Insights & Cases

How does customer feedback affect attitudes and behavior?

How many times per day are you asked to provide feedback on a product or service? Like this app? Rate it in the app store! How is our website? Please fill out this satisfaction measure. Thanks for your recent purchase. Do you have time to fill out a short survey based on your shopping experience? While this kind of data can be useful in service optimization and design, these methods can result in unexpected outcomes. More specifically, soliciting customer feedback can often result in the ‘measurement effect’. This is the finding that measuring attitudes can affect subsequent behavior (positively or negatively). Therefore, how you go about measuring attitudes is essential. In this article, I want to discuss some of the ways in which polling customers can affect their attitudes and behavior. Evaluation Expectations: We are more critical when we expect feedback solicitations In many of our consumption experiences, we can sense an upcoming evaluation. Amazon orders, hotel stays, even an Uber ride; we know that we will be asked to provide our satisfaction and feedback afterward. What effect does this have on our attitudes? Consumer research indicates that it probably awakens the critic within us, making us more negative about...

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Five Startups Who Put Behavior First

behavioral startups

Many companies seek to apply behavioral science to existing business models. Sometimes these are hasty ad-hoc executions, such as failed gamification systems. Other times, they may be more thoughtful and innovative, such as Merrill Edge's "Face Retirement" campaign.  However, such examples are still a matter of applying behavioral insights to a traditional model. What about companies that use behavioral insights right from inception? In this article, I want to list five excellent examples of startups building their core business model around behavior. 1. Moven: Motivating long-term savings What it is: A variety of fintech companies provide customers with savings/spending reminders and other tools to help consumers try to budget their money effectively. While Moven does also offer these types of features, it also goes one step further by offering a “Smart Savings Account”. This system allows customers to develop a personalized savings path, where personally relevant savings goals (i.e. a vacation, a new car) appear on a wish list timeline. Customers’ saving and spending behavior interact with this list, allowing them to visualize their progress towards specific goals. Why it works: Cognizant recently published a report that argued that digitization has disproportionately favored ‘fast money’. There are apps and technologies...

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What’s the impact of innovation in public policy?

It has long been argued that innovation is a driver of economic competitiveness and export performance. Indeed, in economic theory innovation should make workers more efficient. As a result, fewer people are required to produce the same amount of output and the same number of people can produce more output. This should strengthen competitive advantages and support GDP growth. In this short article, I will quickly review the literature and public initiatives in the field of innovation. Innovation in theory Oslo Manual defined innovation as the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relation (1). Innovation is based on the results of new technologies, new combinations of existing technology or the use of other knowledge acquired by the enterprise (2). Joseph Schumpeter considered innovation as a prerequisite for economic development. According to his theory of creative destruction, from the one side innovation destroys technology and decreases employment, whereas from the other side it simultaneously creates more output and other jobs (3, 4). According to Michael Porter, innovation, when defined as a process that allows companies to produce more...

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Does Netflix make us more impatient?

Streaming services are more popular than ever, but what effect does this have on our personalities? According to one report, traditional US media services such as cable television and satellite lost approximately 1.8 million subscribers in 2017. The primary cause of this exodus is, as you probably already knew, streaming services such as Netflix and Hulu. Consumers are rapidly shifting towards on-demand content, free of advertisements and without long waits between programs. However, what (if any) behavioral effect does this have on the millions of people who now favor streaming? One possibility is that ever-present access to what we want is raising expectations and making us more impatient and impulsive. Consider, for example, the urgent demand for a second season of “Making a Murderer” only a month after it debuted (the article notes that the first season was a decade in the making). In this short article, I want to share some reasons for why streaming content could make us more impulsive, as well as some original research I conducted on the subject. More specifically, I’ll present a short survey I conducted with an online sample. Mobile phone use and impulsivity While as of yet there is no direct evidence...

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An introduction to corporate financing with cryptocurrencies

Blockchains, distributed ledgers, smart contracts, dApps, ICOs, ... The buzzwords around digital currency are heard everywhere, but they are sometimes difficult to decipher. In this article, we explain everything you need to know about the latest cryptocurrencies and corporate financing trends to make sure you stay on top of the game. Digital currencies are everywhere these days. The most famous one, Bitcoin, has surged more than 170% since the beginning of 2017.[1] The cryptocurrencies’ total market capitalization has surpassed the $100 billion mark.[2] Whilst some people are preparing for a bubble, others remain convinced of its value. Of course, this price increase might just be speculative, but it could also reflect a change in investors’ attitude towards cryptocurrencies. What if they were now seen as a tool to fund legit startups instead of criminal activities? Let's investigate the latest hype: Ethereum, a new platform using blockchain technology, and the possibility of Initial Coin Offering (ICO) it enables.   Bitcoin price year-over-year increase[3]   Ethereum: More than a cryptocurrency? The rising star in the world of cryptocurrencies is Ethereum. Like Bitcoin, its technology is based on a blockchain or distributed ledger. Ethereum, however, aspires to be more than just a cryptocurrency.[4] Most notably...

