Colin Strong's Blog, page 3

Efficient marketing strategy for behavior-based pricing

 

Pricing is an essential element of your marketing strategy. Together with product, place, and promotion, the pricing strategy tells a lot about your products’ quality and influences the success of your business. While the classical pricing strategy starts from the assumption that each consumer is rational, the behavior-based pricing strategy is based on a totally different perspective. Behavioral pricing has demolished many myths, making entrepreneurs re-think their marketing strategy. For instance, the idea that “clients have a predefined willingness to pay” is completely false.

Even though many might think that consumers’ price acceptance is mainly driven by value, the reality is totally different. People are not paying only for the features a product might have. They develop their pricing acceptance based on many factors, among which the most important is the company’s reliability. This article is going to show how you can build a healthy behavioral pricing strategy and adapt your key marketing concepts based on it.

How should your marketing strategy look when you adopt behavior-based pricing?

Have you ever wondered what determines your client’s willingness to pay? Your customers are influenced by your product’s quality, but the circumstances you use to present and sell your products also play a decisive role. Below you can find some marketing tactics to help you implement behavioral pricing:

Use the separation effect. This means that you can make a split between the moment your client pays for the product and when he actually uses it. This is extremely efficient for products that have a big utility today, which will decrease tomorrow. Therefore, your client is influenced by the circumstances and he will be more willing to buy your product today, especially when he knows that he can pay for it at a later stage.
Offer your clients a limited number of options. They will be more likely to pay the price for your products when he is offered a limited number of alternatives. What happens if you offer 20 different products instead of 6? Even though you may think that your clients will be able to analyze each option and choose the best alternative, this actually doesn’t happen. When they face a large number of alternatives, your customers will feel overwhelmed and abandon the purchase idea as they will feel that the marginal utility is higher than the expected utility.
When dealing with face-to-face negotiations, it is always better to start presenting your top-of-the-range product. Will your client buy it even though it exceeds his budget? Of course! First, you should avoid mentioning the price as much as possible. You will present the products’ extraordinary features without telling how much it costs. This is how your client will develop a feeling of possession towards that product before he knows that it is out of his budget. Finally, when you mention how much the product actually costs, you will be surprised to see that your client is actually open to pay it without objections.
Use as much as possible the power of context. Can you ever imagine if there is any difference between a lemonade bought from the grocery store and one from a 5-star resort? None! However, any client would be more willing to pay a higher price for the lemonade from the luxurious resort. The location’s prestige and context influence your customer’s willingness to pay your price.

In conclusion, the behavior pricing strategy should be developed after an intensive research on your client’s behavior. It is very important to know which are the elements that make your customers buy a product or not. Use the strategies above and take your business to the next level.

Change and branding a company name

I heart media is big radio company in the United state of America with 850 AM and FM radio station. The owner of the business decides to change the name of the radio station to I heart media due to the facts that its radio company online network that allows individual listening to the likes of Ryan Seacrest and Rush Limbaugh use the internet. The clear channel is a throwback this is a unique name that distinguishes from the other Radio station. The owner of the station changes the name of the company to heart media after they face stiff competition from streaming music rival online, as well as competition from satellite radio on which people uses the internet

The owner of the company also changes the name because the radio station has lost popularity from the fans due to the facts that the firm carried a massive debt since the leveraged takeover for the last six years ago, also with long-term debt of $20billion.Debt Becomes a significant threat that the company face.After the company realizes a lot of loss of $606.9million, compared with the loss of $424.5million in 2012change to private.

The new branding of the company was to meet the competition and to reshape the perception of the firm towards for the digital age. The reshape of the company was to win and to overcome competition from digital newcomers like Pandora and specify.The branding also prepares the heart radio to conquer and win award show and multiple live events. This includes the annual iHeartRadio Music Festival, that was ready to perform at Las Vegas

IHeart radio firm had an advantage over other local station this is because their music listened to trough website and social media channels this made iheartRadio precious and recognized as the best radio station in the USA.

Differentiation in a marketing setting

Differentiation in a marketing setting is the ability to distinguish a product from to others or make it attractive to a specific target market. Moreover, it is expressed as a promotional method employed by a business to establish a strong and unique presence in a market, when using this strategy a manufacturer uses several variations on a product to be marketed under the same name brand to give the products a wider coverage and promote market dominance.

