5 Lies You’ve Been Told About Behavioral Science Market Research

5 Lies You’ve Been Told About Behavioral Science Market Research

This article originally appeared on Greenbook.com

The rise in behavioral science terms flooding into the market research community has been a blessing for some, and a curse for others. Identify and avoid these 5 lies told by behavioral science bandwagoners to avoid getting actionless insights.

If you work with consumer insights, chances are you have heard buzz statements such as “System 1”, “Behavioral Science,” or “Understanding Emotions” tossed around quite frequently over the past year. Beyond the buzz, these terms, if harnessed correctly are valuable for understanding what informs human behavior.

The rise in behavioral science (also known as behavioral economics to some) terms flooding into the market research community has been a blessing for some, and a curse for others. Research buyers who have selected trusted, qualified research partners that are well versed in applying behavioral science should stop reading this article now.

If you classify yourself into the other category of research stakeholders that have fallen victim to false claims and empty promises, the following five lies as told by legacy research companies attempting to jump on the behavioral science bandwagon will sound all too familiar:

  1. “We capture future purchase intent” – Every time I hear this, I cringe. Consumers have trouble vocalizing their thoughts and feelings in the present, let alone in predicting future behavior 30 days from now. Traditional measures of future purchase intent such as Likert scales have been shown not accurate for predicting future behavior. If future purchase intent metrics do not offer any statistically significant or predictive validity, they are not valuable enough to report on, let alone to collect from respondents.
  2. “Respondents love our surveys” – For those not in market research, online quantitative studies can be a bore. With the average length of segmentation studies creeping above 30 minutes in length, respondent fatigue and dissatisfaction comes at the expense of collecting a multitude of dimensionless metrics through scale questions. Respondent friendly surveys must be succinct to the point where they avoid long-winded open response boxes and monotonous scale type questions.
  3. “We’re powered by behavioral science” – If a firm tells you this and is unable to identify which scientifically validated methodologies they use, or what experience they have in understanding what informs behavior, the chances are high that their practice is not powered by any behavioral metrics… or science at all for that matter.

Additionally, be careful to not fall for the alphabet soup: a team full of Ph.D.’s is a fantastic resource in market research, but if not appropriately leveraged can yield actionless results for industry players. The benefits of incorporating behavioral science principles lie within the power of understanding what truly drives behavior and examining such behavior through the lens of a specific business application.

  1. “We do System 1” – Implicit association tests that evaluate nonconscious responses are occasionally believed to be the only methodology available to assess the System 1 mind. In reality, there is more to understanding behavior than gauging fast associations alone.

If we made every decision based upon what our System 1 or “fast” brain suggested, half of us would be in jail, and the other half would find themselves indulging in too much dessert at the dinner table. Emotions, experiences, and relationships are also prominent factors in understanding System 1 behavior. Evaluating the speed of attribute associations alone is not enough to understand what drives behavior. It is imperative that System 1 and System 2 research techniques be layered together holistically.

  1. “We’re innovative” – Research methodologies such as conjoint analyses and the Net Promoter Score (NPS) have been around for 30 years. Yes, these are useful tools at a thirty-thousand-foot level, but we must challenge what they tell us about behavior.

Identifying preferences is only half the battle for understanding what informs consumer choice. Without taking a step back and evaluating all of the inputs into decision making, researchers run the risk of telling an incomplete story.

Just because a large (or small) market research firm has adopted the hip terms of the day does not mean that the promised deliverables will meet expectations. If a vendor is unable to identify, quantify, and offer predictions or actionable insight into what informs human behavior, they cannot be considered “System 1” or “Behavioral Science” driven. The field of behavioral science is not limited to observing behavior, as it also can provide insight into how to influence such behavior.

Imposters will say that they have been practicing System 1 research for years, but in reality, offer little by way of methodologies or expertise. It is imperative that research buyers can separate experienced vendors from those seeking to ride a wave of popularity. Research vendors must be able to substantiate claims to be trusted and credible.

If you can’t change behavior with your insights, are they insights into behavior at all?

