Mini Episode 15 - Why do these things always happen to me?

Elliot from Preston wants to know why he’s always such a disaster.

Dan: (00:17)
Welcome to bad decisions. I'm your host, Dan Monheit and I'm still rolling through many episodes as we wait for Dr. Mel to come back into action today, uh, in our list of weird and wonderful questions about human behavior. We have, sometimes happy, sometimes sad, always interesting question from our different Elliot, uh, depressed and Elliot. What you got?

Elliot: (00:38)
This morning? I spilled my coffee, missed my train and stepped in gum. I couldn't help, but think why do these things always happen to me?

Dan: (00:50)
Oh, Elliot. Oh my dear friend, Elliot, because life is cruel. We all know life is cruel. I mean, you know, we've all been there, right? I'm sure you remember that time. You worked so hard to impress your new girlfriend's parents in that super fancy restaurant, five courses over three hours, and nobody thought to mention the poppyseed jammed between your two front teeth or what about that time? You tripped up the stairs into your boss, or when you dropped that massive tray of drinks at the Christmas party, or when you spent an entire day, including multiple new business meetings, blissfully unaware of your wide open fly, or the infamous ketchup stain incident. Shall I go on now, look with a run like that. It is so easy to conclude that the world is conspiring against you, but is it, is it conspiring against all of us?

Dan: (01:35)
Yes. Maybe you did commit some seriously heinous act in a previous life. Dear Elliot, or maybe, maybe my friend. You just have a healthy dose of self confidence, read narcissism and a falling victim to a very, very common mental bias. What do you reckon? Well, let me tell you you're about to meet something called the spotlight effect. The spotlight effect refer to the way we consistently and considerably overestimate how much attention other people are paying to us. So while we may believe that a faux pa a missing shirt button or a massive spill crossing the street has made a significant impact on those around us. Chances are they hardly gave it a second thought why you might ask because they're too busy thinking about themselves. Now the term spotlight effect was first coined by Medvec and Syvitski in 2000 after completing an experiment designed to destroy the street cred of any self-respecting college student, this experiment had a really simple setup. What they decided to do was create a situation where a subject would do something sure. To make them feel really embarrassed in front of a crowd. So how did they create this embarrassing situation you might ask? Well, the research participants were instructed to walk into a crowded classroom, wearing a bright yellow t-shirt featuring the bold enlarge face of the one. The only the inevitable Barry Manalow

Dan: (02:58)
For students, but also poor Barry. Now on average, the subject predicted that 50% of people in the room would see the shirt and take notice of them. In reality, only 25% of their classmates actually notice what they were wearing, which is a full half of what they had expected. Now, what this pretty simple, but pretty interesting experiment tells us is that we overestimate, in fact, we double how much attention we think people are paying to us. And in many ways, this makes complete sense, right? Because as far as our brains are concerned, we are the center of the universe, right? We are the hero protagonist in this blockbuster movie that is all of our own making. So of course it seems like things happen to us more than they happen to anyone else. And of course it seems like everyone else is always gonna notice when they do.

Dan: (03:40)
And they would, if it weren't for their own blockbuster movies playing out in their own heads at the exact same time for brands, the lessons here are simple and powerful. Firstly, if our customers or prospective customers believe that they are all starring in their own show, right? If they are the center of their own universe, who are we to tell them otherwise, right? We should play into the idea that our product service business or brand will help them stand out or fit in when all eyes are on them. Secondly, and I think this is more important than ever, right? We need to redefine brave, right? There's a lot of talk in our industry about doing brave work, brave campaigns, brave coms. Now, if the science tells us that a bright yellow Barry Manalow, t-shirt only gets half the attention. We think it will. Then how much harder should we be pushing our next edgy campaign?

Dan: (04:29)
Right. And I would say it is safe to say at least 100% further than we think we should. So that's it for today, Elliot, I hope that answers your question and you can, uh, you know, feel a little happier about how things go from here. Uh, if you have got questions, thoughts, feelings, queries on weird and wonderful human behaviours that you would just like to understand a little more, you can send 'em through to me, uh, I'm all over the internet at Dan Monheit, or you can email me at askdan@hardhat.com.au. We'll be back in a couple of weeks from now with another mini episode until then look after yourself. And if you really do think everybody's looking at you, who am I to tell you otherwise, miss out.

