vineri, 22 noiembrie 2013

Web Psychology - Whiteboard Friday

Web Psychology - Whiteboard Friday


Web Psychology - Whiteboard Friday

Posted: 21 Nov 2013 03:08 PM PST

Posted by nathalienahai

All marketers hope to see their audiences move down their marketing funnel, eventually converting to paying customers. We reach out through social media, we create content that we hope resonates, and we optimize our sites in hopes of eliciting certain behaviors from those customers. Psychology, thenâ€"the study of mental functions and behaviorsâ€"is a foundational part of what we do.

In today's Whiteboard Friday, Nathalie Nahaiâ€"the web psychologistâ€"explains some of the more fundamental aspects of people's behavior online, offering insight into ways we can improve our efforts to reach them.

For reference, here's a still of this week's whiteboard!

Video Transcription

Hi everyone. My name is Nathalie Nahai. I'm the web psychologist, and today I'm on Whiteboard Friday. So I'm going to be talking with you about web psychology, which is a term that I coined in 2011 to describe the empirical studies of online behavior.

It draws from various different fields. It's a point of convergence for any type of research that looks at online behavior, so things like human-computer interaction, cross-cultural psychology, which is a very, very interesting area, social psychology, how we relate to other people both in groups and on a smaller level, advances in neuroscience, how we can use neuroscientific studies to tell us about how we respond online at a brain-activity level, and as a subset of that, neuroaesthetics, so to visual stimuli. We also got cognitive psychology and things like attention online, that tends to be quite limited, and how to make the most of that attention, and also behavioral economics, which looks at why we behave in seemingly irrational ways online.

All of these different disciplines and many more give us different glimpses into how online behaviors are shaped and can be affected.

In the research for all of this, it was actually for a book that I wrote called "Webs of Influence," which is looking at the psychology of online persuasion. In all the research that I did, I found that there were three key things that you had to be able to do or to think about and to act upon in order to be successful online.

So there are three secrets to online success. The first is to know who you are targeting. The second is to communicate persuasively, and the third and final one is to sell with integrity. So I've broken these down a little bit so that we can have a little look at some of the elements that make up these three pillars.

So let's start with number oneâ€"know who you are targeting. It's really, really important that you research your audience, especially if it's an audience that you think that you're familiar with, because doing research will uncover things that will always surprise you. So I like to start with the most basic of things or the most complex of things, which is the human brain.

What systems are we engaging online? I like to think of it in a metaphorical sense. So you have the logical, which is where we like to think we make decisions, the emotional, which is where we actually seem to make decisions, and then the primal, which is freeze, fight, and flight, sex, food, motion, it's the thing that keeps us alive. So we start with a human brain, and if you have an understanding of how we work, then you can start looking at the psychology of decision making. How do we make decisions, both on and offline? How does that influence what we end up doing versus what we say we might do.

You also then have to look at who's online and why they're there. It's not enough to have an idea about just the people that you think you might like to target. But broaden your scope. Who else is on there that you think would be interested in what you have to say?

Once you've figured out who's online and why they're there, figure out who you specifically are targeting, and you have to narrow this down to make sure that you have a clear enough idea of the persona or personas that you're trying to engage.

Once you've narrowed it down to that point, you have to look at two really key things. Number one, the cultural context of that audience. So are they from a culture that is very high in collectivism or in power distance, the degree to which we accept and expect unequal power distribution? If you're interested in that, there's some fantastic research by a guy called Geert Hofstede, who is a professor of psychology who spent 40 years looking at cultural dimensions. You can find him online. So looking at the cultural context of your audience and then their individual psychology.

So things like individual psychology can mean their gender, personality traits. If you're going to look into personality, check out the big five, the five factor model. It's a lot more accurate than the other models typically. Also things like age, you can also look at the types of clusters of traits that they exhibit in terms of the preferences for online platforms, behaviors. You can really go to quite a strong degree of granularity on that one.

So that gives you a quick overview of some of the elements in section one of knowing who you are targeting.

The second pillar, to communicate persuasively, it really rests on the idea that we tend to prefer to engage with and trust people who are able to make us feel like we have a connection. That's a no-brainer. Research has shown that there is a subset of motor neurons in the brain, called mirror neurons, that activate when you see someone else doing a particular action.

So if I suddenly had my arm chopped off, hopefully if you're empathetic, your mirror neurons would kick in, and you would hopefully feel a sense of wince or pain in sympathy with me. The reason I'm telling you this is because to communicate persuasively, you have to trigger other people so you can literally get on the same wavelength. If you can do that, you'll be able to convert much more effectively.

