Habits and the Marketplace

Though I finished writing habit in the spring of 2008, the world we live in now is far different than the one I wrote about. Yet the ensuing global economic meltdown gives increased relevance and urgency to the book’s central themes.

In short, habit seeks to update marketing theory and practice based on recent finding from neuroscientists and cognitive psychologists. The book’s most startling claim, that up to 95% of behavior is the product of unconscious (habitual) processes, is in stark contrast to current marketing theory that assumes customers make conscious choices. This explains why customer satisfaction doesn’t predict repurchase, why most new products fail and why most advertising is wasted.

From this new understanding, marketers are encouraged to approach customers in ways that otherwise would seem heretical and counterintuitive. For example, if your customers are purchasing your products or services, your goal is to make sure they don’t consciously think about you. If the purchase enters conscious awareness, the realm of the executive mind, it is quite likely that your customer will then re-evaluate your offering as well as your competitors’. Any change in the marketplace can dislodge a habit-based purchase, such as intense advertising, new offerings, changes to packaging, or changes to pricing. And this is why the current economic situation is so critical to understand from a habit perspective. Almost all purchases are now being scrutinized by your customers’ executive minds. From eating out to purchasing a new flat panel TV, the executive mind will carefully evaluate decisions that used be made automatically or spontaneously. In this environment, it is essential that companies from small shops to multinational manufacturers reestablish their value proposition with their customers.

In the brief space allotted, we will look at the first step of this process, which is to understand the context within which your customers are using your products or services. I just had lunch with an executive who makes weather information available for mobile devices. The context for checking the weather could include in the morning when deciding what to wear, during the day to decide whether to take a cab or the subway, and to follow breaking news about a major storm half a world away. By understanding the context, you can craft a solution that will reinforce your customer’s behavior.

To find more about how habits impact your marketing, please check out my new book.

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