Influencing decision making & behavioural economics

The topic that I chose to kickstart Agent’s new Briefings at Breakfast (BABs) initiative was an introduction into behavioural economics – looking back on its inception, rise in prominence and how it’s being used within marketing and messaging all around us, both commercially and politically to influence decision-making.

The date of my talk was 12th March, and the question of where you can see behaviour economics in practice, couldn’t be more prevalent today. The question of when this theory should be used, is still very much an ongoing debate.

The reason I find this topic fascinating is partly due to my role at Agent. As a strategy consultant, part of my role is to carry out research on our clients’ markets, audiences and customers, which we then develop into a marketing strategy that is effective in communicating the right message, using the right channels to the right audience. We then test what we have developed with those target audiences.

When developing messaging it is fundamental that whatever we develop is written specifically with the audience in mind. We always consider the following; how will they consume the information? Where is the most effective context for them to read and act upon it? How easy is the call to action and how can we remove as many barriers to that being successful acted upon?

One of the consequences for me is that I can no longer see any marketing, advertising, speech, or slogan and not deconstruct it. I often consider the inevitable complexity or theory as to why they settled on that as the key message, I am a nightmare to watch adverts with! Creative director and author Dave Trott described strategy as follows: ‘it is not about adding more and more stuff. Strategy is about taking stuff away. Taking away everything, until there’s only one thing left. One single powerful thought.’

The most notable theory over the last few decades when it comes to influencing decision-making is behavioural economics, which is defined as a method of economic analysis that applies psychological insights into human behaviour to explain decision-making. How this is relevant to marketing is by taking the theories and ideas of how people are influenced by both conscious and unconscious biases and applying this when developing the messaging, choice architecture, placement and call to actions of a campaign.

To give you a quick whistle stop background; the theory really accelerated in the 1960’s through the work of two notable cognitive psychologists, Daniel Kahneman & Amos Tversky. The pair worked together on extensively on papers for years, devising and comparing their cognitive models on decision-making under risk and uncertainty to economic models of rational behaviour. Kahneman, went onto win the Noble Prize for economics in 2002, despite being a psychologist, for his work on the subject.

Fast-forward to 2008 and the critically acclaimed book, NUDGE is released. Written by Professors Richard Thaler and Cass Sunstein, their theory as described by them states that; “A nudge, as we will use the term, is any aspect of the choice architecture that alters people’s behaviour in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.” The theory focuses on little changes you can make to the choice architecture of something that can have an effect on an individual’s decision making.

This book has had a huge influence on policy makers across the world, notably Barack Obama and David Cameron, who each set up teams within their Government to look at ways behavioural economics could help to inform policy making. In the UK, this became the Behavioural Insights Team (BIT), also referred to as ‘The Nudge Unit.’ Described at the world’s first governmental institution dedicated to the application of behavioural science, the BIT has since grown out of the Government and sits independently, working with businesses and governments around the world.

One of the working templates created by BIT is to help policymakers develop policies is the EAST framework. This a useful tool developed to help simply apply behavioural insights. The core principles of the framework for the policy you want to introduce should be make it Easy, make it Attractive, make it Social and make it Timely for the audience you want to influence. This is a really useful tool to help develop messaging, writing key messages that can be easily recalled and understood is the goal for any advertising.

If you analyse some of the most effective political campaigns over the last few years and think about how simplified slogans and messaging has been highly extremely successful; notably in the campaign for the UK to leave the EU and the recent general election. There were of course other factors that played into these campaigns, but one constant is that these slogans have all had a similarly easy, attractive, social and timely element to them. Get Brexit Done, Take Back Control, repeated over and over again and again. The rule of three is an often-used trope of speechwriters and something that the Prime Minister particularly favours. Make it easy, make it attractive, make it social, make it timely.

The use of the rule of three has never been more prevalent in political discourse than during the response to the COVID-19 pandemic. “Wash your hands – Halt the spread – Turn the tide – Flatten the peak – Protect the NHS – Stay at home” and so on, repeated by everyone who has taken the lectern at Number 10 during the daily briefings. A little bit like key message bingo. This obviously is not a new thing in politics, political slogans go back as far back as the 18th century. But it is interesting to see just how much it is being used as a technique during the crisis.

It has been suggested that the BIT has been involved with the Government’s response to the crisis. Running mathematical models to understand how the disease may spread, something that relies on predicting behaviours and helping with the messaging (singing ‘Happy Birthday’). It is unclear if the behavioural scientists have been involved directly in shaping the response and steps taken by the Government.

It is important to remember that nudging behaviour is a theory based on experiments and predictions. This therefore could be problematic to use as a response to such a large-scale crisis. As put by Richard Thaler: “a nudge is not a mandate”, and given that UK was the last of the major European countries to mandate any restrictions and the only country to favour a slower, softer, nudging behavioural approach “based on the science”.

Can the application of behavioural economics be useful in developing messaging, mapping out the choice architecture and help influence decision-making of people? Absolutely.

Should it be given equal billing to science in times of a pandemic to predict mass behaviour? This is unclear.

Other topics of interest...

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