Inside the mind of the buyer
TS IGH EARNEST INS Contents
1. Summary 2. Resetting our assumptions – from big rational decisions, to small highly emotive ones 3. Behavioural economics in B2B marketing – why it changes everything 4. Behind it all – two systems of thinking 5. Cognitive ease 6. Choice architecture 7. Goal drivers – what we say, and what we actually think 8. Biases 9. Framing and anchoring 10. Conclusion Appendix Reading list About Earnest
2 1.
Summary
’ve been in business (B2B) marketing voice of the customer. To be the one who So this piece pulls together a starter’s for nearly 20 years and I’ve seen the can answer ‘why’. guide to understand the B2B buyer industry grow up, mature, gain new through the lens of behavioural I And then I stumbled upon behavioural fads, trends and evolve dramatically. economics. It’s not an overview of economics. Despite all this, I’ve always felt something behavioural economics itself, far more was missing. For me, this was the biggest eureka learned and esteemed individuals than moment of my career. At last, I could I have covered that already. A reading understand the ‘why’ as well as the ‘what’. list is at the back if you’re interesting in The marketing industry has become, It has given me and the agency I founded getting a more indepth view of the subject. rightly in some ways, obsessed with data (with Paul Hewerdine and Matt Frost My hope for this piece is that at the very and measurement of activities. Return back in 2009) a fundamentally better least it’ll help you think twice about your on investment is the stamp demanded framework for understanding human audience. The assumptions we’ve all been by Boards and finance directors the world decision-making. making for years have been wrong. And over. Otherwise, marketing limps on And this amazingly connected the dots back now we have science on our side – to explain trying to justify its existence and sadly to the reason why we launched Earnest. why, and to help us lobby internally for too often gets seen as an expendable the right emotionally engaging campaigns cost centre. At the time we felt something was missing in the world of B2B marketing. As an and brand experiences that our customers This rush for short-term returns and industry, we were obsessed with and prospects are secretly craving for. the reliance on data has always left me constructing highly logical rational Good luck. with a niggling doubt. reasons to buy. But, business people The data for me has always done a are still people, they just happen to be grand job of telling WHAT happened. at work. What was missing was emotive But never WHY. I am still something of engagement. And to achieve this you need the proverbial five year old child – I find to understand how B2B buyers really buy, myself asking “Why, why, why, why” until what motives them, drives them and I’m asked to pipe down. And ultimately, what’s really going on in their minds, isn’t that the job of marketing? To be the underneath the surface.
3 2.
Resetting our assumptions – from big rational decisions, to small highly emotive ones
ltimately, we’re all in the business The reality though is that this flood of persuasion. Whether it’s of ‘buyer information’ has not helped In our headlong rush to do ‘content Upersuading someone to open an ‘empower’ the buyers in any way. There’s marketing’ we’ve actually made email, download a whitepaper or, once simply too much information, which it harder for buyers to decide in in a while, buy something from us. So the means B2B buyers effectively become snow a considered way. question we need to be asking every day blind. The busy buyer simply cannot sort, is ‘How do I persuade? What do I need sift and make sense of all this information. Tweet this to say and do?’ Which means that despite in theory having all the information they require, business Fallacy 2: B2B buying involves a single buyers rarely make a decision that is either decision made over a long period of time In B2B marketing we have made two quite fully informed OR objective. It is often said that a major difference big false assumptions regarding this. between business decisions and consumer Fallacy 1: B2B buyers decide on a rational decisions is the length of the buying cycle, basis Despite in theory having all the and the fact that business buying involves The first one, is that we have developed our information they require, business more than one individual. buyers rarely make a decision that messaging, brands and campaigns based In reality, even big business decisions to is either fully informed OR objective. on the belief that persuasion means get to a ‘yes’ are better conceptualised as a providing our audiences with rational series of ‘micro yesses’, made by different reasons to do things. This means we Tweet this people at different times – often made have typically focused on explaining our quickly and often driven by subconscious technical superiority, showing our expert This is a fantastic example of marketing or emotively driven impulses. insights and above all outlining the irony. In our headlong rush to do ‘content Think about a nine month sales cycle for, business benefits. marketing’ we’ve actually made it harder say, enterprise software. What goes into for buyers to decide in a considered way. This is because we’ve been led to believe this decision? Of course there at some point that B2B buyers are empowered with is a ‘macro yes’ where people are going information. And on a very surface level through a balanced score card approach, it’s true, they have lots of information involving all stakeholders, and meeting thrown at them every day. the wonderful folk from Procurement.