So there are different ways in which you can approach this. Most of you might be familiar with Maslow's hierarchy of needs, so things like safety, physical safety, food, shelter, love, all the way up to self actualization. There are ways in which you can help people to achieve these things online. You can do it through all these different elementsâ€"your website, your images, your videos, your color, and your social work.

Websites, very interesting, you've got a huge amount of stuff that influences how people react to you on the website. Things like the fact that we will subconsciously scan a new website for cues as to whether or not we can trust that site when we first visit. These can be things such as padlocks, showing that your information will be secure. It can be things like authority figures endorsing your website.

It could also be stuff that moves into the realm of colors. In color psychology, there are two main colors that seem to have fairly universal effects on the human psyche and emotional state, and that's red and blue.

Red tends to be very high arousing, raises up our heart rate, and it makes us a bit more stimulated. Blue tends to have a similar but opposite effect. So the opposite effect is that it calms us down. We feel like we can trust the person whose site it is, which is probably also why the Fortune 500 and financial sectors use blue typically as their main brand colors, because it calms us down.

Another weird fact about blue is that it kind of warps our perception of time. So if cultural audience is based somewhere that has very low Internet speeds, make your color blue, and they will perceive the speed of the website as loading more quickly.

Videos, things like body language are very, very important. Having a more open, natural, slightly more expansive body language can be quite useful. Again, you've got to check that against culture. The images should always reflect the audience that you're trying to reach. So I'm going to use a London example. If you're looking at reflecting Shoreditch hipsters in East London, then you would want to use people in your images and your videos that reflect those traits. So the kind of jackets that they use and the metro look and the rest of it.

I'm not going to go into social right now because its way too complex and it would take forever. But you get a sense of some of the things that are involved in effective and persuasive communication.

The third and final pillar is about using psychological techniques to sell with integrity, and the reason I've put integrity in there is because it is absolutely key. But if you're nudging people towards taking certain behaviors, you do it in a way that is authentic and that their best interests as well as your best interests at heart. Good business is where you get the intersection between what's good for you and what's good for your audience.

With that in mind, I'm sure some of you will be familiar with Cialdini's six principles of persuasion. You can also use these online. There is a fantastic group of people in the Netherlands who are doing this. They've created a thing called persuasion API that actually tracks which of these principles are more effective on certain people. That's quite fun to check out.

The other thing that's key in terms of using these psychological principles, but in a way that is going to be not manipulative, so doing it honestly, is to build up your reputational capital, so getting people to trust you. That can mean everything from getting social proof, so that's kind of a herd mentality, game of numbers. If I have 5,000 followers on Twitter and you are a new Twitter user and you come on and you see my profile, you'll think, oh that's 5,000. It's indicating that probably she's all right because that many people have liked her already. Things like that, so ratings, social media followers, testimonials, that helps obviously to build your reputational capital.

You can increase your sales also using certain techniques, such as things like bundling, bundling items together, having flexible pricing, which you have to do carefully. So there was a bit of a furorâ€"I can't remember which site it was and I don't want to get sued, so I'm not going to mention itâ€"where people were basically being pitched more expensive holidays when it was known that they were on a Safari browser because it meant that they were a Mac user and therefore probably more likely to part with cash.

So there are ways in which you can use sort of pricing strategies that are better than others. That's an example of a bad way to do it. A better way to do is the way the airlines do it, for instance. So when you're sitting on a plane, the person next to you may have paid twice as much for their seat, but that's probably because they booked three months after you did. So because you got there early, you paid less, and that's a strategy to get the prices of the seats paid but sort of tiered.

So there are various things you can do to increase your sales. Also ratings are very important. You're 20% more likely to buy an item that's been rated versus non-rated. It leads in nicely into the next point, which is around pricing and value.

We have a general pricing heuristic, which says that the more expensive something is, if we don't know anything else about it, the more likely we are to attribute high value to it. So if it's more expensive, it's better value. That's when we have a limited amount of knowledge on an item. So that's something for you to consider. If you want your thing or your service or your product to be perceived as more valuable, you can up the pricing within reason.

B. J. Fogg, one of America's very fabulous researchers and psychologists, came out with this fantastic model called the behavior chain, which shows you how you can use psychological steps or a process to get people to the end point where they buy and further on. I would highly recommend that you check that out. That's a really useful framework to implement some of these strategies.

The final one I want to mention is around risk, trust, and privacy. The biggest barrier online to purchasing or to giving away information is the sense of risk that we have around our trust being violated. How private is my information? How secure is it? Easy things to do here are to not ask for too much more information than you need and to make sure that you have a disclaimer that says you will treat everyone's information with privacy and respect and that you won't pass it onto any third parties.

