Thursday, 6 May 2010

Guiding Lights...

What with all the election business that’s been going on I got thinking about the essence of leadership and the principles upon which it is (should be) founded. I then thought about what can have an effect on these principles and how they are perceived by different people depending on their needs and interests and how huge decisions can sometimes be made on small amounts of information.

This thought led me on to thinking about behavioural economics in general and how brands act, and how we, as consumers, react to them.

Ultimately the three main factors that dictate behaviour are PERSONAL, SOCIAL and ENVIRONMENTAL.

From these pillars we can derive some more detailed principles that affect the way we react to and engage with brands which should stand true even in the face of technological advancement.

Before we talk about these principles it’s important to remember that for many brands the AIDA Model (attention, interest desire, action) is being increasingly questioned and a ‘Value–Action’ gap exists where people hold values that are inconsistent with their behaviour.
This theory is known as cognitive dissonance (e.g. Smokers know smoking is bad for them but seek to justify their cognitive dissonance - “I know a bloke who smoked 50 a day and lived to be 100”).

Below I’ve discussed nine principles based on theory from the myriad books on the subject (Nudge, Predictably Irrational, Paradox of Choice etc) and the planners meetings/debates we’ve had over here at PHD HQ.

1) Choices are influenced by how they are framed

• Quite simply if you are aware of the context of the decision you’re about to make and it will change that context positively then you will be more inclined to make the decision.
• The bottom line is that it’s virtually impossible to present a neutral choice to a human being.

2) We believe things that we can easily imagine are more likely to happen

• Despite statistics and facts that suggest otherwise, the more tangible is often overlooked for the more fantastic if we believe in it enough. This might explain why people take out “earthquake insurance” and have a greater fear of plane crashes than car crashes

3) We make decisions based on outcomes that have happened before

• This seems like the most perverse of human foibles but is probably the most common when it comes to decision making. If something has a proven record to produce the results you want then this is an understandable approach however when the chances are 50/50 making a call on previous results makes no logical sense, but probably ‘feels’ right. Might explain why gamblers go on an ‘unlucky streak’

4) We’re loss averse, and ‘over-value’ things we already have

• Having something as oppose to not, makes the object much more valuable. Emotional value far outstrips rational thought as those who have ‘something’ or the prospect of ‘something’, imagine what it will be like whilst those who don’t have it apply rational thoughts to the situation and realise it for what it is.

5) We’re naturally inert & avoid decisions - so ‘default’ options are very powerful

• This is a very influential marketing technique when used properly. Thankfully there are systems and checks in place which mean you are far more likely to be given the choice to ‘opt-in’ rather than ‘opt-out’ however in cases such as organ donation, would people actively choose to ‘opt-out’?

6) The more we repeat an action the more automatic it becomes

• Habitual behaviour is one of the most difficult aspects of behaviour to change.

• Campaigns such as drink aware and anti-smoking have to be hard hitting as they show the consequences of individuals actions. The message needs to make consumers not only realise what they’re doing isn’t healthy but that there is an alternative and a way out.

• The more hard hitting the ad the more likely they are to be talked about which then generates community spirit and camaraderie between fellow smokers/drinkers to make a change.

7) Personal empowerment is vital for behaviour change

• Knowing or at least feeling that your actions make a difference can make individuals and consequently groups take action

• Known as “Self Efficacy” - a belief I can do it, is more important than an ability to actually do something in changing behaviour, hence why things like Act on CO2 place great focus on what can be done by the individual.

8) ‘Social proof’ wields huge influence

• When food comes out at a party who dares to tuck in first? And when on a Just Giving page we look at how much others have donated and follow suit.

• The steps Facebook is taking with regards making nearly everything ‘likeable’ mean that social proof by association is becoming increasingly prevalent which will greatly change this behaviour

9) Enabling people to change their behaviour is key

• We can change attitude and intention around recycling for example but providing recycling boxes is likely to be far more powerful in changing behaviour.

• In other words – make it easy for people to behave in the way you want them to.

Clearly these are varied and numerous principles and cannot be applied to all brands and campaigns, however knowing how human behaviour works on a fundamental level will help to simplify the objectives of campaigns greatly. It’s all too easy to get bogged down in research, surveys and trending graphs and be influenced by a channel choice that perhaps doesn’t 'feel' right but can be corroborated by the 'figures'...

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