Marketing needs a theory of human behavior – and behavioral economics is that theory
As a marketing, brand and communications practitioner of several decades’ standing, something that has really gotten under my skin over a long period of my working life is the fact that many people who work in the business of influencing consumer behavior through communication do not seem to have a theory – or even want a theory – of what influence or persuasion might be, how and when it works, and how and when it doesn’t.
I often asked myself why there seemed to be no theory, or corpus of evidence, or series of principles that those in the influencing business could subscribe to, consciously or unconsciously, in terms of how they expected people to make those decisions. When we see people (including ourselves) making choices that clearly seem less than optimal, or even irrational – like poor financial decisions, buying that chocolate bar when we are meant to be eating healthily, or stubbornly clinging to a view despite the accumulating weight of evidence against it – we surely need a theory that acknowledges rather than brushes aside the reality of human behavior and decision-making.
But as marketing practitioners, why do we need a theory? To avert the tyranny of subjectivity.
One of the biggest expenditures of time and energy I have witnessed among those commissioning and those creating work in the marketing and comms world is on making subjective calls about the goal of a campaign, and whether a piece of creative work will be effective. It happens alarmingly frequently. A robust theory and an agreed set of principles about how we think we can best affect the target audience we are addressing would help to avoid the “He said, she said” arguments that are based on viewpoints as basic as “not liking” a form of words, or how something looks, or a vague sense that it “doesn’t mention the brand often enough.”
Debunking the myth of Homo Economicus
One of the central tenets of behavioral economics is that it rejects the model generally known as Homo Economicus, or ‘economic man’. This model comprises a series of assumptions about human decision-making and choice that have been the mainstay of classical economics and have been handed down and shared for generations, across government and business alike. It is equally prevalent in the B2B and B2C universes.
The notion is that consumers (or people, as I like to call them) are predominantly rational, and that their decisions are logical, conscious and independently formed. Yet, in study after study, behavioral economics shows how deeply flawed this notion really is. We are not purely logical beings. We reach conclusions about the world around us, and about how to act – including about what we purchase – based on many things besides conscious reasoning, including how we see those around us acting.
In place of that wrong-headed model of Homo Economicus, behavioral economics attempts to explain the reality of how we think and act – based on real science, not just rhetoric or theory. That makes it indispensable for marketers and communications professionals.
Pillars of a new theory
There are six key elements that the theory and principles of behavioral economics offer marketing and communications practitioners.
1. Work with the brain not against it
The brain runs not as a computer or a sponge, but on the principle of effortlessness. To be as energy efficient as it can, the brain creates shortcuts, known as heuristics, that minimize the amount of repetitive heavy lifting it has to do. In many senses, that makes effortlessness the most pertinent definition of intelligence; intelligent brains use less power. The lesson? In your branding and communications, minimize the cognitive burden you place on your audience’s brains: make it easier for them.
2. We are mostly unconscious
This is uncomfortable, perhaps, but true. A vast amount of human ‘thinking’ is done unconsciously, which saves energy. Many decisions happen at the level of System 1, which is known as the “adaptive unconscious.” The late Daniel Kahneman called System 1 “the secret author of our choices.” Yet too much of marketing and brand communication is factual, logical and didactic, only talking to the rational, slower part of the brain – System 2. Does this describe your brand, website or user experience?
3. Speak to emotions
If, in business, we generally tend to overestimate the power of rationality, we also tend to underestimate the importance of emotions. Evolution designed our emotions to overrule reason, especially in times of evolutionary significance. Are you appealing sufficiently to the emotions of your audience?
4. Check your research
If you are involved in commissioning or using the results of market research, you may want to sit down for a moment. If your research relies on asking factual questions of System 2, rather than aiming at the real emotional drivers that lurk in System 1, you may be wasting your time and money on output which is unhelpful, and may even be misleading.
5. Speak to tribes
Far from being independent thinkers, we are more like herd animals than we like to admit. We rely heavily on conformity and compliance. Perhaps we should think of brands and communications as appealing to – or creating – tribes of meaning, rather than always targeting the individual.
6. Learn to reframe
One of the most creative aspects of behavioral economics is its emphasis on re-framing: the idea that you can take the same logically equivalent information but re-frame and re-present it in a different way. Mastering this skill can help us make different decisions, yielding better outcomes.
A theory for the future
A theory of how humans make decisions, based in science, offers marketers a way out of the endless subjective debates about what’s good or not.
Let’s discard the myth of perfect rationality when designing our brands and communications, and replace it with one that fits squarely with the reality of human behavior. We are guided by the brain’s drive for effortlessness, and the immense hidden power of our emotions.
