Marketing Lessons From The Brexit Campaigns

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In this post I will give you 7 marketing lessons from the Brexit campaigns.

The UK’s EU referendum result surprised many people outside the UK. But a review of the strategies used by the campaigns gives some clear reasons for the outcome. It provides some important lessons for marketers. The Remain campaign was expected to win partly because of the uncertainty that leaving the UK would create. The fact that they lost suggests that something major must have gone wrong with their campaign planning and implementation.

In another post I outlined some of the main psychological reasons for Brexit. Here I outline specific lessons for marketing.

1. Start by listening to people.

Listen to people

Source: Freeimages.com

When a new brand begins to eat into an existing brand’s customer base this should be a wake-up call for the marketing team. To survive in the long term all brands needs to be constantly listening to their customers to ensure they remain relevant and in touch with their target audience.

Marketers should explore what customers find appealing about the new brand and what is turning them off the leading brand. By listening to and observing customers we can pick up clues to why they are disillusioned with the established brand. By exploring what attracted existing customers to your brand you can identify what is most appealing about your value proposition. This can help you position your brand in the most effective way.

What went wrong?

The Remain campaign failed to understand that many people felt they had not benefited from globalisation. For this reason only saw the downside of the free movement of people within the EU. The Remain campaign’s tone towards controlling immigration was also cosmopolitan and elitist. This alienated voters worried about free movement of people within the EU as it appeared to dismiss their views as irrelevant. The Remain campaign also failed to offer hope that by staying within the EU the UK was more likely to be able change the principle of free movement of labour.

Strategy Lesson:

Engage in regular research and collaboration initiatives with customers and prospects to understand how they perceive the brand and your competitors. Brands have to evolve as customer behaviour and values change so as to remain relevant and responsive to customer needs. If your strategy is not engaging customers it may be time to change your approach based upon evidence from customer research and feedback.

2. A clear and strong value proposition:

Image of Widerfunnel.com lift model

Source: Widerfunnel.com

A clear and compelling proposition is important for any brand. From day one the Leave message focused on “Take back control” which appeals to our desire for autonomy. According to the psychologist Daniel Pink autonomy is one of our three most important motivations in life. The others being mastery and purpose. Autonomy is something we naturally seek. It improves our lives because we feel happier when we are in control of our destiny.

Products are purchased for explicit goals, but brands need to appeal towards our implicit (psychological) goals to engage people at an emotional level. This is especially important where brands have very similar product features as it is the main way that they can differentiate themselves from each other. Understanding which of these core psychological goals motivates your customers is essential for effective brand positioning and campaign implementation.

Psychological Goals of Brands

6 main implicit psychologial goals

Source: Decode Marketing

What went wrong?

The “Britain stronger in Europe” message had potential to engage voters. There was a lack of consistency of how it was explained and much of the time it was communicated in a negative and bullying fashion (e.g. if you vote leave economic growth will be lower). It was far too reliant on the rational economic argument and the psychological goals of security and discipline. Insufficient effort was made to communicate the many successes of the EU (around autonomy), or the positive benefits of security and discipline.

Strategy Lesson:

Ensure your proposition incorporates a number of relevant psychological goals to widen the appeal of your brand position. Avoid over reliance on the security of the status quo as people want to feel that they are making a positive choice and not being pressurised to avoid change. Purely negative campaigns can make people uncomfortable and motivate people to change for the sake of it.

3. Relevance of message:

Image of City of London view

Source: Freeimages.com

The Leave campaign’s “Taking back control” message was also a more inclusive message. It appealed to a wider demographic audience. Everyone could relate to wanting some autonomy in our relationships with other countries. In practical terms this may be somewhat of an illusion, but it captured the imagination of voters as it triggered a deep psychological desire for more control in our lives.

What went wrong?

The Remain campaign focused mainly on warnings about economic and political consequences of Brexit. For example the Treasury said that house prices might fall and mortgage rates would rise. But this had no relevance to people on the minimum wage with no chance of ever affording a house. People often don’t appreciate the links between macro-economic factors and their day-to-day existence. So these messages didn’t resonate with voters.

The Brexit message also appealed to the desire to destabilise the status quo. This movement has resulted in the emergence of radical politicians like Donald Trump and Bernie Saunders in the US, Jeremy Corbyn in the UK, and Marine Le Pen in France.

Strategy Lesson:

Analyse the behaviour and needs of customers by relevant demographic and behavioural metrics to identify important customer segments. Create user personas to visualise and consider how relevant and motivating your messages are to different customer segments. Such analysis can help improve the targeting and relevance of your messages. Also talk to people about things they can directly relate to and avoid language that is not in every day use.

4. Tell a story:

Brexit told many stories (though many were probably half-truths), but these encouraged people to talk to each other about the EU referendum debate. Stories are powerful tools of persuasion as psychologists have found that when people listen to a narrative tale their brain is stimulated as if they are experiencing the same emotions as communicated in the story. Our social nature encourages us to pass on these narratives through word of mouth or online via social media.

What went wrong?

The Remain story was too rational, with too much emphasis on negative consequences of Brexit and few stories to inspire. This meant the status quo was not presented as a positive choice.

Strategy Lesson:

Encourage consumers to interact with each other my telling an interesting and emotionally engaging story.