The significance of this competitive strategy is based on the notion that, firms have resources that enable them to construct a particular competitive advantage over the rest of the competitors. Moreover, with proper management of resources the firm will reduce competition in every market aspect it is involved in (Smith, 1995). In this case, differentiation is seemingly a process of establishing a difference in products and creating more attractive ones aimed at a particular market. For instance, Apple INC has established a differentiation strategy by producing a smartphone with unique hardware and software version unique compared to major phone companies, thus remaining as a dominant in the mobile phone market through targeting specific users (Ragnetti, 2011).

In addition, it is evident that the use if differentiation one can make a business stand out and successful despite the crowded market. Apparently, this can be achieved by the integration of several aspects of differentiation such as pricing; this is done by offering customers with a different pricing strategy. For instance, high pricing sets a sense of quality and prestige thus attracting a particular group of buyers.  Moreover, convenience is also a primary differentiation strategy where one operates a business in an organized manner to ensure customers times is managed appropriately. In conclusion, with a proper differentiation strategy, the customers will have a positive attitude to the products leading to the success of a company.

How can you use advertising to reach your target audiences (magazines, newspapers, television, and radio)

A 

Mudzanani, (2015) asserts that in business, an advertisement is one fundamental strategy to maintain a competitive advantage. Advertisement creates awareness on the type of business an organization is conducting (Mudzanani,2015).  The fitness and wellness sector is full of competition and requires constant revitalization of the company strategies to maintain a competitive advantage. Fortunately, several methods exists that can be employed to achieve a successful advertisement campaign for the enterprise. These methods include the use of newspaper, television, radio and magazines.

Television

The target market for Goodlife Fitness Club is the elderly and physically challenged people. Also, the working class who needs to keep fit is part of the target market f the fitness club. By using television, the company can incorporate the use of imagery, video, and sound in their advert. This will help viewers identify and associate with the type of services that are offered at the club.

Magazines and News Paper

Percy, (2008) agrees that magazines and Newspapers are readily available in most of the local shops and provide easy access for the people to see the advert. Magazines and Newspapers are ideal for an advertisement for the fitness club as they offer a vivid explanation of the company detail, further providing more information regarding the services, location and maybe the cost of the products that are offered (Percy, 2008).

Radio

Radios are useful tools for advertisement as they are readily available I most homes and even local joints lie pubs Further, radios have been incorporated in most of the smart devices such as smartphones, tablets, and cars stereos (Varey, 2002). Additionally, they can now be accessed through the internet portal. Radio offers a cost-efficient, fast and reliable method of advertisement and reaches a lot of people in a short period. Moreover, radio ad can be repeated as frequently as possible to maximize on the audience base to be achieved.

Five Tips How You Can Promote Your Business Without Spending Too Much Money

 

In order to make good sales in the market, your product or service should be well known to the target audience. Promoting your business allows people to know your offering, and this is a very integral part for any business since it determines the sales in that particular period.

Whether you are building a new enterprise or your business has been around for a while, effectively promoting your business will help you find new customers. However, you do not have to break a bank in the process. With the advent of the web and other technological innovations, there are ways in which you can promote your business which will incur you low costs.

Work on Your Website

A good majority of people out there turn to the web when they want to search for information regarding a specific product or service. The internet has become an integral part of business strategy today, and it remains one of the best ways of promoting a business.

You need to create a website or blog that will showcase the product or service you are offering if you want to win new customers. The idea of creating a site should not scare you since there are plans that fit businesses of various sizes.

While there are professional web design companies that develop high-end websites, there are Content Management Systems on the Web like WordPress, Blogger, and Joomla. These sites offer free templates and websites. You can visit them and create a website for your business for free.

After creating the website, optimize it over time for search engines so that it can rank high on search results.

Harness the Power of Social Media

If you have a website or web strategy, you should have a coherent social media strategy as well. The internet and social media platforms are highly integrated these days, and they complement each other. There are billions of users on various social media platforms, and it is a place where you can find new clients as well as promote your business.

