There is a growing evidence-base for the power of context in influencing honesty, so we wanted to explore how these psychological principles could be applied to enhance the effectiveness of customer communications.

Working with market research firm Consumer Intelligence, and equipped with insights from the brilliant Dan Ariely, we began our journey with an initial experiment. What impact would an honesty pledge have on the propensity to cheat online? Check out the results of our first experiment here:

For those of you who haven’t read it, we highly recommend Dan Ariely’s book, The (Honest) Truth About Dishonesty.

For our full behavioural economics reading list, see our Pinterest Board.

The human brain is wired-up to avoid reasoned decision-making. Although capable of focused consideration, it generally likes us to run on ‘autopilot’, to go with the flow and avoid mental effort. From the perspective of psychology, a purchase process is like a jumble of micro-choices, mostly made with minimal awareness – and highly influenced by context.

That’s not to say that there’s no reasoned thought. There is. There may even be some spreadsheet crunching. But generally-speaking, we simply find ourselves acting – opening an email, watching a video, sharing an infographic or filling out a form – without really being aware of our decision to do so. People are proficient at constructing narratives to explain behaviour. Although as we’ve blogged previously, having plausible justifications is different to knowing what actually motivates our behaviour.

Marketers who fail to consider the role of automatic psychological factors are missing a huge trick. For there are patterns – known as biases or heuristics – in the ways our brains process these contextual cues. This is the crux of applying behavioural economics in marketing: by shaping communications and content to the brain’s natural tendencies, we can more effectively support decision-making – and improve ROI at every touch-point.

Here are three examples of decision-making tendencies:

Marketers who are serious about supporting the buyer journey need to re-evaluate the potential importance of these subtle factors. Most companies do historical analysis – reviewing campaign data after the event to try to explain what happened. Behavioural economics starts with strategy. It’s an experimental, data-driven discipline, which uses scientific insights to inform tweaks and tactics. The goal is to find repeatable, scalable insights about what catalyses action, so that we can learn from our data and make every interaction an act of optimisation.

For more information, read our guide to behavioural economics, or get in touch to set up a behavioural economics workshop with your team.

To successfully reduce voice – let alone enhance customer experience – communications strategies need to focus on customer behaviour rather than channels. And customers calls are the ideal starting point. Here are 5 reasons why:

1. Getting the basics straight
It sounds painfully obvious, but many companies don’t actually know why their customers call them. Without categorising and quantifying different types of calls, how can you possibly gauge which channels will be the most suitable alternatives, let alone develop a business case for investment in alternatives?

2. Identifying sweet-spots
Some customer execs are taking an ad hoc approach to new channels; dabbling with some sms over here, setting up a twitter account over there. While a phased roll-out makes sense, experimentation should aim to address specific, measurable behaviours. If you can find out that 10% of calls occur because customers want to check their account balance, put your energies there first.

3. Neutralising calls
Why migrate a customer call when you can eliminate it? Contact centres are incredibly measurement-focused, but metrics tend to focus on aspects like call duration and fail to question whether the call was necessary in the first place. If customers frequently ring to check delivery details, for example, investigate the interaction that preceded it. Ask how a different vehicle or an automated reminder could neutralise this problem at root.

4. Capturing nuances
It’s easy to focus on the functional requirements that customers have, such as calling to check an account balance. But a customer may call for one reason, yet end up asking about new products or soliciting other advice from the agent, which might impact their loyalty, cross-sell and so forth. When analysing calls, assess what else might be lost in translation – and build those elements into your strategy.

5. Preparing for change
Transitioning from voice-dominant customer service requires behaviour change on the part of both customers and organisations.  As voice is likely to play an important role in promoting self-service or alternative forms of communication, you need to understand existing scripts, internal processes and infrastructure in order to prepare for change initiatives and approaches like behavioural economics.

PrimeDecision has joined forces with contact centre gurus horizon2 to help companies take a behavioural approach to multichannel. If you’re interested to learn more about our methodology, get in touch.

