Bri Williams is the Behavioral Explainer, Managing Director and Behavioural Specialist of People Patterns Pty Ltd. She works with clients to maximize each and every interaction using behavioral economics. That might include your proposals and presentations, letters and emails, websites and apps, product and brand development, sales and customer service scripts, stakeholder meetings and staff performance.
In this episode, Bri talks about the importance of behavioral economics in influencing people’s decision-making to buy.
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Why you have to check out today’s podcast:
- Understand the behavioral economics of consumers in order to overcome barriers to their buying decisions
- How to overcome barriers of apathy, anxiety, and paralysis to get more people on board and encourage retention
- How to structure your offer in a way that it will be easy for customers to make buying decisions
“You cannot ‘not’ influence people. Anything you do in any direction, you are influencing people.”
– Bri Williams
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Topics Covered:
01:07 – Bri’s response to Mark’s Blog titled says, ’Why Behavioral Economics Doesn’t Work with Subscriptions.’
02:31 – Behavioral techniques companies used for retention or expansion
04:21 – Why she calls herself a behavioral explainer
06:21 – The dichotomy of rational and irrational decision-making
09:19 – Three barriers businesses need to think through and overcome to onboard and retain customers
12:49 – Apathy as being the status quo
15:05 – Decision paralysis as a speech paradox of choice
17:06 – Anxiety being the third barrier to getting people to buy and the proven ways to overcome it
21:13 – Is behavioral economics a manipulation game? Is it good or bad?
25:11 – What’s the idea behind behavioral economics
Key Takeaways:
“I agree the good, better, best is a really appropriate sort of structure to work on the cues. Like this is the bestseller or this is what most other people buy. The use of social proofing and social norms to perhaps suggest to people what the preferred option should be. When in doubt, people tend to do what other people do. So signal that to them.” – Bri Williams
“And this is what happens throughout our decision-making. We’re playing tennis all the time. When there’s nothing at stake to lose, we’re going to be more aggressive. We’re going to be more open to risk. But as soon as those stakes have changed, then we’re going to withdraw a little. So as a business, we want people to feel very confident that if they take the desired action, it’s going to be okay.” – Bri Williams
“We’re endeavoring any way to try and get people to do things. Unfortunately, people’s lack of understanding of behavioral science or behavioral economics means that they’re doing it based on this assumption that people do make decisions rationally when in fact we don’t.” – Bri Williams
“Always think of price in context. So oftentimes we think of price as a number when in actual fact the person receiving that price, it’s going to be receiving it in a whole range of contexts. And so it’s your opportunity and in fact, your responsibility as a business to set that context.” – Bri Williams
People / Resources Mentioned:
- Daniel Kahneman
- Thinking, Fast and Slow by Daniel Kahneman
- Behavioral Economics for Business by Bri Williams
- The Little Book of Pricing and Payment by Bri Williams
Connect With Bri Williams:
Connect with Mark Stiving:
- Email: [email protected]
Full Interview Transcript
(Note: This transcript was created using Temi, an AI transcription service. Please forgive any transcription or grammatical errors. We probably sounded better in real life.)
Bri Williams: The first point I would say is that you cannot not influence people. Anything you do in any direction you are influencing people.
[Intro]
Mark Stiving: Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the behavioral relationship between them. I’m Mark Stiving, today our guest is Bri Williams. Here are three things you want to know about Bri before we start, managing director and behavioral specialist for her own company People Patterns. She calls herself a behavior explainer. Fascinating title! And she’s amazingly nice, which you’re going to hear more about when I tell you a story. So welcome, Bri.
Bri Williams: Thank you, Mark. Well, calling me amazingly nice at the get-go really sets me up to fail.
Mark Stiving: Well, at least it sets expectations high. So I actually want to tell the story and I’ll tell the listeners that I asked Bri she would read her parts and luckily Bri agreed cause she’s really nice. But I write blogs and what I usually do when I write a blog is when I think of something that I say, Oh wow, that’s really interesting.
Then I sit down and I write a blog about it and I had this amazingly brilliant thought not too long ago that when I think of behavioral economics, I think of that as the more emotional or illogical, irrational side of decision making. And yet in pricing, we often talk about the value or the very rational side. And I wrote this blog saying, Oh well in subscriptions, once someone’s bought then they actually know the value, so behavioral economics doesn’t work anymore and I don’t know if I titled it this way or my marketing people changed it, but the title is why behavioral economics doesn’t work with subscriptions. Now Bri wrote to me this amazingly nice response. So Bri, go ahead and read your response to me.
