Wednesday, September 07, 2011

Choices give us power?

Another fun topic I blog about is the Paradox of Choice.  It turns out that we are much better at making decisions when we have 4 options than when we have 24.  In theory, more options allow us to select a better combination of features and make better tradeoffs.  But the limitations on our cognitive capacity means that all we do is get frustrated, anxious, and afraid that we are going to miss out on a good choice because we didn’t have the time or memory to get to it.  Of course, having just one choice is also not a good thing because we feel constrained.  There have to be enough options so that we feel we were able to gain a benefit by choosing. 

The marketing consultant I mentioned in my previous post adds a cultural dimension to this.  He concludes that having more choices makes us feel more free, more American even.  So we happily deal with the stress and anxiety of having too many choices in order to feel more powerful. 

Similar to this desire for freedom, he uses the seatbelt laws as a further illustration.  He looked at studies that showed people gruesome movies of car accidents where people were not wearing a seatbelt.  They measured the results and were shocked that FEWER people wore their seatbelts on the way home then had arrived with them on.  Somehow, the movies backfired.  He surmised that the people left thinking “they aren’t going to trick me with those scary movies” and rebelled against the idea.  Same thing with the slogan “Buckle up for Safety.”  They felt like they were being told what to do and their freedom was being constrained.  On the other hand, “click it or ticket” presents a free choice for drivers.  They are given the option of wearing a seatbelt or paying the fine.  As long as they have choice, they are happy to do the right thing, so seatbelt use went up.  Sounds stupid, but the results are hard to argue with.

Motivation and incentives

I have blogged many times about how to motivate employees and what kinds of incentives work in different situations.  In past blogs, I have warned that financial incentives can be counterproductive when creativity is needed  because people tend to get conservative in order to hang on to any financial incentives they have already earned.  In general, I only recommend financial incentives for brute force kinds of jobs, either physically or mentally. 

I was just reading a book written by a marketing consultant that had another take on financial incentives.  Sometimes, we don’t see money as money.  We see it as a trophy that we can compare to other people in similar situations.  This explains why CEOs, athletes, actors, etc are so gung ho at negotiating their compensation, even when it is already higher than they could even hope to spend.  Instead, it’s a way of comparing themselves to others.  It becomes just a scorecard.  Mine is bigger than yours.

So financial incentives can also work for superstars who take an egocentric view of their compensation.  Of course, you don’t want a price war within your company, so this is really just at the level where an individual superstar is comparing themselves to a similar superstar at another organization.

How fast can you decide?

Here is a fun one for the day back to work after a long weekend.

There has been a lot of research on the how fast people can make decisions given the easiest decision tasks.  So for example looking at a picture and deciding if there is an animal in it (not a hidden animal) or looking at two numbers are deciding which one is greater.  These take between 1/3 and 1/2 a second.

The fun part in this study was that they added an interesting twist.  What if they showed you two vending machine snacks and asked you which one you prefer.  In one way, this should be an easier task.  We didn’t know what kind of picture would appear or where the animal would be.  But I sure as heck know that I like Snickers better than Three Musketeers and Doritos better than potato chips.  But making a preference decision requires accessing another part of the brain.  And it takes longer.

More specifically, what they did was have subjects rate their preference for 50 different vending machine snacks on a 5 point scale.  Then they flashed them on a screen in pairs and asked them to pick the one they liked  better.  When they were close (a 1 next to a 2 or a 4 next to a 5) it took longer and they were more likely to make a mistake then when they were distant (a 1 next to a 5).  But it was still pretty fast.  Raising the accuracy by 10% required just an extra 1/6 of a second.

In all of these cases though, we are talking about less than a second.  So if you are a marketer, that is about how long it takes for people to look at your visualization and make a preference decision.  You have less than a second to grab their attention and be "preferred" or not.