Swiss companies leaving potential of behavioural economics untapped
Companies in Switzerland are making little use of the findings generated in the field of behavioural economics. In particular, these findings could help make marketing more successful. The reason for the lack of use is the low level of knowledge in the companies themselves. This is shown by a current ZHAW study.
More than 70% of small and medium-sized enterprises in Switzerland have failed to make use of behavioural economic findings and methods up to now, or have only done so to a limited extent. The main reasons for this are a lack of knowledge and experience, as well as of awareness of the subject within companies. At the same time, around 80% of respondents believe that behavioural economics offers medium to high potential for their companies and their marketing activities. This is shown by a study by the ZHAW School of Management and Law based on interviews and on a survey of executives and marketing managers in Swiss companies.
Major competitive advantages
The field of behavioural economics looks at human behaviour in an economic context. In particular, it investigates people’s actual decision-making behaviour and analyses which factors have an effect. «Especially in the English-speaking world, governments and also NGOs and companies rely on the expertise of behavioural economists. They use this knowledge to gain a better understanding of the behaviour of citizens, employees or customers or to set incentives to promote a desired behavioural trait,» explains Kurt Ackermann, the main author of the study and deputy head of «Behavioral Marketing Unit» at the ZHAW School of Management and Law. Scientific studies indicate that the use of knowledge from the field of behavioural economics can generate significant competitive advantages for companies, including increased sales growth. It can, for example, be advantageous for a provider to present three product variants in an online shop (e.g. small, medium and large) in order to guide consumers towards opting for the medium variant and thus to promote its sales.
Lack of knowledge of basic terminology
However, the study shows that only just over one-third of the company representatives questioned in Switzerland are even familiar with the term «behavioural economics». What's more, only one in every six knows the word «nudging», which refers to simple measures aimed at triggering desired behaviour. «Examples of nudging include the application of adhesive strips to the floor to make it easier for people to keep their distance and other visual reminders that have become ubiquitous since the outbreak of the coronavirus crisis,» explains Ackermann.
Importance of behavioural economics set to grow
In future, the use of behavioural economics is likely to increase in Swiss companies. «After all, around one in ten of all the companies questioned already have employees who work exclusively on behavioural economic topics and questions,» says Steffen Müller, head of the Behavioral Marketing Unit. Furthermore, approximately 70% of those companies that do not currently employ corresponding staff would consider it useful to have such expertise.
The «Swiss Behavioral Economics Study» is based on telephone and personal interviews with managers and marketing heads, as well as a quantitative survey encompassing around 130 Swiss companies from various sectors. The survey was conducted in the summer and autumn of 2019.
Complete study: www.zhaw.ch/imm/behavioral-marketing
ZHAW School of Management and Law, Institut für Marketing Management, Dr. Kurt Ackermann, Telefon 058 934 68 98, E-Mail: email@example.com