You should create profiles for your business on Facebook, Twitter or LinkedIn, depending on the nature and operations of your business. Social media platforms will allow you to interact with your target audience and connect to other players in your industry.

This promotes your business since more people get to know about it in the long run.

Attend Industry Events and Exhibitions

The chances are high that people attending businesses are prospective customers, distributors, resellers or consultants in the field. When you attend exhibitions and events, you not only get to network with these businesses, but you also promote your business to the broader public.

Promoting your business involves getting people to know about the nature of your business. It entails informing an audience that you exist, and you have a product or service to offer. Events and exhibitions are an excellent place to showcase your business, and it is a strategy that does not involve a substantial amount of funds.

Further, industry exhibitions offer opportunities for partnerships. If the aim of promoting your business is to get a partnership with another firm in the industry, then attending industry events and exhibitions can work for you.

Stern and Company is an entity that has a keen focus on public relations and communications, and the services it offers can come in handy in such a scenario.

 

Avail and Publish a Comprehensive Information Pack

Proper business promotion involves getting customers to know about your products and business. While a website and social media pages can serve this purpose, you might consider coming up with a comprehensive information pack which outlines the details of your product or service in depth.

You can achieve this by intentionally leaving off parts of information on your website. This information is what you should include in your information pack. The best place to provide directions on where visitors can access this information pack is on your website.

Provide directions and contacts, and this will be effective in promoting your business since you will be able to get in touch with clients who reach out to you for a copy.

The information on the pack should be valuable since this is what will make web visitors reach out to you in search for more.

Share Pictures and Videos about Your Product

Increasingly, a significant portion of web users today is turning to audiovisual content. This is because the audiovisual content is easily accessible to get information from, and has a lasting impact on the viewer or consumer.

Sharing pictures and videos on online platforms like Instagram, YouTube, and other offline platforms is an effective way of promoting your business. People out there get to know about your products or service through these videos, and the exciting part is that you incur low or no costs.

 

To wrap it up, you do not have to spend a fortune if you want to promote your business. These ways are pocket-friendly yet effective in promoting your business.

 

 

 

 

 

 

The Reclamation of Strategy

As has been shown time and again in the past few years, big data is surely one of the most important investments that a brand can make. Of course the stakes are huge — consulting and technology firm Capgemini has suggested that data can improve performance by 41 percent over a three year period.  So it’s no surprise that management consulting firm A.T. Kearney predicts the value of the big data tech market will rise to US$114 billion by 2018. Given the potential returns, what board would hesitate to sign off on a significant investment in big data?

But successfully using big data to improve a business means more than just collecting the information, or even analyzing it — companies must develop a strategy for how to use the information to build their brands. Unfortunately, many firms are using big data tactically, rather than strategically. Marketers, in particular, are not realizing the full potential of big data — rather than using it to strategically build brands, it’s mainly used to drive programmatic advertising.  This is highly tactical marketing, given the focused, granular tailoring of activity to shift specific behavioural performance metrics.

Perhaps this method might be justified if it was effective, but the jury is still out. While there are undoubtedly many success stories, a clutch of recent studies has questioned the degree to which brands are getting return on their investments. Gartner, for instance, reported that 60 percent of big data projects globally through 2017 will fail to go beyond the pilot and experimentation stage, and will be abandoned.

So what is a brand to do? There’s an entire industry full of consulting and technology companies eager to persuade organizations that the barriers to realizing greater insight and ROI from their data assets is merely further investment in big data technology. But this is not sufficient. To get real ROI from big data, marketers need to reclaim their strategic heritage and use big data to understand their markets in fundamentally new ways. Here’s what that might look like:

At the individual level: Social scientists have long been aware that different psychological attributes, such as our personalities, influence our purchasing decisions. However, this has largely been met with a shrug of the shoulders by marketers, not least because these factors can be hard to measure. Marketers have instead preferred attitudinal data which typically has a more direct (and easier to understand) relevance to consumer activities that marketers can influence.

