#6 The world is changing and so is customer behavior

Understanding the customer is a key element of a brand’s marketing strategy. Before implementing a strategy, it is important to collect their requests and expectations to better target your actions. The analysis of consumer behavior (moving from customer to consumer without explanation) is done in a multidisciplinary manner to allow the company to adapt to this behavior, or even anticipate it. Economics, psychology, sociology and anthropology are the main approaches used. Its contribution contributes as much to strategic thinking as to operational marketing.

Since the beginning of the 2000s, we have even talked about behavioral economics thanks to Dr. Daniel Kahneman, Nobel Prize winner in economics for his prospect theory showing that humans do not always behave rationally when faced with the risks of gains or losses.

His book, "System 1, System 2", describes our mental functioning as being the result of the dialogue between two systems of thought: "system 1", fast and intuitive (the one which is mobilized when we have to recognize an emotion expressed on a face, for example), and "system 2", slower and rational (the one which we use to calculate the product of 17 by 24). These two systems coexist constantly, system 1 making most of the daily decisions, system 2 simply monitoring the first and intervening when something unusual occurs. Everyone has their share of work. The problem is that this distribution of roles is often compromised when we are rational, which is not always the case. This work explains why little by little Doctor Kahneman became very interested in positive psychology, emphasizing the extent to which “attention is the key to everything”. If we were able to focus our attention where it is needed, when it is needed, for the time it is needed, we could savor our moments of happiness much more, and only focus on our moments of pain to draw the necessary information and decisions from them, without ruminating on them. We could thus lead our existence towards more happiness and fewer errors… [1]

Others, like Antonio Damasio, provide an original vision of how emotions manifest themselves in the close interrelationships between the body and the brain in the perception of objects. Based on the case study “Phineas Gage”, the author aims to show how emotions allow us to adapt to the environment and why “for good and bad” they are part of reason (contrary to what a certain classical Cartesian culture indicates, hence the evocative title of the book). Phinéas Gage worked in the construction of Western American railroads in the last century. Following an explosives accident, a crowbar passed through his skull. Gage miraculously emerged alive from this tragedy, but with a radical change in personality: the man, who was appreciated and respected before the accident, became, following it, antisocial and very poorly skilled in his life choices. By studying the neuropsychological consequences of Gage's brain injury, it appears that he had lost respect for social conventions and previously learned moral rules, even though neither fundamental intellectual functions nor language seemed compromised. For Damasio, the “Gage case” ideally illustrates how the lesion of a part of the prefrontal region (ventromedial) significantly disrupts emotionality, this type of damage having the consequences of abolishing the ability to properly plan one's actions in the future, to behave skillfully according to previously learned social rules and finally to make choices likely to be more advantageous for one's survival. Thus, thanks to the contribution of neuropathology, we can support the idea that the brain has the characteristics of being able to anticipate the future and form action plans, based on the fine orchestration of emotion. Indeed, emotion would give weight to the different future solutions in terms of survival and self-interest, relying on the factual emotional marking acquired by the person and on the innate emotional marking of their species. To support his general demonstration, Damasio argues, in the first part of his book, that the neural circuits, which are the basis of the perception of emotions, are located in the limbic system, but also in certain areas of the prefrontal cortex, as well as in the regions of the brain where signals coming from the body are projected and integrated. In a second part, the author attempts to show that the perception of emotions corresponds to sensory information coming from a certain part of the body landscape, at a time t. The juxtaposition of this state to a non-corporeal event, the perception of an external object for example, would then give this event a good or bad “quality” depending on the information coming from the body: the capacity to perceive emotions representing a mechanism for evaluating the quality of relationships between the organism and objects (concrete or abstract). A cognitive value would therefore be attributed to emotions, according to this so-called “somatic means” theory. Finally, in the third part of the work, Damasio ends his demonstration by specifying how the body provides fundamental content to mental representations. This constitutes the reference frame of our representation of the world, of our relationship to it: the fundamental representations of the body in action form a stable spatial and temporal framework, on which the other representations could rely. Thus, the fact of existing would precede that of thinking, contrary to what Cartesian thought indicates.

