Leigh caldwell main stage - 2011

Main Stage, November 3, 2011

Behavioural economics: New new or new old? Leigh Caldwell, Inon Pricing Research

A Presenta*on from the Fes*val of NewMR Main Stage – November 3, 2011

Leigh Caldwell, Inon Pricing Research, UK Festival of NewMR 2011 - Session 7 Schedule: 9:00pm-11:00pm (GMT)

Behavioural economics: New new or new old?

Leigh Caldwell Inon Pricing Research


What to take the following quotes with.


“We never do market research. It isn’t the consumer’s job to know what they want” -- Steve Jobs


“If I’d asked people what they wanted, they’d have said a faster horse”

-- Henry Ford


“The trouble with market research is that people don’t think how they feel, they don’t say what they think and they don’t do what they say.” -- David Ogilvy



Behavioural economics is… how people behave… when they buy stuff… and why


The tricky thing is… they behave a bit weird.


An example


£5 £9

An example


0

50

100 £5 £9

Total revenue: £620

An example


£5 £9 £15

An example

0

50

100


0

50

100 £5 £9

Total revenue: £810 31% up! £15

An example


Consumers put a higher value on something they have invested in… …even if the investment is an illusion

Another example

X XX

X


The same sofa that I’d pay £1599 for I’ll pay £84.99 a month for 36 months A total of £3059.64

One more example



We are constantly on the lookout for wants.




We are constantly on the lookout for wants.


We are constantly on the lookout for wants. Then we identify solutions.




We are constantly on the lookout for wants. Then we identify solutions.


We are constantly on the lookout for wants. Then we identify solutions. And only then do we pick products.


£0.60


£0.60 £0.75


£0.60 £0.75

£0.55


We are constantly on the lookout for wants. Then we identify solutions. And only then do we pick products.

£0.75


Want: I’m cold


Want: I’m cold Solution: I’ll go to Florida


Want: I’m cold Solution: I’ll go to Florida Product: I’ll fly with Delta for $209


Back to our research problem...


We can’t get people to tell us what they want


...but we can find out how to change what they want.



Behavioural experiments can tell us •  how to influence their wants •  how to get them to pick a solution •  how to make them choose our product.


Combinatorics: From 10 billion options


Combinatorics: From 10 billion options ...down to 10


Behavioural economics is:


Behavioural economics is: •  accurate


Behavioural economics is: •  accurate •  actually implementable in practice


Behavioural economics is: •  accurate •  actually implementable in practice •  and tells you how to communicate as well as generating consumer insight


Used in: •  professional services •  household services •  consumer products •  digital media •  government




Q & A


Lenny Murphy Greenbook Blog


Leigh Caldwell

Read Leigh’s blogs hLp://www.knowingandmaking.com/ hLp://www.pricingrevoluPon.com/

Follow Leigh’s tweets at hLp://twiLer.com/leighblue Connect on LinkedIn hLp://uk.linkedin.com/in/leighcaldwell Find out about Leigh’s book hLp://amzn.to/leighbook

Main Stage, November 3, 2011

Behavioural economics: New new or new old? Leigh Caldwell, Inon Pricing Research

A Presenta*on from the Fes*val of NewMR Main Stage – November 3, 2011

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Leigh caldwell main stage - 2011

Marketing