However it is rapidly becoming clear that big data not only tells us what customers do but also how they think. A study by researchers at Microsoft and Cambridge University demonstrated just how much of our inner lives are revealed by very simple pieces of data. They found that Facebook likes revealed a wide range of information about participants from their personality to their voting preferences (even though these were not explicitly identified in the likes). So marketers now potentially have many more levers to play with from their big data assets. Technological advances have now made it a lot easier to start applying this information to good effect — rather than blind A/B testing, marketing communications can now be shaped by a strategic understanding of what underpins preference. For example, many brands are now starting to use this to undertake persuasion profiling of their customer base to understand what types of nudges are most effective at shaping customer activity.

At the social level: Another way in which marketers can make more strategic use of big data is to start exploring the way in which social relationships are revealed through data patterns, something very hard to do by other means such as market research surveys. Many of our beliefs, attitudes and behaviors are shaped by our social connections rather than, as classical marketing would suggest, our own individual preferences and experiences. A good way of thinking about this is to consider forest fires: The fire itself has its own properties in the way it spreads, which we can’t necessarily explain by examining the way in which individual trees burn. Big data allows us to look at the way in which social effects rather than individual preferences are shaping markets. There is now a huge amount of data which tracks exactly how behavior operates at a social level — phone logs, social media, messaging and so on. Studies by people such as Microsoft researcher Duncan Watts have demonstrated how patterns of relationships are themselves critical to preference formation in markets such as music downloads.

Network theory (which identifies the different patterns in the way we communicate with each other) is also relevant here, which Watts demonstrated with his Big Seed marketing strategy. He used large scale mailing lists for an initial “seeding” of viral messages to determine how social effects lead to sharing, to maximize the spread of a campaign. This approach never got widely adopted, perhaps reflecting the way in which marketers continue to resist looking at the world through the lens of individual influence rather than seeing the way in which the spider’s web of relationships is, in itself, a critical means of understanding how to build influence. Perhaps the time has come to re-evaluate this.

At the cultural level: An even more strategic opportunity for marketers is to explore data sets to understand how cultures are changing.  A good example of this is Google’s Ngram service, a digital database of about 4 percent of the world’s books published since 1800. This can help us to understand the ways in which ideas and language have evolved over time. Work by anthropology professors Alex Bentley and Michael J. O’Brien suggests that our use of buzzwords (which appeared in print) spread by social diffusion (copying) rather than reflecting the changes and developments in the topic itself. Hence, in their words, “when humans are overloaded with choices, they tend to copy others and follow trends, especially apparently successful ones.” This approach can of course provide brands with guidance on how to deliver campaigns by shifting their focus toward cultural learning rather than expecting an audience to adopt a message simply because the content is sound.  The point is that a new product may unarguably be an improvement on previous versions but if we ignore cultural learning as a means of communication then adoption rates may falter.

It takes something of a leap of faith to see the full creative potential of big data for marketers. Senior decision makers generally don’t yet fully understand the opportunity while the teams analyzing the data often have a technical rather than a marketing strategy skill set. The opportunities are sitting between these roles, failing to be identified and resourced. But the prize for those brave enough to go looking is invaluable. As human attributes can be identified from data trails, then marketing messages can now be delivered in a way that resonate and hit home so much more effectively. If we start to use data to identify how social relationships can influence attitude and behaviour change then marketing campaigns can take a powerful new direction, giving a whole new meaning to how we think about viral. And as data analytics show us which trends are in decline and which are in ascendance, then brands can put their best foot forward, anticipating consumers rather than reacting to them.

This article first appeared in strategy+business

Burger with extra data?

 

Buying a burger surely represents the height of the ‘old economy’ where your patronage of the outlet – or Quick Service Restaurant (QSR) as they are known – is pretty much a hit or miss affair.  You may like the product, the price, the brand or the experience or a combination of all these.   Or maybe it’s just the one nearest to you.  Your transaction is usually friendly and they may even write your name on a coffee cup but fundamentally it is anonymous.  You leave happy or unhappy,  you may come back or perhaps you never will.  The brand typically does not know and more generally knows precious little about you.  The point is that the only relationship the QSR brand has with you is tantalisingly delicate, managed by a combination of above the line advertising, promotions and the fleeting time you spend in-store.