4 But, what got them to that point? Micro- Why are both these assumptions false? yesses, such as: The first and most obvious reason for Key takeaways • Opening a marketing email about the this is time. In business, all the advances • Despite having more information at their business issue addressed by the software in communications and information technology have simply not created disposal, business buyers find it hard to • Downloading a piece of useful / more time for us. In fact, the pace of our assimilate and sift this to help them make interesting / different content business lives has sped up – meaning an informed decision • Going to the company’s website we make decisions much faster. And • Big buying decisions are actually broken inevitably, with this compromises are • Following them on social media down into lots of ‘micro-yesses’ made and in fact we are constantly • Taking the sales call short-cutting a more thought out • Agreeing to an initial meeting logical decision-making process. Tweet this • Mentioning the issue to ‘the boss’ But as we see, this lack of time just (even tabling a subject matter that isn’t plays to the way our brains really expressly budgeted for or mandated is behave anyway. We may not realise it, a highly emotive decision) but the vast majority of our cognitive decision-making is done through using heuristics (rules of thumb). It’s as if we’re on auto-pilot. The next chapter deals with a branch of science that brings sense to this and gives us a framework to understand how and why we make the decisions that we do – in business as well as in our personal lives.
5 3.
Behavioural economics in B2B marketing – why it changes everything
What is behavioural economics? Behavioural economics has had huge Behavioural economics is an interesting impacts: For too long, marketing has been seen as a cost centre in B2B organisations, fusion of two quite different fields of For our agency: it has changed the way whereas by having solid scientific science: neuro science and behavioural we approach briefs, given us a deeper frameworks on our side, we start psychology. It’s been responsible for understanding of human decision-making to be positioned differently one noble prize for economics (Daniel and therefore what messaging, creative in organisations. Kahneman in 2002) and whilst it’s and tactical campaign plans will work. certainly not a silver bullet, it does fundamentally change the way you think For our clients: they have found that by about how and why B2B buyers buy. working with us on campaigns and brand development work that have a behavioural Behavioural economics shows that the way economics foundation they have not only Key benefits of using behavioural the brain functions, particularly when it had better results, but have also had much economics in B2B marketing comes to making decisions, is radically more fruitful conversations internally different to how we intuitively believe it about the value of marketing. • Provides a set of research-based works. I believe it challenges the concept frameworks to help us understand This last point cannot be understated. For of rational thought. There’s certainly business buying decisions reason going on in our minds every day, too long, marketing has been seen as a cost • Provides a more objective way of but this reasoning functions and behaves centre in B2B organisations, whereas by assessing new product/company in a way that at first glance looks highly having solid scientific frameworks on our messaging and campaign creative irrational. In truth, the way we decide side, we start to be positioned differently is far more complex and fascinating. in organisations. The job of justifying what • Helps to improve the credibility of And it should be of huge interest to we do and the way we do it gets easier. marketing as a strategic function any marketer. and voice of the customer in a B2B organisation
6 4.
Behind it all – two systems of thinking
often wonder how on earth any We do this by some amazingly intense System 1 runs automatically. It works of us actually get out of the house filtering – we only actually see what we hyper fast and as you can see from Figure 1 I each morning. need to. processes the overwhelming majority of inputs to our brains. It’s there calling so Think about it: you get up, shower, get many of the shots, but all the while under dressed, breakfast, leave the house, walk Our brains process a HUGE amount of the surface. We’re rarely aware of its to the station, get on the train, arrive at information. Every colour, every object, existence or operation. It’s the unseen work. Almost on ‘auto-pilot’? every sound, every movement, every smell. force driving so much of what we do. The brain does this in real-time – over 11m Exactly that’s the point, we function on bits per second. More incredible than this auto-pilot. is that the brain does all this whilst Kahneman says that we have two ways of allowing us to function. thinking. The simply named Systems 1 and 2, and they’re both active while we’re awake.
