Why does Most Marketing Fail?
Ever since the 19th century retailer John Wanamaker said “Half the money I spend on advertising is wasted; the trouble is I don’t know which half” marketers have wondered how to identify where money is being wasted and where it creates value. This has tended to focus on better targeting and getting consumer’s attention.
However, advances in neuroscience and the behavioural sciences now tell us that most behaviour is automatic and that around 40% of our daily behaviour is driven by habits. Unless marketing results in behavioural change and creates a habit or a new behaviour it is likely to fail because what’s the purpose of marketing if it’s not to change behaviour?
As habit formation is more effective after a habit has been disrupted (e.g. due to a lack of availability or a problem with how it operates) marketing needs to focus on disrupting habits or piggybacking onto existing habits if it wants to create value.
At this point many marketers like to think about using psychology and persuasive techniques to influence visitor behaviour. This is a mistake because to identify the most effective strategies for influencing user behaviour we must first understand the most common decision style in our market.
For example, the primary drivers of which games people play online are very different from those that determine what home insurance we purchase. With games social influence is crucial because we are drawn to what other people are doing. On the other hand home insurance is a choice we largely make independent of what other people are doing. Insurance policies appear so numerous and similar to each other that people seek ways to short-cut a considered choice, such as price or product ratings.
The decision style map below was first created in 2007 by Mark Earls and Alex Bentley from the extensive analysis they conducted on behalf of the UK Department of Health. This is based upon extensive research, much of which is outlined in I’ll Have What She’s Having by Mark Earls, Alex Bentley, and Michael J O’ Brien. The map distinguishes between four different styles of decision making that we observe and how they influence the choices we make on a daily basis.
Independent or Social? – West to East:
We can tell if a market is heavily driven by social influence by analysing if sales and rank form a long tail distribution (i.e. a few very large brands and many small brands). Social influence makes popular brands even more successful than if people made decisions independently.
When people evaluate brands independently we would expect to see more popular brands of a similar size (i.e. a short tail distribution). The fact that so many markets are dominated by a few large brands shows how social influence is much more important than rational, independent decision making.
Informed or Uninformed? – North to South:
The second dimension of your decision style is determined by either how many similar options people are faced with or the speed of turnover. In many markets, such as groceries, smart phones, package holidays, and popular music, people are faced with lots of choices or fast turnover of brands. In such circumstances it is impossible to make a considered choice and so people either guess or they follow the crowd.
On the other hand there are relatively few phone networks, games consoles, aviator watches and brands of cola. In these markets people either make a considered choice by evaluating important features and benefits or they may copy experts or authoritative individuals.
When we consider the most common decision making style we naturally begin to narrow the number of persuasive strategies that can apply to each sector. Indeed, in his book Copy, Copy, Copy, Mark Earls identifies just 52 marketing strategies across all four decision styles. Now although he admits the list may not be exhaustive, it makes sense that we the decision style will undermine or enhance the use of certain marketing strategies.
For example promoting the quality of the design of your dating app is likely to fall on deaf ears if most prospects are primarily influenced by how popular your service is with people they know and the kind of people they want to go on a date with. Let’s take one quadrant at a time to consider some of the marketing strategies that are appropriate given the decision making style.
Considered Choice – North West:
Until recently this was the default view of many marketers, particularly in manufacturing. This is the idea that people choose based on the product’s real or perceived superiority. The psychologist Daniel Kahneman and many other research studies have shown this decision style is relatively rare, especially as there has been an explosion of choice both online and offline.
However, Dyson for example, uses the strategy of we’ve built a better product.
You can see this with their vacuum cleaners where they promote their “Radial Cyclone technology” and they were the first company to sell a bagless machine. This is an expensive approach and may not always be successful because it’s only one aspect of choice.
Many people are probably more interested in testimonials and user ratings because these are a short-cut to evaluating a technical product.
Other strategies that can be effective in this quadrant include:
- Positioning as the original brand (e.g. Levi-Strauss),
- Offer free trials to get people to experience the superiority of the product,
- Demonstrating the quality of your product (e.g. Persil washes whiter),
- Scarcity can be used to communicate that supply is limited due to the quality of the product.
Guesswork – South West:
Here people are faced with a large number of indistinguishable options of an acceptable quality. Amazon for example had 398 million products in January 2017 and it is increasing almost every day. This may be an extreme, but many e-commerce sites have many thousands of product lines and will often have multiple screens of different options for a single product line.
Marketing strategies that are suited to this environment include using the fear of loss to encourage people to act without delay. Emphasising the cost of delay to trigger loss aversion through flash sales and other time limited promotions encourages customers to act now to avoid missing out on a promotion.
