A Marketer's Guide to Behavioral Economics
Published 2/28/2010
Author: Ned Welch
Ned Welch is a consultant in McKinsey's Toronto office.
Summary
Long before behavioral economica had a name, marketers were using it. “Three for the price of two” offers and extended-payment layaway plans became widespread because they worked—not because marketers had run scientific studies showing that people prefer a supposedly free incentive to an equivalent price discount or that people often behave irrationally when thinking about future consequences. Yet despite marketing’s inadvertent leadership in using principles of behavioral economics, few companies use them in a systematic way. I n this article, learn four practical techniques that should be part of every marketer’s tool kit.
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