Predicting consumer behaviour – Data vs Psychology – the survey results.
While the media maybe championing data as the answer to the great mystery of understanding consumer behavior, our recent survey reveals many clients think psychology offers better insight and value than data. Of course, together they make a great pair.
Since my last article ‘Are you a Metricmaniac?” we wanted to discover how data performed against psychology for predicting consumer behaviour.
Data is certainly stealing all the limelight at the moment and is now even on the agenda of company boards (so we are told by the press), while psychology seems to be forgotten.
No one doubts that data, and even big data, is a valuable source of intelligence about consumer behaviour but is it enough on it’s own? Does it really tell you how, what and why? And well enough? Does it give you the whole picture? Or is it a bit two dimensional, as some experts feel it is?
It’s great when there’s no variations, but consumers change their buying habits all the time – you only have to look at the fashion, music, film, game and many other industries we spend money on to know that we our buying habits change.
Like research groups, how well data is interpreted is critical to how effective it is, if the person analyzing makes a wrong assumption (as I’ve seen previously with research) you get a false result.
We all know that statistics can be anything but truthful. I personally don’t trust software systems to analyse data, I believe you need the human element and intuition – you can’t analyse research groups without the human input. We are in a people to people business and you can’t ever ignore the power of human insight, whatever the machine is saying.
NOT WHAT YOU EXPECT…
The survey results may not be what you expect, though predictably, the two working together makes for better consumer insight, something I think we all agree with.
To have data without psychology is to have like watching a black & white silent movie, it’s ok if you haven’t watched in colour with great sound but once you’ve discovered the bigger picture there’s no turning back.
So before you sign off half your marketing budget to analyzing all that big data, in the quest to find what makes your customer tick, you might just want to read this and embrace a different view – especially those who believe psychology is better value.
THE SURVEY RESULTS
These are the questions and answers.
1. When trying to understand and predict consumer behaviour, which do you think is more important.
It’s not just WHAT? we do but WHY? Just over half opted for psychology but a quarter of all respondents commented that both were as important as each other. So in general they are seen as equal, yet you’d never guess that from press coverage and industry trends.
2. When creating insight into consumer behaviour, which do you think offers better value?
Again, around a quarter of all respondents commented that both were as important as each other, but just over 60% opted for psychology with 18.2% opting for data. Could this be because of the escalating costs of data collection and analytics? Of course the cost of using psychology depends on who you are using and how. Used in conjunction with research groups can be expensive, but using simple like NLP based tools like AardVarK is cheap.
3. How important is consumer insight and consumer behaviour to your marketing?
Not surprisingly 97% thought it was – 70% thought it essential, 27% important. The 3% who opted for ‘debatable’ or ‘not important’ may well be working in industries where insight is less significant. Or cynics. The question is, do we really have enough quality and useful insight into our customers to allow us to make smarter decisions and to help us use budgets more effectively?
4. Have you used psychology to help you understand or predict consumer behaviour?
Surprisingly 82% had and only 15% hadn’t. But then maybe this is not so surprising when you consider predicting behaviour, rather than repeat behaviour, needs a human understanding. (Or could it be that people who use psychology are more inclined to respond to surveys because they have more spare time because they don’t have all that data to analyse?)
The conclusion is that using psychology is valued greatly by marketers, a little more than data but many see the two as good partners. For predicting behaviour it out does data, but with either, and both, it all comes down to how well you understand what you are looking at.
Of course, arguably, psychology is just data in another form. What we know has been gained for thousands of years of studying human behaviour.
The most obvious financial benefit is that psychology is seen as better value.
DO WE KNOW THE BASICS?
Another study we did last year with marketers as part of WHY WOMEN SHOP ON MARS AND MEN SHOP ON VENUS project (see full results at www.venus2mars.net ) revealed that the vast majority thought we didn’t even understand the basic differences between male and female consumers and as 85% of consumer spend is by women that is one hell of a gap in our knowledge as an industry. ’86-90% thought agencies/brands didn’t understand female consumers well enough.’
This is backed up by research from companies like Nielsen, ‘91% of women think advertisers don’t understand them.’
So maybe before we start to sweat the small stuff maybe we should be getting the big stuff sorted first.
SURVEY: If you want to add your voice, you can do the same survey at http://www.surveymonkey.com/s/FSGJCJX
SURVEY RESULTS – Do we really understand female consumers?
WHY WOMEN SHOP ON MARS AND MEN SHOP ON VENUS
REFERENCE ARTICLES: Do we really get consumers? All that freshly sourced data may not be revealing as much about people as brands think. By Jonathan Akwue.
Big data without the human touch means big waste
Are you a Metricmaniac?
Recently the IPA, who have championed Behavioural Economics, had a very successful talk by Marcus Corah, author of The Persuader (how to use emotional persuasion to win more business), on NLP and it’s applications to agencies. Check out his book on Amazon.
Survey size was capped at 200. Number of marketers emailed with survey was 3,765.