System 1 runs automatically. It works hyper fast and processes the Autopilot Pilot overwhelming majority of inputs to INPUT System 1 System 2 DECISION Implicit Explicit our brains. It’s the unseen force driving so much of what we do.
Action Thinking
Fast Slow BITS/SECOND40–50 Parallel Serial 11,000,000 Automatic Controlled Effortless Effortful BITS/SECOND Associative Rule-governed Sets like concrete Flexible
Figure 1
7 System 2 on the other hand operates in a System 1 has quite a tricky relationship It’s a highly efficient process that fundamentally different way. As you can with System 2. System 1 spends time minimises effort and optimises see in the same diagram it processes far generating suggestions for System 2: performance. less, but it does so in a logical, deliberate impressions, intuitions, intentions and So a lot of the time, in the interests of fashion. It’s the heavy lifting part of the feelings. If endorsed by System 2, these getting on with our lives, System 1 rules. brain. It works far slower but is capable impressions and intuitions over time It ‘fast tracks’ a huge amount of the of processing complex information such turn into beliefs and impulses turn into ‘decisions’ we make (See Figure 2). Some as mathematical problems. You notice voluntary actions. are tiny decisions (stopping at a pelican when you’ve been using System 2. Quite System 2 is mobilised when a question crossing, changing gear, left foot before simply, your head hurts. Think of when you arises for System 1 that can’t be answered. right foot and so on). Some are ones where did an exam, or spent time with colleagues we think our pilot is running the show, trying to work through a complex situation and a lot of these are purchase decisions. or scenario.
Autopilot Pilot INPUT System 1 System 2 DECISION Implicit Explicit
Action Thinking Fast Slow Parallel Serial Automatic Controlled Effortless Effortful Associative Rule-governed Sets like concrete Flexible
Figure 2
8 System 1 is particularly active when We’re surrounded by marketing noise The next chapters look a number of there’s a lot going on around us – especially and System 1 efficiently processes out this different frameworks in behavioural when there are lots of people involved. noise. In fact, recent studies have shown economics. One of the challenging aspects Which pretty much describes our entire that the online banner ad ‘rejection rate’ of behavioural economics is that it’s not working lives. has now decreased to just 250 milliseconds. one neat and discrete area of science. So in a quarter of a second (plenty of time Instead it tends to encompass a number The result of all this is that some 85% for System 1) your brain has decided of frameworks, research studies and of all decisions we make are done at a whether to reject advertising immediately concepts. Some of which overlap – the lines subconscious or unconscious level. Looking or hang around that small time longer to between one theory and another often blur. at the stats in Figure 3, this paints a process it. familiar but nonetheless worrying picture So, the next chapters focus on some of for all of us in marketing. System 1 is acting However, System 1 has biases – which can the areas I think are the most relevant, as a highly advanced filtration system. make us error prone. immediately useful and practical for those of us forging a career in business It’s worth saying that it’s not as simple as marketing. ‘System 1 = emotion; System 2 = rational’. “85% of the decisions we make That’s just System 1 creating a lazy are made by the unconscious part shortcut for us. Sadly, it’s more complex of the brain.” Key takeaways than that. Martin Lindstrom, Buyology • There are two systems of thinking.
Human attention span within • System 1 processes most of the inputs Tweet this a marketing context to the brain and works hyper-fast ‘on autopilot’ Ad in trade mag: 1.7 seconds Poster: 1.5 seconds • System 2 is more deliberate – and capable Figure 3 Mailing: 2 seconds of complex problem solving and logic Banner ad: 1 second • System 1 is a highly efficient filtering system that culls most of the shots, even when we think we’ve been rational Source: http://www.b2binternational.com/b2b-blog/2010/04/19/could-neuroscience-be-a-new-research-method/
9 5.
Cognitive ease
ognitive ease is pure System 1 As we already know, System 1 is a powerful System 1 makes lightning fast snap thinking. It’s like a constant flag filtering mechanism, that makes short- judgements. It ‘weighs up’ perceived pain/ C we should be waving: ‘Are we cuts and bypasses ‘rational thinking’. cost against perceived gain (reward/ease). making it easy for our audience’? ‘Am I Cognitive ease is the state by which But, bearing in mind this is System 1 with making life easy for someone’s brain to System 1 ‘accepts’ inputs (visual, aural etc.) its powerful biases working away, there engage and process?’ And this should go or rejects them. is a huge emphasis on ‘perceived’. beyond marketing communications, this See Figure 4. So, how does the brain filter? What is about the broader customer experience. engenders cognitive ease and what causes We should be thinking: ‘Am I easy to do cognitive strain? business with and buy from?’
