[EP 136] Business Behaviour: Using Behavioural Science in Business

In this episode of Talking Law, we speak with the fabulous Bri Williams. Bri is the Managing Director and Behavioural Specialist at People Patterns, and the host of the wonderful video series, Talking Talks. Today’s discussion features Bri and our host Joanna Oakey discussing the top three reasons why people don’t do what you want them to, the rules of letters and emails and how behavioural science can affect pricing. To dive deeply into how behavioural science can amplify your approach to business, tune in now.

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The Little Book of Letters and Emails

Just Do This – The pragmatic guide to running a behaviourally effective business

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Transcript below!

Note: This has been automatically transcribed so will be full of errors! We are not providing it to you as a word-perfect version of the podcast but just as an easy way to provide you with a different way to be able to scan for information that might be relevant to you.

Joanna:
Wonderful Bri just want to say a huge thank you for joining us on the podcast today.

Bri:
I’ve been looking forward to this Joanna, I can’t wait to have a chat with you.

Joanna:
Oh, me too because you’re covering what I think are just absolutely critical topics. Now from a legal perspective, we talk a lot about the importance of keeping cash flow, running in the business and having a cash flow systems working well, in terms of your payments by clients, so that you know, the whole business continues to run because, in fact, cash flow is one of those areas that can really for growing businesses create that the highest element of vulnerability as they grow. And so it’s absolutely critically important, I just love the tape that you have on this area, which is actually completely different to you know, where we come from a legal perspective. So it’s so useful to have all of these different perspectives along the way. So maybe before we get into approaches to cash flow invoicing, follow up systems and all of those sorts of things. Let’s talk first about where you’re coming from today. So maybe can you just give us a bit of a background Bri as to who you are, and your very unique perspectives that you’re bringing us today, where they come from?

Bri:
Thank you, Joanna. And when you’re talking cash flow, you’re talking to a lapsed accountant. I know they’re a lapsed Catholics out there, well Im the lapsed accountant. So I studied finance and psychology as a double degree, which was odd at the time, and finally made sense to me, way down the track of my career, but what I work with my clients about is bringing behavioral science into the work that they do. Now, when I talk about behavioral science, I’m really talking about the psychology of Commerce, the psychology of how people make decisions, and how you can influence those more effectively. So when you’re talking about cash flow, you’re talking at the end of the day to a human who has to reach into their pocket and give you the cash give you the money. And yes, there’s terms and conditions, which of course you help your clients bed down. And that’s very, very important. But it’s also the psychology of how we influence people to want to pay us. Well.

Joanna:
I mean, that’s interesting, isn’t it, you know, to want to pay us okay, that’s a really good point. So how do we do that? And where do you think, I guess, where do you think the barriers are in the way communication happens that that can be impacted by an understanding of behavioral science in this area.

Bri:
So my starting position, and this will probably be a recurring theme throughout our conversation is that everything in business boils down to trying to get people to do something. So that means changing what they’re currently doing to what you want them to do. So not paying to paying, not buying, to buying, not clicking to clicking etc. And that could be your clients or your customers. But it can also be your colleagues trying to get people to participate in a project or sign off, you know, a proposal or whatever you want to get through so that your job is easier to do and that you hit your targets. So if business is about getting people from A to B, the question then is, how do we make sure that we do that the most effective way now, I won’t go into them today. But there are some reasons why we can’t just tell people what to do, because we’ll get possibly a negative reaction. And we can’t just ask people what it would take to get them to change behavior. That’s probably a topic for another day. But what I can share with you is there are only three reasons people don’t do what you want them to.

Joanna:
I want to know what those three reasons are.

