by making a payment.  [10:06] Paying and consuming have sort of a reciprocal relationship…because making a payment reduces the joy of consumption, but consumption reduces the pain of paying. [11:48] The way you talk about the price impacts the pain felt in paying more than the amount. Everything that comes before the price matters much more than the price itself. [12:42] The more a transaction is perceived as: fair, an investment, immediate, for the sake of another person, under one’s own control and has payment before consumption…the WEAKER the pain of paying. [13:45] When the pain of paying is too much – so that people do not buy things that they need or want because it is too difficult to give up money…they are called tightwads. Those who spend too much, too easily and do not feel an appropriate amount of pain before or during the spending process…we call them spendthrifts. [16:43] Tightwads and spendthrifts don't change their ways even when their income fluctuates. [19:45] Tightwads are most sensitive to framing adjustments, so that is where you can make a difference. Adding the word “small” before a fee, or framing the purchase as an investment made it so tightwads were more likely to buy and feel less pain in paying. [22:25] When people feel good about themselves (as when purchasing a virtuous product) there is less pain felt and associated with the payment across the board. [23:35] One of the big issues for spendthrifts is they do not account for or intuitively understand the opportunity cost in the moment when they are getting ready to buy or wanting to buy things. [25:38] Everyone will feel some sort of pain when paying. It is your job to figure out what the buyer needs, what would benefit them the most, and then present it to them in a way that will have the least pain felt. [27:27] Think about how people interpret what they are getting. Did they choose the circumstance or was it thrust upon them? If it was not their choice, are there some other areas where you can help them feel like they did make a choice? [31:14] When the pain of paying isn’t felt as much, it doesn’t impact the experience. [33:29] Loss aversion is a big contributing factor to having the meter running and the pain of paying. [36:30] Sometimes, people are willing to pay money to reduce the pain of lost time and they enjoy the experience more because it was their choice. [37:15] Consumption can reduce the pain felt by paying, but paying can reduce the joy felt during consumption. This is a concept called coupling. [39:56] Think about yourself as a consumer and how you would feel if you got the bill for your product or service after the fact. [40:43] Are there any points in your business where you could use coupons or tokens or chips or beads instead of cash? [41:28] The biggest thing is to make sure that people feel they are really gaining something when they spend money, and that it is not just being thrown away.  [43:11] Classifying your product or service as a gift really helps overcome the pain. [44:34] Reminder: the more a transaction is perceived as: fair, an investment, immediate, for the sake of another person, under one’s own control and has payment before consumption…the WEAKER the pain of paying. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 56. Behavioral Economics Foundations: Mental Accounting Episode 58. Behavioral Economics Foundations: Partitioning Abaneeta Chakraborty on Twitter Tightwads and Spendthrifts: An Interdisciplinary Review Episode 54. Biases Toward Novelty and Stories The Pain of Paying Episode 16. Behavioral Economics Foundations: Framing Episode 5. The Truth About Pricing Episode 51. Behavioral Economics Foundations: Time Discounting Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 17. Unlocking the Power of Numbers The Pain of Paying by Dan Ariely The Red and the Black: Mental Accounting of Savings and Debt

Last week was the tribute to NASA in honor of the 50 year anniversary of Neil Armstrong’s first steps on the moon. In that episode I told you about the space race, the Cold War, and how that all boiled down into five tips your business can learn and implement from the success NASA saw during the 1960s. If you haven’t listened to it yet, give it a shot! Today, we are going to talk about partitioning, which I mentioned briefly in episode 56 on mental accounting. This is essentially about how the way things are offered or packaged can either encourage or discourage additional purchases and actions. I will let you know how this works both for physical products and service businesses, and how you can use this concept within your business. Show Notes: [04:09] Partitioning has shown us that when you put tiny barriers into place, it causes a consumer to consider their options and be presented with a new decision point. [04:46] If you are sitting in front of the TV with a giant, party-sized bag of Cheetos in front of you…how much will you eat? It's likely you will eat more than you intend even if you don't realize it. [05:30] When food items are partitioned into smaller containers, and you're required to take an action like grab another one out of the box, it creates a new decision point. The small transaction cost will drastically reduce the number of people who will go get a second serving. [06:26] An experiment was done with bottomless soup bowls. A group whose bowl kept refilling, without them knowing it, ate 73% more. [07:55] Have you ever found that putting less on your plate and having to go back for seconds caused you to eat less? [09:10] Decision making opportunities increase awareness and the amount of cognitive processing used. [10:31] One study found that once something became common – like a white partition between cookies – it no longer acted as a partitioning mechanism. [11:52] It isn’t just effort that matters, but drawing the attention of the conscious brain really matters too. [13:03] Partitioning and aversion impacts can also be seen in gambling. [13:49] A gambling study featuring partitioned envelopes showed that once an envelope was opened…all the coupons inside were likely going to be bet, but the number of envelopes significantly impacted the total amount gambled. [15:50] Gamblers will think of house money differently and keep cash or chips in different pockets while playing. They have instilled their own method of partitioning, even if they don’t realize it. [16:43] In another study, people with a higher aversion to gambling were significantly impacted by the partitions. [17:57] Partitioning money has also been found to help people save more or spend less. [18:45] The Shopping Momentum effect is where once you start the process of spending, you are more likely to spend again until you hit a partition. [20:32] What does this mean for your business? It's not only impactful on eating and spending, but other behaviors are impacted. It doesn't need to be a physical item that needs to be opened or unwrapped. Any cognitive interventions can trigger partitioning. [22:11] Having an AC that shuts off automatically and you have to walk over and turn back on is a nudge to use less energy. [25:03] Anticipated regret can force you to rethink a decision and possibly change your mind. [26:56] Questioning the price of a customer's purchase is a lose-lose situation where adding a partition is worse for everyone involved. [27:08] It's easy to talk people out of a sale, or make them feel bad about a purchase (or start to regret it) even when you are trying to be helpful. [27:24] If you keep asking someone, “are you sure?” you are creating unnecessary partitions and of course they are going to say, “I guess not” at some point. [28:00] Setting up targets or progress markers, on the other hand, can be great partitions for a business to set up to keep on the radar of their current, past or potential customers. [29:06] Removing partitions and obstacles can be great for businesses and customers alike. [30:08] Schedule a follow up call and get on their calendar RIGHT THEN at the event. I do this all the time thanks to the advice of Sales Maven Nikki Rausch, and it has made such a difference. [32:10] Every piece, whether it is an email or a Facebook ad or a direct mailer should be clear and concise. Can someone look and very quickly know what they are supposed to do? What the next step is? Simplify to eliminate steps. [33:49] The moral: make it easy for people to do business with you. Remove unnecessary partitions in the process and everyone will be happier. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 57. 5 Things Your Business Must Learn from NASA These 5 Leadership Strategies Enabled NASA's Impossible Moon Landing. They Matter Now More Than Ever Episode 56. Behavioral Economics Foundations: Mental Accounting 14th Annual People's Choice Podcast Awards The Effect of Partitions on Controlling Consumption Episode 52. Biases – Math is Hard Bottomless Bowls: Why Visual Cues of Portion Size May Influence Intake A top Cornell food researcher has had 15 studies retracted. That’s a lot. Episode 21. Behavioral Economics Foundations: Habits Episode 51. Behavioral Economics Foundations: Time Discounting Episode 9. Behavioral Economics Foundations: Loss Aversion The Shopping Momentum Effect Episode 27. Behavioral Economics Foundations: The Sense of Hearing and Sound Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture Your Sales Maven The Selling Staircase: Mastering the Art of Relationship Selling

In honor of the 50 year anniversary of Neil Armstrong landing on the moon, we are going to talk about behavioral economics lessons you can learn from NASA! On July 20, 1969, Neil Armstrong descended onto the lunar surface and uttered those immortal words, "That's one small step for man, one giant leap for mankind." It’s hard to believe that was 50 years ago, and that – knowing what we know today about technology – that it was able to be done with the equipment they had available. Most anyone today would think it was impossible to have completed that feat in the 1960s. So the questions may arise – why then? Why the moon? Why did it matter so much? There are lots of lessons your business can learn from NASA during the space race. While your failures are likely not life or death situations and you may not be breaking world records at every turn, and this story unfolded half a century ago, I want to break down five areas where your business – no matter what industry you are in – can learn from the Mercury, Gemini and Apollo missions at NASA. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [05:40] On July 20, 1969, Neil Armstrong descended onto the lunar surface and uttered those immortal words, "That's one small step for man, one giant leap for mankind." [05:43] Most people today would think that would be an impossible feat with 1960s technology. [06:40] The cold war intensified as the Soviet Union launched Sputnik, the first satellite, into orbit in October 1957 – much to the shock of the United States. [07:19] This led to fear and essentially kicked off the space race. The National Aeronautics and Space Administration (also known as NASA) was created in 1958. [07:47] Kennedy really ratcheted up excitement and budget for NASA. [07:59] In Kennedy's famous speech at Rice University, he mentioned that the budget and taxes would be increased to accommodate the new space program.  [08:24] Overall, the Apollo program cost nearly 20 billion dollars – a third of NASA’s budget for those 13 years, so public interest was important to keep funding around for the program. [08:42] Kennedy also does a great job of priming and framing throughout the speech, and playing on the past victories and pride of the US, Texas and the city of Houston. [09:17] In the moon speech, he did great work to motivate the audience and the general public about the importance of the program and to encourage them to get behind the initiative. [10:53] Kennedy drew a line in the sand that helped launch the program. He also helped to overcome some hurdles by saying we CHOOSE to go to the moon. [12:02] Acknowledging our mistakes and hinting that the Soviets had mistakes helped to instill confidence and combat the availability bias. [13:24] Kennedy also made the task ahead relatable to the audience. [14:35] Kennedy's speech was truly amazing and inspiring. Everybody should read /watch it. [14:57] There are a lot of lessons that your business can learn from NASA during the space race. [15:47] 1) Look for problems (and solutions) [16:31] It would be impossible to think of every possible issue that could come up, but it was critical to think through as many of these pieces as possible. [17:01] Using challenges as inspiration is in direct competition with a bias humans are susceptible to called functional fixedness. [17:23] There are times in your business when this natural bias in your brain is doing more damage than you realize. [19:00] When the astronauts needed to fix their CO2 scrubber, they were literally faced with fitting a square peg in a round hole. Flight director Gene Kranz famously said, "I don't care what anything was designed to do--I care about what it can do."  Those on the ground were inspired to overcome their natural tendency toward functional fixedness to create an ingenious hack to save the lives of the astronauts over 100,000 miles away. [19:12] It's important to think through problems before they come up. [20:05] 2) Test and Retest (But Know When to Move) [20:34] Simulations and trial runs were critical. [21:38] They still moved forward instead of suffering analysis paralysis. [21:51] Narrow down your focus to one or two important goals. Break your goal into small tasks and set up tests to ensure they can be done. [22:35] 3) Autonomy and Support [22:53] The teams were united working toward a common goal, but they were also given the autonomy they needed to solve problems. [23:44] The leadership mindset came from the top down. [25:26] I always told my teams that I would support them in any decision they made and let them know how delegation was a sign of my trust in and respect for them. [26:19] In your business, do you delegate enough and trust your team to take on and really own your big vision? Do they feel supported to look for new options and innovative paths for you? [27:01] 4) Visibility Makes a Difference [27:21] The moon landing made the impact it did because of videos and photos cataloging it every step of the way.  Mirror neurons allow us to experience what we are seeing. [28:23] Are you making your important projects visible enough to rally the troops? While not everything needs to be put on video, and not every little detail needs to be shared with everyone…there is a lot of power in transparency. [29:13] Where can you share more – either via video or other communications – to ensure big goals and projects are remembered? [29:27] 5) Word Choice Matters [29:58] No one told Neil Armstrong what to say, or asked him what his first words would be when he stepped onto the lunar surface. The words he chose perfectly captured the moment, [30:00] What he said was easy to remember, poignant, and succinct. [31:31] Gene Kranz had countless quotes including, "failure is not an option." [32:11] The lesson for you as a leader, and within your business is this: in the moment, it may feel like word choice isn't critical. You may think you can always clarify, but the subconscious brain is picking up on so many millions of bits of information. It would take many words to undo the damage of not saying something properly. [33:12] As you move up the ranks in an organization, the words you use in everyday conversations matter much more than you realize. [33:50] I encourage you to be thoughtful each and every time, because the words you choose in any conversation could be the difference between changing the world forever, and just another day. [34:12] RECAP: Think about the ripples and look for problems before they come up so you can plan for them…and always be working on innovative solutions.  Break your goal into smaller tasks, and test each step before you move forward on the final goal (but make sure you actually do move forward) Let your teams know you trust and support their decisions, and that delegation is an extension of your belief in them Make big, important projects as visible and transparent as possible Take the time to choose the right words, because they might be famous quotes attributed to you one day! Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 56. Behavioral Economics Foundations: Mental Accounting @BethAMcAuley on Twitter Your Awards and Accomplishments Don't Mean Anything to Your Customers Unless You Talk About Them in This Way Episode 16. Behavioral Economics Foundations: Framing @thebrainybiz on Twitter The Brainy Business on Facebook The Brainy Business on Instagram The Brainy Business on YouTube 14th Annual People's Choice Podcast Awards Apollo 1's Fatal Fire Almost Ended the Program | Apollo John F. Kennedy Moon Speech - Rice Stadium President Kennedy's Speech at Rice University Episode 18. Behavioral Economics Foundations: Priming ‘No university is more synonymous with NASA than Rice’ How The Cold War Launched The Space Race Episode 15: Behavioral Economics Foundations: Availability Episode 24. Behavioral Economics Foundations: Sense of Sight Episode 27. Behavioral Economics Foundations: The Sense of Hearing and Sound Episode 54. Biases Toward Novelty and Stories NASA History Overview Immunity to Functional Fixedness in Young Children NASA Johnson Space Center Oral History Project Edited Oral History Transcript This is the actual hack that saved the astronauts of the Apollo XIII Lessons in Manliness from Gene Kranz My Everyday Extraordinary The Apollo 13 Accident Episode 29. Resolutions and Keeping Commitments Careers at NASA: Explore the Extraordinary, Every Day Fierce Conversations: Achieving Success at Work and in Life One Conversation at a Time Episode 31. Mirror Neurons

Hopefully, you tuned in last week for the special anniversary episode, where I went over the top episodes by downloads, your votes and some of my favorites. I also gave some of my book recommendations and a sneak peek behind the scenes with the top questions I get asked, the weird thing I hear all the time now…and so much more. Today, we are back into the swing of things with a behavioral economics foundations episode on mental accounting. This concept was mentioned briefly in the biases series, but today we are going to dig into what this really is and just how much it impacts our approach to money, risk, time and more. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [05:02] The concept of mental accounting was introduced by nobel prize winner Richard Thaler, and is based on humans’ illogical approach to value in relative terms instead of looking at it as an absolute. [05:31] Three examples by Richard Thaler of mental accounting.  [07:41] These are all examples of the way that mental accounting can impact the decisions we make. [08:17] Money and accounts should be perfectly fungible (that is an economics term for interchangeable). It shouldn’t matter if money was in a savings account, or a checking account or your pocket or a 401k…it would all exchange exactly the same. [09:32] Our brain segregates when thinking about money. This is one of the reasons the field of behavioral economics was needed…traditional economics does not account for the importance of this phenomenon. [10:10] The three ways money is commonly labeled: expenses are grouped into budgets like food, rent, and entertainment. Wealth is separated into accounts (checking, emergency or “rainy day” funds, and retirement). And lastly income is looked at in categories: namely regular or windfall. [12:35] Much like regular accounting, in mental accounting, individuals will book and post any occurring or planned transactions to the mental account. [15:59] When businesses are reporting their year-end earnings and losses, they always want to have a positive year end, which could make it tempting to hold on to losses until the next year. [16:42] If you are looking like you are going to have a bad year and have no option but to take a loss, general wisdom is to throw in as much negative and expense as you can. If it is going to be negative, might as well have it all come in at once. (Known as “taking the big bath”) [17:13] Adding a small amount to an already large payment doesn’t feel the same as having that payment on its own. This is because of decoupling – where you remove the pain of the payment away from the joy of the purchase. [18:28] There are some times where people significantly prefer to prepay over delaying their payments. Vacations are enjoyed more when they are prepaid because they feel free. [24:10] The way the consumer uses their mental accounting transforms something that can be very expensive hobby (like wine collecting) into one that is seen as free. [25:24] People can and often do plan for expenses in one way and experience it completely differently in the moment. [26:57] Internalize how the brain is wired to make its decisions around mental accounting. Think about how this has impacted you and how it can impact your customers. [27:52] Expenses are thought about in budgets, and wealth is considered in accounts. [28:03] The most tempting and easiest accounts to spend from are the current assets, this is your checking account and physical cash. [28:13] It's less tempting to spend from the current wealth category, which is made up of other liquid assets – savings accounts, stocks, bonds, and mutual funds. [28:33] The next, even less tempting category is equity (like that in a home or car you own). Future income is the least tempting category. These are your retirement accounts. [29:27] Those who have issues with self control should set up accounts that are off limits and put together automatic transfers so they are not tempted. [31:03] An example of losing a movie ticket and losing $10 that shows when the loss is associated with the outing to the movies, it is aversive, but when it is not associated with the outing, it is still annoying, but doesn’t impact the mental account for the movie. [31:22] Money that you earn in your paycheck is considered different than money you win in the lottery or find on the ground. [32:58] How will the mental account allocation impact the way the gift is used? And how does that line up with the intention behind the gift? [35:54] While losses should be lumped together, gains should be separated out to really feel their value - don’t wrap all the Christmas presents in one box.  [36:26] Brands can use mental accounting to their advantage in the way they advertise products. How can you use this frame on mental accounting in your business? [37:03] Mental accounting impacts more than money.   [39:43] Context is important in the way that people react. [42:53] Being aware of how the sausage is made can impact your enjoyment of it. Keep this in mind when you present pricing to customers. [43:10] One other scarce resource impacted by mental accounting is time. [43:41] Labeling time as only in the “family time” account makes it so “work time” isn’t even in the consideration of what to do on Saturday morning.  [45:20] Are there times where you are wasting high value productive time? Take a step back and think about how you could better allocate your mental time account. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Episode 55. Special Anniversary Episode: Celebrating the First Year of the Podcast Episode 45. Overview of Personal Biases The Brainy Business on Facebook The Brainy Business on Instagram The Brainy Business on YouTube Always Leave Home Without It: A Further Investigation of the Credit-Card Effect on Willingness to Pay A 1-minute clip from a Dustin Hoffman interview sums up the life’s work of a Nobel-winning economist Episode 16. Behavioral Economics Foundations: Framing Bank of America Keep the Change Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 51. Behavioral Economics Foundations: Time Discounting The Red and the Black: Mental Accounting of Savings and Debt Invest now, drink later, spend never: On the mental accounting of delayed consumption Mental Accounting Matters Choices, Values, and Frames Episode 30. Booms and Busts Episode 8. What is Value? Here’s what the average NFL player makes in a season Mental Accounting and Consumer Choice Episode 5. The Truth About Pricing

