The rise of behavioral research
One of the bigger trends in the world of insights is behavioral research. Behavioral research is the science of understanding human behavior through observing behavior. Because you’re trying to understand behavior through behavior, it’s considered more reliable than more traditional approaches such as surveys or focus groups. Behavioral research isn’t a particular branch of the social sciences, but a particular approach to understanding people. Whether you’re interested in marketing, psychology, economics or sociology, the behavioral approach promises a more rigorous and insightful view of the social world.
In recent years behavioral research gained popularity as more and more articles and books promote the benefits of understanding behavioral economics, nudging and biases. This trend didn’t only result in a new stream of business wisdom but also complete companies, departments and roles were created with the sole purpose to apply the teachings of behavioral science. For example, Maritz, a company specializing in employee reward systems, recently appointed a Chief Behavioral Officer to their C-suite to signal the importance of behavioral insights to their business. To scale the power of behavioral science, the government of the United Kingdom introduced the Behavioral Insights Team to apply behavioral thinking to solve governmental challenges more effectively. The unit became so successful that it spun off to help governments around the world.
The rise and fall of a big behavioral idea
You would think that behavioral research with this type of traction is bound to change the world. Unfortunately, the picture isn’t that rosey. One of the reasons why behavioral research became so popular in the first place is the support from the scientific community. That very same community has become more and more skeptical in recent years and that message hasn’t reached the masses yet. The level of skepticism is reaching a point where even ideas that were considered canonical to behavioral science, turn out to be based on weak evidence or wrong thinking.
For example, Daniel Kahneman is considered one of the pioneers of behavioral economics and became especially well-known with his book ‘Thinking, Fast and Slow’. One of his core ideas is that humans react disproportionately stronger to losses than to gains, also known as loss aversion. His theory of loss aversion is one of the primary reasons why Kahneman was awarded the Nobel Prize. However, the theory of loss aversion has recently been shown to be built on shaky theoretical foundations and the empirical evidence in support of this theory has been misinterpreted and, ironically, biased . A supposedly core insight of behavioral science lost credibility like snow melting in the sun.
Low versus high stakes
How is it possible that such a fundamental idea of behavioral research turns out to be wrong? Well, not all behavioral research is done in the same way. Ironically, a lot of the ideas that are considered behavioral haven’t been studied in behavioral setting at all but rely instead mostly on survey research. For example, most biases such as the confirmation bias, have been discovered and studied using traditional surveys. The reason why these ideas are still considered behavioral research is because respondents are asked to make a trade-off in the surveys. A hypothetical trade-off but a trade-off nevertheless. The mere fact of asking respondents to make a trade-off despite the stakes being low or even hypothetical, seems enough to categorize it as behavioral research.
The promise of behavioral research is founded on the notion that observing people making real trade-offs reveals a lot more about how humans think and what they find important. But this doesn’t mean any trade-off situation works. Behavioral research that involves high stakes is more likely to be closer to reality than research with low or no stakes. Real life is generally a high stakes situation: decisions have real and sometimes unknown consequences. Every purchase affects your wallet irreversibly. It’s no surprise that claimed behavior in surveys is so different from what people actually do in real life.
The future of insights remains behavioral
Despite the confusion surrounding behavioral research, I’m fully convinced that behavioral research is still the next frontier in consumer insights. But behavioral research needs to be based on actual behavior and not based on behavioral input with low stakes. Solid behavioral research sets the bar higher: the higher the stakes, the closer to reality and, thus, the higher the reliability. Research settings based on gamification, hypothetical trade-offs, eye-tracking and other forms of low stakes situations shouldn’t be immediately discarded but we should be aware that insights obtained from low-stakes situations do not necessarily hold in high-stakes situations. And at the end of the day, the ultimate goal is to understand reality itself and life will always be a high stakes experience.
About the Author: Anouar El Haji is the founder and CEO of Veylinx. He identified the potential of experimental auctions for consumer insights while working on his PhD, which resulted in the founding of Veylinx. He has a PhD in Marketing from the University of Amsterdam. Before that, he obtained a master’s degree in economics and one in business administration (both cum laude).
About Veylinx: Veylinx offers behavioral consumer insights solutions to validate innovations. It has created a unique methodology based on a Nobel Prize winning approach that steps away from measuring intention and measures true behavior. This new approach allows for unprecedented predictability in consumer research and to date has helped numerous Fortune 500 companies to successfully launch new products and services.