Bri Williams: Well here it goes. An interesting perspective Mark. I don’t entirely agree particularly with non-automatic subscriptions which require communication. But thanks for posting. And yes, any business that offers gates is not going to win long-term.
Mark Stiving: Okay. So then I replied, Bri, can you give us an example of behavioral technique companies used for retention or expansion? I couldn’t think of any.
Mark Stiving: And here she goes.
Bri Williams: Mark, the prosperous email Netflix sent me was worded in a way that made me feel like I’d won. They used reciprocity and nailed a language withheld back your process with some of the languages, for instance. So I felt it was okay to cop the increase and then I sort of point you in the direction of more ideas that I had about that.
Mark Stiving: Okay. And now for my favorite part, I wrote an excellent example. Not only do you not agree, but you also wrote a blog post five years ago just to argue with me.
So it turns out when you read this blog, she gives you these amazing reasons why behavioral economics works amazingly well in subscription renewals. And yet go back to what she wrote the very first moment. An interesting perspective, Mark. I don’t agree entirely. Right? She disagreed completely. But thank you Bri for being so nice.
Bri Williams: Well, social media is one of those precarious, some areas aren’t it? And I think anyone who is posting ideas, I think it’s great. Anyone who is out there thinking about things and putting forward a view. So I really appreciated the fact that you’d done that cause it got me thinking about how behavioral economics is perhaps being used in the pricing space particularly or perhaps being limited to acquisition rather than retention. So it made me think and I enjoyed someone feels thinking Mark.
Mark Stiving: I appreciate that. Thank you. Well, let’s dig in a little bit and see what we can learn from each other. Maybe I know I’m certainly going to learn from you. Do you consider yourself to be in pricing?
Bri Williams: Well that’s an interesting one. No, I don’t, I’ve never thought myself a pricing specialist really. And why I called myself the behavior explainer is everything in business is about influencing behavior. So that’s what we do every day, whether we ever think of it in those terms. So what I hope businesses do is really think about how they are interacting with their internal world, more particularly external customers to try and drive them to make a decision.
And of course, pricing is one of those, the hotspots of decision-making. It’s a very tangible distillation of a business’s value as you’ve talked about. And so whilst I don’t explicitly think of myself as working, particularly in pricing a lot of the work I do moves into that area. So I talk a lot about numbers, psychology, principles like anchoring. So how do you best communicate, your value so that you are encouraging people to make the decision you wish them to take.
Mark Stiving: Okay, that makes a lot of sense. And I’m going to ask you a question that you won’t know the answer to, but just try to guess or think about or pontificate on, cause I’d love to know how you think about this. I think of people’s decision making as a combination of rational and irrational or value-based and emotional. I’m not sure there’s, there’s some dichotomy there that makes a lot of sense.
And I’m really curious, what percentage of the decision do you think is, pick your word, irrational, emotional influenced by behavioral economics and could I think of that percentage as in a percentage of the price?
Meaning, if I were to lower the price 10% I could do my behavioral economics poorly. And if I do it really well I can raise my price 10% or something like that. Did that make sense at all to you?
Bri Williams: Yeah, I guess two facets and I’ll lean on the work of Daniel Kahneman in Thinking Fast and Slow for this. So the dichotomy that you’re mentioning is sometimes known as system one and system two. System one is how we make decisions on the fly, our emotional center and making quick decisions. So how does the price look, how do I feel about that price? My immediate reaction to it and the yellow system that we turn on and off when something is particularly important or urgent or highly salient is system two.
Now system two you would most likely align to rational thinking. Now, in terms of the work I’ve consumed and what have you, the vast majority of time when using our system one habitual emotional brine to make decisions. And so we’re going on perhaps more a gut instinct and then we are post rationalizing.
So in terms of how you were saying processing in terms of splitting it, for instance, in emotional and rational or illogical and logical centers, there’s almost a third category, which is the emotional centers. The rationalization of those decisions and then the purely rational decisions as well. Where most businesses go wrong is that they believe that people have the irrational pants on to make most decisions when that’s just not the case.
Mark Stiving: I’ve heard it said a million times that people decide emotionally and then they justify rationally and that’s exactly what you just told us again, but I have such a hard time with that in the following sense. Maybe I agree with the concept, but from company building products, building marketing messages, it feels like we have to solve real problems, deliver real value. There has to be a rational piece there.
Bri Williams: I think the language I would use is that it needs to make sense to people. Now how do we come to something making sense? Well, oftentimes it’s does this resonate with whatever beliefs I’m coming into this decision with?