Welcome to season two of The Brainy Business. This episode is a special anniversary episode celebrating the first year of the podcast. I can’t believe it has been a full year already. Year one brought us 54 episodes with over 60,000 downloads in 133 countries around the world. So  much has happened this year. I’ve made amazing connections to listeners in person and on social media. I’ve had conversations with academics, students, business owners, and marketers. I also launched my column on Inc.com Today, I’m going to share the top ten episodes by downloads, some of your favorites – with clips from the audiograms you submitted, and a few of my favorite episodes – including which ones I share the most. I will also give some looks behind the scenes, with the top questions I get asked, the funniest thing people say to me now (that I had never heard before becoming a podcaster), my favorite books, and more. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [05:43] An audio clip featuring Nikki Rausch of Sales Maven. [06:06] The Business Bros are early adopters and find this podcast instrumental in their marketing. [08:59] I share the top 10 podcasts based on your downloads. [09:40] A message from Maureen about episode 43 and how she benefited from a discovery call and then working together.  [13:15] Number 9 on the countdown was episode 42: A Behavioral Economics Analysi of Apple Card. [14:54] Episode 32 was one of my favorite episodes, and it includes the chocolate cake study. This one is about The Overwhelmed Brain, and I play a quick clip from Debby. This was also the first episode where I referenced the Texas A & M Human Behavior Lab. [19:27] Episode 3 about lead magnets was number 7. This was based on a popular video I did before the podcast launched. [21:03] Episode 47: The Behavioral Analysis of Costco was number 6. I have some more fun business analysis shows coming up. [23:16] Episode 35, which was The Introduction to Choice Architecture and Nudging. This episode is where I first started using my air conditioner example. This is a really intricate and complex topic. It's critical for any business to understand the complexity of choice. [27:03] Episode 45: An Overview of Personal Biases was the fourth most downloaded episode. I was a bit nervous launching into this rapid fire series.  [29:10] Number 3 was episode 5: The Truth About Pricing. I also play a quick clip by Kadra who I was fortunate enough to work with. [32:47] The second most downloaded episode of all time is episode 2. This episode was the Top 5 Wording Mistakes That Businesses Make. Because of this episode I am now associated with cotton candy grapes. [34:40] Number 1 is also Episode 1: Unlocking the Secrets of the Brain. I write out full scripts for my podcast. I discovered this was the best way to work after episode 1 and 2 had to be recorded multiple times each.  [37:38] Episode 11: Anchoring and Adjustment was also really popular. This is the episode with the story about the 38% increase of sales in Snickers. [38:48] Episode 23: Reciprocity and Episode 31 on Mirror Neurons were also popular with listeners. I got to talk about Sheldon Cooper and the Big Bang Theory in episode 23 (which I love). Mirror neurons are so fascinating and one of my favorite topics. [41:39] Kelly Ferguson, of Ferguson Avenue Photography said via Facebook that episode 8, What is Value? is her favorite. It was so much fun to come up with examples of what creates real value.  [42:48] An episode I recommend  often is episode 16 on Framing. I also recommend episode 19 on Herding and episode 17 The Power of Numbers.  [44:00] I also loved talking about Time Discounting and my interview with Texas A & M. My online strategy session was also a favorite.  [44:53] I also loved the episode on Booms, Bubbles and Busts because it was really fun to talk about tulips and Beanie Babies. [45:13] The last episode I want to talk about is episode 9 which was my very first foundations episode on Loss Aversion. I was concerned the foundations episodes would come across as too academic, but people loved them. [47:40] Where we hang out: A lot of people listen to the podcast on their commute or while walking their dogs. Some listen at the gym. One listener even listened while running a marathon. I'd love to hear where we hang out. [52:06] My rapid fire book recommendations with links below. [55:05] A quick shout out to the team at Pro Podcast Solutions.  [55:20] I record my episodes with a USB microphone in my home office.  [56:06] Brain is a custom creation made from a model. I added a little purple paint and we have Brain.  [57:02] Thanks again for making this year beyond what I could have imagined.  Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.  Links and Resources: Melina Palmer Behavioral Economics and Business on Inc. Your Sales Maven Business Bros Podcast Episode 43. A Guide for You to Create a Brainy Brand Episode 42. Apple Card: A Behavioral Economics Analysis Episode 32. The Overwhelmed Brain and Its Impact on Decision Making Episode 3. Do Lead Magnets Work and Do You Need One? Episode 47. A Behavioral Economics Analysis of Costco Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture Episode 45. Overview of Personal Biases Episode 5. The Truth About Pricing Episode 2. The Top 5 Wording Mistakes Businesses Make Episode 1. Unlocking the Secrets of the Brain Episode 49. Present Versus Future Biases Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment Episode 23. Behavioral Economics Foundations: Reciprocity Episode 31. Mirror Neurons Episode 8. What is Value? Episode 19. Behavioral Economics Foundations: Herding Episode 17. Unlocking the Power of Numbers Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 51. Behavioral Economics Foundations: Time Discounting Episode 30. Booms and Busts Episode 33. Inside the Texas A&M Human Behavior Lab Episode 10. On Air Strategy Planning Session with Mariel Court A More Beautiful Question by Warren Berger Predictably Irrational by Dan Ariely Nudge by Richard Thaler Thinking, Fast and Slow by Daniel Kahneman The Buying Brain by Ak Pradeep Simpler by Cass Sunstein The Choice Factory by Richard Shotton The Invisible Gorilla by Christopher Chabris and Daniel Simons Pre-suasion by Robert Cialdini

Today is our last episode in the series on biases – and the last episode of the first year of the podcast! Can you believe it? A whole year of behavioral economics and business. A lot has happened over this year and I look forward to sharing that in next week’s anniversary episode. Today’s episode closes out the series on biases by talking about our brains’ penchant for novelty and story. You probably know that people remember better when they hear stories, and that they pay more attention, but this will explain the concepts of our brain that make it the case for everyone - and how you can use it in your business to be more effective. Show Notes: [04:00] Our brains like things that stick out or are different. This is called the bizarreness effect because things that are bizarre are remembered better than more common stuff. [05:13] We are also more likely to remember funny things compared to those that are not humorous due to the humor effect. [06:32] Incorporating humor into messaging is not always easy. If it is not done right and feels staged it can be detrimental to any brand. [07:32] Due to pareidolia our brains are primed to see faces in pretty much everything. No matter how vague or random the stimuli, it can be seen as significant when our brain gets a hold of it. [08:14] Illusory correlation is an inaccurate memory about the relationship between two different things. [09:17] Seeing faces on houses, trees, cracks in the sidewalk or whatever else (pareidolia) are deeply rooted in our love of story and of novelty. [10:51] Our brains’ appreciation for stories impacts so much of everything we do. We often tell ourselves stories about other people because it helps us to understand them. [11:07] Due to the empathy gap, we are likely to underestimate how much feelings will influence decisions and how strong they can be – this occurs both for ourselves and for other people. [12:48] Due to the identifiable victim effect, people tend to have a lesser response to a large group of people than they do to a single person. [13:58] Giving a specific story can help form a picture in their brain, which means they are more likely to remember you in the future. [14:39] Survivorship bias is a way we can remember and focus on those who survived and ignoring everything else because it is less visible.  [16:14] If you are not thinking about where survivorship bias could be impacting your analysis, you could be doing a huge disservice to your business. [16:33] The just world hypothesis is where we want to believe the world around us is fundamentally just, and we will rationalize some injustice that is otherwise inexplicable as being deserved by the victim. [17:20] Moral luck is the tendency for someone to use the outcome of an event to assign moral standing even when it is likely unrelated. [18:07] Authority bias is where we are more likely to believe and be influenced by the opinion of someone in authority. [20:35] The Ben Franklin effect shows that if we have done a favor for someone, we are more likely to do a second favor for them. [22:03] Social desirability bias is where we want others to see us in the best possible light, so we will likely overreport our own socially desirable behaviors and characteristics, while we will under report them for everyone else. [22:30] The courtesy bias is where we share opinions that are more socially acceptable than our true thoughts and feelings so we do not offend anyone. [22:47] Because of omission bias we will judge actions (also known as commissions) more harshly than inactions (or omissions) even if they are more harmful than taking an action. [24:18] The backfiring effect is when we have done something good, and are therefore more likely to allow ourselves to do something bad. [25:33] The stories we tell ourselves are impacting the decisions we make all the time, and it doesn’t have to be as dramatic as these studies have made it out. [25:56] Once you understand how these biases impact you and your life, think about how it impacts the opinions others have of you (and you have of others). Then think about how understanding them can help you to make better decisions. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show.   Links and Resources: Melina Palmer Behavioral Economics and Business 1 Simple Brain Trick That Can Help You Overcome Self-Doubt Forever The Brainy Biz Facebook Page @thebrainybiz on Twitter The Brainy Biz on Instagram Behavioral Economics Foundations: Anchoring and Adjustment 12 Examples Of Pareidolia Simulating Pareidolia of Faces for Architectural Image Analysis Episode 24. Behavioral Economics Foundations: Sense of Sight The J. Paul Getty Museum Episode 19. Behavioral Economics Foundations: Herding Episode 34. Behavioral Economics Foundations: Optimism Bias Episode 18. Behavioral Economics Foundations: Priming Missing what’s missing: How survivorship bias skews our perception | David McRaney | TEDxJackson Moral Luck CFP Board Commercial Can You Tell the Difference 30 second TV Ad Episode 23. Behavioral Economics Foundations: Reciprocity The Omission Bias in Sports A Meta-Analytic Review of Moral Licensing Do Green Products Make Us Better People? Moral Self-Licensing: When Being Good Frees Us to Be Bad Episode 45. Overview of Personal Biases Episode 46. Biases Toward Others – Including Groups Episode 48. An Overview of Memory Biases Episode 49. Present Versus Future Biases Episode 50. Selective Attention Biases Episode 52. Biases – Math is Hard Episode 53. An Overview of Lazy Brain Biases

