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How to grow in a recession using Behavioral Science Experimentation

Words by: Chris Goward Last updated: June 1st, 2022 10 min. read

  • Behavioural Science

Today, we are in an unprecedented global emotional event.

We’ve had global meltdowns, tragedies, and humanitarian crises before, but this is the first time in living memory that the whole world has been fighting a common enemy with such uncertain outcomes.

This isn’t the only threat humanity faces, but it’s galvanized action like no other. Think about how little has been done about the climate crisis. Why is this different and what does it mean for all of our businesses and livelihoods?

I want to explore that question from a Behavioral Science perspective.

But first, as I begin this message, I’m conscious of all the people who’s health, jobs, and even survival are being affected by COVID-19. I want to acknowledge all the people who are dealing with the medical crisis personally or through loved ones. My thanks go out to the medical community that is supporting all of us with their tireless efforts. This article is not intended to address the health crisis, but to help leaders understand how the crisis is affecting your customers, and take steps to protect your employees, customers, supply chains and financial results.

So, let’s look at how your customers’ behavior and needs have changed today, and what it means for your business.

Everything has suddenly changed

Everyone’s behaviors and habits have immediately and massively changed in the past few weeks. Everyone is now spending more time at home, either in quarantine or at least changing their social distancing behaviour. Everyone is considering how often they wash their hands and touch their face. Everyone is thinking about their toilet paper supply like they never have before.

People in isolation still have the same needs. They just have to be met online more than ever.

Every need must now be met digitally. Which means your business is now digital-first, whether you’re ready or not.

Suddenly, Zoom video conferencing is the hottest stock on the market, and Amazon can’t keep up with demand, intentionally slowing shipments of non-essential items for the first time ever.


Some businesses are booming, but make no mistake, the recession is coming no matter how much stimulus the government throws at it.

Just like in the 2008 recession, some will survive and others won’t. I should know. I started Widerfunnel mid-2007… right before the Great Recession of 2008-2009. Great timing, right?

From that challenging experience, I learned that those who will survive and thrive through the coming recession will be the ones who, today, focus their resources on deeply understanding their customers, testing innovations, and building customer loyalty in the midst of it.

Every crisis contains opportunity. In every struggling economy, some businesses fail and others find new opportunities and emerge stronger.

How does a crisis or economic downturn affect people’s behavior

A crisis causes people to feel and behave differently. The first is…

Cognitive biases are amplified

Stressful and emotional situations cause people to revert to more instinctive, and less rational behavior patterns.

We’ve all seen the toilet paper hoarding panic in the news. It’s happening everywhere. But why? There isn’t a supply chain problem. There’s no shortage of toilet paper. This behaviour doesn’t make sense if you don’t understand Behavioral Science and Cognitive Biases.

This can be explained by a cognitive bias called the Scarcity Effect, which tells us that People place higher value on scarce objects and lower value on those that are abundant. Even the hint of a shortage of something we depend on creates irrational buying behavior. It’s a basic survival instinct and is very hard to overcome.

The effect is amplified in crisis because people are spurred on by what other people do as well. This cognitive bias is known as Herd (or Mob) Mentality, which is an extreme of Social Proof, when individuals are affected by a herd, they may make different decisions than they would have individually.

People react to their unconscious emotions in predictable ways. They don’t respond to their rational, conscious thoughts.

There are hundreds of cognitive biases like these that can help you understand people’s irrational behavior.

But, Behavioral Science is more than a list of cognitive biases.

Many marketers and business leaders have become confused about Behavioral Science and Behavioral Economics. They’ve been fooled into thinking they can pull out a list of cognitive biases to trick their customers into buying more. But that should not be your goal as a business leader.

The goal of Behavioral Science is to find insights about your customers’ emotional needs that lead to resonance and action. By understanding the emotional and functional needs of your customers, you can more effectively meet them, creating satisfied, loyal customers.