Bri:
Drumroll Joanna. There are three reasons and you’ll forgive the majority of I’m about to use, but the first is that they are lazy. Now, what I mean by lazy is that people don’t want to think too much about things. They don’t want any friction in the process. So when it comes to paying you, how can we make it easy, for instance, that’s the first barrier laziness path of least resistance, make sure that the reward is greater than the effort that we’re asking of them. Second barrier scared people are scared to commit because committing to us, for instance, you know, signing off on that deal, means that gotta give something up. Now, obviously, they will have to give up money most of the time, but they also have to give up their credibility. If this goes badly and they have to give up their time and effort. So scared we’ve got to overcome people’s fear of proceeding. And the third barrier is confusion. So lazy, scared, confused. So confusion is when people might want to work with us, they might want to do what we’re talking about. But they’re getting confused as to what is the path I need to take here. Now, we can fall into this trap pretty easily by giving people too many options, or not differentiating those options. I’ve seen emails, for instance, with multiple calls to action, ask yourself, what is the most important thing for me to do here, you’ve given me too much to think about. So Joanna, when we’re trying to get people whether it’s to pay us or whether it’s to do business with it in the first place. Those are the three barriers, behavioral science really shows us we need to overcome in order to be effective.

Joanna:
Wow, fabulous. Okay, I guess, you know, really sort of Nutting into this behavioral science, for practical purposes, in our businesses sort of creates this thought process that I’m sure none of us are having, when we’re thinking about how is it that we’re constructing our emails to get a client to pay? Or how is it that we talk about fees with with our clients? So maybe let’s take those two sort of practical perspectives and dig into each of them so that we can understand, you know, what this thought process, how it can impact us at the end of the day, so So firstly, looking at the cash flow and invoicing follow up systems, how is it then that we should be constructing an email to have the impact of getting a client to pay what’s what’s a bad way? What’s a good way?

Bri:
Yep, perfect. So when I talk about lazy, scared and overwhelmed or lazy, scared and confused being the barriers, they apply to us, also, as people writing the email, so we are lazy. So when you say, we go to write an email, we fall back on our own patents where it’s like, I learned to write sentences in a particular way. And so I’m going to continue those. So all of the techniques that we’re talking about today require some effort on their own behalf in order to influence others. Now, in terms of practicalities, we have to be very careful when we’re writing that email. So in fact, I’ve got a small book called, six golden rules of letters and emails for this reason, it starts with things like the subject line, how do you get people want to want to click? And then it’s into how do you greet them? And at what point do you add tension into the language? And this will depend very much on how negligent they’ve been in paying you. So are they close to time? Have they gone over time? Is this the fifth email that you’ve sent them in the in the communication pathway, so the language will have to change? So in terms of some general hints, whenever we’re asking people to do something for us, I always like the rule of done before do so in other words, tell them what you’ve done before asking them to do something. So I’ve prepared your invoice so that we can proceed with the project. So you’ve shown that you’ve sweated, you’ve put some effort in before then asking them to reciprocate and do something which is pay you, for instance, another rule that I that I share with my clients get before give. In other words, what do they get before what they have to give you so that we can lock in this time so that we can lock in the project so I can confirm the price? Because goodness knows with inflation thing pricing is Jenny so we can lock in the pricing that’s there get? Can you please dot dot dot. Can you please make sure that you hit pay the invoice by x, for instance? So done before do so here I’ve prepared an invoice for you, Joanna? Not here’s your invoice. It’s here I’ve provided I’ve created an invoice for you. So I’ve done your favor of getting new the invoice that you wanted, and get before give. So what do they get by giving me what I want them to give me.

Joanna:
And so how this work, you know, what’s an example of how it could work in the situation where you, the organization has already given? So say you’ve already provided the services and now or the goods and now you’re chasing up payments. So what’s an example of how you could use that get before give in the context that It’s already been provided,

Bri:
it’s difficult isn’t it. And this is where your work becomes so central because it’s about setting up yourself for success in the first place. So making sure that your terms are short. So don’t have prolonged 30 day terms, if you can get away with seven or 14 days, so you anchor them to a shorter period of time, and you withhold or you stagger payment. So you get them to pay a deposit. So that you are not as exposed and you withhold providing that final good or service until they’ve paid now, that’s ideal. If they haven’t done that, then it becomes, as I say, an escalation of scary language. So firstly, assume that perhaps it’s just slipped their knowledge, particularly if you want a continuing relationship. So you might have missed my last email, which was dot, dot, dot and then as you’re going forward, and they’re ghosting you, for instance, that’s when you’re starting increasingly down the scary language path. Now, in terms of the get before give. This is where you really do have to fish around for a benefit for them for finalizing this. But it might be something like so that we can avoid getting, I was gonna say the lawyers. So that we can avoid..

