Field Service Contract

Field Service Contract

Tim Saur, Durst: Incorporating Customer Behavior into Service Contracts, Field Service 2013

In this presentation from Field Service 2013, Tim Saur, Vice President and COO, Americas, Durst Phototechnik, takes a look at how pyschology impacts customer behavior in the field service industry. Saur provides behaviorial analysis that managers can incorporate into field service contracts.  

Video transcript:

Okay. So, good morning everyone. I am going to make about a half day presentation into 35 minutes so I’ve done a lot of editing but I tried to do this for about 45 minutes and almost ran over so I took out some slides but I think we can still get through everything we need.

This is the presentation content. I’ll move quickly through the early slides. I’ll tell you just a little bit of my background. I’ve been studying behavior for about 20 years, never directly. I’m not a psychologist but I took a lot of years of philosophy, logic classes, then game theory. I do have a background in game theory, both of which use human behavior and then my doctoral program I took probably three years worth of human behavior to work on the international business side.

So I’ll go through Durst real quickly, for those of you who don’t know but ultimately what we’re going to do is at Durst, we have about a 60% contract rate and we’re really stuck getting our feedback from our sales team. So you know, I’m, I’m never real good with the status quo so we approach this thing a little bit different, I know it’s unique so we’ll talk about them.

First things first. For those who don’t know Durst. It’s a Tyrolean based company. It’s in the Italian Alps, speaks German. Been with the company for 12 years. I run all of the Americas now, slowly worked our way up. We’ve had a lot of growth, great company, mainly selling printers, a million, half a million to 1.5 million, large format, UV cured. I can sell one if you would like, see me if you have a million dollars and a big space but we’re always a profit center. I like to mention that from a service standpoint. It’s a very important aspect and we’re privately held. Family owned, long term, vision. The family doesn’t work in the company and we’re really a very innovative company. We’re more of an R&D company who happens to be in printing.

Okay. So some other facts about Durst. Just to give you some idea of where we’re at, we have a whole bunch of product lines but basically the Lambda and the Rho make up 84% of our service hours, 78% of the service revenue. The Rho is a newer platform, very diverse, very tough to service, lower margin, no ‘hook’. The Lambdas are legacy, one we’re hanging on that for dear life, great stuff.

Here’s the reasons that we get for refusing from our service sales team and we just, for a point of reference, we have a direct service sales team. It’s a small group of people but our equipment sales people do not sell service contracts. Price points are too different. That’s a topic for another day but it just doesn’t make financial sense. You’ll probably hear something similar. Price, really statement of value, I’ll tell you, in my opinion, you know, if your margins are low, then it’s probably not a real price issue. If your margins are high, it can be a price issue but that’s you hear. The customer is capable. In our case, for instance, they don’t need us. They have maintenance to do it themselves.

The third one you hear a lot which fortunately I can say we don’t hear much. We’ve really high net promoter scores but it’s I do not like your local technician, your company, your person involved. I’m sure we’ve all heard that. I have heard this myself. Those are the three main reasons we get for refusing. The difficulty in particular number two and three is we cannot prove anybody wrong. Price, we’ve tried other examples where it doesn’t really work either.

So I have search of greater contract acceptance from 60%. My belief was there’s deeper subconscious mind at work. So I want to do a study to delve into all the customers that don’t accept with psychological type questions and book human and all of this theory.

Reconcile a customer, cognitive dissidence which I’ll also talk about and find bad logic and change the framing. In other words, what I’m basically saying is I don’t really believe the reason you’re…so I want to find out what the real reason is. Even if you totally disagree with that premise, I think today you’ll learn about how you can be the life of parties or maybe they’ll kick you out of parties but you’ll know more about your kids and spouses so that first thing first is how does the human mind work?

This is what happens. So today whether you believe me or not, lot of research on this, you have an opinion, a conviction or belief. That’s the first thing you have. The next thing is you reconcile this belief with how you perceive yourself. So for instance, I’m an honest guy so I’m not a thief so why do I have so many Durst pens and some computer paper at home, I don’t know. I need to use justification so we’ll talk about that but that’s basically because it’s not material so you have a belief. Politics, religion are always the best. I know they’re probably no goes, you know, in a presentation like this, but politics and religion are very, you see a lot of this but in the business world you do as well. You reconcile that belief. You then use an argument to justify that belief and solidify your opinion. So one of the things just as a simple example, I was doing a workout this morning and I couldn’t hear the TV but the two Boston marathon bomber’s mother was on and she is convinced that they were framed. Now, I mean, we’ve seen so much video footage. It’s ridiculous. But I will tell you from what I’ve studied I actually believe that she believes they were framed. But that’s how your mind can wrap it on. That’s an extreme example. It’s a depressing example but that’s real.