5. Copy, Copy, Copy:

When we find ourselves in a situation of uncertainty, such as having to make a decision about something we little knowledge about, people naturally copy other people in the vicinity. Behaviour is often more powerful than word of mouth because it is more visible and people will copy the actions of people they respect or want to be associated with to reduce conflict and help establish stronger bonds in their social networks. Both campaigns tried to capitalise on this by getting the backing of celebrities and well known politicians.

Brexit undoubtedly benefited from strong leadership (i.e.Boris Johnson) and a consistent message delivered by almost everyone involved in the campaign.

What went wrong?

Remain suffered from being less cohesive as although it was backed by both of the main party leaders they held very different beliefs and values. For instance Jeremy Corbyn refused to share a platform with David Cameron and his support appeared half-hearted. David Cameron was also strongly associated with austerity which had significantly reduced funding in deprived areas since 2010.

Strategy Lesson:

Lead by example. If for instance your brand is positioned to be environmentally friendly make sure your internal policies and behaviour is consistent with this stance. If using celebrity endorsements ensure the person has wide appeal across your target audience.

6. Confirmation bias:

Image of mri-head scan

Source: Freeimages.com

People have a tendency to search and consume new information that confirms their pre-existing beliefs and ideas about a subject. We often filter out or dismiss information that contradicts existing opinions. Many people had negative opinions about the EU due to years of critical articles in the British media and so it was difficult for the Remain campaign to counter this perception.

One way that brands can counter confirmation bias is to communicate that you agree with one aspect of what your audience believes, but then introduce information that conflicts with this information. This creates cognitive dissonance which is where people feel uncomfortable about holding opinions that contradict each other. If you can then introduce an answer or solution to remove the cognitive dissonance people are more likely to agree with your suggestion than if you tried to raise it without going through this process.

For example the Leave campaign claimed that the UK could negotiate access to the EU single market and get agreement to control immigration. The Remain campaign could have agreed access to the single market would be achievable from outside the EU. However, they should have pointed out that to date the EU has not allowed any country access to the single market without also agreeing to free movement of EU nationals. Further, such a deal would not be sustainable for the EU as it would encourage other countries to leave the EU.

However, the Remain campaign could have offered a solution that by retaining membership of the EU the UK would aim to reform the EU from within. If David Cameron had listened to disenfranchised voters he might have put more effort into negotiating a review of freedom of movement within the EU on the basis of economic sustainability and security concerns.

What went wrong?

David Cameron’s re-negotiation of the UK’s relationship with the EU failed to deliver any restrictions on free movement of people within the EU. Rather than reject what was on the table and revert to plan B (i.e. campaign to leave the EU) which would have put the EU under pressure to compromise he accepted their offer. This may have been a fatal error as it reduced trust in Cameron to be able to negotiate with the EU and gave no room for the Remain campaign to argue that they could influence immigration better from within the EU.

Further, journalist and author Tim Hartford argues that confirmation bias was so strong among the Remain team and its supporters that they ignored obvious warnings (e.g, opinion polls) that the Leave campaign were moving into a winning position. This was compounded by betting markets that also favoured a Remain win. However, betting markets are driven by the amount of money wagered on a particular outcome which normally benefits from the wisdom of crowds. But as most of the establishment and the City were in favour of remaining in the EU did their financial clout overly influence the betting markets? This might explain why the betting markets got the result so wrong.

Strategy Lesson:

When people have an existing belief about your brand that is preventing you from persuading them to buy tell them something they already agree with. Then use cognitive dissonance to make them feel uncomfortable. Once you have established a feeling of cognitive dissonance introduce a solution or answer to their problem which eliminates the discomfort.

Be careful not to compromise too easily on issues that your customers perceive as important (e.g. reliability or quality) as this can destroy trust in your ability to deliver on your promises.

We are all prone to confirmation bias and so it is important to be open-minded about data that contradicts our own views about a brand or market. Ensure where possible decisions are based upon reliable data and not just your own gut instincts. Challenge data for potential bias or misinterpretation. This is especially important where different data sources produce conflicting results. Voice of Customer surveys for instance suffer from numerous flaws that can make them highly misleading if the data is taken at face value.

7. Post Brexit Regret:

Image of man with hands over face

Source: FreeImages.com

A survey of voters after the Brexit result found that up to 7% now regretted voting to leave the EU and would vote Remain if they were given another opportunity. Customer can feel regret when they don’t think they have made the best decision. In the case of Brexit some voters believe they were lied to because the Leave campaign reneged on a number of the promises they had made during the campaign.

What went wrong:

Both sides confused voters with misleading claims, and counter-claims. This may have reduced trust in politicians and could have put-off some undecided voters from going to the polling stations. If people find advice complex or difficult to understand this can often lead to procrastination or they will head for a competitor brand. The Leave campaign in particular made a number of very high profile promises that turned out to be inaccurate and undeliverable.

Strategy Lesson:

Ensure you are confident that you can deliver on any promises you make during a marketing campaign. Post-purchase dissatisfaction due to broken promises is likely to result in cancellations or returns and will destroy customer confidence and trust in your brand. As Dave Trott points out:

“The product creates the experience.

The experience creates the reputation.

The reputation creates the brand.”

Dave Trott, One Plus One Equals Three

Thank you for reading my post. I believe there are some important, but simple lessons to learn from the Brexit referendum result. The main lesson is to main sure you have a clear and compelling value proposition and that you understand the different needs of individual customer segments.

