Sensy is here to save the day!
Today I had to join a couple of conference calls.
Because I’m still pumpkin-faced from my surgery, I was only a mere spectator. I couldn’t talk.
There’s nothing more frustrating than the feeling of being trapped, helpless.
You want to say something. You want to help the team come to a proper solution. But you just… can’t.
I’m sure that this is how the “Tweaker” feels. All. The. Time.
Or maybe they’re blissfully moving along—ignorant to the complexity of how human behavior *actually* works.
Which brings us to today’s topic: How the sensible behavioral scientist solves problems.
To make this a little more interesting, let’s name this behavioral scientist “Sensy”.
What would Sensy do to help the struggling grocer mentioned in yesterday's email out?
First of all, she would try to boil the problem down to its essence. In this case, the problem is a lack of sales at the grocery store.
“Hmmmm interesting… What are the primary things driving sales & loyalty at a grocery store?”
Well, it’s really three things.
- Quality and uniqueness of the merchandise
- Friendliness and helpfulness of the staff
- Location, location, location
Then, Sensy would think long and hard about how she could improve each of these fundamental components using behavioral science.
“Quality and uniqueness of the merchandise? Let’s see what we can do…”
Sensy would look at the sales figures for the store, seeing if she can notice any interesting patterns. What are the top selling items? Which things have the highest margin? Which things drive the habit of coming into the store? Which things do people remark on? Which things are returned most often?
Then, she would look at all the other local grocery stores and compare what she sees there with what she sees at the her client’s store.
“They seem to focus on ready-to-eat frozen meals… and they seem to focus on hot, cafeteria-style food… and they focus on health food, organic stuff.”
Then, she would have an in-depth understanding of what behavioral niche the grocer’s store fills. Is his store used to just fill in a couple of specialty items here and there? Or are people doing a bulk of their shopping at his store, and filling in hot meals and organic foods elsewhere?
After constructing this behavior map (which is a huge topic for another time), she would have a clear picture of the behavioral niche that the store is occupying... and how it fits into the wider universe of behaviors that people in the community are doing to fulfill their grocery needs.
She could then use this behavior map to run merchandise tests with the store owner. They could add one item here, one item there, and track the impact of their merchandise strategy on sales, store traffic, and (through surveying) on community perception, etc.
*The behavioral research would be driving the merchandising strategy.*
To gain further insight into the behavior of the store's customers, which would inform future merchandising strategy & behavioral initiatives, she would also have the grocer come up with a "membership card" program, so that they could track each customer over time... which would give them a much richer behavioral data set to work with. This would allow them to truly understand which types of purchase behavior are associated with long-term engagement, and so on... which would determine how they lay out the store, which products they push to new customers... etc.
That's enough for pillar 1. Let's go on to pillar 2...
“The friendliness and helpfulness of the staff…”
Sensy would work with the owner of the grocery store to help them come up with a highly predictive hiring process—so that they can hire the best people possible.
The store gets about 4 applicants for every position available. Some of these people are recommended by customers or current employees, but the owner doesn’t do a great job of comprehensively evaluating each applicant. The people he gets are OK, but a lot of them don’t stay on the job as long as he’d like, and they aren’t really “people people”—even if they seem to be due to their artificially elevated interview charm.
So Sensy has the grocer use software like Applied (https://www.beapplied.com). In addition, she has the applicants take a legitimate personality test, which she uses to determine predispositions (such as agreeableness) and other traits that would be useful for the different grocery store roles.
In addition, Sensy would have the grocer change his incentive structure so that it rewards cooperative behavior; encouraging teamwork.
Location, location, location
Sensy wouldn’t have a whole lot of control over this option, but she could do a quick analysis of the foot traffic that his location receives and compare it to the key competitors on the area. In addition, she could work with the store owner to figure out how to bring his products to new, convenient locations—to fit into the current behavior-patterns of the customers they’re not able to get.
To do this, perhaps they can design and pilot a “delivered to work” program, where the store can take orders from the employees of local companies and deliver batches of orders to company offices on regular schedules.
Or maybe they can test a grab-and-go kiosk that they can place in different locations around town that contain highly desired small items… and things that are heavily purchased at their store that the nearby stores don’t have.
You get the picture.
Finally, Sensy would do an in-depth customer research project. She would talk to customers and follow them around the store—seeing what they do.
And she would talk to all of the customers she could, trying to determine which factors predict whether or not they become habitual customers.
Are the people that come most often just the people who live closest? How old are they? What kind of things do the intensely loyal shoppers buy?
She would build a truly in-depth profile of the once-and-gone customers and the fiercely loyal customers.
And she would try and figure out how to get the customers in group 1 (once and gone) to act more like the customers in group 2 (fiercely loyal). (Note: There’s a method to this madness, but I don’t have time to talk about it here).
As you can see, each of the above interventions has a greater up-front cost than you saw with our tweaker friend yesterday, and each of these interventions is a bit more complex than each individual intervention the tweaker would do… but because the *sensible* behavioral scientist only does a few key, research backed things, they add WAY LESS organizational complexity overall.
Think of it this way: a tweaker will do 15-20 things that add 3 units of complexity each, while Sensy will do 3-5 things that add 5 each.
And all of Sensy’s initiatives are all aimed at *core* problems that the business faces. They’re not superficial. They’re not band-aids. They’re behavioral-science infused solutions to the store’s most important issues. Each of them has the potential to transform the state of the business… they’re not just fun little hacks that will result in some temporary marginal improvement (and jam up the grocer’s operations in the process).
This is, in my mind, the real role of behavioral science in business problem solving: It’s a lens through which the biggest problems can be effectively tackled. It’s the most powerful set of ideas and tools that one can use to come up with creative, yet effective, solutions.