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The Brainy Business | Understanding the Psychology of Why People Buy | Behavioral Economics

Feb 21, 2020

Companies are getting more savvy about using behavioral economics not only to sell products, but to help consumers make better choices. Will Leach has taken the concepts of behavioral economics and social sciences to the next level with his book Marketing to Mindstates: The Practical Guide to Applying Behavior Design to Research and Marketing. I am very excited to talk with him today. He is the founder of the behavioral consultancy TriggerPoint. Previous to starting his business, Will led behavioral science methods at PepsiCo, and he has won numerous awards for his innovative work in behavioral economics.

When reading Will’s book, I knew within the first few pages that he needed to come on the podcast. This is even before I realized that he got his master’s from Texas A&M University (I talked about the Texas A&M Human Behavior Lab in episode 33 where I interviewed Dr. Marco Palma.) Will and I had a lot of fun talking about the lab and team down there before we jumped into the interview. Will was at A&M before the lab was built, but we have both seen it in person thanks to Dr. Palma. 

Will does such a great job of breaking down a really complex area of marketing into a formula that any business can follow – from global corporations like PepsiCo to small businesses. One area I know non-marketers (and even many marketing teams to be honest) struggle with is determining their target market and really narrowing it down and then knowing how to properly communicate with them. Will and I talk about his and the concept of the 18 different mindstates and nine motivations. He also shares his step by step process to help you determine which is the best for your company. This is an innovative and mind opening interview.

Show Notes:

  • [03:46] For Will, behavioral economics was the classic “I didn't know it existed until I stumbled upon it.”
  • [03:56] Will joined the military right out of high school. He then studied classical economics.
  • [04:16] He discovered marketing research through a graduate program and fell in love with it. It wasn't just looking at economics, it was looking at why people do what they do.
  • [04:39] While working at PepsiCo, he discovered behavioral economics and behavioral science. In 2009, PepsiCo invested $20 million in a laboratory to study the neurological impacts of messaging.
  • [05:08] Will was lucky enough to get to run behavioral science experiments, and he loved it so much he started his own business and wrote a book about it.
  • [05:55] His favorite project was working on a brand new snack. It was a healthy baked hummus chip. The brand called Wicked Crisps was designed using purely behavioral sciences. The target market was the owner's daughter (or millennial moms). Will helped design the name, logo, tagline, bag, and website. Behavioral science was behind everything that they designed from fonts to benefits.
  • [11:58] Will studied economics. He didn't want to just talk about theory. He wanted a practical book. 
  • [13:02] He conveys specific models through story. 
  • [14:01] He also dug into motivational psychology and goal theory. He looked at all six social sciences and found patterns.
  • [16:25] Will thinks of mindstates as moments in time when we are being influenced. We aren't always consistent with our beliefs and attitudes. Our environment changes us.
  • [18:20] His book is about moments in time and why a certain archetype may behave outside of the norm for them. Applying mindstates can help understand beliefs and values and impacts of the environment on these moments. 
  • [20:57] Companies now look at how to help customers make better choices. Making their whole life better gives the company permission to sell them more. Brands are getting smarting and taking a holistic approach.
  • [24:46] Will is the most excited about the idea of getting the mindstates out for everyone to use. They want to get more and more people to understand that there is science behind our decisions. There are also emotions around our decisions and just understanding a few small rules is a huge benefit.
  • [25:57] We can sell more with behavioral economics. We can also reduce anxiety levels and create a better society. 
  • [26:30] Will is getting more excited about the education side and using these concepts to help understand and overcome biases.
  • [27:02] He uses goal theory to help understand what people are trying to accomplish. Helping people reach their goals can create a better society.
  • [29:39] The nine motivations are achievement, autonomy, belonging, competence, empowerment, engagement, esteem, nurturance, and security. Then find optimistic and cautious examples.
  • [30:28]  When guys are asked why they want to lose weight and get healthy the answer is usually so they can walk their daughter down the wedding aisle.
  • [31:20] One reason why a dad would want to do this is nurturance. So a goal is “walk my daughter down the aisle” and the motivation is “nurturance.”
  • [32:09] Promotion (or using an optimistic lens) is seeking to maximize losing weight. It's about maximizing gains.
  • [32:45] A prevention lens focuses on eliminating doing bad things.
  • [33:10] These details matter when you frame your benefits. They are either using cautious nurturance or maximizing nurturance. 
  • [36:36] Be clear and stand for one thing. Take a stand and own it, and you will benefit tremendously.
  • [38:33] The Hero and the Outlaw does a good law job of outlining archetypes.

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