For more of our blogs visit conversion-uplift.co.uk/post/.

Can Behavioural Economics Save Marketing?

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Marketing is a Discipline!

In a recent podcastRory Sutherland, of Ogilvy and Mather UK, said that the second client marketing departments are “reduced to ‘MarComs’ marketing is almost lost”. So why do organisations think marketing is solely about communications and not behavioural change?

Marketing communications is of course a fundamental element of the marketing mix, but marketing is a discipline and a way of thinking. Communications should be an integral element of the four P’s, not a separate silo. Turning marketing into MarComs inevitably changes the relationship between areas that were once part of the marketing department.

They establish their own priorities and see communications as a service rather than part of the same discipline. This risks turning marketing into a process rather than a creative discipline. Once this happens MarComs is in danger of becoming a factory that churns out content that follows the set templates and adheres to the brand guidelines. It is unlikely to take risks or inspire customers.

Creativity is at the heart of the marketing discipline and it should be applied across all areas of the function to have maximum impact. A fragmented marketing function also encourages a tactical approach to marketing as MarComs have to respond to what product, pricing and the sales channels decide to do, often with little planning or discussion beforehand.

Marketing and Behavioural Change?

Image of mri-head scan

Source: Freeimages.com

Rory also mentioned how behavioural economics (BE) has the potential to allow creative people, like marketers and market researchers, to get involved in other areas of organisational management. It won’t solve the organisational problems of marketing, but BE can provide a valuable framework and language to create strategies for behavioural change. This would involve coming up with ideas for better choice architecture or nudges to influence the decisions people make. Marketers could be well suited to this role because behavioural change requires a creative and analytical approach to problem solving.

Neither is this about persuading people to do things they don’t want to do or selling them unsuitable products. Behavioural change has failed if this happens as people soon get wise to such unethical behaviour. It would not be sustainable either as companies would not want to risk damaging their brand’s reputation. Behavioural change is about understanding how and why people make the choices they do, but not just limiting ourselves to the marketing products and services.

Humans do not seek a perfect solution:

One of the most fundamental insights that BE gives us is that people seek to satisfy rather than maximise as we live in world of imperfect information and trust. Our goal with most decisions is to avoid a disaster rather than seeking a perfect solution. If this is the case then it should not be a surprise that messages often used in promotional material that refers to an “ideal” or “perfect” solution to “fully” meet your needs misses the mark?

Image of friends in a huddle

Source: Freeimages.com

Habit Formation:

Evolution has slowly created and shaped human decision making processes and so our cognitive machinery is little changed from when we first formed early civilised societies thousands of years ago. As a result we still rely on many of the same strategies for determining who we should buy from and what to do in new and uncertain situations. Behavioural change can use this insight to employ strategies that tap into our herd instinct.

People follow the crowd because it reduces the chance of a decision being a disaster. If the seller is aware they could lose social capital if they sell something unsuitable they are likely to avoid doing so. If, however, it leads to a satisfactory outcomes we may create a habit as we have learned to trust the person or brand concerned. Much of what traditional marketing refers to as brand loyalty is in fact habits. The insight here is that behavioural change is most likely to be effective when it focuses on habit formation or piggy-backs off an existing habit. Disrupting a habit is more important than the message.

image of people sitting outside Starbucks

Source: Freeimages.com

Brands:

Brands are also framed by how people interact with them and the stories they tell each other about their experiences. Trust is strongest when we learn through experience and the actions of the brand that they can deliver on their promises. The key relationships with a brand are the interactions between customers and employees. These define the brand relationship much more strongly than any advertising or social media campaign ever can. Thus, behavioural change is likely to be most effective if it focuses on these interactions.

Brands are created from our experiences.

Dave Trott, One Plus One Equals Three: A Masterclass in Creative Thinking

“The product creates the experience.

The experience creates the reputation.

The reputation creates the brand.”

Emotions:

The context of our decisions and our underling emotions are also crucial to behavioural change. We are much more willing to spend money and pay a premium price when we are searching for a last minute Christmas present that we promised to buy for our partner or children. We hate the feeling of regret and will seek to avoid it if we can. This is partly why scarcity is such a powerful motivator as people don’t like to feel they missed out on a bargain (i.e. loss aversion) because they were too slow to get to make a decision.

Image of man looking at a laptop

Source: Freeimages.com

As a result communications that triggers an emotional response are often more effective at getting attention and influencing behaviour than a purely rational message.

Aarron Walter, Teamtreehouse.com

“Showing personality in your app, website, or brand can be a very powerful way for your audience to identify and empathize with you. People want to connect with real people and too often we forget that businesses are just collections of people”.

Other useful insights from behavioural economics include:

  • We feel most comfortable when our behaviour conforms to recognised social norms relating to concepts such as fairness and social responsibility.
  • Humans are not the selfish, independent thinking agents that economics would have us believe. We will often hold back from behaviour that we believes treats others unfairly or lacks respect for others.
Image of behavioural economics decision bucket

Behavioural Economics Decision Bucket – Factors that influence decision-making.

  • Although people usually have clear explicit goals when making a purchase (e.g. I want a new car), they do not have full access to their psychological (implicit) goals (e.g. belonging and certainty) that help drive brand choice. For this reason there is no point using direct questioning to try to uncover these implicit goals. Our preferences also change over time and so consumer demand is continuously shifting in response to many influences.

