First, I have to declare that I am not a behavioural economist, nor do I pretend to be one. However, I have had some exposure to it over the last year and have learned how to apply the behavioural economics (BE for short) theories to marketing. I think they translate well into social media strategies so below you will find two BE theories and how I think we can leverage them alongside social media tactics.
Behavioural Economics: Not as Scary as it Sounds
When I first learned about BE, it was presented to me by a company who did not employ anyone who didn’t have a Ph.D. Right away I thought that there is no way I am smart enough to understand this! However, as I learned more about it I realized how much of this I was already applying and how much else I could learn from it.
Behavioral Economics is an interdisciplinary science blending psychology, economics, and neuroscience to understand human behavior and decision-making (source: BE Works). That is quite the definition, so what does it mean to us? To marketers, it provides insight into consumer behaviour – what persuades our customers to act and respond a certain way. If you can understand how people tend to act, you can attempt to predict how they will respond to your marketing efforts.
If you want a broader explanation, check out this video by Influence at Work (2012), where Dr. Robert Cialdini describes The Power of Persuasion. It is 11 mins long, but worth the watch!
So how does science relate to social media?
There are two BE theories that kept popping into my head this week as I was learning about social media tactics:
1. Social Reciprocity: Gifting, thanking and apologizing are effective ways (above mere compensation) to increase or maintain customer satisfaction. (Source: Behavioural Science Solutions Ltd.)
This means that as consumers, we place more value on gifts, acknowledgements and apologies than businesses often take into account. If customers can be more satisfied with an apology than mere monetary compensation, this is an easy win for a brand.
It seems to me that more and more people are turning to social media to complain. Given how quickly social media allows companies to react, it provides a perfect platform to respond quickly to customer comments and complaints in a quick and personal manner. I’m not saying that ‘I’m sorry’ is the answer to everything (compensation can be the right thing to do sometimes). However, if companies can save even a fraction of the money paid out to upset customers or save the time of phone reps by decreasing the number of inbound complaint calls by using social media posts, then that’s a pretty solid business case.
I’ll give you a personal example. A couple of years ago I was on a train where the advertised wi-fi was not working. I tweeted at the company that I was disappointed and they promptly replied apologizing and asking for details about which car I was on so that they could have someone fix the wi-fi. I was very impressed and instantly less angry about the situation.
2. Social Proof: Shows that many people endorsing a desired behaviour increases our likelihood of adopting that behaviour. (Source: Behavioural Science Solutions Ltd.)
This BE theory tells us that the more we see other people like or do something, the more likely we are to do that behaviour as well. If brands can find a way to show potential consumers how many people are already engaging with their brand and how much they like it, these potential consumers are more likely to engage themselves.
Sound familiar? My guess is a lot of you went directly to the same place I did: Facebook likes. This scientific theory demonstrates the importance of engaging consumers online and encouraging them to share their interactions, feelings and thoughts. If social media is all about sharing and connecting, then this scientific theory justifies the investment in social media for businesses.
Just the tip of the iceberg.
Behavioural economics is a huge field of study, and I don’t pretend to be an expert in it, but I do believe there is a lot there that marketers can learn from it. The theories above are just two of the many ways in which marketing and behavioral economics can work together. I hope you found this just as interesting and I do and encourage you to keep it in mind as you build out your social media strategies.
As you read through, did other examples of social reciprocity or social proof come to mind?
Two ways social media and science walk hand in hand. https://wp.me/p3QRy0-j19
Science and social media relate? Who knew! #socialmediatips https://wp.me/p3QRy0-j19