Daniel Burstein

Marketing Research: 45% of consumer behavior is habitual (interview with Charles Duhigg)

December 8th, 2015

Let’s pretend for a second you are an alien from outer space studying economics. You’re presented with these two options:

  • Option A: People can make a cup of coffee for 16 to 18 cents in the comfort of their home.
  • Option B: They can haul themselves out of bed earlier, stop at Starbucks and pay two … three … four … five dollars for a cup of coffee.

As a rational alien studying economics, you would know that people will certainly choose Option A.

Except, as we all know, people don’t. They choose Option B. Not everybody, of course. But enough people to generate $16.447 billion in revenue for Starbucks. So many people, in fact, that you must look at this purchase decision — which we’ve become so accustomed to being a part of daily life — as an alien economist to even notice that it’s not a rational economic decision every time people make that purchase.

 

Why people make repeated, economically irrational decisions

So why do people act this way? Because they are no longer making rational economic decisions; rather, they are on autopilot following automated habits. Starbucks’ marketing department has helped turn a simple cup of coffee into a cheap luxury habit.

It’s not just Starbucks, of course. It’s the daily newspaper on your driveway. Movie night. And even, according to Charles Duhigg, the mundane act of brushing your teeth.

Mundane act it may be, but keep in mind the top ten toothpaste brands generated almost $1.2 billion in sales. So it would serve marketers well to get a basic understanding of the science of habit formation.

Which is why I talked to Charles. He’s a Pulitzer Prize-winning reporter for The New York Times, and he’s researched and written the most influential book about the topic — The Power of Habit: Why We Do What We Do in Life and Business. We’re giving away copies in this week’s MarketingSherpa Book Giveaway, which spent 60 weeks on The New York Times’s bestseller list.The Power of Habit by Charles Duhigg

He’s also a featured speaker at MarketingSherpa Summit 2016 in Las Vegas.

I’ve split the discussion into two blog posts. In part one today, you’ll learn how habit is at the core of many purchase decisions and the three components of habit.

We don’t normally publish transcripts of interviews, but Charles was so well spoken that my writing would only get in the way of his insightful points. Here is first part of a lightly edited [for clarity and grammar only] transcript of our conversation.

 

Habit is at the core of many purchase decisions

MarketingSherpa: Let me just start by asking in general, why is it important that marketers recognize habits?

Charles: Well, I think that in many ways, many of the most successful marketing campaigns are campaigns that created habits, right? And I think equally that, and I’m sure that many people who are reading this know this even better than I do, that habits are at the core of many of the decisions we make about brands, and about consumption and all the great things that marketers hope to influence.

When we looked at habits in people’s lives, what researchers have found, and in particular a researcher named Wendy Wood, who’s at Duke University — Wendy followed around a couple hundred people for almost an entire year trying to figure out which of their behaviors were decisions and which of their behaviors were habits.

What she found is that [as much as] 45% of what people do every day is a habit. Right? The way that we get to work in the morning, the route that we take, what we eat for lunch, where we stop to get gas, what kind of gas … we buy, what kind of soda we drink. All of these things are habits, and so understanding how habits function within our brains and within our lives is critical if you are someone who hopes to influence people’s behaviors through marketing.

 

Every habit has three components

MarketingSherpa: You mention that many of the most successful campaigns have created habits, and I know you mention several in the book, but I wonder are there any that you’ve seen that, just as a consumer, something that have really gotten you to create a new habit or that you just saw and you’re like, ‘Hey, yeah, that’s a really interesting campaign. I really like the way they’re doing things.’

Charles: I mean, there’s so many that we hardly even think about at this point because they’re so powerful, right? One of my favorite is milk and cookies. Like people love to drink milk with cookies.

Now, I challenge you. There is no natural state of nature where someone says, apropos of nothing,  ‘I’m eating a cookie. What I really need right now is a glass of milk.’ Right? That’s the power of creating a habit, is that when you start eating one of those delicious Oreos or those chocolate chip cookies, you think to yourself, ‘A glass of milk would taste fantastic right now.’ That’s a habit. That’s because someone really, really cleverly figured out how to link within your brain, cookies and milk.

In the book we talk about the case study of Febreze, that Proctor & Gamble invented this new product that at first was a huge flop. Then they figured out how to make Febreze part of people’s cleaning habits, how to deliver a reward that made people crave that smell, and that made Febreze into a huge hit.

One of the keys things here that at the core, and we haven’t talked about this yet, at the core of sort of the insights about how habits function is this basic finding which is that every habit has three components. We know this from studies in neurology and psychology.

A habit is, first of all — it’s a cue, which is a trigger for an automatic behavior to start, and then a routine, which is the behavior itself, and then finally a reward. That reward is how your brain learns to make that behavior, make that pattern, into something automatic, make it into a habit.

Habit Forming Infographic

 

So once you recognize that, it gives you this really powerful tool for trying to understand — how do I sell a new product? How do I get people to eat more healthily by better habits? How do I get them to drive a different way? How do I get them to find this app that can change their lives? It’s by recognizing that there are these cues and rewards that drive how we automatically behave.

 

Understanding the reward schedule for customers

MarketingSherpa: So, in the book, and what you’re talking about, you talk about the ways that brands or marketers influence customers to create habits essentially like, hey, marketing to have milk with cookies, or what have you, or Febreze.

Have you seen any examples of customer habits actually influencing the brand? So working vice-a-versa or a smart brand out there that’s doing some research and really sees what natural customer habits are and taps into them as opposed to creating them?

Charles: Oh yeah! Absolutely, all the time. I mean, one of my favorite examples of this is …

 

On that cliffhanger, please visit the MarketingSherpa blog on Friday, when we’ll share part two of our interview with Charles Duhigg.

 

You can follow Daniel Burstein, Director of Editorial Content, MarketingSherpa, @DanielBurstein.

 

You might also like

See Charles Duhigg speak at MarketingSherpa Summit in Las Vegas, February 22-24, 2016 (every attendee will receive a copy of The Power of Habit)

Enter for a chance to win a copy of The Power of Habit in the MarketingSherpa Weekly Book Giveaway — enter by December 13, 2015

Marketing Analytics: Why you need to hire an analyst

Email Marketing: Using A/B tests to challenge your assumptions (interview with Dan Ariely from the MarketingExperiments blog)

Daniel Burstein

About Daniel Burstein

Daniel Burstein, Director of Editorial Content, MECLABS Daniel oversees all editorial content coming from the MarketingExperiments and MarketingSherpa brands while helping to shape the editorial direction for MECLABS – working with our team of reporters to dig for actionable information while serving as an advocate for the audience. Daniel is also a frequent speaker and moderator at live events and on webinars. Previously, he was the main writer powering MarketingExperiments publishing engine. Prior to joining the team, Daniel was Vice President of MindPulse Communications, specializing in IT clients such as IBM, VMware and BEA Systems. Daniel has more than 15 years of experience in copywriting, editing, internal communications, sales enablement, and field marketing communications.

Categories: Marketing Tags: ,



We no longer accept comments on the MarketingSherpa blog, but we'd love to hear what you've learned about customer-first marketing. Send us a Letter to the Editor to share your story.