UX London: Psychophysics

by May 29, 2014

In his Psychophysics presentation at UX London 2014 Rory Sutherland shared why classical economics lead businesses astray and how you can take advantage of this opportunity. Here are my notes from his talk:

  • The second-most important thing you can do is improve user experience. The first most important thing is to find a behavioral insight and shift it to a new domain.
  • Neo-classic economics pervade businesses to an unhealthy degree. Better features, lower price should win but human brains work differently. Price is a signal as well as a cost to us. Some people assume lower cost means lower value even if the product is better. And if the difference is too much, many people won't buy at all.
  • Economics assumes that if you drop the price of something, people would be happier. Also, not true.
  • Conventional market research, where you ask people their motivations, is also only part of the purchasing decisions of the brain and a distorting lens as well.
  • Look at your competitors and see where they are mislead by classical economics or conventional market research. That's your opportunity.
  • In business, you don't have to be right. You just have to be less wrong than your competitors. This allows progress to be made more quickly.

Complex Behaviors

  • Mass human behavior is a complex system. Your car is complicated, you can model what it is doing. Traffic is complex because the behavior of one car can influence others -it is hard to model.
  • Complex systems don't have rules but they have recurring patterns. Spot patterns behind what makes something work and apply it to something different.
  • Generally the number one brand in a field is twice as big as the number two. It's unclear why but this pattern recurs all the time.
  • We're working in an evolutionary framework. You have to be willing to adapt.
  • An enormous amount of time in business should be spent butterfly effect hunting. Looking for little things that can have a big impact. These things tend to get delegated to people without much power. Instead, this is where the most experimentation should happen and where the highest tolerance for errors should be.
  • Most economists try to base economics on math. In truth it is based on psychology, which is based on biology, etc.
  • Amazon Prime doesn't work if you don't pay for it. You feel like you need to get your money back. If it was free, you wouldn't feel compelled to buy as much. Economics would assume free would do better.
  • The brain is not a monolithic rational thing. It has different parts that work independently. Lots of our unconsciousness is social, we copy others and follow known paths.
  • Satisficing is why people make choices that are predictable but perhaps not optimal.
  • Lots of things that economists view as irrational behavior make a lot of sense from an evolutionary perspective. Evolutionary speaking, we care far less about the difference between good and pretty good, compared to good vs. shit.
  • Our tastes and preferences are contextual not constant.
  • Unconscious inferences need to be understood in business. For example, we assume a tables and chairs outside a building signal an open restaurant. Our unconsciousness brains understand this.

Design Details

  • The biggest things to improve the human condition are found in the smallest design tweaks.
  • Evolved psychology tells us to withhold our information until the end. For example, guest registration in e-commerce significantly increases conversion. This is a pattern, you can apply to other domains.
  • The human brain hates to be in a state of uncertainty. Feedback that provides a clear sense of certainty quickly that drives further use.
  • Find small UX improvements and extract the physiological insights, then apply to something different.
  • The real innovation in Uber (car services) is the elimination of uncertainty. Find other places where you can reduce uncertainty.
  • Choice reduction: we like choices that after we made them, we feel good about about them. British Airlines increased sales by reducing the number of travel choices.
  • Allow people to make choices in the order they prefer.
  • Our senses are inter-mingled. All our behavior is based on inferences we make unconsciously. Here's the information -what's the best way to interpret this?
  • The most important technology for driverless cars is making them feel approachable/safe.
  • Evolutionary logic gives us a sense of meta-ratinonal behaviors. Use these insights to change the World.