Similarly offering huge discounts can also be an effective strategy for e-commerce websites to attract visitors. The example below shows how Very.co.uk uses large discounts together with scarcity indicators to encourage users to buy from them rather than a competitor.
Advertising that is controversial or is pushing the boundaries gets attention. Ryanair have used controversial advertising and exploited instances of them being banned to get publicity. Below e-commerce plus size fashion retailer navabi.co.uk puts their own slant on a banned ad for diet supplements.
Other strategies that are conducive to this decision style include:
- Reward existing customers with benefits and loyalty schemes such as Tesco’s Clubcard.
- Make it difficult to leave – Auto-renewals are used by many insurance companies to improve customer retention and Amazon Prime also uses this approach to put the onus on the customer to cancel a subscription.
- Collaborate with non-competitive brands – Many airlines, car hire firms and hotel chains introduce each other’s customers to ‘preferred partners’. I recently suggested that a children’s education video app collaborated with support groups for educational special needs to produce content tailored for their needs.
With so much choice and often little to differentiate brands from each other cognitive biases and habit formation can play a crucial role in these kinds of decisions. For example people have a tendency to accept defaults and so Amazon uses this propensity to promote the use of next-day delivery. Once users get into the habit of accepting one-day delivery they can be targeted to sign up to Amazon Prime which has a much higher conversion rate.
Insurance companies exploit prospect theory by highlighting rare conditions or events (e.g. accidental death) to promote their policies. Prospect theory tells us that people overestimate the occurrence of low probability events. In the example below Gopetplan.com lists the high cost of treating cats for relatively rare conditions (e.g. kidney disorders) to exaggerate the potential risk of not taking out pet insurance.
Copying Experts – North East:
In this quadrant people are faced with a number of similar brands that rely on the endorsement, enthusiasm and choices of a small number of people who are acknowledged experts or an authority on the sector. This can also include brands that are selected based upon tradition or that are influenced by long established cultural practices.
Getting experts to endorse your brand is a powerful strategy used by many organisations. Better still if you can find expert makers, people who are known for their activities in your sector. Carol Vorderman is well known for being a mathematician from her time on the TV game show Countdown. For this reason her involvement with The Maths Factor children’s maths tutoring website gives it much more credibility than if it she just any other celebrity.
Getting recommendations from expert users has more authority than simple customer testimonials. Here Formisimo.com, the dedicated form analytics software, displays a testimonial from Peep Laja at ConversionXL.
Create a new or novel kind of expert. The Halifax Bank began the ‘staff as stars’ trend of the noughties by using employees in their adverts and promotions.
In 2017 Gap.com used print and video ads of real people, not models, to promote their summer range. Using images of real people can have more authenticity and be more engaging than using stock photos.
Focus on the next generation of professional users. Cannon.co.uk uses its Europe Ambassador Programme to show case both young budding professional users and established experts.
Give users something to believe in. IBM has repositioned itself with the Smarter Planet campaign to look to the future and has since launched IBM Watson as an AI platform for business. When Steve Jobs launched the original iPod in 2001 he didn’t say Apple are selling an MP3 player. Instead he said you will have “1,000 songs in your pocket.”
Other strategies for brands which rely on recommendations and the behaviour of influential users include:
- Make other choices a no-no. Apple used the “Hello, I’m a Mac and I’m a PC” campaign to clearly differentiate Apple Macs from Microsoft PCs.
- Create an activity that brings people together. This may be a game, an event or with Airbnb it’s creating new opportunities for people to travel and meet people from another town or country. Research by Airbnb found that a significant proportion of clients wouldn’t have gone on a trip if they hadn’t been able to use Airbnb.
Copying Peers – South East:
When people are faced with many similar options of an acceptable standard their choices are often driven by what other people are doing or are perceived to be doing. This is sometimes known as the bandwagon effect as people respond to the impression of what others are doing rather than following experts or people of authority. Influencer marketing is a waste of time here because people follow the crowd rather than any individual person.
This kind of environment can be very volatile as people are prone to following fads and short-term trends that can quickly pass. Computer games, apps, pop music, fashion, toys, gadgets and crypto currencies such as Bitcoin are just a few of the type of products and services that are often driven by copying of peers.
Being seen as the most popular choice is the most obvious strategy in this quadrant. This is great if your brand is the most popular, but otherwise you can display the number of ‘Likes’, shares or ratings on your website as indicator of your popularity. Just make sure the numbers are big as otherwise it could have the opposite effect. Tinder makes this point very clearly below as it states “With 20 billion matches to date, Tinder is the world’s most popular app for meeting people.”