The research group at the Institute of Neurophysiology of the University of Parma, led by Giacomo Rizzolatti, made an extraordinary discovery in the early 1990s for the understanding of mental processes: that of “mirror” neurons. Mirror neurons, initially detected in the pre-motor cortex of macaques, activate when finalized actions are executed, but also when we observe the same actions executed by others (obviously, in this second situation, inhibition of the motor act is associated). Successive neurophysiological studies based on different experimental methods have demonstrated that the human brain is also equipped with a system of mirror neurons located in the parietal and pre-motor cortical regions, with two fundamental functions: controlling the execution of actions and above all, allowing their understanding. Learning and understanding the actions of others therefore occurs through a process of imitation.

Furthermore, experimental results indicate that the same chains of mirror neurons are involved not only in the recognition of the action of the other, but also in the “why” of the action, that is to say in the intention that motivated it. These “cognitive” processes are not simply linked together (as classical cognitive science asserts), but are structured on the basis of circuits which “make it as if it is only possible to understand the meaning and intentions of the other in what they do if we imitate and reproduce their action in our body”.[2]

“Economics would have a lot to gain from relying on people’s actual behavior, not their assumed behavior.” This is one of Dan Ariely’s quotes in his book “C’est (vraiment) moi qui ceci”, French translation of “Predictably irrational, the hidden forces that shape our decisions”.

Our behavior is irrational, but it is often so in a predictive way. Most economic models assume rational behavior of the different actors, in particular of human beings (as consumers for example). We assume that faced with different alternatives, he will choose the one which is objectively the most favorable for him, the one which minimizes his costs, which maximizes his profits, the chances of achieving his objectives. Economic models are based on these assumptions (in particular, the famous law of supply and demand). We ourselves prefer to see ourselves as “rational agents” rather than fallible human beings, and rationalize all our choices a posteriori. However, the reality is very different. We regularly make absurd decisions, or seemingly absurd ones, when we acquire something (small or large), when we change jobs, when we embark on romantic relationships.

The questions addressed have all been the subject of experiments and tests (and the author describes in detail the sometimes very amusing conditions of implementation). Among the themes covered are: how we judge the prices of objects not in absolute terms, but relatively to reference prices – anchors –, which clever marketing campaigns will succeed in suggesting to us, and which will therefore be difficult for us to abandon; how free things have an emotional pull on us, leading us to irrational choices; the greater effectiveness of a placebo drug when its price is high; the balance between social norms and market norms (for example; being paid takes away, under certain conditions, part of the pleasure of doing something); the role of the “excitement” factor that leads us to behave contrary to what we had agreed within ourselves (the experimental implementation is worth reading); the systematic overestimation of the value of the things we own; self-persuasion (where too strong expectations make us see and remember reality differently from what it was); the propensity of all individuals to engage in dishonest behavior when conditions arise; the tendency to postpone until the next day activities that can be done, even if it is irrational to do so... So many questions addressed in a lively and amusing way.

Behavioral economics calls for revising economic models by taking into account the fact that economic agents, humans in particular, are not rational agents optimizing their decisions in light of their objectives. One of the author's conclusions, from the perspective of a society implementing – rationally – laws and regulatory frameworks aimed at objectively protecting the collective interest, is that it is sometimes necessary to make greater use of regulation, of imposing modes of behavior (in economics or public health for example).

And finally, we cannot conclude this article on customer behavior without talking about Richard H. Thaler, new Nobel Prize winner in economics, and his work on Nudges.

