Behavioral economics for marketing: Turning data into persuasion

Shravya Kaparthi

Shravya Kaparthi

March 15, 2019 - Shravya Kaparthi [pictured], Director, Data Analytics & Decision Sciences at RAPP (A part of the Omnicom-DAS Group of companies), writes for ClickZ: One of the biggest mistakes companies make when trying to use data to influence customer behavior is assuming that people make rational choices.

Many businesses have begun using data to influence a customer’s buying decisions, but they’re leaving out the human element when trying to put that information to use.

As a result, businesses’ forays into the world of behavioral design often result in disappointment and the jump to a conclusion that the data itself is bad.

In reality, however, it’s not the data that’s to blame. It’s the fact that most companies don’t know how to package it properly. It’s failing to consider that when a person decides to buy something, it’s usually out of a combination of rational and irrational factors.

But just because people aren’t always rational doesn’t mean they’re unpredictable. To paraphrase words of wisdom from “Predictably Irrational” by Dan Ariely, people may not act rationally, but they can be relied upon to react irrationally.

And marketing is all about behavioral changes, after all. Data can be extremely effective in persuasion, but only if it’s deployed in the right areas. The challenge is figuring out what those areas are. More...