Understanding Consumer Behavior Leads to Understanding Your Employees
James Kelley Ph.D
Employees in your finance department are not the same as employees in the call center, so treating them as such may result in missed opportunities to engage them in wellness initiatives. Utilizing consumer behavior (CB) to segment your employee population could pay dividends when it comes to learning what makes an employee tick.
The Problem + The Opportunity
In Gallup’s “State of American Work Place” report, the study found that 70 percent of employees are either not engaged, or actively disengaged at work. That is not a good start if you are trying to begin, maintain, or grow a wellness initiative. Organizations’ common response to this low level of engagement is to spend more on employee incentives.
According to Fidelity Investments and the National Business Group on Health (NBGH), employers will spend an average of $693 per employee on wellness-based incentives in 2015. However, there is a girth of research that finds incentives are not the best option if you want your employees to truly engage with your wellness program for the long-haul. Consequently, if employee engagement continues to be poor and incentives continue to go up, it would seem like organizations are chasing fool’s gold and ignoring the research. With all the good work going on around workplace wellness and the movement away from ‘wellness to’ employees’, toward ‘well-being for employee’ considering consumer behavior rather than industrial-organizational psychology may be the way to go.
Defining Consumer Behavior
Consumer behavior is “the processes involved when individuals or groups select, purchase, use or dispose of products, services, ideas, or experiences to satisfy needs and desires.” Consumer behavior was born out of psychology, but an important distinction, though subtle, is the context in which CB is applied. Psychology focuses the principles of behavior and cognition to maximize human performance, whereas CB takes the individual behavior and focuses on how, when, and why consumers are influenced during the consumption process. Thus, using CB as the contextual lens for HR executives or wellness directors, the definition of CB drills right down to the challenges they face: gaining a deeper understanding of the processes of why some employees do and do not engage in a wellness program. Consequently, the field of CB may be helpful in providing insights for the wellness industry. This article discusses two overarching topics that HR executives and wellness directors can use to gain a deeper understanding of employees and to better understand the factors of adoption for a wellness program.
The Art of Segmentation
Segmentation is the art of dividing up a population into manageable, measureable and responsive smaller groups. There are several methods for segmenting your population from simple demographics to more complex methods of psychographics.
First, are basic demographics, such as age, gender, income and zip code. Demographics are fairly straightforward and allow Human Resources to easily dissect the employee population. This method should be used at a minimum to create a simple employee breakdown for better targeted messaging. However, though a simple solution, and most cost effective, this will probably yield minimal results. By using demographics, there is a set of assumptions made about a similar group. For example, a majority 25-35 will behave similar, have similar hobbies, and in general like the same things. This also complicates wellness-branding strategy by creating a singular message to employee segments that may have differing attitudes, beliefs and behaviors.
Next, HR looks into behavioral segmenting, which is based on the basis of how employees feel about, act toward or use a good or service. Behavioral segmenting is slightly less common then demographics. Historically, organizations focus their efforts on the high-risk employee population in an aim to reduce health care costs. The problem with this approach is that it focuses on negative behavior, and this can lead to shame and/or guilt for the employee population which in turn feeds a negative corporate culture. Instead, consider flipping this concept in another direction and focus on positive behaviors in the organization. For example, using behavioral segmentation, an organization can find and cluster all the employees who believe in mindfulness, yoga, or exercise in general. This can be method for finding wellness champions and strengthening the corporate perception of caring.
Psychographics—or the use of psychological, anthropological or sociological factors—is the most robust type of segmentation. They require a unique set of resources; however, the effort may just result in fruitful outcomes.
It is my belief that this approach has the greatest potential to make an impact with wellness programs. Utilizing psychographics takes a more scientific approach, but it allows organizations to cluster employee populations based on activities, interests, and opinions leading to segments of the employee population responding to similar wellness branding. This method also allows an organization to gain a deeper understanding of their employees’ values.
At face value, this method could be seen as too personal. I would argue that it is not about the individual but rather the population. For example, knowing that some employees are highly materialistic, or opinion followers/leaders or risk adverse versus risk takers, can have a profound impact on saying the right message to the right employee population. Words are a powerful tool. Especially when the right audience is listening.
