Please be informed that the IPA offices will be closed Friday 4th August.
We will respond to you as soon as we return on Monday 7th August.

New IPA report outlines 5 common Behavioural Economics marketing strategies

The IPA has published 'Behavioural Economics in Action: Strategies and Insights from the IPA Effectiveness Awards', a new best practice guide that provides tangible examples and top tips on how Behavioural Economics can creatively solve business problems.

25/02/2015

Written by leading Behavioural Economics consultant Nick Southgate and Rory Sutherland, Former IPA President and Vice-Chairman, Ogilvy Group UK, the guide sets out the five common BE strategies to emerge from the analysis of six years of IPA Effectiveness Awards papers: Big nudges; Small nudges and behavioural journeys; Price campaigns; Positioning campaigns; and Better data and better evaluation.

In discussing these strategies the guide highlights 14 case studies, including Aldi, BHF, Dacia, and TfL, and provides a wealth of accompanying best practice tips for applying Behavioural Economics theories to future campaigns. Some of these tips include:

  • Piggy-back widespread behaviours that people already know or already do. These provide a ‘behavioural channel’ to reach lots of people who can be nudged.
  • Make the behaviour as easy and intuitive as possible. Any barrier or effort, however small, reduces the power of a nudge.
  • Move from an understanding of the customer journey as a single-direction funnel of logical steps and embrace a more holistic and flexible ‘pinball’ view which accepts that the journey is complex.
  • Refuse the separation between brand and execution. How people buy is as important as what they buy. A well-designed customer journey is not merely a route to the brand, but an integral part of the brand experience.
  • Consider reframing the discount available as a more compelling incentive. E.g. a prize freeze is more compelling than a small percentage discount. Framing gives discounts meaning that communicates more than price alone.
  • Put the value of discounts against people’s pain points (e.g. booking fees, price rises, delivery charges) instead of against value people accept (typically the core goods). 

Says Nick Southgate: “Whether it is building a big nudge to change behaviour, finding a series of small nudges to bring even more customers towards a brand, making a price work harder or a positioning that turns a business into a beloved icon of the high street, it is the creativity of agencies making this happen. By providing advice and exemplars within this guide, we hope that more agencies can capitalise on this hugely powerful discipline.”

Says Rory Sutherland: “Much human behaviour is not conventionally rational - it is meta-rational. It is perfectly sensible given the informational constraints of the physical and social worlds in which we live and in which we evolved. But it differs quite markedly from the idea of ‘rationality’ which has become prevalent in economics, in business and in government policy-making. So that is the real job of any marketer to question “Are we being shallowly rational here? Are we making decisions based on assumptions of human cognition and behaviour which simply cannot apply in the real world?” Every single and highly effective case within this guide has come about because someone had the wit and courage to ask that question. I encourage others to follow suit.”

Download Behavioural Economics in Action: Strategies and Insights from the IPA Effectiveness Awards from the IPA website. It is free to IPA members and £25 to non-members.

This publication is the latest in a series of publications the IPA has produced around the topic of Behavioural Economics and its potential application to the advertising industry. Download previous publications including: ‘Behavioural Economics - Red Hot or Red Herring?’, ‘We're All Choice Architects Now: Second edition’; and ‘Behavioural Economics - Let's get practical’ here.

The rigorous IPA Effectiveness Awards reward campaigns that demonstrate their marketing payback. For effectiveness content including interviews with clients and agencies, short campaign films of the campaigns and thought pieces, and to search over 1,200 case studies, visit the IPA’s Effectiveness hub.

View videos of the event here.

Last updated 25/02/2015


Contact the IPA

ABCe audit Offical Webby Awards Honoree (2011, 2013)

Website, membership and content management software by Senior
Creative design by Igentics

The IPA
© 2017 IPA. All rights reserved. No part of this
site may be reproduced without our permission.