Mini Episode 14 - Why does everyone remember Kodak as a failure?

Nicole from Chatswood wants to know why the Kodak moment was one worth forgetting?

Dan : (00:18)
Welcome to bad decisions. I'm your host Dan Monheit from Hardhat. And you know how this works today. We have got a cracker of a question from Nicole in Chatswood, Nicole, what you got,

Nicole: (00:27)
Hey Dan, the other day, I bought a disposable camera for my long weekend away, which got me thinking, why does everyone remember Kodak as such a failure?

Dan : (00:35)
Well, because it was okay. Let's be honest. That's a little bit unfair because before it was a failure, Kodak was a lot of other things too. See, while today doing a Kodak is shorthand for a company failing to evolve fast enough at various points in the past, it could have just as easily meant being one of the largest and most successful companies in the world completely and utterly dominating a category or actively seeking to disrupt oneself to innovation.

Speaker 3: (01:01)
50 years ago, Kodak was the third largest company in the whole of America. In 1976, Kodak held 85% of the entire camera market. And 90% of the film market, the digital camera was invented by Steven Sassan a Kodak engineer in 1975

Dan : (01:21)
Numbers aside, Kodak also had a tremendous cultural impact right across the globe Kodak moments even today are how we describe those emotional high points of our lives. And that's to say nothing of that universal giddy moment of anticipation. If you're old enough that came with picking up a part of newly developed photos in a bright yellow envelope from our local chemist or Photoshop. Yeah. Before it's spectacular bankruptcy in 2012, Kodak was everything we think about apple, Google and Amazon today. So why don't we remember any of the good stuff, in fact, why don't we remember most things? Cause when you consider everything we experience our day-to-day lives. The vast majority of it, pretty much just evaporates as soon as the moment has passed. So what do we remember? Well, according to the aptly named peak end rule, it's the emotional highs and lows as well as the endings that make all the difference.

Dan : (02:13)
In other words, not all parts of an experience are created equal when it comes to shaping our memories in a study by Carmen and Schreiber back in 2000 participants were asked to listen to audio tracks, comprised of irritating sounds of varying loudness and frequency. At the end of the track, participants were asked to rate the overall annoyance of what they just heard now, rather than answers being correlated to the track's average level of annoyance. The answers were far more in line with the peak levels of annoyance, as well as how the tracks ended. This perspective helps us understand how a terrible flight home can ruin an otherwise wonderful holiday. Why a beautiful brunch can be tainted by a surprise surcharge on the bill and why despite decades of steady success. The only thing any of us remember of Kodak is a big stinking failure. So while many of us are diligently working to create outstanding end to end customer experience for the brands we represent, we would actually do well to remember that we should be shooting for outstanding memories of those experiences instead after all it is the memory, not the experience that drives our customers likelihood to talk about repeat or recommend the experience to others.

Dan : (03:23)
So if we are going for memories, we should focus on creating one or two emotional high points really late in an experience while ensuring that nothing else is diabolical along the way hand saving their biggest hit for the Encore and the wonderful tradition of lolli bags at the end of kids, parties are both perfect examples of bringing the peak end rule and outstanding memories to life. So if nothing else ask yourself, what's your lollie bag gonna be? So there you have it, Nicole, that is why everybody remembers Kodak as a failure, despite their incredible years of success. If you have got a question that you've always wondered about, perhaps an observation into a weird or wonderful human behavior, shoot it through to me. I would love to hear it and I will do my best to answer it. In an upcoming episode, you can get me all over the internet at Dan Moheit, or you can send me an email, just shoot it through to askdan@hardhat.com.au. That is all for this episode. And I will catch in a couple of weeks, peace out.

Mini Episode 13 - Why did I buy so many pairs of sweatpants?

Holly from Brighton wants to know why counting her sweats has got her sweating.

Dan: (00:18)
Welcome to bad decisions. I know you guys are waiting to hear the dulcet tones of Dr. Mel, and I can assure you, she is just around the corner, but for now you're still just me answering your weird and wonderful questions about human behavior. And today we have an absolute classic. This comes to us from Holly in Brighton. Holly, what you got for us?

