Marketers have understood for a while that consumers often make decisions that may be seen as irrational. Behavioral economics provides a framework for understanding how consumers actually behave, not just how we think they behave, and is based on well-grounded science and research.
An in-depth knowledge and understanding of behavioral economics can help marketers and advertisers:
Identify cognitive biases and heuristics involved in the customer journey
Gain greater insight into consumer behavior, motivations, habits, and decision-making
Devise strategies to remove biases or re-bias in order to responsibly drive consumer behavior
Create campaigns based on one or more nudges, price framing, and/or positioning
Design human-centered products and services
Better time communication efforts
Create more accurate surveys and questionnaires
Design better customer experiences
Embrace a culture of experimentation and data iteration
Simplify the user experience
Devise more effective pricing and discount strategies
Below is a video featuring Rory Sutherland, Head of OgilvyChange and a expert in how behavioural economics and psychology influence decision making, perception, and actions.