OPINION1 October 2020

How academic and commercial behavioural science differ

Behavioural economics Finance Media Opinion Public Sector Technology

Ellie Jacobs reflects on why more needs to be learned to take behavioural science from commercially applicable to commercially valuable.

As a recent behavioural science graduate, last week’s MRS Behavioural Science Virtual Summit allowed me to compare how behavioural science is described academically vs how it’s used commercially.

Four things stood out:

  • Business is behavioural science – after all, all businesses revolve around behaviour
  • Resultantly, knowingly or unknowingly, we’re all practicing behavioural science daily
  • Behavioural science skills alone aren’t enough to use behavioural science commercially
  • Simplicity is key to the complex study of human behaviour.

Business is behavioural science

The breadth of sectors and topics presented at the summit showed that we’re all in the behaviour business. Fundamentally, all businesses want to understand, change or maintain behaviour, and behavioural science can do this. Often faster and/or cheaper vs traditional methods.

Dr Benny Cheung, director at Decision Technology, showed how five nudges increased honest disclosure of speeding charges in the context of motor insurance. The most effective nudge utilised social norms by stating: “95% of insurance customers fill in their forms fairly and accurately and make honest insurance claims – be one of them.”

This simple message, shown before claim forms were filled out, increased admission to speeding charges by 10%, and elicited honesty in 55% of cases where otherwise people would have been dishonest. Such a simple message with a negligible implementation cost could stop the insurance industry losing £1.2bn to fraud annually. Insurance claims are unlikely to be highly associated with behavioural science, however, this study demonstrates how present it is in business.

That was behaviour science ‘for good’. However, Crawford Hollingworth noted behavioural science being used ‘for bad’ – something that’s rarely discussed academically. He discussed  ‘sludge’ – excessive friction that results in bad outcomes for consumers or businesses. It can be intentional, (e.g. pressure selling), or unintentional (e.g. friction that prevents switching service provider). This raises the question – should behavioural science students be warned about the ‘danger’ of the knowledge they’re learning?

We’re behavioural scientists 24/7

In academia, behavioural science concepts are discussed using precise terminology, largely in the context of theory or experimental findings. As market researchers, these wide-reaching concepts are deeply ingrained in everything we do. Most obviously, how we frame questions will influence how consumers respond, and may have differing influences depending on the type of consumer we’re speaking to.

For example, those less numerate are less attentive to numerical information. This means that they rely more on how words are framed and are therefore more influenced by framing effects. This highlights the importance of keeping your audience in mind when writing surveys or moderating groups/interviews.

Behavioural science isn’t a standalone discipline

Behavioural science is typically studied as a standalone discipline. However, to use behavioural science commercially you need to combine behavioural science knowledge with other skills. Namely, the context of your client’s world and how behavioural science can be used within it.  

Technology – not often associated with academic studies – conversely, is important in designing commercial behavioural science research. Google’s mass A/B testing is the best-known example of this. However, Gorilla in The Room showed how technology and behavioural science can work together in another way.

The company partnered with ITV to commission research to help ITV better understand their audience. Using VR, non-fans ‘sat with’ fans of TV shows Dancing on Ice and Who Wants to be a Millionaire and watch them together. The research found that non-fans stopped evaluating the programme and instead evaluated it via fans’ experience.

Behavioural science is simple science

Those unfamiliar with behavioural science may view it as a complicated discipline, with many psychological and behavioural heuristics, biases, and effects. But simplicity sits at the heart of behavioural science. If you want to encourage a behaviour, make it easy. And if you want to discourage it, make it difficult.

Simplicity’s importance was echoed by Nicola Wass and Dr Holly Hope Smith of So-Mo, who partnered with Liverpool City Council to tackle one of the UK’s most dangerous pedestrian crossings. The crossing is in an area of high deprivation, where poor mental and physical health are rife. The impact of this kind of deprivation is reduced cognitive availability, meaning that System 1 thinking is more heavily relied upon. Any interventions requiring cognitive processing, such as information-based campaigns, are therefore unlikely to be effective.

The nudges to be implemented at the crossing are to draw attention to it using visual and auditory cues. These cues require no cognitive processing and therefore work best when using System 1 thinking. In this instance, simplicity was key.

Where next?

The behavioural science taught at universities differs to the behavioural science used commercially, in many ways for the better. While behavioural science’s academic underpinnings are vital to making it commercially applicable, much more needs to be learned to make it commercially valuable – technology, ethics, and businesses understanding, to name a few.

What’s also clear is that behavioural science should be taught further afield than behavioural science students. Understanding behaviour is vital to all businesses and the science behind it is therefore something everyone should learn about. Behavioural science in the national curriculum, anyone?

Ellie Jacobs is research executive at Northstar Research