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How Behavioral Economics Found Its Way into Market Research

How Behavioral Economics Found Its Way into Market Research

Market researchers, regardless of the industry they find themselves working in, are in the business of understanding people. Understanding how people or consumers behave has been of interest to business leaders for decades as it can determine success in the marketplace.

By understanding who customers are and what they want, businesses can tailor their product and service offerings to match expectations.

Serving as a tool to avoid managerial bias in decision-making, market research provides a necessary ‘checks and balances’ system for business leaders.  This practice ensures that consumer needs are met and exceeded, further strengthening the triangular relationship between customer, product (or service) and brand. Business leaders must make decisions involving changes to products or services with the customer’s voice in mind, at all times.

Traditionally, consumer research has taken a normative approach. Normative views on behavior involve projecting how we believe consumers will act based upon available information. If you have ever conducted an online study that yielded positive results upfront, only to find out that what you uncovered didn’t hold true in the field, you have observed the nuances of evaluating human behavior first hand.

 

When consumers deviate from the normative path, or how we think they will act based on what we know about them or what they tell us, they engage in descriptive behavior. Descriptive behavior refers to how the person acted, regardless of the prior prediction. It is this difference between normative and prescriptive types of behavior that has given rise to a new field of social sciences that continues to grow exponentially in relevance: behavioral economics.

Behavioral economics was born at the intersection of two namesake fields: economics and psychology.

Thinking about economics, a normative field, and psychology, a descriptive field, the newfound approach to evaluating consumer insights allows researchers to observe how people behave in the “real” world when no one is watching (or paying for their input).

As Richard Thaler, the winner of the 2017 Nobel Prize in Economic Sciences, began to observe how people made seemingly irrational choices that differ from what the traditionally normative economic theory would predict, the importance of understanding how and why consumers make decisions became ever important.

Traditional market research studies (such as concept testing or brand tracking) often ask consumers to predict how likely they will be to engage with a product or brand at some point in the future. This approach is commonly believed to predict precisely how loyal customers will be, but when asked on a 7-point Likert scale without additional context, has been shown to not accurately predict future behavior.

How can it be that consumers can say how they will act at one point in time, and engage in different behavior in the future? The answer lies in the field of behavioral economics.

Daniel Kahneman, a psychologist (go figure!) who won the 2002 Nobel Prize in Economic Sciences explained this differing behavior in his 2011 New York Times bestseller, Thinking Fast and Slow. Kahneman suggests that the brain thinks and makes decisions using two separate metaphorical brains, the System 1 and System 2.

The System 1 brain is responsible for “fast, automatic, frequent, emotional, and unconscious” thinking. A few examples of thinking with the System 1 brain as explained by Kahneman are: solving the math equation 2+2, completing the phrase “war and …”, also, connecting the description ‘quiet and structured person with an eye for details’ to a specific job, all in a fast and automatic manner.

In contrast, the System 2 brain is responsible for “slow, effortful, infrequent, logical, calculating, and conscious” decisions. Examples of System 2 thinking are solving 17×24, determining the price/quality ratio of two washing machines, and actively counting the number of times that the letter A appears in this paragraph. All of these functions require a significantly more amount of time and mental bandwidth.

When consumers make decisions, they often rely on their System 1 (with the occasional moderative input from their System 2) to make choices. This approach is more efficient than thinking with the System 2 alone, saving valuable brain power to process other mental tasks that are frequent or habitual in nature.

Due to the vast amount of processing that the System 1 brain conducts, it is typically handled in the nonconscious parts of the human mind, or in the background while the System 2 is working on completing other complex tasks.

 

Without relying on their System 1 brain as they currently do, consumers purchasing a soda at a supermarket would be passed by dozens of other shoppers in the aisle while they deliberated over which brand has the best price/quantity trade-off. The System 1 uses automatic thinking that is guided by past experiences, relationships, and mental models to help make decisions faster, easier, and more automatically than the more deliberate and rational System 2 brain.

Unfortunately, traditional market research taps into the System 2 brain- an old approach that is normative in nature and does not begin to reflect how consumers descriptively make decisions.