Holly: (00:38)
Hi, Dan. I was just in the middle of moving and I'm going through my closet and I've just realized that I have way too many pairs of sweatpants. I don't know where they've come from. I swear I only had a few and really only use a couple now, but now I'm thinking about all the shopping sprees that I've had in the last year, and I've just got too many, and now I have to dump them all. Why did I buy so many pair of sweatpants?

Dan: (01:03)
Oh, Holly, look let me just start by going on the record here and saying, I don't really see the problem. I mean, I'm looking at my own wardrobe. I see 11 pairs of almost identical sweatpants that I bought over the course of 2020. And I take joy knowing that these are now a key part of the estate that my lucky kids will one day inherit. So I don't know what the problem is. However, let's see if we can get to the bottom of it anyway. Right? There is no question that each purchase seemed like a good idea at the time, right? Same goes for my wine subscription, my razor subscription, my stock subscription, my bacon subscription, my underwear subscription and my online yoga Pilates meditation subscription. Also, my eyebrow ring from 1998 and also the Green Day tattoo on the small of my back.

Dan: (1:45)
Not really, but you kind of get it. But that's enough about me, Holly, let's talk about you. Why did you buy all of those sweatpants and why does today Holly, seem somewhat less thrilled about it than lockdown Holly who bought them all in the first place? Well, the answer is because lockdown Holly was suffering from projection bias, like we all do all the time. Projection bias is our tendency to assume that our future selves will have the exact same set of tastes, preferences and priorities that our current selves do. See, it turns out that the difficulty we have feeling empathy towards others, also annoyingly extends to our future selves. A shortcoming that Carnegie Mellon University psychologist, George Loewenstein labeled the intra personal empathy gap. In a series of like pretty interesting experiments, Loewenstein, contrasted people's predictions about how much they would be affected by a major life change.

Dan: (02:32)
So something like moving to a different climate, winning the lottery, becoming a paraplegic. So he contrasted that with data from people who had actually experienced those life changes. What Loewenstein found was that people consistently and significantly overestimated the impact that these changes would have on their happiness. And a really big part of that is because they couldn't imagine experiencing these changes in any context, other than the one they were already in. If it's warm outside, we can't imagine ever not wanting a pool or a convertible. If we are starving while we shop, we know what happens, right? We end up loading up our supermarket trollies, like we will be eating for Australia for the next week straight. If we've been working from home in sweats for months on end, it also seems unfathomable that we will ever slip back into a suit or heels, or a suit and heels, or whatever takes your fancy, right?

Dan: (03:19)
So we better buy some more trackie dacks. This lack of foresight can have major consequences, as we fail to appreciate that today's enthusiasm towards a monthly wine subscription, an overpriced handbag, or even an edgy neck tattoo, may not be matched by our future selves, who ultimately inherit the results of all of these decisions.

Dan: (03:37)
For brands, the projection bias provides a golden opportunity to capitalize on motivation in the moment. So this could be as simple as offering to book a follow up visit or service immediately after the first one, adding recurring payments or bulk buy options or going pedal to the metal on media when conditions are absolutely perfect. People will make all sorts of decisions. Many of them long term, and many of them bad, based on the assumption that they will always feel exactly as they do, right here, right now. So, Holly, I know that doesn't really help your track pants situation, but at least, hopefully you have now some understanding of why you did it and maybe it will stop you burdening, future Holly, with more terrible purchases that today Holly wants. To everybody else out there who a question about a weird or wonderful human behavior that they've witnessed maybe in others, maybe in themselves, please send it through to me.

Dan: (04:27)
You can get me at Dan Monheit around most of the internet or on the old fashioned email at askdan@hardhat.com.au. It's been a lot of fun. Hope you guys enjoyed and looking forward to tackling the next one of these with you in a couple of weeks from now. Take care.

Mini Episode 12 - Why do I keep paying for a gym membership I never use?

Richard from Annandale wants to know why his wallets getting a bigger work out than his gym membership

Dan: (0:17)
Welcome to Bad Decisions. It is good to be back, 2022. We are still in mini episode format, but I have on very good authority that Dr. Mel will be returning to the fray very, very soon. In the meantime, we have a few more of your curly, wonderful, interesting questions to answer. And today's comes to us courtesy of Richard, or dare I say Richo, from Annendale. What you got, Rich?

