A Beginner’s Guide to Leverage Irrationality for Experimentation

Human beings are irrational. We are complex creatures influenced by context and emotions, we make good and bad decisions, and we often fail to achieve our goals. This post is designed to show you how understanding irrationality can help you grow your business and how you can promote this way of thinking across your organization. 

Harnessing the complexity of human behavior can guide your experimentation efforts more effectively. You will be able to learn constantly and create solutions that benefit both the client and your business. 

In this blog, you’ll go over what irrationality is and why this is relevant for experimentation. You will learn how to study human behavior to find new hypotheses, design better solutions, and increase the effectiveness of your communications. Last but not least, you will learn some best practices to become a successful experimenter and start changing the culture inside your organization.

What does being irrational mean?

Saying humans are irrational doesn’t suggest that every person is erratic or unpredictable. For sure it doesn’t imply that people are just plain fools. It means that humans are not computers capable of processing all information to always make the optimal decision. Humans are complex, and much more than self-interested logical agents trying to maximize their utility. 

The good news is that part of this irrationality can be studied and even predicted. This is the idea behind Behavioral Economics (BE), a field that combines economics and psychology to understand human behavior and decision-making. 
The insights obtained from BE open up a whole new area of application to business. In the following sections, you will find out how to navigate irrationality to guide your experimentation efforts and improve your client’s experience.

Leverage irrationality for experimentation

The power of experimentation is clear. It helps understand what works and what doesn’t, and it is an effective way to learn fast and iterate. But, experimentation is more than shooting in the dark. It should be guided by clear hypotheses and here is where BE comes in handy.

If you don’t understand how your clients behave and make their decisions, it is plausible that you won’t be able to understand why something is not working as expected. If you don’t have a clear idea of how your users might react to new situations, your chances of creating a good solution are low. 

When we are designing experiments, it is fundamental to understand clients’ behavior to identify problems and opportunities, harness their irrationality to design proper solutions, and communicate properly to make sure the messages are well received.

Studying irrational behavior to find problems and opportunities

People must take several actions and decisions to achieve any objective. In each of those steps, there will be an interaction between the motivation to move on and the barriers and friction they can face along the way. Only when the motivation is bigger than the friction can the person go to the next step.

For example, imagine someone wants to buy a donut. It is not just one decision to buy the donut, they also need to think about:

1. Knowing their options of where to buy one and choosing where to go.
2. Taking their wallet and defining a route to get there.
3. Going to the store.
4. Getting in line to make their order.
5. Deciding which donut to buy and how many.
6. Deciding if they want to purchase a beverage as well.
7. Making their order.
8. Paying (and having the means to do it). 

And this is just to buy a donut. Imagine the case for more complex goals. 

Every experiment is related to users, trying to change their behavior to get them to a certain goal, like buying a new product or updating their information. Then, if you want to promote a certain behavior from your clients, you need to have a good understanding of all the steps needed to achieve that goal.

Promote specific behaviors

1. Map every decision and action they must take to get there.

Always consider the context in which these decisions are made and put yourself in the shoes of the user. Is it possible they are angry when they get to a particular step? Are they occupied with other things? What could be their fears and concerns?

2. Find frictions and barriers they can face.

There could be actual barriers like the store being closed when they want to buy. Or there could be psychological barriers, like incentives to procrastinate and postpone action.

3. Get data

This might be easier in some contexts than in others. But, if you can gather data on how many people get to each step you will be able to identify quicker where the users are facing the most important pain points. 

Doing this will help you to understand where the real issues are. In the donut example, you might think that your sales are low because you don’t have enough parking spaces, but after doing this exercise you find out that most of your clients get to the store but they don’t buy anything after seeing that the queue is advancing really slow.

Once you have all the steps and barriers mapped out, the opportunities to experiment will become clearer.

How to promote specific behavior

If behavior is the result of the interaction between barriers and motivation, the best way to promote a certain behavior is to:

1. Eliminate all the friction points and barriers they can face.

For example, you can reduce the cognitive load required to achieve the goal by minimizing the number of decisions they must make.

