YOUR CHOICE OR MINE? THE POWER OF PSYCHOLOGICAL BIASES IN MARKETING.
Recently I had the pleasure of listening to Richard Shotton as he described, very entertainingly, many different ways of applying humour, science and psychology to marketing. Richard is, clearly a student of why we do things, and how we can do them better.
Relevance: Let’s face it as much as we would like to pretend that all the customers that we work with on a day-to-day basis are rational thinkers who behave in a rational manner, that’s just simply not the case. Consumer psychology and applying this to the myriad of challenges that consumers face is extremely relevant.
Robustness: Many people who work in marketing will have at some stage of their career witnessed people who work in other business disciplines claiming that marketing is just made-up; unlike accountancy which has hard rules that need to be followed. Behavioural science lends marketing credibility through the fact that behavioural science experiments are peer reviewed. It’s official, marketing plus behavioural science means we’re authorised! You better watch your back accountants!
Range: Marketing, as I explained in a recent blog only has its roots back about 50 or 60 years. Behavioural science goes back more than twice that; back to when psychologists and scientists took on the challenge of understanding the drivers of human behaviour.
So relevance, robustness, and range are all reasons that Shotton argues that behavioural science has a role to play in marketing.
I did mention also that Richard was very entertaining in how he described the role of behavioural science and marketing. He did this by outlining various biases psychological and otherwise that customers use to make decisions. He talked about the generation effect, the Keats heuristic and concreteness. I recommend you pick up a copy of his newest book – The Illusion of Choice for lots of detail on all these 16 1/2 psychological biases he discusses. However, for the purpose of today I thought it would be useful to take you through three of them. Three biases that we all utilise on a day-to-day basis and by us as marketers understanding them, how we can position our brands positively for our customers.
Three Marketing Biases
The three biases I would like to discuss are – the Red Sneakers Effect, the Wisdom of Wit, the Peak End Rule.
The Red Sneakers Effect. Like so much of what Richard Shotton discussed, I found that I had definitely been subjected to the Red Sneakers Effect without even realising it. We’re all familiar with the pressure to conform and we have seen particularly how this can have an impact on groups of customers. For instance, for those of us who have run focus groups we can often see how a particularly powerful individual can sway a group which can lead others to go along with their opinion even though they may not agree with it. Of course, an experienced moderator will be able to clear this up very quickly but nonetheless the pressure to conform is still there. However, Richard Shotton argues there are times when flouting these group norms is beneficial for the person who does this. And generally, those who deviate from conforming are those who have high status.
Let’s look at the experiment where the Red Sneakers Effect got its name. In 2011, Francesca Gino from the Harvard Business School conducted a field study at the association for consumer research conference. She recognised an inverse correlation between how well people were dressed and the number of papers they had published. In layman’s terms, the most successful academics were the ones who are most likely to break convention and be dressed less like we might expect successful academics to dress. Having observed this, she undertook an experiment with 159 participants. Each participant was asked to rate the status and competence of a professor based on a short description that Gino had given them. They were told things like “Richard is clean shaven, always wears a tie and polishes his shoes” whereas “Steve is typically in a T-shirt at work and has a beard.” And they were asked one simple question. Rate the competence of Steve versus Richard. The findings were statistically significant and showed that most reckoned that Steve would be more confident than Richard in this instance. The logic being, according to Gino “nonconformity often has a social cost” and to paraphrase “the nonconforming individual must be in a powerful position that they can risk the social cost of behaving the way they do – by being scruffy(er) and risking standing out.”
Nice experiment but what does this mean for you and your brand?
Firstly, if your brand already has a degree of status then it may be able to take advantage of the Red Sneakers Effect. By breaking conventions and starting to set the rules for the category. Secondly, the breaking of conventions by your brand needs to be seen as deliberate – or in its most basic terms your brand needs to “own it”. Finally, the study suggests that the value of the Red Sneakers Effect will be highest for those familiar with your brand.
I’m not saying that implementing and taking advantage of the Red Sneakers Effect is easy but if you are a market leading brand it’s definitely one for you to consider. In its simplest terms, the red sneakers effect is about leadership and confidence. Your customer chooses your brand to represent them. Are you willing to flout conventions to stand out and deliver more perceived value for these customers? If so, go for it.
The Wisdom of Wit
This one is easier to explain, basically, funny sells. Richard Shotton argues that you are more likely to pay a larger tip to a waiter who has been humorous or at least cracked a few jokes over the course of the evening. Funny is also memorable. That is evidenced by the 2014 study in Loma Linda University, California where a sample was asked to recall a list of words. The sample is then divided in two with half watching a humorous video and half sitting quietly by themselves. Once these 20 minutes had passed the psychologists conducting the test repeated the recall test; the memory boost among the group who had watched the humorous video was more than double that achieved by the control group – 44% versus 20%.
Nice findings but what does this mean for you and your brand?
Try to find the humour in your advertising and more generally in your marketing mix. There’s a whole separate school of study that says that humour is even more important when trying to communicate uncomfortable matters, for example, smoking cessation or weight loss. Has anyone seen the 2012 public safety message from the Melbourne metro “Dumb ways to die”? You get the message, humour works so use it more often.
The Peak End Rule.
Life is busy and increasingly noisy. We have thousands of messages coming at us every single day from different directions. Our brains quite simply are not developed to remember as many of these interactions and messages as we would like to. So, what we do is cherry pick the ones that stand out best to us. Either the most enjoyable are sometimes unfortunately the least enjoyable moments.
Let’s imagine you are eagerly anticipating a meal out with family or friends. As you have your starter followed by your main course, you can’t but feel that the meal is average. It turns out that the experience is not the special occasion you had hoped it would be. As you move towards desserts, things start to take a different turn – no it’s not just that the wine starts to kick in! First of all, the dessert is really tasty, and you start having really good conversations with the people around you. Having enjoyed the dessert or cheese board (whatever works for you), you now decide that a short coffee or even perhaps glass of port would be nice to finish off the evening. You leave the restaurant 30 minutes later feeling fully content, and commenting to your family on what a lovely evening it was. This is the Peak End Rule in action.
Nice dessert but what does this mean for you and your brand?
The simplest way to remember the Peak End Rule is to focus on the moments that really matter for your customers. Amplify the positives in such a way that that’s all they can remember. Leave them wanting more. How many of us here have queued for hours upon hours in theme parks such as Universal or Disneyland but left at the end of the end of the day with smiles on our faces? It’s no coincidence the fireworks display happens as you leave for the day. Understand customer buying process, curate this process and end on a high.
The Red Sneakers Effect, the Wisdom of Wit, and the Peak End Rule are just three of the biases customers engage in, every single day. Understanding these biases naturally puts the brand owner in a position of power. At LifeStars, we would recommend that brands get as close to its customers as possible in order to understand how they are perceiving your brand performance in terms of these biases.
It’s very easy to say wear the red sneakers, but do you have license to do that? How are your customers likely to react? Use LifeStars to find out – keep them close. Similarly, the Wisdom of Wit is extremely easy to understand yet research shows that in general, advertising is becoming more serious, rather than more humorous. Seems like brands are playing it safe. Isn’t that what market research is for? Have the ideas, assess the ideas, and use LifeStars to do it – research is a safe place in which to explore ideas.
Finally, the Peak End Rule, leave them wanting more? By utilising LifeStars, brands can ensure that their market research is far simpler, much quicker and costs approximately 49% less? Quick, simple, cost-effective research? Sign up here.
