Traditional economics and business planning in general really assumes logical people making rational choices in everything that they do all the time. And as we're all human we know that that doesn't really work that way, right? We have great intentions and then don't follow through, um, or all sorts of implications that can come up. And a lot of the things that we don't think should matter at a logical level, the brain is picking up on and it's impacting behavior all the time.
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Hi, this is Victoria Meyer. Welcome back to The Chemical Show Where Chemicals Means Business. Today, I am speaking with Melina Palmer, who is an applied behavioral economist and the CEO of The Brainy Business. So Melina has a passion for helping everyone from around the world to understand what behavioral economics is. And by the way, we're going to get into that. So stay tuned. And how it can be applied to communicate more effectively, run your business more effectively, et cetera.
Melina is the host of The Brainy Business Podcast. Check it out. And has written three books. What Your Employees Want and Can't Tell You, What Your Customers Want and Can't Tell You, and The Truth About Pricing. We're going to be talking about The Truth About Pricing, but we may touch on those other things today. More importantly, Melina is one of our featured speakers at The Chemical Summit this year.
So that's being held on October 8th and 9th, 2024 in Spring, Texas, um, the theme of one of the foundations of The Chemical Summit is thought leadership, creating connections and getting insights that you can apply. And Melina in combination with the conversations we'll have at the Summit brings all three. This is going to be a sellout event. Get your tickets today, TheChemicalSummit.
com and Melina is going to give you some insights today, but you're really going to want to hear her in person at the summit. So Melina, thanks for joining us.
Oh, absolutely. I'm delighted to be here now and, uh, in person, uh, coming up in October.
Yeah. Me too. Can't wait. So let's just start with your origin story. How did you get interested in the world of behavioral economics?
Well, I look back to a particular point when I was doing my undergrad. So I was studying business administration and marketing, and there was this one section of one class, like little piece of one book that was talking about buying psychology and why people do the things they do and I thought it was just the most fascinating thing that I have ever seen and got really excited about it and said, Oh my goodness, I need to go get a master's in this. I I'm delighted.
And I spent the better part of 10 years calling universities that said, uh, that's not a thing. It's not a program. It doesn't exist. We got nothing for you. So it kind of lived on a shelf somewhere, right? Put a pin in it of this thing I might study someday. Uh, and I was running a marketing department for a financial institution, and got involved with a group that was, uh, this like innovation fellowship.
They brought in a team from the Center for Advanced Hindsight at Duke university, which is their behavioral economics wing And And as they were talking about the work they were doing and their research, I realized, Oh my goodness, this is exactly what I have been looking for all of this time. And I found myself a master's program and jumped in and I knew I was early because of that path that I had been on trying to find schools and things.
But especially on the applied side, I didn't know how early I was and things that were so clear to me about how understanding human behavior is key to brand strategy and internal communication and pricing
Yeah.
and all these things in business, just nobody was really talking about it. And so I started to do that and was just at the beginning of this like snowball of people discovering behavioral economics. So then people found The Brainy Business and that led to books and courses and, and trainings and all the things that we do today.
Yeah. That's cool. So first of all, the fact that Duke has a department about hindsight is an interesting thing. Advanced hindsight at that. It's like irony of all names, right? So that's, that's cool. And so I did wonder about that. Are there degree programs today? So you had to really work to seek it out, but is it becoming a more common opportunity?
One of the big. Issues was that I didn't know the name that the field had given itself, right? So behavioral economics doesn't seem like a lot of what it is that we're, we're doing on the surface, especially coming in as a marketer. Right. Um, and so I didn't know what to ask for and it's not always and often not housed in the business school. So that's part of a problem. Two, right, as we're
Does it go with psychology?
can, right? So my degree I got from a school of psychology. Um, and so yeah, psychology or econ, but sometimes it's in part of a philosophy department or, uh, there can be all sorts. So, yes, delighted that there are more and more programs that are coming up, um, including, uh, so I work with Texas A&M we have a certificate in applied behavioral economics.
That's virtual and available for people all over the world so that they don't have to struggle through the same type of thing that I went through of trying to find a program.
That's cool. So alright. Let's tackle this. What is behavioral economics and why should leaders care?
Yeah. For you to know why you want to go into all these programs that exist.
Why do I want to use it in my business?
