Thursday, November 17, 2016

Old Brains, New World: The 3 Fs Of Shopper Activation

At the OmniShopper International conference in London this week, the focus was on how we shop now. Technology has made shopping easier than ever. But it’s also given birth to a myriad of new technologies for tracking, targeting and sales activation – one speaker estimated that there were now more than 3,500 start-ups operating in the space between a brand and its end buyer.

In this forest of complexity, how do we see the wood for the trees? In a morning keynote, BrainJuicer’s Chief Juicer John Kearon suggested we were answering the wrong question. How we shop is changing at a breakneck pace. But how we decide – the cognitive tools we bring to bear on shopping – hasn’t shifted at all. 

This isn't to say shopper insight is business as usual. Insights from the behavioural sciences are often paid lip service to, but it’s harder to actually implement them at scale. The effort is worth it, though, as getting behavioural activation right is a powerful route to profitable brand growth.

As behavioural scientists tell us, we decide using our fast, intuitive System 1, and then our slow System 2 generally rubber stamps the decision. Only a tiny minority of choices involve System 2 at all. And yet an enormous amount of promotional and shopper insight activity is designed to excite it by creating cut-through and trying to stop people and get them to think. Instead, why not put System 1 at the centre and focus on making it easier to buy a brand?

Marketing analysts Les Binet and Peter Field invoke the 60/40 rule, which their analysis suggests holds true even in a digital era. 60% of your budget should be spent on brand building, 40% on activation. Shopper is clearly a huge part of that 40%, so getting at the System 1 heart of the buying experience should be a serious marketing priority. But how to do it?

For brand building, we know that the key decision-making heuristics are the 3 Fs: Fame (how easily something comes to mind), Feeling (how good it makes people feel) and Fluency (how easily recognisable its unique assets are). The 3 Fs explain how brands grow. They also let Kearon predict how close the US election would be – Hillary Clinton had a small advantage on Feeling, but ultimately Donald Trump beat her on Fluency.

But activation – the heart of shopper – requires a different set of factors. Kearon introduced the activation 3Fs – more direct levers of consumer behaviour at the point of decision. These are Framing (the world around us), Following (the world between us), and Feeling (the world within us). Feeling – the need for an experience to create positive emotion – is what Activation and Brand Building have in common. Kearon described a study of online shopping where analysis of emotion showed that people who felt happy when shopping spent almost twice as much on average as those who claimed to feel nothing. Positive emotion is vital at every stage of the brand building and activation process.

But Following and Framing are unique to the purchase moment. Framing is all about managing the choice architecture around a purchase to make certain choices feel more obvious or easy. This can be done through pricing – Kearon showed how a charity setting its default contributions higher raised its average contribution dramatically, even though givers could still give as little as they wanted. It can also be done through promotion – making an offer limited, for instance, is a reliable way of boosting take-up. And it can be done through subtle changes in the environment – as in the famous experiment where German and French music played in an off-license boosted sales of wines from those respective countries.

Following, meanwhile, is all about what other people are doing: we are social animals and make System 1 choices based on information about other humans and their choices. Kearon described an experiment designed to make pub drinkers drink more water to reduce or dilute their alcohol consumption. The most effective intervention, he said, turned out to be a poster simply showing somebody drinking a glass of water. Mirror neurons in the brain meant people seeing the poster wanted to drink themselves – and take-up of the free water in the bar shot up.

These examples of Framing, Following and Feeling were entertaining, but is there a way to apply these ideas at scale without taking a gamble on real-world profits? This is where new technology does start to help, said Kearon. The upsurge of interest in virtual reality, and the rapid improvement of virtual store technology, creates the possibility of a gigantic laboratory where A/B testing of in-store behavioural activations can happen. Wild theories – like Kearon’s notion that pet treats would sell better in the human sweets aisle! – can be tested at vastly less expense and risk. The culture of optimisation that already exists in online commerce can come to physical retail, and the lessons of Framing, Following, Feeling and System 1 decision making can be truly absorbed.

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