When I taught marketing courses, many of my students would insist that they weren’t influenced by marketing in their purchase decisions. They believed they weighed their decisions based on totally rational factors. When I would probe and ask them how they picked the vehicle they drove, the smartphone they used, the brand of athletic shoes they wore or even the toothpaste they used, it seems their decisions were based more on their emotions than their reasoning.
In fact, a Gallup report titled The Next Discipline: Applying Behavioral Economics to Drive Growth and Profitability notes that some believe as much as 70% of our economic decision-making is emotional and only 30% is rational.
It seems that, as humans, we’re not as rational as we think we are. To make matters even more complicated for B2B marketers, business buying groups are made up of irrational humans who bring their own biases, ambitions, insecurities and more to the decision-making process.
Enter Behavioral Economics
In simple terms, behavioral economics looks at how humans make economic decisions (purchases) based on emotional — and irrational — factors rather than solely on sound reasoning.
Understanding and applying human psychology to buying decisions has been around for a long time in the consumer world. Now, marketers have begun to apply behavioral economics principles in a more structured and thoughtful way in the B2B marketing world.
Here are four principles you can start using in your B2B marketing.
Principle #1: Provide a default choice.
Make the decision easy for your buyers. Whether your product is cellular phones, commercial banking services or content, offer your buyers bundles. Packages require less decision-making.
Event marketers can offer registration packages at different price levels for sessions only, sessions and special events and an all-inclusive package with pre-conference workshops.
Content marketers can include embedded videos or podcasts, links to additional content or quick ways to request a demo or register for a webinar.
Duke University Professor of Psychology and Behavioral Economics Dan Ariely presents a fascinating video about the different results for organ donations in Europe when citizens were given an opt-in or opt-out choice. It’s worth watching.
Principle #2: Frame the choice in a positive way.
The language you use to present an offer matters. Keep it positive. Keep it conversational. Forrester Principal Analyst Ryan Hart talks about this in The Use of Behavioral Science Has Moved Beyond Marketing.
For B2B marketers, this may mean framing a solution benefit like this: “fully automates these tasks for your employees so they can spend less time on ‘busy’ work and more time doing the important work that they love.”
A less friendly and less positive approach like “reduces the time your employees have to spend on time-consuming manual processes that keep them from their business-critical work” is likely to be less successful.
Principle #3: Provide a baseline for comparison with anchoring.
In its An Introduction to Behavioral Economics, behavioraleconomics.com uses the example of configuring a computer with a starting or anchor price, and then showing how the price would change when the buyer adds or deletes options.
For content marketers, think about creating infographics or research reports that show statistics that let the buyer or the organization see where they stand in comparison to others.
In my recent blog post on case studies, I cited the 2019 Content Preferences Survey Report to show that nearly half (47%) of the 200 senior-level B2B marketing professionals surveyed cited case studies as the most valuable influencer content format — the top choice. This is a classic example of anchoring.
Principle #4: Build trust and loyalty by putting the buyer’s benefit before your own.
This one should be a no-brainer for B2B content marketers with a buyer-centric mentality. Let your buyers know that you won’t try to sell them something they don’t need. Let them know you’re willing to walk away from the business if your company doesn’t think it’s the right fit. This honesty and integrity will build strong, loyal business relationships.
Content4Demand uses this approach with all our prospects and clients. If we don’t believe we can deliver what a client needs or we feel that the fit isn’t right, we’ll tell clients so and help them find an alternative.
Always Use Ethical Means to Achieve Your Ends
Behavioral economics, when practiced ethically, isn’t about manipulating people or organizations to get them to do something that’s not beneficial to them. In fact, it should be used to do the opposite, to help business customers align the emotional factors with the rational factors and make the right decision.
The Gallup report cited earlier notes that 10 companies that have applied behavioral economics principles to customers and employees outperformed their peers by 85% in sales growth and more than 25% in gross margin. So applying these principles could benefit you and your customers.
Are you ready to dig into the year ahead? Be sure to check out 10 Ways to Make 2020 Your Best Marketing Year Yet for our take on the key trends you need to know.
