Understand Behavioural Economics For Your Business

April 17, 2014Uncategorized

Behavourial economics and content marketingMarketers: suspend your notions of ROI and lead funnels. Let’s talk about how behavioural economics can shape content marketing.

Behavioural economics – that heady concoction of psychology and economic thinking – as a practice incites both admiration and criticism in equal portions. But regardless of your leanings or how effective you deem it, a clear correlation exists between behavioural economics and content marketers’ obsession: buyer behaviour.

In case you weren’t already acquainted …

Traditional economics rests on the assumption that we are rational creatures and that we make rational decisions. Behavioural economics considers the social, psychological and emotional factors that influence the decision-making process.

To borrow the strapline from Dan Ariely’s book Predictably Irrational, they are “the hidden forces that shape our decisions”.

Know thy customer

As marketers, we’re always on a quest to understand – to know better – and to help our clients make better business decisions.

Behavioural economics aims to help us understand the decision-making process of consumers – something undoubtedly of value to marketers everywhere. The thinking behind it allows us to understand the psychology of what we buy, how we choose and why we need to make sense of it all. For lead generation, it can help inform a content strategy and make sense of the consumer mindset in the buying cycle.

“Marketers have long been aware that irrationality helps shape consumer behaviour,” writes Ned Walsh, a consultant at McKinsey & Company. “Behavioural economics can make that irrationality more predictable.”

In short, it can help us get inside the customer mindset, inform brand personas and help along the overall lead-generation journey. It can help marketers ‘design’ choice with their audience/consumers.

So putting aside the buzzwords, what are some key insights for us content marketers?

1

 

 

 

To paraphrase social psychologist Robert Caldini, we believe a behaviour is correct if we see others doing it – this is called social proofing. In content marketing, social proofing takes a few forms, such as testimonials, case studies, celebrity or social influencer endorsements (blogs, for example) or the number of likes on a Facebook page.

As consumers become more informed, social proofing will become more important as a marketing tactic. The takeaway here is to focus more on the influencers than the masses – you can amplify your reach by focusing on niche audiences and individuals with clout in their peer groups or communities.

2

 

 

 

My psychologist friend once told me about a client of hers – a stockbroker who made really calculated and high-pressure decisions throughout the day, but when it came to choosing what to have for dinner he couldn’t make a decision. She called this “decision fatigue” – a concept that as humans, we can make only a certain number of decisions before we become tired.

In a similar vein, behavioural economists say that consumers are often paralysed by choice – a notion popularised by psychologist Barry Schwartz.

To curtail decision paralysis, make sure your content strategy is niche – pillars and subcategories can help streamline content and make this goal easier. Be selective with what you publish and don’t try to be everything to everyone.

3

 

 

 

Consumers tend to make decisions based on availability – what is the closest, fastest way to get item A. This is why SEO is so important for search rankings – consumers don’t want to spend hours scouring the net for information. And with the rise of Google Hummingbird, brands need to get better at producing quality content.

4

 

 

 

According to Ariely, most of us will either do nothing or opt for the ‘default’ when confronted with a decision. So if you’re a new player in an oversaturated market, you need to give consumers a good reason to break the default cycle.

Besides UX and website optimisation best practices, a content strategist’s job is also to help their clients build trust by focusing on Youtility.

Mapping it out

Regardless of whether you consider this mere economic quackery, the ideas behind behavioural economics are helpful because they offer yet another roadmap to understanding the human mind in the decision-making process.

For marketers, these insights are valuable for creating and developing content strategies that will resonate with our target audiences.

Lieu Pham – Content Strategist 

6