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How Behavioral Science Thinking Improves Marketing
Small businesses should adopt a more nuanced understanding of their customers, informed by behavioral insights and grounded in real-world observations.
Gee Ranasinha
October 9, 2024
The reason so much of a small business marketing efforts fail is because we are trying to industrialize a department of our organization that can’t be industrialized. Implementing behavioral science thinking is perhaps the single biggest improvement a business can make to their marketing effectiveness.
In many ways, we could say that small business owners have never had it so good. It’s easier than ever to start a business, and there are a gazillion number of affordable marketing tools and services out there to help us on our journey. But the one thing that’s stubbornly refused to budge in all this time is the traditional, let’s call it “economics-driven approach” to marketing that seems to be ingrained in the minds of most business people.
I’m not just calling out the disconnect between how most businesses think their customers buy stuff and how customers actually buy stuff. I’m saying that, regardless of size, businesses need to rethink the way they’ve been marketing if they want to prevent their organization from appearing irrelevant to today’s buyer. With increased market and category competition, and powerful tools such as LLMs, businesses need to review their marketing processes ASAP if they’re not going to be swept away in the current tsunami.
As Steven Covey says, “If we keep doing what we’re doing, we’re going to keep getting what we’re getting.”
The Blind Spot in the Boardroom
The Blind Spot in the boardroom refers to why businesses neglect buyer behavior in their marketing strategies. In theory, marketing for a small business today should be easy – or at least easier. Compared to a decade ago, marketers have a huge armory of weaponry at their disposal. Customer research, feedback loops, demographic profiling, outreach workflow automation – this list is endless. For the price of your average monthly car loan payment, you can put together an awesome technology stack that’ll do pretty much everything except put the bins out.
We have so many tools – AI, custom audience profiles, remarketing tags, and whatever else. Yet the effectiveness of our marketing efforts is getting worse. How can that be? How can things have been better before we had all of this tech?
Excuse-seekers will blame increased competition, or a more educated, savvy buyer. Blame-avoiders will mention some horse manure about customer attention spans getting shorter, or the greater choice in communication channels. The real reason is a lot more basic: Most of what passes for marketing today just plain sucks.
86% of marketing isn’t recalled or remembered. Since annual global marketing expenditure is around $1.76tn (yes, trillion!), that means we’re flushing $1.5 trillion straight down the poop chute. Not exactly a great return on our money, is it?
The Illusion of Rationality
The core problem comes down to the way higher-ups in business equate the “process” of marketing with processes involved in other business units. Since their world is one stuffed full of logic and rationality, they think the rest of the world runs the same way.
Let’s look at manufacturing as an example. To increase the profit margin on a product, you take raw materials, apply labor and capital, and produce a good that sells for more than it costs to make. Simple enough, right?