Simple, clear language Familiar Repetitive Complicated Human endorsement Change Smile/good mood ‘One off’ ‘Lonely decision’ Intangible Reward/ease
Pain/risk
Figure 4
10 One of the biggest challenges with • Stop doing ‘one off’ campaigns. System • Swift and aligned sales follow up. being a System 1 marketer is not only 1 hates ‘one off’ and it means that too Sales follow ups conducted more than understanding that System 1 is biased much investment is being put into 48 hours after the campaign hits are disproportionately by certain things, but reactive one off marketing campaigns not effective, as are sales calls where the also that because it operates so quickly, that are being filtered out. operative does not align to a campaign’s we’re not even aware of it influencing messaging. Our filtering mechanism • Logical journey and ‘pay off’. Campaigns our decisions. likes ‘recall’, but if too long is taken or need to make it highly obvious what a different message is put forward, then But despite this caveat, there are plenty people need to do and, when they’ve we react negatively to the sales call. of cognitive ease drivers that are just completed an action, what happens next. plain common sense which means there’s Too often campaigns start well, but they a lot in B2B marketing that we can fix don’t make it easy for someone to follow straight away: through and complete an action Campaigns need to make it highly obvious what people need to do and, • Ban complex language. Let’s face (especially one that invites a sales when they’ve completed an action, it, we’ve got some bad form on this. conversation!). what happens next. Let’s make things simpler, let’s cut the management speak and techno babble.
• Be descriptively obvious. This is a logical Tweet this follow on from the point above but is key for headline writing, website copy signposting and call to actions.
11 Behavioural economics and the Repetition is a huge factor in cognitive Key takeaways justification for brand building ease and it’s one that we should be most concerned about in marketing. • Use simple, clear language Repetition is a huge factor in cognitive • Stop one off campaigns and move to ease and it’s one that we should be longer-term consistent and repetitive most concerned about in marketing. Tweet this programmes The brain likes repetitiveness because it’s a signal that signifies ‘safe’. This One interesting point to note here is that • Evoke a smile in the mind, it creates goes all the way back to the jungle some of the factors that System 1 weighs cognitive ease and frames your brand where if we’ve seen something before up are quite emotive. One reason for in a positive light it’s likely that it’s safe by the mere fact bringing more emotive messaging into that we’re still alive to tell the tale! our marketing is that it evokes a ‘smile in the mind’ or some kind of good feeling In fact this leads onto the evidence in the prospect or customer that makes that brand building is essential in it more likely the brain will process the creating cognitive ease and decision information we’re asking of it. favourability. Research has shown that the brain ‘lights up’ in a unique way when presented with ‘favoured’ brands. The neuro-science here shows that favoured brands, which require us to have significant familiarity with them, have a special relationship – and one that counteracts the effect of price (which conversely lights up the physical pain centres in the brain).
12 6.
Choice architecture
o we like choice? Or find choice Stall 3 sold double the amount than Stall 1 Understanding the dynamics behind difficult? and Stall 2 combined. So the answer to my choice architecture is particularly D first question is yes: we like choice, but find valuable in an online sales environment. it stops us making a decision if too much Online retailers have become expert at Research has shown that if we’re presented choice is presented to us. architecting their online experiences to with too little choice, or too much choice, always elicit an active purchasing choice we err on the side of System 1’s favourite – by presenting (often) between three and choice – which is to do nothing. We like choice, but find it stops us five options, but with the right levels A completely non-B2B example illustrates making a decision if too much choice of price and feature differentiation choice architecture rather nicely. Research is presented to us. between each to nudge the prospect was done to see the effect on decision- towards the option they’d ideally like making purely down to the amount of you to transact on. Tweet this choice that people are subject to. Choice architecture is a term first coined Three stalls were set up at a market hall. in the 2008 book ‘Nudge: improving They each sold cakes (the same ones at the decisions about health, wealth and same price). Stall 1 had just one variety on happiness’ (Richard Thaler and Cass offer. Stall 2 had 15 varieties – all the same Sunstein). Whilst it has little in the way price but different colours and flavours. of business marketing examples, the Stall 3 had just three varieties. principles of choice architecture are ones highly relevant to us in B2B marketing.
