Behavioral Economics: Employee and Customer Behavior
Javier Ramirez
Liberty University
BUSI 520: Strategic Marketing Management
Muriel Wilson
January 23, 2022
Behavioral Economics: Employee and Customer Behaviour
Learn how to motivate positive behaviour change
On this three-week course, you’ll learn how to promote positive behaviour change in
your employees through effective incentives and an awareness of default behaviours.
You’ll also explore customer behaviours and the role commitment plays in their
decision-making.
Through an understanding of incentivisation, default behaviours, and commitment,
you’ll recognise the role these play in motivating positive behaviour change in both your
employees and customers.
Explore how mental accounting affects the response to incentives
To help increase the success of your incentives, you’ll explore the role of reference
points and mental accounting.
You’ll also examine defaults – the pre-selected options available if an individual doesn’t
make an active choice. You’ll explore how they exert influence, even if they have significant
consequences, and why they work so effectively in anything from pension choices to
hospital care.
Understand the use of different incentives
Exploring different types of incentives such as financial and pro-social, you’ll learn how
successful they are in affecting behaviour change.
You’ll also explore the difference between incentives and commitments and consider
how you could use commitment pledges to change behaviour in a professional setting.
Understand key learnings in behavioural science
By the end of the course, you’ll have a solid understanding of the behavioural economic
factors that can influence your employees and customers.
Guided by Paul Dolan, Professor of Behavioural Science at the London School of
Economics and Political Science, you’ll have the skills and knowledge to start pushing for
positive behavioural change in your workplace.
What makes a good persona?
Personas are all about specificity. The more you can do as a designer or marketer to
make your persona specific, the more your team will be able to make great products and
run effective marketing campaigns.
For example, if you are a mattress company like Endy, you might say your persona’s
pain point is that “typical, affordable mattresses are uncomfortable.” That would help you
write copy about how comfortable the mattress is, but ultimately, it is a limited amount of
insight.
Be more specific when creating a realistic character. For example: “Ana lives in a big city
and feels like she’s already paying too much on rent, so the idea of spending a month’s rent
on a mattress feels excessive. At the same time, she doesn’t want to feel like she’s in college
anymore. She also shares a bed with her partner and they often get too warm. So she’s
open to making a big investment in the right product if she feels like it’s sensible.” This level
of detail will lead to more evocative marketing copy, focused on the product’s cooling
materials, and better decisions about the overall product roadmap.
How to create a persona
1. Research your customer
2. Hypothesize based on findings
3. Test and validate
To create a persona, both product and marketing teams will follow a similar three-step
process.
1. Research your customer
Start by learning as much as you can about your customers or potential customers. You
can do this through market research work like individual customer interviews, focus groups,
surveys, and reviewing third-party research. If your product is digital, such as an app, you
can also find trends in the data and behavioral patterns of its users.
Customer research allows you to remove personal bias from the process. You might
assume your customer values one feature of your product over others, but thorough
research could tell you something different.
2. Hypothesize based on findings
Once you feel you’ve gathered enough data to understand your customers’ profiles,
pain points, and goals, begin creating hypotheses for how to define personas based on your
research findings. You could create a short persona description that includes everything
from their name, their pain points, and their job title. However, every detail on your one-
pager remains a hypothesis until you’re able to validate it through testing.
The clearer detail you can add to your persona, the better. These buyer persona
examples can function as templates for achieving the level of detail needed to be effective.
3. Test and validate
There are many ways to test your persona. This phase is where product and marketing
teams will take different approaches to get to the same outcome: establishing confidence in
their persona’s definition.
A product team will validate their personas through additional UX research, such as
watching their user base interact with prototype designs, and asking UX-driven questions.
They may also test their hypothesis by making a persona-oriented change to their product,
and then tracking usage data for improvements. Their goal is to see activity in the answers
or data that validates their hypotheses about their persona.
A marketing team will validate their persona’s definition through quantitative test
marketing campaigns. For example, they might launch social media advertising campaigns
targeting users representing two versions of their persona and see which performs better.
Or they may target one audience, but with multiple messages, to see which best speaks to
their pain point. This can be a highly effective way to prove your persona hypotheses.
Remember that your persona is never going to be 100% “true,” as it’s based on a
fictional character. But the exercise of creating and validating personas can help develop a
better understanding of your customer. Whether you’re on a product team, marketing
team, or a business owner doing it all yourself, there’s almost nothing more important than
that.