Joanna:
That sounds like a benefit. Hahaha

Bri:
for you, Joanna For sure. Hahaha. That’s when you can start to play around with the language of what do they get out of finalizing this and it would be so that we can avoid, you know, the unpleasantness or the protracted contractual relationship or whatever it happens to be. Can you please, you know, see to this urgently. So I would look at it as being an escalation process,

Joanna:
Brilliant, love it. Oh, that’s absolute fabulous. So, one of the things that we also sort of mentioned in passing, you talked about the escalation of prices at the moment. So that brings up a really great second area that I wanted to drill into the the way in which you talk about fees. And I think this is going to be really, you know, of extreme importance to our clients at the moment as we’re hiring, entering into this environment of high inflation everywhere. So fees are obviously one of those things that, that all of our clients should be looking at and you know, our accountants and our listeners, on this podcast, thinks it is really interesting topic. And when you talk about this whole, you know, laziness, fear and confusion, I often wonder if, you know, professional service providers often suffer these three areas themselves, when when being fearful of increasing fees or talking about fees, you know, and maybe a bit lazy, they couldn’t be bothered going through the process of talking about fees either. And confusion, maybe they they’re also confused about that, how they’re going to approach it. So they they procrastinate and procrastinate, and we absolutely, you know, we absolutely have conversations a lot with businesses that I think suffer these issues. What’s the solution Bri? Give it to us? What should we do?

Bri:
Well, I think behavioral science is good in that it takes out that awkwardness because you know that the techniques that you’re using are based on science. And so it’s not just you putting your finger in the air and saying I guess I should follow up this customer, you can, you know, do it in a methodical way, which I know as an ex accountant, appeals to our logic, for sure. But in terms of right now, and fees, there’s an expectation at the moment that prices are going up. So we should be capitalizing on that because otherwise our margins are going to get squeezed, we’re paying more for milk. So there’s a natural expectation that there will be an adjustment now. That’s key, some language I just use there because when we are communicating a price change to our clients, we don’t want to keep saying your price is going up. We’re giving you a price rise. Everything’s increasing. No. You want to be clear in that you want to say yes, maybe once you want to say your price is increasing, but from there on, swap increase out with change or adjustment. This is a way of avoiding inflammatory language being repeated. So we don’t want to keep hitting them over the head saying this is bad news. This is bad news. Yes, be honest and transparent, say look at prices are going up because and you can contextualize it with the adjustments in the economy, that from there on, swap it out for less inflammatory words like adjusted or change, and people will have a tolerance for that. So that’s at the moment, because there’s a hotbed of inflation. Now, in non inflationary periods of time, we do want to get into the habit, and this is where we have to overcome our laziness, but set and forget, establish a pattern of your prices being adjusted every first of July, or every first of January, or whatever timeframe you want, so that you get your clients practiced and expecting that prices won’t stay fixed all the time, there is going to be a natural adjustment.

Joanna:
Really clever, absolutely. So clever. I love these examples because they give real clarity around how, how we can use these these concepts in practice. And deal with our own risk of procrastination, I guess along the way, as well. And just one last thing I want to touch on, before we finish up this discussion, we’ve talked about fees and pricing, just maybe if you can give us sort of your top two or three tips, looking from a marketing perspective, because one of the things that you talked about, in your your three step issues, the laziness, fear, and confusion was the issue with providing too many options. So maybe if you can just talk about that, in a marketing sense, I think that’d be really useful for our listeners, to hear and to sort of ruminate on as they’re preparing their own marketing or their own options. And maybe even this comes back to pricing options, because you talked about increasing fees. But sometimes, a fee increase might also come with looking at different ways that you can optional bundle things. But how do we work out? What is that level between good options versus entering into the space of confusion? So maybe you can take us through that Bri?