2. Boost motivation along the way.

Make the goal attractive, inspire them to move forward whenever you can, and reward their behavior as quickly and frequently as possible. In our donut example, you can let people create their own personalized donuts. There is evidence that humans tend to value things more when they have put effort into creating them. 

Do not underestimate the potential of mapping each step carefully! As you can see in the image, sometimes the problems for your clients arise way before you think and there could be opportunities to enhance their experience from start to finish.

Designing proper solutions for irrationals

The key to a good experiment is not only to have the opportunity correctly identified. How you build the solution is also relevant. Acknowledging that your clients are irrational will help you make those solutions more effective and design your products to help your clients have a better experience. There are several examples of things you can do. 

Choice overload

For starters, since humans are not unsensible rational computers, having more options makes it harder to decide and end up less satisfied with the choices made. Have you ever gone to a restaurant with so many options that you start getting anxious to start wondering later if you should have picked another option? It isn’t a nice experience, right? 

This is called choice overload, and you can solve it by reducing options or helping people make their own decisions. In the previous donut example, the restaurant could show “Our favorite donut” or “Our most sold donuts”. In an experiment, the number of options users faced in a particular flow was reduced by guiding them depending on their intentions. This change translated into an increase in conversion rate of up to 22%.

Gamification

Another example is using gamification to increase engagement and guide clients through your product. I’ve had the opportunity to work on gamification projects with two different apps. In both cases, we developed a simple game where users obtained points for doing certain actions in their app. 

Those points were then used to increase their level in the game. Both games increased all app usage metrics and NPS scores. The beauty of it is that we didn’t even have to give them money! The dopamine gained from advancing in the game will keep people engaged, even if they only receive points for it.

Design specific plans for clients

But these are just examples. When designing solutions for irrational beings you should always keep in mind that human behavior is complex. Some factors that influence behavior are outside of our control, like emotions or individual traits. And these may add noise to your client’s behavior. This means that just because something has worked in another time or place, it won’t necessarily work with your clients and in your line of business. 

Therefore, you should always design specific plans for your clients. The best way to do this is:

1. Invest in understanding your clients

If you want to be able to influence their behavior, you need to understand them. Who is my client? What do they expect from my product or service? What benefit are they obtaining from my business? What issues are they facing with my current product? Both qualitative and quantitative data are very useful in these situations. 

2. Focus on what the client needs

Stop focusing only on what your business wants. A person won’t do anything if they don’t perceive benefit from it. Take a more user-centric approach and start thinking about how your product can bring benefit to your clients, instead of thinking about how your client can adapt to your product. 

Furthermore, stop thinking that your clients always know what is best for them. This doesn’t mean that it is not important to know what the user wants, but you should keep in mind that it is hard for humans to predict our behavior. 

Have you ever thought that something was good for you and then regretted it? Have you ever planned to take certain actions to then end up doing something completely different? The same thing could happen to your clients.

Communicating with irrationals

A couple of months ago, my team and I started questioning a button that led to one of the main products of an application. The button had stayed the same for a long time, but the concept was too technical and wasn’t attractive enough to boost action. Thus, we designed a simple experiment: changing the text of the button to something easier to grasp. This change of just one word increased product usage by more than 20%. 

As you can see, subtle changes in the way communication is framed can improve the effectiveness of your experiments. The impact of a message could increase dramatically by just changing the framing or by adding a single word like “congratulations” before giving exciting news.

Bias and heuristics

The most basic approach for harnessing that power is to learn biases and heuristics. To make a long story short, our brain uses different rules of thumb to save time and effort when making decisions. The problem is that these rules of thumb deviate us from the rational optimal decision. Those consistent deviations from the optimal decision are called biases and can turn into new patterns of irrational behavior. 

There is a very long list of biases and behavioral principles you can apply to make your communication more effective. For example, you can promote a particular behavior by telling your clients what others are doing inside your product (herding). Or you may keep clients motivated if you show them how close they are to achieving their objective (goal gradient).

