Behavioural Economics expert urges marketers to “act now”
Market conditions are ripe for discerning brands to take advantage of a shift in consumer habits and expectations. But CMOs must first understand the behaviours that are driving consumer decisions.
In its continued effort to provide skills to the marketing industry, the Association for Data-Driven Marketing and Advertising (ADMA) is working with renowned Behavioural Economics expert, Dan Monheit, who has warned marketers to “not waste the crisis” when engaging with customers post-pandemic.
“The window is small, and this crisis represents a once-in-a-career opportunity for marketers to start fresh with how they engage with their customers. Brands are built on emotional connection, and it’s been incredibly difficult for businesses to establish that connection with new and existing customers during the crisis,” Mr Monheit said.
The opportunity for marketers could be as brief as 6-12 months to act on these shifts in behaviour – before they become ingrained as ‘the new normal’.
According to ADMA CEO Andrea Martens, “Marketers are now in a prime position to influence their businesses more broadly given their close proximity to and understanding of the customer, which has never been more important. Behavioural Economics provides an additional edge to play a more strategic role in business-critical decisions.”
This is where behavioural economics enters the equation, as it aims to understand the effect of individual psychological processes - including emotions, norms, and habits - on an individual’s decision-making.
From building brand awareness, to increasing value perception, lifting conversion and even through to improving the very design of the product offering - Behavioural Economics touches every part of the customer journey. And that's because most products and services we buy today have a value that’s almost entirely subjective - it is reliant on mental shortcuts that all people use to determine the value of things.
For marketers, it's about how we can tap into these biases for the benefit our products, services, communications and ultimately, brand equity.
“We’ve been shopping online, communicating online, even teaching our children online – so the chance for meaningful interaction has been limited. As such, we have seen dramatic changes in customer behaviour, and now is the time to dig deep into understanding what is influencing these changes, and how marketing activities can take advantage,” Monheit attests.
At the heart of Behavioural Economics is a recognition that people rely on mental shortcuts, rather than weighing up every option for each of the thousands of choices they make each day. “Recognising and understanding these biases gives marketers an edge to create stronger and more effective messaging, products and services that connect emotionally and create action,” Mr Monheit said.
In the environment we now find ourselves, Behavioural Economics represents a real unfair advantage for those marketers who understand what makes us tick as humans, not just consumers.
Mr Monheit will be sharing these insights and others at the upcoming ADMA Behavioural Economics Masterclass, held virtually over 4 weeks from November 16, Tuesday 1pm - 2pm (AEST).