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Oracle Data Cloud Blog

The psychology behind consumer-purchase decisions with Dave Kelly, CEO, AnalyticsIQ

This week’s guest blog post by Dave Kelly, CEO, AnalyticsIQ, is abstracted from the original, published in The New Possible thought leadership journal.

In the digital universe, where business competition is fierce and advertising is relentless, marketers need every advantage to reach the right customer with the right message.

Many give themselves a better chance of doing exactly that by using big data and predictive analytics to anticipate the “who, what, when and where” of consumer actions. However, due to the lack of quality data related to cognitive motivations, the “why” behind consumer purchases has been historically difficult to examine and understand, let alone predict and leverage for personalized marketing.

This is because, as James Kobielus, IBM Data Science Evangelist states, “most pop psychology that pervades marketing is shallow” and “largely unsupported by solid academic research.”

Nevertheless, it’s undeniable that a legitimate understanding of the specific cognitive factors driving individual consumers to make the distinct purchase decisions they make would provide marketers with unprecedented insight for campaign optimization. As Eric Bradlow, Professor of Marketing at Wharton, explains, “the science of psychology—why people are doing what they are doing—in traditional marketing research provides a great complement to what can be measured.”

Our team of marketing analysts at AnalyticsIQ knew we needed help to develop the psychological motivation predictors that are achieved when the worlds of cognitive science and predictive analytics collide.

While some parallels exist, predictive marketing analytics and cognitive psychology are uniquely complex fields. Even though both rely heavily on scientists, surveys and statistics to expand the breadth of knowledge available within each respective discipline, it is obviously unreasonable to expect a marketing data scientist to have a grasp on every nuance and intricacy needed to develop reliable psychological scores.

It’s just as unreasonable to expect a cognitive scientist to build predictive data products resulting in a 360-degree customer view. As previously mentioned, surveys are a common method used in both psychology and marketing to collect unavailable or nonexistent data. But self-reported survey results aren’t always trustworthy because human beings are not the best barometers of their innermost motivations and characteristics.

And there is no guarantee every respondent will interpret and answer a particular question as intended. An expertise in psychology comes in handy in multiple ways when attempting to break through the initial barriers when pursuing dependable survey results for predictive modeling. Specifically, question creation and overall survey design benefit when embedded with best practices in psychology in mind.

Carefully considering the way questions are worded, the number of question variations asked, the response options and where questions are positioned relative to others from a cognitive perspective greatly increases the chances of producing a stable survey. While these considerations may seem insignificant, the culmination of each can lead consumers to provide valid responses.

Read more from this article by visiting page 26 of The New Possible thought leadership journal.

About Dave Kelly

Dave is an analytics entrepreneur with strong business acumen. After successfully creating and selling Sigma Analytics in the early 2000s, Dave founded AnalyticsIQ in 2007 and was named the ‘Analytic Marketer of the Year’ in 2012. Whether he is taking care of his employees, meeting with clients or traveling the world, this car-lover is always on the go!

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