When to apply behavioural economics solutions to your business

“When would I use behavioural economics in my business?” This is one of the questions I get most often.

In my experience there are typically four points at which clients are triggered to seek behavioural economics solutions.

Research and development phase

Research and development can be formal, like when a research firm is commissioned to explore a particular issue, or the business undertakes a product development process.

R&D can also be informal, where you are brainstorming ideas and want to inject a fresh perspective on your product or service, marketing approach or value proposition.

In the R&D phase things are conceptual and exploratory, which makes it an ideal time to run your assumptions about what customers want and how they are likely to respond up against behavioural science.

You will benefit from behavioural economics when you find yourself thinking:

• Do we need a new website, and if so, what needs to be done differently?
• Will this product or service resonate with customers?
• How can we give this new idea the best possible chance of success?
• We need new thinking on this issue; traditional market research hasn’t given us the answers we need.

Deployment phase

At the other end of the development cycle, clients often engage me when they are about to hit the metaphorical button on a piece of work (e.g. going live with a website or EDM, sending a letter to customers, releasing a product or launching a marketing campaign), but just want to ensure it is optimised before it’s too late. As the saying goes, there is no second chance to make a first impression.

This is pre-deployment: the point where things are in the finishing stages – say, 90% ready to go and you just want a final check. The good news is even at this late stage behavioural economics can make a difference by vetting the initiative against points of resistance and tinkering with the malleable elements such as language, imagery and context.

There is another small window for applied behavioural economics at the post-deployment stage, where you’ve released something that hasn’t worked the way you expected (e.g. product take-up lower than required). Here we can use behavioural economics solutions to troubleshoot what’s happening, in order to zone in on where corrective action is most urgently required.

You will benefit from behavioural economics solutions when you find yourself thinking:

• Are we sure about this? Have we covered all our bases?
• What are we missing?
• Am I 100% comfortable that we’ve done everything we can to get this right?
• Why isn’t this working? How can we recover and get the traction we deserve?

Broken business-as-usual

‘Business-as-usual’ is a funny beast because ‘usual’ often means frustration, inefficiency and missed opportunities. In this bucket I include clients who have turned to behavioural economics in moments of crisis, when you’ve finally realised something is just not right. It might be missing out on too many pitches, or completing a fraught strategic prioritisation process where, once again, the business has ended up with more priorities than you can handle.

You will benefit from behavioural economics solutions when you find yourself thinking:

• There must be a better way?
• Does this have to be so hard?
• Why aren’t we getting better at this?
• We keep trying our best but falling short – why?
• Why don’t they get it? We need to do things differently!

Staff development

The desire to develop team skills is another trigger for clients. Often it coincides with finding yourself in a new job or role, or planning your training budget for the year. But why behavioural economics particularly? Often my clients have read a book, watched a TED talk, or seen me in the media or presenting at a conference. The key is your curiosity has been sparked about what behavioural economics can mean for you.

You will benefit from behavioural economics solutions when you find yourself thinking:

• There’s something in this ‘behavioural economics’, but how can I apply it in my business?
• I’m sick of the same old training courses that don’t shift the dial
• How can I give my team skills that will have immediate impact?
• How can I get my team to read from the same page when their skills and perspectives are so different?

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