Jaewoo teaches and writes about design thinking and behavioral economics for customer experience, new product development, and new product adoption. He is an associate professor of marketing and participating professor of experience design at Kookmin University.
I was invited by Digital Marketing Summit 2023 to moderate a fireside chat between two customer experience professionals. They are Jonah Hong, Corporate Vice President and Head of Digital Customer Experience at the Hyundai Motor Group and Dan Gingiss, the author of the Experience Maker.
Digital Marketing Summit 2023
Jonah Hong highlighted bitter patience. He introduced the challenges that Hyundai Motor Group faces. “To address different customers with different tastes and preferences, we have to create tens of millions, or even hundreds of millions of personalized content for a vehicle. To do this globally, organizations have to exchange data each other in the short term and we have to go beyond functional organizations in the long term. To do this work dynamically, automatically, and in real time, investments had to be made in technology.”
Digital Marketing Summit 2023
Dan Gingiss emphasized sweet fruit. In the conversation, he elaborated a wide variety of real life examples in which people spent more and they recommended a company more strongly when the company delivered superior experience to customers. His examples clarifies that having a positive customer experience values more than consuming a high-performing product.
Seth Godin gave a speech on the topic of innovation strategy in low growth economy at the Dong-A Business Forum 2015. I was invited to moderate his speech in December, 2015.
Seth Godin is an Author, Entrepreneur and Most of All, A teacher. Seth is an entrepreneur, best-selling author, and speaker. In addition to launching one of the most popular blogs in the world, he has written 20 best-selling books, including The Dip, Linchpin, Purple Cow, Tribes, and What To Do When It’s Your Turn (And It’s Always Your Turn). His book, This is Marketing, was an instant bestseller in countries around the world. The latest book is The Practice, and creatives everywhere have made it a bestseller. Though renowned for his writing and speaking, Seth also founded two companies, Squidoo and Yoyodyne (acquired by Yahoo!). By focusing on everything from effective marketing and leadership, to the spread of ideas and changing everything, Seth has been able to motivate and inspire countless people around the world.
In our conversation, he asked us to be artists and be hubris. In his words, artists are the people who challenge conventional rules with brevity, insights, and determination. Only those who fail constatntly will become artists.
He made it clear that mass production, mass distribution, and mass marketing do not work any more. In the past, average products appealed. However, only ultimate products or “art” appeal in the new, connected world.
While emphasizing the value of constant failures, he separated ready from preparedness. Ready means that people are ready to embrace failure. Since many Koreans are not ready but prepared to be perfect, he suggested them to be Salto Mortale, a desperate jump translated into Italian.
Coming January 3rd to 6th of 2022, EBS Business Review will broadcast “Behavioral Economics for Dummies.”
The world-renowned bestseller book, Nudge, by Richard H. Thaler, winner of the 2017 Nobel Prize in Economics, is well known for its coverage of behavioral economics. The term nudge which has an idiomatic meaning of nudging with an elbow refers to guiding people’s choices through gentle intervention instead of compulsion or coercion. Different from normative economics and descriptive psychology, prescriptive behavioral economics intervenes and guides people’s choices by closing the gap between behavior and mind.
What is the hidden key of behavioral economics? You will learn its various cases which show the power that moves the world.
The secret of 99% adoption of organ donation (January 3rd)
As medical dramas suggest, hospitals need more organ doners. In order to solve the supply-demand problem of organ donation in Korea, a policy was implemented in 2007 which inserts a statement regarding donation into the driver’s license upon issuance or renewal. However, the survey result in 2018 showed that the actual number of those who wish to donate is only about 3%.
What about other countries? If we look into the organ donation rate in European countries in the early 2000s, Denmark had a rate of about 5%, Germany had a rate of about 12%. However, there are many other countries boasting a rate of 99%, such as Portugal and France. What is the secret behind these countries with a high donation rate? We will explore successful uses of behavioral economics that change people’s behavior.
