The Importance of Behavioral Economics
The importance of behavioral economics for marketers is immeasurable. It allows for a better understanding of the human mind. It also helps marketers to understand the consumer decision-making process. They can develop value propositions that fit the consumer’s needs. Behavior economics gives marketers the ‘’big picture’’ answers to some questions, such as:
- How quick or considered is consumer decision-making?
- How much information can the consumer take in?
- How important is the context in affecting the perception of the brand and influencing behavior?
- How emotional and rational is consumer decision-making?
Behavior economics illuminates why small things can make a huge difference. It explains why a specific action succeeds or fails.
How Behavior Economics Works
In recent times, we have seen how behavior science has moved from the academic world into the real world. Behavior science is making a significant difference in our daily life. It helps us make better choices in finance and health care. It guides us to do more efficient work. It also influences how we shop on High Street and online, nudging us to be more generous.
Improving Products and Services
Marketers can use Behavioral Economics to make better decisions and boost profitability. They can integrate insights from behavioral science with subjects such as user-centered design. They also look at behavior focused qualitative research grounded in anthropology and psychology. They can understand packaging and product placement better. This research helps them to develop a more detailed picture of behavior. They can then test different behavioral hypotheses through controlled experiments and trials.
Boosting Profits and Performance
Marketers can use Behavioral Economics to be more sensitive to context. Behavioral scientists and practitioners are also thinking much harder about crucial details that may be overlooked or subtle. For example, they are looking at when and where to nudge people. They are studying what contexts work best with different solutions. Some settings might suit solutions based on defaults and are automatic. Other situations might call for more reflective solutions. These situations engage the individual in a complex decision and facilitating understanding.
Benefits of Behavior Economics Optimizations
Here are ways that you can apply behavioral economics to promote business:
- Reduce uncertainty about their product or service.
- Limit the number of options for the client.
- Use social proof to generate better business insights.
Behavior Economics and Qualitative Research
Qualitative Market Research deals with the attitudes of current and potential consumers. It also explores buyer feelings, thoughts, and opinions. It determines their motivating reasons for behavior. Many business leaders worry that Behavior Economics is incompatible with Qualitative Research. However, B.E. principles can improve Qualitative Research. Behavioral Economics projects enable researchers to uncover the real thoughts and feelings of participants. Thus, companies can create more effective marketing communications.
Quantitative Market Research Approaches
Quantitative market researchers ask current and potential consumers different questions on topics such as pricing, behavior and preferences. They do so in a systematic manner using polls, surveys, or questionnaires. They can analyze the responses to decide how to improve products and services. Marketers can conduct Quantitative Market Research using primary or secondary techniques.
Primary Research Methods
Most marketers use primary methods to conduct Quantitative Market Research. Common methods we use are:
- One-on-one interviews
- Computer-assisted personnel interviews
Secondary Market Research Techniques
Marketers sometimes use secondary methods to conduct Quantitative Market Research. These techniques can confirm a hypothesis. They also help marketers to draw conclusions from empirical and primary data.
Big Data and Data Science
We also provide data analytics and Data Science support solutions that can analyze large data sets and uncover new behavioral insights.