We asked five entrepreneurs what behavioral economics can do to improve your startup’s status in the industry. Check out their answers below.
To Understand Micro-Behavior
Our ability to experiment with data, A/B test, and create models of behavior with minutiae requires us to rethink traditional behavioral economics. For us, understanding why people make the food decisions they make becomes paramount to providing them with decision-making information that facilitates healthy eating behavior. Think of it as a marriage of design thinking and revenue streams.
– Vivek Narayan of GorMonjee
To Not Overwhelm Consumers With Choice
Behavioral economics can make the irrationality of consumer behavior more predictable. When a default option isn’t possible, you must be wary of generating “choice overload,” which makes consumers less likely to purchase. Reducing the number of options makes people likelier not only to reach a decision but also to feel more satisfied with their choice.
To Build Better Business Insights
The core idea of behavioral economics is to form a better understanding of how people think and act. By studying how your customers interact with your products, and what they are thinking as they do so, you can identify and eliminate problem points. Figure out what’s giving them a bad experience, and get rid of it.
– Steven Buchwald of Buchwald & Associates
To Make Your Products/Pricing Easy to Understand
If your pricing or options for prospects or even existing clientele are too complicated, people will give up and go somewhere else. I’ve done it plenty of times when I am shopping for different goods and services. The easier it is to understand from an outsider’s point of view, the more you’ll sell.
To Break Down Options
Rather than showing the whole price, you can show the pricing per part. I am the owner of a tutoring company. Rather than giving my clients the price for the whole package, I show the pricing per hour.
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