new research: why a provocative approach falls short in ... · short in two out of three critical...
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New Research: Why a Provocative Approach Falls Short in Two out of Three Critical Conversations
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Your Participation
Tim Riesterer
Co-Author:
Customer Message Management
Conversations That Win the Complex Sale
The Three Value Conversations
Chief Strategy and Research Officer
Corporate Visions
@TRiesterer
Why Change?
Customer Acquisition Customer Renewal
Why Stay?
Customer lifecycle messaging
Best Practices Imitation
Winner
Losers
Decision-Making Science
Buyer Simulation Approach
Neuroscience
Seller Opinion Survey Approach
Review 40
years of
Research
Findings
Decision Science-Based Simulations
• Neuroscience
• Behavioral
Economics
• Social
Psychology
Identify Core
Science
Concept
Related to Task
Status
Quo
Bias
• Preference
Stability
• Perceived Cost
of Change
• Selection
Difficulty
• Anticipated
Regret
Persuasion
Uncertainty
Loss
Aversion/
Risk
Seeking
Contrast
Effect
Determine Most
Likely Principles
to Test
Condition 1
Condition 2
Condition 3
Condition 4
Condition 5
Develop
Marketing/Sales
Messaging
Conditions
Recruit
hundreds of
participants to
simulation
Winning
Condition
Develop a messaging
framework based on
winning condition.
Validate against
proven decision
science principles
Identify statistically
significant differences
based on simulation
responses to determine
winning condition.
Review 40
years of
Research
Findings
Decision Science-Based Simulations
• Neuroscience
• Behavioral
Economics
• Social
Psychology
Identify Core
Science
Concept
Related to Task
Status
Quo
Bias
• Preference
Stability
• Perceived Cost
of Change
• Selection
Difficulty
• Anticipated
Regret
Persuasion
Uncertainty
Loss
Aversion/
Risk
Seeking
Contrast
Effect
Determine Most
Likely Principles
to Test
Condition 1
Condition 2
Condition 3
Condition 4
Condition 5
Develop
Marketing/Sales
Messaging
Conditions
Recruit
hundreds of
participants to
simulation
Winning
Condition
Develop a messaging
framework based on
winning condition.
Validate against
proven decision
science principles
Identify statistically
significant differences
based on simulation
responses to determine
winning condition.
w/ third-party researcher
Best Practices Imitation
Winner
Losers
Decision-Making Science
Buyer Simulation Approach
Neuroscience
Seller Opinion Survey Approach
Why Change?
Customer Acquisition
Customer lifecycle messaging
YourSolution
Defeating the Status Quo Bias
Preference
Stability
YourSolution
Defeating the Status Quo Bias
Preference
Stability
Cost of
Action/
Change
YourSolution
Defeating the Status Quo Bias
Cost of
Action/
Change
Preference
Stability
Selection
Difficulty
Defeating the Status Quo Bias
YourSolution
Preference
StabilityAnticipated
Regret
/Blame
Cost of
Action/
Change
Selection
Difficulty
Defeating the Status Quo Bias
YourSolution
Preference
StabilityAnticipated
Regret
/Blame
Cost of
Action/
Change
Selection
Difficulty
Cost of Staying same
De-stabilize their preferences
Create enough Contrast
Before and after hero Story
Defeating the Status Quo Bias
YourSolution
Professor Zak Tormala
Stanford Business School
Why Change Story
Messaging Test
Four Test Conditions
• Standard Problem/Solution/Credential Pitch
• Problem/Solution w/Value Adds Pitch
• Problem/Solution w/Unconsidered Needs Pitch
• Lead with Unconsidered Needs Pitch
Uniqueness
2
3
4
5
6
StandardSolution
Value AddedSolution
UnconsideredNeeds Last
UnconsideredNeeds First
Statistically Significant
Uniqueness Improvement 50%
Quality
5
6
7
8
9
StandardSolution
Value AddedSolution
UnconsideredNeeds Last
UnconsideredNeeds First
Statistically Significant
Quality Improvement 10+%
Persuasiveness
4
5
6
7
8
StandardSolution
Value AddedSolution
UnconsideredNeeds Last
UnconsideredNeeds First
Statistically Significant
Persuasion Improvement (10+%)
Dr. Zakary Tormala
Stanford
Highlighting unconsidered needs is unexpected, which can boost persuasion, but this only helps when it happens at the
beginning of the message. When it
happens at the end, it’s too late.