Yeah. So I like to say that if traditional economics and psychology had just the most adorable baby, we would have behavioral economics, um, and essentially the reason that the field came about why it matters is because traditional economics and business planning in general really assumes logical people making rational choices in everything that they do all the time. And as we're all human we know that that doesn't really work that way, right?
We have great intentions and then don't follow through, um, or all sorts of implications that can come up. And a lot of the things that we don't think should matter at a logical level, the brain is picking up on and it's impacting behavior all the time. So what behavioral economics does is helps us to understand those rules that the brain is using to make decisions.
And in applied behavioral economics, um, I help companies to understand how they can get, use that so that more customers buy and employees buy in.
So can you give us an example? Like just when do we see this in use? Like would I recognize it if it jumped up in bit me?
well, it's, it's
to speak.
a funny thing because, for the most part we don't notice it. And it's because all these things are happening on a subconscious level So one of the stats that I love to share with people, because it helps us, we learn about our brains, is that research shows we humans make 35, 000 decisions a day. Each of us, 35, 000 decisions. How many decisions do you remember making yesterday?
Probably like five or ten or who
right?
Not that
yeah, if I was
went out to dinner. Hey, there was a few decisions in
right. If I was, to really stretch myself, I could come up with a hundred, right? At the most, but not thousands, let alone 35,000
yeah,
of them. Right. And so we know that really in this way, our lives are just a series of micro moments and micro decisions. And what behavioral economics is doing is understanding how your brain is making those little decisions. I like to think about it like bumpers and bowling, right? As we're helping to guide someone down a path, something along those lines. And so understanding the rules, you can either be working with them.
To make it easier to get through, or you can be working against them in a way that can derail things. So the example that actually comes up funny enough is not from either of the two books that we've talked about talking about today, but it's, it's in my brain, so I'm going to bring it up, uh, which is, uh, thinking about. change and communicating change within an organization or sending even something as simple as an email.
So there's this concept of framing and that how we say something matters more than what we say. And so in this case, I have this example from, uh, a boss. Years ago, and I got an email from her at 10 a. m. On a Thursday, I got an email that says, we need to talk be in my office at two. So that is one of the scariest emails I've ever gotten.
Yeah. It's going to trigger you in all kinds of
Right. And I had been at this company for, you know, less than 90 days. And so, you know, I spent those four hours looking at every project I had been working on. Every person I had been talking to. I'm like binge eating all the snacks and texting everybody. I'm so stressed. Right. All the way through, uh, these
four hours. Right.
Yeah. I get into her office. She has me sit down and says, I'm going to be out of the office tomorrow and wanted to let you know that yours is the email I'm putting on my out of office responder. And that was it, right? That was the point of this meeting. And so,
Which could have been an
yeah, that could have
first place.
the email if we had thought about the framing. So the thing, and what's really amazing about this is when I was writing about this for my book. Ten years later, I felt the stress, right? My blood pressure increasing as I'm thinking about this experience. And this was just a moment for her. I guarantee
Yeah.
she not remember it. There wasn't any ill intent. I came to learn over the years, you know, there was a very specific meeting on Thursday mornings where I would get these sort of short emails, right, mid sort of thought stream, like boop, boop, boop. But, If she had been more thoughtful about that email, I lost hours of productive time. And even over the years, you know, and I get these types of emails, I would look at that and you say, it's probably nothing, but, what if it is right?
It's always in back of
Yeah.
your mind. You're living in this state of extra cognitive stress and strain, which makes it to where I'm less likely to be open to change. Like, can you imagine if she was going to be telling me about a change or something that she needed me to do in that meeting, uh, even if it's objectively good, I'm not really ready to hear it. And so a simple reframe on that email to say, I'm going to be out of the office tomorrow. Do you have some time to talk about it too? yes, I do.
Sure. Yeah, absolutely. And you would be in a positive state of mind as opposed to a negative state of mind for that
right. And in this case, it's like the first time that she was entrusting for me to be the person on the email. It would have been this delightful thing, and I'm sure she thought it was great, but it was so stressful for me because of this simple way that this is framed. And so research shows that we spend 17 hours per person per week clarifying something that was previously said.
Wow. That's a lot of time.
Too much time, right? So if we can be a little bit more thoughtful in the way we send those emails in the points of communication and what we say to people and, um, how we say it and it frees up, we'll say five hours per person per week, like that. Amazing when you think about that across an organization.
