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Future Proof Your Brand

 In Business decisions, Insights, Realizer Blog

Future Proof your brand

In April 2013 Cleo magazine relaunched with less sex. During market research, readers had told them in no uncertain terms that they wanted more fashion and lifestyle and less sexual content, so the magazine duly took note, revamped and relaunched. A year later, Cleo magazine was the 3rd fastest declining of all magazines, shedding nearly a third of its readers, with a circulation plunge of 30.1% (ABJ, June 2014). In comparison, sister title Cosmopolitan had declined just 7.9%. What happened?

Sometimes Yes can mean No

The Cleo story is a great example of the difference between what people say versus what they actually do. Traditional market research techniques can fail us when it comes to working out what really drives people and in turn how we should plot a future strategy for our brands.

It’s not that people lie to us. It turns out that people don’t know their own preferences that well, so they tend to make up reasons to explain their own behaviour in a way that’s consistent with their own self-image. Witness an experiment done by psychologist Dan Gilbert. He asked a wide range of people how much their preferences had changed in the last ten years, and people in every age group could identify that their preferences for music, or hobbies, or past times had changed quite substantially. “I used to listen to Metallica and now I play Mozart!”

He then asked the same people how much they thought they’d change in the next ten years and they said, “oh no, not much at all”. So even though a 50 year old looking back could see lots of change in their forties, a 40 year old looking forward thought there would be very little. And the same was due for every age group. Essentially, we believe our preferences are fixed, and that we have become the final version of our self, but that’s not the case at all – we will change more than we think.

A new way of thinking about behaviour

This finding is part of a much wider area of research into behavioural economics, a relatively new addition to the area of economics in the last 40 years, which has highlighted the difference between what a rational human might do, and what a real human actually does. In traditional rational economic theories, people have stable and rational preferences and act consistently on them. Not so in behavioural economics where a raft of cognitive biases show that the brain often takes short cuts when it makes decisions and these short cuts are driven by rough rules of thumb, and by gut feel, more than by conscious rational choice.

For example, the confirmation bias is where we tend to examine a problem by looking only for evidence to support our current beliefs, instead of the rational approach which would also look at contrary evidence.

One of the implications of behavioural economics on brands is the role of emotions and gut feel on shopping decisions. Brands are sometimes referred to as short cuts for consumers to make their choice easier. If I had to make a rational choice in every section of every aisle of the supermarket, shopping would be an exhausting effort. A perfect illustration of this came from the research of neuroscientist Antonio Damasio, who has studied people who’ve lost the ability to feel emotions through brain damage. He found that their ability to make decisions, including apparently simple ones like what brands to buy in the supermarket, was heavily impaired. For every purchase they had no strong feelings of what to buy, and instead had to compare each product on facts such as salt content and price per 100gm. As a result, these people took much longer to complete their shopping and found it bewildering.

Other studies, for example by the Advertising Research Foundation, show that emotional reactions to advertising are up to three times more important than the actual content and message of the ad. In short, brands aren’t for rational people, they are for real humans who use their gut feel to make quicker decisions.

Framing people’s choices can influence what they do

So, if market researchers, and people themselves, can’t accurately predict how they’ll behave or whether they’ll buy a product, what does this mean for marketers who are trying to influence minds and behaviours? First you need to build emotional appeal of your brand, but that’s well known.

What’s less well known, is a way of influencing consumers’ behaviour in the short term called Nudge theory, coined in a 2008 book of the same name by Thaler and Sunstein. It advocates changing the way choices are framed in subtle “nudges” that encourage people to choose the best option for them. For example, when looking at contributing money to a pension – which is objectively a good idea, but one which people often ignore for short term gain – they designed a program called “Save More Tomorrow” which  takes advantage of the idea that people are more open to forgoing money in the future than they are today. It asks people to start contributing to a pension plan when they get their next pay rise. The plan is ingenious (and effective) because it’s in the future, and offset by a pay rise. It has been shown to double the amount people save for retirement, just by reframing the choices.

Another term for this approach is “choice architecture” and a classic example of it is the concept of the Paradox of Choice: the idea that giving consumers too much choice can sometimes reduce their likelihood to buy anything. Iyengar and Lepper had consumers sample from either a range of 6 jams, or from a range of 24 jams. They found that while they attracted more sampling for the bigger range, the number of people who went on to buy one was much lower with the bigger range. Sometimes having too much choice makes it too hard to pick the absolute best flavour – and so they give up and buy nothing.

When it comes to choice architecture, and nudging your shopping behaviours, supermarkets lead the way. The location of the fresh food, the size of shopping trolley, whether the way in encourages you to go clockwise or anti-clockwise, premiums for eye level positioning, the location of confectionery and magazines at the checkouts – all of these manipulations would make no difference to the truly rational shopper, but are proven to increase sales and are used by supermarkets the world over.

What marketers can do

We believe that future proofing brands relies on better understanding consumers’ decision-making. To get this understanding here’s what you can do:-

Change the way you do research by moving from traditional surveys and focus groups to behavioural observation techniques such as shadow shopping or biometric analysis such as reading emotions directly from people’s faces to see how people react when faced with real world choices. The use of mobile phones as a conduit for research can also get you closer to the moment of sale, which is important as we know how much the context people are in affects their decisions.

Take a scientific approach to marketing. Whilst approaches like A/B testing are common in digital media, it’s amazing that the vast majority of marketing decisions are not made from robust data like this. Marketers seem averse to the idea of controlled experiments, i.e. testing which small nudges might make a big difference to your results. The authors of Freakonomics attribute this to a fear of admitting that they don’t know which bits of their marketing are working or why. It’s human nature not to admit that we don’t know something, but it creates a lot of false confidence and misplaced effort.

To future your brand, start by admitting the limits of your knowledge of consumers’ decisions in your category – and then take a behavioural and scientific approach to close that knowledge gap.