Consumer insights via behavioral marketing

reduce costs for launching complex projects with behavioral economics
Arsen Dallan
Arsen Dallakyan, the first (#1) Russian author, whose book on behavioral marketing published in Europe in English for the global market.
#1 on the count of references in the media specialist with the caption "behavioral marketing"
#1 results in Google and Yandex on request "behavioral marketing" on the territory of the Russian Federation
Баннерная слепота — психологическая оптическая иллюзия, благодаря которой пользователь сайта не замечает рекламные блоки (баннеры) или объекты, похожие на них. Ист. Википедия
По результатам анализа, Marilyn выявила, что среднестатистический россиянин видит в день в среднем 430 рекламных объявлений, из них — 245 баннеров, 133 контекстных объявления и 51 видеоролик.
Бренд- контакт - это контакт, не связанный с прямой рекламой - упаковки, логотипы, упоминания друзей и многое другое.
От 3000 до 20000 бренд-контактов в день по данным Media Dynamics, Inc за 2014 г.
1. Consumers see more brand messages than their brains can handle.
2. Consumers are constantly multi-tasking—driving, walking, talking.
3. Consumers are tired of being burned by faulty brand promises.
....
by Graham Robertson
Инициативный всероссийский опрос НАФИ проведен в ноябре 2015 г. Опрошено 1600 человек в 132 населенных пунктах в 46 регионах России. Статистическая погрешность не превышает 3,4%.

При этом средний CTR рекламы, размещаемой на Facebook, составляет всего 1.29%. Среди интернет-магазинов наибольший CTR увидели в Германии - 1.63%, а США оказались на втором месте - там на рекламу товаров кликали в 1.54% случаев.
Источник: отчет Advertising Index от Salesforce

The Fogg Behavior Model shows that three elements must converge at the same moment for a behavior to occur: Motivation, Ability, and Trigger. When a behavior does not occur, at least one of those three elements is missing.



The Hook model by Nir Eyal
1.Triggers
- Internal Triggers
- External triggers
2.The Action
3.The Variable Reward
4.The Investment
Согласно собственной экспертной оценки.
Из расчета, что в среднем в неделю проходила 1 встреча с участием 5 человек и продолжительностью 1,5 часа. из которых из которых,примерно, 40% времени уходило на защиту функциональных KPI каждого подразделения.
British goverment orfanization The behavioural insight team (BIT) decides social problems via behavioar economics approach.
The first (#1) Russian author whose book on behavioral marketing was published in Еurope in inglish for worldwide.
#1 по кол-ву упоминаний в СМИ специалист с титром "поведенческий маркетолог"
#1 в выдаче Google и Yandex по запросу "поведенческий маркетолог" на территории РФ
customer experience, decision making, behavioral economics, behavioural economics,
When in 1998 Procter & Gamble failed new project on launching "the destroyer of odors", while spending $21 000 000 on marketing and advertising, nobody could imagine thatthe problem was not in local mistake, but in particular aspect of consumer behavior that ruined thousands of companies and became threaten #1 for new projects in Russia
Threaten #3. Ad. ROI is falling, and digital too
Consumers got used to ad and became "blind"
Runet users see about 430 ad messengers per day, but this figure is nothing compare to quantity of brand-contacts - 20 000 per day!

Distrust to business is growing
In case of seven most impotant changes in customer behavior third place is occupied by customers dissapointment in brand promises of the companies. For instance, according to NAFI pole by 2015: only 34% russians trust insurance companies, 38% in 2014 and и 41% – 2013