Beyond Reason

  • The Beyond Reason model below shows eight overall implicit motivations and each of these is then broken down into a further four specific psychological goals. Marketers can use this model as a framework for discussing important psychological goals of their target audience. Rather than focusing on ’emotional responses’ marketers need to target relevant psychological goals to influence behavioural change.
Behavioural science provides us with a framework for behavioural change

Source: This motivation model is the intellectual property of BEYOND REASON

  • Intrinsic motivations, such as mastery and autonomy, can be more powerful at driving our behaviour than carrots and sticks, especially when the activity is not routine. Indeed, research has shown that extrinsic motivators, such as bonuses, often reduce motivation and performance when applied to creative tasks.

As you can imagine these insights can be employed in any environment where behavioural change is needed. This could be to tackle health and safety issues, reduce waste, improve compliance with good working practices, address employee motivation, or improve the effectiveness of communication.

What Next?

Well, Ogilvy and Mather, the global advertising and marketing agency, have already created a new business unit, Ogilvy Change, dedicated to the application of behavioural economics to deliver measurable changes in behaviour across a diverse range of environments. I recently attended the monthly London Behavioural Economics Network meeting where the team from Ogilvy Change discussed work they had conducted on behavioural change in a factory in South America for improving hygiene and the psychological optimising of a call centre in the UK. From small beginnings the team at Ogilvy Change are now working with a number of global businesses to press forward the application of behavioural science in the real world and maybe it is time we did the same.

Featured image by Alex Knight on Pexels

Why Is The Market Research Budget The First To Be Cut?

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Is The Market Research Budget Under Pressure?

A few years ago I was working for a UK commercial bank and the Marketing department had been called to meet the new Head of Marketing. As our new colleague was introduced to each area of marketing she acknowledged the value that they offer to the organisation. However, when she was introduced to the Market Research Team we heard the fatal words “Oh, yes, Market Research, the first area to be cut when there is a downturn.”

Ironically within a matter of months we were hit by the financial crisis of 2008 and almost immediately my budget was drastically cut back. So, why is there a perception that the market research budget is fair game when times are difficult? There are of course a number of inter-related reasons. From my experience here are the main factors behind this attitude to the market research budget.

Return on investment:

Senior managers understand numbers as they deal with them every day. To speak their language and gain trust it is important to provide figures on the value of research. Key here is stakeholder management to uncover all the potential benefits of decisions informed by research. But also follow-up on research by owning the action planning process, and agreeing how to calculate the value of research in monetary terms. This will put you in a stronger position to defend the market research budget.

Revenue is up image

Source: Freeimages.com

This will also help in trying to prioritise research budget from a ROI perspective. But more importantly if we are seen to estimate the benefit of research in monetary terms the budget is less likely to be perceived as a cost centre. Instead it may be a source of revenue and cost savings.

As managers are just as loss averse as the rest of us they don’t like to have to justify expenditure unless there is a benefit. Building trust by talking their language allows us to re-frame research in a more commercial sense. It opens up opportunities to discuss more strategic projects to address longer-term business goals.

Loss aversion can also be used to our benefit as research can help protect a brand by uncovering poor sales practices and training needs of customer facing staff though covert observational techniques. For digital communications research use A/B testing to measure any uplift in conversion. Then calculate the loss of revenue if the old content has been retained.

Herd mentality:

When other companies are reducing costs by cutting back on research and development. It is easy for a senior manager to use this as evidence to support their own plans to save money. This copycat or herd instinct is difficult to prevent as in times of uncertainty we like to follow what other people are doing.

Managers demonstrate a herd instinct by cutting the market research budget first

This of course is not always wise and when people copy behaviour blindly without assessing the risks it can end in disaster. The important strategy here is to identify and highlight those successful organisations that are not following the herd. Investigate their approach to research and their successes in the field of insights to demonstrate the value in having a longer time horizon. The market research budget should be an investment not a drain on resources.

Confirmation Bias:

Managers often suffer from confirmation bias as they look for information that will confirm their attitudes and opinions. The danger here is that managers often try to use insights from research to justify a decision they have already made. Rory Sutherland suggests that over 50% of market research may be commissioned as a kind of insurance against a decision going wrong. The manager can then blame the research if it proves a disaster. I suspect this is probably not far off.

If the research is for “arse covering” as Rory puts it I try to steer the research towards a more useful area of insight. Review the problem from a wider frame of reference and identify other questions that might be more valuable. Make a subtle suggestion to the manager by asking them if they had thought about asking this question instead. Explain how this new question would help their problem, but also how it might be more beneficial.

Also make sure you ask the commissioning manager what they think the research will discover to counter hindsight bias. You can add this to the brief and create a research hypothesis. The market research budget will be easier to defend if you can show you deliver findings that were not predictable.

Emotional attachment:

As human beings we are emotional rather than rational creatures. Our decisions are heavily influenced by implicit or psychological goals, such as power and autonomy. We respond most positively to people who take a genuine interest in our lives and make us feel important.

image of woman smiling to show emotions

Source: Freeimages.com

Make an effort to get to know your senior managers, find out what motivates them, from both a personal and business perspective. This will also help you identify their achievements so that you can give sincere complements to build a stronger relationship.