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Bitcoins, Blockchains and the Future of Cryptocurrencies

bitcoin

On August 1st 2017, Bitcoin reached a fork in the road, and split in two. The digital currency market is populated with thousands of copycats ("Altcoins"), but only Ethereum competes, and in some ways, beats Bitcoin. Eight years ago, an enigmatic figure called Satoshi Nakamoto published a paper titled "Bitcoin: A Peer-to-Peer Electronic Cash System". This paper described a payment system that removed banks and other financial intermediaries from the equation by creating a chain of verified transactions. In order to validate and protect these transactions, cryptography was used. The aim of the paper was not to create a new digital currency, but one of the outcomes was the birth of a new digital currency called Bitcoin in 2009. This was not the first digital currency, nor the first attempt to use cryptography to manage the currency, but Bitcoin is still around, unlike Mr Nakamoto. The avatar, or pseudonym, has disappeared, but the real person (or persons) who assumed the name is probably still around and actively participating in the market. Why Does Anyone Need Digital Currency? Consider any financial transaction you undertake; it involves a horde of intermediaries, all of whom control the terms under which you operate and...

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Product upgrades: Losing your phone and dropping your mug

How do consumers make the decision to trade in their outdated model for the newest release? Product life cycles are steadily decreasing in length. Consider, for example, the rate at which new phones and computers arrive on the market each year. Consequently, your fresh new laptop may become a relic in the next year, if not the next few months. This can be beneficial for consumers, as they always have access to the latest available features and technologies. Conversely, it can be frustrating, as consumers often have to weigh the decision to hold onto an outdated model against the pain of paying for a new release. So how then do consumers go about justifying product upgrades when they possess an existing model? Moreover, are all upgrade justifications the same? With increasing preference for access versus ownership (e.g. Spotify vs. owning an album), can consumers use similar justifications for digital products as they do for material products? This article was inspired by a recent paper featured in the Journal of Marketing Research, titled “"Be Careless with That!” Availability of Product Upgrades Increases Cavalier Behavior toward Possessions” (Bellezza, Ackerman, Gino, 2015). Put briefly, the paper explored how owning an outdated product increased...

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Brexit – the seven year itch and some tech implications

Metadata Article 50 gave Britain 2 years to exit from the EU. Deadline date is 29 March 2019. We predict that this shift will take much longer than that, bringing benefits to EU countries and disadvantaging the UK. In these digital times, it could be expected that Brexit would have a considerable impact on British technology and technology providers. There are very few tech firms in Britain that welcomed the vote to exit the EU, but they are making the best of it.  The main hurdles currently under scrutiny (with more to emerge as EU legislation is gradually unpacked) are:- to GDPR or not to GDPR opting for or against the "single market" Britain as a "safe third country" as defined under Dublin III the use of foreign workers in the IT space and tech space in general Predominantly these are human issues, ranging from the right of freedom of movement to protection of personal data. Even the single market has many aspects targeted around consumer rights and benefits, such as the recent scrapping of roaming charges in June. While it would not make sense for Britain to deviate radically from anything currently in place, there is a great deal...

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10 new rules for banks in the digital era

Traditional banks are beset from all sides by disruptive threats and challenges. In this article, we want to examine some of the more pressing considerations from two lenses: behavioral and economic. With respect to the former, digital technologies have drastically affected how customers think about, interact with, and expect from their financial service provider. With respect to the latter, a host of external pressures and new opportunities are forcing banks to revaluate their core business model and products. Consequently, we have developed the following ten rules. The first five are driven by behavioral insights, while the other five are driven by economic insights. Behavioral 1. Help customers control their impulses Numerous surveys show that consumers are more impatient than ever, and more likely to engage in impulse shopping. This is likely attributable to the immediacy and accessibility afforded by mobile phones, which have been linked to impatience and the inability to delay rewards. Financial services need to offer services to help consumers resist temptation and monitor their finances in real time. Movenbank offers fantastic tools to help customers reign in their impulses and track their expenditures. 2. Commit to transparency According to a recent ‘Trust Barometer’ by Edelman, financial services...

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Using Behavioral Insights to Win at Cannes Lions 2017

Who used behavioral insights the best at Cannes? There was a wealth of creativity and innovation at Cannes Lions this year. Many entries relied upon wit (a personal favorite being Burger King’s “Okay Google” campaign) or leveraging new technology (such as the AI-driven campaign for The Young Pope). However, a number of winners stood out to us for their fantastic application of behavioral insights. Immunity Charm - Lions Health Grand Prix for Good – Cultural Compatibility https://www.youtube.com/watch?v=e4ku5QXvrj0&t The Immunity Charm is an effort in Afghanistan to provide doctors with immunization information for children. According to the case study, people in Afghanistan are often resistant to the concept of vaccines. As a result, parents are often unmotivated to keep and maintain an immunization history. This brilliant initiative took a cultural incompatibility (traditional biases against vaccinations) and developed a solution that merged seamlessly with an existing behavior (bracelets already worn by infants). Now, doctors have immediate knowledge of a child’s vaccine history simply by referencing a color-coded bracelet. This approach reminds me of efforts to reduce post-harvest loss in Tanzania, led by the excellent behavioral change organization ideas42. One of the ways ideas42 was able to increase adoption of efficient harvest bags was to...

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