Behavioral Economics: From HYPE to HUB
Behavioural Economics (BEco) is the application of behavioural science to business. It uses the knowledge and methodologies of these areas to study people's economic decisions in depth and, ultimately, to try to influence them.
Incorporating BEco angles and ingredients has become increasingly important for companies because it allows them to better understand their customers and also help them make better decisions. It has been shown that people often make decisions based on emotions, biases and heuristics, which are mental shortcuts that simplify decision making. By understanding these emotional and cognitive factors, companies can design products, services and marketing campaigns that are more likely to attract and connect with people.
This was the topic that The Cocktail put on the table last Thursday 13th April in the auditorium of La Matriz. The main objective of the meeting was to help organisations to incorporate Behavioral Economics, listening to companies that have already done or are doing so.
During the event, some insights were revealed on how to move from the initial HYPE of Behavioral Economics to setting up a HUB of this discipline, from experts who have already implemented it in their companies (or who are helping to make it possible):
Nuria Pesquera, Global Head of Behavioral Economics at BBVA, shared with us the path the company has taken from its first BEco pilot in 2016 to having a team of 80 specialists and developing more than 500 research projects. Nuria unveiled some of the keys to start this journey from HYPE to HUB in an organisation: "The questions were like, 'What if we apply what Daniel Kahneman, the founding psychologist of behavioural economics, or some other scholar says, what if we understand cognitive biases and come up with solutions?' And so we started the experiments. And we started to see that this was working".
Ángel Alonso, Head of Ecommerce at Repsol, explained how BEco has been applied in the transactional channel and in the company's multi-energy offer.
Ángel unveiled some important elements to consider in order to start this journey of integrating Beco in companies, and which have been key for Repsol in this journey:
"You must first evangelise in a transversal way. This will make your life easier because the discipline makes sense and is applicable to many things. It doesn't make sense to apply it to online sales but not to customer communications. Apart from the fact that it is a topic that people love; the areas respond very gratefully when BEco topics are proposed" Angel Alonso
Alfonso Mata, Sr Strategy Consultant at The Cocktail, spoke to us about transformations and the need for a process for organisations to assimilate BEco: "Transitions are complex and many of them fail. They are not linear; they have ups and downs. Moving from HYPE to HUB will always involve a transition process that has 'pains', the main ones being:
● Lack of involvement and sponsorship
● Lack of a clear and cohesive vision
● Lack of clear business objectives or specific needs to be met
Alfonso also told us that during this transformation process towards the BEco HUB, companies can be categorised into three stages:
● Start-up companies: They begin to show an interest in the discipline, usually through individual employees who have identified potential avenues of application.
● Start-ups: BEco is sponsored by specific individuals who have started testing it in some use cases, but in an isolated and unstructured way.
● Mature companies: The company has profiles or even dedicated teams to operate the discipline, evangelise the company, and connect with other areas.
Finally, Alfonso presented a methodology developed by The Cocktail to help organisations transform towards the BEco HUB:
Carolina López, VP of Customer Experience at Banco Santander, spoke to us at the round table about some of the keys to starting the BEco journey at the bank.
"BEco doesn't replace anything you had, but it does complement it very well." Carolina López