3 behavioural economics tips for embedding insights into organisations

The value of the market research sector in the UK has been estimated at around £9 billion.

But how much of this research is truly acted on and used to drive meaningful change in organisations?

This article presents three behavioural economics tips for embedding insights into organisations.

The following three tips will help Insight teams and research agencies to best demonstrate the critical importance of insights – and of the value both parties bring to organisations:

1. Beware the tyranny of choice

2. Simplify, simplify…and simplify again

3. Avoid unnecessary uncertainty

Ready to begin with the first tip?

TIP 1: Beware the tyranny of choice

The first key insight for us from behavioural economics is that humans typically don’t like too much choice.

This is often referred to as “choice overload” – and it’s important specifically when we are crafting recommendations based off insights.

Why is it so important?

Well, two things.

First, evidence suggests that when too many options are presented, people may become unmotivated to make any choice at all.

Second, when presented with what has been described as the “tyranny of choice”, people may also experience an increase in negative emotions and fatigue.

Clearly neither of the above are good when it comes to enabling and encouraging people to take actions off insights (nor for effective relationship building!).

Therefore…

RECOMMENDED ACTION:

No matter how tempting it is to provide a long list of recommendations, try to present a small number (3-4) of recommended, insight-derived actions to your stakeholders and clients.

TIP 2: Simplify, simplify…and simplify again

Behavioural economists often like to describe how humans regularly use “heuristics” in their decision making.

Er, what’s a heuristic?

A heuristic is a mental shortcut or rule of thumb. Heuristics are typically used to navigate, or to reduce high levels of complexity.

When it comes to audience mental processing of research data, a very relevant heuristic is the “fluency heuristic”.

The fluency heuristic describes how humans tend to believe that information which is more easy to process (or to retrieve from memory) is also more:

1. True

2. Reliable

3. Trustworthy

In essence, the more skillfully research insights are communicated…the more likely they are to be believed.

Therefore…

RECOMMENDED ACTIONS:

Especially when presenting large amounts of information or data, try to avoid complex language.

Explain as clearly as possible any essential technical terms.

Reframe – or embed into a simple infographic – details of statistical concepts drawn on.

TIP 3: Avoid unnecessary uncertainty

The final key insight from behavioural economics surrounds something called “ambiguity aversion”.

What’s ambiguity aversion?

Essentially, this describes how humans typically don’t like uncertainty. In short, humans tend to be more comfortable with the known as opposed to the unknown.

So as well as striving for simplicity (tip 2 above), when communicating insights we should also be very careful to convey certainty and not uncertainty. 

While researchers are naturally very good at drawing out research caveats, ambiguity aversion suggests that to avoid invoking unnecessary uncertainty when it comes to research findings, caveats should wherever possible be kept to a minimum.

Therefore…

RECOMMENDED ACTIONS:

Avoid using phrases like “might cause” and instead use more certain phrases like “cause” (although don’t try to claim causality if it’s not present…).

Use appendices and supporting documents for research data which, if presented, might create unnecessary uncertainty – for example quantitative data based on small samples.

Conclusion

This article has presented three behavioural economics tips for embedding insights into organisations:

1. Beware the tyranny of choice

2. Simplify, simplify…and simplify again

3. Avoid unnecessary uncertainty

Alternatively, these can be further summed up as a simple checklist of the three C’s.

In summary, beware:

1. Choice paralysis

2. Complex language

3. Cautious language

Lastly, while these three tips will help you embed primary research insights into organisations, they are equally relevant when it comes to secondary research.

To learn more about our new REVISIT solution – which helps Insight teams enhance their impact using existing data – see here.