In the end, dividing the employee population into manageable, measureable, and responsive segments can pay dividends for gaining a deeper understanding of what your employees want and need in a wellness program. Additionally, consumer behavior provides a plethora of different psychological measures that can be explored inside the organization that provide a deeper and more robust understanding towards employee’s wellness consumption. However, there are several factors that can also have an impact on an employee’s participation in a wellness initiative.
Why Employees are Unwilling to Adopt Wellness Initiatives
To better explain this concept, it is important to briefly discuss how individuals recognize they have a problem. An individual realizes they may have a problem when they experience internal tension between their current mental state (I’m unhappy with how I physically feel) and their ideal mental state (I want to physically feel good). When the dissonance becomes significant, they will search for alternatives to reduce this mental tension. Consequently, it is important to the success of the wellness initiative that the initiative itself is meaningful and clear, and that its perceived benefits are succinctly articulated.
Choose a point of relevance, and let that point be known. Pointing out one clear competitive advantage gained from participating in an initiative will help create tension in the decision-making process. Research has identified four key factors that affect adoption: complexity, trialability, observability, and relative advantage.
The degree to which an employee finds a wellness initiative difficult to either participate in, or understand. When all things are equal, we choose to engage in new wellness initiatives when they are easy to understand and when the perceived risk of participation is low. Use K.I.S.S. (Keep It Simple, Stupid). Life is complicated enough, the wellness program need not be. By making barriers of entry low, you will increase the likelihood of success.
Trialability is the ease of trying a wellness initiative for a limited time. Like many things in life, if employees can first try the activity without a large-scale commitment, they are more likely to give it a go. Call it dating. Or think Apple store demos, or food samples in a grocery store. For wellness, the success rate will be higher if your employees can first ‘try’ it with minimal or no commitment. Incentivize the trial, not the behavior. Incentivizing ‘the behavior change’ only will land you back at square one. It is well documented that using incentives does not result in long-term behavior change. However, what if we lower the incentive and pair it with trying the new activity? Not fool-proof, but what if you capture 3 percent more into the program?
Observability is the degree to which the benefits of participating in the wellness initiative can be observed. The rapid adoption of initiatives with tangible results (weight loss, lowered blood pressure, reduction in body fat, etc.) is due to these easily observable outcomes (Note: I do not support this practice, it is merely an example). The ability to witness what one can achieve is a powerful tool for getting individuals to buy in to its success. Treat the success of your wellness initiative like a parade— march out your champions for all to see. It doesn’t have to just be individuals who lost weight, or accomplished a challenge. It could be something as simple as recognizing employees who completed a mindfulness workshop: Print and distribute certificates of completion for display at workspaces.
Relative advantage is the degree to which a wellness initiative is perceived as superior to what currently exists. Perceived relative advantage is arguably the most important attribute of those discussed here, and should be considered the ‘moment of truth’ when a wellness initiative is launched. If the organization does not currently have a wellness program, it is critical to create a communication strategy that targets the various constituencies in a way that best relates to their wellness needs. However, if the organization is currently running a multi-prong approach to providing a robust wellness program, but the engagement numbers are low, it is very possible that the organization is not taking an inside out approach to creating and supporting organizational initiatives.
Wrapping it All Together
Whether you want to gain a deeper understanding of your employee population or determine what is impacting employee adoption of a wellness program, consumer behavior is ideal for exploring employees path to wellness consumption. At the end of the day, with engagement as low as it is, and job satisfaction in the dumps, gaining a deeper understanding of how, what and when employees engage is never more critical than now.
About the Author
Dr. James Kelley is the CEO of Brave Endurance Wellness Consulting, where he uses his unique background to help organizations maneuver their wellness needs. He specializes in using consumer behavior as a core mechanism to assist organizations. Dr. Kelley received his Ph.D. from the University of Western Australia in 2010, and is also an Assistant Professor of marketing at Saint Joseph’s University in Philadelphia, P.A.