Still, it should be noted that using BE to communicate is more than just biases and heuristics. The effectiveness of each strategy depends on the characteristics of your clients and the context in which these decisions are made. On top of that, clients can learn from previous communications and change their responses.

Then, it is fundamental to keep making experiments, monitoring the impact of our communications, and keeping in mind certain best practices when designing communication strategies:

1. It is not one size fits all. Certain groups of clients can be more sensitive to a strategy than others. Personalize communications whenever possible.
2. Time matters: remember behavior is context-sensitive. Always think of when the best moment is to send a particular communication.
3. Reduce the cognitive load of your messages. The shorter and easier to read, the better.

Boosting culture

Leveraging irrationality comes hand-in-hand with experimentation. The problem is that experimenting across an organization can be a difficult task. In the end, organizations are constituted by irrational beings. People are afraid of taking risks or they might be reluctant to change the way they think.

Still, there are several things we can do to change the culture of our organization toward experimentation. Probably it will be a hard and long process, but it is possible. I’ve seen how companies can be fully transformed from organizations that never experiment to insight-driven companies that are always willing to try new things.

Approaches

Here are some approaches that have helped me in the past to boost an experimental culture:

1. Start small and simple: Don’t overcomplicate things. Start with experiments that are fast and easy to implement and where you have strong reasons to believe they will work. Early and quick results will be the best tool to boost the experimentation culture.
2. Make everyone feel a part of it: If experiments are a collaborative effort people will be more willing to do it. Brainstorm ideas, build solutions with different teams, put different perspectives to test, and share the learnings with everyone. 
3. Test the ideas of others. People need to see that experiments help them answer their own questions and that they can learn a lot from them.
4. Evangelize continuously. Be super clear and non-technical on the reasons why experiments are valuable. Examples of past successful experiments are good tools to send the message.  
5. Celebrate failures: don’t let yourself think that experiments are only valuable when they are successful. Create a safe environment to take risks and acknowledge the learnings you get from failed experiments.

Three things that define a true behavior change professional

Now you have a broad image of all you can achieve by understanding irrationality. But, before closing this post, it’s important to note the three traits you should have to be successful in the business of changing behavior:

1. Be responsible

Changing behavior entails ethical considerations. You should be responsible when thinking about influencing behavior. The action you are trying to foment should translate into a benefit for your client. Pursue win-win situations that give your clients a good experience, get them better, and also benefit your business.  

Besides, for your users to do something, they should have a clear goal and be able to obtain a clear benefit from it. If the goal is unclear, or if they don’t want it, they simply won’t do it.

2. Be curious

Human behavior is a fascinating subject. Keep learning and updating yourself. There are always new things that Behavioral Scientists discover. The more you understand human behavior, the more effective your strategies will be.

If you want to go deeper into the world of BE and its applications, check out the following books:

• Kahneman, D. (2011). Thinking Fast and Slow. Farrar, Straus and Giroux.
• Thaler, R., & Sunstein, C. (2009). Nudge. Penguin Books.
• Sutherland, R. (2019). Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life. William Morrow.
• Ariely, D. (2010). Predictably Irrational. Harper Perennial.
• Soman, D. (2015). The Last Mile: Creating Social and Economic Value from Behavioral Insights. University of Toronto Press.

3. Be creative

Some great ideas come from asking questions that seem ridiculous at first. Don’t limit yourself to what is usual – take risks and try new things. Not all your ideas will be successful, but the beauty of irrationality is that we can always learn new things and find better ways to relate with our clients.

As Rory Sutherland mentioned in his book Alchemy, The Dark Art and Curious Science of Creating Magic in Brands, business, and Life:

Not everything that makes sense works, and not everything that works makes sense.

Conclusion

As mentioned before, understanding irrationality for experimentation can help you find opportunities to experiment, guide the way you innovate, and improve the effectiveness of your communications. Just by acknowledging that your clients are irrational and putting yourself in their shoes, you can make a huge difference.

Finally, the most exciting part of irrationality is that there are still a lot of things we haven’t discovered yet. So, always experiment, keep curious, and have fun learning new things about your clients.

Check out our Advanced Experimentation Masterclass course to create a culture of learning.