A dialogue between consumer psychologist Laura Zaikauskaite and myself on the topic why consumer psychologists are necessary for organizations.
Identifying Key Drivers of Consumer Behavior
True consumer centricity is impossible without good understanding of consumer psychology. A lot of businesses want to achieve consumer centricity, but without understanding consumer psychology (judgment, decision making, behavior etc.) it is difficult to truly be consumer centric.
Much of consumer centricity is rooted in empathy (putting yourself in the customers’ shoes), empirical observation and common sense. All of these are relevant for designing businesses that focus on the buyers. Consumer psychology goes beyond because it relies on empirically proven theories that simply cut through the noise.
Consumer psychology research showed that common sense (i.e. intuition) often is wrong when predicting human behavior. One source of behavioral science’s the beauty is that its findings are counter-intuitive.
The rise of behavioral economics has provided with firm background for the idea that consumers are driven by non-conscious behavior more often than they expect they do. Surely, it steers their actions to seemingly unpredictable directions. Although it’s so important to understand why and how irrational behavior happens, market researchers rarely measure that. This means that brands do not assess the effect of counter-intuitive scenarios and do not leverage its effect to deliver consumer-centric experience.
The main difference between traditional and psychological approach to market research is that consumer psychologists know how to identify and capture the impact of cognitive biases, non-conscious thoughts, and assess their influence on rational mind. They use implicit and neuro research methodologies to decode the interaction between speed of information processing, attention, memory encoding and retrieval, therefore are able to design most efficient approaches to model consumer centricity.
In fact, it’s worth noting that consumer psychology often uses controlled experiments which are superior to empirical observation. The later tells us what is happening, but the former has the ability to tell us what would happen if some things were different.
High Emphasis on Consumer’s Values
Empathy is a wonderful human trait and, perhaps, without it human societies would function very differently from how they do. Yet, empathy isn’t enough when it comes to consumer centricity because sometimes people are not aware of the causes, drivers of their actions and decisions.
For this reason, consumer psychologists emphasize the influence of positive long-term effect of inner values and do everything to prevent psychological contract breach. We all know that consumers don’t like change and prefer stable environments which help to build long-term relationships. Such predictability can often be defined by a certain level of consumer-brand trust, reputation, and responsibility, therefore consumer psychologists aim to model consumer experience by communicating just that.
Relying on Different Models of Behavior
Consumer psychology (behavior) is a part of marketing science. In practice, however, the relationship between the two has some particularities.
Marketing is, quite often, very applied. Marketers are very much about doing things and, I have to admit, are superior to consumer psychologists when it comes to achieving results. This particular focus on doing and results is both the strong and the weak point of marketers because it focuses on how and not on why. Consumer psychologists focus on the later, on understanding why people do what they do and why phenomena occur. From a practical point of view knowing why things happen as they do is less relevant and, in a way, this is wrong.
I believe the weak point of marketing is that it underestimates the long-term effect of consumer values - the fundamental driver of human behavior. The reason consumer psychologists are so efficient in building value-centric marketing strategies is because they do not rely on traditional marketing models. They go beyond measures of demographics, income level, and spend. They focus on understanding the why which helps to deliver clarity in marketing communication.
For example, it's long known that society implies certain norms and associations. This means our world relies on semantic network which is hardwired in the brain. If you activate right button - all the positive associations start to flow, and you notice a positive shift in attitudes and long term sales. You hit the wrong one - here's a massive decrease in profit. Take cognitive biases, speed of information processing, emotion. All of them are powerful drivers of human behavior and could be used to deliver consumer centricity, but traditional marketing models do not assess that.
While getting things done is important for the present, understanding why things happen is important for the future. An organization can’t develop new products and services, new approaches etc. without understanding why people do what they do.
In my view, marketers are similar to car mechanics while consumer psychologists are like engineers. Each of them is very important, just for different things.
Laura, you mentioned several times cognitive biases and irrationality and I tend to disagree that they are biases. Indeed they are errors in judgment, but only according to the normative economics rationality. We humans are not meant to be reasoning machines, we are living creatures who need to survive and reproduce. Perhaps, in our next talk, we can discuss economic vs. evolutionary rationality and what exactly is a cognitive bias.