Are behavioural science and nudging just the latest re-incarnation of marketing?
Not so fast. While there’s no question that marketing and behavioural science stumble onto many of the same territories, there are several important distinctions. These differences have allowed behavioural science to usurp marketing as the way forward. Here's why:
Over the past few years, behavioural science has blossomed as an alternative to ‘rational man’ explanations of consumer behaviour.
The new field largely draws influence from the work Kahneman, Tversky and Thaler. However, many might argue marketeers got there first. While classical economists never adequately examined how buyers and sellers make decisions, this has always been one of the goals of marketing.
Philip Kotler, often called the father of modern marketing, argues marketeers have known that consumers act irrationally for over a century and have been ‘nudging’ all this time, just without using the label. Is he correct? We think these are the three reasons why he may not be.
1] Traditional marketing glosses over true motivations
First, traditional market research places far too much importance on consumer’s self-reported data. This approach is unlikely to reveal the significance of cognitive biases because people are not always aware of them.
One illustration of this is a study on how ambient music influences wine sales.
When German music was played in a wine shop, 73% of all wine sales were of German Wine. When French music was played, 77% of all wine sales were French. Yet, when asked only 2% of people cited the ambient background music as the reason for their choice in wine. In fact, 86% flat out denied that the music had any influence on their decision at all.
It’s not that these people were lying, it’s that they were confabulating. They simply weren’t aware of their true motivations.
So, if we only rely on claimed research, behavioural biases will appear to be insignificant influencers.
2] Behavioural science is more of an empathic process
By its very definition, nudging is about helping people make choices that are good for the consumers themselves. Traditional marketing, on the other hand, merely aims to entice people into choices that primarily bring about benefits for businesses and maximise profit. This is a myopic approach that can have negative long-term consequences. The focus here is placed on what needs to be sold, not necessarily on the best alternative for customers. In choosing this path, businesses are missing a trick.
There is a win-win solution here. Applying behavioural science can benefit customers focusing on the options that are best for people, leaving the possibility to opt-out or opt-in.
In this sense nudging is an empathic process. As opposed to marketing, where one of the goals is to create new desires, choice architects attempt to comprehend what motivates people to make their best choices, and then try to correct existing biases in order to unlock this potential.
This presents a somewhat altruistic opportunity for businesses to apply choice architecture to nudge their customers into making better life decisions that benefit the customers and in turn the business itself.
We are social animals and form networks of trust by the commitment in reciprocity. If we are assisted in making good consumer decisions and life choices, we feel will then feel motivated to reply with a benefit in kind by supporting the business that provided the service.
Good intentions matter to the customer. If we know, as consumers, that a company is trying to change our behaviour in our interest then we see them more favourably. Nudging presupposes good intentions while marketing is morally blind.
3] Behavioural science has better tactics
Finally, behavioural science aims to construct a framework that marketing ignores. If ideas are not embedded into a framework then these ideas get lost. Although advertising can be brilliant, it only sets us a goal, it doesn’t unpack how the work was created and how it can be further applied. Behavioural science, on the other hand, grants us some very tangible tactics.
This is where behavioural toolkits like the C Factors come in handy. Moreover, investing in training on the application of toolkits for the relevant staff at your company will reap rewards for your brand. At Cowry, we train our clients to understand how the human brain works and how their customers make decisions This provides them with tangible tactics going forward.
Once we have behavioural insights around our customer’s needs we can go beyond marketing to enhance customer experience. Applying these insights lead to a more sustainable relationship between business and consumer. Cowry has been built on these foundations, leading to exceptional results for our clients.
Hoffman, E., McCabe, K. A., & Smith, V. L. (1998) Behavioral foundations of reciprocity: Experimental economics and evolutionary psychology. Economic Inquiry, 36(3), 335-352
North, A., Hargreaves, D. & McKendrick, J. (1997) In-store music affects product choice. Nature 390, 132.
Shotten, R (2018) The Choice Factory: 25 behavioural biases that influence what we buy, Harrimen House.