Behavioural Economics can provide valuable insights for marketers and explains patterns of customer behaviour. It helps brands to react to consumers' emotional demands and can rationalise seemingly incongruous actions. However, some commentators question how relevant these insights are, given that most of the research focuses on individual, Western responses and does not account for nuances.

Definition

Behavioural economics describes the subconscious drivers of consumer purchase and intent which often contradict conventional economic principles.

Key insights

1. Behavioural design tackles the process that leads to the desired outcome

Behavioural design is an application of behavioural economics which aims to make it easier for consumers to make the desired decisions and behaviour changes. Techniques to enable this include:

  • Reducing the number of choices
  • Setting the desired option as the default
  • Setting the context to express choices differently
  • Zooming out to the whole picture to find the best solution
  • Finding the trigger of reward e.g. scarcity
  • Finding effective rewards which cost nothing