Make other people’s choices visible. Apple did this with their white ear buds for the iPod as most other music players came with black or grey headphones. Spotify uses this strategy to increase engagement with users.
It displays the number of followers popular playlist have which encourages users to explore new artists or different genres by showing what other people are potentially listening to.
Let people see other’s enthusiasm. Use ratings and reviews to show how enthusiastic and engaged users are with your site or app.
This gives people confidence that your product or service is both popular and delivers what it promises. Zombies, Run! is a popular running app with a difference that makes each running session into an adventure.
You can tell from the reviews that many users love the experience.
Make other choices appear less popular. This uses reverse psychology to encourage people to go for the more popular option. This approach can be very effective in choice architecture to speed up decision making and improve conversions. For example, when offering different options, such as pricing plans, makes sure you clearly show which is your most popular plan.
Allow people to do activities they are already do together. Instant messaging apps such as Snapchat and WhatsApp have been able to attract many users who previously sent SMS text messages or used other social media platforms to communicate with their friends and family. These apps have benefited from tapping into an existing behaviour rather than creating a whole new habit. This is always going to be an easier approach than designing an app or website for a new behaviour.
Another strategy that many companies use to encourage copying from peers is a refer a friend programme. American Express built their business around this and more recently companies such as Hotjar have also effectively used this approach to accelerate their growth.
Now that we have identified the primary decision making style in our market we are in much better situation to consider how to persuade visitors to choose our brand rather than a competitors. All too often companies copy the strategy of their competitors rather than looking outside their sector for inspiration. Copying competitors can destroy value because it often leads to a lack of differentiation and websites and apps that look the same.
By considering the primary decision making style we can look to gather ideas and insights from other markets that have the same decision style. This is more likely to result in innovation and create differentiation than looking within our own sector. We can be confident if a strategy works in another market it has potential for being successful in our sector.
Don’t focus on a single strategy though, take three or four at least and consider how you could apply them to your brand. This gives you more scope for experimentation and allows you to learn what is best for your situation. If you have sufficient traffic you could use A/B testing to try out different strategies on your landing pages to see which are best at engaging with and converting visitors.
Thinking about how prospects make decisions in your market helps you learn from the success and failure of others as it encourages you to look outside your own sector. It also helps you to challenge existing pre-conceptions about what really drives behaviour and why certain strategies might be effective and others not so.
The conventional view that people make considered, rational choices happens a lot less than many people think. The explosion of choice facilitated by the internet has probably further reduced the sectors where this is plausible. Trying to build a better product is also expensive and there is no guarantee of success.
Where people are faced with so much choice and very similar options that they can’t distinguish between different brands it should not be surprising that people are forced to look for short-cuts to make their decision easier. People only have so much time and mental energy to give to a decision and so when this occurs we are forced to simplify the process. This is why cognitive biases and habits can be powerful drivers of behaviour in e-commerce and other sectors which are characterised by this style.
For many products and services where there are relatively few similar choices we either lack the expertise or time to fully evaluate the options available to us. For this reason we are drawn to copying people who are perceived experts or have authority in this area. It is important though that the quality of your product or service is clear as otherwise even experts are unlikely to adopt it. Getting the support or recommendation of people with authority or expertise is crucial for success here.
We probably underestimate how often pure popularity is the key driver to decision making. We might think that our choice of pop song we bought on iTunes or the gadget we bought online last week was a considered choice, but it is more likely that it was heavily influenced by what we see or think other people are doing. Popularity is a powerful short-cut for decision making as it allows us to rely on other people and this can sometimes be a safe bet. Other times it can lead to speculative bubbles and fads that lack substance.
Using the decision style map though encourages us to look outside our own sector for ideas and inspiration. This helps to avoid the trap of focussing too much on our competitors and destroying value by reducing differentiation. However, the decision style map undermines the current fad of influencer marketing which assumes that most decisions are in the North East quadrant where people copy experts. This is obviously not the case and where social influence is important it is more often driven by the crowd rather than individual people.
The decision styles map is not black and white though. It is a tool for marketers to use to generate discussion and use as a framework for considering different strategies. Sometimes a product or service can fall between two decision styles and so it can be worth considering testing strategies from more than one quadrant. The important aspect of the decision styles map is that it allows us to learn from what other people have tried in the past as there is no need to reinvent the wheel.
About: Neal Cole is the founder of Conversion Uplift, a marketing consultancy which specialises in marketing strategy and conversion optimisation. Neal previously worked for large blue-chip companies such as Aviva and Shop Direct before going freelance