I hope that is enough of a quick whiff around. Those are the basic three pillars. But ultimately there is one golden rule that you have to follow, and it takes this form. So, number one, research your audience. It doesn't matter who they are, research who they are. That means that you can do things like on SurveyMonkey or some questionnaires. Qual and quantitative stuff is brilliant. Find out, do your research, and that will form the foundation for your online endeavors.

Number two, once you've got your research, test your hypothesis. If you know that your research shows you that these are 18 to 30 year old hipsters in Shoreditch and they're likely to like these sorts of preferences and they have this cluster of personality traits, create something and test that hypothesis and see if it pans out.

Third and final step, analyze your results and evolve accordingly. Okay. Well, that's pretty much it. So then you just repeat the cycle, and if there's ever a gap in your knowledge, go back to the first point and do some fresh research.

Ultimately, that's it. Web psychology, it rocks. Peace out.

Video transcription by Speechpad.com


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Seth's Blog : Looking for patterns (where they don't exist)

 

Looking for patterns (where they don't exist)

What do Yahoo, Google, Facebook and Twitter all have in common?

That's right: They have brand names that revolve around repeating a letter. Two "o"s in the first three and a double "t" in the last.

Human beings are pattern-making machines. That's a key to our survival instinct--we seek out patterns and use them to predict the future.

Which is great, except when the pattern isn't there, when our pattern-making machinery is busy picking things out that truly don't matter.

One of the problems of using the past to predict the future is that we sometimes fall in love with the inevitable coincidental patterns that can't help but exist in any set. But that doesn't mean that they work for predicting the future. Past performance is often no predictor of future results.

And yet you wouldn't know that from all the meetings we have arguing about things that can be clearly proven to be random artifacts.

The real danger of false pattern matching is that it helps us avoid the real work of digging deep for a genuine understanding of human behavior and the organizations that succeed.

       

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joi, 21 noiembrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Spain Household Income Drops 10% to 2005 Level

Posted: 21 Nov 2013 06:53 PM PST

Those touting the "recovery" in Spain need to step back and ponder this headline story translated from Libre Mercado: household income falls 10% and back to 2005 levels.
Interim results from the Living Conditions Survey released Wednesday by the National Statistics Institute (INE) show that the annual average net income per household in Spain stood at 23,123 euros in 2012, a decrease of 3.5% compared the previous year. Meanwhile, the average per capita income reached 9,098 euros, 2.4% lower than in the previous year.

The average income of Spanish households has fallen by 9.5% during the crisis, which translates to about 2,400 euros less per year between 2008 and 2012, as shown in the following table.

According to the survey, 16.9% of Spanish households had "great difficulty" making ends meet in 2013, the highest percentage recorded throughout the period of crisis. In 2012, households that expressed much difficulty to reach end of the month was 13.5%, ie 3.4 points lower than those found in this situation this year. In 2007, households that arrived at the end month with great difficulty were 10.7%, which rose in 2008 (12.8%) and 2009 (14.8%) and decreased in 2010 (14.2%) and 2011 (10.6%) to return to pick up the record level reached 16.9% this year.

The statistics also revealed that 40.9% of households are not able to handle unforeseen expenses, a proportion that has been declining compared to 2012, when households in this situation reached 41.4%. In addition, the INE notes that the number of households that could not go on holiday at least one week a year this year stood at 45.8%, also a record for the crisis, and far greater to the 37% recorded in 2007.
Spanish Recovery? With declining income? At record levels?
Really?!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Eurozone Flash PMI Shows Slight Growth, France Back in Contraction

Posted: 21 Nov 2013 12:43 PM PST

The rosy eurozone growth estimates of a few months ago have bitten the dust already with the possible exception of Germany.

The Markit Flash Eurozone PMI signals slowing growth for second successive month in November, with France leading the way.
  • Flash Eurozone PMI Composite Output Index at 51.5 (51.9 in October). Three-month low.
  • Flash Eurozone Services PMI Activity Index at 50.9 (51.6 in October). Three-month low.
  • Flash Eurozone Manufacturing PMI at 51.5 (51.3 in October). 29-month high.
  • Flash Eurozone Manufacturing PMI Output Index at 52.8 (52.9 in October). Two-month low.


At 51.5, down from 51.9 in October, the flash estimate of the Markit Eurozone PMI ® Composite Output Index remained above the 50.0 no-change level for a fifth successive month in November, but signalled a modest easing in the rate of expansion for the second month running.

Output growth in manufacturing stabilised at a robust rate and remained stronger than service sector expansion, which eased to the weakest since August. Trends were also varied by country. The composite PMI covering both manufacturing and services in Germany rose to its highest since January, signalling increasingly robust growth and a seventh successive monthly expansion.

In contrast, the comparable index for France fell to its lowest since June, signalling a renewed decline after just two months of fractional growth. Elsewhere across the region, output rose for the fourth month in a row, but the rate of increase was the weakest seen over that period.

