Dr Gerrard Gibbons once shared this wonderful insight: “Every day, brands make bets on human behaviour”. He’s absolutely right – but it’s a confronting thought because, at first airing, it puts so much of what marketers do at risk and beyond our control.
On reflection, the bets themselves vary.
Let’s start with the most obvious one. Every day marketers responsible for growing market share and demand are hoping that what they have to offer can be delivered and sold in sufficient volumes and with the requisite margin to hit CAGR (compound annual growth rate). Standing in their way are not just the obvious tangibles (competitors, logistics, distribution agreements, pricing, timing) but also the many intangibles that govern human behaviour (awareness, perception, distraction, personal priorities, expectations, inclination, loyalty).
Balancing influence and response
Gerrard’s observation explains so much about the speculative nature of what we do. Marketers are continually working to align the tangibles in their favour through a variety of channel mechanisms and, at the same time, looking to counter the intangible initiatives of other brands. These are the competitive bets. They’re based around choice and priority.
That brings us to the second stake. As marketers we look to influence how consumers behave. That, we’ve told ourselves is something we can do effectively through persuasion and engagement. But the inverse is also true: in a connected world, how consumers choose to behave (amongst and between themselves) affects us. These are the consensus bets. They’re based on prediction and reinforcement.
“Every day, brands make bets on human behaviour”.
And it’s here of course that big data is creating such a stir. Increasingly, the behaviours that consumers are prompted to make are nowhere near as random as they first appear. As John Naughton points out here, algorithms now drive, or at least, influence many behaviours that consumers probably don’t think twice about. He cites Amazon and Google as examples of how data-focused brands are projecting what they know already into how they believe consumers will behave.
Elsewhere, Professor Viktor Mayer-Schönberger points out how Target can now calculate not just whether a woman is pregnant but also when she is most likely to give birth, again based on behaviours. Mums-to-be buy lots of unscented lotion at around the third month of pregnancy, and then, a few weeks later they purchase supplements such as magnesium, calcium and zinc. Based on behavioural analysis, Target has been able to identify a range of products that acted as proxies for pregnancy prediction for every customer who paid with a credit card or used a loyalty card or mailed coupons. That level of consumer understanding is both scary and insightful.
Predictive tools, not predictable brands
To me though we need to treat big data with some caution in terms of its ability to deliver long-term competitive advantage. Predictive tools enable brands to cater specifically and powerfully to consumer habits. They deliver on demand generation through what I call “exciting functionalism” – ideas and technologies that build on what people already do in order to provide them with more of what they know they want. That makes them essentially safe, or at the very least quantified, bets. But in the “upgrade economy” where everyone expects everything to get better, faster and easier, such behaviours have a relatively short half-life in terms of excitement. They can quickly commoditise into expected deliverables and/or they are easily and quickly copied by other competitors using similar technologies – meaning they soon become part of the ‘new normal’.
Our behaviours also change quickly. Think about how we consume information. Once we turned. Then we pointed. Now we swipe. We all swipe.
The third behavioural bet is sectorial. Brands like Uber and airbnb are disrupting staid parts of the travel industry by inviting people to plan and take journeys in different ways. Like the budget airlines, online dating services and bargain sites before them, their quid pro quo is to offer incentives for people to behave in different ways. Xero is asking small business owners to think about their book-keeping in new ways and offering them smart, beautiful accounting in return. Nespresso’s looking to do the same for coffee lovers, enabling them to buy pods where once they would have had to fiddle around with beans. Ultimately these brands will live or die on two things: their ability to shift enough people to these new behaviours; and their ability to introduce extensions or additions to these behaviours that keep them ahead of the copycats, capitalise on brand trust and provide more rewards or new rewards in different areas. Their bet is cumulative. It’s built around mass migrations to new ways of doing things.
The fourth behavioural bet is aspirational. People get to do what they most like doing or what they haven’t been able to do, or felt inclined to do, before. Ultimately these are wagers not on products but on ideas. Red Bull associates itself with exciting behaviours, both as a participant and as a spectator. They’ve aligned their brand with the rush that comes with those behaviours.
Building stories on behaviours
That raises another point. Twitter is not the only way to message people. But it’s the one that more people have bonded with. Ultimately, it’s not the best idea that necessarily wins or the one that has the greatest promotion or the one that is most easily available or the best social media support that encourages the greatest behavioural change. In a world where so many are networked together and channels are increasingly fragmented, the brands that will win are the ones that best align with how people want to behave or that best influence how they and others behave together. This explains why ideas that don’t seem earth-shattering on paper can transfix a nation and yet products and ideas that have been worked on by a cast of hundreds and researched to death in focus groups can stall once they are released.
The question that drives out of that is not “what is our brand going to do for our customers?” but rather “what are our customers going to be able to do with our brand?” In other words, “How does our brand help people behave, or enable people to behave together, that is exciting and inspiring and different from the behaviours that other brands inspire?”
That’s the product story more brands need to be telling. And that’s the real bet for brands such as social media mainstays Facebook – how to balance their need for revenue and growth with their customers’ desire for rewarding and tribal association that exceeds the many other networking options they are being presented with.
Ultimately, Gerrard’s “bets on human behaviours” live or die on two questions. First – “What’s the reward for starting?” And then – “What’s the reward for continuing to behave this way?”