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Smart City & Behavioural Sciences: two sides of the same coin?

 

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Why and how Smart City and behavioural sciences are meant to collaborate in the close future.

 

 

 

WHAT IS A SMART CITY?

 

Urbanization has never been spreading so quick. The percentage of people living in cities is increasing every day (50% worldwide and 77% in Europe). An ever-growing population living in reduced spaces becomes a real challenge. A geo-demographic conundrum lies in maintaining people’s life quality, as well as promoting a reasonable, ecological and sustained use of energy. Real-time data collecting, artificial intelligence, big data and connected objects are all technological innovations that bring a new dimension to this challenge: they create an information network from which decisions can eventually be taken.

 

 

“Twenty-first century’s cities shall be built around their inhabitants’ habits, behaviours and needs”

 

 

Adjusting public transport to real-time busy periods, improving waste recycling, centralizing cities’ services for better efficiency, encouraging the production and use of sustainable energy, improving the co-existence of different ways of commuting… these are all issues which a Smart City is eventually supposed to provide adequate solutions.

 

 

USERS AT THE HEART OF THE SYSTEM

 

As Smart City enthusiasts put it, users’ behaviour is at the heart of the system. Smart Cities will be developed through them and for them. Twenty-first century’s cities shall be built around their inhabitants’ habits, behaviours and needs. Smart Cities will be democratic! Beyond the above-mentioned technological improvements, other more down-to-Earth issues are at stake: 1) understand users, their psychology and expectations to adequately answer their needs, and 2) reciprocally, for users to respond to a Smart City’s requirements, guiding them towards new habits.

 

 

“Communicating is not influencing, proposing is not persuading”

 

A CRITICAL ROLE FOR BEHAVIOURAL SCIENCES & NUDGES

 

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Understanding and predicting citizen’s behaviour is one thing. Favouring the adoption of new habits is another. Public projects commonly fail to stimulate citizens’ commitment mainly because communication agencies and public relations experts usually are unable to anticipate users’ psychology and behaviour. This is especially true for projects linked to waste recycling or sustainable energy use. Communicating is not influencing. Proposing is not persuading. Yet communication represents the launching platform for Smart City projects. It is not sufficient to provide recycling bins for citizens to use them. For guidelines to be followed, it is not sufficient to ask people to save water on a drought period, nor to save electricity during times of peak demand. The Smart City can eventually optimise our collective lifestyles if and only if users behave in a way that makes this optimisation possible. Without adherence or commitment from users, Smart Cities will simply fail.

 

The aim of a Smart City is by definition to promote efficient and sustainable collective interests. The question lies in how to translate these collective interests into individual motivations; without any effort of this sort, new habits promoted by the Smart City simply won’t be added to its citizens’ behavioural repertoires. There is a need for persuading users to modify their habits and adopt new ones. This can be achieved through associating the ergonomy of the Smart City to users’ psychology.

 

 

ENCOURAGING USER’S COMMITMENT & ADHERENCE

 

The good news is that behavioural sciences have uncovered many solutions intended to successfully influence behaviour: nudges, strategical communication, decision architecture or more traditional social psychology interventions all propose efficient techniques to encourage the creation of new norms and habits.

 

smart city behavioural sciencesIt does not come as a surprise that currently these disciplines are largely ignored by strategic planners and agencies. Indeed, these groups commonly tend to focus more on the aesthetic aspects of communication campaigns than on core messages and how they are framed. I argue that Smart Cities’ stakes are too high to ignore users’ psychology and not put it at the centre of the thinking process. Encouraging citizens to adopt new habits is a subtle and crucial process. Behavioural sciences genuinely provides necessary and reliable tools to make it a success.

 

In 2014, the governments of 51 countries worldwide were using or planning to use a range of behavioural science techniques, including nudges, for public innovation projects. In the UK for instance, David Cameron’s government set up a Behavioural Interventions Team from 2010 onwards.

 

These past initiatives now provide useful feedback about how Smart Cities can benefit from behavioural sciences’ techniques. Cities have a chance to be smart only if the professionals involved in their development rely on rigorous approaches and knowledge about how people think, take decisions and act. This represents a critical turning point for the creation of tomorrow’s user-powered and sustainable urban centres.

 

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ABOUT THE AUTHOR:

 

Dr Morgan DAVID   

A former academic and behavioural sciences expert, Dr Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, public innovation, communication & customer experience. ANALYTICA is the creator of CogniSales and of CogniMenu, the first neuromarketing service of new-generation menu engineering aimed at improving restaurants’ sales.

 

 

neuro-marketing menu engineering

What is menu engineering?

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Your restaurant’s menu is your number 1 generator of sales. Menus and display boards have unexploited sales potential which menu engineering can optimise. Largely ignored by traditional marketers, this innovative tool generates a substantial improvement in restaurants’ average orders and margins. What is menu engineering, then? And how does it work?

 

 

Menu engineering is a technique that reinvents restaurants’ menus and display boards to optimise their sales. We are not talking about replacing current meals, their composition, or the restaurant’s philosophy! Chefs and restaurant owners are the best people to propose meals and services that suit their vision, while menu engineering uses neuromarketing, price optimisation and customer-experience. Once employed, these techniques lead to a powerful and efficient change in a menu’s structure, its layout and the way pieces of information are displayed on it.

 

Previous-generation menu engineering aims to categorize different meals and beverages based on their contribution margin and their popularity. This way you can easily identify the most profitable meals and also those that require more selling effort.

