When consumer loyalty is fragile, nudge, don’t push
Behavioral science and psychology contain a treasure trove of information for advertisers. Here, Samuel Hughes, senior strategist at Evoke Mind+Matter, runs through 3 cognitive biases every marketer should know.
Brands are required to work harder for customer loyalty during the recession. But what factors into their decision-making? / Image courtesy of Evoke Mind+Matter
During a recession, consumers do not simply ‘trade down’ for cheaper equivalent products across the board, but consumer loyalty does become more fragile as we reevaluate purchasing decisions. Understanding consumer decision-making and behavior in this context is essential. Behavioral economics helps us better understand behavior. It can also make communications more effective at the critical moment before a decision.
Put simply, behavioral economics helps us to understand and leverage the irrational and powerful mental shortcuts (‘heuristics’) that we all unthinkingly use daily. In this article, we’ll look at three examples of cognitive bias which can feature in consumer behavior: framing, liking, and scarcity.
The ‘framing effect’ describes how decision-making can be influenced by the way that information is presented. This is particularly important to understand in marketing, for example in product claims and calls to action.
‘Positive’ frames are effective when they highlight desirable outcomes@ ‘75% fat-free’; ‘9 in 10 people saw an improvement’.
‘Negative’ frames are useful to suppress action, highlighting undesirable outcomes: consider how a product labeled ‘25% fat’ would perform compared to ‘75% fat-free’, despite it being the same information.
Negative frames can be more effective at driving behavior when they introduce risk, such as ‘you’re twice as likely to develop skin cancer if you don’t use sunscreen’ (versus positive framing: ‘using sunscreen halves your risk of skin cancer’). Both positive and negative frames have their uses depending on the audience’s motivation and what kind of action or inaction we are encouraging.
Framing can go beyond copy claims, into broader brand framing. Consider how at-home coffee machine brands choose to frame their solution in comparison to barista-made take-out options, rather than in comparison to instant coffee or cafetieres. The former frame highlights cost-effectiveness and convenience.
Choosing the right frame can have a big impact on a consumer’s decision-making, and therefore the effectiveness of marketing activity. Understanding the consumer’s motivations and picking the right frame is critical.
Another cognitive bias extremely relevant to our modern social influencer-heavy marketing landscape (but described by Robert Cialdini back in the 80s) is the ‘liking effect’. A key component of this is ‘similarity’: the easier it is for us to recognize something, the less brainpower we need to process it, and our brain interprets this ‘ease’ with ‘goodness’. Being relevant to an audience means increasing their likelihood to convert.
At Evoke Mind+Matter, we devised a campaign for a specialist skincare brand on this principle. The target audience was people with problematic psoriasis and eczema-prone skin. They were caught between the mass media image of either ‘perfect skin’, or the red, medical, and harsh presentation of dry skin conditions. To better reflect the audience’s experiences and leverage the liking effect, every partner, ambassador, and influencer featured in the campaign was living with a skin condition. They all made a commitment to show both their skin and share their experiences in an unfiltered way, including the impact it had on their self-esteem and mental health – in some cases, for the very first time.
This campaign reflected the reality of customers’ experience and deepened trust in the brand by normalizing the condition, fueling year-on-year growth. Most importantly, among people with dry skin conditions who saw the campaign, the portion who feel comfortable in their own skin doubled.
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Another principle with relevance to the growing worlds of ‘hype’ and Black Friday-style sales is ‘scarcity’. This is where a perceived lack of supply or time triggers a ‘loss aversion’ response. We don’t want to miss out (just think of the power of ‘FOMO’), and so are more likely to, for instance, buy something if a deal looks like it will end soon.
Scarcity is something that e-commerce and travel sites routinely employ to increase urgency, with techniques such as ‘high demand’ notifiers, by telling us how many others are looking at a product or room, and by showing short-term cut-price figures. These are no doubt often effective, but there is a risk with overusing them, due to the concept of ‘psychological reactance’.
Reactance happens when someone notices these techniques and feels coerced. When this happens, they put up barriers to decision-making. More visibly obvious techniques such as scarcity run a higher risk; using behavioral economic principles is a fine balance.
Behavioral economics offers a wealth of opportunities, including and beyond these three, to help understand behavior and improve the effectiveness of communications. But remember: they’re not tools to make people behave in the way you want. Instead, it’s important to fully understand the audience and use those techniques that can help give them a shortcut to justifying decisions and purchases that they’re already inclined to make. You’re simply helping them over that line.
After all, we call it nudging, not pushing.
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