How to plan for impulsive customers

How to plan for impulsive customers

I was lamenting to a colleague recently that hotel mini-bars don’t have any healthy food options. He laughed and scoffed at my suggestion. It just so happens that this colleague was Tom Potter who founded Eagle Boys Pizza in Australia and New Zealand and who knows his way around eating behaviours.

He shared the story of suggesting to a healthy popcorn franchise in the US with whom he was involved that they not only carry healthy popcorn, but also the caramel, sugar coated range for sweet-tooths. You see, through his observation and experience, Tom knew that healthy intentions can be derailed by impulsive, in-the-moment choices; it’s going to McDonald’s intending to have a salad but being lured by the smell of fries instead.It’s a kind of a “bait and switch” strategy where people are attracted by the promise of healthy food but then choose something else in the moment.

We are how we eat

Behavioural science has taken this a step further and proven that we are, in fact, poor decision-makers when it comes to our stomachs. We are how we eat.

For example, did you know that:

  • People dining in ‘healthy’ Subway restaurants underestimate the calories they consume.
  • Adding salad to a plate of less healthy food makes people think they are consuming fewer calories.
  • Vending machines that carry both healthy and non-healthy snacks will increase the likelihood of the less healthy options being chosen.
  • People eat more when a product is labelled as ‘healthy’.

System 1 and System 2

Known as the health halo effect, these examples illustrate how the context in which food is consumed can change our rational assessment. Broadly speaking, we use our System 1 auto-pilot, intuitive, fast thinking to characterise the situation as being healthy, which means we drop our guard and forget to do the System 2 slow, rational, calculating analysis. 

And it’s not just food. System 1 impulsivity can derail System 2 planning for any product or service. You might intend to save for a deposit but that goal gets eroded by smaller, impulsive spending on everyday items.

Where does this leave you as a business?

Impulsivity can be good or bad depending on your type of business, so it is up to you to design the context for your product/service. Think of yourself as the architect of choice.

You need to influence the associations your customers creating when they think of you, visit your website and/or office. How are you engaging their System 1 to motivate the behaviour you want to see?  

1. First, consider whether yours is an indulgent or healthy product. Can you make your customer feel better about an indulgence by using the halo effect to advantage? If you sell a product that is healthy (e.g. financial services), how can you get the people motivated to act in your favour rather than get distracted by a short-term sugar fix like new shoes?

2. And second, how have you shaped the decision-making environment to support your offer? For example, if you are in a professional services role you can mitigate the risk of negative System 1 snap-judgments about your credibility by hanging your qualifications on the wall and carrying them on your website, and you can increase positive snap-judgments by including testimonials and awards.

And for hotel mini-bars? Well, I reckon smart hotels could gain a marketing edge by promoting healthy food options because it appeals to the System 2, forward thinking part of us. However, I also think they would end up discarding a lot of fruit and veg because it’s also more likely that once standing at the mini-bar, assessing their options suddenly the overpriced chocolate bar looks much more attractive than the stick of celery. System 1 strikes again.

Bri Williams runs People Patterns Pty Ltd, a consultancy specialising in the application of behavioural economics to everyday business issues such as financial decision-making, website conversions, marketing effectiveness and change management.

 

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