Nov. 23, 2015 "How to give customers a nudge": I cut out this article by Harvey Schachter in the Globe and Mail on Sept. 21, 2015. This is like a psychology article:
A lawyer, an economist, a marketer, and a behavioural scientist walk into a bar.
This isn’t a joke but a way that University of Toronto professor Dilip Soman helps illuminate important changes in recent years in marketing.
The bartender, he continues, shares a serious problem: “If I want to get people to move from Option A to Option B, how can I do that?” The shift might be anything from an attempt to dissuade individuals from drinking large-sized soda drinks or to get them to order a more profitable beer at the bar.
The lawyer has a quick answer: Make it illegal to choose Option A. Assuming no other alternatives, Option B will be picked. That’s valid, Prof. Soman notes, even for companies selling products: They could make Option A unavailable, assuming they control it.
The economist doesn’t believe we need to ban anything. Incentives can do the trick, with some kind of economic tax on choosing A or economic benefit for choosing B. Companies, for example, could offer a discount or some loyalty points for buying B.
The marketer instinctively is inclined to suggest another approach: Advertising. People probably aren’t choosing Option B as they don’t know about it or understand why it’s superior. The advertising industry is framed around the premise that if you provide the public with the right information and a compelling reason to buy Option B, it will succeed.
Finally, it is the behavioural scientist’s turn. His recommendation is simply to make it easy for people to choose Option B. Create a world in which it’s harder to choose Option A than B. Give people a nudge.
The story elaborates on an incident a few years ago, when Prof. Soman, who teaches a behavioural science course to his marketing students, was in a bar with an economist, discussing choice.
He uses it in his new book, The Last Mile, because it illuminates the struggles that corporations, governments and social agencies face when persuading people to pick the preferred option.
In the past, economics and marketing ruled (with governments, of course, resorting to bans at times). Universities taught that “rational economic man” would make sound choices based on information and price. But now we know that simply isn’t true. First, the number of choices before us can sometimes be bewildering. When Prof. Soman was a kid, he had two choices of bread at the grocery store; now he faces about 60 alternatives. As well, human beings are irrational. We can be nudged, as many behavioural studies show.
If you’re selling an eight-ounce cup of coffee and a 12-ounce cup, for example, and want to increase sales of the latter, just add a third choice, 16-ounce. When three choices are offered, studies show people prefer the middle one. Context matters.
Prof. Soman says that we need to be alert to behavioural research and figure out how to use it effectively. He calls it the last mile problem. The first mile for organizations are their many activities to get a product to the marketplace, such as R&D and organizational processes. The last mile is when consumers make contact with the product or service – how it is presented in stores or online to them. “We have spent way too much time thinking about the first mile and not enough on the last mile,” he said in an interview.
He believes there are three pillars of human decision-making. One is how context influences our decision-making, whether the three sizes of coffee cups, putting healthy foods at eye level, or using smaller plates to encourage less food consumption. The second is explained by Isaac Newton’s laws of motion: A body at rest will continue to be at rest unless it is given an external push, and a body that is moving continues until some external force slows it down. People will continue with their default behaviour – what they prefer – unless pushed to do something differently.
The third pillar for understanding behaviour is intertemporal choice – how choice at one period of time influences choice at another time. For Prof. Soman, it is tied to a comment in one of his favourite books, Magical Thinking, by Augusten Burroughs: “I myself am made entirely of flaws stitched together with good intentions.” Or as Prof. Soman puts it in his own book: “Everyone intends to be good, everybody intends to eat healthy food, everybody intends to save more for the future. It is just that life gets in the way and they don’t act on their good intentions.”
If you intend to follow the advice of the behavioural scientist in the bar, Prof. Soman urges you to run tests in order to understand what is influencing your clients. “In the last mile, everything in the context matters – the displays in the store, the sequence in which the choices are seen – everything. It’s critically important to test, and keep testing,” he said in the interview. Keep in mind that much of the success of a new product or policy comes in that last mile, the land of behavioural choice.
"I was laid off is it too late to claim long term disability": I cut out this article in the Globe and Mail on Sept. 21, 2015:
THE QUESTION
I am a 54-year-old woman. I worked for Company A from 1996 to 2006, then moved to Company B and while there, collected long-term disability payments from 2007 to 2009. I returned to the original company in 2012 and was let go in February of 2015. My contract guaranteed severance, and after some back and forth, they paid me that amount. But my pre-existing health issues have since returned. I can’t find other work and my doctor says that I should be on long-term disability, but the company says that benefit is no longer available. What are my options?
THE FIRST ANSWER
Bill Howatt
Chief research and development officer, workforce productivity, Morneau Shepell, Toronto
At this point, you are doing the right thing: Exploring your options by asking good questions. This is one of the best approaches when one is stuck. By asking others for their point of view, you may be able to shed light on issues you have not thought of before. There’s a normal grieving process when one’s health slips, but what one thinks and chooses to do ultimately defines one’s quality of life.
As you obtain options, it is advisable to write out the problem you want to solve and why. This will position you to determine what a minimal, viable solution looks like, and as you get your facts, you will be able to make an informed decision about where and how you want to spend your energy.
It appears that your work situation has ended as well as it can. However, if you still feel you have further entitlements, one option is to investigate this with an employment lawyer.
If you are convinced you can no longer work, the focus now appears to be on your health. What financial and emotional support can you get to stabilize or improve your short-and long-term quality of life? You may decide your priority is to put in place an action place that meets your minimal financial needs, and to focus your energy and efforts on what you can to do stabilize your health, improve it, or at least prevent any decline in your condition.
THE SECOND ANSWER
Daniel LublinEmployment lawyer, Whitten & Lublin, Toronto
Following a termination, employers have several obligations to continue health benefits, including long-term disability benefits, for a certain period of time but not forever. Once that obligation ends, if an employee is ill or injured, it is too late to make any claims under their former benefits plan or against the ex-employer.
Employers generally have to continue all benefits the employee held while employed for a reasonable period of time following termination. This time frame is determined by various factors, such as an employee’s age, tenure and position, the provincial employment standards legislation, any contractual agreement signed, an agreement made at the time of termination or a time frame set by a court.
In cases where employers have not continued all benefits for a fair or contractually required time period and ex-employees can prove that they would have otherwise received insurance or disability insurance coverage had those benefits been continued, courts have awarded damages against employers to compensate the employee for the lost benefits.
However, if an illness or injury occurs following the time frame when benefits should have been continued, then the employer and insurance company are no longer responsible to pay out any benefits. For any just-dismissed employee, this is one of the most important reasons to ensure that benefits continuation or replacement benefits are put into place.
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