So cognitive dissidence. What is cognitive dissidence? So I like to pick on smokers for cognitive dissidence so I apologize if you’re a smoker but smokers are famous for this. So they want to perceive themselves as healthy people but everybody knows smoking isn’t so oftentimes and I know some smokers. It’s the old, “hey, you’re going to die from something,” those with probably all those excuses so this is a perfect cartoon. Excellent health statistics, smokers are less likely to die of age related illness. Hey, might as well smoke. But this is really how it works. And I’ll use a bunch of funny examples today but hopefully you can think about them in your life and your business and they’re pretty prevalent.

The first video, I have to have these guys que but this is human behavior so we go from that’s how the mind works to this is how behavior works and there’s no better way to explain human behavior than… Nope, no, you had it, I think, go back one. Yeah, you hit that right there. Just click on it. Let go. You got it.

So there’s no better to learn about human behavior, the Simpsons.

[Start of video clip]

Homer turns up at the Adult Education Annex. A sign reads: "We take the 'dolt' out of a-dolt education". Homer walks past several classrooms. The first class is "How To Turn A Man Into Putty In Your Hands", taught by Patty & Selma.

PATTY: One way to drive your man wild is to wear tight, revealing clothes. Selma walks out from behind a screen, wearing a tight dress.

CLASS: Eww!

PATTY: At this point I'd like to remind you there are no refunds. In the next room, Moe is teaching a class called "Funk Dancing For Self Defense".

MOE: All right, here's the four-one-one, folks. Say some gangster is dissing your fly-girl. You just give him one of these. He plays some funk music and dances. Suddenly, he pulls out a shotgun and shoots into the air.

MOE: Ooh! Ah! Ooh!

Homer walks on.

Next, Lenny is teaching "How To Chew Tobacco". He spits some tobacco into the spittoon.

LENNY: See, that 'ping' sound means the spit was on target. Now you try. The class try, but don't have much luck. Abe Simpson's teeth fall out.

ABE SIMPSON: Oh...

LENNY: Gettin' better.

HOMER: Wait a minute, even Lenny is teaching a class. Look at the way they admire and adore him. That's it! If he can teach a class, He can teach a class! I mean I can teach a class!

Homer is being interviewed by the manager.

MANAGER: What is your area of expertise?

HOMER: Well, I can tell the difference between butter and 'I Can't Believe It's Not Butter'.

MANAGER: No you can't, Mr. Simpson, no-one can!

HOMER: Oh, I failed again! Everybody can teach a class but me! I'm an idiot! What am I going to tell my wife and kids?

MANAGER: Oh, you're married?

HOMER: (suggestively) That depends. Is there another way to get this job?

MANAGER: No, Mr. Simpson, what I mean is we may have a job for you after all. We need someone to teach a course on how to build a successful marriage.

HOMER: I'll do it! Anything to get me out of that house, away from all that nagging, and noise... uh, of a family of love. Tra-la-la-la!

[End of video clip]

So that’s a humorous vide that talk about human behavior. The way humans behave, we use a combination of logic, character and emotion to make an argument so in this case, Homer basically makes an argument of character. If Lenny can be a teacher, I can be a teacher. You’ll hear that periodically or you’ll see that in different arguments. All have hidden biases and dissidence. We all have illusions. So in this case, Homer, for instance, has motivated reason. He needs a job. He has self justification to protect his ego. He thinks he can tell the difference between butter and ‘I Can’t Believe It’s Not Butter.’ And yet, the influence he has an agenda, so the person he was talking to at the end, for instance, needed somebody to teach a class so he has an agenda. So this is how human behavior works.

So when we went into this, the goal of the study, it really is scientific based – identify hidden bias in customers, identify the subconscious reasons for not accepting, seek the ways, seek to find a way to fragment these customers. In other words, maybe some just have been raised never to have a service contract because they’re too profitable, for instance. Maybe others truly believe that they want to be friends with their operators and they can’t fix the printer.

The third one. Arm the service sales team with a new knowledge and program and then basically send them out with this new way to reconcile the cognitive dissidence. In order to attack this, so you have to understand the three ways in which all arguments are framed.

