What can we learn from

Behavioural Economics?
FTMF 12th August
What is it?
 “Behavioural Economics”
Understanding
A branch of economichuman natur
and financial
analysis which applies scientific research
n order
emotionaltofactors
change
to betterconsume
on human and social, cognitive and
understand
economic decisions by consumers,
borrowers, behaviour”
investors, and how they affect
market prices, returns and the allocation
of resources.
Influential books about helping
people to make the right
decisions
In summary…
• Seemingly
insignificant factors
like environment and
emotions can make a
big difference in how
people make a
decision
• It is possible to
develop strategies,
tools and methods to
help people make the
A nudge to help people eat more
healthily
 Some interesting insights
into why people make the
wrong choices
 “Anchoring”
Q: What’s the population of Birmingham?

A: 1m
You said 2.45m
ople from large cities will generally gues
gher number than people from small tow
 8,000,000

What’s the population of

Birmingham?
 200,000

What’s the population of

Birmingham?
You said 2.2m

You said 2.7m

 Real life anchors

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 Some interesting things
we can use to change
consumer behaviour in our
favour
 “Availability”
We assess the likelihood of something
happening based on how easily examples
come to mind
 “Availability” is enhanced by
recency and relevance to you
 Using media to make an issue
more “available”: Relevance

Four houses in Abbeyville Road

SW4 haven’t paid their licence fee

Combination of media placement and

creative made the threat more “available”
Increasing “availability” of an
issue or brand by getting into
popular culture
 Exploiting The “Status Quo
Bias”

People have a general tendency to stick

with their current situation
Status quo bias inherent in many
brand choices
 Exploiting The Status Quo
Bias
• Overcommit to lifestages when
habits change
The “Conformity”
phenomenon
Conformity and tax compliance
“Your taxes go “Punishment for
towards education, non-compliance”
police, etc”

“More than 90% of

“Help if you are Minnesotans have
unsure how to fill out already complied”
the form”
 A successful “conformity”
strategy from Sky

Desired takeout: “Lots of other people

like me have done this and benefited
from it”
 Universal “conformity”
campaigns

Desired takeout: “Lots of other people

like me have seen these films and loved
them”
 “Priming”
Nationally representative sample of 40,000 people:
“Do you intend to buy a new
car in the next six months?”
Purchase Rate

+35%
Asking people if they’re going to do something
increases their likelihood of doing it
Simple
 How might we use this?
• Create an e-mail panel of potential
customers and ask them regularly
about new products, intention to buy,
and marketing materials

Market Word Of Increased

research Mouth Purchasing
 Two different approaches to
changing people’s behaviour
A TRADITIONAL APPROACH B.E.-INFORMED

• Benefit led • Getting into popular culture

• Focussing on USPs • Partnering with influential

media
• “Head” communications
• Using case-studies and
testimonials of “people like
me”

• Asking people their opinions

and to participate

• Talking to people at times

when new habits are formed
 Your Elevator Pitch
• What’s the brand / campaign?

• What’s the problem?

• What are your behavioural-

economics-influenced ideas?
Team Ideas Influenced By
Behavioural Economics
 GSK
• Polygrip
– TV ad not performing
– There’s currently no help for people who
lose their teeth (no interest for dentists)

– Invest in a “starter pack” for

people with dentures (make
Polygrip part of the new regime)
 PRUDENTIAL
• Increasing “availability”:
– Taking thought-leadership on “the
future of retirement”

• Priming:
– Asking “do you intend to retire?” to
get people doing something about
it
 NATWEST / RBS
• For SMEs:
– Conformity - use stats on the total
amounts borrowed
– Increase “availability” - show
examples of regional business
success
 DIRECT LINE
• Anchoring
– Use average market premium value
for segments to show value of DL
• Conformity
– 25th anniversary - showcase the
number of customers through our
books since launch
• Availability
– Get involved with popular culture -
eg Aviva / Plymouth
 SKY SPORTS
• How to get people to follow the ATP
tennis
• Conformity
– Show rea people’s support for
Murray / get the nation behind him
• Status Quo
– Overinvest during Wimbledon
(make the habit of watching tennis
more permanent)
• Priming
– Create a tennis fantasy league
• Popular culture
 DUK Help Scheme
• Conformity
– Testimonials featuring real people
that have gone digital
– Create AFPs on ITV local getting
local communities talking about it
• Priming
– Marketing that explicitly asks “do you
know someone who needs help?”
 ONS CENSUS
• Conformity
– Test a message which reports hgh
levels of compliance i.e. 90% of
people have already done this
– Show “people like you” filling in
forms for low response groups
 HIPP ORGANIC
• Conformity:
– Celebrity endorsement
– Find a spokesperson for the brand
– Product placement
 DOLMIO
• Status Quo bias:
– Overcommit to students to ensure
they get the habit early as they
start to cook for themselves
• Conformity:
– Take a “nation’s favourite” stance
– Target mum’s social networks
• Getting into popular culture:
– Make Thursday Spag Bol day