{"id":127843,"date":"2018-11-27T09:00:00","date_gmt":"2018-11-27T09:00:00","guid":{"rendered":"https:\/\/www.smartinsights.com\/?p=127843"},"modified":"2018-11-26T16:56:20","modified_gmt":"2018-11-26T16:56:20","slug":"what-can-b2b-marketers-learn-from-behavioural-economics","status":"publish","type":"post","link":"https:\/\/www.smartinsights.com\/b2b-digital-marketing\/b2b-strategy\/what-can-b2b-marketers-learn-from-behavioural-economics\/","title":{"rendered":"What can B2B marketers learn from behavioural economics?"},"content":{"rendered":"

How to boost business results by recognizing cognitive biases<\/h2>\n

In the 1970\u2019s two young psychologists named Daniel Kahneman and Amos Tversky pioneered a new field of study, which eventually became known as behavioural psychology. They were interested in understanding whether humans were rational, economic decision-makers or fallible creatures, vulnerable to mistakes and errors as a result of \u2018cognitive load\u2019. Their research suggested that our brains use two \u2018systems\u2019 for making decisions:<\/p>\n

\"The<\/p>\n

In the words of Daniel Kahneman, system one \u2018runs the show\u2019 but is powered by a range of heuristics, or rules of thumb, which lead to biases and behavioural quirks.<\/p>\n

There are now nearly 200 recognized cognitive biases<\/a> that can affect how we make decisions in a multitude of different ways. Some are fairly well known (e.g. anchoring) whilst others are slightly more obscure (e.g. the false consensus bias).<\/p>\n

Either way, all cognitive biases can have significant implications for the way we design and run our marketing, from targeting to creative, from positioning to media placement and pricing. It\u2019s a topic we\u2019ve explored before on Smart Insights<\/a> but worth revisiting again, this time taking a specific look at B2B marketing.<\/p>\n

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H2H not B2B<\/h3>\n

There\u2019s now a common saying within marketing circles that there is no such thing as B2B or B2C, only H2H<\/a> (human-to-human), an important reminder that regardless of the product, company or industry, we\u2019re always working and selling to fellow human beings.<\/p>\n

This insight is important, as it sets the context for why a solid understanding of behavioural science is important within the workplace. When we turn up at work we don\u2019t suddenly transform into ultra-rational decision-makers. We continue to be just as susceptible to the same biases as everyday consumers.<\/p>\n

Within the world of B2B marketing, we\u2019re often working on very long, complex sales cycles involving a large number of different decision-makers. We may think that when we\u2019re at work we act and think differently but we must acknowledge our own biases and those of we work with and for.<\/p>\n

So what are some of the most common cognitive biases that could influence B2B marketing?<\/p>\n

Overconfidence<\/h3>\n

Most of us tend to overestimate our own abilities. The Dunning-Kruger effect<\/a> illustrates the cognitive bias of illusory superiority and comes from people\u2019s inability to recognize their limited ability in a particular task or skill. Without the self-awareness of metacognition, we cannot objectively evaluate our true competence or incompetence.<\/p>\n

Implications<\/h4>\n

There could be costly effects on businesses that don\u2019t mitigate against overconfidence. For example, imagine a pitch scenario involving three agencies, two of whom fail to win the contract. The first agency blames everyone but themselves whilst the second carefully reviews not only their performance but that of the winning agency.<\/p>\n

The overconfidence of the first agency may result in more wasted time and effort pitching for business for which they are unsuited. A little less confidence and more humility can go a long way!<\/p>\n

Applications<\/h4>\n

The overconfidence bias can also impact how we market to prospects and clients. If the people we target believe they are better than the competition we need to consider the implications for our messaging. In this instance we can use our audience\u2019s belief in their own products to our advantage:<\/p>\n