Application of Behavioral Economics to Life Science Market Research

Whatever your opinion on behavioral economics, it’s hard to escape. It is the subject of several best sellers (‘Freakonomics’, by Steven Levitt and Stephen Dubner; ‘Thinking, Fast and Slow’ by Nobel Prize winner Daniel Kahneman) and some of its principles have even entered the general lexicon (e.g. ‘game theory’, ‘loss aversion’).

As a theory on human conduct, it rests on the observation that people often make illogical decisions. Homo economicus, a being that behaves with perfect rationality and self-interest, is not real. Many factors drive irrational behavior – these may be psychological, cognitive, emotional, cultural, or social, and work at conscious or subconscious level.

As someone professionally invested in understanding not just how people behave but why, I find this subject fascinating. In particular, this idea that we believe we are more rational than we are in reality. This speaks to one of the main challenges of drawing meaningful insights from market research – if customers cannot recognize the true drivers of their own behavior, how are marketeers, strategists and sales teams meant to know?

This gap between stated and actual behavior is well accounted for in the retail sector, with experts available to apply key principles to explain everything from purchasing life insurance to cereal. Now you could argue that while ‘Joe Public’ is susceptible to emotional thinking, life science professionals are ‘built differently’. They are trained to make conclusions based on objective analysis of data. But I would say that belief is somewhat naïve and refer you to a different sector with scientifically-minded consumers – healthcare professionals.

I have been on the receiving end of many a lecture from doctors emphasizing the importance of facts and taking emotion out of the equation. Yet, in the same interview, they tell me they prefer treatments with which they feel comfortable, even if data suggests a newer alternative is superior. A perfect example of irrational behavior dictating decisions, in this case likely driven by familiarity bias. By using this knowledge, pharma companies are also leveraging behavior triggers to optimize brand success.

What does this mean for market research with life science professionals? First, we need to acknowledge that life scientists, like physicians, like you and me, are only human, and just as subject to the same biases and influential factors. Next, we need to execute research appropriately. Hanson Wade Intelligence combine highly scientific technical knowledge with clever questioning and techniques that truly get ‘underneath the skin’ of your customers. Finally, content must be analyzed via this lens, to deliver a deep understanding of not just what is said, but what it means.

We have had great success approaching research with this mindset, revealing new insights in a space our client thought they knew all there was to know. This allowed them to revitalize their communication materials to increase resonance and land more effectively.

One final thought – many clients are frustrated because customers are not acting as desired, and they feel powerless to change it. If this frustration feels familiar, then let Hanson Wade Intelligence show you how the utilization of behavioral economic principles could make the difference.