The rise of artificial intelligence, machine learning, and other advanced technologies is making marketing more data-driven than ever before. Marketers can now measure nearly every aspect of their audience and use that information to target them with precision. But all this data also means there’s more information to parse. How do you know which stats are most important? Which details are relevant for your campaign? That’s where Psychology comes in. By understanding the science behind how humans process information and make decisions, you can make better strategic decisions about your marketing plan. This article will introduce you to some of the key concepts behind the science of marketing, including neural networks and heuristics, social psychology, and decision theory.
What is a neural network?
A neural network is a computer system that simulates how neurons in the human brain function. Humans have billions of neurons that interact with each other to process information. A neural network functions the same way, but with computers programmed to simulate these biological functions. Neural networks are a type of machine learning, meaning that the system automatically improves its performance through a process called “training”. There are many different types of neural network algorithms currently in use, but all of these algorithms work by breaking down a problem into smaller bits and pieces. Then, the algorithm generates a model that predicts the relationship between these pieces. Neural networks have many applications in the field of marketing, from predicting customer behaviour to marketing automation.
How biases and heuristics affect our decisions
Biases and heuristics are two of the most important concepts when it comes to the science of marketing and how people make decisions. Biases are mental shortcuts that people often rely on to make decisions quickly. Because this process is quicker, it also burns less energy and is therefore more sustainable over time. This is why biases are often called “energy-saving devices”. The three most common biases when it comes to marketing are the availability heuristic, anchoring, and confirmation bias. Let’s look at each of these in more detail. The availability heuristic is a mental shortcut where we assume that what we can easily recall or think of is also likely to happen. For example, if you want to estimate how many people will visit a particular city, you might be tempted to think of your home city, even though that number isn’t relevant. Anchoring is another common marketing bias in which we base our decisions on a specific number. This number can be arbitrary or come from an outside source, but it can also have a big impact on how we see the world. For example, when buying a new car, the first price you hear may have a big impact on how much you’re willing to pay for that car. Even though a much better deal might be available, you may be stuck with a lower number in your head.
The art of predicting human behaviour
As you’ve seen, marketing is all about predicting human behaviour. Who will buy your product? How can you communicate that it’s the best option for your audience? These are just a few examples of the types of questions marketers are trying to answer every day. All of these questions boil down to the same concept: predicting human behaviour. Marketers use a variety of tools and techniques to measure consumer behaviour and predict future actions. Some of the most common methods include A/B testing, surveys, focus groups, and predictive modelling. Marketing analytics and experimentation are also essential parts of the process. How will you know if your marketing tactics are working if you don’t measure how they perform compared to other strategies? Data analysis and experimentation will help you identify the best strategies for your business.
Psychology is one of the most important fields in marketing, but it’s not the only factor to consider when making strategic decisions. Social psychology, decision theory, and other disciplines are also critical for developing a winning marketing strategy. At the end of the day, it’s important to understand all the factors affecting your decisions and remember that no one factor is ever responsible for a win.