13 In B2B we can use choice architecture to Key to achieving this are a few simple great effect. As marketers we get to frame principles: Key takeaways which choices and options are presented to 1. Limit the options. More than 3-5 and our prospects and customers. Everything • People like choice. But too much choice you’re highly likely to assist people from calls to action, product choices in means people ‘stall’ and make no decision in choosing nothing! a sales scenario to online ecommerce – • By limiting options, setting a default and choice architecture is a great tool to 2. Decide what you want the ‘default’ priming this as the favoured option you engender better decision-making. And to be. are more able to influence an outcome when I say ‘better’, I mean this in the 3. You can then ‘load’ this choice with context of helping ‘nudge’ our audience stronger messaging, or features, or to make the choices we want them to. even just make use of a shaded colour (a technique you see more and more on ecommerce sites these days – As marketers we get to frame which see page 23). choices and options are presented to our prospects and customers.
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14 7.
Goal drivers – what we say, and what we actually think
“To understand people, one needs Category Buyer to understand what leads them to act specific specific as they do, and to understand what leads them to act as they do one needs to know their goals.” Driven by the Driven by the organisation EXPLICIT IMPLICIT individual Motives and Cultural Models, edited by Roy G. D’Andrade, Claudia Strauss GOALS GOALS
Understanding goal drivers is one of the hardest areas of behavioural economics, Need to demonstrate you Will differentiate your offer but it’s also one of the most powerful when satisfy these goals to be and RAISE consideration we know how to tap into it and useful as a ABLE to be considered foundational part of our marketing efforts. Figure 5 The basics are straightforward, if we want to get better at persuading people to buy Explicit drivers – these are the ones that Implicit drivers – now, here’s where the from us we have to understand WHY ‘the business’ will talk about and overtly real action is. Implicit drivers are specific people are even thinking about buying state. And in fact, you’ll hear B2B buyers to the individual buyer themselves. They our category of product in the first place. state explicit reasons in purchasing are very rarely stated overtly but in fact After all, your products and services are meetings all the time. Which is to be are the things that will decide a sale one essentially a means to an end. With this expected and in our marketing we need to way or the other. Most importantly for in mind, you need to understand what at least show we’re capable of delivering us in marketing, here’s where you can that end game really is. against these goals. actually differentiate. Interestingly, great Digging deeper, there are two types of goal salespeople understand this. They’ve been driver (see Figure 5). using a far more subtle emotive ‘sell’ for years. We need to get better at this.
15 When it comes to these implicit goals, Example: choosing an agency The difficulty of aligning with buyer goals research shows that there are two basic Think about your own role and the times really shows, because in B2B marketing motivational drivers: you’ve been involved in making a business we’ve typically approached this by going down the route of ‘issues-based’ i) Promotion: where the emphasis is on purchase. For instance, why did you really marketing. Which sounds great on paper, gaining / benefiting / progressing in choose your last agency? Was it because but actually if that’s ALL we’re doing – it’s some way you saw they’d won lots of awards for their clients and you’d actually really like to a flawed approach. ii) Prevention: where the emphasis is on up the chances of getting your hands on The real problem with issues-based avoiding loss / protecting the status quo some silverware – and the recognition that marketing is that we all end up / living up to an expectation comes with it (motivation = promotion)? campaigning around the same issues! Or was it because you felt that your We’ve been used to dealing with product incumbent agency just wasn’t cutting parity for years, but now we have message it and you feared both your business parity. and career falling behind (motivation = prevention)? This was born out by some research carried out in 2013 by the CEB and Google. A word of caution here. Implicit goal drivers are not easy to use. And for more detailed references to goal drivers, Phil The real problem with issues-based Barden’s Decoded is a great place to start marketing is that we all end up (reading list at the end). campaigning around the same issues!