So where I say you don't necessarily notice it, like you said, you don't see it, but now that you can start to be looking for it, I, I like to talk about with communication to think about it like popcorn, right? Popcorn's this great scent that like draws you in when you're going to the movies and we love it. It can be exciting, enticing, all these things. And we've all been in the office when someone burnt a bag of popcorn.
No doubt.
And it's all anyone can talk about for the rest of the day. And it lingers, right? It's like weeks later and you go, Oh, did Melina burn popcorn again? Right. It's, it's out there. Right. So you can look at your communication and say, is this going to be burnt popcorn? Like, how could I reframe it so that it's not right. That's just like simple question that you can ask to think about a reframe that can save tons of time across the team. And really, you know, that's money for the company.
Absolutely. And I, I've learned that along the way. Um, but number two, well, my, uh, so my second daughter just finished her freshman year at Texas A& M. So the Texas A& M connection, and I kid you not, it's like finals week and she said they got evacuated. There's a fire alarm at like 2 a. m. or 3 a. m. because somebody had burnt popcorn and set off the fire alarm. It was so bad and smoky and whatever. She's like, are you kidding me?
We've been in the dorms for nine months and you still haven't figured out how to make popcorn. Right. Not to mention the fact that at some point during your Prior 19 years, you hadn't learned how to make popcorn.
So, um, it's, that's interesting that the other piece, so that communications piece I've learned, um, and part of this is kind of the one to one learning and the one to many learning, but there's, um, with my marketing assistant, I've learned that when I send her ideas, she's ready to implement and I'm like, Oh no, no, no, that was just an idea. So I, I know to frame it as put this in your future folder. Not for today, but for future that we might want to look at this.
Um, and then we eliminate the back and forth up front. She knows what I want to do with it. I can still get it off my desk, uh, and know that, okay, it's someplace where we can talk about it in the future. So it's, um, that, but it is, it's an extra. Um, probably a second at this point of thinking before I do something to make it more impactful.
right. And having that little bit of space up front to be able to plan and say, Hey, what do we actually want? Out of this, like, what do I want someone to do? And if we're thinking in these micro moments instead of big moments
Yeah.
of change, right. And it's exactly the same when we're thinking about communicating with customers and getting people to buy. Right. And so
Yeah
if we don't think about like, okay, well. I want to have like manifested this product and then eventually people buy it like that's what's going to happen, right? Well, no, right? There are lots of little moments along the way, some that are more important than others, some that are more nudgeable than others, and you can find.
where you can be using numbers in a thoughtful way, where you can be incorporating a question, where you can be doing all these things that are helping to move them to that next micro moment, that next decision, and we know the way where we want them to go down the path, whether that's internal or external. And right now, if we just get one thing from this, what's the most important next thing to ensure that we're staying on track and on the path.
And if we break things down in that way, then we're just that much more thoughtful and things really tie in together and you can start to say, what can be asynchronous here? Like what can we turn into a process? Because we thought about it one time. That's going to streamline everything down the way.
Cool. So how does this all tie into pricing? So I actually have your book here. So people that are watching the video, um, your most recent book is around The Truth About Pricing. So I guess the question is, what is the truth?
Yes and don't worry I'm not like giving away the whole book in this case, because I actually share, I think it's on page three that I say what the truth about pricing is in the book, which is that pricing is generally not about the price and everything that happens before the price matters more than the number on the tag or however, or, you know, in the bid sheet or whatever it
Yeah.
is that we have there. Right. And so all that stuff. That happens before the price is the psychology. It's the thoughtfulness of these things we're talking about and how you're framing that message, how you're incorporating all these different aspects, uh, into really helping people down the path of by the time they're ready to buy. Doesn't even really matter what the price is. It's secondary.
Yeah. It's, it's kind of like the Birkin bag or the it bag. I was reading an article today in the Wall Street Journal, they were talking about what's the next it bag, um, in terms of handbags. And, um, by the way, I have none of those bags because I'm not willing to spend thousands of dollars, but there's a certain mystique around it that has nothing to do with its functionality.
Um, and I think sometimes in the, It's certainly in our industry and the B2B industry and in chemicals, people often think about functionality as the only source of value and pricing. But what you're saying is it's the rest of the story.