Ad became more expensive
In 2016 Facebook and Instagram increased cost of 1000 shows (CPM- model) on +65% and + 42%
Threaten #2. Loyalty is nothing
Does loyal programms help to retain the customer? No. In 2010 leading brand visioner М. Lindstrom proved: the consumers don't treat brands like people: they feel neither gratefulness, nor love, nor obligations to brands. In consumer mind trade marks are seen more likely as way to reach personal goals. Moreover, motivation is not the only thing that determinantes consumer behavior. Also simplicity and its triggers are very important. That why in order to maintain clients it's crutial to work on transforming customers experience in to a habit but not on loyalty. And do you ever think why Facebook account can be customized in such details?
Threaten #1. Irrational customer behavior
What has happened with P&G?
With help of expensive focus-group and polls marketers get convinced that people want to buy product that eliminates odors. They spent millions on product development and soon a new Febreze was launched on the market. The sales took off during the first week, but than stopped. Mamagers didn't undestand why people didint buy it again. Researchers held omnichannel mass ads campaing. according to surveys clients were 100% satisfied and Febreze really eliminate odors. But when managers visit customers houses it appeared that spray was left in the distant corner. Owners didn't use it.
The project was deemed as a failure. But his leader D. Stimson didn't gave up and appealed to psychologist. He found out that consumers don't really need "odors killer", but they need "creator of smel of cleanliness"
When consumers used Febreze they didin't receive sensory reinforcement of theirs activities, so their brain didn't produce dopamine and they didn't want to use spray again.
Behavioral model didn't transform into habit.
Than D. Stimson decided to add to Febreze the "smell of ocean air", and showed in the ad that you need to use the spray in the and of your cleaning. Since that zilch of Febreze became "signature" of caring housewife and its market size reached $ 1 bln. ( case is described by Ch. Dahhig, Power of habit

Polls and surveys can't predict customer behavior. Consumers don't know how they will react in reality. A lot of different factors influence on their behavior.
If you fight with these threatens by persuading customers in advantages of your service, like a majority of other companies do, you are making a mistake.
With further consequences:

- 17%
Labour capacity decreases due to crossfunctional competition

Different goals of different department cause the competition. If marketing department is responsible for "persuading clients" than no wonder that in 2014 in M*K insurance company marketing dep spent 176 man-hours on arguing with administration dep
310 m/h - in * Europe Bank in 2010


+ 25%
Wages fund grows due to excess employees


Basing on my own expert assessment about 25% of employees work on ineffective projects in companies with more than 3000 workers
- 79%
Marketing ROI is falling


In 2010 * Europe Bank spent $500 000 on merchandising, revenue inscreased in $200 000. In 2013 M*K spent $400000 on TV ads on NY holidays without any revenue growth. And I can mention dozens similar examples revenue from own background




Familiar case?
Where is the mistake?
Уou don't need to persuade your customers in advantages of your product. You'd better nudge them to the first customers experience анализ!

I don't understand what's the difference?
For instance:
In London withing the programm " Healthy food" (ВIT ) had the task to increase consuption for vegetables. There were two aprroaches.

1. Standart one. Persuation of customers.
Coloful posters, encouraging visitors buy more vegetables and promoting healthy food, were put in stores in prominent places.

2. Behavioral economics one. Nudging to customer experience анализ.

Special sections for vegetables were added in shopping cart.

In the result of the first campaign vegetables consuption increased by 3%.
Due to second campaign - by 108%.

Why did it happen?
In most cases it's much easier to change behavior than beliefs because beliefs are "protected" by conscience, but behavior is influence by a lots of subconscience factors that person doesn't notice.
For insrance, drivers that briefly saw sign "Danger", but didn't manage to recognize it, slowed down more often than those whos saw the sign clearly.

Behavioral psycologist R. Chaldini in 1995 proved that changing behavior leads to changing the attitude - people strive to avoid cognitive dissonance and corect thoughts and feelings according to the behavior.

