Monday, June 17, 2024

Using behavioural economics to drive customer engagement

For many companies, sometimes it takes a fresh perspective to figure things out, and at BE Works that’s just what they do. The Toronto-based consulting firm analyzes consumer behaviour and determine ways of influencing people to achieve the desired behavior. Welcome to the new world of behavioural economics.

We spoke with BE Works CEO Kelly Peters to find out what behavioural economics is, and how their techniques boost customer engagement. Peters says it’s an interdisciplinary method of understanding how people behave in the real world, and what determines how they make buying decisions.

Founded by a team of marketing experts with a passion for the sciences in 2010, BE Works is the only company of its kind. They have worked with some major clients such as Ontario Energy Board and the Insurance Board of Canada in the four years they’ve been operating.

Peters walked us through BE Works’ process. “We start by gathering observations. Whether that is through insights, or gathered through big data, or other means of understanding the experience of the consumer or employee,” Peters says.

“We look in particular at where their decisions points are, and what could be influencing those decision points. Those observations lead us to a diagnostic on what are the things that are either inhibiting the intended behavior, or are instigating a behaviour we want to stop, and what are the opportunities in that,” she says.

At BE Works, they believe there’s a gap between what businesses think drives customer engagement, and what science can determine about that very same engagement. It’s their job to close that gap. Almost everyone working at BE Works has some sort of background in the sciences, so they’re strongly familiar with how to work the scientific method.

The result is a very different approach to market research, and Peters says there are three things that separate them from other firms. First of all, their findings aren’t based on things like focus groups, but on research published in peer-reviewed scientific journals.

Secondly, they use a tactic called “nudges.”

She says these nudges are signals that have survived peer review, and BE tests them in each unique situation and see if they hold true in the particular situation they are trying to influence.

Lastly, they test everything through in-field experiments. “These experiments are held to a standard. It’s not intuition driving our process, but we use the scientific method to ensure objectivity and validity of our recommendations,” says Peters.

The BE Works method shows some outstanding results for their clients. For the Ontario Energy Board (OEB) they helped them understand the barriers to compliance with the time-of-use price schema introduced about 10 years ago. BE Works looked to behavioral strategies to help OEB improve the effectiveness of time-of-use pricing. BE Works showed them how the interdisciplinary study of behavioral economics can help with that mission, and in the end suggested ways to break through those barriers.

Peters feels that many businesses are frustrated with the limits of what they can achieve with the data they have because it doesn’t give them enough actionable advice. The deeper insights of psychology offer a new perspective that can probe the depths of what incites consumer engagement. Through the right techniques it is possible to influence the desired behavior, such as scaling down power use during peak hours.

“Our goal has been driven by organizational leaders who have developed an appetite, for one reason or another, because they want the greater insights of psychology,” says Peters. “There are people who are hungry for the behavioural insights.”

Photo of Kelly Peters via BE Works


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