And so that’s more still an emotional calibration as opposed to a rational one. I think often you are very right in when we’re working in our business, we think rationally about what problem we’re solving and all of the features and benefits, and then it should be this price and this is what it might be relative to another service.
And we assume that our customer is going to come into that decision in the same way. And it’s often not the case. And so that’s why often you can promote with facts and figures, features and benefits, and the product flops because it’s not meeting a psychological need that I tend to talk about in terms of three areas.
So if you’re trying to get someone to buy, these are the three reasons people might resist making that decision. The first is they’re apathetic, they don’t care, they can’t be bothered. So they’re not thinking about it. It’s not emotionally engaging them. And so that’s the first problem you need to overcome when you’re addressing your market. How do I get someone interested enough to buy?
The second area when we need to work on is decision paralysis. So they might be interested in what we’re suggesting, but then they’re getting overwhelmed by making that decision, making that choice so that the decision paralysis, the paradox of choice, those sorts of things. If we put out, you know, 10 different products, we might end up getting fewer styles than if we had three. And the third issue we need to overcome when we’re trying to get people to purchase is their fear, their anxiety. It’s not about, partly it’s about of course losing money if this goes wrong.
But it also can be things like, well, am I going to look like a fool if I buy this if I invest in this if I commit to this action. And it all goes pear shaped. So apathy, paralysis, and anxiety are the three things every business needs to think through and overcome in order to get people to come on board and of course to stay on board.
Mark Stiving: Okay. And so real quickly, can you give us examples of how to overcome those in some, let’s choose a subscription company just for fun.
Bri Williams: Do you have one in mind?
Mark Stiving: Doesn’t matter. We can choose Zoom or actually here’s a great one. What if we chose Impact Pricing, which just launched a subscription to all of our educational courses.
Bri Williams: So if we’re looking at the first barrier, so for a new customer, apathy, how do I get them interested? That’s where, for instance, perception of values at how do you communicate your price is going to be important. So am I going to anchor them to a high number?
So it could be, I don’t know, let’s say $1,000 if you buy an annual subscription, sorry if it’s month by month, but it’s only 900 if you buy an annual subscription. And so they’ve anchored me to the price. So now I feel like I can win by taking the annual price because my perception of value has been influenced through that. So that’s a way of engaging my system one, my emotional thinking when it comes to being confronted with the price point itself.
The other element of apathy is heading, make it easy for people. So as interested as people are, they’re not going to, we prefer the path of least resistance. And so as soon as you have points of friction, if it’s difficult for me to find your website, it’s difficult for me to navigate your site.
If you’ve got multiple calls to action, that’s just going to make the process of buying from you particularly difficult and the more difficult you make it, the more interested I have to be. And so the process to be better, the bells and whistles have to be better. No, no, no. The better thing to do as a business is reduce that friction so people just have to be interested enough and it’s easy enough so that apathy doesn’t become an issue for them to come on board.
Mark Stiving: Interesting. When you said apathy, in my mind I was thinking almost status quo. The problem isn’t bad enough. I wouldn’t spend my money to solve that problem.
Bri Williams: That’s exactly right. Because ultimately when you’re thinking through any challenge in your business, I talk about it as being, getting people from point A to point B. Point A is what they’re currently doing. So that’s the status quo phase. Point B is what I want them to do. So that’s the Delta. So to get people from not buying, to buying, to get them out of this rut, to get them to come on board with my product.
I need to overcome their apathy about doing that so that I can’t be bothered. I need to overcome their decision paralysis and I need to overcome their anxiety about moving from what they know to what is the new world for instance, this new subscription. So apathy is the first layer to really and the big killer, particularly when you’re first trying to get a new customer on board. How do I get them interested and make it super easy for them to do that?
Mark Stiving: Nice.
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Bri Williams: Decision paralysis. So this is the speech about the paradox of choice. So these are questions businesses need to make around how many products do I market? Do I go to a webpage and I’m tripping over myself with multiple different versions and I don’t understand the difference between them. So I might be really interested in coming on board with this subscription. But now you’re confusing me because I can’t tell the difference between option a, option B or I can’t tell the difference between A, B, C,D, E, F, G. So this is where, for instance, if you think about website design, the sequence in which you put your options. If you think about like a table of options, how do you design those options? Which ones do you want them to buy? You, of course, would like them to buy the highest margin product. So where do you place that in this array of choices that you’re presenting to people? Paralysis is really heading, make the decision, the preferred decision from your perspective as a business, but also for the customer. How do you make that choice? The one that they’re more likely to take?