The right way:
behavioral economics model

If you want to decrease costs on projects, you should influence on customer decision making
customer experience, decision making, behavioral economics, behavioural economics,
How?
Creating customer environment
Much more German wine was sold in store when German music was playing in section ( D. Ariely, behavioral economics expert)
Coding consumer emotions
Our brain evaluates our senses, but not facts.
Value is calculated according emotions, but not thinking and logic. Sensory perception forms the first feelings, then the person is realize of them, analyzes them and decides to take any action. (Neurobyology, Behavioral economics )
Exploring behavioral patterns
In fastfood chain clients bought twice more ingredients when they were asked to remove them than when were asked to add them. It's much more effective to offer from largest to smallest proposal. And what about your website catalog?
Using rules of perception
in 2014 in London was decreased quantity of speed limits violations on city roads due to new speed control screens. What is В чем их особенность? На экране высвечивался смайлик, если ты ехал нормально и "грустный" смайлик, если ты превысил скорость. (P. Barden. behavioral marketing expert)
Catching on biases
In the USA in 2010 in grocery stores a special campaign "three bars for the price of two" was held. People bought two bars on average. Than marketers put new poster " buy eighteen bars and put it in your fridge", and customers start to buy three and more bars at a time. This is bias "anchoreffect". There are more than 70 such biases.
Exploiting the mechanics of attention
Why does a hungry man see more signs of food? Because firstly all information goes to limbic system - 11 mln bit per sec., and after this it goes to neocortex - only 40 bit per sec. Emotionally marked information is prioritized. At the moment when you are hungry food causes the most powerful and if your leg hurts, what will you see firstly in this case?
Behavioral economics in project management consists of using these and many others instruments for insreasing ROI
Watch how behavioral economics helps in company positioning

Classical segmentation means shaping groups of clients according to their age, income and lifestyle.
But in insurance it's not enough, because such clients generate loss. So we decided to find where are the roots of losses. And we found out - in motive of the buying insurance. We conduct a survey and identified two main groups.
1. I buy insurance in order not to lose money that I invested in a car in unpredictable situation
2. I buy insurance in order to economy. I know how often I can get in to car accident and can calculate difference between cost of repair and insurance.
Also there are some additional groups:
- those who were forced to buy insurance by bank
- those who follows the principal " I'm ready to pay for insurance only if it's cost aren't sufficient for me"

Insurance companies work with all types of clients which means that they often sell insurance to people who don't really need it.

As the result the attract not target segment by marketing campaigns, cashbacks, negative options, and boxes the costs only $10
It leads to low loyalty, clients turnover.

Client turnover, lack " the elasticity of demand to price " (In 2014 40% of clients from top 10 insurance company sad that they want to move to another company in case of increasingly price by 5 % without changing conditions)

In same time according to survey segment #1 is ready to pay 30% more for higher service. Due to it we changed our marketing campaign for this segment. Detailed description of the most important transformations you can read here.

As the result:
Target profitable segment grew from 10% to 48% in the company's portfolio.
Negative financial result declined from - $100 mln to - $45mln.
Profitability of car insurance grew from -13% to +5% ( the average figure for marker -4-6%)

2014, case of behavioral economics in re-positioning company, 3.41 min

What changes with behavioral economics model:

Costs on project will decrease due to matching you service/product customer requests in every point of communication.
Например, узнав, что для клиента страховой компании главный критерий выбора - это удобство получения выплаты, мы изменили 22 процесса в урегулировании убытка и тем самым повысили удовлетворенность с 76 баллов до 98, что в свою очередь породило множество положительных отзывов в сети и рост рейтинга компании с 29 места до 3-го. Все это привело к росту продаж и сокращения издержек на рекламу, потому что 95% из 100% потенциальных клиентов доверяет не рекламе, а отзывам реальных людей.
What else?
Processes

Processes that don't add value for clients are optimizing.