Public institutions can be smarter (January 4th)
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In 2020, an experiment was conducted in US to find out how to increase the vaccination rate for the flu. As a result of sending 20 messages that encouraged people to get vaccinated, the most effective one was the combination of messages sent three days before vaccination saying “a flu vaccine is available for you” and one day before vaccination saying “a flu vaccine has been reserved for your appointment.” For those who received these messages, they made a promise to themselves to get vaccinated, resulting in an increased vaccination rate of about 5%.
Since behavioral economics brings great results with little cost, it is actively applied in many public institutions. Let’s listen to other cases of public policy which solve tough social problems.
When tech giants meet behavioral economics (January 5th)
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Marketing is a key area in which behavioral economics is actively applied. Various mechanisms can be used to target customers, which can lead to an increase in revenue and market share. Lyft, a ride-sharing company once conducted an experiment to encourage users to drive during peak demand times, Friday nights, instead of quiet mornings on Wednesdays.
They divided drivers into two groups randomly. One group was given information that their income would increase if they worked on Friday night. The other group was given information that their income would decrease if they did not work on Friday night. More people in the latter group chose to drive Friday night because people tended to avoid loss, helping Lyft mobilize the drivers’ behavior. What are the other special secrets of behavioral economics that change peoples’ choices and help companies increase profits?
Nudge yourself (January 6th)
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Self control is a process of paying the small pain in the present to obtain a greater gain in the future. But when the pain in the present is overwhelming to bear, people lose their motivation to control themselves. To solve this problem, we have to go beyond the present bias and go back to the past self.
Imagine that alarm wakes you up in the early morning. If you want to overcome the thought of having sleep for one more hour, you need to go back to the ‘me’ last night who set the alarm. To make a rational decision, you have to remember your own attitude of yesterday when getting up early eventually leads to a greater benefit than oversleep. We will introduce the secret of behavioral economics that makes a better ‘me’ based on deep understanding of human.
Jaewoo Joo is a field researcher who applies academic insights to solve real world problems. He received a Ph.D. in Marketing from the University of Toronto after obtaining a Bachelor degree and a Master degree from Seoul National University. Jaewoo is interested in developing customer experience by utilizing empathic design thinking and counter-intuitive behavioral economics. He is an associate professor of marketing and participating professor of experience design at Kookmin University.
References
Johnson, E. J., & Goldstein, D. (2003). Do defaults save lives? Science, 302(5649), 1338–1339.
Milkman, K. L., Patel, M. S., Gandhi, L., Graci, H. N., Gromet, D. M., Ho, H., … Duckworth, A. L. (2021). A megastudy of text-based nudges encouraging patients to get vaccinated at an upcoming doctor’s appointment. Proceedings of the National Academy of Sciences of the United States of America (Vol. 118).
Scheiber, N. (2017). How Uber uses psychological tricks to push its drivers’ buttons, The New York Times, April 2, https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html.
Soman, D., & Shi, M. (2003). Virtual progress: The effect of path characteristics on perceptions of progress and choice. Management Science, 49(9), 1229–1250.
But in recent years, for a number of reasons, the shine of design thinking has been wearing off. Critics have argued that its short-term focus on novel and naive ideas has resulted in unrealistic and ungrounded recommendations. And they have maintained that by centering designers—mainly practitioners of corporate design within agencies—it has reinforced existing inequities rather than challenging them.
Although design thinking *process* rarely produces market-shaking products, design thinking *training* shakes the way people think. When carefully customized, it encourages engineers to be customer-centric and think outside the box. More details about how LG Academy customized a design thinking training is available upon request.
Figure 1 The overall structure and time allocation of the d.school’s design thinking training program
Organizations have sought to adopt design thinking aiming at innovation. However, implementing such a creative problem-solving approach based on designers’ mindsets and practices requires the navigation of obstacles. Corporate structure and culture hinder the adoption course, and cognitive barriers affect non-designer engagement. In this regard, training has been used as a means of easing the process. Although considered a crucial step in design thinking implementation, research on training initiatives is scarce in the literature. Most studies mirror that about d.school boot camp and innovative programs developed by companies globally remain unknown. This practice-oriented paper investigates a training blueprint tailored for LG Corporation in South Korea, targeting R & D personnel working in several affiliates that needed creative problem-solving skills to improve business performance. The study findings unveil a customized initiative that expanded the established boot camp model by adding preceding activities to increase learning opportunities and enable empathetic observation. Fundamentally, the customization strategy aimed to provide participants with customer-oriented tools to solve business problems. In addition, the training program reframed the design thinking steps in order to make it relevant for employees and foster corporate implementation goals. Ultimately, this case study supplies literature describing a training blueprint to disseminate design thinking considering two dimensions: individual adoption and organizational implementation challenges.