 

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Yet, it is essential to go beyond this limited phase of identification to apply a corresponding tactic that will improve your margins and average orders. How can new-generation menu engineering improve these two essential dimensions of your profits? By developing and reinventing your menu and display boards through four tactics:

 

 

1/ PRICE OPTIMISATION

 

Optimising prices allows you to increase margins and to avoid losing sales opportunities. Decreasing the price of a meal does not automatically translate into more sales. Conversely, raising the price of a meal will not automatically decrease sales. Fast-food and gourmet restaurants follow different rules regarding pricing strategy and price presentation. By carefully analysing any meals’ profitability to determine a price optimisation tactic, you will 1) reach a wider variety of clients, and 2) avoid losing sales opportunities and revenue related to sub-optimal pricing.

 

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Discover CogniMenu, the 1st new-generation menu engineering service in the UK!

 

2/ NEUROMARKETING

 

So far you have improved margins by optimising prices. The second step will consist of guiding your customers towards the most profitable meals and beverages. To this end, neuromarketing is crucial for your price optimisation strategy to be a success. Also called ‘customer psychology’, neuromarketing uses the way our brain takes decisions to guide your customers in their choice of a meal. By increasing the popularity of meals with the highest margins, neuromarketing generates higher profits. This is achieved through reinventing the way information is laid out on your menus and display boards, and through improving their structure.

 

 

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3/ STRUCTURE

The structure of your menu or display boards is the cornerstone of your menu engineering strategy. Price optimisation and neuromarketing requires restructuring your menu to achieve efficiency. The structure and organisation of your menu are crucial to guide your customers in their choice of meals. A carefully-built structure will also contribute to a better customer experience.

 

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4/ CUSTOMER EXPERIENCE

 

Unsatisfactory customer experience results in less sales and missed repeat business. I better repeat this twice for emphasis: you need to understand your customers’ needs to please them and generate successful sales. For these reasons your menu has to follow basic ergonomic principles. For example, information on your menu and boards must be displayed in a way that customers’ brains will process with ease and accuracy. That may sound simple, but many menus and display boards are nothing but puzzles to be solved by your customers. Most menus do not anticipate customers’ queries and automatic reasoning. The fluency with which information can be explored by your customers is a crucial determinant of their satisfaction.

 

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Are the menus or display boards of your restaurant optimised? Find out with the brand-new and FREE tool developed for you by CogniMenu, the 1st new-generation menu engineering service in the UK! Click here or on the link below to analyze your menu!

www.cabinet-analytica.fr/en/assess-your-menu/

 

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ABOUT THE AUTHOR:

Dr Morgan DAVID   

A former academic and behavioural sciences expert, Dr Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, webmarketing, customer experience, sales strategy and pricing tactics. ANALYTICA created CogniSales, a neuromarketing sales service, and CogniMenu, the first new-generation menu engineering service.

 

 

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What is neuromarketing?

Offering great services and great products is rarely enough to generate sales. The reason for this lies in our brain. As functional as it is, our brain does not always act in a rational way!

 

 

 

Our brain uses precise rules when collecting, processing information and eventually taking decisions. Neuromarketing consists of taking into account these decision rules, along with the way our brain works, to optimise customer experience and encourage purchases. Emphasis can thus be put on products and services that provide you with the highest margins and profits.

 

Neuromarketing is not magical! Techniques used are based on rigorous scientific evidence from psychology, and their efficiency has been proven to improve selling strategy. Neuromarketing is a great, reliable and efficient tool to increase sales, margins, and your customers’ satisfaction and loyalty.

 

SOME EXAMPLES

 

  • One of the most famous examples of neuromarketing are prices ending with the number 9. Labelling a product at £49 will appear more cost-effective in customers’ eyes and generate more sales than the same product labelled at £50. This is true, but not in every case. It has been proven that a price ending with zero, such as £50, increases customers’ quality perception of the corresponding product, thereby increasing purchase intent. Context indeed matters: a technique that is efficient to boost sales at a given point of purchase may not be as efficient at another one. It is neuromarketing experts’ work to adjust these techniques in a subtle and individualized way as a function of your needs and of your business’ peculiarities.

 

  • Another application consists of taking into account the way our brain makes choices: we mostly compare different options in a relative way, rarely an absolute way. For instance, a pair of shoes labelled at £40 will be perceived as a more of a deal when compared with another pair labelled at £50, than when compared with a third one at £30, and when on its own. This effect can be used to promote products and favour their purchase.

 

 

Neuromarketing and consumer psychology applied to packaging

 

 

  • Another technique linked to pricing consists of splitting the cost of a service to increase client loyalty. It has for instance been shown that people paying a monthly membership to a gym trained more regularly than people paying membership on an annual basis. Annual memberships decreased loyalty to the gym and to the brand, but also the consumption of side-products, such as food, drinks and sports equipment, sold in the facilities. In this situation, a monthly membership strategy seems like a more beneficial pricing strategy.

 

 

“Neuromarketing is an efficient and easily applicable tool to boost sales”

 

 

Again, what is relevant and efficient for one business might not be the same for another one. The act of buying is known as being psychologically ‘painful’ for customers. Reducing the number of buying instances should in some cases be favoured. For instance, insurance companies could provide their clients with offers including several options at a given price rather than enabling them to add costly options separately.

 

To conclude, neuromarketing is an efficient and easily applicable tool to boost sales. Its associated techniques, when applied by experts, will lead to major improvements in customers’ satisfaction and loyalty, and increases in profits and margins.

 

 

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ABOUT THE AUTHOR:

 

Dr. Morgan DAVID   

A former academic and behavioural sciences expert, Dr. Morgan David is the founder and director of ANALYTICA, a consultancy agency based in the UK and in France. ANALYTICA uses the way our brain works to design better products and better services in the realm of neuromarketing, webmarketing, customer experience, sales strategy and pricing tactics. ANALYTICA is the creator of CogniSales and of CogniMenu, the first neuromarketing service of new-generation menu engineering aimed at improving restaurants’ sales.