Private sector employment in the eurozone fell for  the twenty-third consecutive month, with the rate of job losses accelerating marginally for the second successive month. Manufacturers reported the smallest drop in payroll numbers since July, while employment in the services sector fell at the strongest rate since August . By country, staffing numbers rose for the third time in five months in Germany, but fell at the steepest rate for six months in France. Elsewhere, the rate of job shedding eased to the second-lowest seen for over two years.
Chris Williamson, Chief Economist at Markit Comments
Some encouragement must be gleaned from the PMI signalling expansion of the eurozone economy for a fifth successive month in November, but the average reading over the fourth quarter so far is signalling a very modest 0.2% expansion of GDP across the region, and it looks like momentum is being lost again.

Any improvements were largely confined to Germany, where the PMI has notched up the best growth since mid - 2011 so far in the fourth quarter, signalling a 0.5% increase in GDP. France, on the other hand, showed further signs of being the 'sick man of Europe' with output showing a renewed decline and raising the risk that GDP could fall again in the fourth quarter, constituting a renewed recession. Meanwhile growth outside the 'big two' slowed to near-stagnation.
Core vs. Periphery Output


Core vs. Periphery Employment



Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

China's 3rd Plenum Means Slower Growth; Australia's "One Trick Pony" is Biggest Loser; What About Canada?

Posted: 21 Nov 2013 11:17 AM PST

Here's some interesting analysis from Steen Jakobsen, chief economist of Saxo Bank, regarding implications of China's 3rd plenum.

Before presenting the viewpoint of Jakobsen, some readers may be wondering "What is the 3rd Plenum?"

Business Insider explains ...
BI: What is the 3rd Plenum?

Bill Bishop: A Plenum is a meeting of the Communist Party's Central Committee. This Central Committee has 205 full and 167 alternate members, chosen at the First Plenum of the 18th Party Congress in November 2012. Each Party Congress lasts for 5 years, and with the exception of the first year there is usually one Plenum held per year. The Politburo, comprised of 25 members, meets more regularly, and the Standing Committee, made up of 7 members, meets even more frequently. Xi Jinping is the General Secretary of the Party and also holds the top posts in the State (President) and Military (Chairman of the Central Military Commission)

Third Plenums are seen as important because the First Plenum introduces the new leadership, the Second Plenum tends to be personnel- and Party construction-focused, while the third one is usually seen as the first plenary session at which the new leadership has basically consolidated power and can introduce a broader economic and political blueprint.

BI: Why is it significant?

BB: Not all Third Plenums are that significant, and plenty of reforms have happened outside of a Third Plenum, But, the Third Plenum of the 11th Party Congress in December 1978, held just two years after the death of Chairman Mao, the end of the Cultural Revolution and the arrest of the gang of Four, launched "reform and opening" and put China on its current path.
Steen Jakobsen on 3rd Plenum Growth
3rd Plenum historically means SIGNIFICANTLY lower growth.



My take on politics remains the same: It's about consolidating the party's power not reform. They are increasing security and control at all levels. Do not forget the simple math of China. The local governments have 80% of all expenditure & expenses, but only 40% of tax receipts.

What now? Uniform sales tax? Yes.....but not reform in the western world meaning of the word.

The 3rd plenum will "cost" growth - and - China model needs to be recalibrated – both of which means lower growth probably 200-300 bps in total. From 7.5% official growth to 5.5% over next two-three year.

Australia's "One Trick Pony" is Biggest Loser

The biggest loser: Australia. The most direct link is commodity expansion and now slowing global demand.

RBA wants lower AUD according to their latest Minutes. I agree.

The equilibrium price for AUD is probably around .9000 but a .8500/.8200 is needed to kick start an economy which over the last decade not only became a "one trick pony" but also a country of expensive unit labor cost and strong unions.

It's time for Australia to undo its "Lucky One" illusion. Luck can only get you so far.
What About Canada?

I agree with Steen that Australia is likely to be the biggest loser. And if the overall thesis is correct, commodity exporters in general are in trouble.

This puts Canada squarely in the spotlight. Emerging markets, especially those dependent on Chinese growth, are also in for a tough time.

I have been talking about this for a long time actually. For example, please see my September 2012 post By 2015 Hard Commodity Prices Will Collapse; Australia's Mining Boom Dies (and the Official Denials Start)

Additional Thoughts on Chinese Growth


If anything, Steen's call for China GDP to slow "significantly" to 5.5% is actually on the optimistic side. 3% average for the rest of the decade is more like it.

Meanwhile, watch the Australian dollar as the Reserve Bank of Australia (RBA) becomes the next player in the central bank competitive currency devaluation game.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com