Behavioral Bites -
Strategies and Insights for Business
In a new monthly thought piece SevenOne AdFactory CEO Tom Schwarz and Strategy and Insights Manager Valeria Witsch offer a perspective on human behavior, and what these insights could mean for new brands and their marketing strategies.
SevenOne AdFactory's Strategy and Insights team specializes in the development of creative brand strategies based on the observation and analysis of behavioral insights and market developments.
I see the world the way I want to
by Valeria Witsch
“I see the world the way I want to”: Hidden behind this peppy Pippi Longstocking lyric is a relevant message for marketing executives. People do not see things how they objectively are, rather than how they choose to subjectively perceive them. In other words: subjective interpretation, rather than objective reality, is key.
Human perception is to blame: that is, the unconscious process of filtering and merging pieces of information into subjective impressions. And so it happens that identical products, services or situations, depending on their presentation and context, appear attractive or not. This effect was first explored in 1979 by Daniel Kahneman and Amos Tversky as part of their famous "Prospect Theory" and is commonly referred to as the "framing effect". Let's take the wait at a red light as an example. As long as the light is red, we do not know how long we have to wait. We generally find this state of uncertainty unsatisfactory. However, if we see a countdown at the traffic lights, the end is in sight. The uncertainty is resolved and the wait becomes more bearable. In Korea, for example, such countdowns at traffic lights are commonplace. Less frustration among motorists has also helped to reduce the accident rate.
Another example comes from adman Rory Sutherland, who states: Anyone standing alone in the corner with a glass of wine at a party and staring out the window is an anti-social oddball. Someone doing the exact same thing while smoking a cigarette, on the other hand, is a philosopher.
The "framing effect" can have many different faces. It may be that a decision between two alternatives is formulated as loss or profit. Or that a particular product is perceived as relatively cheap or expensive by its position in an arrangement of products. After all, it can be individual attributes, like the cigarette in the above example, that lead us to completely different conclusions. It is not the big things, but often the very small things, which make for successful marketing.
650 vs 1
by Tom Schwarz
Fear of change (metathesiophobia) is one of the most common causes of failure. Followed closely by the fear of making mistakes (atychiphobia) and the fear of anything new (neophobia). These fears are to a certain extent perfectly healthy, as they protect us from serious mistakes and dangers and allowed us to survive in primitive times. We are all a bit shy about coming out of our comfort zone and getting involved in something new. The unknown scares us and prevents progress and renewal. There are 650 scientifically recognised fears and phobias. But only one form of courage. And without the courage to fail, there is no real innovation. Unfortunately, in large corporations this is far too rarely called upon and encouraged, because there is a culture of avoiding mistakes. Today, the one that excels in his career is the one that makes the least mistakes.
It is scientifically proven that the fear of losing is much greater than the joy of winning. This explains why sports teams playing against relegation appear particularly unlucky. The first thing that top athletes learn is to turn this around. Jürgen Klopp summed it up well when he said: "The lust for victory must be 10 times higher than the fear of defeat." It is the people who do not fear change who write history and move us forward. People who are not afraid to be ridiculed (catagelophobia).
And if they had never existed, we would still be sitting in our caves today (agoraphobia), just as our ancestors once did. In complete safety, of course.
Innovation, not organisation
by Valeria Witsch
Innovation is a cultural issue which begins with a willingness to try something new. But what sounds straightforward is really anything but because it goes against everything culturally anchored in our organisations. Organisations are designed for self-preservation and change is often seen as a threat. These roots go so deep that it even comes across in our language. Words like “maverick” hold negative connotations, also meaning a troublemaker, someone who does not fit into existing structures. Successful innovation starts with using the right language which, while not always easy, helps to better integrate things and give them their proper value.
The creative input of each employee is more important than his physical effort or sheer presence in the workplace. We need to learn to let these things go. Firm office structures and times are not optimal conditions for an innovative corporate culture: the more complex these become, the more space they occupy - especially in the minds of employees. This leads to a situation where everyone only moves inside the staked playing field; knowledge no longer circulates freely.