Richard: (00:40)
Hey, Dan. The other day I was regrettably looking through my bank statements and I was confused about this cost that kept coming. And then I noticed it was my gym membership and I haven't been there in so, so long, but instead of calling them up to quit, I just haven't got around to it. So I was wondering, why do I keep paying for this gym membership that I'm never using?

Dan: (1:01)
Oh, Richo, my man, I feel you. And, I too, have asked myself on occasion, how did it come to this? I mean, what once was this enthusiastic commitment to a better body, a better life, a better you is now nothing more than a monthly reminder on the credit card statement of just how far we have fallen. But, chin up, mate. Honestly, it's happened to the best of us and it might not be a gym membership. Maybe it's that Foxtail package you signed up for in 2007. Maybe it's the dentist that you can't stand, but also can't break up with, or maybe just that weird tendency to just say, "Sure" whenever we're offered expensive sparkling mineral water when we sit down at a restaurant. Of course, none of these choices really make any sense, especially when, in the moment of making them, the better course of action is very, very easy for us to see.

Dan: (1:50)
See, the thing we're dealing with here is really powerful. It is something called the default bias. The default bias describes our tendency to just accept preset or default courses of action rather than carefully weighing up all of the options available to us. The reason that defaults are so powerful is because, fundamentally, we are busy and when it comes to making decisions, we are lazy, right? We make thousands and thousands of decisions every day and if we stop to consider each one of them in the detail that they deserve, we would honestly never make it past breakfast. One of the most interesting real world examples of just how powerful default options can be comes to us from the world of organ donations. Now, as you may or may not know, many European countries, so places like Austria, Belgium, France, Hungary, Poland, Portugal, these guys are the rock stars of the organ donation world.

Dan: (02:42)
Their organ donation rates are 98% percent or higher. And, in fact, in some of these places, they're actually at about a hundred percent. In Australia, by contrast, our organ donation rates are a horrific, embarrassing, terrible 33%. And that is despite almost three quarters of us actually being in favor of donating our organs once we die. The difference is not in the people. The differences in the process. You see, in Austria, Belgium, France, Hungary, Poland, Portugal, as soon as you get your driver's license, you are now an organ donor unless you specifically decide to opt out. So in these countries, donating is the default. In Australia, it is the other way around, right? The default is we're out unless we specifically decide to opt in. And this tiny difference, the small difference in the way that this choice has been architected, has created a tremendous tragic gap in how many lives are saved each year.

Dan: (03:39)
Because of their power, the default options we provide for a meeting time, a serving size, a contract end date, or a life-altering medical procedure can often have far greater implications than we ever could imagine. Like throwing away thousands and thousands of dollars on a month-to-month gym membership that we know, in reality, we will never actually use. For brands, there are so many ways to leverage the default bias. So they can do it in thinking about how they suggest or recommend different options for key decisions that customers need to make, giving people really easy ways to reorder their last purchase, suggesting that this belt might go with that bag, offering people fancy mineral water to start, right? All of these things are options that people are likely to say yes to just because it's too hard to think about what we should be doing instead.

Dan: 04:26)
So, Richo, I hope that answers your question on why you cannot cancel your gym membership. If it is anything like the last time I tried to get out of a gym membership, which was back in the early 2000s, you are going to need to fax them a letter suggesting why you want to get out of it, then attend a meeting between 10:00 AM and 10:14 AM on a weekday and plead your case for why they should let you out of this deal.

Dan: (04:47)
So hopefully it is easier than that these days. If not, the other alternative is you could just start going and your body will thank you. The other thing. Not your body, but somebody else's body might thank you for, is becoming an organ donor and if you are in Australia or really anywhere in the world, I highly recommend you do that. It only takes a minute and can make a huge difference. If you've got any questions about the weird and wonderful things you've observed in human behavior, feel free to send them through all over the Internet at Dan Monheit or you can get me on email at askdan@hardhat.com.au. We'll see you next time.

Mini Episode 11 - Why do people stay in jobs they hate?

Amanda from Paddington wants to know why it’s so hard for ‘her friend’ to quit her joyless job.

Dan: 00:17 Welcome to Bad Decisions, mini episode 11. I'm your host, Dan Monheit from Hard Hat, and if you've made it this far, you know why we're here. So let's just go to the question for this week.