The data economy is fundamentally changing this and creating significant new opportunities for QSR  brands.  And it needs to.  The industry is under threat like never before.   New entrants are appearing all the time.  The booming coffee shop industry is increasingly entering their space by offering food, as are retailers anxious to encourage greater dwell time among their customers. The industry has an image problem as it is increasingly seen as a source of poor health in the population just at a time when food trends are heading towards a wider range of flavours, healthier options, locally sourced and crafted in an artisanal way.  QSR brands have responded strongly, launching new menu items, fresh store layouts and more intelligent, emotionally based advertising.  All of these are clearly important but the position of established players is under serious threat.  In 2014 McDonald’s’ annual net income dropped 15% to $4.7bn – one of the worst years in the company’s history.

So what can established brands do?  Of course they can reinvent themselves to adapt to changing market tastes; it can be a difficult balancing act to move quickly enough whilst at the same time not alienating the core customer base.  But one area where established brands need to focus on is the emerging data economy; when Uber are launching their own fast-food offer you know the time has come to more radically reinvent the QSR.  This is part of a broader move away towards a data mediated economy where ubiquitous technology is offering new opportunities for brands to reinvent their engagement with customers.  Here are a few ways in which this is starting to happen for the QSR category.

Mobile apps:  Starbucks’ app has shown the way in which mobile ordering and indeed payment has fundamentally changed customers’ relationship with the brand.  This is really table stakes for any QSR brand that wants to build an ongoing relationship with their customers; it is a fundamental building block on the road to ‘servitization’ where the proposition shifts from selling products to selling ‘product-service systems ‘.  For example, Subway’s app allows their customers to locate the nearest store, create their sandwich or salad and save their favorite orders.  Surely this fundamentally shifts the nature of the conversation.

Personalisation:  Once there is a way to engage with the customer more directly, it is possible to start allowing much greater personalisation of the offer.  Some QSR brands such as Chipotle Mexican Grill have always offered this in-store whilst others, such as McDonalds are rolling their TasteCrafted approach to personalising burgers.  But the real opportunity is when it comes to personalising promotions.  McDonalds for instance recently launched an  app featuring mobile-only offers and the option to favourite foods in order to personalise coupons. These can also be targeted based on factors such as the customer’s birthday, location and weather. Giving your customers what they want – indeed precisely what they want – is surely not only a great relationship build for brands but a great source of understanding of customer desires.

Reward schemes:  Once tired emblems of a different era, reward schemes are enjoying a resurgence in popularity.  As digital becomes a much more flexible tool, able to respond in a much more intimate way to personal preferences and behaviours, they are a means of maintaining much more fluid and engaged relationship with customers.  Indeed, a recent survey reported the rather astonishing finding that loyalty-program members visit a restaurant 82 percent of the time because of the value of the reward.  Starbucks is perhaps the best example of a great loyalty scheme, with over 8 million active users.  The success looks due, in no small part, to the way it properly integrates the loyalty scheme with payment, in-store digital experiences  and their mobile app.  It is worth noting that Byron Sharp’s influential perspective here is that these sorts of schemes do not work – they simply cater to the already loyal.  The point is that the world has perhaps changed since he researched his book – he has a point but digital is looking like it might be a game changer.

Social:  Once customers are engaging with the brand digitally, it is a small step to encourage them to use social media – which has further potential to drive traffic and business to the brand.  A great example of this is Dominos ‘Pizza Legends’, an online portal that encourages their customers to design their own pizza using a selection of bases, sauces, and toppings. Each ‘Pizza Legend’ is used to create a short animated video that is shareable on Facebook and Twitter.

Transparency:  Last but by no means least, consumers are expecting a greater understanding of the provenance and sustainability of the food that they buy.  There is an increasing demand for information about the health and ethical implications of the food they consume.  KFC, for example, has responded to this by devoting a large amount of space on their website talking about nutritional value of their food through to responsible sourcing of their ingredients.  Digital channels are becoming important in giving increasingly vocal consumers easy access to this type of information, and indeed it provides QSR brands with an opportunity to engage in a meaningful way with their customers.

QSR brands can, if they choose, remain in the category of the market where transactions are anonymous and their relationships with consumers mediated purely by a combination of advertising, promotions and in-store experiences.  However, there is also potential for a richer and deeper engagement that allows brands to better understand their customer base and respond in ways that moves their brand along.

