CHAPTER 21 | BEHAVIORAL ECONOMICS CHEAT SHEET 01

MARKETING’S TAKE ON TRANSACTION PSYCHOLOGY

If you’ve been reading previous chapters, much of this has been covered under the umbrella of how psychology can be the infrastructure for creative briefing, market positioning and transaction triggers.

Point being, all this stuff has been around since Freud, but a couple of decades ago all of the heuristics were organized into behavioral economics, something a person could actually formally study in business school.

Which is more fun than studying accounting.

The next few chapters will organize behavioral economics into a checklist that can be used as a framework for writing creative or marketing briefs. Or for looking at campaigns before they publish as you ask yourself “How can this be better?” or “Am I pulling all the levers?”

And as you review these, keep in mind that they are nudges. Or, you shall be the butt of jokes by people in-the-know because your strategy will be showing.

Favorites, in alphabetical order so as not to bias you…hey, look, bias as a verb!

ANCHORING

It’s when the first number or piece of information a person sees is their reference point or the truth by which all other information is measured.

CREATIVE LEVER  Numbers, order, contrast, planting of the seed
USE Pricing, value comparison
TIP/TRAP Always control the first number. Don’t be like Kohls Department Stores or TEMU, in that they have crossed the strategic line into unbelievability
EXAMPLE “Originally $1,200, now $699”

AUTHORITY BIAS

It’s when you believe something because it comes from an expert or institution

CREATIVE LEVER Credentials, symbols, icons, badges
USE Healthcare, finance, B2B
TIP/TRAP Get specific, such as “board-certified.” Never say “expert.” Sadly, when used as a lie or stretch of the truth (DO NOT), it makes it nearly impossible for actual experts to be believed. Your fault for normalizing spin and making it hard for the rest of us who are honest
EXAMPLE “Dermatologist recommended”

CHOICE ARCHITECTURE

Also know as decision trees

CREATIVE LEVER Design hierarchies
USE Product line development, in-store display
TIP/TRAP Use a professional designer. Do not Canva this yourself. Fewer choices outperform more choices. In-store eye level choices have the highest profit margins
EXAMPLE Think a decade ago, Apple vs Microsoft. It's less obvious, but still true today