Liraz Margalit, "Being vulnerable is ... the birthplace of innovation, creativity and change"

One of the biggest unanswered questions that haunt marketers is why customers behave the way they do. With data analytics, it's now possible to paint a very specific picture of what customers do, when they do what they do and where. But why?  

This is where Liraz Margalit comes in. A digital psychologist, Liraz blends cognitive psychology and behavioral economics to help clients better understand customers' behavior. While we're all irrational beings, understanding the triggers and underlying psychology driving our decision making can give companies a competitive edge. In her regular column, Liraz explores the at times illogical choices we as customers make and the just as dubious decisions marketers make to woo us. 

What kept you sane during 2020?

In Israel we had a coronavirus lockdown at the beginning of the outbreak. Before the outbreak I was away almost never home. I was on a business travel routine, and all of my plans suddenly got canceled. I knew that the only way to mentally get used to the idea of staying home is to switch gear. Focusing on what I’m missing is useless. So I decided to take advantage of this time at home and finally finish my book — Mind Change — how the digital world reshape our thoughts, emotions and behavior. I created a discipline process at home that is based on a new routine — getting up early, meditate (a practice I found extremely helpful in adopting a new perspective), get my morning run to help me clear my head. Not to be too scientific on you here but physical activity stimulates the release of serotonin and the dopamine that really brighten up that mood (if you wonder — outdoor exercise was allowed during the lockdown). And then after a nice breakfast I was sitting down to write. I truly believe that the fact that I set a new and exciting goal kept me going and of course the new routine really helped me stay in focus.

Where do you look for inspiration for your articles?

I think that’s the million dollar question for every writer. How to keep writing creatively and how to keep my audience engaged. My inspiration comes from different sources, and usually when I least expect it. The rule for me is — If I try too hard to come up with a new idea — it never works. My most significant source of inspiration comes from talking to my clients. When they consult with me on the challenges they are facing or ask me to help them figure out different aspects of consumer behavior, I always gain new insights.

For example — analyses of ecommerce websites that I conducted for one of my retail clients revealed surprising behavior: visitors who were exposed to additional details and information about the product were less likely to purchase it compared to visitors who were exposed only to the product image and general details. The reason is that product information forces the brain to activate a rational thought process and hence prevent the emotional process from taking place. The emotional process is what triggered impulse purchase. Ironically, customers are not aware of the effect that "too much information" has on their behavior and when asked, they repeatedly state that being provided with information about the product before purchasing plays a central role in their purchasing decisions.

So my inspiration is always a combination of psychological theory and consumer behavior practice. Although we like to think of ourselves as rational creatures, absorbing information, weighing it carefully, and making thoughtful decisions, many of our most crucial choices are made by what we call hunches, gut feelings and a somewhat automatic reaction that is beyond or beneath consciousness.

What’s the best piece of advice you’ve ever received?

After seeing the unforgettable Ted Talk by Brené Brown I understood something about myself, I understood that I don’t let myself be vulnerable and moreover, I see vulnerability as weakness. I kept trying to convey an ideal perception of myself to others and it made me avoid taking unnecessary risks. I used to believe that showing imperfection is the worst that can happen to you and that the most important thing in life is to be perfect. But I learn that vulnerability is not weakness. Brene defines vulnerability as emotional risk. Being vulnerable is to let ourselves be seen, and it is the birthplace of innovation creativity and change. In this Ted Talk she quoted “the man in the arena” by Theodore Roosevelt. Whenever I fail I go back and read it and remind myself to enjoy the failure.

I will put it here for you:

'It's not the critic who counts, it is not the man who sits and points out how the doer of deeds could have done things better, and how he falls and stumbles.

The credit goes to the man in the arena whose face is marred with dust and blood and sweat but when he's in the arena at best he wins and at worst he loses but when he fails, when he loses, he does so daring greatly.'

Which of your projects or research from 2020 (or upcoming for 2021) are you most excited about and why?

After eight years of experience of working as a digital psychologist, I realized that yes, people want speed and convenience, but, what they really want is a personalized experience. Businesses have so many different kinds of users requiring various types of experiences, and 'personalization' — that million-dollar idea that we can predict customers’ behavior in advance and then offer them a tailored online experience — is touted as the ultimate solution. Enterprises are pouring resources into personalization in a bid to gain an advantage on their competition and increase their profits. The problem is that businesses are swimming in data about their consumers, but despite all this information, they don’t know why their customers are buying their product.

So seven month ago I co-founded a startup that developed a humanized bot that is dialogue-oriented. Rather than serving the same advert to 100 million people, you can sub-segment people by personality and change the creative to resonate with individuals based on how they see the world. We leveraged conversational-AI and behavioral models to let brands engaging customers by personality profile. We offer the chance to empathize with individuals, and engage them with the message, advertisement, or content in a way that is more likely to resonate with them. Beyond traditional personalization based on demographics, or consumer self-expressed desires, this kind of customization claims to interpret basic human drives and match issue messaging with personality traits. It empowers brands to use a chatbot for the entire customer journey, from asking if they are happy with your service to get a special discount, upsell, or announcing a new feature — all through one friendly and personalized channel.

If you could only recommend one business book, what would it be and why?

"The Engineering of Consent" is an essay by Edward Bernays first published in 1947, and a book he published in 1955. Who knew that Sigmund Freud, the father of psychoanalysis and critic of all things American, was an unwitting contributor to the rise of Western consumer culture? Women sporting cigarettes as a symbol of female empowerment and the ubiquitous bacon-and-egg breakfast were two public relations campaigns inspired by Freudian ideas. The link between theory and practice was Edward L. Bernays, the acknowledged father of public relations and nephew of Sigmund Freud.

The book offers an utterly fascinating probe into the depths of consumerism and democracy. It reveals how those in power have used Freud’s theories to manipulate public opinion and perception and you can see those ideas still exists today. Alexander Nix, Cambridge Analtyca CEO’s said: “We can use ‘big data’ to understand exactly what messages each specific group within a target audience need to hear. By understanding how people think we can identify what it would take to change their mindsets and associated voting patterns.”

As in Bernay’s words:

'The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of…in almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind, who harness old social forces and contrive new ways to bind and guide the world.' (Propaganda, Edward Bernays)

What was the best book you read  in 2020?

"Behave: The Biology of Good and Evil" by Robert Sapolsky

What was the best movie you watched  in 2020?

"The Inventor: Out for Blood in Silicon Valley"

What was the best meal you ate in 2020?

On a business trip to London at Yuu Kitchen