Figuring out how consumers make purchase decisions can guide marketing campaignsConsumer behavior, while generally a sum of thoughts, feelings, opinions, spending power, convenience and persuasion, is never a direct combination of all of these things, even in a certain formula. It is complex, variable, and often seemingly contradictory.

Behavioral economics attempts to understand the complex nature of consumers. Marketers and business owners can use this kind of insight to guide everything from the layout of their stores to the layout of their promotional brochures.

"Marketers have long been aware that irrationality helps shape consumer behavior," said a recent report from the McKinsey Quarterly. "Behavioral economics can make that irrationality more predictable. Understanding exactly how small changes to the details of an offer can influence the way people react to it is crucial to unlocking significant value – often at very low cost."

For example, not all purchases – even when they are of the same amount – are felt equally, said the report. For one, consumers view spending their windfall gains, pocket money, income and savings all differently, with the first two causing the least amount of pain and the last two ordered according to increasing amounts of painfulness.

Consequently, delayed payments are potentially more convincing than coupons or discounts, because they allow consumers to keep more of their money at that moment. Businesses therefore may want to advertise a "buy now, pay later" option.

In addition, an abundance of choices can actually hinder conversions. The McKinsey Quarterly cited a study in which a display of 24 jams was set up in a grocery store, along with a display of 6 jams. While the larger display garnered more visitors, it saw few purchases. However, the display of 6 jams got fewer visitors but sales were more than five times higher.

How does this apply to marketing? Choose your featured products and services carefully and focus on those, instead of bombarding consumers with page after page of choices. Postcard campaigns can be a great way for marketers to stick to this principle, as there are only so many offers that can be displayed on a small card.

Even aside from behavioral economics, paying attention to consumer preferences should always be part of a well-designed marketing campaign, as studies have shown that the most effective marketing messages are those that are perceived as relevant to the recipient.

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