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Perspectives

Behavioral Economics: Understanding Consumer Perceptions and Control

By Alex Ain
Abstract image with three heads filled with different images to describe the thinking process of different consumers through the lenses of behavioral economics

To enjoy good health, to bring true happiness to one’s family, to bring peace to all, one must first discipline and control one’s own mind. If a man can control his mind he can find the way to Enlightenment, and all wisdom and virtue will naturally come to him.

Buddah

For much of 2020 and 2021, our health, happiness and peace have been controlled by factors outside of our control, including nature, public policy, and global economic trends. It is in our nature, as humans and consumers, to want to regain that control.

As we have yet to fully emerge from the pandemic, global supply chain issues continue to cause price increases, and obtaining goods and services remains relatively difficult. As such, a common and important theme in contemporary marketing strategy is the identification of how and why consumers seek to regain control through their behaviors and purchases.

As strategists, identifying and exploring this theme is key to forming distinct and valuable insights. In this two-part HawkPartners series, we first examine at how control is key for consumers – especially under current market conditions. Next, in the second part of the series, we will focus on strategies and tactics necessary to unpack the complexities associated with a loss of control and the search for regained control.

Regaining control is challenging, yet critical, to understand

The salience of gaining control in the current environment notwithstanding, appealing to consumers’ sense of control is not entirely unique to the challenges brought on by the pandemic:

  • Psychologically, the “meme stock”/GameStop adventure was as much about regular investors taking back control of the stock market from hedge funds as it was about making money.
  • Pharma advertising for chronic conditions has always been built on regaining control. We are all familiar with commercials depicting a parent who misses their kid’s event because they had to resolve their chronic medical issue, only to regain control of their life by taking a particular medication.

While these examples represent clear, well-defined examples of consumers wanting to regain control of their lives, strategists and brands cannot rely entirely on subjects to understand or articulate why they do what they do. Indeed, many automatic and irrational biases influence behavior.

Image to represent how consumers use control in Behavioral Economics to regain certainty

Are these issues – tied to a desire for control – having a greater impact than consumers realize? Dr. Dana Rose Garfin, assistant adjunct professor at the University of California, Irvine, believes they are. “Consumers aren’t going to be very aware what they are doing or why they are doing it” when it comes to their attempts to reestablish control during and after the pandemic. “That will occur with reflection.”

Emotionally, consumers will be looking to reconcile “the fear, anxiety and anger they experienced due to feeling a lack of control. Consumer behavior will likely center around feeling better about life,” according to Dr. Garfin.

While challenging to understand, consumer attempts to regain a sense of emotional control could include behaviors and/or purchases associated with:

  • Gifts
  • Family Time
  • Charity/Volunteering
  • Collections/Hobbies

Simultaneously, regaining rational control during challenging times is not as easy to unpack. Dr. Garfin says consumers will be looking to “keep what works for them from the pandemic, and what does not work for them they will be looking to make it better.”

Consumer attempts to regain a sense of rational control could include behaviors and/or purchases associated with:

Saving Time

 

Financial Gain/Savings

 

Work/Job Changes

 

Health & Exercise Purchases

The challenge lies in unlocking the critical insights that either led or will lead to a desired consumer behavior. As such, marketers and brands who strategically examine these behaviors relative to a regained sense of control are more likely to gain a competitive advantage in the marketplace.


Join us again for a follow-up article where we explore strategies and tactics to unlock consumer behavior relative to regaining control.

Connect with Alex Ain to learn more about behavioral economics for your brand.