Subscribed 2015: Psychology of the Consumer

Zuora Conference

Baba Shiv

Designing Solutions for the Human Brain

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The “X” Framework…

DOPAMINE

DOPAMINEComforted

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Type 1 Mindset…

DOPAMINE

DOPAMINEComforted

Comfort, familiar, tried & trusted, social validation habitual behaviors

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Type 2 Mindset…

DOPAMINE

DOPAMINEComforted

Comfort, familiar, tried & trusted, social validation habitual behaviors

Excitement, novelty, Variety, challenge

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Evolution of businesses: Type 2 Type 1…

DOPAMINE

DOPAMINEComforted

Good at Exploitation

Good at Exploration

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Next: Influencing others…What we have seen so far

Focusing on the rational brain is not enoughNeed to focus on the needs of the instinctual brain

X Framework: Type 1 vs Type 2 mindsetsType 1: Alleviating stress, fear, frustration; fostering

comfort, reassurance, peace of mindType 2: Alleviating boredom; fostering excitement“Hybrids”: The brain

Needs some reassuranceBefore going in for excitement

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Influencing Type 1s…Comfort, reassurance

Familiarity, trust, rapportSocial proof, validation

Stress, fear, frustrationSafety nets (e.g., guarantees, insurance) Frustration by reducing time, effort (physical, mental)

Also: Desperation (e.g., social rejection)

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Type 2s & Hybrids…

Type 2s: ExcitementNovelty, Variety, Discovery, Adventure, Challenge

Hybrids: Build some reassurance into the value propositionThen offer excitement

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Discovering the solution(s) the customer is seekingThe pathway or pathways (type 1, type 2, or both) through

Heuristics (based on factors that influence the pathways)Research

Discovery…

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Open to explorationNew IdeasFeeling reassured

Other factors influencing the mindsets…

Age

AGE NEUROCHEMICALS [serotonin, dopamine]

Time-of-day LATER IN DAY NEURO-

CHEMICALS

[serotonin, dopamine]

Alcohol* CORTISOL

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Factors influencing the mindsets…

Age

AGE NEUROCHEMICALS [serotonin, dopamine]

Time-of-day LATER IN DAY NEURO-

CHEMICALS

[serotonin, dopamine]

Alcohol* CORTISOL

Time of day

Sero

ton

in

Wake up

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Other factors: Relevance for leaders…

Sleep hygieneImportance of deep sleep

Fitness hygieneAbout 15 min. of cardio target heart rate

Release of a peptide, ANP SerotoninDietary hygiene

Importance of protein in the diet

© Baba Shiv 2015, All Rights Reserved

Summary…Emotion not reason drive most decisionsCrafting solutions for the emotional brainSolutions differ: Type 1 vs Type 2 mindsets

Type 1: Reassurance through trust, familiarity, social validation, safety nets, etc.

Type 2: Excitement through novelty, variety, etc.

Factors influencing the mindsetsAge, time-of-day, sleep, fitness and diet

© Baba Shiv 2015, All Rights Reserved

THANK YOU!

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Recommended readings…

Decision Making

© Baba Shiv 2015, All Rights Reserved

Recommended readings…

Introduction to Neuroscience