Amanda: 00:26 Hi, Dan. It's Amanda from Paddington here. I have a friend who complains about her job every day and it got me thinking, why do people stay in the jobs they hate?

Dan: 00:35 Oh, Amanda from Paddington. Definitely just asking for a friend. Though you do sound very happy on the call. So maybe it's not you at all. To be honest, the last 18 months have definitely caused a lot of people to have a good, hard look inside themselves and wonder what on earth am I doing? And to be honest, I'm old enough to remember all the way back to the Y2K bug, right 99 to 2000 where that was I think the last major time that so many people actually paused to consider what on earth we are meant to be doing without fleeting existence on this spinning rock in the middle of space, right? And asking ourselves all sorts of hard questions, like why we are still working for old stink breath in the corner office. So of course there's a very pragmatic reasons why good people stay in bad jobs or people stay in jobs that they hate.

Dan: 01:18 So we have life pressures. We have kids and mortgages and school fees and all of that sort of stuff, which is kind of boring, but very, very real. But I dare say for many of us, there is a sobering reality that really, if we really, really wanted to, we would have the complete freedom to change our careers or at least change our jobs this very second if we chose to. So why don't we? Why don't more people quit bad jobs or quit bad relationships, or at the very least quit bad shows on Netflix? What we're dealing with here is the behavioral bias known as the sunk cost fallacy. Now sunk cost refers to any money, effort, time, basically anything that we have already paid or invested that we can't get back that makes us behave in a counterproductive or counterintuitive way. So you might have heard the old saying of throwing good money after bad.

Dan: 02:03 That is the epitome of the sunk cost fallacy, right? And put really simply sunk cost fallacy is our innate desire to want to follow through on what we've already invested in in the past, even if objectively, it makes no sense for us to do so. Now what's really annoying about the sunk cost fallacy is the more we invest in something, the greater the sunk cost becomes, making it harder and harder to just walk away. Crazier still is the way that sunk cost fallacy causes us to plow ahead so as not to have wasted our past and in doing so, bizarrely actually causes us to waste our future, which is the only thing that we still have control over.

Dan: 02:39 A study by Arkansas BloomBoard back in 1985 proposes scenario for students who are going on a ski trip. In this scenario, the subjects had purchased a hundred dollar ski pass for a weekend trip to Michigan. Not bad. As well as a $50 ski pass for a trip to Wisconsin, which objectively speaking, they would have found much more enjoyable than Michigan. Unfortunately, and we've all been here, without realizing it, they actually booked the trips on the exact same date, meaning they could only go to one. Now rationally, this is an absolute no brainer. Of course, you choose Wisconsin. You know it is going to be more enjoyable, right?

Dan: 03:12 And especially when you consider the fact that both tickets have already been paid for non-refundable in the past, sunk. However, only 46% of people chose Wisconsin with the majority actually choosing the more expensive trip to Michigan. So essentially 54% of subjects made a decision based on how much they'd already spent in the past, not based on how much fun they would be having in the future. So bringing it back to people staying in jobs that they hate, while we may dream of flipping our careers of opening a cafe of going back to university or finally leaving a job that pays really well, but ultimately makes us very, very sad, we tend to stay because of the three-year degree we did back in 2007 and all of the time, the energy, the effort, the emotion that we have invested to get to this point in our career.

Dan: 03:58 The sunk cost fallacy has this uncanny ability to bind us to our current situation even when it is clearly not working out the way we hoped it would. For brands, the sunk cost fallacy can be a major driver of conversion. If we can get customers to make small investments early on in the process, the cost of walking away can quickly become a major motivator for them to stay on board. So offering things like free trials or helping customers import all of their data from a previous system into a new one can be perfect ways to start. So I hope that answers your question of why people stay in jobs they hate, Amanda, and I hope you, I mean, your friend can really ask themselves the big questions and end up happy, because you sound like a really lovely person.

Dan: 04:40. I'd love of you to end up doing something that you enjoy. So that is all for this week. If you have questions that you would like answered, you can hit me up all over the internet at Dan Monheit, or email me at askdan@hardhat.com.au. We'll be back in a couple of weeks with more answers to your weird and wonderful questions about why we do the things that we do. Until then, take care, and I'll catch you next time.