This was one of my favourite quotes from MSIX16 by Ed Harrison, MD Australia at BrainJuicer. It’s a great way to introduce Behavioural Economics
This term Behavioural Economics (BE), is loosely interchanged with Behavioural Science and Marketing Science. There is even conjecture between leaders in these areas about what the best term is. It differs from Neuromarketing which is focused on brain imaging and scanning as a response to marketing stimuli. BE is based on psychological insights. Despite what you call it the theories are compelling and changing the way many marketers are marketing.
Having said that, after attending the conference consecutively for three years, it’s interesting to note that delegate numbers haven’t grown – which was mentioned by Adam Ferrier the conference Curator, yesterday. He conceded that the numbers have been consistent indicating that many in the industry are still not adopting this approach. Adam went on to share some other examples to highlight that “sometimes being early feels a lot like being wrong”. It highlights to me, that this is a competitive advantage for consultancies and businesses that choose to adopt Behavioural Economics. Unfortunately, the delegation showed that again this year, that creatives were underrepresented and they too could really value from adopting behavioural economics thinking into their processes.
So what is it!?
In essence it is about flipping our thinking about what people say and think they will do versus what they will actually do. Understanding what leads people to their behaviour and how we can apply influence. It’s about getting people to take action rather than building awareness.
We can use empirical evidence to explain and predict the short-cuts our brains use to navigate the world. Understanding these heuristics (mental short-cuts) and biases helps guide our marketing approach.
It’s an area that has been studied and used largely within the academic and economic sectors, and is now starting to be utilised by the marketing industry. While some of the big data applications make it very big business centric, there remains many applications for small and medium businesses to utilise these insights – across the whole business.
For example, framing things differently – is there really a difference between a blueberry muffin and a blueberry cupcake? Anchoring price with options – why are we given multiple options for subscriptions – to make one price look better than another and make the decision easier. Eliciting commitment – if we commit to something, we are more likely to do it, we like to be consistent – hello political campaigning strategies. There are many spurs that can be adopted.
There are many hailed authors, psychologists and leaders in this field. I highly recommend Adam Ferrier’s book, The Advertising Effect: How to change behaviour which gives a deep insight into how Marketing and Advertising Agencies can adopt this approach, but it’s an equally critical read for in-house Marketing Directors and teams.
I challenge you to read some of the below books, and test a different approach to some of your marketing efforts or campaigns.
Here is a list of the most mentioned books over the last three conferences:
- The Advertising Effect: How to change behaviour – Adam Ferrier
- Thinking Fast and Slow – Daniel Kahneman
- Nudge – Richard Thaler & Cass Sunstein
- Predictably Irrational – Dan Ariely
I have a long, long list of others once you get through those, send me an email if you’d like more suggestions.