Why Change Story Model
Unconsidered Need
Flawed Current Approach
Improved New Way
Story with Contrast
Why Change?
Customer Acquisition
Customer lifecycle messaging
Why Change?
Customer Acquisition Customer Renewal
Why Stay?
Customer lifecycle messaging
Preference
StabilityAnticipated
Regret
/Blame
Cost of
Action/
Change
Selection
Difficulty
Cost of Staying same
De-stabilize their preferences
Defeating the Status Quo Bias
YourSolution
Create enough Contrast
Before and after hero Story
Preference
StabilityAnticipated
Regret
/Blame
Cost of
Action/
Change
Selection
Difficulty
Cost of Staying same
De-stabilize their preferences
Create enough Contrast
Before and after hero Story
Defeating the Status Quo Bias
Reinforce
Reinforce Reinforce
Reinforce
REINFORCING
YourSolution
Professor Zak Tormala
Stanford Business School
Why Stay Story
Messaging Test
Three Test Conditions
• Reinforce Status Quo Bias Message
• Provocative/Challenging/Insight Message
• Provocative Message with Upsell/Price Increase
Attitudes
4
5
6
7
Status Quo Point of View Point of View + UpsellReinforce
Status Quo
Provocative
MessageProvocative
Message w/Upsell
Statistically Significant Improvement 9.63%
4
5
6
7
8
Status Quo Point of View Point of View + Upsell
Intention to Renew
Reinforce
Status Quo
Provocative
Message
Provocative
Message w/Upsell
Statistically Significant Improvement 13.27%
Switching Likelihood
4
5
6
7
Status Quo Point of View Point of View + UpsellReinforce
Status Quo
Provocative
Message
Provocative
Message w/Upsell
Statistically Significant
Decrease 10.61%
Across multiple dimensions, the
status quo reinforcement messages were more persuasive and effective than the provocative messages in the
‘why stay’ context.
Dr. Zakary Tormala
Stanford
Why Stay Story Model
Document Results
Review Prior Decision Process
Mention Risk of Change
Highlight Cost of Change
Detail Competitive Advances
Why Change?
Customer Acquisition Customer Renewal
Why Stay?
Customer lifecycle
Why Change?
Customer Acquisition Customer Renewal
Why Stay?
Customer lifecycle
Professor Nick LeeWarwick Business School
Why Pay
Messaging Test
Situation Background
Small business owner, hired firm to provide and promote health and wellness benefit program. Your contract is up for renewal
Started at 20% participation, goal was 80%, achieved 50%.
Turnover down, but not sure if attributable to program
In addition to the renewal, your vendor is asking for a 4% price increase in the new two-year contract.
Tested six different price increase messaging approaches to determine most effective.
Six Test Conditions
Same Opening Documents Business Results to Date
Introduce Unconsidered Need
Improved Capabilities w/ Anchor
Improved Capabilities No Anchor
Improved Capabilities Timed Discount
External Factors No Control
Reinforce Status Quo Bias
New opt-out
approach and
new services
New features
that increase
performance
Adds 8% but
we will share
cost - net 4%
increase
Will cost 4%
more, but
should see
payback 1 yr
Same 4% Price Increase Rate In Every Case
New features
that increase
performance
Adds 4% to
the cost of
the contract
New features
that increase
performance
Adds 8% to
cost but you
get 4% timing
discount
Must pass
along outside
cost increase
Adds 8% but
will split the
difference to
make it 4%
Deliberately
reinforce and
highlight new
features
Will be adding
4% to cost of
contract
Least Favorable Attitude
Most Favorable Attitude
18.8%
Least Likely to Renew
Most Likely to Renew
15.5%
Least Likely to Stick With
Most Likely to Stick With
14.4%
Most Likely to Switch
Least Likely to Switch
16.3%
Most Likely to Consider Competitive Offers
Least Likely to Consider Competitors Offers
7.6%
Put your customers at risk by challenging them
• Lowest favorable attitude
• Least likely to renew• Least likely to stick
• Most likely to switch• Most likely to look at competitive offers
• Lowest performer in 5 other areas: (least credible, lowest confidence, least innovative, least trustworthy, least compelling)
• Most unique and unexpected
The picture is compelling. If you introduce
an unconsidered need, you actually start making them think more carefully about what they want, and how to get it, so they might be more likely to consider others. That was pretty amazing to me, how it was so clear!
