Episode 34 - Behavioural Science I

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📰 Top Story: Behavioural Science

My brand new CRM Marketing course is getting rave reviews, particularly the behavioural science section. In it, I highlight 32 different behavioural science techniques you can use to maximise the impact of your retention activities at moments of truth. 

The truth is that behavioural science is critical to driving CRM marketing performance, but these techniques can be applied to a wide range of customer touchpoints and interactions.  

Of course, the right retention strategy is critical to driving retention outcomes, including 

1. Understanding the levers you can pull to drive retention 

2. Understanding and focussing on moments of truth 

3. Understanding customer lifetime value

4. Understanding how value is realised

5. Customer love & customer centricity 

6. Focussing on the right customers  

These are things I have gone deep on in previous episodes, you can check these out here.

While applying these strategies is critical to maximising retention outcomes, what matters is how you execute your strategy. 

You can have a brilliant strategy, but if you execute badly, you will fail to make an impact on retention KPIs.

Behavioural science (alongside the right data, personalisation and measurement approach) is a critical element of brilliance in CRM Marketing and retention execution. 

What is behavioural science?  

Dictionary.com defines behavioural science as “the scientific study of human and animal behaviour.”

In the context of retention, though, it’s about tapping into what Daniel Kahneman calls the automatic system. 

Daniel Kahneman has shown that human beings leverage two neurological systems to make decisions: 

While we think that every decision we make is considered the reality, our lives are so busy we often refer to the automatic system to make decisions without even realising it. 

Truly, we only use the slow or rational mind for major life decisions like getting married, moving home or having a child. 

Behavioural science in retention involves leveraging execution techniques across all customer touchpoints (e.g., CRM marketing, digital experiences, and service channels) that tap into the automatic mind to drive mutually beneficial outcomes. 

Here are two examples.

The ‘yeah whatever’ heuristic 

If you favour one set of outcomes, you can significantly influence people by choosing it as the default. 

Customers who are satisfied with the service will likely stay with the default rather than change.

This is the ‘yeah, whatever heuristic.’  

This is especially the case if the barrier to change requires effort. 

A great example of this comes from the world of sport: Manchester United. 

At Manchester United, switching from a program where fans were requested to renew their Official Membership manually every year to a program where customer renewal was automatic at the start of the season hugely increased the number of fans whose membership was renewed earlier.

Hindsight bias 

Staying in the world of sports, hindsight bias or the ‘knew it all along effect’ is when you see past events as being more predictable than they really were. 

Researchers have shown that people tend to believe they knew things would happen, even if pre- and post-event testing proves otherwise. 

A great example of this is a football expert friend who states that after a major football tournament, they knew X team would win, when in fact, if you tested this before the tournament, the truth is that they would not. 

Gambling brands can use this to prompt sports betting by creating content encouraging customers to believe they knew with hindsight what would happen. 

The logical next step would be to predict the next sporting event. 

In the next episode of this newsletter, we will dive into three more behavioural science principles. 

🤖 AI Feature

This week, the big news in the world of AI was the release of Deepseek's new AI chatbot, which beat or was comparable to major models like ChatGPT and Claude but delivered at a fraction of the cost.

This Forbes article argues that the real story is not geopolitics or NVIDIA’s share prices crashing but that open-source AI is now upending traditional closed-source models.

Until Next week, 

Tom 

Feedback on my BRAND NEW CRM Marketing Strategy Course

“A brilliant course, offering insights into a wide-ranging selection of topics."

"Love the case studies."

"The behavioural science module is the most engaging and useful one"​​​

"It's excellent, packed with valuable insights and practical takeaways.” 

“It was a fantastic experience, and I’d highly recommend it to anyone looking to expand their skill set in CRM & Retention Marketing.”