This morning Duke University professor, Dan Ariely, helped to launch LeadsCon activities with his key note address entitled Transforming Consumer Insights into Market Opportunities.

Professor Ariely’s talk was quite interesting and reminds us that as online marketers there are many ways people are influenced by how things are presented. Given the examples he provided, we may inadvertently not be getting the responses we anticipate because of how we are presenting our information to consumers/customers. It is our responsibility to constantly evolve and test our messaging in order to improve the results we get.

Some of the examples he discussed included:

1. People avoid making decisions when complexity is added to the decision making process
2. People can easily misinterpret information based on how information is presented
3. When people become too focused, they may inadvertently miss noticing the obvious
4. When giving people too many choices you may paralyze them from taking action
5. People’s decisions can be greatly influenced by what you include in an offering

People avoid making decisions when complexity is added to the decision making process

In showing how people avoid making decisions when adding complexity, Ariely gave an example of how citizens in countries responded to government efforts to have them donate their organs upon death. A graph was shown of various European countries with a group of countries where 0% – 25% of citizens donated organs and a group of countries where close to 100% donated organs. Ariely explained that many of these countries shared many of the same cultural backgrounds. However, what affected participation in organ donor program was “Opt-in” vs. “Opt-out” choice. Ariely argued that low participation was associated with “opt-in” programs as people are reluctant to think about what will happen to them after their death.

People can easily misinterpret information based on how information is presented

Ariely showed two images of tables and asked if one table’s diameter was greater than another table’s width. The table with the diameter was tall and thin while the other table was square. As it turned out, the diameter and the width were the same. However, the image he showed tricked the eye into believing the thin and tall table was going to have a much wider diameter.

When people become too focused, they may inadvertently miss noticing the obvious

The audience was asked to watch a short clip of two groups of people each passing a basketball. One group wore white shirts and the other group wore black shirts. Ariely asked the audience to count the number of times the white group passed the basketball and told us our financial success in life depended on accurately counting the exact number. Both groups weaved within each other as they passed the ball so that the audience had to pay close attention. After the film finished playing Ariely asked us if we had noticed the small black gorilla that was in the screen. Few people raised their hands. In replaying the clip, a man in black gorilla suit walks across the screen and waves at the audience. Something extremely noticeable, but something few people caught because we all were paying such close attention to the passing of the ball by the team in the white shirts.

When giving people too many choices you may paralyze them from taking action

Ariely cited a study in how shoppers reacted to an in-store supermarket test with jams. In one test 6 jams were sampled by customers while in the second test 24 jams were offered. At the end of each sampling, the consumers were given a coupon to purchase a jam. While the test with 24 jams generated greater consumer participation, only 3% of the customers ended up using the coupon while 30% of the consumers used the coupon in the test where only 6 jams were offered.

People’s decisions can be greatly influenced by what you include in an offering

The Economist ran an ad for its news service with the following offering for a period of time:

1. $59 for complete access to its website
2. $125 for the printed newspaper
3. $125 for the printed newspaper and access to the website

Ariely pointed out that $125 for the printed newspaper was clearly an inferior offering and should never be chose given that a consumer could also receive access to the web in option 3 at no additional cost.

In testing his students with all three options, 16% chose option 1 and 84% chose option 3. No one, understandably, chose option 2 given its inferiority. However, when Ariely removed option 2 from the equation, the results were quite different with 68% choosing option 1 and 32% option 3.

One of the fastest growing departments within LeadPoint is our United Kingdom division. One of the benefits that our UK cousins have is the fact that lead generation is still in its infancy in the UK compared with the US. This can be both a benefit and an obstacle.

As in the United States, the lead generation pitch makes a lot of sense – reach prospective customers, buy the results of somebody else’s marketing spend, and speak to prospective customers within moments of their requesting to be contacted.

Our UK office felt marketing such a concept to a new market would be a slam dunk and that prospective partners would be lining up around the corner to buy leads.

As evidenced by their 300% growth in 2008, the reception of lead gen in the UK has been strong. However, as is generally the case, success does not come without challenges. Despite our UK team’s best efforts, they were not always able to communicate the value of how lead generation and technology are interlinked.

In the US where work shuts down if the Internet should happen to go down and many of us cannot fathom life without a Blackberry, it appears that the need for technology in the UK (at least in some business sectors) is not as pervasive as in the US.

In one instance our UK office was contacted by a prospective buyer who read in the press about the merits of lead generation and was excited at the prospect of buying them. Unfortunately, the gentleman did not have an email address to receive leads, nor a computer for that matter.

When trying to explain how online lead generation and owning a computer go together like the British summer and rain, he promptly told our sales person that he didn’t like typing so he would not be changing his working practices any time soon.

Our UK office assumed that this was just an isolated incident. Apparently this wasn’t the case. Not long afterwards, another prospective customer contacted them who also did not have a computer. However, this gentleman did not see the lack of a computer as an obstruction to buying Internet generated leads. Instead, he came up with the solution that our UK office should just call him every time he received a lead and read him the lead detail over the phone. He could then just copy the information down himself.

Despite such setbacks, lead generation is continuing to grow in popularity in the UK as it has in the US as word of its value spreads. We congratulate our UK office for their 2008 success and look forward to a successful 2009.

For those of you unfamiliar with Kaizen 改善, it’s a Japanese philosophy focused on continuous improvement. It’s a philosophy that LeadPoint embraces as part of a continued effort to enhance the quality of leads that flow through our market. In keeping with this philosophy, over the last few months we have been improving the measurement protocols used to evaluate each lead that lead sellers submit to each LeadPoint market.  Our efforts were rewarded with some eye opening results.

Online lead generation is inherently a numbers game. Visitors click on an ad. Some of them fill out the form. Others leave. Some visitors convert to actual sales and others don’t provide their real phone numbers. This disparity is the backbone of lead gen.

Some sources have always provided better results than others. We’ve worked diligently to improve our ability to grade leads and sellers effectively.  We’ve learned a lot, some of which we suspected all along and some of which surprised us greatly.  The most shocking discovery was the level of energy some companies will exert to commit what is best described as nothing other than egregious fraud. Our new market monitoring processes have allowed us to quickly identify and remove these bad actors and to refund affected lead buyer funds in a timely fashion.

As a by-product of our efforts and innovations, we have been able to ensure that both valued constituents of our marketplaces can continue to thrive. Our lead buyers can buy with the assurance that they are purchasing a “top shelf” product that yields industry leading conversion metrics. This renewal of confidence in the market resulted in our trusted, quality marketing partners once again capturing top returns on their marketing dollars.

Standing at the doorstep of an exciting 2009, LeadPoint reaffirms its pledge to practice a quality focused Kaizen in our pursuit of attaining market Nirvana, a trading platform where both sides of the model achieve a state of blissful return on investment.