I will be speaking at Impact 2020. The Market Research Society annual conference together with David Penn and Danny Russell. #mrslive #mrx
Here is the headline for the session
Bonfire of the Vanities: Time to Consign Behavioural Economics to the Flames?
Does BE tell us anything about making brands more attractive, resilient and sustainable over time? Or is it just a ‘box of tricks’ for short-term kicks? Join David and Chris to explore its limits in research.
The programme is available here
I will be using some themes from my recent book Attractive Thinking and this blog introduces the subject and explains that Attractive Thinking is a rallying cry for marketers to get back to the basics of why people buy stuff. #mrslive #mrx #attractivethinking
Attractive Thinking is a rallying cry for marketers to get back to the basics of why people buy stuff. People only buy things when it solves a problem or a need that they have. People do not buy brands because they like them or because of a brilliant marketing campaign. They buy things because it will help them in some way, solve a problem and address a need. Usually, this is both emotional and functional.
The central premise underlying Attractive Thinking is that the purpose of a business is to solve a problem and address a need for their customers in a way that will make a profit for the business while providing them with great products. This is what enables a brand and business to thrive.
The evidence for this comes from the work of Ehrenberg, Sharp, Field and Binet (amongst others). Ehrenberg showed that it is market penetration that matters not customer loyalty, attracting more customers is what drives growth, not trying to hang to the ones we have through incentives. Sharp showed us that the marketers’ job is to get their brand noticed and remembered. Marketers must make their brands iconic, memorable and recognisable. Customers have a weak and transient relationship with most brands. they like the brand for as long as they need it and if they notice it and understand how it helps them. It is a bit like our relationship with our friends. the ones we see and spend time and are rewarding are the ones we like the most. Field and Binet showed us that the most effective way to spend marketing money is to split the investment between brand building (creating an emotional connection) and brand activation (stimulating people to buy). All these observations are related to each other.
When we understand this we know the marketers’ job is to create something that solves a problem for people, then make sure they know about it and make it recognisable and easy to buy
Behavioural Economics has a role to play in doing this more effectively in that it offers to tools to deliver some of the tasks mentioned above. But it is a tool to help with these tasks it is not a set of marketing tricks that can help us create growth from nowhere. If we can use it to get noticed, to be remembered, to help people understand what we offer, to reach more customers, then it can add value. But if we try to manipulate people to be loyal to buy things they don’t need, then we are spending money inefficiently.
The answer is to recognise the drivers of successful businesses. They all have the following things in place
- A value proposition for their customers that is relevant and distinctive
- The communicate this with sufficient power
- They make sure they deliver it every time and every day
- The business has basic economics that work
The method to achieve this is to keep coming back to five fundamental questions that drive brand strategy. If we have good answers to these then we will get growth. When we are struggling it because we are not addressing one or more of these questions properly.
- Who are our customers and what is their problem?
- How can we solve the problem and stand out?
- How do we create a product or service that delivers this?
- How do people find out about it and where do they buy it?
- How do we engage our shareholders, colleagues and customers in these tasks?
Looking forward to a lively debate with the audience.