We are getting near the end of our eight week series on all the biases. There is just one more to go after this one, which is about how our brains are biased toward novelty and stories. The first six episodes in the series, which are linked in the show notes, were on personal biases, how we are biased toward others (both individuals and groups), memory, present versus future, selective attention, and last week was all about how math is hard. Turns out we aren’t so good with money, value, numbers, games and probabilities. So, why do we take shortcuts or accept something as a fact without actually doing the investigative work behind it? It all has to do with our lazy brain. The truth is we have the power to use our brains however we want. Learning some of the lazy brain biases will help us use our brain more efficiently in our life and our businesses - or at least help us understand the science behind some of our choices.  Show Notes [04:58] The default effect, which was covered in episode 20 and again in episode 38 as part of the series on nudges. We humans are most likely to choose a default option when we are provided one, whether it is in our best interest or not. [05:39] Due to the decoy effect someone’s preference for a choice or product will change based on the options that are presented. [08:05] We have an automation bias, which leads us to have an excessive dependence on automated systems, this can create a situation where those automated decisions override the choices of individuals that would be more correct and accurate. [08:43] There are lots of things automation can’t do properly, so it is important to be thoughtful and take a look under the hood every now and then. [09:08] The law of the instrument, where we are overly reliant on a familiar tool. The old adage to explain this is, “If all you have is a hammer...everything looks like a nail.” [09:26] Functional fixedness is where someone is limited to using an object only in the way it is traditionally designed or expected to be used. [09:49] Our businesses would be best served if we could look at a problem in a new way, from a new angle, and find a new approach. [10:49] A great example featuring the Apollo XIII story. [11:54] Our brains are looking for the easiest answer and solution most of the time, the way the information is presented – or the frame – can determine what actions we take. [12:44] When I talk about anchoring and pricing I always recommend to start with the highest price first. [13:00] The contrast effect makes it so different stimuli are viewed differently based on what was seen just before it. [14:12] Interoceptive bias is when we believe that input from our senses are used to influence our external decisions. [15:22] The ambiguity effect is when we avoid options and choices where we don’t know the odds or likelihood of the outcome in advance, and we would rather choose an option with bad odds that we happen to know, than go down the unknown path. [15:55] Action bias is where we take an action to feel like we are in control of something. [17:38] There are two versions of illicit transference. The fallacy of composition is when you assume things about a group because of one person you have interacted with. The fallacy of division is where you determine each individual must be like the whole group. [20:59] When we are presented with tasks that are particularly daunting, we may become a victim of Parkinson's law of triviality, which is also known as bikeshedding. This is when trivial issues are given way too much weight and we can get stuck on the small stuff to avoid fixing the big stuff. [23:03] Lag effect is how we learn better if our studying is spread out over time instead of trying to cram it all in during one session. The levels of processing effect is where not all methods of putting information into our memory have the same level of effectiveness [24:07] The list length effect is where we can remember more items when given a longer list. Our brains are only as lazy as we allow them to be. [24:56] Take a limiting belief that you have and push the limits. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Episode 45. Overview of Personal Biases Episode 46. Biases Toward Others – Including Groups Episode 48. An Overview of Memory Biases Episode 49. Present Versus Future Biases Episode 50. Selective Attention Biases Episode 52. Biases – Math is Hard Leave an Audio Review or Talk With Me Episode 20. Behavioral Economics Foundations: Defaults Episode 38. Behavioral Economics Foundations: The D in NUDGES – Defaults Episode 12. Behavioral Economics Foundations: Relativity Predictably Irrational Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment The Greatest Space Hack Ever This Is the Actual Hack That Saved the Astronauts of the Apollo XIII Apollo Expeditions to the Moon - A Square Peg in a Round Hole Episode 16. Behavioral Economics Foundations: Framing Episode 18. Behavioral Economics Foundations: Priming Action Bias Among Elite Soccer Goalkeepers: the Case of Penalty Kicks Action Bias and Environmental Decisions The Inaction Effect in the Psychology of Regret Episode 19. Behavioral Economics Foundations: Herding Episode 17. Unlocking the Power of Numbers Episode 5. The Truth About Pricing Episode 21. Behavioral Economics Foundations: Habits

Last week we got to finally have the episode on time discounting, which was very exciting for me because as many of you know, it is my all time favorite concept. As you learned in episode 51, I call it the “I’ll Start Monday Effect” because it is the bias behind all the times we commit ourselves to do something in the future (like starting a new exercise program on Monday) and when we wake up…we feel like a completely different person and hit snooze. As you have heard me mention on the show many times before, our brains are lazy, and they like to take the path of least resistance to get to what they believe to be a “good enough” answer as quickly as possible. We will get into that in more detail next week, but today I want to talk about how that impacts our interactions with numbers and math. Most people think math is hard and our brains are particularly lazy when it comes to hard stuff, so we often risk being wrong rather than take the time to do the numbers. I dive deep in the fascinating whys and why nots of this phenomena. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes [04:34] Our brains are lazy, and they like to take the path of least resistance to get to what they believe to be a “good enough” answer as quickly as possible. [05:54] Our brains make lots of assumptions based on the little bit of information they are looking at. This combines with our brain’s natural tendency to believe everything it learns to be TRUE first and ask questions later. [06:27] Because we are particularly lazy when it comes to math, we rely on the source of whatever is thrown our way, and the brain would rather risk being wrong than to take the time to do the numbers in everyday interactions. [07:27] Because of unit bias, you may have assumed the amount you serve yourself matches the intended serving size. [09:00] Calories are the main comparison people make when thinking about cereal. Most people don't take the time to do the actual math involved in the serving size. [09:54] Due to the less is better effect, our preferences change when we evaluate things alone versus comparing them against others (this is relativity in action). [11:16] Great quote from Thinking Fast and Slow, (which was actually a quote from Paul Rozen, an expert in disgust) “a single cockroach will completely wreck the appeal of a bowl of cherries, but a cherry will do nothing at all for a bowl of cockroaches.” [11:48] MONEY AND VALUE Due to the money illusion, we tend to concentrate on the nominal or face value of our money, instead of thinking of it in terms of how much it can get for us. [12:09] Due to the denomination effect we are more likely to spend money in smaller denominations than when it is in bigger ones. [12:53] We still do a lot of mental accounting. This is where we think money in different places or accounts is not all accessible in the same way. [13:33] Why is $1000 not the same everywhere? Consider all the ways this is good and bad. [14:37] Due to the IKEA effect (yes, that is its actual name) people will value things more that they made themselves or partially assembled. [15:13] The endowment effect is where we value things we own more than things we do not. [15:43] For your business, remember that making people feel like they came up with the idea makes them more likely to support it. [16:11] Due to the Zeigarnik effect we will remember the tasks we did not complete – or where we were interrupted – better than the tasks we did complete. [16:43] Due to the disposition effect we humans will tend to sell assets that have accumulated in value and hold onto those that have declined in value. [17:29] Because of our time saving bias, when going at a relatively low speed, we underestimate the amount of time we could save by speeding up or lose by slowing down. [18:14] Perspective can make a huge difference for good and bad. [18:40] Duration neglect. This likely combines with the IKEA effect where we forget the 8 hours it took to put together that simple bookshelf and just see the glorious thing we have created. [20:05] Well-traveled road effect. We underestimate how long it will take us to go on roads or routes we have taken a lot, and overestimate how long it will take to go on less familiar ones. [21:37] GAMES AND PROBABILITIES The hot hand fallacy. ​It's a myth that “hot hands” are going to continue to defy the odds. [22:18] The clustering illusion is where we see phantom patterns and overestimate the importance of small streaks. [22:40] This is a lot like the gambler’s fallacy. This is where we think the past has any impact on the future probability. [23:50] We are biased toward having zero risk if we can. This is much like ambiguity aversion, or uncertainty aversion, people are more likely to prefer the things we know. [25:46] Neglected probability territory is when we are uncertain about the options or outcomes and need to make a decision we completely disregard everything we do know about probabilities. [26:12] Berkson's paradox is where someone will misinterpret statistical experiments when the probabilities are conditional. [27:11] Due to the subadditivity effect, we judge the probability of the whole to be less than the probability of its individual parts. [27:41] Insensitivity to sample size, which is where we don’t properly anticipate the variation that will show up in small samples. [28:04] Weber Fechner Law which is when we find it difficult to compare and see small differences among large samples. [29:38] Melina shares a story from Thinking Fast and Slow. [33:31] Everything we know to be true is not necessarily true. We need to step back, flex, and relax. Try to take an objective look at your business processes. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Episode 51. Behavioral Economics Foundations: Time Discounting @atubanos on Twitter Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment Episode 16. Behavioral Economics Foundations: Framing Less Is Better: When Low-value Options Are Valued More Highly than High-value Options Episode 12. Behavioral Economics Foundations: Relativity Thinking Fast and Slow Episode 45. Overview of Personal Biases Episode 30. Booms and Busts The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence Episode 49. Present Versus Future Biases Treatment Decisions Under Ambiguity Ambiguity and Nonparticipation: The Role of Regulation Risk, Ambiguity, and the Savage Axioms Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture Statistics How To Episode 49. Present Versus Future Biases How to Feel Like You Have All the Time in the World (even If You Don’t)