Bri:
Yes, it’s a classic experience, where we are trying to be generous and providing everything to everyone. And we don’t want to let anyone off the hook. So we want to provide more and more options. And that becomes bloated and unwieldy for us to manage and very difficult for them to process. So it’s a combination of two factors. Yes, it’s the number of options, but it’s also how you differentiate those options. Now, as a rule of thumb, I would tend to work on the proposition of three options in most cases. Now, that might mean you end up having to cluster things in different hierarchies so that you have three of this group and three of that group and what have you. But an odd number helps, because then it draws attention to whatever you have as the middle option. Because there is such a thing as the Goldilocks effect, people do like to tend to gravitate towards the middle. Now that then becomes a question of, we have to make sure that that middle option has the best margin for us. So what do we put as a more expensive option, and we want to, for them to see that offensive option first, because this uses the principle of anchoring, which I mentioned very briefly, but anchoring is the first number or first piece of information people receive is the most important, it becomes an anchor point. So if Option A is $2,000, and Option B is $1,000, I’m going to get a different reaction than If we had those reverse, and I was going from $1,000 to $2,000. The pain is more significant in the second example, because I just added $1,000. Now you want me to upgrade to 2000. Ouch, as opposed to $2,000 makes $1,000 terrific value. So it’s the sequence of those options. And it’s also how you differentiate them. So when I talk about differentiation that can come really down to design of how you articulate your features and benefits not even just what features and benefits you have. But for instance, using ticks and crosses. And crosses are significant here because often we like to say you can have option one, two or three, and we tick them all Sure. Option three, the cheapest option might have fewer ticks. But really, it might at a glance, given everyone’s lazy think, Oh, well option three looks okay, swap out those blank features, for instance with a Crossmark and suddenly there’s a different psychological pain. So when it comes to choices and making sure people don’t get overwhelmed by them, yeah, try and win limit or cluster the number of options, make sure you differentiate those options and make sure you sequence the options in a way that’s going to make the one you want them to buy look the most attractive.

Joanna:
Bri you’re a master. This is amazing what fabulous information for our audience today. I just want to say a huge thank you, to you for coming on to the show. I think all of these areas that you’re talking about are just so important for businesses. To get stuck into more, you mentioned something about a mini book that you have, can you tell us a little bit about that and, and also, let us know how our audience can get in contact with you if they want to get more information and understanding of how to apply these behavioral science principles and practice practically in their business in a day to day environment.

Bri:
Thank you. And the other beautiful thing, of course, about what we’ve talked about, it’s not like you’re doing more stuff, it’s doing what you’re already doing, just doing it slightly differently. So it’s tweaking, you don’t have to buy new widgets, you don’t have to overhaul your business, it’s just about 1% changes that can drive your effectiveness. Now, in terms of the book, I mentioned, it is a very small book, it’s called The Little Book of letters and emails. You can find that on my site, which is briwilliams.com. And Bri is spelled b r i not like the cheese, although I’ve had all of the cheese jokes, one can have in their life, briwilliams.com. But I’d also recommend a couple of things for your audience. One is Just Do This, which is my program. It’s like a repository where people can go in and find out how do I design my invoice so that it converts more effectively? How do I design my website so that it does the same? How do I There are scripts in there to help you follow up with any challenge that you have so that you have the language, a bit of which we’ve talked about today. So Just Do This means I’ve I’ve taken out all the difficult stuff you just have Just Do This to get a more effective business. If you’re more interested in behavioral influence skills set, I would check out my influencing action course which is teaching you about the model of lazy, scared and confused.

Joanna:
Wow, I love it. Bri huge thank you for coming on to the podcast today.

Bri:
Absolute pleasure.

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