How behavioural science can be utilised to connect with consumers in challenging economic times
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Companies have been in the practice of using behavioural science strategies to engage with customers, for the better part of the last 100 years, only without the guise of it being called behavioural science. In the marketing sphere, behavioural science was popularised by Robert Cialdini, in his widely consumed book, ‘Influence – The power of persuasion’, see our previous two blog posts here, explaining the 6 principles of persuasion Cialdini pioneered in these books.

The art of behavioural science has been used to increase sales in ingenious ways. Stroll around any Tesco, and you will find luxury and premium branded products e.g., Kellogg’s and Heinz, placed in your line of sight, while the cheaper Tesco owned brands will be away tucked from your attention. If you aren’t fully consciously pondering which brand of beans you want to buy, i.e., if you aren’t fully concerned with price attributes and/or brand alliance, then this simple nudge might just be enough to push you into purchasing the more expensive product.

Similarly, products marketed towards children will be placed at lower levels, in their line of sight. Or take the ‘limited time only’ deals on items you did not enter the shop intending to buy, don’t these always happen to be located right as you walk in or just by the tills?

Some of these small product placements and nudges are indeed ingenious and simple, but stack these small nudges on top of one another and you’ll find time and time again, they have considerable effects on behaviour. Note that, even if we’re aware that these nudges are happening, it doesn’t make us immune to their influence. 

Many of us now find ourselves in a position where we do not have the luxury of buying slightly more expensive cereal, or picking up the unneeded products by the till, due to the challenging economic times we find ourselves in. Furthermore, the influence of these nudges on behaviour is diminished. If this economic downturn is to be as bad as its forecasted to be, companies might think to switch their focus to keeping customers engaged with brands, as sales and profits inevitably fall.

History is full of examples in which firms have survived economic downturns, even as recent as the Covid-19 pandemic. What lessons can we take from them?

Throughout the pandemic, Monzo, the FinTech bank, successfully used behavioural science techniques to help customers save their money. They teamed up with the Financial Capability Lab to ensure their customers made the most out of every penny they earnt. They did this through their mobile banking app, which sends timed, data-lead notifications and allows customers to set and remove spending limits as they see fit. The three ways in which they are helping their customers save money may seem like common sense at first glance, but other banks are yet to implement these welfare-increasing nudges for their customers.

Firstly, Monzo encourages their customers to set savings goals. These goals, with clear deadlines attached, are more realistic for the customer, as you have a clear goal and end date. This helps with your long-term vision and your short-term motivation.

Next, they are ensuring that their customers are receiving feedback related to these goals regularly. Receiving regular reminders such as how much you have already saved, what percentage you have already saved, and how much you have to go, will keep you focused on your end goal. Ultimately helping you save your money.

Finally, Monzo allowed their customers to add and remove their own spending limits on their accounts. This might seem counter-productive at first glance, why would you let your customers remove spending limits when you’re trying to encourage them to save more money? But, doing this adds friction to the process, something which we have a bias against. It makes individuals think about why they originally set the spending limit and what reasons they have to remove it.

Many brands’ advertising campaigns use an array of cognitive biases without realising. During the COVID-19 pandemic, many businesses lost money, staff and customers, because of supply issues or restrictions. Many didn’t make it. But the use of behavioural science techniques helped some make a full recovery.

Take KFC for instance. You might remember the uproar when KFC ran out of chicken when they were first allowed to re-open as restrictions eased. Customers who had waited months for a taste of the 11 secret herbs and spices, were left angry with the company, when they turned up to a note on the door saying there was no chicken.

To save face, they employed the humour effect. Newspapers were plastered with an advert apologising for the supply-chain issue, with the famous fried-chicken bucket and its name rearanged to ‘FCK’. This is an example of the ‘humour effect’: we remember information better when it’s funny. And when we were able to go out for food, we remembered FCK, and so we went to KFC.

An issue that would have made some food chains lose customers, and stores, was turned into a joke that has become a crucial part of their brand identity – making people laugh.

We are surrounded by companies like Monzo and KFC who want us to see them as a valuable brand that cares about their customers in difficult times, and this in turn drives consumer engagement and supports these relationships through tumultuous times.

There is clearly value in a good nudge in during these turbulent times.

If you would like more about nudging your customers, contact us at contact@lynn.global

This article was written by Ethan McQuaid, behavioural scientist, and Clodagh Joyce, pr & communications executive

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