This should also allow you to find out about their perception of research so that you can consider how to counter common misconceptions about market research. But the important behaviour is to listen and get them to tell you what their priorities are. You can then go back later with plans to target these needs. As is often the case it’s not what we know, but who we know that matters. Having a senior stakeholder as a champion of the market research budget will help protect your funding.

Targets & Short-Termism: 

Understandingly there is a tendency among public companies to focus on hitting the next quarterly targets. This tends to result in an obsession with setting goals to help meet these targets. However, research from the Harvard Business School – “Goals gone wild” indicates that goals imposed on people by others (e.g. sales, quarterly returns, customer satisfaction scores etc), narrow our focus and limit our thinking. This reduces our ability to come up with innovative solutions.

There is also plenty of evidence to suggest that goal setting can result in unethical behaviour. Tesco and Halifax (now part of Lloyds Banking Group) in the UK and Enron in the US are prime examples of where lofty revenue and growth targets encouraged a race to meet them at any cost.

Image of Enron E logo

Source: Freeimages.com

Short-term thinking almost inevitably leads to less research and development. Research can help counteract the negative side-effects of goal setting and inform decision making. You can employ loss aversion here to focus attention on the dangers of missing out on new emerging trends or disruptive technology.

You can also ensure that your focus reflects the needs of the business to achieve efficiency’s and cost savings by proposing projects that assist this process. Behavioural economics for instance can be used to used in many areas, from call centres to production lines, to create new habits and improve customer decision making.

Does Social Influence Drive Most Consumer Behaviour?

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Can most of the things we buy really be the result of the behaviour and opinions of other people, whether openly or through covert imitation? This challenges conventional thinking about how people make decisions and common assumptions that most market research is based upon. However, many of these are false assumptions so isn’t it about time we looked at the data and came up with a model of human decision making that doesn’t neglect social influence?

The Power of the Herd:

In the book I’ll Have What She’s Having by Mark Earls, Alex Bentley and Michael O’Brien the authors assert that social learning (imitating other people) is the engine for the spread of culture, behaviour and new ideas. The basic premise is nothing new. ‘Herd behaviour’ was first popularised a hundred years ago by Wilfred Trotter in his book Instincts of the Herd in peace and war (1914).

Social influence and our herd instinct determines consumer behaviour more than we realise

However, more recently the economists Thaler and Sunstein suggested that social influence is important. Most people learn from others and it is one of the most effective ways to nudge behaviour.

They noted that in Jonestown an entire population committed suicide due the power of social influence. That teenage girls are more likely to become pregnant if they see other teenagers having children. But also obesity, academic effort of students, broadcasting fads and the behaviour of US federal judges have all been found to be heavily influenced by their peers.

Is it a co-incidence that we buy so many of the same brands as our parents and have adopted some of their behaviours’ and phrases? Some of these preferences change as a result of friends, partners, colleagues, and others in our social networks. But by who? Our personal belief system is also the result of interactions with other people. We largely rely on people we respect and trust (see authority) rather than actively seeking experiences to form our beliefs.

Super Social Humans:

Source: FreeImages.comEarls and his co-authors suggest that our tendency to copy results from humans being the most social of all primates. Living in groups we possess superior cognitive abilities that allow us to copy behaviour and ideas. These characteristics have enabled humans to adapt and survive in changing social landscapes. We only have to look at how people now use smart phones to see how quickly humans find new ways to interact and exploit opportunities that didn’t exist just 20 years ago.

That is not to say that people automatically follow each others like lemmings. Humans do of course innovate. Earls and co assert that ideas spread through a small amount of individual learning (innovation), and then social learning by the vast majority of people. Sales and motivation consultant Cavett Robert confirmed the same observation:

“Since 95 percent of the people are imitators and only 5 percent initiators. People are persuaded more by the actions of others than by any proof we can offer.” Cavett Robert

Interactions and Conformity:

Further, Earls and his co-authors point out that even if an idea or behaviour is intrinsically appealing, unless the knowledge of, motivation for, or acceptance spread through our interactions with others it will not get very far. Indeed, social norms emerge and change in our cultures as a result of behaviour spreading through conformity.

No one sets out what these norms should be. But people from a particular culture will generally agree on social norms without having to confer with each other. We learn what the norms are through our interactions with other people. Further, as Robert Cialdini and other social scientists have found social proof and norms can be a powerful way to persuade people to behave in a certain way.

  • Too much choice!
Image of brands on a supermarket shelf

The psychologist Barry Schwartz points out that as the number of choices we have continues to rise. People have no alternative but to rely on second-hand information rather than personal experience. His concern was about global telecommunications and how these networks copy and distribute the same stories. Even if a story is false the danger is that the more people hear it, the more they assume it is true.

“When you hear the same story everywhere you look and listen, you assume it must be true.” Barry Schwartz, The Paradox of Choice: Why More Is Less, Revised Edition

In our modern societies copying is likely to be the most effective strategy for most decisions. We neither have the time or capacity to process so many choices. Schwartz visited a US consumer electronics store as part of the research for his book The Paradox of Choice. He estimated that the individual components in the store would enable one to create 6,512,000 different stereo systems. Perhaps it’s not surprising the iPod became so popular!