In previous research on in-app purchasing, one of the revenue sources for mobile games focuses on users’ unilateral relationships, such as their achievement, loyalty, and perception. However, little has been discussed about the commercial impact of the bilateral relationship. We extend discussions by examining an unprecedented issue, that is, the role of the bilateral relationships between users and mobile game companies in increasing in-app purchasing intention. We borrow from the business literature and psychology to hypothesize that when mobile game users co-create value with a mobile game company, their psychological ownership of the mobile game increases, which in turn increases their in-app purchasing intentions. To test this hypothesis, we conducted a carefully designed study by recruiting eighty-six Chinese game users. Half of the participants were exposed to an imaginary mobile game whose interface allowed them to co-create value with the mobile game company and the other half were exposed to an identical mobile game whose interface did not. We recruited participants from the two online platforms in which Chinese mobile game players gather—Weibo and WeChat Moment. Using SPSS 26, we conducted an independent samples test to test the effect of value co-creation and employed Hayes Model 4 to test whether psychological ownership mediated the relationship between value co-creation and in-app purchasing intention. We found that (1) when participants were allowed to co-create value, their in-app purchasing intentions increased, and (2) the relationship between value co-creation and in-app purchasing intention was mediated by psychological ownership. Our findings provide fresh insights for mobile game designers and marketers.
In the early stages of the design and innovation processes, stakeholders often develop a design brief. As a document gathering all design requirements, it is adopted as an agreement and a roadmap to facilitate communication throughout the project. This study expands the current literature about design brief tools by delving into the briefing process within design interventions conducted by design promotion organisations. We investigated the strategies and practices of Centro Brasil Design to nurture design among Brazilian enterprises. Particularly, we focused on its Design Export program, which aims to insert design in export-oriented businesses. Supported by the Design Quality Criteria framework, our study probed the program’s development and its design briefs, as well as the designers involved in the projects. The findings revealed how a design brief could lever the design advisory service. We further identified a new approach to briefing procedures and a design brief model for design interventions.
Keywords
Design brief, briefing, Design Quality Criteria, Centro Brasil Design, design promotion
This research examines the effectiveness of traffic-boosting mobile coupons through a randomized field experiment of over half a million South Korean consumers. The research question analyzes the effectiveness of the content (six message types) and context (three days out of the week for coupon distribution) of mobile coupons on response-to-coupon, store visits, and purchase amount for a health and beauty retail chain. Big data on individual customers, gathered from a field experiment, was analyzed through bivariate probit, mediation analysis, and tobit regression. The results show that message content affects store visits, which was fully mediated through response-to-coupon. In particular, messages that “made the amount of discount salient” and “formed a personal connection” were more effective than other messages. In terms of context, messages sent during the weekdays were more effective in increasing store visit, than those sent during the weekend.
Keywords
Mobile promotion · Mobile coupon · Message content · Message context · Coupon distribution · Field experiment
Acknowledgements
We would like to express our deep gratitude to Hyojung Kim, Sul Namgoong, and Joongjae Lee at Shinhan Card for their assistance with the collection of our data.
