While data can help us achieve a much deeper understanding of customer activity, an overcommitment to it can also blind us from the darker corners of human behavior that data struggles to explain. Truth is, smart marketers have been deploying soft science for years as a way to discover, digest, and convert cold, hard information into more impactful messaging.
Behavioral economics brings together a variety of disciplines (cognitive science, social psychology, marketing, and others) to shed more light on when, how, and, most importantly, why consumers make decisions. Fundamentally, the principles behind behavioral economics all play off of a simple reality: Consumer decision-making is 30% rational and 70% emotional.
We can take away some lessons and tips from the core findings of behavioral economics research:
• Tapping into people’s desire for acceptance: We all adhere to social norms in an effort to fit in. Leveraging social proof can help you take advantage of this reality.
• Recognizing that people would rather avoid a loss than make a gain: According to TrackMaven’s Rebecca Lee White, “the psychological pain from losing is twice the amount of the pleasure of a gain.” This point can be applied by adjusting how you position offers.
• Avoiding analysis paralysis: Sometimes, less is more. That’s certainly true when it comes to the number of options you present to customers.