Companies that understand the three foundational principles of behavioral economics from the previous lesson know that their customers are not fully rational. They know:

Companies who understand this use behavioral design.

 

Behavioral design uses what we know about the psychology of decision making — behavioral economics — to purposefully inform design decisions. Behavioral scientists use this systematic approach across industries to successfully design products, revise features, and change users’ behavior for good. In this course we will teach you how to use the behavioral design process in your own organization.

This lesson will go over all three steps at a high level. In the following lessons we’ll dive deeper! And at the end of the course you’ll be an expert in Behavioral Design. 

As behavioral scientists we study what people do and not what they say they do. A Behavioral Diagnosis is the tool to do this. It is a literal map of everything your customers actually do.

 

Where do you start? First, you have to identify a key behavior - the action that you want your customer to complete. It doesn’t have to be the final step in your customer experience; it could be any action you want them to take. If you don’t know your key behavior yet, that’s fine too! The next step of the process will help you figure out where to focus. 

 

Next, you create a behavioral map by outlining each and every step to get to your key behavior. If you don’t know your key behavior yet, map out as many steps of your customer journey as you can. This should be a detailed list of every action a person must take to get to (and ultimately perform) the selected behavior. Once you have the steps laid out, layer on any data you have about how many people complete each step, conversion metrics, and more. With these steps and data identified, select one of the most problematic steps for your customer - where they’re most likely to drop off - and use that as your key behavior.

 

Example: Imagine we identified the problem area as early childhood math learning in public education and the key behavior as having a substitute teacher successfully complete full lesson plans. In the mapping stage, we would look at the small details of the environment to identify what was happening. For example, the substitute teacher comes in 15 minutes prior to the start of class and looks at his phone for 10 of those minutes. He reviews the five sentences of instructions left to him by the teacher prior to class starting. He does not acknowledge the kids as they enter. He takes the first 10 minutes of class to get to know students’ names. The class list has errors. The kids correct two of the names. He spends five minutes of the 15 minute lesson on directions to ensure the kids understand what’s going on.

 

By focusing on what people do instead of what they say, we can generate hypotheses about how to solve a problem based on actual behavior.

 

We ask ourselves: What is each and every step that a person has to complete to successfully reach their behavior?

The second step of behavioral design is to identify and label the psychological biases that a user faces as they move along the behavioral flow. The world of psychological biases gets complex very quickly - Wikipedia lists close to 200! To simplify this world, our team uses a model we call the 3Bs. We’ll detail the framework in upcoming lessons. We’ve used the 3B approach with the top companies in the world to assess and solve some of the toughest behavioral problems. By no means is this framework inclusive of all the biases, but it does give us a place to start when analyzing a system. Once you master the main concepts of the 3Bs, you’ll be able to go a level deeper and identify the specific psychologies at play. 

The final step of Behavioral Design is to design a solution that increases the key behavior you picked. To do this, we pick a barrier we want to remove or a benefit we want to add to the system. We then create a hypothesis and design a controlled experiment to test if we change the likelihood that someone will complete our key behavior. We define what we think will happen as a result of our intervention by using the format “If ____, then ____, because ____.” Our hypothesis should help clarify why we are testing this intervention and what effect we expect to see.

 

Over the span of this course, we’ll cover each of these steps at both a high level and in depth. But where to start? One of the most critical pieces of behavioral design is defining your goal. In the next lesson, you’ll learn why selecting the wrong behavioral goal can be, at best, annoying and, at worst, deadly.