*Source: Yankee Group, Merging Tactical and Strategic Information to Perfect the Customer Interaction Experience (2007)

**Source: The US Contact Center Decision-makers’ Guide (5th Edn. 2012)

When you hear the term ‘behavioural economics’, what does it conjure? For many, it’s a selection of anecdotes and optical illusions – the road markings that make drivers slow down when going round corners, or the line drawings where identical shapes are perceived to be larger or longer than each other.

In relation to marketing, behavioural economics is chiefly a process of experimentation.

Most marketing teams do the basics, like running A/B tests to compare subject-lines, different content or calls to action. But tests are often pretty ad hoc and ‘finger in the air’ – and are rarely informed by scientific or psychological insights. Analysis is conducted after a campaign has run, to try to explain what happened or what could work in future. For teams who really want to drive up response rates, getting more methodical is a must. And behavioural economics will be a natural ally.

You don’t have to be a behavioural economist to appreciate that voting behaviour can be affected by contextual factors. Reflecting on the UK’s recent Police & Crime Commissioner (PCC) elections, many commentators mused that the miserable November weather and limited daylight probably factored – to some degree at least – in the dire voter turnout. But this merely scratches the surface.

Obama’s 2012 Presidential campaign set a compelling precedent for the use of behavioural economics. His team incorporated psychological insights into a range of activities, from press releases to doorsteps. For instance, volunteers were trained to get key small details right, like referencing past voting behaviour in their conversations:
“Mr. Jones, we know you have voted in the past” — acts as a subtle prompt to future voting… People want to be congruent with what they have committed to in the past, especially if that commitment is public.
Simply getting people to formulate a plan to vote on election day, or to make an informal pledge to do so, were also seen to increase voter participation.

Sites like 38degrees are also receiving accolades for their success in using digital to engage people in politics. They consistently get the basics right, lowering barriers to action through concrete calls to action, clear arguments and facilitating each step through functionality like pre-populated text. Contrast this with the local elections: a poorly-publicised offline process lacking even an email or SMS reminder on the day of voting.

Obama’s team were also getting these elements right through prioritising data and digital. Many marketers could learn from their rigorous optimisation of email messaging and the Amazon-style one-click fundraising.

Good luck to the Electoral Commission’s thorough review. There is a lot of work to be done.

P.S. If you haven’t seen it yet, check out our past blog on how perceptions of candidate competence can predict electoral outcomes from visual inference alone.

For decades Barry has been banging the same drum: that the vast majority of accidents are not the result of mechanical failures, they’re caused by human errors resulting from poorly-designed environments. Take human factors seriously and you can avoid these predictable errors – and benefit from productivity gains in the process.

What’s interesting is that companies typically take up Barry’s advice in the aftermath of an accident. They are triggered to reconsider their approach to human behaviour by something going badly wrong.

And while there are major PR and social media disasters, marketing catastrophes are typically more subtle: they are betrayed by an absence. There are no sirens or headlines; instead there are falling response rates, poor customer experiences and low conversions. The failure to shape communications around human tendencies (and heuristics) is a missed opportunity to engage, upsell and extend product usage. But it’s not a failure that will sink the ship – at least not in the short term. Marketers must be alert to the measurable gains that behavioural insight can bring – through both optimisation and innovation.

Barry’s story:

Each film will share a different person’s story and their personal experience of applying insight from psychology and the behavioural sciences to real-world challenges.

Our hope is that these interviews will paint a richer picture of how the wealth of the behavioural sciences is having measurable impact across a range of industries, from healthcare to advertising. The body of evidence is growing every day and we’re excited to be a part of it.

In this first film we hear from Marcus Munafò, Professor of Biological Psychology at Bristol University, whose research has major implications for legislation and policy-making related to tobacco and alcohol. He’s also doing some fascinating work around the controlled inducement of anxiety, which has implications for high-performance athletes, among others.

Getting stuck into content-curation engine Pinterest last week, we started gathering together some of the fascinating books out there. Some are airport page-turners, while others are more weighty academic tomes. But if you have an interest in neuroscience, behavioural economics or the psychology of decision-making, it will hopefully introduce you to some new perspectives.

View our behavioural booklist here.

We plan to keep updating it over time, so additional suggestions are much appreciated and most welcome.

Today’s post tackles justification. It’s often lumped together with post-rationalisation, or seen as synonymous with decision-making. Yet justification isn’t just a passive follow-on from choice; research shows that the requirement to justify a decision heavily influences – and even changes – the decision itself.

One experiment on this topic asked a group of people to choose their preference between two pictures, both by Pierre Mondrian.

Another group were then asked the same thing, besides being told they would need to explain their preference afterwards (psychologists call this a verbalisation condition).

If purely asked to choose which they liked best, more people opted for the abstract art. Whereas the group asked to explain their preference went the opposite way, choosing the figurative piece instead. Interestingly, when people were asked to choose and explain which they disliked most, people also opted for the figurative piece more often.

Clearly, even when we think of our preferences as deeply personal, we are swayed by the need to justify our decisions to others.

Why is this? Availability bias may lead people to choose the path of least resistance; opting for whichever they feel will be easiest to explain – in this case, the figurative work. There is a social aspect to this: wanting to be perceived as capable of fulfilling the task by providing good reasons. Researchers also think that being asked to explain our choice triggers a different set of mental processes, which genuinely leads us to form different conclusions. More palatable than the idea of deceiving others or suppressing our true preference, it means our brain is actually ‘computing’ things differently according to our conditions.

Now typically ‘emotional’ topics like art appreciation or philanthropy lend themselves to such experiments. Their value is perceived as more subjective than complex, so-called ‘rational’ decision-making, like selecting which insurance or IT software to buy. But the dynamics of choice have implications for both. To get you started, here are some potential take-outs:

1. Equip people with positive narratives. Memorable, emotive explanations for a product choice may reduce the burden of justification, making it easier for people to choose. But remember the flipside; it may also enhance their ability to reject or criticise.
2. Non-verbal matters. In a corporate age which is obsessed by measurement, many businesses ask customers to self-report – ‘did you find X helpful?’; ‘what made you choose Y?’; ‘would you cycle to work more if you had a better bus service?’. Don’t overstate people’s own awareness of what drives their behaviour.
3. Explore instant responses. Imagine how people might respond to your service in a vacuum, in a completely anonymous world with no-one to observe them. Try blind-testing and experiments that strip things back to the bare unbranded essentials.
4. Look for post-influence. In tech, a typical influencer might be a geeky mate who provides guidance to people ahead of their product purchase. But don’t miss those influencers who come into play after a decision. While not overt or articulated, knowing you will also have to explain yourself to specific people in the future may inflict unspoken conditions on the purchase decision itself.
5. Use questions carefully. Recognise that the act of asking something may change the mental processes at work. Explore the role of questions in your communications to make this work to your advantage.

It strikes us that accompanying today’s pressure to automate, personalise, measure and scale communications is a great opportunity to optimise those efforts through behavioural insight. But it requires a new evaluation of buyer decision-making. Existing models are hugely outdated – they talk of rational versus emotional factors, or left-brain versus right-brain. The behavioural sciences show how complex the real picture is, and also how much more impactful we could be if we got a pragmatic handle on it.

Most decisions – whether to click on an email, attend an event or even buy a product – are not simply made ‘rationally’ or even ‘emotionally’. They are heavily influenced by automatic mental responses which bypass deliberative reasoning and thought-processes.

The evidence is provocative:

• One study of facial cues showed a 68-72% success rate in predicting Senate election outcomes in the US, based purely on 1-second exposure to photographs of the candidates. When asked ‘who looks the most competent?’ people instinctively opted for males with strong jawlines and a slight smile of confidence – and most of the time, those trait inferences aligned with the winners.
• Other research found that judgments of power from the faces of chief executive officers (CEOs) of Fortune 1,000 companies predicted their actual success as leaders, as measured by the amounts of profits that their companies earned.

Now, we’re not advocating you optimise your funnel by using imagery of alpha males. But organisations must respond to the fact that although people post-rationalise decisions (and are fully persuaded of their reasoning), most choices are significantly influenced by fast mental processes they are largely unaware of. And this isn’t a consumer issue – a past post covered Israeli probation judges whose decisions were swayed by how recently they had eaten.

The time has come for B2B to spend more effort on understanding the human within the marketing machine.