Market Patterns:

Earls and is his co-authors point out that patterns in market data are the best guide as to whether decisions are heavily subject to social influence. If people largely make decisions independently of each other, and use some kind of rational cost-benefit selection process, we would expect to see a normal distribution (short-tail) of brands. This is most likely to occur where there are relatively few similar products to choose from.

Furthermore, brand loyalty would not to be correlated with brand size and advertising would be as effective at attracting new customers as it is with existing buyers. Markets would be more stable as people wouldn’t follow trends. Sudden and massive cascades (e.g. the switch to digital cameras) wouldn’t occur as peoples’ preferences would not change until they had decided for themselves that a new product would better meet their needs. This indicates social influence is active all around us.

More Market Patterns:

In reality many markets are characterized by long-tail distribution that marketers recognize by the 80:20 rule. Andrew Ehrenberg’s work in social and market research identified that short-tail distribution can exist in static and non-segmented markets. This means there is no turnover of products. But in many of today’s highly segmented markets we can see countless products come and go during a year.

Ehrenberg’s work confirmed the double jeopardy law that small brand’s suffer from both fewer buyers and also less loyal customers compared to large brands. He also found that price elasticity declines in magnitude as a brand’s share rises. Why should this be if we are not subject to social influence from others? His work indicated that most promotions only have a short-term impact on sales and almost all buyers during promotions are repeat purchases rather than new customers. He concluded that most advertising simply raises awareness of a brand but rarely seems to persuade. Indeed, one of his key conclusions is that most FMCG markets lack any real brand loyalty. Purchasing patterns are from habit and availability than any emotional attachment to a brand.

Directed Copying:

Image of photocopying machine
Source: FreeImages.com

Earls and his co-authors make an important distinction between two kinds of social influence that humans use to learn from. These are crucial for marketers as they influence the dynamics of the social landscape and how markets change over time.

When we have a choice between many apparently equivalent options we often find copying the behaviour or decisions of a particular person preferable to trying to evaluate all the different options ourselves. Directed copying occurs where people copy in an advantageous direction. This may involve copying successful people, members of our family, people who are similar, or celebrities. When we copy people or groups that we wish to identify with this may lead to social diffusion within the confines of the group.

Undirected Copying:

Image of a large crowd of people
Source: FreeImages.com

Undirected copying occurs where we copy people, probably subconsciously, with little if any knowledge of the person we are imitating. This often happens where there are not just a huge number of similar options to choose from. But there are also too many people or groups of people to copy from. Further, people appear as equally uninformed as you and are probably copying other people themselves.

Undirected copying is particularly useful for all those thousands of little choices that we hardly given any thought to and so it is largely an unconscious process. However, it is a model that can be used at the population level. This is because even if individually we have specific reasons for copying someone else, there are likely to be so many and varied reasons for copying that we can consider it undirected.

Undirected copying is probably the norm in many situations and may help predict rates of change. It acts like the interactions of cascade models and is characterized by continual flux, unpredictability and long tail distributions. The latter reflects the fact that only a small percentage of new ideas ever becoming popular as most fail. This is why we see a turnover of ideas, as the most popular ones are more likely to be used again.

Some Implications of Social Influence:

  • Directed copying can explain variations in the normal ebb and flow that results from undirected copying. This could be from a cultural or media event (e.g. the Olympics or a motion picture release) as well the adoption by a celebrity. Celebrity endorsements don’t have the same impact, as it is not genuine behaviour.
  • When an idea is better than the rest, copying kicks in. It increases its popularity until something else comes along. Copying is from the quality of ideas. The more people in the population, the better the ideas.
  • The nature of copying among populations can be influenced by their interconnections. Large, interconnected networks of people where there are relatively few similar products tend to favour directed copying. In such networks the behaviour of individuals is greatly influenced by those upstream. If we hope that people will select on the basis of quality (i.e. the follow the copy if better rule) then this kind of network is more likely to benefit a superior idea. This is similar to the early adopters marketing model where innovators generate new ideas that are picked up by early adopters and then copied by others.

More Implications of Social Influence:

  • Undirected copying produces unpredictable landscapes where probabilities are the best guide to picking winners. In financial markets for instance a balanced portfolio has more chance of selecting a winner than trying to pick individual stocks.
  • The success or failure of an idea is often unpredictable and largely random. What determines success at any one moment is how popular it is.
  • Conventional marketing and market research thinking significantly underestimates the power of social influence in determining many of the things people buy and the behaviours we adopt. Further, emotional brand loyalty may be a lot less prevalent than many marketers believe it is. Behaviour mainly drives attitudes to brands, but what influences behaviour? I suggest that it may be time to believe the math, not the myth.
Further reading:
I'll Have What She's Having: Mapping Social Behavior (Simplicity: Design, Technology, Business, Life)

I’ll Have What She’s Having: Mapping Social Behavior (Simplicity: Design, Technology, Business, Life)

The Contribution of Andrew Ehrenberg to Social and Marketing Research by John A Bound.

Featured image from Adrienn on Pexels

What Makes Social Networks Tick?

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Why Do People Cooperate in Social Networks?

What underlies the evolutionary success of the human race and allows social networks to function? In the book I’ll have what she’s having by Bentley, Earls and O’Brien, the authors’ assert that cooperation between individuals is key to both.

Research into a diverse range of group activities by North-western University Institute found that individual performance was a poor indicator of team success. Group results are a combination of individual performances and how well people co-operate. This post examines how cooperation evolves in social networks.

