From Big Ideas to Small Nudges
When it comes to making decisions, you probably think you’re pretty rational – you buy the cheaper one, the one that’s more reliable, the one that your neighbor has. But as it turns out, and in the words of David McRaney, You Are Not So Smart.
If you’ve ever read Freakonomics or followed the works of Dan Ariely, then you are probably quite familiar with behavioral economics and the idea that we often do things that don’t make any sense because of “errors” (or cognitive biases) in our thinking.
Having recently read The Advertising Effect: How to Change Behavior, and given the launch of agencies like Ogilvy Change and FCB’s Institute of Decision Making, it feels like it’s time now more than ever to consider how we might apply this thinking to what we do. Can behavioral economics help us to turn biases into insights and nudges into creative fodder?
Knowing what cognitive biases or barriers exist is a great starting point. Maybe your consumer is buying the competitive brand because everyone else is (bandwagon effect) or maybe she’s too scared to try your product because there is too much uncertainty surrounding it (zero-risk bias). Once you know what’s stopping her from acting, you can then start devising ways to get her to respond. Perhaps it’s as simple as giving her an incentive or social reward. Or maybe you need to change the environment or teach her a new skill.
Historically our industry has debated the merits of rational persuasion (what we want people to think) over more emotional advertising (what we want people to feel). Behavioral economics forces us to question whether we can more effectively encourage response through action (what we want people to do).