Yes. Well, and actually I have, uh, the Birkin is a case study that I have, uh, I give some examples at the end of the book and, um, yeah, the Birkin bag is one of them because as you're saying, it's such a, a fascinating and interesting example where, you know, when we think about utility, uh, you know, plastic bag from the, um, Grocery store that I'm reusing would do the same thing as that Birkin does, right?
It holds things and has handles Done it right, but of course not that is not how this works works right? It's not about those things It's about my identity and knowing we're a herding species. So this piece of social proof is driven by scarcity Um, there's aspects of loss aversion and what it means, you know for me to be able to have this, this item, what it says about you and all these different aspects.
And so what I really love about the Birkin too, is it's not just about being able to afford it, right? So that's another thing, because there are a lot of really expensive bags and things that someone could spend their money on. But in the case of, of.
Hermes in the Birkin, they have actually set it up that the only way that you can get a Birkin bag is you have to spend now enough money with Hermes outside of this to develop a relationship with a sales associate that they would then recommend you as someone who could get a bag and you don't get to customize the color or the size or anything for your bag. It's saying, Hey, this is now available.
You're on the list and you're now eligible to spend thousands of dollars and pay us all this money for a bag in a color you hate that's too small to hold your stuff. Do you want it? And people say, heck yes, I do. And I am going change, Yeah. This is now my new favorite color and I'm updating my wardrobe to match the bag. Like, but you have to be essentially like nice enough to have the relationship that that sales associate wants to pass you along. Which.
I love because so often we feel like we have to cater to people that maybe aren't so nice because they happen to have the, the money or, or whatever it is. And. If you think about, well, what if we don't do it that way? We could build the model however we want and have it to where people are knocking down our door to be able to spend money with us. Like, it's really cool. I, I love the Birkin. I'm glad you brought it up.
And, and, and being in a position where people are asking to do business with you and buy your products is a bit of a Holy grail, right? As opposed to having to sell, just being in the position that in some ways you're the gatekeeper.
Yeah.
So how do we translate this to B2B markets? When we, uh, you know, chemical industry often thinks about, um, products being products. And in fact, I talk about this a lot to folks that nobody actually cares about the specification because there's just an assumption that that product is going to do what it does. Um, it's all the other things. Quality relationship where they perceived value, et cetera.
But when you think about this and kind of just the, the lessons that from behavioral economics, how do they apply into B2B markets?
Yeah. So at the end of the day. It is still a human person that is making the decision whether they're going to buy from you or not in the case of B2B, what you have is some more complexity that you have multiple someone's multiple human persons that are various gatekeepers with differing levels of authority. And if you can understand what their motivations are. And can cater to those. It helps to streamline a process. So and knowing they don't all want to need the same things.
So there are kind of different levers you want to pull at different points. So, you know, your CFO is going to be looking at something that's different than that power user or someone that's having to be running Something that could impact you, right? Where it's saying, well, we already have all these things input into a system that we're using. I'd have to change a bunch of these codes to switch to a new vendor. Uh, I'm not willing to do it. So like got to fire me or, and like, good luck.
That person
Yeah,
could derail everything if, and if you don't know, they exist up front to where you can be understanding what they need. It's like down the path, but if you can think about them in advance and what's going to help them to love this idea, uh, you know, getting them in the room is really key that they could derail your whole giant sale because they said, no, and you don't even know that they exist if you're not taking the time to be thoughtful about them.
So, uh, you still need to understand what's going to be appealing to the CEO, the CFO, all these other people along the way and how you're going to communicate to them. but understanding what behavioral levers to pull with each of them is really key. And so when you are in that B2B space, knowing that you have multiple humans that can interact in different ways, and you're just applying the same concepts, uh, to each of them,
I think that's right. Um, I just recorded an interview. So in fact today, so prior to our interview, um, and that actually gets published a couple of weeks before this, um, episode goes live with, um, Gaurab from Solugen. And one of the things they talked about was in terms of, and they're a startup company. So for your benefit, Melina there, and actually for other people's benefit who didn't listen to episode, go listen to it. Um, and aren't familiar with Solugen.
They're a startup in chemicals and it's there, they found an enzymatic way to create chemicals and, uh, more carbon. Um, let's just call it carbon beneficial and more sustainable product. But, you know, we talked about how did they figure out how to go to market their customers, they went to the people that were actually using it, right?