For instance, clients of insurance companies often can wait car assistant up to 1.5 hours in his damaged car which causes lots of complaints. We suggested car assistants to bring hot coffee or lemonade with them. It decreased amount of complaints and increased number of second purchases even for higher tariff +3%

Services

You can launch services for clients and save money on it

For instance, 87% of clients compare prices and read reviews before buying care insurance. When insurance company placed on its main web pages other people reviews and gave opportunity to compare prices, traffic grew and budget on Internet promotion was cut by $400 000
People

The cost of personnel will be decreased

In insurance company 24 marketing managers were reduced and their functions were outsoursed. It allowed to safe $ 1.3 mln per year

Advertising

Stop wasting money on ineffective advertising

Insurance company from Top-10 spends on average about $3 mln. on media advertising.
When we launched a project aimed to motivate clients to leave reviews in the Internet, insurance company coverage nearly all potential clients (87% of clients read reviews in the Internet, 91% of them use such info in decision making ) and saved 76% ad budget.

Our behavioral marketing services for you:
Project management based on desicion making approach and Scrum methodology
How we decreased ad budget by 34% in MSK, case
In 2014 MSK insurance company conducted costumer journey. One of the result was mapping 22 points of communications « client – company». Before CJ we thought that there were only 5 points.
Further development of processes and interaction with clients led to growths of positive reviews in the Internet ( the first place in 2015) and possibility to cut ad budget by 30% . For more details about the projects - watch the video.

Watch video with the projects wich changing company and cut ad spends, 2.28 min
Choose your package:
Want to minimize risks and costs on launching project
Planning


from $3000
Looking for an inspiring project-manager for current project
Project management

from $5000 per month
Decreasing of sales, reduction of personnel. Need a tough lider
Crisis management

from $72000 per year
Or order separeted service,
we provide all of digital agency services
Look all of services
What you get in result of behavioral marketing approach:
Client-centered business processes
Persuasive ad campaings
A lot of useful customer insights for next growth
Arsen Dallan has a fascinating and thought provoking look at the concept of pleasure from both a human and business point of view.
Global marketing expert
author of bestseller Brainfluence,
behavioral economics consultant
Who it say?
Roger Dooley about Arsen Dallan
Roger Dooley
author of Brainfluence
One of the most famouse global marketing consultant, creator the main neuromarketing blog www.neuromarketing.com and column Brainy Marketing in Forbes.
What is my first step?
Do Customer Journey Mapping!
customer journey mapping

First of all you need be sure what watch, listen, feel, think and image about your service your real live client
Learn more about CJM
The logic of Customer Journey mapping
1. Clients audit
Aim: to gather and systemize clients information about points of communication
Result: presentation for all team members

2. Research
Aim: to identify real costumer journey. Result: key elements of customer journey: what clients do/think/ feel/see in each point of communications
3. Workshops
Aim: basing on gather information, create customer journey, identify problematic points suggest decisions and create plan of actions for every point of communication.
Result: approved customer journey and plan of actions fore every point of communications with KPI and responsible employees
4. The cooperative client and agency work
Aim: to improve customer interaction with the product and communication in problematic points.
Result: for client- to change processes/ technologies/product for improving problematic points, for agency - to change communication with customer
How to use Customer Journey Map
Example #1, classical one

Before 1968 in beauty industry quality of product was considered to be key point in commercial success. But with help of cjm L'oreal discovered that brand influence is stronger during in the first choice than during active evaluation.
That's why focus was transferred from rational qualities of product to emotional side. And was implemented through sensual advertising and package that proved brand promise.


Comprehensive Customer Journey presentation
I'd like to get the link
How to use Customer journey. Instance 2

Вместо интегрированной кампании, покрывающей все этапы, Hyundai создал компанию для самого слабого участка маршрута – финансовой защите потребителя.
Они разрешили возвращать обратно автомобили, если потребитель терял работу. Это сообщение стало основным фактором, помогшим Huyndai ворваться в первичный выбор многих новых потребителей и увеличить долю бренда.
Часто путают Сustomer journey mapping и «Тайного покупателя»

С тайным покупателем вы видите только малую часть того, что видит потребитель.
- Появилась потребность купить
- Вспомнил предыдущий опыт
- Спросил друзей и знакомых
- Посмотрел в интернете
- Понял, какие варианты существуют
- Отложил покупку,
- Позвонил и узнал по телефону
- Решил заехать как будет время
- По дороге с работы свернул в магазин