BENEFITS OUTWEIGH THE COST:

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Co-operation can flourish in complex systems such as social media and modern highly interconnected societies. For co-operation to evolve game theorist Martin Nowak identified that the benefits must outweigh the costs to the individual. It is human nature that people will not persist with a behaviour that does not have a perceived return greater than the time or effort invested in the activity. Social networks rely on the benefits outweighing the costs of participation.

The authors’ grouped conditions that need to exist for co-operation to evolve into three categories.

1Group Mentality:

People support others who are either biologically related (kin selection) or belong to the same group (group selection). Despite the power of kinship it is group selection that is more common in our modern societies. Humans are naturally drawn towards cooperating as part of a group or social network. Psychological studies suggest that people have more positive emotions and are more motivated when feeling part of a community. This goodwill allows for sharing, bartering, trading, lending, borrowing and many other collaborative behaviours.

Cooperation allows people to provide different skills to manufacture complex products that an individual would struggle to build. To grow a single crop that can be exchanged for goods and services from other members of the group. People benefit from assisting the group because their long term interests are usually from the group’s success. As a result more cooperative groups, such as online social networks, tend to be more successful and grow at the expense of less cooperative groups.

2. Reciprocity:

Image of African-American male hands holding a red velvet box with gold ribbon.

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The system of indebtedness originating from the rule of reciprocation may be a unique characteristic of human nature. Indeed, the archaeologist Richard Leakey suggests that reciprocation is part of what makes us human:

“We are human because our ancestors learned to share their food and their skills in an honored network of obligation.” Richard Leakey

Reciprocation acts as an adaptive mechanism that facilitates the division of labour, the exchange of goods and services, and the formation of clusters of inter-dependencies that link people together into social networks. Robert Cialdini asserts that reciprocation is essential for our ability to make social advances because it provides confidence to the person who gives something to another individual that their effort will not be in vain.

Reciprocation can work where an individual looks for another person to cooperate first before they cooperate. However this form of direct reciprocation can be unreliable because the mood can quickly be destroyed by freeloaders. But it also fails to explain why someone will cooperate with people they don’t know and may never meet again.

Indirect reciprocation, where co-operation has become common, if not the norm, is a more powerful form of reciprocation. This occurs when individuals respond in kind to the reciprocal behaviour of others. Twitter relies on the mechanism of reciprocation to drive the flow of information around the social network. Following other people, re-tweeting other’s posts, answering questions, and leaving comments on blogs all encourage reciprocal behaviour from others.

3. Reputation:

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Authority or reputation is a further enabler of indirect reciprocation. Robert Cialdini asserts that our obedience to authority allows for the evolution of complex systems for resource production, trade, defence, and social control that would otherwise not be possible. Such obedience often takes place with little or no conscious thought. Often a communication from a recognised authority is used as a behavioural shortcut that determines how we act in a certain situation. For example on Twitter people will sometimes re-tweet a link before reading the post because of the reputation of the source.

Earls and his co-authors assert that reputation only works if a person has legitimate authority. However, Cialdini points out that in reality just the appearance of authority can be sufficient for people to be influenced by a person or group. For instance titles reflect years of work. But it is very easy for a person to adopt just the label and receive automatic submission to their judgement. Clothes, such as a doctor’s uniform, can also trigger our mechanical compliance to authority.

In a similar way group membership and kinship use various forms of identification so that individuals know whether they belong to a group or not. This could be a surname or clan name in some societies or you from your accent or appearance. Whatever the nature of the group though copying and conforming is an essential part of belonging to a group or social network. Because we are social creatures membership of groups often overrides our individuality and determines our place in society.

“The key to group membership, of course, is copying those around you so that when you’re in Rome you act as the Romans do, and not like someone else.” Bentley, Earls & O’Brien – I’ll Have What She’s Having.

Implications:

  •  Social networks take many forms, from close groups of friends located within a small geographical location, to global social media networks. As a result we can use the ‘rules of the game’ as the authors’ refer to them in many different situations to encourage cooperation and innovation.
  • There are huge benefits to be gained from encouraging a culture of cooperation within our diverse social networks. People are more likely to be able to achieve change when battling a bureaucracy if they cooperate than working in isolation. Similarly within organisations cooperation is essential for any change program to be successful. Conventional top down strategies will often fail because they have not got buy-in from people lower down the organisational structure. Management need to accept that they can’t force people to do things that they don’t agree with. Innovation is also more likely to result from collaboration.
  • Brands and organisations in general can assist the process of cooperation by making sharing of content easy and rewarding. Facebook, Twitter and other large social media appear to provide a ready-made solution for sharing. Analysis of the dynamics of Facebook communities by Emilio Ferrara discovered that there are relatively few large communities in Facebook. The vast majority are small size communities. However, members of such networks often suffer from information overload due to the number of connections each has. This reduces the chance that individual members will see and share content.Image of 3 people sitting on a bench talking