So I’m going to go through these as well but the three key, every argument that you’ll ever face and again argument sometimes is confrontational. It’s not necessarily meant to be confrontational. It’s a person who doesn’t want to buy your contract. But they usually use logic, character, emotion. The best ones use all three but in everyday life with their children, your family, at work, colleagues, co workers, wherever you are, these are the three. So for those of you that don’t know logic and I think I don’t know, I took years and years of logic but I think everybody takes some sort of logic. It’s this, if P then Q or if X then Y. I would buy your contract if you priced correctly. If the contract is not priced correctly, therefore I’m not buying your contract.

In this clip, Jerry Seinfeld, another one of my favorites to use, uses an argument of logic with this receptionist, for this teller.

Yeah, there you go. Thanks.

[Start of video clip]

Car Rental Assistant: We have no midsize available at the moment.

Jerry Seinfeld: I don't understand. I made a reservation. Do you have my reservation?

Car Rental Assistant: Yes, we do, unfortunately we ran out of cars.

Jerry Seinfeld: But the reservation keeps the car here, that's why you have the reservation.

Car Rental Assistant: I know why we have reservations.

Jerry Seinfeld: I don't think you do. If you did I will have a car. So you know how to take the reservation, you just don't know how to hold the reservation. And that's really the most important part of the reservation: the holding. Anybody can just take them.

Jerry Seinfeld: Let me speak with my supervisor.

Jerry Seinfeld: There we go. The supervisor. You know what she’s saying over there?

Female: What?

[End of video clip]

So in this case, Jerry is using a logical argument. They’re the most prevalent in business. I’m assuming everybody knows them and in fact, later I have a section about some of the four premise, bad logical arguments that I want to present to you that you’ll hear so that you can know how to address them. But logic is the most common one. They took my reservation. You should have my reservation.

The second one. Locked in guys. Oh, yeah, okay, so perfect.

So the next one’s an argument of character. Now character is a plea or appeal to build a bond or separating groups from out groups. I don’t know if anybody knows this, my 13-year-old son got me into this but this is called The IT Crowd. It’s a British comedy and it’s basically about a group of geeks that work in an IT department of a big company. So just to set this clip up, they were at a pub and one of their friends or an acquaintance gave them two tickets to a soccer match. Neither one of them really like soccer but that’s, go ahead guys. So that’s just a little background.

[Start of video clip]

Moss: Great, he's kicked the ball. Now the ball is over there. That man has it now. That's an interesting development. Maybe he'll kick the ball. He has indeed! And apparently that deserves a round of applause.

Ross: Will you shut-up they’re going to hear you.

Moss: This is the worst thing in the world.

Ross: What can I do? He bought the tickets on the phone when we were in the pub. I could hardly say no, could I?

Moss: Can I use this?

Ross: I don’t know. Look, they are singing, they are singing, maybe we should sing.

Moss: Just promise me, we won’t do anything else with them. I want to go back to being weird. I like being weird. Weird’s all I’ve got. That my sweet style.

Ross: Okay, look here. We’ll make our excuses when the match is over. How long do football matches last?

Moss: A billion hours apparently.

[End of video clip]

So Moss is the one on the left. That’s his appeal of character. This is not us. I want to go back to being weird. That’s an argument of character that you’ll hear or say.

Oh guys, I think I’m dead. You’re going to have to do it. There you go. Okay.

So the third one, we’ll go back to Seinfeld but it’s an argument of emotion. You should treat me better! You can do this! I think you’re rude! Children are great at arguments of emotion and you see the exclamation points after everyone. That’s kind of how you tell an argument of emotion.

In this clip, Kramer is going to use emotions to try to motivate Elaine. Go ahead guys.

[Start of Video Clip]

Kramer: What’s wrong?

Elaine: Oh, Peterman ran off to Burma. Now he wants me to run the catalogue.

Kramer: Where?

Jerry: Myanmar.

Kramer: Is that the discount pharmacy?

Elaine: I’m just going to tell him no. I can’t run the catalogue.

Kramer: Oh woh, Can’t? When did that word enter your vocabulary? What, is the job too difficult? What, you don’t have enough experience? You’re not smart enough? Where is your confidence? Let me tell you a story. When I had first studied karate.

Elaine: Karate.