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16 Figure 6 from their research shows that apply very similar attributes: they’re business value doesn’t differentiate, it just lumping you all in the same boat. gets you to the longlist. Buyers intrinsically The research found that personal value understand the basics of what it is you do – trumps business value by a factor of two. so when it comes to business value, they
Perceived Business Value, by Brand
10
Industrial Supplies Professional Services
Agreement 5 Tech Security Software Network Equipment Shipping
1 Printing Individual Brands, Grouped by Industry
n = 3,000 Figure 6 Source: CEB/Motista Survey
17 As Figure 7 shows, the CEB/Google research found that personal value has twice the Impact of Perceived Brand Benefits on Customer Outcome* effect as business value on achieving a commercial outcome – namely achieving 50.0% a sale, and achieving price premium. 42.6% In fact the CEB and Google found that business brands had greater emotional connection to their customers than most consumer ones. The conclusion here is that 25.0% 21.4% B2B buying is highly personal—even more
so than B2C buying—due to the level of Percent Increase personal risk buyers feel. Therefore, discovering and leveraging implicit goals is critical to success in B2B 0.0% marketing. Business Value Personal Value • Functional benefits • Professional benefits • Business benefits (e.g. career advancement) • Social benefits (e.g. popularity) • Emotional benefits (e.g. confidence) • Self-image benefits (e.g. pride)
Figure 7 Source: CEB/Motista Survey
18 Unfortunately, there’s precious little in terms of B2B frameworks that help us The Earnest Goal Matrix here – there’s some good consumer ones such as the one you’ll find in Phil Barden’s Implicit goals Primary driver Motivations Persona Decoded. To that end, we developed the Earnest I need to do this Gain an advantage Goal Matrix (Figure 8) to capture the Progress to get ahead over others; Innovate; Go-getter Lead the field different implicit goals that commonly drive and influence buyer behaviour. Receive acclaim; I need to do this The aim is to provide B2B marketers with Advance career; Status seeker Recognition to look good a framework that can be used to build Win awards/accolades multi-dimensional personas – and Personal discovery;
PROMOTION I need to do this Learning experience; as a result, more rounded propositions to learn/because Adventurer Stimulation Challenge myself; it looks interesting that best satisfy their audiences’ explicit Helping others and implicit goals.
I need to do this Be secure; Prevent to avoid losing out/ Worrier Avoidance losses; Avoid threats Key takeaways losing something
• There are two types of goals: explicit Stay on top; I need to do this to Maintain status quo; Controller and implicit Control stay in control Be empowered • Explicit goals are the ones that ‘the business’ will talk about, but implicit I need to do this Need to comply; PREVENTION Obligation because it’s expected Fulfil promises; Box-ticker goals are more personal of me Be true to my word • Careful use of implicit goals enable us to differentiate and avoid message parity Figure 8
19 8.
Biases
here are over 150 documented Social proof – desire to feel ‘less alone’ Liking – We buy from people we like. biases, so this is a big (and growing) when making a decision It’s irrational but powerfully true. The field of behavioural economics. T Quite simply, human beings are social challenging aspect of this in business In this piece, I’m going to focus on some animals. We like to know what other people marketing is working out ‘how’ to be ones that I both see regularly and are think, and we subconsciously want to align liked. What do we need to do? And when particularly relevant to business with that and fit in. Even if we’re adamant does a drive to be liked become desperate marketing. For an excellent detailed dive we don’t. This goes right back to the law of and false? into biases, I recommend ‘Influence: the the jungle (again). The premise is, if lots of psychology of persuasion’ (Robert Cialdini). There’s no quick answer to this, but my people are doing this, it’s probably safe view is that we need to aspire to create (and it usually is in fact). In the consumer a ‘smile in the mind’. I’m not talking world, it’s why messages such as ‘best- Reciprocity – give back to somebody that about making people laugh out loud selling’ traditionally have worked so well. gave you something (there’s a time and place for this, and And it completely nails why normally sane plenty of times it’s not for us!), but This goes back to our ancient forefathers people trust the opinions of complete achieving a tone of voice and point of where as a society and species we survived strangers on TripAdvisor. because we had the ability to share. This view that lighten someone’s day a bit. betterment of the species has left us with a In B2B, we already use social proof to good Beyond that, you can be liked just by legacy that if someone gives us something, effect. Case studies, testimonials, social being helpful, providing genuinely useful we feel subconsciously like we owe them. media itself – all of this creates a valuable content (without asking for the poor Even if nothing was asked for. halo of ‘others like/buy this, so it’s OK if I prospect’s life history). Be generous. And do so as well’. So now you know why. above all don’t take yourself too seriously This is helpful for us in marketing. It’s why (whilst taking the task at hand seriously, we should be generous with our content if you know what I mean…). and our insights – share willingly and without asking for much, if anything, in return. And bizarrely, it’s one of the reasons why ‘high impact’ DM works so well.
