Understanding that people behave in predictably irrational ways is one of digital response marketing’s most effective tools. To someone whose only tool is a hammer, every problem looks a bit like a nail. And in twenty first century marketing, there’s a tendency to see digital innovation in much the same way, as the answer to every challenge.
This is particularly true in the hothouse world of tech startup customer acquisition, where explosive growth followed by IPO is the standard operating model.
This has led to the rise of the growth hacker – buccaneering marketing alchemists with the power to turn lead into sales gold with exploits that brilliantly harness flaws in ‘the system’.
That, at least, is the hype. But, sadly, real life doesn’t come with cheat codes.
Many growth hacks are short term tactics that do little build real value. What’s more, their focus on gaining tactical advantage – on gaming the system – is a distraction from the task of building lasting customer relationships.
In my last post, I looked at how the best growth hacking has a lot in common with classic direct response advertising. This time, I’ll dive into the fundamental principles of response and why they matter to today’s digital marketers.
If you want to grow, get to know your audience
However good your marketing, some people will never respond, whatever you say. That’s both normal and immensely liberating. It means there’s absolutely no point in trying to appeal to everyone. Instead, focus on the people who are most likely to do business with you. And, guess what, they’re likely to be a lot like the customers you have already.
This means that the single most important thing you can do is to really get under existing customers’ skin. Talk to them, survey them, track their behaviour on your sites and apps. The things you’re looking for are:
- The reasons they chose your business. Is it your service, your product range, your convenience, your prices, your expertise, your offers or something else that makes you stand out?
- The good and bad things about dealing with you.
- The things that would make their experience even better.
- You can even ask if they’re likely to recommend you – though I’d argue NPS isn’t a universal panacea, doesn’t show how to improve engagement, promotes corporate complacency and bores customers to tears.
Anyway, the essential point is that the more customer insight you get your hands on, the more ammunition you’ll have for marketing campaigns – and corporate behaviours – that build sustainable long term success.
Simple stories, complex tests
People have short attention spans and even shorter memories, so marketing messages work best when they’re clear and immediately understandable. That’s as true for complex B2B propositions as it is for FMCG promotions.
However tempting it is to include as much information as you can, in customer acquisition you’ll get better results by keeping things simple and single-minded. And, just as important, you need to attach a clear, compelling consumer benefit to every call to action.
The first step is to work out what’s the one thing you can say to a prospective customer that’ll make them choose you rather than a competitor. Sometimes, it seems immediately obvious. Sometimes there are a few candidate messages to choose from.
Either way, don’t take anything for granted. Classic direct marketers tested everything, from headlines and images to offers and audiences. Today, digital media give you unprecedented opportunities to test and refine your marketing performance.
The more you test, the more you’ll learn. And the more you learn, the smarter and more effective your marketing will be.
Hacking human behaviour
We like to think we’re rational beings, but our mental operating systems are riddled with bugs, biases, kinks and quirks. Understanding that people behave in predictably irrational ways is one of digital response marketing’s most effective tools.
Some of these tactics are so well-worn that we barely notice them. Take the supermarket three-for-two offer: it relies on the fact that we perceive ‘free’ incentives as more valuable than a discount of the same amount. And so we leave the shop with three bags of tangerines instead of the one bag we went in for.
But there are many more techniques that can achieve dramatic uplifts in marketing performance – often with nothing more than a few carefully chosen words.
For example, when you offer someone a choice, simply informing them how most people choose to respond can make them significantly more likely to respond in the same way. A famous example is Noah Goldstein and Robert Cialdini’s researchon hotel towel reuse.
Showing previous guests’ towel reuse decisions changes current guests’ choices.
Behavioural economics – the study of how our psychology distorts the logic of our decision-making – gives marketers almost infinite possibilities to accelerate growth through systematic testing. This is a massive (and massively documented) field. Here are a few fundamental principles which have yielded dramatic marketing results:
- Conformity: as the hotel towels study shows, people have an innate tendency to follow behavioural norms. Communicating those norms increases the likelihood that people will follow them.
- Loss aversion: ‘lossesloom larger than gains’ – psychological research suggests that the pain we feel at losing something is twice as powerful as the pleasure of gaining something. In digital response terms, an offer constructed so the prospect loses something if they don’t accept is likely to be more effective than an offer which gives them something if they do.
- Reciprocity: when someone does something for us, we’re more likely to do something for them. That sweet you get with the bill at the end of a restaurant meal? Studies show it’s likely to encourage you to leave a generous tip. In digital marketing terms, giving customers extra bandwidth, airtime or storage can be a powerful sales tool.
- Framing effects and choice architecture: would you buy a burger that’s 10% fat, or one that’s 90% lean? Presenting choices in a way that emphasises positive or negative attributes can have a significant impact on people’s decision making. You can see this manipulation of semantics practically everywhere – from wine lists to The Economist’s subscription offer.
This is just a tiny sample of the ways in which understanding the implications of cognitive biases can deliver marketing advantage. There are hundreds of behavioural buttons that we could push, and here we need to be guided by what’s right rather than what’s possible.
Clearly, there’s a difference between wording that makes people more likely to reuse hotel towels and social media ads that deploy misinformation and prejudice for political gain. Where you draw the line is a question our digitally transforming world will likely grapple with for decades to come.
Here at Luxus, we’d argue that, as with growth hacking, there’s a difference between honest, sustainable marketing growth and tactical exploits. Or to put it another way, you can’t build long term growth on short term hussles.
Want to bring more real growth to your digital marketing? We’d love to help. Contact us!