Welcome back to another episode of the Behavioral Economics and Marketing Podcast Series.
This is Sandra Thomas Kaminal. In this episode, we will be applying framing effect to targeted messaging. In behavioral economics, framing effect refers to the principle that information is not static, but fluid, based on how, when, and where it is communicated.
In other words, people’s decisions tend to be affected by the way in which the choices are framed through copywriting, imagery, tone, pricing, and placement. For example, let’s consider the trolley problem. The trolley problem is a classic thought experiment in ethics modeling.
It presents an ethical dilemma about a fictional scenario in which an onlooker has the choice to save five people in danger of being hit by a trolley by diverting the trolley to kill just one person. In the basic scenario, most people would choose to save the five people in danger and sacrifice the one person. However, if the question is framed differently, the answer is not always obvious.
For example, what if the one person is a family member? Would you continue to choose to save the five people? The term, the trolley problem, is often used more loosely with regard to any choice that seemingly has a tradeoff between what is good and what sacrifices are acceptable, if at all. Another famous example of framing the trolley problem is called the transplant problem. In this fictional scenario, a brilliant transplant surgeon has five patients, each in need of a different organ, each of whom will die without that organ.
Unfortunately, there are no organs available to perform any of these five transplant operations. The doctor discovers a sixth person whose organs are compatible with all five of his dying patients. Should he kill the one person to save the other five? By framing it this way, most people would choose to save the one person.
Thus, the way in which choices are framed influences the choices that are made. There are several applications in which the framing effect can be applied to marketing. In this episode, we will discuss the framing effect as applied to targeted messaging.
Much like the trolley problem can be framed in different ways to elicit different responses, good marketing professionals can frame their message for different audiences. This is called targeted messaging. The truth is that there are few, if any, products or services that a one-size-fits-all marketing message will apply.
Consider toothpaste, a non-durable good that is bought in a routine manner often with very little thought. A single brand or type of toothpaste may have several customer value propositions such as whitening, cavity protection, taste, etc. However, bombarding every customer with each of these customer value propositions can be confusing to your customer.
And in marketing, confusion is death. Therefore, marketing professionals should segment their target market and vary the copywriting, the imagery, the tone, the pricing, and the placement to pertain to each segment. This is called market segmentation.
Market segmentation involves aggregating customers into groups based on one or more common characteristics such as behavioral, demographic, geographic, psychographic, product class, having similar needs, or responding similarly to a marketing program. To get started on market segmentation, marketing professionals should conduct market research. The best place to start with market research is through their own customer database.
This provides a good basis for understanding what products and services are selling best, when they sell, where their customers found them, what was most engaging to them throughout that customer journey, what common characteristics do their customers have. It is equally important to look at the lost customers, the ones that came to your website, ordered a brochure, received a quote, but didn’t buy. Do these people have similarities that can be grouped together? Marketing professionals can dig into why these groups fell through the cracks and look to improve their messaging or product offering specifically for each of these segments.
Alternatively, understanding which segments won’t purchase your product or service can save time and money by not targeting them. In addition to analyzing their own customer database, marketing professionals should use market data to better understand the market as a whole. When considering market data, be sure to compare your customer profile to the market data.
Is there a segment that your company commands a large market share of, or are there opportunities in segments that you aren’t performing well in? Further, marketing professionals can conduct primary research to better understand each segment and their needs. One of my favorite, and what I believe to be one of the most effective ways to segment is based on engagement. When a customer engages with a particular product or a type of product or marketing message, then you should re-target them.
Have you looked at a product online and then saw ads for it elsewhere on the internet? Then you have been re-targeted. This approach has been adopted by marketers around the world. The reason why is because it is one of the most effective ways to segment and deliver targeted messages to customers and potential customers.
Once marketing professionals have segmented their customer base, it is time to develop targeted messaging to reach their clients and potential clients with the right message at the right time in the right place. Targeted messaging is much more than the copywriting. It is time of day, day of week, placement, tone, imagery, et cetera, et cetera.
Getting the right message to the right segment is a fundamental part of marketing. But so many marketers miss their mark. Unfortunately, during tough times such as these, marketing budgets and teams are shaved.
Companies will keep the lower-paid employees that do not have the experience and or education to understand the nuances of segmentation, framing, and targeted messaging. We’ve all seen the results of these cuts in those marketing messages that are poorly placed, badly worded, or completely irrelevant. For example, I have recently been delivered advertisements for, it’s time to take your senior class pictures, and my favorite, start your modeling career with Maxim Magazine.
These types of marketing mishaps can cost a company millions, not just in the sunk cost of poor marketing and list depletion, but in the opportunity cost of lost potential sales at a time when companies need to make every marketing dollar count. A good marketer will know how to segment and how to reach the segment with the right targeted messaging. How to do it right.
Number one, research your market considering your customer database, your lost sales, and the market at large. Number two, segment your target market into groups based on one or more characteristics. This could be behavioral or demographic, geographic, psychographic, your product class, having similar needs, or responding similarly to a marketing program.
Number three, develop messaging tone and style and imagery geared to each of these groups. Number four, consider different mediums or ad placements for each target group. Number five, get your timing right.
You want to reach your customers and potential customers when they are most likely to be engaged. Number six, assess your results and make changes as needed. Lastly, I will give another example.
Consider for a moment the cruise industry. A single cruise may have multiple target segments. They could have young singles, couples, families, and baby boomers.
Each of these segments will have different motivations for booking a cruise. Young singles may be looking to party while the baby boomers are looking to relax, and the couples may be looking for something a little more romantic. The marketing message should understand and reflect the customer value proposition for each of these target segments.
Further, each of these segments will consume different media. Reaching all target segments with one placement is not always achievable. Marketing professionals should vary their placements based on the target segment.
Young professionals may interact more with podcasts, while baby boomers may be more reachable with a direct mail campaign. It is important to note that multiple touch points and channels will produce the best results, and fully researching your target segment is key. In this cruise example, marketing professionals would segment their target market by demographics and frame their message for each of their target segments by varying the copywriting, the imagery, the tone, even pricing and placement.
Wrapping it up, understanding how we as humans make decisions is an important part of marketing. Behavioral economics is the study of decision making and can give keen insight into buyer behavior and help to shape your marketing mix. Framing effect refers to the principle that information is not static but fluid based on when and how it is communicated.
Good marketers can leverage the framing effect by varying their marketing message to different target audiences to increase the level of engagement and ultimately the return on investment. Thank you for listening to another episode of behavioral economics and this is Sandra Thomas-Kamanaugh.
Listen on your favorite platform: The Behavioral Economics in Marketing’s Podcast
Leave a Reply