The Choice Factory

1. Behavioral Biases Shape Consumer Decisions

Behavioural science has identified a remarkably broad, and ever-growing, range of biases. This breadth means that whatever your communication challenge, there's normally a relevant bias that can help solve it.

Understanding biases is crucial. Behavioral science provides robust explanations for why people buy particular products. Consumers are overwhelmed by decisions and rely on mental shortcuts, which are prone to biases. These biases can be leveraged by advertisers to influence consumer behavior.

Biases are diverse and applicable. The field covers a wide range of biases, ensuring that there's likely a relevant bias for any advertising challenge. This diversity allows marketers to work with human nature rather than against it. Some successful brands, like Apple and Volkswagen, are already applying behavioral science principles, but they're in the minority, presenting an opportunity for others to gain an advantage.

2. The Power of Social Proof in Marketing

"Eight out of ten owners said their cats prefer it".

Social proof is highly influential. People are significantly influenced by the behavior of others. This principle can be applied in advertising by highlighting the popularity of a product or service. For example, Whiskas' long-running campaign used social proof effectively.

Tailor social proof messages. The effectiveness of social proof can be enhanced by making it more relevant to the target audience. For instance, Costa Coffee refers to their popularity among coffee lovers rather than general drinkers. This approach resonates more with connoisseurs and has boosted sales significantly. Marketers should consider:

• Using regional messages (e.g., "Manchester's favorite")
• Tailoring claims to specific publications or audience segments
• Creating the illusion of popularity through distinctive product features (like Apple's white earphones)

3. Distinctiveness: Stand Out to Be Remembered

"When the world zigs, zag."

Break category norms. Many advertisers follow category conventions, leading to indistinguishable campaigns. To be memorable, brands should identify and subvert these formulaic rules. For example:

• Comparethemarket broke away from functional messaging in the comparison site category with their anthropomorphic meerkat campaign.
• Red Bull differentiated itself by using smaller cans, creating a new category of energy drinks.

Invest in launch. First impressions are crucial and hard to overturn. Marketers should allocate a disproportionately large part of their budget to product launches to establish strong initial impressions.

4. Habits: The Challenge of Changing Consumer Behavior

Since habits are context specific, if a consumer's environment changes the habits become loosened.

Target moments of change. Habits account for a significant proportion of consumer actions but are difficult to break. Brands should identify moments when habits are disrupted, such as when consumers undergo life events (e.g., moving house, starting a new job, having a baby). During these periods, consumers are more likely to switch brands.

Communicate before habits form. It's easier to influence behavior before habits become entrenched. For example:

• Target category entrants (e.g., students shopping for groceries for the first time)
• Focus on first-time parents rather than those with multiple children

5. The Pain of Payment: How Price Perception Affects Purchases

When consumers pay with cash the cost of the good is far more salient, paying by card masks that sensation.

Payment methods influence spending. Research shows that paying by card (especially contactless) reduces the perceived pain of payment compared to cash. This can lead to increased spending and underestimation of expenses. Retailers should:

• Invest in cashless payment technology
• Consider selling pre-paid gift cards, which further distance consumers from the tangibility of money

Presentation affects price perception. Small changes in how prices are displayed can significantly impact sales:

• Remove currency symbols from menus (e.g., 10 instead of $10)
• Use charm pricing (e.g., $3.99 instead of $4.00)
• Adjust time frames for payments (e.g., "£4.57 per day" instead of "£1,668 per year")

6. Primacy Effect: First Impressions Matter in Advertising

The first terms set up in most subjects a direction which then exerts a continuous effect on the latter terms.

Initial information shapes perception. The order in which information is presented affects how it's interpreted. In advertising, this means:

• Ensure your brand goes first in competitive situations (e.g., in a TV ad break)
• Be single-minded in communications to avoid diluting the impact
• Invest heavily in product launches, as initial impressions are hard to overturn

Focus on easy-to-associate values. Rather than trying to associate a brand with the most important category values, focus on those that are easiest to establish. Success in building these associations will inadvertently color other attributes.

7. Expectancy Theory: How Expectations Shape Experiences

Expectations can generate as much value as the actual product.

Presentation is crucial. How a product is presented can significantly impact its perceived quality and value. This applies to both physical presentation and marketing copy. For example:

• Serve food on high-quality dinnerware to enhance taste perception
• Use descriptive menu labels to improve dish appeal and sales

Be aware of unintended associations. Consumers interpret brand communications through their own set of prejudices and biases. For instance, labeling a product as "eco-friendly" might lead consumers to assume it's less effective. Brands should:

• Test for unintended associations before launching new products or campaigns
• Counter negative associations with strong messaging about core benefits

8. The Curse of Knowledge: Empathizing with Consumers

The conscious brain thinks it is the Oval Office but it is actually the press office.

Marketers struggle to empathize. The curse of knowledge refers to the difficulty of imagining what it's like not to know something that we know. This leads to:

• Ads that are too complex for consumers to process quickly
• Overestimation of how much attention consumers pay to ads

Strategies to overcome the curse:

• Evaluate ads in realistic contexts (e.g., on actual billboards, not in office presentations)
• Use simple research techniques like "method planning" to understand the consumer experience
• Remember that most consumers are "satisficers" looking for good-enough solutions, not "maximizers" seeking perfection

9. Media Context: The Importance of Ad Placement

A small ad reading "Ex-governess seeks occasional evening work" would go largely unremarked in the chaste personal columns of The Lady. Exactly the same words in the window of a King's Cross newsagent would prompt different expectations.

Context shapes perception. The media environment in which an ad appears significantly influences how it's interpreted. This means:

• Don't rely solely on reaching the right audience; consider the context of your ad placements
• Recognize that ad exposures in different contexts have different values

The power of perceived waste. Advertising known to be expensive signals the resources and commitment of the advertiser. This "wasteful" spending can enhance brand credibility and perceived quality. Brands should consider:

• Occasional extravagant ad placements or sponsorships
• Using media formats perceived as more expensive (e.g., TV vs. YouTube)

10. Ethics of Nudging: Balancing Effectiveness and Responsibility

If we think it's appropriate and acceptable for such communications to occur, it seems sensible to expect those designing or writing them to make them effective and easy to understand.

Nudges are not manipulative mind control. Behavioral science techniques increase the probability of desired outcomes but don't guarantee them. They're regulated like other forms of advertising and should be viewed as tools for effective communication.

Focus on long-term brand health. The ethical application of behavioral science in marketing involves:

• Ensuring that nudges don't leave consumers feeling they haven't received fair value
• Avoiding short-term gains that might damage long-term brand reputation
• Using techniques to enhance the effectiveness of products or services that provide genuine value to consumers

Last updated: October 7, 2024