How Does Behavioral Science Impact Business?

Human capital is the common denominator at the root of all business activities. Organizations are started by humans, operated by humans, and ultimately exist for humans. So as a business owner, it makes sense that when you understand what influences human behavior, you’re in a better position to motivate employees, strengthen customer relationships and establish buy-in from stakeholders. In other words, it helps to know behavioral science.

First of All: What Exactly Is Behavioral Science?

Behavioral science studies which factors drive human thoughts, actions, choices, and interactions. It’s based on neuroscience but is also influenced by a person’s emotions, biases, environment, or social conditioning. While some behaviors are unique to an individual, others are sociocultural patterns shared by a collective group. Harnessing these patterns is a subtle but effective contributor to organizational success.

Behavioral science can be used in various business spheres, from marketing to management, to impact decisions and leverage certain outcomes. How does this work? Once you can see the “why” behind human behaviors, you can nudge customers, employees, and other stakeholders to choose particular actions that will benefit your bottom line.

This occurs with a strategy called heuristics, or choice architecture. According to research from Business Information Review, the term heuristic means “to discover,” so when applied correctly, it will cue someone to discover the right course of action you want them to take. You’ll achieve this by streamlining the brain’s decision-making processes to focus on your outcome as the most attractive, beneficial, or logical choice.

How Does Behavioral Science Impact Business?

The overarching idea is this: when a person thinks they made a specific discovery on their own, they’ll choose to act on it. For example, let’s assume you want to nurture a more productive, collaborative work culture. Instead of forcing those behaviors on team members, you’ll present collaboration and productivity as the most viable choices.

Offer experiential insight into how these traits fuel higher levels of team morale, performance, camaraderie, satisfaction, and overall success. In doing so, you’ll incentivize employees to choose your desired actions without micromanagement. And because it’s their decision, those behaviors are more likely to be sustainable long-term.

This tactic is also effective in impacting consumer decisions. Picture an online marketing campaign to sell a product. Rather than being too pushy with a barrage of obvious sales pitches, you can use heuristics to showcase your product as the most rational, default choice that everyone is making. Limit the scope of decisions, position your brand as the right option, and build a campaign that will be hard to resist.

Behavioral science gives you a window into the habitual way consumers’ experiences and conditioning influence how they spend money and interact with brands, points out Frontiers in Psychology. This information will help you craft a marketing message that appeals to the social norms of your customer base and tells the brain, “This product has value. I need it to enhance my life.” As a result, they’ll be more inclined to purchase.

How Do You Combine Data with Behavioral Science?

Of course, you can’t allow human behavior to dictate all business operations and strategies. Personal biases can sometimes obstruct decision-making or result in unpredictable choices. After all, human beings are not always rational actors, so you won’t be able to anticipate the same patterns of behavior all the time.

You’ll need to balance what behavioral science observations tell you with hard, real-time data from consumer analytics, market research, and team performance metrics. Using only behavioral science to drive your customer and employee interactions can lead to errors in judgment when you expect them to act in a certain way based on experience (or even your own bias), but they choose to do something else entirely.

“Behavioral insights are helpful,” point out the business and financial experts at Concorde Investment Services. “But make sure that you rigorously examine their origin and context.” Are those insights rooted in actual metrics you can visualize, measure, and plot out, or are they based on assumptions of how a person could behave?

When you combine behavioral science with actionable data analysis, you will be more successful in your communications, operations, and other organizational processes. To understand what makes the human brain tick, compare this information against your market research, and you’ll have a winning combination.

Behavioral Science Can Be a Key Ingredient for Success

Think about an obstacle your business is currently facing. It could be an issue with employee performance, customer retention, brand awareness, marketing impressions, or anything else. Now consider how you might be able to solve this problem with a more in-depth knowledge of what motivates the decisions of those you want to influence. That’s the power of making behavioral science part of your business model.

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