Kramer: Yeah, karate. I had no support. Not from him, not from Newman, no. The first time I sparred with an opponent, I was terrified. My legs they were like noodles. Damn, I looked inside and I found my katra.

Elaine: Katra?

Kramer: Yeah, your spirit, your being, that part of you that says, yes, I can.

Jerry: Sammy Davis had it.

Kramer: So I listened to my katra and now whoot! I’m dominating the dojo. I’m class champion.

Elaine: Well you know, I, I have watched Peterman run the company.

Kramer: Sure you have.

Elaine: I know how to do it! A pair of pants, a stupid story, a huge markup? I can do that!

Kramer: You follow your katra and you can do anything. Now get out of here.

Elaine: Okay.

Kramer: That kid is going to be alright.

Jerry: No, she’s not.

Joey: Come on, Kramer.

Kramer: Hey there!

Joey: Come on. Mom is down in the car.

Kramer: Okay, Joey.

Jerry: You guys both have class at the same time?

Kramer: We’re in the same class.

Jerry: What do you mean you’re in the same class?

Kramer: He almost beat me.

Jerry: Kramer, you’re fighting children?!

Kramer: We’re all at the same skill level, Jerry.

Jerry: He’s nine years old! You don’t need karate. You could just wring his neck!

Kramer: I got carpool.

[End of video clip]

Okay, so that’s the argument of emotion, the appeal to Elaine to go run her catalogue business.

Okay so, just a quick summary.

Arguments are based in logic, emotion and character. That topic alone could probably take, I’ll just tell you the best case is all three. If you want to go home and think about this figure, how you can work in all three of these elements into one argument would be really good. Arguments are used to justify and solidify opinions. We’re now under that last step of the human mind. So the way they’re solidified and mechanism based self justification. Self justification is not lying. Lying is different. Self justification is basically you convincing yourself that what you’re saying is the truth.

So a couple of examples here. Objective bias. Actually that’s the example of probably the Boston marathon mother, for instance. She is not objective. Another good one – objective bias is really prevalent in sports. We’ve probably all been there where someone is rooting for one team and the other person is rooting for the other one and that fumble, when the guy’s knee was down, one person who wants it to be a fumble sees his knee, knocked down. The other one who sees his knee down, it’s getting more difficult. It’s objective bias, based on objective so you have bias. You don’t even realize that you convinced yourself.

The second, a real popular one, I guess, is the pyramid of choice. The pyramid of choice is a really interesting one and something you have to watch out for. What we do which is once you make a choice, people tend to dig their heels in particularly if it’s significant or it’s how they begin to define themselves. For instance, there’s a lot of research on cheating. So if I have a chance to cheat and you have a chance to cheat and I choose not to and you do, when I leave that test, for example, I think cheaters are the worst people in the world even if before I don’t necessarily think that because I chose not to.

Confirmation bias. This is another easy one. Politics is great for this one. So confirmation bias is really a bias where all you do is gather information that confirms what you want to hear. Fox News and MSNBC are two perfect places for that. So everybody probably knows really conservative people who watch nothing but Fox News. Guess what? Confirmation bias. The other end of the spectrum, really liberal people watching MSNBC. Same deal. You listen to Rush Limbaugh, you’re really conservative. It’s confirmation bias. You might not like it but that’s the way it is.

Group norms. This is another one of those which people probably are pretty familiar with but basically you get into groups. You get into clicks and all of a sudden you start to define yourself as part of that group. In a business world for instance is where you get a group of executives together and they all agree. Our table was earlier talking about Kodak’s inability to switch to digital. This is one of those group norms ideally. What was going to digital but it’s a combination of financial demands with the fact that they all sat around and said yes and then went to play golf. So it allows produce your own self. You don’t even know you do. One of the things hard about presenting this is because everybody here are probably saying, well, I don’t do that. So it’s the beauty of the mind.

Okay so, all right. Are you controlling or yeah, you got to go again. Maybe you’re out of battery so just to put them all up.

So manifestation of self-image. How does this affect service, for instance? There is an illusion of confidence. People are over confident. Again in our world, I can’t speak to yours but a million dollar printers, there will be maintenance people that essentially say I can fix it. Hey boss, don’t get the contract. I can do it. They’re probably trying to impress the boss but has also illusion of confidence. Smart people don’t buy contracts. This is again, you know, you’d have to ask yourself but I don’t get extended warranties on anything at my home but yet I’m trying to sell extended warranties so. You have to reconcile those too.