Dr. Nick Lee
Warwick
CHALLENGE
Why Change?
Customer Acquisition Customer Renewal
Why Stay?
Customer lifecycle
CHALLENGE
v
Price Increase with Anchor
and Form of a “Justified”Discount
You have made great progress on your goals over these last two years. You’ve seen health and wellness program participation grow from 20% to 50%.
Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In
addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.
When you signed up two years ago, you really did your homework and looked at a lot of options before getting your entire team to come to a consensus
and choose our company. It was a long process that involved a lot of people, but you ultimately arrived at a big decision to bring this program on board.
As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that it’s important to maintain
momentum to achieve your ultimate participation and retention goals. Any change to the program at this point could create an unnecessary risk of losing
the positive gains you’ve made.
Not to mention that bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other
changes that you won’t have to spend if you continue working with us.
Over the last two years we’ve been developing new capabilities to drive more satisfied participants, as well as give you confidence that your program is
keeping pace with anything else available in the market today. As you consider your renewal with us, we wanted to let you know about two new services
we think can have a tremendous impact on your goals.
The first is a new weekly report that shows non-participants in the program how much benefit that those who are participating are seeing in terms of their
fitness and wellness, as well as how much they are saving, and benefiting in terms of healthcare, by being part of your plan versus the alternatives. This
kind of communication on a monthly basis will provide a gentle nudge to help encourage them to get into the program for the great benefits.
Secondly, we’ve also added a new smartphone app with online tools, including automatic result tracking, and integration with popular fitness trackers. In
tests, these touches have been shown to help your employees get more benefits from health and wellness programs, and feel like they’re making progress
on their goals. The result has been shown to be higher employee plan satisfaction.
The new services and functionality will add approximately 8% to the annual cost of your plan. However, if you renew before the end of the
month, we will reduce the price increase by 50%, making it just a 4% overall increase to get this level of service.
You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80% participation goal and further increase your
employee retention rates.
Document Results
You have made great progress on your goals over these last two years. You’ve seen health and wellness program participation grow from 20% to 50%.
Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In
addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.
When you signed up two years ago, you really did your homework and looked at a lot of options before getting your entire team to come to a consensus
and choose our company. It was a long process that involved a lot of people, but you ultimately arrived at a big decision to bring this program on board.
As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that it’s important to maintain
momentum to achieve your ultimate participation and retention goals. Any change to the program at this point could create an unnecessary risk of losing
the positive gains you’ve made.
Not to mention that bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other
changes that you won’t have to spend if you continue working with us.
Over the last two years we’ve been developing new capabilities to drive more satisfied participants, as well as give you confidence that your program is
keeping pace with anything else available in the market today. As you consider your renewal with us, we wanted to let you know about two new services
we think can have a tremendous impact on your goals.
The first is a new weekly report that shows non-participants in the program how much benefit that those who are participating are seeing in terms of their
fitness and wellness, as well as how much they are saving, and benefiting in terms of healthcare, by being part of your plan versus the alternatives. This
kind of communication on a monthly basis will provide a gentle nudge to help encourage them to get into the program for the great benefits.
Secondly, we’ve also added a new smartphone app with online tools, including automatic result tracking, and integration with popular fitness trackers. In
tests, these touches have been shown to help your employees get more benefits from health and wellness programs, and feel like they’re making progress
on their goals. The result has been shown to be higher employee plan satisfaction.
The new services and functionality will add approximately 8% to the annual cost of your plan. However, if you renew before the end of the
month, we will reduce the price increase by 50%, making it just a 4% overall increase to get this level of service.
You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80% participation goal and further increase your
employee retention rates.
Reinforce Status Quo Bias
You have made great progress on your goals over these last two years. You’ve seen health and wellness program participation grow from 20% to 50%.
Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In
addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.
