We shouldn’t be surprised with the government intervention in the energy market, introducing an energy price cap for standard variable tariffs.
The root cause lies with customer inertia and wrong-headed assumptions about what impacts our decision-making.
Year in, year out, fewer than one in five people switch supplier. Yet they’ve been told relentlessly they’re being ripped-off for not moving.
Ofgem, the government, and the media cannot see that price messages do not drive switching; 80% of people are showing by their actions that price isn’t a motivating force.
Which brings us to Customer Mindset Mapping. It’s a new, planning-based approach predicated on building a better understanding of how people make decisions and then acting on this in our marketing communications.
It’s a process that starts with, and tracks, the “why” of what people do. If we can unmask the psychology we can better understand people and reflect this in our marketing.
It also helps explain some of the decision-making and misinformation surrounding the outcome of recent elections.
The conventional wisdom is that around one third of people don’t give truthful answers about which way they vote in the UK, explaining why pollsters, politicians, and pundits were so surprised with recent outcomes at the big ballots.
But look at it another way. People aren’t really lying. It’s all to do with the psychology of decision-making. Because what people say they’ll do, isn’t necessarily what they do at the critical moment.
Swathes of data point to the fact that we make decisions emotionally, and very quickly – in the spur of the moment. Google called this, in the context of online decision-making, the “zero moment of truth”. It talked about responses being spontaneous, researched, or habitual.
The psychology that impacts this process is analysed a great deal by the marketing industry but understanding it enough to apply it is the challenge. Just think about the brands in your inbox. How many of them really talk to you and seem to understand what you feel about what they’re offering?
Working with psychologists we ask questions designed to reach an understanding of how people feel about a company and its brand.
Typically it unearths four to six mindsets – including “Anxiety”, “Apathy”, “Confidence”, and “Distress”. Then we build a picture of how each customer makes decisions, what they lean on, and what makes them tick.
Once we understand the mindsets we can then extrapolate and go out across a brand’s customer base, understanding people’s value and making classic segmentation decisions, which lead to effective decisions about marketing spend.
The ultimate goal in this is to help brands steer clear of the discounting, swim-to-the-bottom, mentality.
By tracking people’s behaviour we place a real value on them and they reciprocate by placing real value on the brand. It takes brands away from an over-reliance on discounting.
Why sell your product cheaply when you can profitably engage with people based on their mindset and provide genuine customer value?
Programmatic advertising provided a way of seeing how a customer behaves towards a brand or a whole category. Ultimately it lacked the necessary sophistication and has become discredited.
Customer Mindset Mapping will go some way to addressing this issue by providing a clearer picture. It understands the space between what people say they will do, and then how they actually behave.
This is a leap forward in a marketing environment that involves a great deal of chat about data science but very little action.
When we get down to it, good practice is asking “why” the customer does something. It’s all too easy to observe people’s interesting behaviour but the real rigour comes in making causal links between their various mindsets and their decision-making.
Ben Rachel is planning director at Soul