An illusion of attention is well, believe me, we can do more. The key really here is that all of us seek evidence to support our beliefs, consistent and meaningful and we discount evidence against our beliefs. So if you’ve ever had a chance to get a promotion and you’re up against another person, you probably sat there and said look at what I’ve got. I’ve got an X, Y and Z for this company. I have this degree. I have this many years of experience. I’ve worked this many hours. I deserve this promotion and if the other person gets it or before he even have anything to say, look, they’ll go home at six, they haven’t done other stuff I’ve done but they can look at it the same way. They probably are. They’ve done A, B, C. You’ve done X, Y, and Z. So not the great metaphor but that’s kind of the way this works. You discount stuff that doesn’t help you.

So this is, just one more example of kind of self justification. I don’t know if anybody knows who this is, probably not but its Leon Festinger so he’s a social psychologist and in the 50s he infiltrated a cult in California. The cult themselves were relatively harmless but they’re a doomsday cult, so they figured, I think, December 20th 1955, I don’t remember exactly, the world was going to end. So they came up to that time and there was a group of followers. Some of the followers followed but, you know, they stayed home and kept their jobs but there is a big group of followers who sold their homes, quit their jobs, the world’s ending, who cares? But then they went over to this house, so the world is going to end at midnight and I know you guys know it didn’t actually end because we’re still here but that kind of hurts the story but anyway, it was supposed to end at midnight and obviously midnight came and went, nothing happened. 1 a.m. came and went, 2 a.m. and there started to become some doubt in this group. Maybe they were wrong. It’s possible that they were wrong. So at 4:45 in the morning, the woman who led this group had a revelation, maybe a vision if you will, that the reason the world didn’t end was because they all came together and prayed for it. So they all ran out into the street trying to gather more followers because they just saved the world. Now what was interesting about this is the thought in psychology at that time was this would be impossible, that people are rational. They’d realize man, we’re stupid. There’s no way this was happening and they’d all go home and feel like idiots. Leon Festinger, what made him famous was he predicted that the people that gave up the most would have the strongest convictions. And sure enough, that’s happened and now 50 years later, we kind of understand that. But the point is the harder you push and you have to be careful dealing with customers or anyone because the harder you push, the more they’re vested into this, the more they align in the sand and find a way to justify their behavior. So deep convictions equals big resistance. You’re better off getting to people early.

Okay so just to recap. Human mind. Where have we been? You have an opinion and conviction? We talked about reconciling. We know what cognitive dissidence is. We use an argument and we justify our beliefs so that basis of knowledge is really what our survey is about. I’m trying to learn why people turn our contracts down. This may end up going nowhere but that’s kind of my personality, you got to at least try.

So the summary of who we are is ambiguity is great for humans. These are some take aways that you can have. I don’t know. You know, in the business hopefully it will help you, but on a personal level. You can define yourself as you see appropriate. Your mind is a marginal scientist but a great lawyer so what I mean by this is scientists are trained and what I learned getting my doctorate program is you do experiments, you gather evidence and you come to a conclusion, technically try to falsify things, well, you come to a conclusion. Lawyers work in the exact opposite way, right? They know a conclusion they want, innocent or guilty and they go and find evidence that justifies that position or backs up that position. So we’re marginal scientists in our mind but we’re really great lawyers and motivated reasoning at work. This goes well on what you do but it ignores or downplays. Again, going back to that promotion idea, the skills that you want to cut out, well, they’re not important anyways. It helps to keep you positive. That’s one thing that is good about this. We justify, we can define ourselves as we feel good. We’ll probably all be depressed if we weren’t. I got to move now from the police chief example in the interest of time so we will come back to that.

So now I want to talk about some logical fallacies. I want to spend just maybe 10 minutes, I think I still have on logical fallacies, then I go through our survey just to give you where we’re at. But there’s four types of logical fallacies. It’s the most prevalent. I’m going to use the Simpsons again but this is mistaking causality for correlation. So if you can, you got to cue up the one of the left first and then the one on the right. Sorry, it’s a homemade video this time.

[Start of video clip]

Female: Run, daddy, run!

D'oh!

Maude: Run, Daddy! Run!

Open the door, Maude! I don't have time for the secret knock!

Maude: Oh.! I'm panicking, Neddy. I can't work the knob.

Kent: This is Kent Brockman with a special report from the Channel 6 News copter. A large bearlike animal, most likely a bear has wandered down from the hills in search of food or, perhaps, employment. Please remain calm. Stay in your homes.