When you signed up two years ago, you really did your homework and looked at a lot of options before getting your entire team to come to a consensus
and choose our company. It was a long process that involved a lot of people, but you ultimately arrived at a big decision to bring this program on board.
As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that it’s important to maintain
momentum to achieve your ultimate participation and retention goals. Any change to the program at this point could create an unnecessary risk of losing
the positive gains you’ve made.
Not to mention that bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other
changes that you won’t have to spend if you continue working with us.
Over the last two years we’ve been developing new capabilities to drive more satisfied participants, as well as give you confidence that your program is
keeping pace with anything else available in the market today. As you consider your renewal with us, we wanted to let you know about two new services
we think can have a tremendous impact on your goals.
The first is a new weekly report that shows non-participants in the program how much benefit that those who are participating are seeing in terms of their
fitness and wellness, as well as how much they are saving, and benefiting in terms of healthcare, by being part of your plan versus the alternatives. This
kind of communication on a monthly basis will provide a gentle nudge to help encourage them to get into the program for the great benefits.
Secondly, we’ve also added a new smartphone app with online tools, including automatic result tracking, and integration with popular fitness trackers. In
tests, these touches have been shown to help your employees get more benefits from health and wellness programs, and feel like they’re making progress
on their goals. The result has been shown to be higher employee plan satisfaction.
The new services and functionality will add approximately 8% to the annual cost of your plan. However, if you renew before the end of the
month, we will reduce the price increase by 50%, making it just a 4% overall increase to get this level of service.
You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80% participation goal and further increase your
employee retention rates.
Detailed New Capabilities
You have made great progress on your goals over these last two years. You’ve seen health and wellness program participation grow from 20% to 50%.
Your employee satisfaction scores are up, and you’ve said some employees have even taken the time to thank you for the changes you’ve made. In
addition, your employee retention rates have started to improve, which you said was the ultimate goal of making these changes.
When you signed up two years ago, you really did your homework and looked at a lot of options before getting your entire team to come to a consensus
and choose our company. It was a long process that involved a lot of people, but you ultimately arrived at a big decision to bring this program on board.
As you look at making a renewal decision, it’s important to realize that you are at a critical point in this journey and that it’s important to maintain
momentum to achieve your ultimate participation and retention goals. Any change to the program at this point could create an unnecessary risk of losing
the positive gains you’ve made.
Not to mention that bringing in another vendor would require you to invest time in getting them up to speed and money on implementation costs and other
changes that you won’t have to spend if you continue working with us.
Over the last two years we’ve been developing new capabilities to drive more satisfied participants, as well as give you confidence that your program is
keeping pace with anything else available in the market today. As you consider your renewal with us, we wanted to let you know about two new services
we think can have a tremendous impact on your goals.
The first is a new weekly report that shows non-participants in the program how much benefit that those who are participating are seeing in terms of their
fitness and wellness, as well as how much they are saving, and benefiting in terms of healthcare, by being part of your plan versus the alternatives. This
kind of communication on a monthly basis will provide a gentle nudge to help encourage them to get into the program for the great benefits.
Secondly, we’ve also added a new smartphone app with online tools, including automatic result tracking, and integration with popular fitness trackers. In
tests, these touches have been shown to help your employees get more benefits from health and wellness programs, and feel like they’re making progress
on their goals. The result has been shown to be higher employee plan satisfaction.
The new services and functionality will add approximately 8% to the annual cost of your plan. However, if you renew before the end of the
month, we will reduce the price increase by 50%, making it just a 4% overall increase to get this level of service.
You’re making great progress. Stick with our program for another two years, and I know you’ll get to your 80% participation goal and further increase your
employee retention rates.
Price Increase Anchor and “Justified” Discount
v
Price Increase with Anchor
and Form of a “Justified”Discount
CHALLENGE
Why Change?
Customer Acquisition Customer Renewal
Why Stay?
Customer lifecycle messaging
CHALLENGE
Why Change?
Customer Acquisition
Why Stay?
Customer lifecycle messaging
Why Change?
Customer Renewal
New Sales
Tim RiestererChief Strategy and Research Officer
Corporate Visions
@triesterer
Linkedin/in/tim-riesterer
FREE REPORThttp://cvi.to/webinar-why-pay