The nudge, literally the “nudge”, helps the irrational beings that we are to make decisions. Because according to the theorists of behavioral economics, of which Richard H. Thaler is now the herald, homo-economicus does not exist. On the contrary, all decision-making is influenced by "cognitive biases" such as the environment, emotions, instinct... In his 2008 work, "Nudge, the gentle method to inspire good decision-making", co-signed with Cass R. Sustein, the researcher develops the idea of ​​a paternalism "which does not prohibit anything or restrict anyone's options", but which greatly influences.

The academic speaks of "mental accounting" to explain how individuals "simplify their financial decision-making" by focusing in particular on "the impact of each individual decision rather than the overall effect", analyzes the academy.“It also showed how loss aversion can explain why people place a greater value on something if they own it than if they do not,” the Royal Swedish Academy said recently.

The SNCF is experimenting with the “nudge” technique to reduce incivility

The SNCF has launched eleven experiments in Ile-de-France inspired by the theory of “nudge”, literally a “nudge” or “nudge”.

Some see it as a form of mental manipulation, in any case a way of influencing behavior. The SNCF has launched eleven experiments in Ile-de-France inspired by the theory of “nudge”, literally a “nudge” or “nudge”.

The most famous example of this technique is that of a fake fly painted at the bottom of the urinals at the Amsterdam airport, in the Netherlands. Since this development, there has been an 80% reduction in cleaning expenses in men's toilets. For what ? Simply because the image of the animal implicitly encouraged users to aim more accurately.

Encouraging results

Enough to convince the SNCF to test this method against incivility. No quantified objective but a stated desire to modify the bad behavior of certain travelers, who are today the cause of around 20% of delays or disruptions in public transport in Ile-de-France. And rather than direct repression, the idea is to use trickery, as in the underground tunnel of a station, where many pedestrians did not respect the signs.

“Instead of putting a forbidden sign which gives the idea that we are not allowed to go there but that there is indeed a path, we put a dead end sign. We have reduced the wrong direction of use on one of our underground passages by 50%.

Alain Krakovitch, general director of SNCF Transilien at Franceinfo

The SNCF also tries to encourage travelers to validate their transport ticket, even when the automatic doors are broken and let everyone through.“We put in place signage above the validators with trees which shows that each time we validate, we will plant a tree. We accompany the gesture of validation with an environmental gesture which has therefore encouraged people, in Aulnay for example, to validate their Navigo pass much more,” reports Alain Krakovitch. Officially, these are only simple experiments, limited for the moment to Ile-de-France. But the SNCF should obviously seek to soon generalize those which meet the best results.

Mind manipulation?

Michel Badoc is professor emeritus at HEC, specialist in neuroscience. For him, the development of “nudges” firstly corresponds to an observation.“Everyone believed that people were rational and in fact we see that the brain, in many cases, makes automatic decisions, outside of consciousness and outside of rationality. Experts in the United States show us, for example, that 70% to 80% of purchases are irrational,” he underlines.

“In fact, we try to make the brain function outside of any consciousness on things that it perceives automatically, hence the place, even if we don't like to hear this word, of the subliminal aspect which allows us to give the brain information, which can even be false information but which it perceives as real.”

Michel Badoc, specialist in neuroscience at Franceinfo

If these techniques can then indeed be compared to manipulation, Michel Badoc raises a point which he considers essential: "I think that manipulation does not come from the technique, it depends above all on the purpose for which it is used. There are rules that exist", recalls the specialist, even if he recognizes that completely banning subliminal would be a little difficult.“The smile of a saleswoman, for example, is subliminal and will sell much more than if she sulks,” he notes.

Customer behavior evolves over time perhaps because of ourselves and the mass of advertising that is sent into the eyes of these consumers every day. Behavior changes to better elevate yourself, to feel different and to extricate yourself from this advertising world to once again become a full human being to whom the brand speaks individually.

[1] D.Kahneman, Système 1, système 2 : Les deux vitesses de la pensée, Flammarion, 2012

[2] Les neurones miroirs - Giacomo Rizzolatti, Corrado Sinigaglia – Odile Jacob - 2011