So often I think the conversations happen between sales and procurement, but actually getting down to where the actual users of the product are and what their pain points are, why they use it, what they like about it. They found to be really valuable, right? So the operator who's using the product has a very different need than the procurement manager, then the business manager, then the CFO, then the CEO. and understanding all those various touch points becomes pretty critical.
right, right. Well, and that's, so here where, what you said is a piece that's like down the line, other people that like it. And we're able to share and say, people like you like this thing and are seeing value from it, right? That's our testimonials. That's social proof. That's the same thing I was talking about with the Birkin bag, right? So it's the same concept
Yeah.
but we're thinking about it in a people like you have done. And trust this, it's the star ratings and reviews we see on Amazon and how many followers people have wherever else we humans are really motivated by that. And it helps us to feel safe in making a decision. And so accreditations and certifications certifications those are a form of social proof as well to show that you can trust us. Other people did some due diligence and vetted us were trustworthy.
Even being able to say, you know, amongst our clients like you this is the most popular choice, right? That's, that's
Hmm.
the social proof piece. And so it feels like sometimes we shouldn't have to say that it shouldn't be about that. Yeah, it is.
Right.
It's about that. And if you omit those things, it just makes it so much harder to sell. And so if you can line up, so in The Truth About Pricing, I give these steps of how you're going to be shaping out pricing, how to think about it, all the things that happen before the price, right? And. We can say, if you've built out what that best offer is, what, you know, is the best thing for most people to buy from you.
And then you want to put all your eggs in making it obvious that this is the best choice. And it's the, you know, maybe it's the best value. Perhaps it's something that's most popular, but we're making it very clear that this is a good choice. Testimonials line up with it. It's also profitable for you and it's something that's really great for the customer, right? So we're layering all those things in. And then you want to create this.
What I call the wingman product or service that is in addition to this and that wingman is typically something that is also going to be a high anchor, right? So it is more expensive and likely has more stuff in it than what most people would need. And you
would Yeah.
talk about that thing first so that we say, okay, we've got this thing and I'm going to use much lower, easier numbers here as we're saying, but it's like, this is
the Yeah.
10,000 dollar option, and it's got the extra deals and stuff in it. We also have this
7,500
dollar one
Yeah.
and it's easy for most, right. Then like most people pick this one and that's a great option for you. If you started low and say, well, we can get in as low as 2, 500 and there's the 7, 500 thing I think you should get. Or we have something that's 10, 000 like, like those are way too expensive and they might've been the same thing, but when we start high, it makes a difference.
Yeah. Yeah. So that whole anchor, uh, anchor high, uh, as, as you do in negotiations, right. Or, or anchor low, depending on which direction you want to go. Um, so, you know, I think in the industry, there's often this belief that pricing is kind of almost solely based on supply demand or solely based on cost of goods sold, or maybe not solely, but it's 80%. Let's just say 80 percent of the price is supply demand or feedstock related. How do you respond? Respond to that.
When you think about that as a pricing mechanism.
Yeah. Um, I disagree clearly, right. In that I wrote a book saying something else. Um, and. In the way, but if, if it's all you think about, you can very easily make it about that, right? If you don't think about all the psychology, it comes down to price because people don't have anything else to be thinking about.
If you're just looking at what your competitors are pricing at and you, or going, like you said, off cost of goods sold or whatnot, and you do a percentage above and you're talking to someone about this like nitty gritty numbers stuff. Sure. They're going to focus on that because you made it about that. But if you don't, it doesn't have to be. And that's where all these psychological principles from behavioral science come in.
Yeah. So that's when you start focusing in on how are you using it? What's the, what's the value? What do you, what do you value, and how are using that in our product or in this product, et cetera. Is that how you would go into it?
Yeah. And I mean, just even my favorite example to show how this, how you can break yourself free of this. So there's a chapter in The Truth About Pricing, that's called you, right. And saying that you, the collective, you are really the biggest hurdle to pricing, working, you And being able to sell things at a higher price point, if that's what works for you, it's not all about raising prices.
