Matthew Willcox, FCB/The Institute of Behavioral Science
Background on the Institute: Our global team of contributors brings regular commentary on news, musings and points of view from the intersection of the business of marketing and the science of behavior. Our focus is the understanding of how and why people make the choices they do and using these insights into human behavior to help solve marketing problems. Many of these insights are derived from emerging research in three areas: Behavioral Economics, Neuroeconomics, and Evolutionary Psychology.
The insights from Behavioral Economics are particularly valuable to marketers. The original research in this field has demonstrated that when people make an economic choice, their behavior doesn’t conform to the rational self-interest predicted by economists and is actually driven by hardwired cognitive processes or biases.
Psychologists Kahneman and Tversky won the Nobel Prize for Economics in 2002 for their work in the area, but the real value of Behavioral Economics to advertising and marketing is not what it tells us about economics, but what it reveals about human nature and behavior.
From the presentation:
- How we make decisions about the future: Humans have an irrational preference for a smaller reward now over a larger one in the future. Make your future self less of a stranger. For example, most Americans don’t save enough money for retirement, even if they can afford to
- How we instinctually avoid losses. People don’t want to give up fun now for protection in the future. Nor do kids
- Scarcity makes things irresistible: people want more of the things that they can have less of. If it is getting scarce, I want it and I want it now! Fear of losing out
- The best marketing does one thing really well—it works naturally with your brain. So align your brand with how people naturally choose and you can make your brand a natural choice!
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