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What is behavioral economics? Why does it matter to you?

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Podcast Episodes

What is behavioral economics? Why does it matter to you?

142. Status Quo Bias: Why Change Feels Terrifying, a Behavioral Economics Foundations Episode

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Today is all about status quo bias. This is perhaps one of the most foundational foundations there is. It truly is at the center of so many biases and heuristics the brain uses to make decisions, which is why you have heard me talk about it a lot on the show.
Most recently, I talked about this on episode 139 on the endowment effect, and that is because these two are commonly combined with loss aversion to come up with a “trifecta” that keeps us stuck. In today’s episode, I’ll go beyond explaining what status quo bias and why it is such a foundational foundation…and give you tips for how to be more effective personally, with colleagues, and the two ways to use it with customers (if you get it wrong it can mean a huge loss in conversions!)

Show Notes:

  • [00:41] Today we will be talking all about status quo bias which is perhaps one of the most foundational foundations there is.
  • [02:34] First: a reminder of how the brain works. All our brains have a conscious and subconscious processing working concurrently all the time.
  • [03:07] The subconscious is in charge 99% of the time.
  • [03:52] The average person makes 35,000 decisions every single day.
  • [04:52] The subconscious decides what is considered “normal” by using biases and heuristics (or rules of thumb). Things that have worked in the past that it believes apply to that specific situation by a millisecond choice.
  • [05:29] Your brain wants to have as much as possible processed by your subconscious because it is more efficient. It uses less energy. It is faster and it thinks it knows best. Because the subconscious is a creature of habit and predictability it isn’t surprising that it has a very strong bias for the status quo.
  • [06:27] The status quo can change based on whatever we’ve become accustomed to and that can change greatly over time.
  • [07:56] Now that the change is upon you, the stuff you know and are used to looks pretty darn good.
  • [08:25] This feeling that the devil you know is better than the devil you don’t is inherent in choices we make every day to maintain that status quo.
  • [08:55] Melina shares an interesting article in Psychology Today which talks about a thought experiment from two different angles.
  • [11:49] What would you choose in each case?
  • [13:13] Wanting to keep things the same or feeling immense stress or fear about the idea of starting something new doesn’t mean the old thing is better or that the new thing is worse or a bad decision. It just means that it is new, and you know that already! That is probably what drew you to the opportunity in the first place.
  • [13:59] If you were looking to do something new and have done the due diligence, embrace that feeling as a good sign and move forward with confidence. It will become a habit before you know it and be a new status quo you can’t imagine living without.
  • [15:36] The pandemic was a massive, forced shift in circumstance caused (essentially) everyone on earth to have their status quo bias shaken up in a way that we had to try new stuff to find a new normal. Solutions that were once unfathomable are now easy.
  • [17:05] There are ways to work with the biases of the brain so they will be less impactful when presenting change. If you do that well, people will generally adjust to the new norm and establish a new bias toward that status quo.
  • [19:12] It is very important to consider the context of your relationship with the customer when determining how to present information for them and which way to use status quo bias. 
  • [20:26] The way you frame your message is really critical and a subtle shift in the way you talk about the status quo can be a huge swing in retention rates.
  • [21:42] Don’t include too many choices or too much extra stuff, because, as I already said, when people get overwhelmed they are more likely to go with the status quo.
  • [22:34] Recap: The first most important thing to remember is that status quo bias is a foundation for a reason. It is firmly rooted in the way our brains work and it will always be present.
  • [22:58] When you are looking or planning for a change, know that the feeling of fear as you get close to pulling the trigger on it doesn’t mean you are on the wrong track.
  • [24:27] I’m the closing keynote for the Y conference from the Insights Association taking place virtually on March 9 and 10. The tickets are very affordable and free to their members and corporate researchers, so go check it out with the link in the show notes.
  • [24:45] It was also just announced that I will be the MC for the You Better Behave! Virtual masterclass taking place from 12:00-6:00 Eastern on March 31. This is also virtual and has keynotes from Nir Eyal and Tim and Kurt from Behavioral Grooves, as well as confirmed speakers from Bayer, Reebok, Nestle and more.
  • [25:37] My first book, What Your Customer Wants (And Can’t Tell You) is officially on presale and available on AmazonBookshop, and Barnes & Noble so you can buy today and be one of the first to receive a copy when it officially launches May 11, 2021.

Thanks for listening. Don’t forget to subscribe on Apple Podcasts or Android. If you like what you heard, please leave a review on iTunes and share what you liked about the show. 

I hope you love everything recommended via The Brainy Business! Everything was independently reviewed and selected by me, Melina Palmer. So you know, as an Amazon Associate I earn from qualifying purchases. That means if you decide to shop from the links on this page (via Amazon or others), The Brainy Business may collect a share of sales or other compensation.

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