However, as brands see the opportunities for the way in which data can transform their business, it is essential not to lose sight of the role of the consumer in all of this.  Do they actually want this level of engagement?  Why do consumers eagerly take-up some loyalty schemes whilst others, apparently identical, fail spectacularly?  Have privacy concerns got the potential to derail plans? Care needs to be taken to ensure that the scale of investment is done with the consumer in mind at all times.

Nevertheless, it is clear that established QSR brands are struggling. The market wants change and new entrants are shaking things up.  The data economy gives established brands the opportunity to reinvent themselves but the promise of this will only get delivered by brands going on a journey hand in hand with consumers.

 

Crystalizing our thinking about the data economy

Have you tried Cystal Knows yet?  It’s a website that claims to scour the web and your emails (with appropriate permissions) for information that it allows it to build a personality profile on your behalf.  In my case I was rather miffed by what it came up with, given that it included the description that I am ‘detail oriented and sceptical of change’!

In addition to the profile, it also provides guidance on how to communicate with others – seamlessly integrating into your email account. So it suggests that when speaking with me you adopt a ‘calm and steady tone, don’t appear over aggressive and don’t talk big picture’.  Not exactly the stuff of the most exciting of dialogues – you have been warned!

And you can not only get your profile but it will search the web for anyone with an online presence, giving a rating for the confidence that it is making assertions about their character (74% confidence in my case..)  This has resulted in colleagues and friends doing a lot of checking out of themselves and other people.

More seriously, it surfaces a few issues in my mind.  First, although quite a few people considered their description to be accurate, you could say the same about horoscopes or numerology.  They are sufficiently vague descriptions that it is easy to see yourself in them.   That’s not to say that they are not accurate but the jury is firmly out, not least because it is unclear, to me at least, how these descriptions are derived.

However, does this not demonstrate the direction in which the data analytics is potentially moving?  At the moment there is a huge programmatic advertising industry examining our behaviours, using massive data sources to target what is intended to be relevant adverts. The market research industry has a large sentiment analytics industry, examining the attitudes we express to a wide variety of products and services on social media. But there is relatively little focus on the sort of analysis that Crystal Knows produces – our personality types, communication styles and so on.  My view is that we are at the cusp of a significant refocus  in analytics – we are moving to a digital psychology era which is fuelled by the data we are unwittingly giving away huge amounts about ourselves in our daily online activities.

Which then leads to my second point.  Looking at my rather unappealing profile, I am left wondering if they are seeing a side of me that I am not aware of.  In terms of the Johari window, is this reflecting my ‘blind self’ – things that others know about me but I don’t know about myself?  In some ways this is nothing new – the rumour is that supermarkets are pretty good at predicting when you will die based on your shopping basket.  US retailer Target famously predicted a pregnancy before others in the family were aware.   But what is different here is how this feels.  It is less about what I do and more about who I am.  Is that description really me? It creates an uncanniness that feels quite creepy.  Brands should be wary about adopting digital psychology approaches without properly thinking through the implications of how this will make consumers feel and the effect this might have on brand attachment.

All this in turns talks to a wider question.  Can we really develop a deep understanding of people based on their data trails?  The Behaviourist view (which is the dominant Silicon Valley perspective) would say yes, we can.  People are inherently ‘readable’ and predictable through measurement by activities such as neuroscience, AB testing and experiments.  And I have written on the way in which the market research industry has left this area relatively under-explored .  The opposing, let’s call it ‘Humanist’ view is that we ourselves are the only reliable narrators of our inner lives, albeit this may need some clever teasing out sometimes.   It is not a completely polarised argument, both have something to contribute but I would question whether there has been sufficient discussion concerning the relative contributions of each.  It feels at times that the advocates of either side are either too steeped in their own area to step back or there are commercial interests that need to be defended for us to recognise the contribution of the other.

In summary I would say try Crystal Knows – at the very least it’s great fun and sparks a lot of conversation and amusement.  But more importantly it surfaces a number of key issues that marketers and market researchers need to address as the data economy evolves.