Simpson: Looks like bad news for the Impson family. Let's all calm down. Everyone's going to be just fine, as long as I've got enough beers. All right, that does it.

[End of video clip]

So there’s a bear in town and they’re trying to, there was a bear in town and they’re trying to figure out what to do.

[Start of video clip]

They swiped my "pic-a-nic" basket.

Think of the children! Very well.

I promise swift and decisive action against these hibernating hucksters.

Simpson: Ah, not a bear in sight. The Bear Patrol must be working like a charm.

Lisa: That's specious reasoning, Dad.

Simpson: Thank you, honey.

Lisa: By your logic, I could claim this rock keeps tigers away.

Simpson: Oh, how does it work?

Lisa: It doesn't work.

Simpson: Uh-huh.

Lisa: It's just a stupid rock.

Simpson: Uh-huh.

Lisa: But I don't see any tigers around here, do you?

Simpson: Lisa, I want to buy your rock. Whoo-hoo! A perfect day! Zero bears and one big, fat, hairy paycheck. Hey! How come my pay is so low? "Bear Patrol Tax $5.00." What? This is an outrage! It's the biggest tax increase in history!

Lisa: Actually, Dad, it's the smallest tax increase in history.

Simpson: Let the bears pay the bear tax. I pay the Homer tax.

Lisa: That's the homeowner tax.

Simpson: Well, anyway, I'm still outraged.

Okay, so that is, that one was causality and correlation. So for those…probably everybody caught it, but just to be clear, he says the bear patrol is working because there’s no bears but that’s a correlation not cause, but that’s the most common one that you’ll people mistake correlation for causality which is, Lisa, of course, makes fun of them with a rock and a tiger. So same logic there. That’s how she shows him it’s wrong. But that is a funny example. There’s some really savvy ways to bury this and it could be hard to figure out but that is the most common one which is people think correlation is cause.

The next one is, I won’t say it but does anybody know what this is? Anybody have any idea? All right this is… Oh what was that? Yes, this is the famous Virgin Mary grilled cheese sandwich. This, anybody have any idea what this sold for? Once bitten grilled cheese Virgin Mary sandwich? How much? Close. $28,000.

The next problem we have logically is pattern and recognition. Human faces are the worst but pattern and recognition. So this, somebody believes, was the Virgin Mary coming to a grilled cheese sandwich and sold it for $28,000. Pattern and recognition could be a real problem in service. For instance, we’ve had a problem at Durst. One time I know a printer went down, I’d say, three times in a month, all on a night shift. Our service guys concluded it must be the people on the night shift. Not a completely unreasonable conclusion but it also, they quickly went down a wrong path. You see this also with police investigations on well, on, basically family matters, to figure the stuff they immediately go after the family and hone it on someone, but pattern and recognition is a major problem.

The third one is also a serious problem. So this is Jenny McCarthy and that chart on the right is the link between autism and the MMR vaccination. So she, I think most, maybe most people now has an autistic son and she was one of the leading people who said that it’s a result of the MMR vaccination. In the interest of time, I will tell you, there is no link. There is a lot of studies out there but what happens is it’s the timing of the events and autism shows itself shortly typically at the same age when you get the MMR vaccination but this is a very serious issue. There are people who don’t get MMR vaccinations because of this and you have a celebrity talking about it so, we’ve had some fun today but that’s a very serious issue but this is what’s called, the failed logic is chronological. So for instance, another one in the service world, for instance, everytime your service tech comes in, a week later, my printer breaks. That’s the same idea. Could they be related? Of course, they could be but it’s also now that your customer is defining this guy comes in, it breaks a week later. Chances are that doesn’t happen that much. There is a whole another issue there, mainly remember exceptions. This is why you think you always get stuck in the slow lanes. That’s what you remember. You don’t remember fast lanes but it’s another topic too. But that’s the third one that I want you to keep in mind. People who think chronological becomes logical.

Last one coming up. Good to great. A lot of people have probably read this book. Jim Collins. He’s made a lot of money off it. I’ve never read it, will never read it myself. Not trying to rip on Jim Collins but the problem with this, you could read it. The problem with this is the conclusions people make. This is called retrospective narrative bias. So after things are done, somebody comes and takes a look and says hey, here’s what they did. Write the book about it. Every company should do it and gets rich. He’s actually a pretty good guy but that logic doesn’t work because it’s not science. He didn’t test other companies that did that to see how they did and he didn’t test the companies that succeeded without doing that. So if it’s presented in a way that hey, here’s a way five companies did it. You should consider it. I’m okay with it. But the book’s written in a way that you should go do all of this and it’s called retrospective narrative bias. It’s another one. People will look after the fact and say, hey look this is an obvious conclusion. Probably not.

