Clothes or toys, mobile phones or investment plans, offline or online, retailers are swamping us with choices, far more than you and I could conceivably peruse. While earlier economic theory, as well as conventional wisdom, would suggest that we would always be better off with more options ( we could just ignore the ones we didn’t like), empirical evidence shows that excessive choice, be it in picking a pair of jeans or choosing your life partner may not always be such a good thing.
Company culture is made up of shared beliefs and values which are established by the organization’s leaders and then communicated and embedded through various methods, ultimately shaping employee perceptions, behaviours and understanding. Company culture it’s the element that differentiates a business from its competitors. Usually, companies with a strong culture tend to develop superior results as compared to the companies with weaker cultures. When a culture is strong, it leads to motivated employees and high performing managers.
Behavioural economics has many practical applications for building, creating and modelling company culture. Here are six essential tips.
Behavioural economics can help you understand what are the reasons that motivate consumers to stick with a brand.
Insights from behavioural research are showing that customers like to buy what they are used to when people have enjoyed a brand or a taste for years; they tend to inflate its value. When calculating the pros and cons of purchasing a product or a service, emotional biases often cloud the ability to make rational choices (customers are influenced by their own personality and the feelings of attachment or obligation that they may have towards a brand). In fact, we can actually state that cognitive biases often prevent people from acting in their own best interest. Read More
A well-known and loved brand is one of the most valuable assets a company owns. Behavioural branding involves in creating the company’s own logo, slogan and the graphic that will help people identify the company’s products or services while browsing shops or while surfing the internet. The foundation for building a successful brand is to define the business targeted audience and focusing on tailoring a message that meets their specific needs.
Classical pricing theories assume that customers behave rationally and have access to complete information regarding cost-benefit ratio. According to those theoretical principles, the pain of payment should be identical for every penny spend (customers want to obtain as much for their money as possible). Those theories are based on the hypothesis that customers act rationally. However, in real life, many factors influence the way consumers value money and how much pain they feel upon spending it.