20 Authority – desire to follow the expert Scarcity – desire to have things that are rare Key takeaways Our brains love to see something endorsed by ‘an expert’. It de-risks things for System I call this the Apple Effect. Why is it • There are over 150 recorded biases 1. This is again helpful for us in marketing. that (probably) sane people queue for Thought leadership is already established a considerable amount of time to get • Understanding them helps us at a as being important, but it pays to add a product that will be freely available tactical level – using within inbound and personality to this – to give each piece a without queuing within a relatively outbound marketing communications name and a face (particularly a face which short time horizon? Apple has brilliantly deliverables System 1 retains as information far more leveraged the scarcity effect – people feel readily than names). that they need this desirable product NOW because ‘they might run out’ (they won’t although Apple apparently deliberately understocks to create the experience of ‘missing out’).
21 9.
Framing and anchoring
t’s a fact that decisions are rarely An Ad Agency boss was walking back taken without some kind of context to his Madison Avenue office with his being in place. And this is something client (think back to the Mad Men area to I IT IS SPRING in marketing that we lose sight of time contextualise this story by the way). It was AND and time again. a beautiful, bright sunny day in April after I AM BLIND I AM BLIND a long, hard winter in New York. He turns to his client and says “Why don’t We tend to look very inwardly: focusing we cut though Central Park? It’s the perfect on our proposition, our message, our day for it.” The client agrees and they differentiation, our call to action. But what continue through the park. Part way about our forgotten prospect or customer? through they see the sad figure of a beggar, What frame of reference do they already with an empty begging bowl. Next to him have about us, our proposition, our In this particular story, the key here his handmade sign says ‘I am blind’. People message? is that an emotive frame of reference were looking at him, but passing him by drastically improved the impact of a very Our target’s frame of reference has a without donating. rational ‘call to action’. By changing the major impact on how a message is received. They both stopped and the Ad Agency frame of reference (or in this, actually It has a major influence and colours their boss says “You know what, I guarantee creating a new frame of reference), perception. The good news is that we can I can help this guy out – simply by adding behaviour changed – the task of affect this frame of reference or even four words to his sign. In fact, I’ll bet persuasion was achieved. completely create it for them. $100 on it.” The client was intrigued Rational messages within and accepted (with the revised bet being emotional frames that regardless, the $100 would go to the What follows is a much repeated and blind beggar). re-used story. Nonetheless, it is a lovely The Ad Agency boss added four words anecdote that conveys what framing is and sure enough, within a few minutes all about. people were stopping and donating in their dozens.
22 Anchoring and our terrible ability to do Whilst this is an extreme example, the Compare plans Basic Professional Enterprise Monthly pricing £1,680*/ mathematics point is that we can use anchors and £140*/month £560*/month (billed annually) month frames of reference in our marketing. System 2 is good at maths. It can handle the Included contacts 100 1,000 10,000 You see this already on most ecommerce logic that pervades mathematics and can £70 per £35 per Additional contacts £7 per 1,000 1,000 1,000 slowly process numerical information to sites, they use framing and anchoring pricing (per month) contacts contacts contacts to nudge you to buy the more expensive get a correct answer. User limit 3 Unlimited Unlimited option (but not the most expensive). This However, System 1 is like the bored child on Site Visits (per month) 3000 Unlimited Unlimited process of setting a ‘default’ is a useful a car journey. It gets bored and wants us to Subdomains Available 1 4 Unlimited technique, not only for any of us who 10% 10% Email Send Limit get to the answer far faster than System 2 1000 Contact Contact sell online, but it also works just as (per month) will deliver. So it makes shortcuts. It even, Tier Limit Tier Limit effectively offline. Required Training £360 £1400 £1400 in the interest of blurting out an answer, (one-time fee) See this example from Hubspot. It nudges leaps onto the most irrelevant ‘anchors’. Blog ✔ ✔ ✔
