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Consumer behavior studies that are changing the way we do business

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Consumer behavior has come a really long way into the mainstream marketing understanding and final execution. Product development, research, market-value fit, etc. all come under the umbrella of consumer strategy and behavior, and science is changing the way we think about it every day. We have a stronger sense of control about our strategies and conclusions derived from one part of the world can drastically affect another part of the world in unseen ways. E.g. when the digital revolution began in 2011-12, brands quickly transitioned towards social media platforms to reach their customers. What they didn’t realize that research uncovered the extent of robots and faulty numbers, which lead marketers to make steadfast decisions. Another interesting research came from heatmaps and how they radically transformed major e-commerce player’s web approach. No longer did they keep most of their information in the bottom-fold, they ensured that they had all the information needed on the navigation bar, as well as the space reserved for other features.

It comes down to how the research was carried out and how it was implemented. That’s the crux of the power of marketing and consumer behavior studies. In a similar way, there are many studies that may be published by biased sources and hence they must be quelled immediately and not utilized as a part of our strategy. As a strategist, our job is to uncover insights that find the truth, and learning more about key studies can enhance our knowledge base. Here are some studies that are really changing misconceptions and thoughts about how business was done as usual –

#1 Dopamine’s role in anticipation and happiness – It has often been perceived that dopamine (neuro-chemical) has a major role to play in the happiness one receives when they are interacting with a product or service. Research from decades has shown efforts of marketers trying to extract dopamine from the minds of the consumers to make them enter stores. That’s the mark of a true brand, like Apple – when the product is so special that people line up for miles. Well, the idea that they’re a part of something greater is actually the motivating factor than the product itself. It’s not the Apple X that’s appealing, it’s the myth, the legend and the community around it that spikes dopamine levels. It’s the excitement of being one of the first few to line up and share opinions about the hugely anticipated launch. And the fact is, the IPhone may not have changed much over the last 3-4 versions, but the line keeps getting longer – because of Dopamine.

Researcher and professor Robert Sapolsky at Stanford University uncovered a study related to dopamine and monkeys, which can help us demystify the dopamine-action relationship. According to the research, monkeys were given a reward for an action performed. When the uncertainty of the reward was flexible, the monkeys had a shot of dopamine in their brain, but the actual pleasure derived from the reward was at baseline. At the 50-50 chance of winning the reward, the monkeys had a higher dopamine level than at the 100% level. In other words, the anticipation of getting the reward was greater than the actual pleasure derived from it. Thus, the action of obtaining a product may be more rewarding than the actual product itself because of the uncertainty. This explains Christmas deals, goodie baskets, and birthday presents from loved ones. Strategists need to explore this opportunity adeptly or face the lapses in the “zone of uncertainty” (20-80 chances or lesser) or “lame-duck deals” which are when brands offer discounts year-round masking under a special feature.

#2 The Compensatory Consumer Behavior Model – A lot of research has gone into why we buy the things we do, and this model developed by researchers by Dr. Galinski et al (Columbia University) explains a lot about why we buy expensive things. Unless we’re all car connoisseurs, we don’t have a handle on the difference between horse-powers of a Mercedes and a BMW. We value pride, prestige and legacy as well, when considering these options. But why do we add value to the intangibles? It has to do with our “greater-self” or “aspirational-self”. Not to be confused by an aspirational-purchase, which is simply a purchase driven by aspiring to be in a class or a league. The compensatory behavior model explains how all human beings have an ideal-self in their mind that they live up to, and hope to achieve one day. The actual drive to purchase something comes from the “compensation” of not being in that class. E.g. A 45-year old working man eyes a BMW and desires to buy it. His rational self goes against the idea, but the compensatory-self argues that he needs it in order to feel satisfied about being his ideal self. The compensatory model is what plays into the purchase of the aspirational brand and not the product, features, and exclusivity alone. For strategists, it’s important to note that when marketing your product or brand, you must employ techniques that allow the compensatory nature of the customer to fully explore all possibilities with the help of your product. E.g. An Apple pen can help people become artists and designers, and a Prada shoe can help women become more desirable or powerful in a board meeting. Using the appropriate language, tone and communications strategy, you can correctly leverage the compensatory model.

#3 Signaling and Development/Growth Mindset – Research by Carol Dweck and others have proven the power of “Growth Mindset v/s Fixed Mindset”. When the consumer is bombarded with fear, anxiety and desire via social media, news or even driving in traffic, the advertising, marketing and communication must work even harder to take the consumer from a fixed mindset to a growth one. Once the consumer adequately associates your product or service with a growth mindset (locally integrated), they are more inclined to select your brand over others. In fact, the product itself can be a signaling mechanism to project inner-need to be in the growth-mindset. These could include craft designs, interior furniture, or buying new homes. In research conducted by Dr. Mathur et al, they found that consumers signal to one another about their personal outlook on life with the help of their purchases for their homes, personal development and lives. Marketers can take advantage of this research by aligning their brands to a growth-mindset message or to a fixed-mindset one. Many brands, especially legacy ones, will benefit from leveraging loyalty for incumbent brands. Others benefit multi-fold by innovating and projecting a growth-mindset message.

Sanchit Khera is a marketing strategy consultant in Mumbai, helping brands overcome sales, comms, digital, and PR challenges with the help of marketing & brand strategy.

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