Today, we are getting back to our behavioral economics foundations episodes to discuss time discounting. I hope you enjoyed the last three episodes in our series on all the biases, where I told you about memory biases, our biases toward the future and how that impacts our decisions today, and how our selective attention and focus can color our decisions. Time discounting is one of my favorite concepts. I recently did a research project centered around the concept of time discounting and saving money, and there is a white paper about it coming out this summer. Time discounting is the basis behind a lot of the future versus present biases which I talk about in Episode 49. In this episode, we will learn all about time discounting and why I love it so much. I tell people to think of time discounting as the “I’ll start Monday effect.” In this episode, you’ll learn why. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes [07:30] Have you ever said you would start your diet, or exercise plan, or quit smoking, or be more organized or whatever it is… “on Monday”? [08:58] So, what happened? Why do you feel like a completely different person when the alarm goes off than the person who set the alarm the night before? [09:26] When we think about ourselves, a certain part of the brain lights up, and it does this differently when we are thinking about ourselves versus thinking about someone else. [10:05] For most of us (and especially for particularly impatient people) when we talk about our future self, the brain lights up as if it is talking about a completely different person! [10:34] It's easy to talk about our future selves doing something early in the morning, but when the alarm goes off it's actually us who is waking up. [11:08] We have a hard time judging what is best for us today from what is best for us tomorrow. [12:30] We aren’t inherently good are bad at this...more like we are great at this in some situations but terrible at it in others. [12:54] When looking at this from your business perspective (and in understanding more about yourself…which we will talk about both later on in the episode) try to think about the concept in general and how it could apply to you, your peers and current or potential customers. [13:16] The term hyperbolic time discounting shows us that the way we discount is not consistent over time, and studies have found it does not occur at a rate that is constant or linear. [15:40] Our lazy brains (which is the topic of an upcoming bias episode) don’t take the time to do all this logical thinking, and the subconscious wins out with its present-focused mentality. [16:10] Think of some of the ways that time discounting has affected you, because I'm sure it has come up in many ways. [17:14] Just because it is hardwired doesn’t mean you can’t change it. On the contrary, understanding how this concept works and how it is genetically conditioned in your brain allows you to set up a sort of brain hack so you can work WITH your brain to change and accomplish your goals. [19:46] If a client came to me with this problem (of helping employees save more for retirement), the first thing I would do is recommend we dig into the current plans. What are the offering, how do they present it to employees, when do they get it, what are the options, how difficult is it, etc. And then I would remind them that just because a plan has always been set up a certain way…doesn’t mean it is the right way or that it has to stay that way. [21:35] One other question to consider when thinking about the power of time discounting is opting in versus opting out. Forcing people to choose more often and consciously think of what they are doing does not always encourage them to make better decisions. [23:11] It's easy for the brain to commit when it is in a cold state. [25:17] BRINGING TOMORROW TO TODAY One other way to make the future self of you and your customers to be more visible in the present, is to look at renderings. Consider how you could help someone make tomorrow more real today with the help of technology. [30:02] OTHER BUSINESS EXAMPLES I once worked for a company that changed the review process for managers so that every manager’s ability to get their full raise potential was dependent upon having their reviews done in a timely manner. [32:43] ​I also used to encourage my employees to keep lists of all their accomplishments throughout the year and would reach out to them a month before their review to let me know what they were especially proud of. [33:30] ​I would also recommend for companies to not stack reviews so they are all needing to be completed at once. [37:37] ​Vagueness can produce inaction even when people are informed about risks and potential improvements. What can you provide to your staff to help them find the blood drive or voting booth or get their flu shot? [39:03] Making the experience real and actionable (you can picture that today even if your day/time is not for a week or so) makes it more real. This also activates mirror neurons. [40:12] Every customer who is not signed up for a recurring plan with you of some kind is having to take on some sort of action and give up their precious money to do business with you. [42:00] If you have people delaying to buy for whatever reason, think about why they are putting off the decision. [42:48] The brain wants the benefit now, so make it as easy as possible to say yes when they are on the fence. [43:27] The next example is a little taste of what I did in my research project with the credit union in Oregon. [44:25] Constant reminders of saving keep it on your brain. [45:24] One thing many of us do is set far too many goals for ourselves. Due to our optimism bias, we think we can do a lot more than we really can. One reason we have an optimism bias is because of time discounting. [47:13] If you only had one top priority to get done, you would be much more likely to accomplish it. [48:07] You can use loss aversion to motivate your clients by putting money in a jar if they keep their commitment, but if they don't they lose it all. This makes future consequences tangible today. [49:26] When you are looking for ways to apply the solution to time discounting, it doesn’t have to be directly related to the thing that is causing the delay. [52:53] I want to help everyone realize their future dreams by taking the right actions today - how can we work to combat time discounting in your business? Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Episode 48. An Overview of Memory Biases Episode 49. Present Versus Future Biases Episode 50. Selective Attention Biases Episode 19. Behavioral Economics Foundations: Herding Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment Buffalo Seamery on Instagram Impulsivity and Cigarette Smoking: Delay Discounting in Current, Never, and Ex-smokers. Time Discounting and Time Preference: A Critical Review Increasing Saving Behavior Through Age-Progressed Renderings of the Future Self Golden Eggs and Hyperbolic Discounting Initial Examination of Priming Tasks to Decrease Delay Discounting Unstuck in Time: Episodic Future Thinking Reduces Delay Discounting and Cigarette Smoking Simpler: The Future of Government by Cass Sunstein Episode 21. Behavioral Economics Foundations: Habits Episode 22. The Power of Habit Nudge: Improving Decisions About Health, Wealth, and Happiness Implementation Intentions: Strong Effects of Simple Plans. Procrastination, Deadlines, and Performance: Self-Control by Precommitment The Power of Small Wins Episode 20. Behavioral Economics Foundations: Defaults Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture Episode 32. The Overwhelmed Brain and Its Impact on Decision Making Episode 19. Behavioral Economics Foundations: Herding Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving Episode 9. Behavioral Economics Foundations: Loss Aversion Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving Oldify - Age Your Face Change My {FACE} Human Behavior Lab About the Research Episode 36. Behavioral Economics Foundations: The N in NUDGES – iNcentives Episode 39. Behavioral Economics Foundations: The E in NUDGES – Expect Error Episode 31. Mirror Neurons Episode 34. Behavioral Economics Foundations: Optimism Bias

This has been an amazing month as I spoke at eight different events across the country on 6 different topics, from pricing to change management, why consumers are weird and how behavioral economics is the future of branding. I love speaking at events like this and want to welcome all of you who are joining the podcast after hearing me speak at one of those events. I had so much fun getting to know and interact with many of you, and want to thank you for listening. Welcome to The Brainy Business Family! What do I mean when I talk about “selective attention” biases? If you have been listening to the series so far, you know we have talked about how our brains are biased toward ourselves, the way we think about others, our memories, and past versus future. Today, we are going to dig into all those biases that have to do with how we focus our attention and how that can color our impression of the world around us. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [00:04:25] We are going to dig into all those biases that have to do with how we focus our attention and how that can color our impression of the world around us. [00:05:34] I have broken selective attention into three categories: where we focus our attention, how that impacts the decisions we make, and how it colors our perception when looking back. [00:05:54] The most common concept and one I am guessing you are very familiar with even if you don’t know the name of it, is called the frequency illusion, selection bias or the Baader-Meinhof effect. This is where after something comes to our attention it seems to be everywhere. [00:07:30] The recency illusion which would be if I thought the phenomenon of the word “panacea” being everywhere is because it is a brand new word everyone has just started using (instead of a word that was recently introduced to me). [00:08:30] This is similar to availability, which was the focus of episode 15. We humans put more weight and importance on things we can recall easiest. [00:09:43] This can lead to the availability cascade, which is a self-reinforcing process where hearing and seeing something more and more makes it feel more and more true or real. [00:10:14] Once we become familiar with things or concepts, we are much more likely to like or believe them because of the mere exposure effect. [00:10:53] Selective perception is when our expectations impact the way we perceive things. For example, if you expect a sales call to go badly, it probably will. [00:11:53] This is very similar to attentional bias, which is when our perceptions are impacted by recurring thoughts and the focusing effect, which is when we place too much importance on one aspect of an event. [00:14:12] The Von Restorff effect, is where something that sticks out is more likely to be remembered than everything else. [00:16:09] Due to the rhyme as reason effect, we believe statements that rhyme to be more truthful than those that don’t. [00:16:45] Due to the belief bias, we also base the logical strength of an entire argument on the believability of the conclusion. [00:17:26] We also tend to focus on specifics and think they are more likely to happen than general conditions because of conjunction fallacy. [00:18:39] Base rate fallacy or base rate neglect, where we tend to ignore generic or general information (also known as base rate information) to focus on more specific information that only pertains to a certain case. [00:20:13] Exaggerated expectation is where people tend to predict and expect more extreme outcomes than what actually happen. [00:20:46] DECISIONS MADE: Our brains get what they expect. Because of the Semmelweis reflex, people tend to reject new evidence that contradicts their perspective, paradigm, or expectation. [00:21:27] Experimenters or expectation bias is the tendency for someone to believe, certify, and publish data that aligns with what they expected to see. [00:22:46] Illusory correlation is when someone will inaccurately perceive a relationship between two unrelated events. [00:23:40] Subjective validation ​is where someone sees something as being true if their previous beliefs demand it to be true. [00:24:09] Biases can lead to the backfire effect or the continued influence effect, which is when someone will disconfirm evidence that is presented by strengthening their previous beliefs. We also suffer from confirmation bias, which is when we search for, interpret, remember or focus on information that confirms our preconceptions. [00:25:16] The size of the space being searched can cause the researcher to observe something statistically significant that actually wouldn’t be if the parameters had been set correctly because of the look elsewhere effect. This is similar to congruencies bias, where someone will directly test their hypotheses instead of testing possible alternatives. [00:27:25] Information bias is when we keep seeking more and more information even when it can’t affect our actions. Distinction bias is when you are comparing two things at once you are more likely to see what is different about them (than if you evaluate each on its own). [00:28:51] Due to hindsight bias or the “I knew it all along effect” we tend to see past events as being more predictable than they actually were. [00:29:22] Outcome bias is when we judge a decision based on the outcome instead of the quality of the decision. [00:29:57] The misinformation effect is where memories are less accurate because of information that comes about after the event is over. [00:30:20] Consistency bias is where you remember your past attitudes and behavior as in alignment with the way you think and feel now (even if you didn’t feel that way at the time). Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Episode 45. Overview of Personal Biases Episode 46. Biases Toward Others – Including Groups Episode 48. An Overview of Memory Biases Episode 49. Present Versus Future Biases Episode 15: Behavioral Economics Foundations: Availability Judgment under Uncertainty: Heuristics and Biases Availability: A Heuristic for Judging Frequency and Probability OJ Simpson Murder Trial: "If It Doesn't Fit, You Must Acquit" Episode 19. Behavioral Economics Foundations: Herding Episode 30. Booms and Busts Thinking, Fast and Slow The Base-Rate Fallacy in Probability Judgments Episode 4. Questions or Answers Calendly Acuity Schedulicity

This episode is about present versus future biases. This is part 4 of our 8 part series about biases. We've already talked about personal biases, how we think about ourselves versus other people, and memories. When it comes to present versus future, people want their payoffs now, so humans tend to place a greater weight on the outcome that is closer to now. Other things that impact our decisions include losses and risks. We are impacted more by losses than gains. We are also biased towards maintaining the status quo. I talk about optimism bias and even pessimism bias. When you know the rules of the game, it can be easier than you think to trick your brain into doing more in your favor – whether it is making choices today that you will appreciate tomorrow, or helping to get yourself out of a negative spiral. This episode will help you understand why we tend to make decisions a certain way and enable you to make better decisions for your business and your life. Show Notes: [04:10] People want their payoffs as quickly as possible. We place greater weight on things that happen closer to now. [04:31] This is closely tied to time discounting (what I call the “I’ll start Monday effect”). [04:39] We tend to make decisions today that our future self may not be as happy about. [05:39] Due to diversification or projection bias, we may think our future self will want more variety than we really want or will use. [06:07] You think you'll want options that are more virtuous - could be related to optimism bias. [07:14] Due to impact bias, we overestimate the duration of intensity of the impact of how we will feel in the future. [07:50] We are also victim to projection bias, which means we overestimate how much our future self will share the preferences we have today. [08:34] Reactance is the urge to rebel and do the opposite of what someone wants you to do to hold on to some form of control and power. [10:44] Irrational escalation – also known as the sunk cost fallacy – where people will keep spending and justify pouring money into a bad prior investment even though evidence shows it is bad. [12:43] As your brain gets overwhelmed your subconscious is more likely to take the reigns, meaning you will make more battery and present-focused decisions. [13:47] The hot-cold empathy gap finds that in a cold state it's much easier to make better decisions then in a hot state or in the moment. [16:01] The reverse is the cold-hot empathy gap where smokers underestimated their cravings to smoke when they were in a cold state. [17:26] People are impacted more by losses than gains – and it takes double the joy felt by a gain to equal the pain felt by a loss. [17:52] Dread aversion – dread results in double the emotional impact of savoring. [20:11] We tend to beef up the status quo and defend it more than may be warranted because of system justification. [20:33] Due to normalcy bias and not wanting to think about change, we may refuse to plan for or have the proper reaction to a disaster which has never happened before. [21:35] Due to a zero risk bias, we will prefer to reduce a small risk down to nothing than taking a bigger reduction in a larger risk. [22:47] Because of risk compensation or the Peltzman effect, we are more likely to take a greater risk when our perceived safety increases. [24:26] Because of the pseudocertainty effect we are more likely to make choices that avoid risk if the expected outcome is a good one, but seek out risk in an attempt to avoid a negative outcome. Which could lead to the ostrich effect or ignoring a negative situation. [26:06] A predisposition toward viewing the past in a positive way and the future in a negative way is called declinism. [26:21] The pessimism bias is to overestimate the likelihood of negative things happening to us in the future. [26:42] A zero sum bias is where you think that the only way one person gains is at the expense of another. [27:05] Look for the win win. For one person to succeed, it doesn't mean that another person has to fail. [27:25] Negativity bias is when it's easier for us to remember negative memories over positive memories. The worse than average effect is where we believe that we are worse at tasks than average people are. [29:06] Acting like a confident, optimistic person can create the benefits as if you are confident and optimistic. [29:44] When you know the rules of the game, it can be easier than you think to trick your brain into doing more in your favor and using these biases as your advantage. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Episode 45. Overview of Personal Biases Episode 46. Biases Toward Others – Including Groups Episode 48. An Overview of Memory Biases @wagsRJ Robert Parlange on Twitter Magic of Self Direction by David S. Schwartz @BusinessBrosPod on Twitter Rich Dad, Poor Dad by Robert Kiyosaki A More Beautiful Question by Warren Berger Fierce Conversations by Susan Scott @thebrainybiz on Twitter Diversification Bias: Explaining the Discrepancy in Variety Seeking Between Combined and Separated Choices Mixing Virtue and Vice: Combining the Immediacy Effect and the Diversification Heuristic Episode 32. The Overwhelmed Brain and Its Impact on Decision Making Research on How Self-control Works Could Help You Stick With New Year's Resolutions Free Will in Consumer Behavior: Self-control, Ego Depletion, and Choice A Multilab Preregistered Replication of the Ego-Depletion Effect Hot–Cold Empathy Gaps and Medical Decision Making Exploring the Cold-to-Hot Empathy Gap in Smokers Episode 9. Behavioral Economics Foundations: Loss Aversion The Endowment Effect Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias Behavioral Economics Foundations: Optimism Bias Experimental Tests of the Endowment Effect and the Coase Theorem Does Market Experience Eliminate Market Anomalies? The Case of Exogenous Market Experience

This behavioral economics podcast episode is about memories. Specifically, it will be an overview of memory biases  Last week, we took a little break from our series on “all the biases” for a behavioral economics analysis of Costco. Today, we dig into memory. This topic will be divided into three sections. The first section is general memory stuff, then we will talk about false memories and wrap it up with some tips on how you can use these biases to help you remember things better! When we think about our brains and all the amazing things they do, much of what we are accessing are memories. This episode breaks it all down with some fun facts and cool tips about our memories that a lot of you may not know. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes: [03:59] When we think about our brains and all the amazing things they do, much of what we are accessing are memories. [04:21] Most people think of our brains like a filing cabinet, but that's not how it works. [04:36] Our memories are basically inaccurate renditions our brains tell us...and every time we access them, we change them a little. [04:49] The more we think about something the less likely it is to be accurate. This is partially because of two biases called leveling and sharpening. [05:00] Memories can be distorted over time when details are lost. In this process, there may be selective recollection (where you only remember, sharpen and exaggerate certain portions of the memory). Or, it can be leveled out to fit some other biases that exist and just get a little dulled over time. Both of these are constantly reinforcing each other over time. [06:41] Our biases impact our memories and our present and future. [06:58] Because of the self relevance effect we find it much easier to recall memories about our self or things related to ourselves. [07:13] You are the hero of your own story, but even you don't remember your own story correctly. [07:20] Due to the fading effect bias, our brains like to feel positive emotions more than negative ones, so the emotions tied to bad memories will fade quicker than the emotions tied to positive events. This is likely tied to optimism bias and our ability to persevere through hardship. [07:54] Because of reminiscence bump, people do not remember things from all times of their life equally. Instead, people will have memories and be able to recall more personal events from happenings in early adulthood and adolescence than from any other time in their life. [08:35] We remember some time periods better than others, some items from years and years ago are able to be recalled “like it was yesterday.” [08:55] Due to the telescoping effect, we tend to think of recent events as being further back in time, and those which happened longer ago are placed more recent in our minds. [09:14] The peak end rule – where experiences are not about the sum of that entire experience over time. Instead, it is about how it was at its peak and how it ended. [10:12] If something bad happened, it might be worth putting in some effort to make sure that is not the last experience and instead have it be a midpoint negative item if you can, that becomes outweighed by some very positive peaks over time. [11:05] The tip of the tongue phenomenon. I am sure you have had this frustrating experience at least once – when you can almost remember something…and the word or phrase or moment or name of that movie is “on the tip of your tongue” – right? This is thought to happen due to blocking, when multiple memories that are similar to each other are being called upon at the same time. [12:23] A false memory is when we accidentally think something we imagined really happened, and misattribute it as a memory. [12:55] Think about selling – confidence is key to selling. Try and imagine what it would be like if you had done this successfully already, think through the whole memory to help make it as real as possible. When you believe it, that could make future selling easier. [14:02] Our brains are powerful, but they are easily manipulated too. [14:40] The illusion of truth effect. Essentially, people are more likely to believe something they have heard before – or are familiar with – than something they have never heard before (or are unfamiliar with). [15:25] The opposite of a false memory is called cryptomnesia – when a real memory is mistaken as imagination because there is not the proper subjective experience of it being a memory. [16:54] We kind of smooth and average things out. This is why we tend to remember high values, likelihoods and probabilities as lower than they were, and low ones as higher. This is known as the conservatism or regressive bias. [17:39] You remember something that took a long time as not being as much as it really was, and because you are optimistic you will do even better the next time, you severely underestimate how long it will take. [18:12] HOW TO REMEMBER THINGS BETTER [20:04] Don't bog down your consciousness with stuff that can be found easily. Make room for other stuff that can't be found easily. [20:35] Repeated exposure over a long period of time is better than cramming it all in last minute. [21:12] It's easier to remember something in the right context. [22:23] It's easier to remember happy memories when you're happy and sad memories when you're sad. [23:24] Repeating information out loud can help you remember it this is called the generation effect. [24:38] Having the general message should be enough to help you remember. [26:13] Note cards with images could help you remember. [27:35] Stuff that takes longer to read and process is easier to remember. [29:12] Put the most important things on the list at the end. This is because of the modality effect. [30:21] In networking situations or in meetings…are you always waiting for someone to take a breath or pause so you can speak? That is a sign you aren’t really listening to others when they speak, because you are creating a next in line effect all the time. [30:48] Being a good listener is key to building relationships in life and business. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: @walidkoleilat on Twitter Episode 47. A Behavioral Economics Analysis of Costco Episode 42. Apple Card: A Behavioral Economics Analysis COGNITION Chapter 6: MEMORY DISTORTIONS Fundamentals of Cognitive Psychology Episode 45. Overview of Personal Biases The Science of ‘Accidental’ Joke-Stealing and Plagiarism Episode 32. The Overwhelmed Brain and Its Impact on Decision Making  

If you’ve been listening to the podcast for a while, you have likely heard me mention Costco before. They do so many things differently than traditional business might suggest is best or profitable, but they have found a way to make it work and their business thrives because of it. In this episode, I’m going to discuss how Costco rivals almost any store or brand, and how they don’t do traditional marketing and advertising. I’ll talk about how they invest back into the community, have a simple code of ethics, reward shareholders, and how having a membership model and plan can work if it’s done right. Costco is the perfect brand for a behavioral economics analysis, because they do things differently, but in a smart, strategic way that makes their unconventional plan a huge success. Today, we learn why Costco is the powerhouse that it is (and what you can implement in your own business - even if your model is completely different). Show Notes: [04:19] Many consider Costco’s biggest rivals to be Walmart / Sam’s Club or Target – but depending on the section of the store…they pretty much compete with everyone: from Amazon, Home Depot and Best Buy to Expedia, Pizza Hut, Les Schwab and your local optometrist. [04:54] They participate in the community and reinvest in the company in a way that creates advocates, which reduces the need for traditional marketing. [05:32] That gets me to the core of Costco – their mission. It seems basic and generic enough, “to continually provide members with quality goods and services at the lowest possible prices.” [06:06] But they differentiate with their Simple Code Of Ethics: Obey the law. Take care of our members. Take care of our employees. Respect our suppliers. And then, reward shareholders. [06:57] The Costco membership model. [08:01] A membership is good for the store because it encourages people to shop there to “get their money’s worth” – this is loss aversion in action. And, this is not just triggered by perceived ownership…you actually have some real ownership because you have paid to be part of the in-crowd. [09:29] Costco has put a lot of work into making it a lifestyle choice. [10:22] Having time to slow down and experience with all the senses puts perceived ownership into overdrive. [10:54] This aversion to losses combines with the scarcity factor to encourage people to buy more. I’m sure items are scarce at Costco to encourage sales, but there is more to it than that. The high turnover of product and high efficiency model of Costco increases their profit margin and allows the whole model to really work. [11:31] They also have a very generous return policy. [13:22] The Costco food court is one of predictable beauty, which as you know is a perfect recipe for building habits. [15:28] And, of course, this increase in sales is made possible by one form of marketing Costco does believe in – free samples. Again, this is loss aversion and reciprocity at work. [17:12] If the item is an exclusive Kirkland Signature item, you know the exact thing isn’t available in other stores. All Kirkland Signature products are carefully researched, tested, hand selected, or custom-created by Costco. They truly live their mission through the whole Kirkland Signature experience – of doing best by their members, employees and suppliers. [20:02] One reason samples increase sales at Costco is because there are not too many choices. [21:28] Happy employees means lower turnover, which reduces expenses. Happy employees also means a better experience for shoppers, which keeps them happy and coming back. And, knowing that you shop at a place that values their employees also makes shoppers feel good. [22:34] Costco also does a lot of work to support their local communities, with a focus on children, education, as well as health and human services for grants and donations. [24:00] Costco works with partners and uses the value of bulk buying with their suppliers. [25:09] It is about knowing profits matter, but they aren’t everything. Squeezing out an extra 50 cents on hot dogs or rotisserie chickens – or allowing for a 16% margin on some products would make a huge impact on shareholder pockets, but it isn’t worth the negative it would cost to the members, who come first. [27:04] No company’s set up is something any other business can copy and paste. [27:29] Costco knows who they are and what their brand is there to do, and every decision they make is so easy because they can tie it back to the mission and code. [29:16] Is being a member of benefit that would work well in your business? Think about the value. [30:43] What do you stand for? Make it clear to yourself, employees, customers, and more. [32:04] Do you make it easy for people to buy from you? Are you encouraging them to get items or is it difficult? Can they get a test or sample? [33:42] Money back guarantees are worth it. [34:00] Should you incorporate a loss leader that benefits people and draws them in? [35:09] Think about the full experience. What can you be doing? [36:33] Everything matters, and it's always important to try things. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Unlocking the Secrets of the Brain @wagsRJ on Twitter Magic of Self Direction by David S Schwartz @BusinessBrosPod on Twitter Rich Dad, Poor Dad by Robert Kiyosaki A More Beautiful Question by Warren Berger Fierce Conversations by Susan Scott Costco’s Mission, Business Model, Strategy & SWOT The Costco Story What is Costco's Mission Statement and Code of Ethics? Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 19. Behavioral Economics Foundations: Herding Episode 45. Overview of Personal Biases Episode 46. Biases Toward Others – Including Groups Episode 23. Behavioral Economics Foundations: Reciprocity Business Strategy Lessons From Costco Business Model Episode 24. Behavioral Economics Foundations: Sense of Sight Episode 28. Behavioral Economics Foundations: The Sense of Touch Episode 26. Behavioral Economics Foundations: The Sense of Taste Episode 25. Behavioral Economics Foundations: The Sense of Smell Episode 27. Behavioral Economics Foundations: The Sense of Hearing and Sound Episode 14. Behavioral Economics Foundations: Scarcity 12 of the weirdest returns Costco employees have ever seen! Episode 21. Behavioral Economics Foundations: Habits Episode 22. The Power of Habit Things You Didn’t Know About the Costco Food Court Why Costco Food Courts Have Charged $1.50 for Hot Dogs Since 1985, According to Employees Costco's Great Pricing Strategy and Business Model Costco Builds Nebraska Supply Chain For Its $5 Rotisserie Chickens 5 Things You Didn’t Know About Costco’s Free Samples Episode 5. The Truth About Pricing Episode 35. Behavioral Economics Foundations: Nudges and Choice Architecture How Costco Became the Anti-Wal-Mart Costco's Simple Strategy For Outperforming Wal-Mart And Target Donation and Grant Eligibility Guidelines Costco Communities The Top 100 Retailers of 2018 Episode 43. A Guide for You to Create a Brainy Brand Episode 44. Rebrand, Refresh or Reinforce?

