Reflexity

Archive for the ‘Behavioral marketing’ Category

If you seek ways to improve your online marketing campaigns but have run out of ideas, look towards behavioral science for inspiration. Behavioral science is a discipline that collects and studies data on how people react when faced with a decision and how decisions, such as those made by peers and governments, influence individuals. Freakonomics and Predictably Irrational are two books on this subject which present interesting and easy-to-read examples of societal reactions to various circumstances, with outcomes that will surprise you.

One interesting example from Predictably Irrational is an experiment based on the price of drugs and people’s perceived effectiveness of the drug. The author and his fellow scientists found that when people were given a ‘new’ pain-killer, which they were told was very cheap, their perception of the pain-relief it provided was less than when they were given a drug (the exact same drug) which they were led to believe was very expensive. The test subjects responded that they experienced greater pain-relief when given a drug that was perceived to be more expensive.

If people find they obtain better pain-relief results from a pricier drug, should we therefore aim to keep the health care system as expensive as possible, thus providing society a perception, and indeed a very real feeling of ‘better’ health care?

These are interesting thoughts for the Obama Administration to ponder while formulating social security and health care programs. That being said, France and other European nations’ health care systems are cheaper and more effective than that of the United States.

So what will analytics be able to tell you if you change your price, incentives, imagery and viewer access to reviews? Let behavioral experts shed light on your site’s visitor behaviour and be inspired to test your site according to the interesting insights provided on the human decision processes.

Here is a summary of the most interesting knowledge shared at the conference, Les Affaires – Adapt Your Marketing Strategy In Times Of Crisis held in Montreal on 12 March 2009.

Changes in Consumer Behavior Resulting From Economic Crisis

The US housing bubble of 2008, which propelled the current global financial crisis, is largely due to consumer behavior. Similar to the Great Depression of the 1930s where a run on banks perpetuated a downward financial spiral, it is consumer behavior again that is dictating the crisis of 2008.

Consumer behavior towards budgeting, debt and spending has changed in recent decades. Ever higher amounts of personal debt are more acceptable. According to Jacques Nantel, Professor Secretary General of Marketing at the University of Montreal, real household income has not increased in the last ten years. However, retail sales rose almost 180%, along with personal debt, from less than 50% of disposable income to more than 120%. It is this attitude towards personal debt that is accountable for the current economic situation, rather than the sub-prime mortgage market specifically.

As a consequence of the economic crisis, there are foreseeable adjustments consumers will make to their behavior. A reduction in credit is the foremost concern for consumers. Either their bank will press them to pay on loans, or consumers will voluntarily seek to reduce their credit card bills or consolidate all their debts into a lower interest loan.

That being said, consumers want to limit further debts and have developed distrust towards credit terms on sale items. Selling products with financing credit terms and various credit payment options are no longer the deal-closers they used to be. Instead, people are looking for quality and durability rather than the greatest quantity for the cheapest price. Consumers are rediscovering the virtues of a household budget and doing the math on saving for an item rather than paying for it on credit.

What this means for marketing

Just as the post-war generation’s spending habits were strongly shaped by war conditions, adjustments in consumer behavior are already taking place in those living through this crisis. Marketers require new strategies for success with these customers.

Firstly, marketing budgets are affected. Naturally, businesses are keen to cut costs and apply greater pressure on marketing teams for return on investment evidence. Strategic marketers with a strong brand name and lots of cash could use this time to fill in the recently vacated publicity landscape with their ads at discount media prices. However, launching a new brand might prove difficult, unless it’s a budget brand – and, as mentioned above, household budgeting is the new black.

This economic climate is the ideal time for marketers to explore online marketing, pay per click and social media avenues for advertising campaigns. Not only do you receive immediate and transparent results of return on investment, positive or negative, you also amass a wealth of demographic and geographic data to support future campaigns and your bid for a larger budget. It is the ability to target, in a very focused fashion, groups of consumers on the internet which promises to make internet marketing such a success. Additionally, email newsletters for retention campaigns can be specifically targeted towards your consumer demographics. Note here, it is imperative to avoid anything resembling spam, keeping in mind consumers’ heightened sense of distrust.

Consumers prefer to make purchases from someone they trust, who understands their individual needs. Online advertising allows you to focus on specific demographics and modify your advertising adcopy and images immediately to suit the times. Now is the perfect time to empathize with your consumer’s financial situation. Use the internet to market directly to your consumers and change your sales messaging to suit their new purchasing behaviors.

We thought we would share with you our top 5 6 favourite online marketing and optimization blogs of 2007. They will surely remain in our top for 2008 but if you have your own favourite feel free to share them with us. These are, in our humble opinion, the best of the best, the kind of posts and articles making you go hmmm.

• Web analytics: Occam’s Razor by Avinash Kaushik needs to be read if you’re interested in website analytics. Avinash is also the author of Web Analytics and Hour a Day and he’s actually a consultant and Analytics Evangelist at Google. There are goldmines of useful information in your web analytics (you have one installed don’t you?) and Avinash shows you the ins and outs.
• Site Optimization: Jonathan Mendez’ blog and OTTO Digital’s blogs talk about landing page optimization, site optimization, in other words everything you can dream about online optimization. As Reflexity is heavily involved in that space it’s always interesting to read their findings and learn from their experiences. More than a must.
• Online media and marketing insights: Charlene Li’s blog talks about her experiences and findings about how social media, social marketing & networking are influencing the way business use these technologies online. Charlene is VP and principal analyst at Forrester Research and covers their social computing and web 2.0 research. Insightful.
• Viral Marketing, user experience and online advertising: Andrew Chen’s Futuristic Play will provide you with comments, tips, and ideas about users/customers acquisition and how to keep them. His blog is much more than that but these subjects alone will really be worth your time. We can’t wait to see what will be his next business!
• Persuasion, conversions & marketing: GrokDotCom’s blog posts are about online persuasion; from persuasive architecture to content persuasion/copywriting and everything in between. The goal is to make easier for people to convert into a sale, a registration or a lead. Tons of very valuable information.
• Online banking: Colin Henderson’s The Bank Watch brings a bowl of fresh air with the latest trends, news and experiences with online banking. Colin is a firm believer in embracing new technologies and ideas to reach consumers and enhance their experience. So are we. Kudos Colin!

Ok, so we had more a top 6 instead of a top 5. We couldn’t leave one out. Lets be original and call it our top 6.

What are your best blogs? We’re curious to know…