- Зашел в магазин
- Сказал, что ему надо
- Выбрал и заплатил
- Уехал

- Распаковал
- Начал пользоваться
- Сформировал мнение об продукте
- Поделился мнением с друзьями
All marketers understand that you need to focus on the reward a product gives, rather than focus on the function of the product. But what they don't know is that it is the pleasure coming from an intrinsic reward that drives our behavior.
Arsen Dallan knows and uses it.
Global marketing expert
ex-СEO The Neuromarketing Science & Business Association
Who it say?
Martin de Munnik about Arsen Dallan
Martin de Munnik
Founder at Neurensics,
CEO The Neuromarketing Science & Business Association

If you strive to influence on decision making your customers

You should find marketers who know customer behavioral insights.
If you need the most recognized of them - contact Arsen Dallan
Why Arsen Dallan?
The largest relevant expirience
A lot of marketers work on branding, research ot trade-promo segment, but Arsen Dallan has 12 years of exact behavioral marketing background.
Как пример, одним из первых проектов в 2004 было создание итальянской среды на деревообрабатывающем заводе в Башкирии в поддержку новой продукции под итальянским брендом Enricco Piccoli: в столовой появилось итальянское меню, рабочим выдали халаты с их именами на итальянском языке, на завод приезжала "итальянская" комиссия и прочее.

High level rensposobility
Arsen Dallan held top position in corporations, such as the vice-president, head of marketing department of insurance company "MSK" (VTB group) income $700 mln, 5000 emploees, fegeral coverege.
Deep learning
Arsen Dallan is the only one marketer who professionally specializes in the main determinant of human behavior - The Pleasure Phenomenon. His book The Pursuit of Pleasure was published in Germany for wordwide and became first book on behavioral marketing by russian author
I know Arsen Dallan as very professional explorer an often ignored, yet exceedingly important, topic: the human drive to experience pleasure and the consequences of the resulting behaviour
Global marketing expert
Principal at Neurothinking, author of Neurobranding
Who it say?
Dr. Peter Steid about Arsen Dallan
Dr. Peter Steidl
Principal at Neurothinking, author of Neurobranding
He is marketing academic, a researcher, an educator, an author and a speaker. His clients are Coca-Cola, Citi group, Bmw and others
The brilliant public reputation is the best reference
Arsen Dallan is most famouse behavioral marketing expert on Russian National TV - 1-st chanell, Russia, NTV, Moscow 24 and and magasines such as Vedomosti, Kommersant and others
Wacth all video and articles>>>
Interview on Russian National TV, 20 min
More about Arsen Dallan
Background
Launching big projects:
income
$1 bln
people
50 00 participants
coverege
10 000 merchants
For more than 12 years Arsen Dallan keep rich experiences of launching the succesfull projects: new products, e-commerce, digital campains, neuromarketing and five-senses ads
Phd in The national Identity during the Globalization Era
Not ready for consulting right now?
Feel needs for learning more about behavioral marketing tools?
Sure, read the newest customer behavior book
Read the book of main behavioral determinant and learn worktools on real live business cases
Arsen Dallan has a deep understanding in restructuringmarketing in a company for creating client - centered business
Globak marketing expert
Зав. кафедрой поведенческой экономики ВШЭ
Who it say?
behavioral economics expert Arsen Dallan
Alexis belianin about Arsen Dallan
Laboratory Head: Laboratory for Experimental and Behavioural Economics
Assistant Professor: International College of Economics and Finance



Stop
convince consumers

No budget wasting anymore!





Be behavioral now
With
expert #1 in Russia

Arsen Dallan
behavioral marketer and behavioral economics expert

Moscow, Russia
+79853618531
arsdallan@arsdallan.ru
behavioral economics expert Arsen Dallan
Start small,
but right now!

You can ask me good reading about any behavioral marketing and behavioral economics podcast, workshops, educations. Also you can describe me your business case and ask advice.
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