CHAPTER 22 | BEHAVIORAL ECONOMICS IS LIKE TOILET PAPER
If you’ve just tripped on this, BOOK OF SECRETS is a “chapter book” delivered on LinkedIn. It’s for marketers regardless of where they reside: as CEOs in small to medium businesses, client-side marketers with a department, in an agency as a creative, account person, or planner.
We're creating a PDF checklist for the most applicable tenets of behavioral economics. It’s to be used when you ask yourself, “Am I pulling all the levers?” Contact me for that.
FYI when micro economics is not involved, this is all choice theory. For instance, there’s a “centrality preference” that means if there are four stalls in a bathroom, most people will choose the middle two. They are the stalls that use the most toilet paper.
This is the list of top behavioral economics heuristics that impact marketing, in alphabetical order, second in the BE series.
COMMITMENTS & CONSISTENCY
It’s making people “follow the crowd in step” with ways that are consistent with prior commitments or behaviors
CREATIVE LEVER Graphic progress indicators, small asks
USE Onboarding, subscriptions, soliciting donations
TIP/TRAP Small asks lead to bigger asks. This is how to get someone hooked on habit while creating loyalty. It happens all the time in mob and crime movies, in that favors are repaid. The repayment is small at first.
EXAMPLE “You’ve already started setting up your account. It’s only a few steps to finish.”
EFFORT HEURISTIC
It’s when you think that the more time something takes to create, the more valuable it should be
CREATIVE LEVER Credentials, symbols, icons, badges
USE Luxury brands, expensive products within a category
TIP/TRAP You have to show the work, which is often in slow motion or close up with a halo in any motion or still photography. Knowing your audience is especially important here, especially male/female triggers
EXAMPLE “Hand crafted in small batches.”
ENDOWMENT EFFECT
It’s making people feel they own something, because losing something is more powerful than gaining something, even if the dollar amount is equal
CREATIVE LEVER Customization, trials, guarantees, earned equity
USE SaaS, automotive, curated “boxes” in fashion, subscriptions
TIP/TRAP People do not like to lose something or have something taken away. You see this in politics, in that “my opponent will take away your right to (fill in the blank)” even though it may be replaced with something better or more valuable
EXAMPLE “If you cancel your cable you’ll lose the free month you accrued.”
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