What is behavioural economics?
Behavioural economics has become mainstream over the last few years, but watch out for those paying lip service – it’s one thing to talk the talk, another to apply it.
The big insight is that behaviour is as likely to be instinctive as it is reasoned. Our brains have a lot to keep up with, so we spend a large part of our lives on autopilot, relying not on logic but on a series of mental shortcuts and social and environmental cues to guide us on.
For market research, there are major implications.
The first is that opinion and attitude are often less predictive of behaviour than we assume. We can hold strong views on the importance of charity, for example, but never cough up a penny.
The context in which consumers make decisions is also key. If our behaviour is shaped by a particular set of social and environmental nudges then the answers to questions asked outside of that context are likely to be partial or just plain wrong.
Last, system 1 decision making probably impacts brand and communications more than any other area of market research. As life speeds up and we have less time to ponder and contemplate, our everyday purchasing behaviours become ever more intuitive or ‘of the moment’.
