- [00:40] Today I get the honor of introducing you to Dr. Benny Cheung, a director of Dectech.
- [03:11] Benny shares his background and how he got involved in behavioral science. He started in behavioral genomics.
- [03:44] Benny joined Dectech in 2005 to apply techniques and technology in behavioral science in a commercial backdrop supporting clients to understand their consumers better. Now the mission at DecTech is to provide the tools that will allow their clients to make more accurate and cost-effective predictions about their consumer’s behavior.
- [05:08] A lot of behavior we can trace back to genetics, so you inherit a lot of behavioral traits.
- [05:35] Nowadays his focus is more on the commercial backdrop and consumer purchasing commercial decision making.
- [06:32] Benny shares about a study he did with worms in 1999 about genetics and how intricately genetics is related to the behavioral outcome.
- [07:55] In that study, feeding behavior came down to a single gene. While not all behaviors are that simple, genetics plays a very important role in behavior. Your environment also has a very important role to play.
- [09:48] Benny shares about his opportunistic insurance fraud project. They focused on everyday consumers that were giving into temptations of being less than honest at a specific point during their customer life cycle.
- [11:29] The project was for the Insurance Fraud Bureau in the UK.
- [12:42] Opportunistic fraud is different from high-profile organized fraud because it is often undetected. That is a challenge for the industry.
- [12:54] The IFB came to them and asked them to come up with a solution to fight this kind of opportunistic fraud.
- [15:27] This type of fraud is typically not planned, instead it is something people choose to do at the moment.
- [16:14] Nudges only work well in certain situations. You really can only nudge someone if they are sitting on the fence.
- [18:47] Coming up with the intervention messages was the first task. The second task was to come up with a testing paradigm where they could test their effectiveness.
- [20:41] The five principles they picked to focus their intervention methods were: norming(herding), consistency, priming, framing, and reciprocity.
- [23:10] They prompted in a covert way as customers verified they were not a robot.
- [26:04] When you have to focus on the words like in the captcha it has a different impact on the brain.
- [26:24] For these interventions to be usable they can’t leave a negative perception or imprint.
- [27:11] They tested using a randomized controlled trial. Recreating the realism of applying for motor insurance online was a very important aspect.
- [29:24] By comparing peoples’ responses collectively to those contentious questions in the different conditions they could see how effective the interventions were in swaying dishonesty.
- [30:13] On average the interventions were able to sway 36% of the dishonesty. An intervention in the norming category was proven most effective and had a 55% impact of dishonesty swaying.
- [31:21] Of the 18 interventions they tested only one of them didn’t really work. All of them have shown some positive impact in swaying dishonesty.
- [33:47] In behavioral science it is paramount to test. The Holy Grail of testing is doing a real-life trial, but they can be costly and risky to do, and hard to scale.
- [36:01] It is beneficial to get out of your way and test things when it is a safe space so you can see what amazing things can come out of it.
- [38:53] None of the interventions left a negative impact on the outcome of perceptions.
- [40:58] Melina’s closing reflections.
- [41:39] In the case of opportunistic fraud, it was important to know that this is often a decision made in the moment instead of premeditated or otherwise planned. This is why the nudges were effective: they appeared right at the moment where someone was teetering on the edge. Where does that exist in your business and what are some nudges you could implement to help encourage behavior for your customers or employees?
- [42:52] Grab Melina’s brand new book, What Your Customer Wants (And Can’t Tell You), which is now on presale!
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Connect with Benny:
Past Episodes and Other Important Links:
- Using behavioural science to reduce opportunistic insurance fraud
- Interview with Henry Stott
- Temptation Bundling
- NUDGES & Choice Architecture
- Social Proof
- Loss Aversion
- Interview with Dan Ariely
- How To Set Up Your Own Experiments
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