This is the second episode in the series on “all the biases” broken up into eight categories. Last week, I told you about all the personal biases (and the rules your brain uses to convince itself it is the most awesome and amazing thing in the world). Today, we are going to talk about all the biases that relate to other people and groups. We will start out with general biases, and then have sections about the biases that apply for people we are similar to and those we are different from. And, in case you are curious, the other six categories of biases we will cover in coming weeks are: memories, future versus present thinking, selective attention, math is hard, lazy brain, and finally novelty and stories. I’m so excited to break those all down for you! And as a reminder, this series is not about digging deep on any one topic, but instead giving you just a little taste of each bias and how you can use it in life and business. Each of these biases will likely get its own episode over time, but this will allow you to learn a little about them, and how they relate to each other, now. CLICK HERE FOR YOUR FREE DOWNLOAD! Show Notes [04:32] Intro to general biases toward other people and groups. [05:28] This first term is probably one you are familiar with: groupthink. This is essentially what happens when people are in groups, and either because they want to have a harmonious experience or not rock the boat…or just the herding mentality of humans, the people within the group start to make bad decisions. These could be irrational or different than what the person would choose to do if left to their own devices, and it is often in an attempt to minimize conflicts. [06:01] One way Amazon combats this is by having a silent start to meetings (and I linked to an article in Inc. about this in the show notes). Essentially, the leader of the meeting has to write a very well-thought out meeting prep document, which is presented at the beginning of the meeting, and everyone will sit and read it silently to themselves. [07:18] Shared information bias can be counterintuitive. [08:03] Bike shedding is when it's easier to talk about a simple topic instead of the one big topic that you should be talking about. [08:29] Be aware of the bandwagon effect in groups. [10:20] It's harder to build the snowball than to keep it moving so you will have more effort on the front end. [10:55] People look better and are more attractive when they're in a group then when they're by themselves. Remember, things are not always what they seem, so don't be intimidated. [11:57] Because of hostile attribution bias you might think that the group will be mean to you. [13:07] Stereotyping is a natural tendency and doesn't have to be hostile. It's expecting someone who's a member of a certain group to have certain characteristics. [15:04] Humans are complex and belong to all sorts of affinity groups that make up our identities. [16:09] The bulk of your perception of any person is based on their group affiliations and a stereotypical bias which may or may not be true or accurate for an individual. [17:52] Implicit association, which is how quickly a word comes to mind or matches with a previous word that was said. That can show how closely they are associated. [20:10] Because of the moral credential effect, if you have tended to not be prejudiced in the past…your likeliness to be prejudiced in the future is actually higher! [21:21] Fundamental attribution error is important to keep in mind when thinking about how we assess the actions and choices of other people. [22:10] When people experience the flip of this – thinking others’ behavior is due to a situation and their own behaviors are more about their personality, it is called extrinsic incentives bias. [23:25] When you make an internal attribution error to the whole group instead of the individuals that make it up, it is called ultimate attribution error. [24:04] When we apply this bias to individuals instead of a group, it is called the halo effect. [25:50] And, my general advice is to be aware of it and try to think of other people as multidimensional, and remember that every group is made up of multiple, multidimensional people. [26:18] PEOPLE LIKE US 00:26:34] Alright, moving on to groups of people like us. In general, we like people who are like us more than people who are not like us. This is called the in-group bias, and people are more likely to give preferential treatment to people who they see as part of their own group, or who they think are like them. [27:57] Another place where in-group bias can come up is when hearing about a victim in a story. Defensive attribution hypothesis occurs when people assign more blame as their similarity to the victim increases – this can be both in physical attributes or situational similarities. [29:25] Anthropocentric thinking is when we use human analogies and thought processes when considering less familiar, non-human things. A common example would be noting that most humans think of death as a negative thing, they apply this same value to non-human entities, even though death is necessary for many ecosystems to thrive. [31:36] This is called anthropomorphism or (as you might remember from school) personification. When we see a dog smiling we think it is happy. [32:27] PEOPLE DIFFERENT FROM US [33:03] Reactive evaluation, which means we will think less of proposals or suggestions that we believe came from an adversary or someone not like us. [35:09] Be aware of these biases and how they impact your experiences every single day. [35:30] Try to identify your biases and see where you are unfairly judging or giving benefits to someone similar to you. [35:55] Let's open our minds and make the world a little less biased and a little more thoughtful shall we? Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: Jeannette Castañeda on Twitter Episode 18. Behavioral Economics Foundations: Priming Episode 19. Behavioral Economics Foundations: Herding Episode 45. Overview of Personal Biases 'Silent Start': The Brilliant (and Surprising) Meeting Method I Learned From Amazon's Jeff Bezos Hostile Attribution Bias 21 Things You Didn’t Know About Bronies Brony Herd Census & State of the Herd Report Episode 33. Inside the Texas A&M Human Behavior Lab Dr. Palma from the Texas A&M Human Behavior Lab Moral Credentialing and the Rationalization of Misconduct Susan Boyle Audition HD - FULL Top 10 Professions Dominated by Women University of Phoenix: Red Socks Marketing Myopia Do Dogs Smile? The Science Behind the Looks We Get From a Happy Dog

This is the start of a new series on cognitive biases. To present the series in an organized fashion I found around 200 biases and then categorized them in a way that would be relevant to what we do here on The Brainy Business. I came up with eight categories, and I will go over each bias in the category in a pretty quick succession. A cognitive bias is an error in the way humans think. It's a way that is often not in our best interest. These biases aren't random. They are predictable and that is the basis for behavioral economics. This week we are talking about those personal biases that lead us all to believe we are uniquely talented and awesome…and generally better than everyone else. As you listen to the list, think about yourself – how have you experienced this in your own life? And also think about other people – have you seen this in others? How could you use that bias in the way you message to customers or attract people to your business? Show Notes [10:48] EVERYONE IS UNIQUELY TALENTED Optimism bias: Humans assume they are more likely to have a positive outcome in life compared to other people. [11:28] You want to look at ways you can use optimism bias to your advantage when setting big goals, but your day to day tasks should be more realistic and less than you think you can accomplish. [11:32] Planning fallacy is the tendency to underestimate how long it will take us to complete a task. [12:30] Do you ever find yourself with a list of 10 things you “need to do” today and you only end up getting through two? Understanding planning fallacy can help you do better in setting more realistic tasks (and therefore being happier - and more productive). [12:48] Naive realism is the belief that unlike other people, we see reality exactly as it is. [14:21] Try to be open to the perspectives of others. Your curse of knowledge will make this hard because you know a lot about your area of expertise. [15:01] In order to be successful in life and business, you need to be able to understand the perspectives of other people and how they differ from yours. [16:09] The false consensus effect is our tendency to overestimate how much other people agree with us. [17:41] Illusion of asymmetric insight this is when people think they understand their peers better than those same people understand them. [18:15] If you assume that everyone thinks you don’t understand them as well as they understand you, it could be beneficial to ask them questions that help them explain more about themselves to you. [18:49] Illusion of transparency: people also overestimate their ability to know others, and the ability for others to know them. [19:56] False uniqueness bias is when everybody thinks of themselves and their business as a special snowflake with unique problems unlike anyone else's. [21:17] When you are communicating what you offer, use the Forer effect (also known as the Barnum effect) to your advantage. This could also be seen as the astrology effect or the fortune telling phenomenon: people tend to think statements that are vague and general enough to relate to a large group of people are highly accurate and “exactly them!” [22:42] Generalities can inspire people to take action, so keep that in mind when creating your messaging. [22:57] Illusion of control, which is your tendency to overestimate the influence you have over external events. [25:33] Egocentric bias is when you feel like you do more than the other person and because of our naive cynicism, we also expect other people to have this bias more than ourselves. [26:47] It's important to praise others for their contributions without diminishing your own efforts. [27:28] Social comparison bias: Because of self-preservation and wanting to stand out and be the best, we tend to favor potential candidates whose strengths are not in direct competition with our own. [27:50] Self serving bias, where we want to claim more responsibility for successes than the things we might have failed on. We want all the glory and none of the blame. [28:23] The spotlight effect is the tendency to overestimate the amount that others are focused on our appearance or the things we say or do. [28:53] Because everyone else is the center of their own universe as well, you can relax a little. [30:07] Because of the 3rd person effect everyone believes they're less likely to be influenced by mass marketing than other people. [30:40] A bias blind spot is where we see ourselves as less biased than others and tend to be better at spotting these cognitive biases in others than in ourselves. [31:23] Illusory superiority is where we overestimate our own desirable qualities and underestimate our undesirable qualities. [32:14] Restraint bias: We all think we have more restraint than others and generally overestimating our ability to resist temptations. [32:53] Trait ascription bias: We think others have very predictable personalities, moods and behaviors (that they are more one dimensional) and that we personally are much more dynamic. [35:14] The overconfidence effect: for certain types of questions, people will say they are 99% certain in their answers…but they are actually wrong 40% of the time. [36:24] Pro innovation bias, which is essentially having massive optimism about an invention or innovation. [37:48] REVISING IN HINDSIGHT [38:06] Post purchase rationalization is when people buy on emotion and then persuade themselves it was the right decision. [38:55] Choice supportive bias is where we say retroactively are choices were more informed than they actually were. [39:22] Illusion of external agency, which means we think our personal preferences are based on insightful influences and benevolence. [40:21] Illusion of validity, where we believe our judgments and choices were accurate. [40:43] Conservatism belief revision you would not sufficiently revise your belief. [41:13] Continued influence effect, where you continue to believe misinformation even after it has been corrected. Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. Links and Resources: The Brainy Business on YouTube Torcom Talk on YouTube @ser_technology on Twitter Ser Tech Webinar Blowing Consumers Minds Using Behavioral Economics Episode 16. Behavioral Economics Foundations: Framing Ser Tech Webcasts Ser Tech Open Lending @thebrainybiz on Twitter @HBLtamu on Twitter Predictably Irrational Episode 9. Behavioral Economics Foundations: Loss Aversion Episode 15: Behavioral Economics Foundations: Availability Episode 34. Behavioral Economics Foundations: Optimism Bias Exploring the "Planning Fallacy": Why People Underestimate Their Task Completion Times Episode 11. Behavioral Economics Foundations: Anchoring and Adjustment Episode 14. Behavioral Economics Foundations: Scarcity Five Most Daunting NFL Stadiums for Visiting Teams Scarlett Johansson & Brie Larson Play ‘Who Saves the World? Girls!’ Episode 32. The Overwhelmed Brain and Its Impact on Decision Making The Trouble With Overconfidence Episode 5. The Truth About Pricing