Humanizing big data

My book is out!  In short, it’s all about the people side of data.  I suspect we are getting tired of hearing that big data has huge promise – surely we all get that now.  The fundamental point of this book is that the promise will not be realised unless we understand the human side of data.

First, the gathering, cleaning, analysis and interpretation of data is a very human process.  We like to think that advances such as machine learning can ‘allow the data to speak for itself’ but I argue that this is not the case.  We need to recognise that human intervention comes at each point in the process and indeed is an essential ingredient if we are to try and make sense of the human sitting behind the data point.

Second, we can do so much more with big data than personalised marketing.  Perhaps if we step back from the frantic ‘big data arms race’ that is underway,  then we can start using new ways of looking at data to develop insights that give brands much greater differentiation than ever-more targeted advertising.

Third, we need to explore the consumer experience of living in a data mediated world.  What is our response to brands that send us personalised marketing materials?  How do we feel about privacy?  Is lack of privacy now a social norm?  And does data in our own hands make us empowered or confused?

These are big issues for big data and ones that social scientists and consumer researchers need to wade into.  This book is designed to raise the issues and develop some new directions to further the debate.

You can buy a copy of Humanizing Big Data for a 20% discount (before the end of March) from Kogan Page using the code FRIENDSOFCOLIN  or, of course, you can go to Amazon if you are based in the UK or from Amazon.com if you are based in the US..

Context: The Cinderella of consumer research?

“If you reduce human life to responses to stimuli, then you will seem to be justified is seeing us as biological devices programmed to respond to stimuli”.  So says Raymond Tallis in his bold book, ‘Aping Mankind’.  His book is a searing critique of what he calls ‘Neuromania’ and Darwinitis’ which are essentially reductionist perspectives on our human-ness, attributing our behaviours to evolutionary brain functions rather than a function of free will.

He writes about the importance of understanding the context in which decisions are made.  When we are undertaking a lab experiment, whether it be an fMRI scan in response to an advertisement, a psychology experiment looking at our reactions to different pricing options, or indeed answering a survey, we are inevitably separated from the context of our everyday lives.   The danger is that this can push out our personal and cultural histories,  which are needed, more than we may wish to think, to make sense of our responses.

Economist David Levine refers to this in his book, which has the rather arresting title ‘Is Behavioral Economics Doomed?’. He covers a lot of ground in his exploration of economics and the degree to which it needs (or perhaps not as he would argue) behavioural economics to provide a coherent explanation of human behaviour.  One of the examples he takes to task is the ‘better-than-average’ effect that was identified by psychology researcher Ola Svenson that 93% of US drivers considered themselves as better than the median.

At one level this looks ridiculous.  How can 93% of this population be above average?  Surely this is a cognitive error that we are making. But perhaps this statistic looks ridiculous only because it is divorced from the context in which people are making decisions.  It is surely possible to assess your driving ability in many different ways – how good you are at driving fast, avoiding accidents, ability parallel park and son on. Just asking one question – ‘how good a driver do you think you are?’ – presumes a judgement about the relative importance of each of these (and undoubtedly other) elements.

So, I think I am a good driver because I am quite confident at driving in London traffic but I am really bad at parallel parking.  My wife, on the other hand, is great at parallel parking.  We both think we are better than average and we are.  Just in different ways.

Perhaps this helps to explain why behavioural economics has had a somewhat chequered history when it comes to ‘nudging’ behaviour in ‘real world’ environments. As Tim Harford pointed out,  behavioural economics findings that are widely accepted and indeed proven from lab studies, such as the effect of social proof on decision making, “[do not] always apply and it can be hard to predict when or why”.

This is not to say that behavioural economics does not have value but perhaps we need to have a better means of determining in which situations it has explanatory value and when it will struggle to provide a meaningful account of human behaviour.  Whilst a researcher’s life is a lot more straightforward if we can simply assess the response from the individual we need to be careful that we properly consider the context in which the behaviour takes place and the meaning that the individual ascribes to their actions.

There is a danger that those involved in researching human behaviour, whether from an academic or commercial perspective, get stuck in their own particular explanatory framework.  Whether it is economics, behavioural economics or situationalism.  Perhaps the real opportunity lies in being able to move between different lenses on the world, integrating our thinking and approaches rather than trying to prove one is better than the other.