Okay. So just to summarize for you. Things for you to watch out. Faulty conclusions resolve from causality concluded by correlation, pattern recognition, chronological events and incorrect premise, retrospective narrative. I tell you this because that’s what we’re going after at Durst. We’re not asking those specific questions but this is what we’re looking for. Go ahead guys, sorry.

Yeah, put them all. Yeah, go with the next one, too. At our survey, we specifically work with a company out of Cleveland, Ohio. We want to measure illusions. Want to get a gauge of how confident people are. What’s more of value to you? For us, lower price or adding printheads? That’s a kind of an internal thing but printheads are a very expensive consumable in our world.

Psychological and behavior type questions. We look to the future and past. What roles should a supplier play in your business? Is it different now than in the past? Do you expect to change in the future? We’re again trying to understand their future expectations in some of their memories. I didn’t have time to get into this. They’re the last slides and unfortunately I’m not going to have time to get into it. But that’s a very important role and then deeper into the philosophy. Outside of this, outside of business, Durst, do you have extended warranty on your refrigerator? These are the type of things we’re trying to learn. Okay, go ahead.

So where are we today? You know, we partner with the university on this study and we’re working with a company out of Ohio to conduct them. They’re still being conducted. New equipment sold, has now an acceptance rate of greater than 90% on contract. The survey must be working, right, you believe that? You should but I’ll take credit for that. Maybe I’ll get a promotion out of it.

So illusion of objectivity. So I’m not sure that’s causality and correlation again but we really do have over 90% acceptance now but the point is there may be different reasons than that.

Continue to look for better questions and it continues to remain. Identify hidden biases and fragment not accepting customers.

Right. There’s just two more slides. I’m out of time, I think.

Final thoughts for you—Develop contracts to remove bias. So one of the things we started to put in place but we use it on a limited basis as where we find a customer who really believes that I’m not buying a contract because you make too much money. People don’t like that and everybody is so much impressed about service contracts being profitable. We offer rebate programs.

Now the second bullet point. Be cautious not to change plans completely. It doesn’t take a mathematician to figure out that if we did that for every customer, our margins would drop. So you know, this is the internal thing that a group of service people can do. So you have to fragment based on the psychology.

Be aware of illusions and teach service sales how to approach the argument. Again, I have access to our service sales team. I don’t know if you do directly but you know, they often run to price. They often run to giving something for free. So we’re now trying to work with them more on how to basically teach them to counter an argument.

Life in general for you for whatever it’s worth. Apply your new found knowledge to everyday experience and consider how your subconscious mind impacts the company, employees and customers. I write service engineers are very vulnerable to over confidence. This is our finding, probably again similar to yours. A good service engineer in our world loves to be a hero. They love to be the savior and the problem is that gives them a whole bunch of over confidence. They remember when they’re successful and when they’re not successful, what happens? Companies fall. Product managements fall. R&Ds fall. That can be a little bit dangerous. At Durst, we don’t really want them talking about that. It’s basically protecting themselves and not always true.

And then the last thing reflect about yourself. Introspection. You can actually go away with the self justification, cognitive dissonance. I would say the only advantage I may be have over you is having studied and read it for so long that the tunnel that I look through is maybe a little more clearer than yours. I don’t know but you can’t get yourself out of just being aware of it. And again this knowledge…

That’s all. Yeah, you got to keep going. There were kind of bonus slides if we had time. The only thing I’ll tell you about this in one minute is we can’t do all but illusion of memory and future expectations, if you struggle and someone here struggles with happiness this is usually a problem. They have a false memory of how great it used to be or a future expectation of how great it’s going to be. That’s why if you get that promotion, that’s all you ever wanted, you don’t become happy. It’s a topic for another day but that’s all. I’ll just leave you with that and I can give you some reading materials if you like.

Go ahead, there’s a last slide. That’s it, guys. If anybody’s interested in working with Durst on the survey, we’d love to partner with you. I can talk more about it. Just give me your card. The bigger data samples that we have, better, and if you need extra information, let me know.