We need the confidence that beyond the already defined horizons exciting possibilities await us. "Whoever pinches at the small flickering point fixed in the sky sees little. We see best at the pupil edge. There lie the surprises." (Wolf Lotter)
The World Wild West
by Valeria Witsch
The Internet has catapulted our society from an industrial to a knowledge culture. Everyone has access to information, long-distance communication has become commonplace and potential consumers are just a few clicks away. However, while market entry for brands has become easier, long-term survival has become much more difficult. Like in the Wild West, online it’s about the survival of the fittest, the winner takes all and paradoxically, in spite of the democratization of possibilities mentioned above, online power is concentrated in the hands of a few. These winners have one thing in common: they are aware of the cognitive bias that drives consumers.
Amazon is the master of this. Their 1-click economy is the perfect answer to our laziness and owes its success to this extremely strong consumer insight. As Daniel Kahneman puts it: “A general “law of least effort” applies to cognitive as well as physical exertion. […] if there are several ways of achieving the same goal, people will eventually gravitate to the least demanding course of action. […] Laziness is built deep into our nature.” What seems extremely functional to the outside is in truth a very instinctive, emotional customer experience. Another strong consumer insight, for example, is that too much content and clicks can overwhelm the consumer and, as a consequence, affect the motivation to purchase (choice overload). When it comes to ecommerce, it's the small things which make the big difference. The order in which different purchase options are displayed also affects our choice (framing).
An understanding of cognitive bias is also relevant for offline businesses. In creating their successful model IKEA recognized that, despite the extra effort required, the consumer actually values self-assembled furniture more than they do pre-manufactured goods. This cognitive bias is therefore known as the IKEA-effect.
Google & Amazon = NASA
by Tom Schwarz
The Romans built and perfected the roads system and became a world power. The British did the same with the sea routes and built an empire. During the Cold War the thinking was: he who rules space, rules the world. And it all began with the race to the moon. The internet, a project designed to enable disturbance-free communication in the event of nuclear war, also emerged during this time.
How is it today? He who rules the internet rules society. Today the world is mastered by he (or she) who can influence it. Trump (unfortunately) knows how to work this to his advantage as much as the digital giants. There are no boundaries, dictatorships or limitations that can stop this development. The digital giants are more powerful than ever weapon and are spreading more quickly than any epidemic. Today 140 characters can cause a landslide.
Thousands of scientists were researching rockets, nuclear bombs and killer satellites without knowing that the solution was actually hidden in a minor “spin off”. The key to world domination lay in the communication that these people had developed among themselves in case of emergencies. Ergo: everyone sees big things with eyes wide shut. But, it is the seemingly small things that mark the dividing line between success and failure.
A VISIONARY, VISION IS SCARY
by Valeria Witsch
Of word play and love of the status quo
„A visionary, vision is scary”, is a statement that is many things to many people: a play-on-words, an Eminem quote and a description of a conflict we as people often experience.
Openness to change is enormously important and yet we as people find it extremely hard. Habit promises security. We are comfortable with the status quo, or at the very least we make our peace with it – anything is better than putting the (scaredy) cat among the pigeons. Nobody wants to be responsible if a change makes a situation worse.
But herein lies the crux of the problem: He who takes a chance on the new is not the one who risks worsening a situation, but he who always continues on the same path. This is truer than ever in today's fast-moving world. Brands and the people behind them need to remain adaptable and maintain an ability to learn. This requires a culture that allows for mistakes and wiggle room which, in the age of optimized time and budget planning, has to be fought harder and harder for. As Simon Sinek so rightly puts it: "The goal in business is not to win, but to stay in the game."
The perceived unique
by Valeria Witsch
Advertising in the era of the individual
People of today are desperate to assert their individualism but deep rooted in all of us is the need to belong to a wider movement. Successful international brands succeed in meeting both needs with products which feel like true one-offs but also offer mass appeal. Apple puts their users at the centre of their advertising, for example, while at the same time selling products which mean membership to an exclusive worldwide club. Brands flourishing in today’s society should show this higher purpose and also offer their users space to identify.
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