A wide range of businesses actively use cute characters such as the globally popular LINE FRIENDS characters for product design to increase consumers’ product adoption. Prior research has found that whimsical cuteness—which elicits fun and playful mental representations—can lead to higher product adoption. The effectiveness, however, has been investigated mostly in indulgent contexts. This article aims to uncover the opposite phenomenon, that is, whimsical cuteness could be detrimental for product adoption, in particular, in a non-indulgent context. In a pre-test, we measured the different types of cuteness of nine LINE FRIENDS characters, selecting one pair of characters differed only in terms of whimsical cuteness. Additionally considering product newness, the main study tested whether product adoption differed depending on the level of whimsical cuteness and product newness. The results demonstrate that participants were less likely to adopt a non-indulgent product when it was highly whimsically cute compared to less whimsically cute because the indulgence provoked by fun and playful mental representations conflicted against the restraint reinforced by a product for self-control. The adverse effect increases when the product has lower product newness whereas high product newness dampens the effect. The findings suggest that practitioners should carefully consider product nature and newness when applying whimsically cute features to product design and marketing promotions. This study has originality in that it is the first to demonstrate the adverse effect of whimsical cuteness on new product adoption and verify the moderating effect of product newness.
Keywords
Whimsical cuteness, New product adoption, Product newness, Self-control, LINE FRIENDS
The key practical significance is that a product design which makes products seem whimsically cute has potentially detrimental effects on consumers’ product adoption, especially when the products are non-indulgent. Although nudge is an interesting lens for designers (Chen et al. 2019), our finding suggests that whimsical cuteness can have counter-nudging effects (Saghai 2013; Sunstein 2017) that make consumers not to adopt self-control products, contrary to the expectation of designers and marketers. For instance, cute characters with high whimsical cuteness might in fact hinder consumers’ adoption of products for self-control such as diet foods and time and study management products. Thus, practitioners should beware of using whimsically cute characters on products related to self-control (pg. 629).
Mental illness has always been an important issue for young adults. Moreover, initiatives resulting from the outbreak of COVID‐19 have had an even greater impact on the mental health of young adults. This study sought to examine the effect of gamification on whether young adults adopt in‐person counseling. One hundred twenty young adults (42 males and 78 females) with an average age of 29 years participated in our experiment. In the experiment, a 2 (Gamification: no vs. yes) × 2 (Vividness: low vs. high) between‐subjects design was employed. In the “yes” gamification condition, participants decided whether or not to read introductory material about in‐person counseling, and also whether or not to adopt in‐person counseling in the future. The results of the study show that: (1) gamification increased adoption, (2) participants’ perception of subjective usability of in‐person counseling mediated the effect of gamification to adoption, and (3) vividness of presentation moderated subjective usability. Our study demonstrated that gamification nudges young adults to adopt in‐person counseling while subjective usability mediates the relationship, and vividness moderates the relationship between gamification and subjective usability. Our findings provide counselors fresh insights into motivating people to access counseling services.
“… gamification has the primary purpose of promoting human motivation and performance in a particular activity. The importance of gamification has been thoroughly discussed theoretically and practically in an increasing number of research studies for health professions education (Van Nuland et al. 2015; Verkuyl et al. 2017;Buttetal. 2018). Ourexperimental study found that gamification does have a positive effect on people adopting in-person counselling” (pg. 1360).
Contemporary electronic manufacturers struggle with how to develop attractive bundles by combining their existing smart products. In the present work, we propose Goal Based Bundling (GBB) by drawing on the academic research of goal systems theory (Kruglanski et al., 2018) and shed light on two previously ignored aspects of bundling strategy: service and glue product. We applied our GBB to a collaborative project with Samsung Electronics, whose goal was to develop new product bundles for kids by combining multiple smart home products. We constructed a framework of Samsung Electronics’ smart products and then visualized it on its sales website. A UI design conveying the value of smart products bundle was developed based on GBB structure. We discuss the process and the result of our project to provide insights into the product managers who combine existing smart products to develop a bundle.
“Although bundling tactics are frequently called upon in business, marketing research on product bundles is surprisingly sparse (Russell et al., 1999). This paper represents an attempt to identify bundling smart products by borrowing the key concepts from the Goal Systems Theory (Kruglanski et al., 2018). We posit that constructing a products bundle following a hierarchical goal structure overcomes the limitation of combining categorically dissimilar products. Moreover, it addresses an important role of service in smart product bundling.” (pg. 2898)
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