How Behavioral Science Powers Brand Choice

Richard ShottonMay 9, 20195393 min

Behavioral science is currently one of the hottest topics in marketing. This attention isn’t undeserved; if anything, we should devote more of our time and energy to the subject. After all, it’s the study of why people make decisions. Not the study of how people make decisions in theory. No. It’s the study of how people make decisions in reality, with all the wonderful, messy and surprising detail that involves. Since marketers are interested in decision making in commercial situations, it’s hard to think of any more relevant topic.

A Robust Approach To Marketing Decisions

Relevance isn’t the only strength though, it’s also highly robust. It’s based on the peer-reviewed experiments of some of the world’s leading scientists. Academics stretching from contemporary Nobel Laureates, like Daniel Kahneman and Richard Thaler, to historic figures, like B. F. Skinner and Elliot Aronson.

Even though the discipline has academic roots, it is immensely practical. Consider a bias like price relativity. This is the idea that consumers have no fixed conception of what is good value. Instead, they work out whether an item is a fair price by considering what they have previously paid for something similar.

At first it sounds like a dusty academic finding. But it should interest marketers as it means they can boost their consumer’s willingness to pay by orders of magnitude if they can change their comparison set.

Brands have done this many times – from Red Bull to craft beer. But the best example is Nespresso. If it had been devised by a lesser team than Nestle they may have launched it in half pound bags in Albertsons.

Had they done so, and charged the same per gram price they do now, those bags would cost $45.00. There is no way on earth anyone would spend that much on a bag of coffee. It would feel like a barely legal rip-off.

But of course, that’s not what Nestle did. They sold Nespresso in pods, and since each pod gives you a cup serving the comparison set changes to Costa Coffee or Starbucks. Suddenly, 57 cents for a pod of Lungo feels remarkably good value compared to $4.00 for a flat white. But 57 cents for a pod or $45.00 for a one pound bag are the same per gram price. One seems remarkably good value, while one feels exorbitant.

Nestle has made billions from applying a well-known bias from behavioral science to their marketing.

An Insight For Every Occasion

The robustness and relevance of the discipline should be enough reason to apply behavioral science. But there is another, underappreciated strength: its remarkable range. Behavioral science is not a single, grand theory but rather a collection of insights and ideas exploring the human condition.

The variety means that whatever problem you are facing, there will be an experiment to draw on.

These insights stretch from those with a strategic application, to ones with a media planning application (such as avoiding confirmation bias) even to matters around pricing or media placement.

Of course, this diversity can be confusing but there are many frameworks that help to navigate the complexity and steer you towards the right bias. Perhaps the most useful is the EAST framework which was designed by the UK Government’s Behavioral Insight Team and which you can access for free here.

Hopefully, the three strengths of behavioral science (relevance, range and robustness) are enough to convince you of the discipline’s importance. But perhaps the final word should go to Kevin Chesters, the ex-CSO at Ogilvy:

If you’re a planner and you don’t employ behavioral science in your day job, then you’re a bloody idiot. It would be like being a pilot and forgetting to use your eyes.

Contributed to Branding Strategy Insider by: Richard Shotton, Head Of Behavioral Science at MG OMD and the author of The Choice Factory, the best selling book about applying behavioral science to advertising. Originally published by TheMarketCreative.

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