SYDNEY: An understanding of how behavioural economics impacts consumer choices can help marketers build a better customer experience and keep their brands top of mind, according to an expert in buying behaviours.
Humans make thousands of decisions every day but most of them are simply “good enough” rather than perfect, said Bri Williams, a buying behaviour expert, at the Mumbrella360 conference in Sydney recently.
“The problem here is what’s known as the paradox of choice. We desire the freedom to choose, but then we can get overwhelmed by it,” she explained. (For more on how brands can use behavioural economics effectively, read WARC’s report: How behavioural economics can improve customer experience.)
While Williams noted that the science of behavioural economics is complex, a clear guiding principle drives it: “In order to stay on top of behaviour, and behaviour as it seems to change, you really need to understand what is underneath it.”
One way brands can combat the negative impact of overwhelming choice is to use the human tendency to follow others.
“We tend to do what other people do,” said Williams. “If I’m overwhelmed by choice, and I know an authority has made a decision for me, I’m going to be more likely to follow that.”
This is why labelling products as ‘best sellers’ can be effective. Staff recommendations, the likes of which are found in wine shops and bookstores, are another useful tool. Algorithmic recommendations, such as those used on streaming video services, or e-commerce sites that recommend products based on a user’s purchase history, are also common.
Alongside the paralysis induced by too much choice, marketers need to understand the element of fear that customers experience when asked to make a leap into the unknown: “we’re more motivated to avoid loss than to seek gain,” Williams noted.
But there are tactics that can be effective, including complete transparency with consumers or shifting social norms. One such example is a food court in a shopping centre that wanted to reduce the lunchtime rush at noon. By introducing signage that said, “Who says lunch has to be after 12?” the complex increased footfall by 25%.
Humans make thousands of decisions every day but most of them are simply “good enough” rather than perfect, said Bri Williams, a buying behaviour expert, at the Mumbrella360 conference in Sydney recently.
“The problem here is what’s known as the paradox of choice. We desire the freedom to choose, but then we can get overwhelmed by it,” she explained. (For more on how brands can use behavioural economics effectively, read WARC’s report: How behavioural economics can improve customer experience.)
While Williams noted that the science of behavioural economics is complex, a clear guiding principle drives it: “In order to stay on top of behaviour, and behaviour as it seems to change, you really need to understand what is underneath it.”
One way brands can combat the negative impact of overwhelming choice is to use the human tendency to follow others.
“We tend to do what other people do,” said Williams. “If I’m overwhelmed by choice, and I know an authority has made a decision for me, I’m going to be more likely to follow that.”
This is why labelling products as ‘best sellers’ can be effective. Staff recommendations, the likes of which are found in wine shops and bookstores, are another useful tool. Algorithmic recommendations, such as those used on streaming video services, or e-commerce sites that recommend products based on a user’s purchase history, are also common.
Alongside the paralysis induced by too much choice, marketers need to understand the element of fear that customers experience when asked to make a leap into the unknown: “we’re more motivated to avoid loss than to seek gain,” Williams noted.
But there are tactics that can be effective, including complete transparency with consumers or shifting social norms. One such example is a food court in a shopping centre that wanted to reduce the lunchtime rush at noon. By introducing signage that said, “Who says lunch has to be after 12?” the complex increased footfall by 25%.
Sourced from WARC
