Applied Choice Architecture
Behavioral science is the future of market research. Next practice research and consulting must pull the meaningful how’s and why’s of human behavior from the behavioral sciences, including: behavioral economics, social psychology, cognitive psychology, cultural anthropology, sociology and neuroscience. These literatures are rich with insights on the why’s of behavior, including practical and easily implemented insights on how to architect choice in ways that are beneficial to company goals. Sentient Decision Science is uniquely constructed around culling the insights from these literatures for practical business advantage. It takes creative behavioral science, with keen business acumen as a guide, to produce research results that are game changing.
Architecting consumer choice is a great example of the application of behavioral science principles to create specific tactical recommendations that have a big impact on the bottom line.
The past 30 years of behavioral science has produced significant advancements in explaining how different factors of a choice environment impact consumer choice. Importantly, this is not just a story about neuroscience, but includes a social analysis of framing effects, sale and resale, product bundles, emotional advertising, price leveraging and seasonal product placement. In short, new knowledge on how the environment impacts actual consumer choice provides specific tactical guidance on how to lubricate consumer choice toward your products.
At Sentient Decision Science, our unique methods of analysis and investigation allow us to directly tap into universal principles from human psychology. This depth of understanding provides us with the foundation for effectively architecting the choice environment in order to lubricate shopper choice toward products (i.e. making it easier, removing friction and obstacles that slow down or redirect our behavior of interest). The deeper level of explanation of how and why behind an observed surface effect arms marketing divisions with intelligence to construct the choice environment with broad tactical executions built on the foundation of behavioral science principles. The result is marketing executions that directly impact shopper choice. But these aren't one-hit-wonders. These executions have legs and can be applied creatively across the product suite. Once we know the how and why behind a behavior, there are endless ways for creative geniuses to execute tactics off the same basic behavioral science principle.
Some Principles of Choice Architecture:
Framing Effects—one of the most basic and easily applied choice architecture principles is the framing effect. Framing is positioning the same information in a way that has a differential effect on judgment and behavior. Think 'Two for $2.00' versus 'Buy one, get one free!' The information is the same, but is framed in a different way, and the latter produces much more choice in your desired direction.
Attraction, Compromise and Background Contrast Effects—the probability that you will choose one product depends on the other possible items you have to choose from. By constructing the choice set with options that compete with an existing product in specific ways, you can structurally drive interest toward the preferred product in your line.
Mental Accounting—when we make decisions, we quantify our self-image into mental 'accounts'. When we feel guilty about a product, we won't buy it; by assuaging brand guilt through pricing and sale adjustments, you can dramatically improve your sales.
Subconscious Value Activation—'priming' is a psychological term for introducing stimuli that activates an association within a person’s mind. Targeted subconscious priming in marketing executions heightens consumer positive feelings about a product by essentially priming a need (physical, emotional or rational) and allowing your product and brand to deliver on that need. Establishing compatibility between our marketing primes and the benefits that your product and brand deliver is essential to lubricate consumer choice. This congruence is based on the behavioral science principle of stimulus-response-compatibility.
Hot State-Decision Making—sometimes we're ripe for making emotionally-heated decisions. Finding out precisely when these moments occur is instrumental for your business to provide your customers with what they need, when they need it. Read more about the pervasive power of hot-state decision making here.
Anchoring and Adjustment—by giving consumers a specific reference point, such as price or quality, you can significantly alter perceptions of a product’s perceived worth and usefulness. Anchor your brand where it belongs within the choice set according your terms of value, rather than allowing your competitor’s the ability to create the reference point.
The Certainty Effect—though we like to think we’re rational creatures, our perceptions of certainty are skewed by the probability of a certain outcome. If we expect something to happen and its probability decreases, we lose far more faith in that event than in something that was less probable also decreasing in probability by the same amount. Instead of offering four for the price of three, offer one free with three purchased. The zero prices connote a greater 'certainty' of good value.
Contact us to learn more about how these choice architecture principles can be applied to your business: submit requests to firstname.lastname@example.org.