I have examples of, you know, for value businesses where you're, how can we bring this down as much as we can, right? What are, what are our options there? If you're wanting to sell, you know, lower margins, but higher quantities and things like that. Um, so it doesn't. Have to be about that. But if we're thinking about raising prices and getting, and we're so fixed on the cost, right? I want you to imagine that you're going to be selling grilled cheese sandwiches.
So when we think about a grilled cheese sandwich, uh, you as a customer, you know, how much would you pay for one? You really want a grilled cheese,
Five bucks. I don't know. It depends on where I go. If I'm going to my kitchen, it's slave labor free, right?
You're right. We know that the cost of items to make a grilled cheese is maybe a dollar, right? And even a terrible cook could probably. Put one together. You could, uh, you know, make your way through this sort of thing. Uh, and like you said, maybe you pay 5 for one. I've had people say 10, 15. Uh, I think even like 20 or 25 is the highest. Uh, I've heard someone say if it's like, uh, but I'm expecting a pretty fancy grilled cheese, right? And I really wanted one.
Uh, there is a restaurant in New York City. It's called Serendipity Three. They have a 214 dollar grilled cheese sandwich that they sell. Wow. And yes,
What makes it special?
but so aren't you intrigued now? Don't you feel like you kind of want to
I am intrigued.
to know what the hype's about, right? I want to get in on this thing. Yeah. So there's a, you know, flex of gold in the crust and it's made with Dom Perignon champagne and this very special cheese from these cows that only lactate for a certain period of time and they graze on licorice and strawberries and all this stuff, right? It's like a whole thing, but this is the framing. We're priming you
And there's a whole story around it.
scarcity and we want to be a part of the thing, right? Like it's really, it's, I kind of would want to try. And if I'm in New York with a family, do we do, we want to share about it on social media and be posting about it, right? Our social proof coming back in. They also have 200 French fries that had a wait list of eight to 10 weeks when they launched, they have a thousand dollar vanilla Sunday. They have more normally priced things too, but imagine you're going there.
Maybe you're not going to get the 200 sandwich because. You know, but you might get a 35 sandwich to say you were there and you were part of the vibe.
Right?
And you want to talk about it. Right? So that's that high anchor of something that even with these extreme
Oh, interesting.
examples, right, even with the most expensive ingredients, it's not like. They're only making 14 on the sandwich when they're spending 200 on ingredients, right? That's not what's happening here, but they've turned it into this vibe about the brand that we want to invest to be a part
Mmm.
of it because it's Serendipity Three, right? It's what, what it is. And, and I'm, I'm part of their clients. I'm cool. I'm, I'm in the in crowd. You just wish you were cool like me. And I got, they let me buy a sandwich for them for 30 bucks.
Yeah, actually, that's a really good example of anchoring, right? The hot anchoring high, because, um, I mean, apparently somebody buys a 200 grilled cheese. And if I think about if I take this back to the chemical industry, and it'd be to be example that there there are often products that are special. Maybe they're special because, um, of the way that they're made. Their sustainability profile today is obviously a big thing. Maybe their performance criteria. Uh, but am I okay?
Well, I can't necessarily make that work in formulation, but I can make the next best thing work. Um, and then the next best thing in your case, a 35 grilled cheese seems like a bargain, even though. I would never normally spend $35 for a grilled cheese. Maybe I wouldn't normally spend a dollar a pound on a particular product, but by comparison, if I'm comparing it to the product I really want, that's $10 a pound. A dollar seems really affordable.
Mm-Hmm. right. And even for that's why I talk about it as the wingman, right? Instead of sometimes throughout behavioral science, you'll see this referred to as decoy pricing, right? And I
Okay.
don't love that term because decoy makes it sound like the other thing is bad, right? So it shouldn't be bad,
Yeah.
but it's like it's whole job though. You should be delighted if someone buys the wingman, right? Like, Hooray, how cool. Right. And the wingman's job is to make the best offer look good, right? That's what it's there to
Hmm.
do. In this case, if you have that sustainable option or whatnot, what I have found over the years too, sometimes it's bundling, right? So you can bundle two things that you offered together. And that becomes this high anchor price. People didn't even know they could get this other thing, but like, cool. Like that's nice to know you don't have to discount it. Anything else. It can just be something that's already there. You talk about first say, or you could just start with one of them.