Mark Stiving: Yeah, and as soon as you said the word paralysis, what jumped to my mind is something that I teach constantly to companies. And that is you really need to have a good, better, best offering. And almost every company can figure this out given enough time and options and things. But that makes it simple for the buyer to make a decision. And it demonstrates that we understand their problems, their markets.
Bri Williams: And things that can help people and I agree the good, better, best is a really appropriate sort of structure to work on the cues. Like this is the bestseller or this is what most other people buy. You know, this is the use of social proofing and social norms to perhaps suggest to people what the preferred option should be. When in doubt, people tend to do what other people do. So signal that to them.
Mark Stiving: Yeah. Okay, excellent. And so the last one was
Bri Williams: The third one is anxiety. Now, this is the silent killer when it comes to getting customers on board because they usually don’t turn around and tell you, I’ll look, I was nervous about doing business with you. So they want the side that they’ll turn around and say things like, well, your price wasn’t rush or you were too expensive. So they’ll give you those sorts of excuses. Anxiety is the tension they’re feeling about making the commitment to you. So or that can be as simple as if I press this button, I don’t know where it’s going to take me or I’m on the payment page and it hasn’t got that little secure seal. So I don’t know if my credit card details are going to be safe. So anxiety is this tension people feel about moving from the known current status quo to moving to this unknown new world of your product? And so we need to have strategies to allay their concerns. So things like money-back guarantees, things like client testimonials, these are all ways that you can reduce people’s fear about it not turning out well for them.
Mark Stiving: Yeah, very nice. And we know that people hate making mistakes and so that’s exactly what anxiety is all about.
Bri Williams: That’s right. So in behavioral economics, we are talking about loss aversion. So people are more motivated to avoid the loss than seek gain. So I always think about the game of tennis. For instance, first, serve you can hit the ball as hard as you like. You can go close to the line because if it goes wrong you get a second serve. The stakes are different. As soon as you’re on your second serve, you become more conservative.
You slow the ball down, you kick in the court because you’d have something more to lose. You will lose the point if you miss the serve. And this is what happens throughout our decision-making. We’re playing tennis all the time. When there’s nothing at stake to lose, we’re going to be more aggressive. We’re going to be more open to risk. But as soon as those stakes have changed, then we’re going to withdraw a little. So as a business, we want people to feel very confident that if they take the desired action, it’s going to be okay.
Now, the second point of anxiety is something you can actually help to overcome apathy. Because not only do we give people nothing to fear if they do take the action. So if you do buy from us, it’s going to be okay. We want to give them something to fear if you don’t buy from us, you’re going to be worse off for whatever reasons. So we can use this tension people will naturally feel to our advantage effectively. So this is the fear of missing out. It’s a limited time offer. It’s, you know, only five units left. All of those things, these sort of scarcity principles signal to people that if you don’t commit to this action, you’ll a lot going to be worse. So, of course, you’d want to typecast subscription.
Mark Stiving:
I hate it when I’m shopping for a flight and they say two seats left. Oh, that just annoys me.
Bri Williams: And I annoy you but doesn’t work. Accommodation booking sites, use it all the time. Rightly or wrongly, they always go close to the line but the principle is valid that people sometimes need a little bit of a push and so limited time offers and those sorts of things. There’s a reason why we use them so much. It’s because they work.
Mark Stiving: Yup. I’m complete with you. Okay. I dunno if you read all of the other comments that went through in that LinkedIn thread that we were playing on. But there was a series of comments that I went back and forth with another gentleman and I want to ask you the question cause I really want to hear your opinion. This is a hard question cause in a way it challenges everything that you do and that is how much of what you do is manipulation and is it bad or is it good?
Bri Williams: Yeah and it is a question that is often raised of behavioral economics and the first point I would say is that you cannot not influence people. Anything you do in any direction you are influencing people. The difference here I suppose is that things, for instance, I provide businesses with you are more directive in what you’re trying to do. So you know perhaps more about what you were doing.
So that is a difference. But it is a device around by Hyperbolic Economics. To what extent should you tell people that they are being influenced? And a lot of the research is suggesting that even when people are told by being in some language-nudged or influenced, that really doesn’t have a bearing on their decision. So the curious thing, and I think the way people process information is for instance if you said Bri you made that decision because we influenced you. We put some different music on in the bottle shop and that made you buy French wine versus German wine.
