NEW YORK: Marketers need to consider factors such as short-termism, "hyperbolic" discounting and other principles from behavioural economics as they seek to build connections with consumers, a leading executive from FCB has argued.
Matthew Willcox, Founder/Executive Director of FCB's Institute of Decision Making, discussed this subject at the Advertising Research Foundation's (ARF) 2017 Annual Conference.
And he suggested that one habit which profoundly influences how consumers make choices involves a frequent inability to prioritise long-term payoffs over short-term gains.
"When we think about ourselves in the future, it's almost as if we're thinking about someone else," Willcox said. (For more details, read Warc's exclusive report: How behavioural economics explains marketing.)
One solution to this problem is making it easier to picture the future – as shown by a Bank of America Merrill Lynch effort letting investment retirement account clients see their faces age simply through taking a photo with a webcam.
As a result, customers were able to make stronger associations with what lay ahead. "It's the notion of making your future self less of a stranger," Willcox said.
One other powerful determinant of consumer decisions is an aversion to loss,a motivator that often outweighs the potential for receiving benefits.
"As humans, we're hard-wired to be repelled by the feelings of loss ... The most important thing about this notion of loss-aversion is not actually just about framing things as losses in your marketing," he said.
Indeed, that understanding is essential in tackling problems like encouraging people to save more for pensions or wear sunscreen at the beach.
"When we're trying to change behaviour, we really need to understand the loss that may be implicit in them making that decision," Willcox said.
"We need to understand what they're giving up – even if they can't really talk that much about it – because that loss may be the most significant thing that holds people back from doing the thing that we need them to do."
Data sourced from Warc