Getting the most out of Behavioural Economics in Qualitative Research

Are you considering using qualitative research for strategic positioning, brand development, or customer experience projects? Do you also want to use the insights you have learnt from Behavioural Economics  (B.E.) but worry whether B.E. is compatible with qualitative research?  

Perhaps you have heard people say that qualitative research isn’t useful because ‘people don’t know why they do things’ for example, which has led some people to conduct research only about behaviour and not about what motivates people to behave as they do, or about how people think.

I have good news for you.  Adopting B.E. principles can actually improve qualitative research, and qualitative research can itself add value to B.E. projects.  To show how this works, I have written two BellBird posts about using B.E. and qualitative research together.

  1. This first post makes the point that B.E. thinking benefits qualitative research, but only if we broaden our understanding of what B.E. is and what it can do.
  2. The second post (How B.E and qualitative research can work together)  shows how qualitative research thinking can be benefit B.E. projects.

How B.E. thinking benefits qualitative research

George Loewenstein is one of the founders of B.E.  He has B.E. cred  - he is a Professor of Economics and Psychology at Carnegie Mellon University and a Director of Behavioral Economics at the Center for Health Incentives at the Leonard Davis Institute of the University of Pennsylvania.

Loewenstein defines B.E. as the ‘application of psychology to economics’.  His perception of B.E. is much broader, more positive  and human-centred than those depressing lists of biases and heuristics and clever-but-perhaps-manipulative nudges that have been the talk of our industry for the last few years. 

A lot of his work focuses on beliefs. He reminds us that people can get pleasure not just through the usual five senses but also from such things as mastering a skill, having a  good name, or feeling benevolent.  He talks about these as people’s ‘beliefs about themselves and the world.’

In other words, B.E. thinking is not just about behaviour and biases.  Standard B.E. argues that people don’t change brands because of ‘status quo bias’ for example  (which frankly is not very helpful).  A belief-based view would say that people don’t switch away from brands that positively reflect their own sense of identity.

Some of Lowenstein’s most useful insights have been:

  • Beliefs are like possessions. People hold onto their beliefs because they feel good. That means we have to rethink what ‘persuasion’ means, and rethink how we research persuasive messages.
  • People may actively avoid information – such as nutrition or financial information – not because of ‘overload’ but to protect their beliefs; and in protecting their beliefs they are protecting their sense of identity.

"People are motivated to hold onto their beliefs because they feel good or help them fit into the sense they have made of the world" * 

  • People have a drive to make sense of their world. We have studied this ourselves. See our website pages on sense-making for more about this.
  • People sometimes do things simply out of curiosity. Curiosity makes people impulsive and gives them the urge to explore.  

Loewenstein is not the only B.E academic to take this broader view. Daniel Kahnemen’s book Thinking Fast and Slow for example is about much more than biases. Kahneman says that people have two ‘selves’, the experiencing self and the remembering self. The ‘remembering self’ is the one that tells stories and makes choices.

Here are 3 ways that we can use this more positive belief-based version of B.E. in qualitative research

1. Customer experience journeys

B.E. can work well in customer journey research because it focuses the research on how to make the journey easy, for example reducing the number of choices available and providing an effective default. However, journey research typically focuses on the transactional ‘pain points’ that customers struggle with. If we take a broader view of B.E. and adopt a sense-making approach, we would explore how people frame the problem they are solving, what they pay attention to, including what other people are (presumed to be) doing, how they react emotionally and how it makes them feel about themselves.

2. Drivers of loyalty and repeat purchase behaviour

Researchers are often asked to help organisations encourage customers to be more loyal. To do this, we identify the drivers of loyalty and repeat purchase behaviour. Unlike the customer journey research described above, loyalty and repeat purchase research must be conducted after the fact, because – as Daniel Kahneman says – it is the memory of what happened that most affects whether the behaviour will be repeated. To understand consumers’ motivation to repeat the behaviour, conduct the research after the experience, about the memory of that experience.

3. Developing communications strategy to encourage a change in behaviour

Many social campaigns rely on the transmission of information – think of the road statistics, almost any health campaign and the Swim and Survive campaign which tries to teach Australians about backyard pool safety. The governments and not-for -profit agencies responsible for these campaigns  need people to pay attention, process the information, and then follow it.  

The problem is, people don’t simply jettison their old ideas as soon as the government communicates a new idea to them, do they?  Neither standard B.E. nor standard market research has any models that would predict what people do with their old information.  The broadened view of B.E. however does offer us a model, which is that people hold onto their existing beliefs if those beliefs are part of their sense of identity.

“Rather than dispassionately updating their views to new information...belief-based utility leads people to avoid information and use other strategies to protect their beliefs”*

At Susan Bell Research, we understand B.E. and the psychology behind it. We are also experts in sense-making. To learn more Contact Sue and start a conversation.

Tags: Behavioural Economics, Market Research, Qualitative Research , Customer journeys, Senses, Thinking frameworks