Protobrand leverages behavioral economics to understand behavior better by tapping into the System 1 to evaluate the factors that drive behavior such as emotions and subconscious preferences.

This new approach utilizes methodologies such as visual metaphor elicitation and response latency. These tools can better predict actions as they tap into the emotional and non-conscious drivers that play a role in informing behavior. By asking questions that consumers can answer about how they feel, at the moment, researchers can better predict the choices that consumers will make in the future.

It is essential that the field of market research continues on its path to understanding what truly drives behavior: implicit preferences and emotions, to deliver actionable consumer insights to clients. Without a keen focus on identifying the drivers of descriptive behavior, business decisions using normative predications become at risk for failure.

Put Down Your Partisan Positions and Pick Up Behavioral Economics

Put Down Your Partisan Positions and Pick Up Behavioral Economics

I was deeply saddened to hear that there was yet another mass shooting in wake of all the other gun-related tragedies that our country suffered in recent months. As I sit down to write this blog, I am listening to news sources blame causes from mental illness to domestic terrorism. All question when will it be “enough” before action is taken?

My thoughts on this matter are not politically based. Regardless of what your party affiliation is, gun violence is everyone’s problem- and worst nightmare. Growing up in Connecticut in the wake of the Sandy Hook massacre, I noted a drastic shift in statewide gun policy. Connecticut began working on legislation as far back as 1994 to curb gun violence. This effort worked well for the Nutmeg state but did not have an appreciable impact on nationwide gun violence beyond its borders.

With Left and Right politicians squabbling with each other over balancing the appropriate political response with protecting Second Amendment rights, many are left asking how long will it take before a compromise with action is reached to protect citizens going about their everyday life. Depending on whom you ask, the answers will range from 3 months to 3 decades to never.

While these politicians argue along partisan lines, there is room for Behavioral Economics to play a role in reducing the number of mass-shootings and gun related deaths across our country. Traditional economics focuses on supply and demand of the individual and the firm. Actors in this realm choose to maximize their own profit at every opportunity while maintaining a high level of utility per unit of goods consumed. Herein lies the problem- “rational actors” as they are known, focus on their interests and personal wishes, not towards their impact on society. An individual who chooses to exercise his or her own rights will fight tooth and nail to protect their stakes in the matter until there is a reason to shift their preferences or actions. Rational actors care about maximizing their own outcomes, often ignoring the actions of others. This concept is often known as following one’s personal dominant strategy.

Contrasting traditional economics is the field of Behavioral Economics. This field combines an understanding of economics and psychology to elicit change across multiple domains (healthcare, finance, marketing, etc.). Behavioral economics has been used to help individuals make better healthcare choices, save more money for retirement, eat healthier, and even live longer. Employing a solution based on Behavioral Economics is perhaps one of the only approaches to solve a social policy-based problem that takes into account the impact of initiatives on the individual and the society in which they live rather than focusing on a political solution, which has failed thus far.

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Dr. Karla Hoff’s approach to explaining the differences between Traditional (Standard) and Behavioral Economics.

The time to shine is now for those who champion behavioral and decision sciences in the for-profit industry to lobby for its inclusion in public policy initiatives aimed at curbing gun violence.

In this blog, I won’t speculate specifically what types of interventions would best solve this countrywide epidemic. I do believe there is a role for behavioral economics to create solutions. I will pose this question to my colleagues: What does our discipline tell us can be done to reduce the amount of gun-related deaths in this country when one follows the next in rapid succession with barely any time to recover from the last?

Let’s start the conversation until we can provide solutions that are not politically based and accepted by both sides as a step in the right direction. We must keep this dialogue going so we can live in safety without fear of experiencing these heinous acts of gun violence. I invite you to reach out to share your ideas of how we can leverage psychology and economics to help solve this problem. I look forward to bringing together the brightest minds in academia and industry to start hypothesizing successful interventions to solve this problem. Stay tuned for more pieces covering the responses and ideas that have been received since the posting of this article.