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One Big Behavioral Economics Lesson for Email Marketers

Imagine you’re on your way to work and happen upon a pop-up coffee stand. They’re handing out free cups of coffee in exchange for feedback about the drink. There’s a table with the usual coffee-related complements like milk, cream, and sugar — but also some offbeat options like orange peel, sweet paprika, and anise.

Even if you have absolutely no interest in adding a dash of paprika to your coffee, the fashion in which those offbeat spices are presented — whether they’re in classy crystal spice containers or jagged-edged Styrofoam cups — will likely affect your enjoyment of your coffee.

That’s what researchers Marco Bertini, Elie Ofek, and Dan Ariely discovered when they ran this experiment at MIT. Ariely describes the results in his book, Predictably Irrational:

[T]he interesting thing was that when the odd condiments were offered in the fancy containers, the coffee drinkers were much more likely to tell us that they liked the coffee a lot, that they would be willing to pay well for it, and that they would recommend that we should start serving this new blend in the cafeteria. When the coffee ambience looked upscale, in other words, the coffee tasted upscale as well.

Whether you go for a fancy pour-over at a hipster cafe, the comforting contents of a hefty diner mug, or a skinny extra-hot caramel macchiato upside down venti at Starbucks — you probably have a strong preference about where you get your brew. How did that preference come to be? There’s a lot at work beyond the cut-and-dry calculation of quality and cost — a jumble of taste, memory, perception, feeling, and as this experiment shows, the design around your experience.

Ariely is a behavioral economist, which means he studies how psychological, emotional, and cognitive factors impact our motivation, decision-making, and behavior, or more simply put, why the heck we do what we do, in spite of all our diets and dreams. Of course, looking to fields like behavioral economics and psychology is nothing new in marketing — if anything, it’s part and parcel of the job — nor is it very surprising that aspects like presentation shapes behavior.

And yet.

I’ve been thinking a lot about email marketing goals, how we see much more handwringing over the short-term pursuit of opens and clicks versus the long-term pursuit of meaningfully understanding and impacting customer behavior.

Sometimes the nuggets of insight into human nature we get from fields like behavioral economics seem tailor-made to apply as email hacks and ploys — but in doing so, we might be missing the forest for the trees, customers for clicks. How are your email messages changing decisions beyond the click? How are they influencing broader customer perception, experience, and behavior?

Designing behavioral marketing decisions

Kristen Berman, a co-founder with Ariely, of Irrational Labs, reminds us that whatever our intentions, the way we communicate, operate, and build things affects what people do:

It is the person who designs the environment in which we live in who has the most influence on our decisions as opposed to the person who is actually making the decision.

How you communicate with your users is part of their environment. You’re playing a role in designing their decisions beyond the issue of whether they clicked on a link or not. You see, email plays especially well as an environmental element or a component of choice architecture. Because email tends to span a series of multiple interactions, serve as an extension of your product or offering, and feel personal and relevant, you can use it to design experiences.

Great experience design provides a notable competitive advantage. In the brick-and-mortar world, that may be the interior design and atmosphere of a space. The ambience that Starbucks deliberately created in their stores, for example, played a vital role in their success. The roasty aroma of fresh ground beans, the earthy colors and smooth music, and menu of fancy Italian-sounding drink names at a time when third places were few and third-wave coffee yet to bloom established Starbucks’s position as a go-to spot. “I’ve always loved the design aspect of Starbucks,” chairman and CEO Howard Schultz writes in his memoir Pour Your Heart Into It. “I consider graphics and store design to be a differentiating factor, a way to show our customers that Starbucks is one step ahead.”

Many internet businesses (that aren’t e-commerce) put off or don’t put resources into user communication, beyond occasional announcements and promotions. But what’s going to stand out and keep you steps ahead in this software-eating age is people’s experiences in the environment you create for them — and a core part of that is how you communicate with them.

To me, the most significant takeaway from behavioral economics that we can apply to marketing, and email in particular, is to push to be much more creative, empathetic, and intentional when it comes to people’s experiences. Are we designing decisions, architecting choices, building value, and promoting people’s experiences or merely promoting?

Do you have any email success metrics beyond opens and clicks? Share with us in the comments!