The second, and arguably more important insight about times of crisis is…

People are more willing to change habits in times of upheaval

One of the most difficult things to do in a business is to change buyers’ habits. It’s suddenly become much, much easier.

Through Widerfunnel’s current work with innovative services, such as HP Instant Ink, Dollar Shave Club, Root Insurance, Heifer International, The Motley Fool, and many more, we’ve learned that people’s habits are difficult to change.

A customer insight study for Dollar Shave Club, for example, revealed that their customers have a high degree of inertia in their shopping habits. Changing from buying razors and deodorant in the grocery store to having it delivered monthly is a well-worn habit that many people won’t bother to change. That inertia and disinterest in changing can be overcome more effectively by increasing the perceived value of the Dollar Shave Club subscription. People simply don’t invest the attention or energy to change their habits unless they feel a strong need to.

But today, you don’t have to put quite as much brute force behind getting people’s consideration.

What we know now is that after a major life change event, people are more likely to make changes to their habits. This is a newly discovered cognitive bias called the
Habit Discontinuity Hypothesis.

Several recent studies have validated this, including a fascinating study by Bas Verplanken and Debbie Roy, which showed that when people’s habits are disturbed, they are more sensitive to new information and adopt a mind-set that is conducive to behaviour change.

Think about that for a moment. Who’s lifestyle has not been disturbed by the COVID crisis?

What that means for you is that everyone on the planet right now is more open to considering new information and behavior options than ever before. In the current emotional context, people are primed to hear your messages and consider whether they should change their previous habits and defaults.

The third consideration is…

What you knew about your customers no longer applied

Customers are not only more open to change today, but what they need, want, and value has also changed.

Testing to validate your insights is more important than ever.

We’ve run many experiments over the years that prove the importance of considering seasonality. Seasonality is not just the changing of the four seasons or holidays, but any external event that changes the emotional context and motivation. For example, occasions like Christmas, Mother’s Day, and Valentine’s Day in the West create an increase in emotional Urgency.

Think about how the current seasonality affects the external forces in the 6 conversion factors. During a crisis, external urgency is increased. People are more likely to take action even without a lot of added persuasion.

On the other hand, patience is lower in your visitors. This puts extra pressure on Relevance. Your extraneous information can cause people to bounce more quickly.

Today, we’ve entered a new seasonality context. The emotional context and needs plus functional needs for your products may be entirely different.

The only way to know how to communicate effectively to your customers is to experiment much more.

If you respond to this crisis effectively over the coming months, and experiment even more to learn the new lay of the land, you can leapfrog ahead.

Don’t retrench now. Invest in the right areas.

You can take action to increase your chances of success. Here are a few things you can do.

Question your existing insights and assumptions

Behavior, emotion, and needs have changed. Update your messages for the time we’re in. Controlled testing now is more important than ever to validate new insights.

Get more competitive

Double down on your investment in experimentation now. The competitor who innovates and optimizes best in this time will win.

Increase your confidence

Uncertainty increases fear. Use a mix of qualitative interview methods with low cost experiments to validate assumptions before major investments and then strike with confidence.

Minimize Risk and speed up expertise

If you don’t have a highly mature experimentation program, consider outsourcing experimentation to experts. You can get all the expertise you need without risk to scale up and down quickly. This is the brilliance of companies like Uber. In a down economy, they have no risk of massive layoffs because all of their driver labour is outsourced.

Ask powerful questions

Use a mix of qualitative and quantitative methods to dive deep into your customer insights through the lens of Behavioral Economics and Behavioral Design. A mixed-methods approach is the best way to triangulate on the truth by gathering both highly confident validation and deeply rich “thick data” insights.

Create customer loyalty in crisis

When people feel they are disadvantaged or in need, they never forget someone who gave them a leg up. If you can deliver added value now, you’ll earn customer loyalty. If you need inspiration, here’s a list of companies that are doing good in this crisis.

Great leaders rise to face challenges. This is your time to shine.

We are often more frightened than hurt; and we suffer more in the imagination than reality.

– Seneca

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