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How Behavioral Economics Can Help Marketers Drive Change

Credit: Deloitte Digital

Marketing has never been so critical to company success. Customer experience has become one of the key differentiators and drivers of growth in the market today. Seventy-five percent of marketing leaders now own or share responsibility for a P&L, and growth has become a primary charter for 68% of them. Clearly, much depends on the success of your marketing executive's ability to drive change.

However, even though marketing influence has expanded immensely over the last few years, marketers still find big challenges in the lack of direct control over many of the touch points where critical interactions between customer and brand promise take place. So, in the absence of end-to-end control, how can you most effectively influence those interactions?

Everyone who has tried to create change knows even the most brilliant initiatives can fail because people, for one reason or another, just don't support them. It can seem like a mystery—but it turns out that some behavioral economics principles can help untangle the reasons for this. When used strategically within your organization, they may be able to help you shift old behaviors that could be inhibiting your ability to deliver on brand promise.

The foundation of all this is the understanding that humans don't always behave rationally. (Surprising, no?) Research that laid the foundation for behavioral economics demonstrated a variety of ways this shows up in everyday life. For example: Most of us dislike the feeling of losing more than we like to win; we are strongly influenced by a sense of kinship or belonging; the order and framing of options influences our choices; temporary ownership makes us value things more; and even small barriers can cause us to get off track disproportionately.

Frustrating as these "irrational" behaviors may be, when you understand how they work in your organization, they can help you identify better ways to encourage change—when there are product quality issues, but you don't oversee product; when store operations aren't aligning with brand values, but you don't manage sales teams; when service delivery isn't living up to your promises. If you take a few tips out of the behavioral economics handbook, you may be able to grow your influence and help behaviors shift to more customer-focused outcomes:

1. Frame your problem and define the ambition.
What is the current situation? What are you trying to achieve? Becoming a more customer-centric business is a massive shift for people whose careers started in a predigital era. They have to think differently and often completely upend how they go about achieving their goals. If you are like many marketing organizations, your ultimate goal is to shift the way people work for the benefit of the customer—and the path is fraught with behaviors to change, from product development to retail environments, customer service and beyond.

For example, let's say you have successfully led the launch of a new brand identity with updated messaging. Your customers have responded to message and campaigns—but you quickly find that the biggest gaps in customer experience are completely out of marketing's control—areas such as product or service delivery, food service, parking. The list goes on. To shift these parts of the business, you have to get the rest of the C-suite to invest in and value the customer experience as it is promised through brand-building activities.

2. Identify which behavior changes are required to achieve those goals.
What changes in behavior are needed to achieve your goal? It's important to understand where resistance may be rooted. For example, is someone's identity as a certain type of leader affecting their ability to get on board with your vision? Or is it more that their mental models, perceptions and norms just don't include the new vision yet? Is the P&L in the way?

As a marketing leader, you need to help colleagues understand (and agree) that the brand is not "owned" by marketing, but shared by the entire C-suite. To understand the causes behind the behaviors, you need to begin identifying behaviors that are in your way, and then do some internal research to understand the causes behind those behaviors—either by individual or for an entire team. This can help you develop the right strategy to address the most critical underlying issue.

3. Design a solution that helps people overcome "irrational" decision-making.
Once you've identified the reasons behind the habits you're trying to change, you can begin to design approaches to alter them. If one of your challenges is a very authoritarian leader, try framing the change as a decision (or series of decisions) to be improved. This allows the leader to own the decision-making process. Similarly, if you face a business leader who simply does not understand the role of marketing to drive growth, design interactions not to convince, but to inspire—just as you would with a customer.

If you're trying to deliver on a new brand promise, this goal might be best addressed by taking the full C-suite on a "learning journey" focusing on impacts way beyond marketing measures about acquisition, redemption and preference. It is essential that marketers speak the language of business and not the jargon of marketing. If there are leaders who have strong (possibly outdated) opinions about marketing's role, don't underestimate the power of a neutral source who can help the team learn together and deliver new information without preconceived notions getting in the way. Ultimately, this can help the C-suite create a shared vision and mutual accountability for the entire customer experience.

You're in the business of influence—use it
As a marketer, every day you influence without control—though you may be more accustomed to using those skills with external audiences. To succeed as a key driver of growth in today's environment will require you as a marketer to turn these skills inward toward the people who can help you achieve your goals. Map out what you "own" and what you must "influence," and the behaviors that must be in place to drive them. Then plan the outcome as clearly and inspirationally as you would a customer journey. This is your strength. Play to it.

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