Kahneman looked at what happened if you to the mid range option, because they Blog SEO ✔ ✔ ✔✔ you asked the same question regarding know that there are far fewer enterprise Recommendations numbers, but each with different in-built customers and that their sweet spot is Blog Analytics ✔ ✔ ✔ Integrated Social ✔ ✔✔ ✔✔ anchors. For example, if you ask people if mid market organisations – who could Publishing
Gandhi died before or after he was 114, you potentially ‘go small’ and get the Basic Mobile Optimization ✔ ✔ ✔ will end up with a much higher number edition. Hubspot though have loaded the Social Media ✔ ✔✔ ✔✔ mid range option with some killer features Social Media than if you phrased the same question but ✔ ✔ ✔ Monitoring referring to whether he died before or after and frame it as the default choice. Social Media ✔ ✔✔ ✔ his 35th birthday. Publishing Social Media ✔ ✔ ✔ Analytics
Social Media ✔ ✔ ✔ Monitoring
Social Media ✔ ✔ ✔ Bookmarklet
Search Engine ✔ ✔ ✔ Optimization
Keywords ✔ ✔ ✔
23 A few years ago, The Economist did Unsurprisingly, no-one opted for the Unfortunately in marketing, too often we a fascinating split test on its various middle option. It’s obviously bad value, don’t have control over pricing strategies. subscription packages. The results but, only when compared to the others. It’s often left to product management and illustrate the power of framing and when a sales conversation occurs, then Then, they stripped out the middle option. anchoring very clearly. the last line of control is the sales rep. The perceptions reversed. Without the But, we need to be more involved and drive In the first test, they launched the middle anchor, the prospect’s frame of the pricing approach. Using behavioural following three subscription levels. reference changed and they made a very economics we can add a lot of value to different economic judgement call. the organisations we work for and given that we are all so driven by return on investment, this is a great way for us to stand up and shine.
16% 68%
84% 32%
Initial test result Result when middle anchor removed
24 Brand is the ultimate frame of reference This de-risks that brand for System 1 and creates a frame of reference that we trust Key takeaways Thinking back to the chapter on Cognitive – which the brand can then use to launch Ease, we know that repetition is important, new products, services and so on. If all we • Framing and anchoring can hugely as it creates familiarity with System 1 and do is launch new products, deliver new influence price decisions when options therefore stops us being filtered out. The campaigns and so on – then we’re creating are presented in context lesson here for us in marketing, is that a new frame of reference every time. we deliver a sustained investment in our • Emotional frames of reference hugely That’s asking a lot from our audience! singular brand message – we create a add impact and response to a rational frame of reference. One which we own. message The great long-lasting brands that we can • Your brand is your ultimate frame of all remember at the drop of a hat all do this. reference: fail to invest at your peril They sustain a message. Not just over a quarter, but over a decade.
25 10.
Conclusion
or too long, we’ve laboured under I view it as a marvellous fact that they buyers. It means ensuring we resonate the misapprehension that business don’t. They are human beings, as fallible emotionally – connecting with our F buyers decide in rational ways, and interesting as any consumer of audience on a far more meaningful respond to rational feature/benefit FMCG goods. level than just ticking boxes. messages and calmly and methodically This makes our jobs in business (B2B) We owe it to ourselves and our industry select the best solution based on its fit marketing far more interesting, varied to develop brands, communications and to their well articulated business needs. and exciting. It means that creativity experiences that do justice to this. is essential in our marketing So there’s my call to arms. Let’s make communications. It means we need it happen. to dig far deeper to understand our
26 Reading list
Thinking fast and slow Daniel Kahneman Penguin Books, 2011
Influence: the psychology of persuasion Robert Cialdini HarperCollins, 2007
Predictably irrational Dan Ariely HarperCollins, 2008
Decoded Phil Barden, John Wiley & Sons, 2013
‘Nudge: improving decisions about health, wealth and happiness’ Richard Thaler and Cass Sunstein, 2008
And more from Earnest: http://www.slideshare.net/earnestagency/the-yes-factor http://www.slideshare.net/earnestagency/b2b-emotional-engagement-2014-conference-crunched http://www.slideshare.net/earnestagency/behavioural-economics-in-b2b-marketing
27 What next?
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