And this is how much that thing would cost. Right. And people are amazed time and time again, as you create that, that wingman, you know, you have the high anchor, whether it's a bundle or something people go, Oh my, I didn't even know I could get this. Like, yes, I want this thing. Like, and then you realize,
Got it.
actually the thing I thought was the high anchor is what we should really be selling. And now we can create a new wingman. Like, and it's an easy way to raise your prices as you get some, some wins.
Yeah. And as you talk about the bundling, it makes me think about, we used to, uh, and this is a practice that, um, I learned when I was at Shell and I know other companies probably followed around, um, MISO, multiple equivalent simultaneous offers, but part of the deal is that. Yeah. You know, it's not just product, it's pricing terms, it's delivery, maybe level of R and D and being able to actually pull those multiple pieces together that you may or may not have valued individually.
Um, that you may or may not have considered as part of your offer, but having it be part of your offer bundle, and then being able to compare bundle A with bundle B, what do you really. What's really important to you, that as a seller, I'm happy to offer and as the buyer, you're happy to receive. And it makes it all feel more valuable.
Absolutely.
And you could theoretically get a better price for it no matter how you define better.
Yes, for sure.
So, you know, I've got a lot of questions for you on this, but we're going to run out of time. Um, so let me just, let me start with this. There seems to be a strong element of linguistics, right? When I think about part of your early example about how you write an email, and the response that that creates, what I might happen to say about a product or service or, um, how, I identify you as the hero in the story about getting this product or service.
There seems to be a strong element of linguistics in this. Is it true? Is this about language as much as it is about value and pricing and negotiations? Hmm.
And, um, you know, we've potentially opened the Pandora's box of one of my like passion spots. So we'll like, I'm going to rein myself in at least a little bit but it definitely is. And showing the power of the right word can change so much. So our brains work in associations when we're talking about things and the right word can either keep us moving forward and the wrong word can kind of throw things off. So even something as simple as if you want someone to know that it's expensive, right?
For whatever you're talking about, but you don't want to be like, Hey, it's expensive. So don't talk to me unless you have money, right? Because that's, It doesn't really feel great, even just saying the word investment, right? So this would be an investment in, in your, you and whatnot, right? That one word can make a real difference.
And there's an entire kind of adjacent field that is emerging that is known as cognitive semiotics, which is essentially how the mind makes meaning and understanding the power of metaphors. And the choices that we use in words and images and how that is impacting decisions people are going to make. And so the, um, research shows that every, the 20, every 25th word that we use is a metaphor. Every 25th word we say is actually a metaphor. And so
All right. Give me an example of this cause give me an example of that. Yeah. Cause I'm having a hard time believing it.
Inflation is rising. Yeah. Okay. It's not, but it is right. That's how we can understand it. Right. And so we're making these associations to these sort of physical properties all the time. We talk about funds as being liquids. Right. So we have liquid assets, funds are frozen, we're drowning in debt, right? We, we use these terms all the time. We're not actually doing those things, but they are the way that we think about them and how we talk about things.
And so when you can align your metaphors in a proper way, it reduces the cognitive load for someone. And so there was some research done talking about like, so if you talk about, um, Make medication for depression. And you can say it's either. So if you talk about someone being coming into the light, or they're going to be more uplifting
Yeah. Yeah.
right. And when you align the metaphor, it's more impactful than if you say like, you know, depression brings you down and this medication can help. Bring you into the light, like, ok what, like that feels weird
Yeah. Right.
right? But when you can line the two things up and say, you know, the problem is like this, we do this and they match, right? So depression is bringing you down. This medication will help you feel uplifted. You're going to be on the rise. You're, you're coming out of this thing, right? People just naturally go, yeah, yeah, that makes sense. I get it. if we don't even realize
Got it.
that we're using a metaphor, every 25th word,
Yeah.
guaranteed you're mixing them up a lot and it's not lining up. Right. So if you just even think, what do we want to be and say, like here for The Brainy Businesses that we help you unlock what's possible, right. And making sure we have keys and locks and things. Open being unlocked. Uh, you know, or it's in the vault, it's not available right now, that sort of metaphor we want to go all in on because it helps with that consistency in the brain.
And so again, it comes back to thoughtfulness, knowing what you're going to be about, what that means and how you can line all that up. So yes, linguistics is a part of it. Imagery is a part of it. And it all comes down to thoughtful alignment.
