Behavioral economics expert Melina Palmer on exploring the science of consumer behavior

The majority of our purchasing decisions are made by the subconscious brain. Do you know how to contact him?

For many years, economics has followed the principle of the economic man: a theory that assumes that individuals are rational in their decision-making and make logical choices based on cost-benefit analyses. This, of course, turned out not to be the case. People are not always rational when making economic decisions. And that's where behavioral economics comes in: drawing on psychology, it recognizes that human behavior is often influenced by emotions, cognitive biases, social norms and many other factors, highlighting the inner workings of our decision-making.

Behavioral economist Melina Palmer believes it's essential to consider this idea when creating marketing and sales strategies: don't appeal to the rational man, target the subconscious mind. And the best part is that a few tweaks here and there can make all the difference. Melina is an applied behavioral economist, consultant, teacher at the Texas A&M Human Behavior Lab, and host of The Brainy Business podcast. She is also the author of the book What Your Customer Wants and Can't Tell You: Unlocking Consumer Decisions with the Science of Behavioral Economics, which explains the neuroscience of consumer behavior. And that is precisely what we are going to talk about today. Which messaging works best? Why do people buy the things they buy? Why do customers choose certain brands over others?

In today's episode, we caught up with Melina to talk the secrets of consumer decisions and how to use behavioral economics to communicate more effectively and increase your bottom line.

Lack of time? Here are some key points:

Framing things differently can have a big impact on consumer behavior and decision-making, and businesses can use it to attract customers and differentiate themselves from competitors. In business, it is important to learn to understand what motivates the subconscious part of the brain that is involved in the buying process and to learn how to communicate with it. Applying behavioral economics is like cooking: when you understand concepts like framing and anchoring, you can combine them and modify recipes to drive business results. As a species of breeder, we seek security in numbers - which is why testimonials and star ratings are effective in influencing behavior. Numbers are also very powerful in influencing our decisions. Be more thoughtful and question habitual decisions. By applying this mindset and constantly testing and tweaking things, you can open up new growth opportunities for your business.

If you like the discussion, watch more episodes of our podcast. You can follow on Apple Podcasts, Spotify, YouTube or grab the RSS feed in your player of choice. The following is a slightly edited transcript of the episode.

From Broadway Dreams to Behavioral Economics

Liam Geraghty: Melina, thank you so much for joining us. You are welcome to the show.

Melina Palmer: Nice to be here.

Liam: To start, could you tell us a bit about your background to this point in your career?

Melina: Of course. In fact, I had always planned to go to musical theater school. This was the plan forever and ever. And then, in high school, I decided that I didn't want to be a high school choir teacher. I liked mine, but it wasn't the path I wanted for myself. I finished in business administration and marketing. When I was doing my undergrad there was a class where there was a section in a book about buying psychology and why people do what they do, and I thought that was just the most incredible thing I had ever seen in my entire life. I had never really thought about getting an advanced degree, but then I said, "I'm going to get a master's degree in this."

"I knew I was early because I was looking for it, but I didn't know how early I was"