But why I would process that information is no, I was always going to buy a French wine because I’m a decision-maker. I’m an intelligent person that is impervious to influence. Now, the bottom line is that we are all flawed decision-makers and this is the whole nature of hyperbolic economics. It’s sort of a thing and codifying these biases and heuristics that are innate in human wiring. That means that we are susceptible to particular techniques and cues that influence our decisions. So has that answered your question or given you some…
Mark Stiving: Yeah, it’s actually interesting. I love the answer that says you’re influencing it no matter what. The question is, do you know what you’re doing or not? And the example that jumped into my mind is I have this really bad problem and that I don’t smile naturally and I was probably 40 years old before I learned that when you meet people, I should force myself to smile. Now is that manipulation or is that just building a better relationship, but I’m going to do one or the other. I’m going to smile or not smile. How does that work? That was just really insightful to me.
Bri Williams: It’s a very interesting thing. You can’t turn it off. You can’t turn off influencing others. So for instance, I work with a lot of businesses and they send out letters to their customer base might be a price increase, might be a sort of a government department trying to get people to do particular things like sending the letters out anyway, the letters are usually atrocious because they’re not moving anyone in the direction that is better for everyone. So, for instance, if you want people in your citizenship to adopt a particular policy, surely you want the letter to do the best job of moving people towards that policy. And likewise a price change. So we want people to, Princeton’s continue to work with us.
We don’t want them to cancel their subscription. So we’re endeavoring any way to try and get people to do things. Unfortunately, people’s lack of understanding of behavioral science or behavioral economics means that they’re doing it based on this assumption that people do make decisions rationally when in fact we don’t.
Mark Stiving: Yeah. And let me say the last sentence you just said in slightly different words because I think what you said was intimidating to people you said because we don’t understand behavioral economics or behavioral science. And I think I would change that to say because we don’t understand how people respond to our actions.
Bri Williams: Yeah, it is. Don’t put a label on it because that’s sort of the discipline, which is sort of the fast track to understanding how people do make decisions is, yeah, I mean, and this is why I launched my business nine years ago. Prior to that, I’d been in the corporate sector working in product management for instance, and really we commissioned a lot of research and people would tell us what they would do if we did change to the product and yet they wouldn’t do it when we released the product. And so I started scratching my head and saying, I think we’ve made some errors in how we think people make decisions. And behavioral economics is sort of for me, the roadmap for how we can understand what’s happening under the surface, under the hook and as people, if business people can really hook into that, they are going to be much more effective in everything that they’re going to do.
Mark Stiving: Nice. Nice. I knew I was going to be fascinated by this conversation, Bri. Thank you so much.
Bri Williams: Hey, Mark. I think pricing is such a big area. It’s sort of all roads lead to pricing. Don’t they in value perception?
Mark Stiving: I certainly think so. So I have to end with the question that I always end with. What’s one piece of pricing advice that you would give our listeners that you think could have a big impact on their business
Bri Williams: Pricing advice? Always think of price in context. So oftentimes we think of price as a number when in actual fact the person receiving that price, it’s going to be receiving it in a whole range of contexts. And so it’s your opportunity and in fact, your responsibility as a business to set that context.
Mark Stiving: Nice. Nice. Bri, thank you so much for your time today. If anybody wants to contact you, how can they do that?
Bri Williams: They can jump onto my website, briwilliams.com.au. So Bri is spelled B-R-I. I’ve got a couple of books that might be of interest. One is Behavioral Economics For Business, which really talks about things like retention strategies and pricing. And I’ve also got a book called The Little Book Of pricing And Payment, which can also be helpful to those in the area.
Mark Stiving: What’s that one about?
Bri Williams: A little Book of Pricing And Payment. It talks a lot about numbers psychology. So I know you’ve mentioned things like font size and colors and what have you. So it tackles a few of those questions. For instance, should you price, should you give advice for free? Should you beat about, I don’t know, pay what you want. Pricing. So it dabbles in the whole area of psychology of pricing.
Mark Stiving: Nice. I am going to have to read those. And by the way, Bri, I don’t think I told you this, but my dissertation was a 99 cents.
Bri Williams: Wow. Another conversation, Mark. I look forward to that.
Mark Stiving: Exactly. episode 60 is all done. Let’s see. I have to say my favorite part was the realization that we do things whether we intend to or not. We’re always influencing. What was your favorite part? Please let us know in the comments of wherever you downloaded and listen to this and while you’re at it, would you please leave us a five-star review. We take these very seriously and they help us out immensely.
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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy
