A behavioral experiment; choosing colors

I have read many articles for the last 3 years regarding behavioral economics and neuroscience and in 2014 I decided to make experiments of my own. I have a small website around 1K unique visitors each month; kartsec.com. This web site recommends you the most advantageous credit card by matching the card’s campaigns with your expectations and your spending behaviors.

The planned business model depended on users filling credit card applicant forms and getting commission on each new credit card customer from the bank.

The site had 3 major features; recommending which card to apply for(wizard1),recommend one of your existing cards for a unique shopping transaction(wizard2), recommend a brand to buy from (wizard3). The first one was going to bring direct income, the others were only ways of gathering information from users to run data mining experiments. So I had to make the first one more attractive than the others.

I started with a basic rule, the left-upper part of the page is the most clicked part. So I placed card recommendation link on that part;

kartsec.com first version

This layout and colors proved that it was right to put the wizard1 to the left-upper part of the page. Wizard1 took 5 times more traffic than wizard2. However there was still more to do here because I needed more traffic going to wizard1. So I decided to change the colors and came up with a second design;

www.kartsec.com final version

Changing the colors had an incredible effect on the traffic flow. Starting from the main page; wizard1 takes 12 times more traffic than wizard2 and 20 times more traffic than wizard3.

While routing the traffic in the target proportions, I still could make many other experiments to optimize it but one of the most important tasks in behavioral experimenting is to choose the most beneficial part to experiment on. From now on any change would bring small changes on the traffic route so I had to test other things which would bring more benefits. So I decided to work on decreasing the bounce rates, which was about %40, too high for the sustainability of my business model.

Why did Arby’s fail?

Why did Arby’s fail to expand in Turkey and Burger King succeeded?

Arby's failure

First of all I want to mention that I like Arby’s more than Burger King or McDonald’s, Horsey Sauce rules!

Arby’s entered the Turkish market in 1996 and opened in 48 branches. Whereas, Burger King, entering the market in 1995, opened more than 550 restaurants in Turkey. Is it only the timing, the 1 year that made it possible for Burger King to expand and Arby’s to fail?

There are several reasons for the failue of Arby’s and it was obvious for a long time. First of all let’s analyze what Burger King had done to compete with McDonald’s in Turkey. They opened a restaurant next to each McDonald’s branch. They targeted the same customers and with the similar taste. Only difference was, their brand relied on a slogan like; “flame-broiled meat”. They were sure that the same market was expanding enough to satisfy two large brands. So, they heavily spent on opening restaurants and marketing, but spent less in quality or innovation.

On the other hand, what Arby’s tried to do, and thought obliged to do, was innovation. Their strategy was right because they were one year behind Burger King and Burger King had already spent millions in marketing, also took high risks by opening as many new restaurants as they can. They were in a deadly competition with McDonald’s and it would be a death sentence for Arby’s to enter that war. However their biggest mistake was their curly potatoes🙂 Let’s remember what innovation meant; the process of translating an idea or invention into a good or service that creates value or for which customers will pay. Have you ever heard someone saying “I love Burger King burgers but I hate their fries” or “I love McDonald’s but their beef sucks” ? So if there is no such complaint from the customers, trying to find an innovation for fries or beef would not work. Arby’s also tried to target a higher segment by raising the prices. I remember myself in high school and university not eating at the Arby’s because it was too expensive. Keeping in mind that the teenagers and college students are the best customers of fast food chains, it was obviously too risky to abandon this segment. That didn’t work either because when eating fast food, people do not expect to have the feeling of being special or expect high quality. They just want to get their stomach full with an average good taste with a cheap price. I have seen many small restaurants losing their customers because of moving to a larger and more stylish place, they abandon their customers’ expectancy of being in a low quality restaurant. Yes I do believe that such an expectancy does exist🙂 If someone would pay more for a qualified burger they wouldn’t go to Arby’s. For eating a quality burger they would go to a better restaurant like Shake&Shack or Burger Joint. Arby’s found the right way for innovation but it was too late, adding different sauce types. They should have used this weapon to take a share from the same huge pie of McDonald’s.

In 2011, Arby’s decided to lower the prices in Turkey but it was already too late for this as well.

McDonald’s and Burger King got the cheap fast food market, Shake&Shack segment restaurants took the expensive fast food market, which left nothing to Arby’s in the end.

Great examples of advertising

Adverts have these in common;
Make use of context,
Participate users,
Make emotional bond,
Make social bond

Blowing the wind, make use of the environment, use sensors;

Renovated with OBI, make use of the environment;

Miserero, the social swipe, participate the user, emotional effect;

DHL is faster, funny;

Milka last piece, emotions, social interaction;

successful viral videos

A research in HBR found the common principles of videos which spread viral in social networks. These videos use ordinary people. This is a common sense also seen in elections too, if a candidate seems too good he won’t be chosen but if he is only good enough then he will be chosen🙂

Another principle is humor. Somehow it relates to gamification in my mind. If something is entertaining, it will work.

The next is simplicity. %5 is the best click rate of banners directing to a video. And after clicking the banner %80 go on watching it. How many of them do you think would reverse the video in order to understand it? So you have to make it simple.

Whimsical content is the last but the most important one. The era of content has already risen, but the next wave is the era of creative content. Content access will be easy with the help of cloud services and low content license fees. But now it will be the creativity that counts. As the number of free content rises, the creative and unpredictable content will be eye-catching.

organizational change

Because of a short notice meeting request I had to come up with a few ideas about making the organizational changes effect employees’ mood in a positive way. Even if my starting point was about the feelings of an employee I also started to think about how to make organizational changes better. Three main steps came up to my mind. First of all clearly explaining the need and purpose of this change. Secondly, involving employees during the change project and ask for their ideas,opinions. Last but not the least, explaining the improvement that is expected after this change and what is expected from them individually.

The purpose of the change
What is the need or the problem? What is wrong?
Change in the organization may be based on a need for something new in the market or the company, or it may even be based on a problem in the company. The reason why this change project is needed and what kind of improvements we need to have with this change should be clearly explained. These reasons will be more persuasive with numerical information, these statistics will convince employees that we really need this change. These reasons can be explained by reference to the company’s vision, so it can be shown that this change also supports the vision.

I think it is useful to participate first line managers, team members while trying to find a solution to the change reason above. Even if the density of daily work is so high for this level employees, only a few words from them will do a lot of help and rescue the change project team from doing something wrong. While choosing these people it is very important to find the ones who expect no benefit in this change and who will give ideas only for the good of the company. With this approach it is also possible to learn what employees want to see and hear in the change project. By talking to a few, you will hear the expected reaction to the change.

Participating employees while the plan for change is going on and earn their support
As soon as the change project in in a mature phase, there should be a general meeting with the participation of effected employees. Of course there might be useful feedback in this meeting but the main objective of this meeting is to place the effected people in the middle of the change plan and not to the end.In this meeting the reason of change, the need or the problem should be declared and it should be reflected to employees as if the change project is not at the end but at the beginning (even if it is not). This way you will achieve 2 important objectives. First of all you will give the impression of giving the control of the change project to employees themselves. Secondly, you will come up with a mature idea so that people will not lose the trust on the project. This is an important issue because missing data may encounter a prejudice in the minds of employees and they may have a very aggressive attitude against the project from the very beginning.

When such a step is added to the process of change, some managers may say that it will make the employees heads get confused for no reasons. But it should be known that even if there is not such a step employees will hear about the change project from the very beginning, start talking and thinking about the change already.

The expected results of change
The expected result and the expected impact of the change should be clearly explained. No generic sentences should be used like “improvement in operational flows”🙂

January 2007 issue of HBR, John Kotter’s informative article on this topic, the following quote pretty well sums up what I tried to explain;

“Transformation is impossible unless hundreds or thousands of people are willing to help, often to the point of making short-term sacrifices. Employees will not make sacrifices, even if they are unhappy with the status quo, unless they believe that useful change is possible. Without credible communication, and a lot of it, the hearts and minds of the troops are never captured.”

economy in Turkey

For years and years Turkey was struggling with coup d’etat in 1980, coalition governments and many economic crisis. Now a new age for Turkey is getting started. Just at the end of the 2007–2010 financial crisis Turkey had a GDP growth rate of %8.2 while most of the world was just trying to catch a number above zero. Now it has come to a time that we will see whether the Turks will adapt to this financial situation or go on working and producing like the old in crisis days. Years and years Turks worked hard and consume less and learned how to live with economic crisis. They even were not aware of the fact that they were in crisis because it was a kind of normal to them. If the national memory of the country goes on remembering this fact, they will continue to grow. So even if they have a strong financial growth they will not depend the economy on that but go on producing and making new investments to produce more. The combination of both financial growth and commercial growth will bring success. However there is also a fact that the Turkish culture is very adaptive and forgets easily about the past. What will be the result if they start to benefit only from this financial growth and start being non productive, being used to earn without producing. Then the end will again be a similar crisis in Greece. In order not to be the next Greece, Turks should never forget the past.