Yeah. So I know you work with a lot of companies, um, helping them understand all of these elements. And it strikes me that, you know, obviously this is introducing a new approach, um, some of which may already be happening is in, in some cases it's instinctive, right? I think for some people, some of this is instinctive. In terms of how they frame things, position things, et cetera, for others, it's not right. And I think, uh, you know, I think about The Truth About Pricing.
When I think about what your customers want, it's aligning your business, you know, whether it be the salespeople, business managers, product plant, et cetera. And it's not necessarily easy to wrap your head around this and align it. So are there a couple of like easy suggestions in terms of how you find, um, the steps to get companies in their organizations aligned to being, to be thinking of this way. Um, and to be framing their conversations in this way.
Yeah. And so so much. Of course. Thank you for asking that. And, you know, for us, The Brainy Business, we're at, we're teaching and mentoring organization. And so what we specialize in is helping align those trainings for organizations so they can be having, like, these are the concepts that you and your team should know around leadership.
These are the concepts you should know if you're looking at pricing, or if you're looking at experience and brand design, and to be able to say, these are a few things that you should know, this is what's really going on, here's how you can start to use it. That is the core of what we do here at The Brainy Business. So people can, you don't have to go get the PhD in this and, you know, way down the road, maybe someone's going to be able to apply this for you.
And so, What I recommend for people as you're getting started, right. And trying to figure out a couple things.
Yeah.
you know, we talked about the email as a point that we can, we can start with, right. And if you think you like this idea of framing, right. And you, that resonated with you. You say, you know what? I'm going to be thoughtful about one more email this week, right? We micro moments too, right? It's not that we're going to go try and do everything all at once.
If I'm going to do one thing, one email, every email this week, I'm going to try to be really thoughtful about the subject line and what I'm wanting somebody to do, or, you know, going into my sales. Calls for the next month. I'm going to think about anchoring and how I can create, what's my wing man going to be, and I'm going to try that out for a month and I'm going to see what happens, right? Test one thing. And, and go in on it, know why you're doing it and just see, right?
What you can get, but you want to know what the end result is, what you're trying to accomplish. You're going to do that little test and you'll start to see some lift in a really exciting way.
Yeah. That's cool. All right. Um, my final question, and I could ask you some more, but we're going to maybe make this the final one. Um, Maybe I'm going to have to actually, um, what do you see? So you obviously work with a lot of different business leaders.
What are the characteristics that stand out, um, in business leaders that are most effective in maybe leading their business, their companies or businesses or in helping them, um, Um, turn the tide towards more behavioral centricity and how they're running their businesses.
I love this question. I don't, I don't think I've ever been asked this specific question and it's one of my favorite ones. So thank you. I would say that it is this, um, openness to learning. Right. Being, uh, and this like coachability feedback sort of space and knowing that, you know, this, uh, it starts with you opportunity, right? So the ripples of change start with that one thing, right?
And it's nice to say, Oh, wouldn't it be great if someday we did that, but until they do this, there's nothing to be done. Those who take an action, like I'm talking about that one email, that one change you're going to make. Go do it and then you can talk about it and being able to look at yourself and saying, you know What might I be doing? That's not helping me on this journey and how might I change that and I want to learn more about that and I want to Tell other people about the value.
I'm seeing you get inspired excited It's making people want to be a part of that. They want to try that little change because you are successful too, right so that openness to learning to knowing that You The way that you've done it isn't necessarily perfect and the only way or whatever that is, but opportunities for change and testing some new things out, they are, and just a general interest in humans.
people and their behavior and knowing that when you work with people, things just can work better and trying to be generous with others. I, those sorts of mindsets, um, are the ones that are most receptive to behavioral economics and, uh, see lots of successes they start to implement.
Yeah. Love it. And experimentation. That's what comes to mind when you say that is being willing to experiment, um, and keep learning. Great. Well, Melina, this was really cool. Um, thank you for sharing, uh, your insights and I, you know, we touched on a lot of topics around behavioral economics and other things.
I think there's a lot of food for thought here and I know you're going to be imparting some different wisdom, um, especially as we think about customers, uh, when you come to The Chemical Summit later this year. So thank you.
course. Thanks for having me.
Yeah. And thank you everyone for joining us today. Keep listening, keep following, keep sharing, and we will talk with you again soon.
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