    Source: FreeImages.com

More Implications
  • As ‘super social’ apes humans benefit from being embedded within groups rather than acting in a selfish and isolated way. Research suggests that people who surround us influence and regulate our behaviour. Organisations can benefit from our social nature by engaging with people in a collaborative manner to encourage creativity and innovation. This helps build trust and is more likely to influence mass behaviour than conventional marketing approaches. Indeed, Rachael Botsman suggests that trust is the currency of the new economy and is our most valuable asset.
  • Organisations can encourage a culture of reciprocation by taking a genuine interest in their customers and staff. People are generally good at spotting insincere interactions, but appreciate communications that are both helpful and engaging. Offering interesting and unique content facilitates reciprocation because it is more likely to be well received when shared.
  • Reputation gives authority to communications. Organisations often adopt brand values as a way of demonstrating their commitment to key customer beliefs. However, Mark Earls suggests that actions are the most powerful means of communicating behavioural change. Organisations are more likely to be successful in achieving change if they align the company’s actions with their core beliefs. This demonstrates more clearly than any marketing communication that the organisation is serious about its core beliefs.
Further reading: 

I'll Have What She's Having: Mapping Social Behavior (Simplicity: Design, Technology, Business, Life)

Do Companies Care About The Quality Of Market Research?

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What Do Executives Care About?

I’ve read a number of posts about the quality of market research. Some of these posts have criticised poor practices of research suppliers and others point to the frailties of client side-researchers. Some valid points have been made, but there is a danger that we are missing the bigger picture.

  1. Market research is a collaborative process and unless all parties work together we will gather data, but we are unlikely to gain much insight. This of course includes the people we call respondents. As Mark Earls points out in his book Herd, co-creativity is deep rooted in human nature. Most new ways of looking at problems are the result of people working together in groups rather than on their own. This is why the nature of the relationship between the client, agency and respondent is so important to the success of research.
  2. Most senior managers in client-side companies are more concerned about the quality of insights and the action that results from research spend. They assume that we are the experts and will use our professional judgement to ensure research is carried out.

There are many challenges on both the client-side and the supplier-side to completing a successful research project. However, from working on the client-side there are some practices that can help the different parties work together more collaboratively.

  • Keep processes manageable and simple. I once came across a colleague who was updating a manual for a continuous customer satisfaction project. It was over 100 pages long. The research agency has to follow the procedures in the document! Even if someone did read the manual there is no way that they could digest every procedure and ensure they were all implemented.

Illusionary Roots

“Of course, organograms, Gantt charts and 6-sigma processes all make us feel more secure. But this security is based on just the same illusory roots as our own individual volition and sense of self.” Mark Earls, Herd.

  • Include action planning or post-research workshops in the brief and proposal to ensure that it is positioned to all concerned as an integral part of the process. This can help kick start the process of getting buy-in and commitment from client-side management to an essential part of any project. Unless planned from the beginning there is a risk that management will create a separate process and the research team may not even be involved.
  • Focus on using your interactions with each other to exchange ideas and knowledge. This can be particularly useful when conducting a review of published research and current thinking related to the business problem.

There are also a number of ways that client-side researchers can encourage a more collaborative approach and improve the chances of valuable insights being identified from a study.

Client-Side Behaviours:

  • Don’t rely solely on head office management’s view of the business problem. In any large organisation it is difficult for Head Office management to be in touch with what’s happening at the coal face. Company culture and human nature often don’t encourage staff to feedback problems they encounter. Research agencies can help with this process, but it’s valuable for the client-side research to meet with staff at different levels that are directly affected by the problem. This can be a great source for developing hypothesis to test in your research.
  • Try to uncover hidden agendas’ by engaging with different stakeholders. Challenge the need for research. What if there was no research? Explore what stakeholders anticipate will come out from the research and what they perceive to be the main barriers to change.
  • Don’t be too prescriptive with your research brief. You can state your preferences for how the research should be designed, but leave it open for discussion and refinement.
  • Don’t look at the project in isolation. Share other relevant insights with your research agency and discuss whether they can add value to your current project.

There are also behaviours that research agencies can employ to improve the relationship with the client. This encourages a more collaborative approach. These may seem obvious, but sometimes agencies don’t follow these practices.

Research Agency Behaviours:

  • Research the organisation and client. A lot of client-side teams have been downsized over recent years and so have less time to brief suppliers. Help the client by doing some homework. Use LinkedIn to find out about the background of the client.
  • When you get a brief from a client call them up to discuss the brief. Find out about the background to the project and allow the client to explain their thinking behind the suggested approach. See how open they are to alternative and more collaborative approaches.
  • Don’t just re-produce the brief in your proposal. Take the opportunity to add value to the brief and if appropriate look at the problem from different angles. Clients are often put off a proposal if it is perceived to follow a standard template. There is little effort to explore the business problem further.
  • Be up front about the level of time and support you can offer before you need to charge additional fees. Many client-side researchers are under pressure to save money and don’t appreciate having to request an increase in budget.
  • Find out about your audience and who the key stakeholders are. Ask the client-side researcher to brief you about any reservations or concerns stakeholders have about the research.
  • Focus on insights rather than data and methodology. It is a myth that turning up for a debrief with a large PowerPoint deck or a set of data tables impresses clients. Management would rather focus on one slide with genuine insights than spend an hour going through a long detailed presentation.

Conclusion:

Market research is not about quality, the client or the agency. What matters is the customer or prospect and what insights we can derive from the whole process. To maximise insights we should seek to collaborate with all parties involved to avoid over-focusing on our internal procedures and policies.

Further reading:
Herd - How to change mass behaviour by harnessing our true nature

Herd, Mark Earls.