Introduction
Like haute-couture clothing, the business world is a place of fashion fads. When a topic gets a certain momentum behind it, it will suddenly start to appear everywhere. Journeymen journalists and LinkedIn shills will pop in to stoke the public’s anxiety and a torrent of content will flood the web.
As you have probably already experienced, such an outpouring of content makes it very easy to lose your footing, after which you can get swept away by the rolling tide into making bad investment and organizational decisions. Therefore, many of the most important trends of the last couple of years (Crypto being the prime example) have had profoundly negative impacts on a lot of individuals and corporations.
The mere fact that a topic is or has been fashionable, does however not mean there is no innate value to it. It therefore makes sense to take a moment to look back on a topic when the fervor around it has settled down somewhat.
In this article, we shall delve into the concept of psychological targeting, and its potential uses in scaling Change Management. The type of intervention we are discussing in this article first captured the public’s imagination in 2018, when the Facebook–Cambridge Analytica data scandal broke out and it was revealed that unscrupulous corporate actors had misused data harvested from up to 87 million Facebook users to interfere in the U.S. Presidential elections of 2016 and the Brexit referendum.
What is Psychological Targeting?
The first thing we must do is create a comprehensive definition of psychological targeting. Out of the available options in the literature, we prefer the one in (Appel & Matz, 2021), which defines psychological targeting as follows:
“The process of extracting individuals’ psychological characteristics from their digital footprints in order to target them with psychologically-informed interventions at scale.”
Psychological targeting is thus a method primarily used by advertisers and marketers to tailor their messages and content based on individuals’ psychological characteristics, preferences, and behaviors.
An important remark here is that in most current applications, psychological targeting is usually deployed in a rather straightforward manner to tailor the content of an offering to specific psychological profiles. Equally interesting is the application of insights from psychological targeting towards tailoring the form of the message, which can be far more persuasive.
Where Does Psychological Targeting Originate?
The practice of psychological targeting emerged with the advent of data analytics and the digital age. The availability of vast amounts of user data from online platforms and social media has fueled the development of psychological targeting strategies.
Through advanced techniques such as machine learning, data mining, and predictive analytics, marketers can extract valuable insights from the data generated by individuals’ online activities. These insights enable the identification of patterns, correlations, and preferences that form the basis of psychological targeting.
What Value Can Psychological Targeting Unlock?
Since psychological targeting offers substantial value in the field of marketing and advertising, it is necessary for us to start with a comprehensive overview of its value-enhancing capabilities in this field. Once this primer is out of the way, we shall extrapolate potential uses for the psychological targeting toolkit in the field of change management.
Personalized advertisements have long been seen as the ultimate force multiplier by marketeers. The more relevant an ad becomes, the more chances for the marketing operation to reach its goal.
Personalization is of course a key aspect of psychological targeting. The core idea behind it is that when individuals encounter messages that align with their personality traits, interests, or values, they are more likely to pay attention and respond positively. This targeted approach leads to higher levels of engagement, as individuals feel a stronger connection with the brand or product being advertised.
Moreover, psychological targeting enables marketers to allocate resources more effectively. Instead of deploying a broad and generic campaign to a wide audience, they can focus their efforts on specific segments with higher potential for conversion. This not only saves costs but also improves return on investment (ROI) by reaching individuals who are more likely to be interested in the product or service.
In other words, by tailoring messages to resonate with the psychological characteristics of individuals, marketers can enhance the holy trinity namely:
- Engagement
- Increase conversion rates
- Maximize the effectiveness of their campaigns
These benefits can specifically be accrued when targeting new customer groups. It is notoriously hard to tap into new customers. If you have never sold or worked with a target audience before, how would you be able to draw their attention after all? By using psychological targeting to tailor your product offering to the new customer’s psychological need, it becomes easier to find purchase.
By extension, psychological targeting can also help you change the content of your message to suit the individual’s underlying personality type. A city could market its extensive indigenous culinary landscape to individuals with a high Openness, while they could create marketing materials emphasizing the presence of international chains, as well as the presence of restaurants serving the target tourists native cuisine (e.g., to a Belgian tourist low in Openness, a place like Cape Town could market its lovely Belgian restaurant at the V&A Water Front, as well as the fact that brands like Burger King, McDonalds, etc. are also present).
A Small Case Study: the Hilton Hotels & Resorts
The Harvard Business Review offers a fascinating case study of the Hilton Hotels & Resort group. Hilton’s primary aim was to use psychological targeting to create richer and more-personalized customer journeys.
By offering an application that travelers could connect to their personal Facebook profile, travelers who opted in would receive a personalized travel profile. This included recommendations about travel packages based on their personality type and instructions for the local staff on how to interact with travelers based on their personal profile (e.g., instructions not to engage in small talk with introverted travelers).
By using psychological targeting to tailor both the form of the customer experience as well as the content, Hilton was able to generate a considerable amount of buzz. The audience saw clearly that benefits were shared between Hilton and the end-user, which was very important to the eventual success of the campaign (60.000 users in 3 months and winning a prize for travel marketing innovation). This in turn resulted in higher click-through and social-engagement rates, which meant a higher return on investment and brand visibility for the company.
Why should change managers keep track of developments in psychological targeting?
Change keeps accelerating
The uses of psychological targeting, however, can go beyond the realm of mere marketing. Over the last two decades, our world has grown increasingly complex. This has led to a proliferation of acronyms ranging from TUNA (Turbulent-Uncertain-Novel-Ambiguous) to VUCA (Volatility, uncertainty, complexity, and ambiguity) and some others that are even more exotic and obscure.
In this VUCA/TUNA world of ours, the need for change has grown exponentially. Not only are the very foundations of our society constantly overwritten by new political, social, economic, environmental, legal, and technological changes, the pace of change has also accelerated tremendously.
This has created a directly proportional need for more change management, while simultaneously forcing change management to become more sophisticated. So not only do we have more instances of change management, which follow up one another in a more rapid pace, but also the change complexity has risen.
This requires new approaches to looking at (behavioral) change, particularly when engineering new broad-based policies that can influence wide ranging aspects of the population. The most well-known example of a (relatively) new approach is the proliferation of Nudge theory, based on the work of the famous professors Thaler and Sunstein.
Behavioral change approaches
Nudge theory, rooted in behavioral economics, suggests that small, subtle changes in the way choices are presented or framed can significantly influence people’s decisions and behaviors.
By consciously designing choice architecture around specific needs, policymakers and organizations can “nudge” individuals towards making choices that are in their own best interests or align with desired societal outcomes, while still preserving freedom of choice.
These nudges work by leveraging cognitive biases and heuristics, gently steering individuals towards preferred options without imposing mandates or limiting options. The most famous example is the increase in organ donations after death (an extremely desirable behavior) which can be achieved from moving from an opt-in system to an opt-out system.
Of course, the fact that Nudge theory is the most famous approach, does not make it the only one. Nor are these various approaches mutually incompatible. On the contrary, since the problems and changes themselves are getting more complex, the solutions must do so as well.
Why should change managers use Psychological Targeting?
Keeping that in mind, insights derived from psychological targeting add another tool to the arsenal of the change-and policy manager. Psychological targeting is so interesting because it goes beyond demographic and geographic segmentation by delving into the psychological makeup of the targeted audience. By understanding the unique motivations, values, and beliefs of individuals, change managers can create highly personalized and relevant campaigns to enable behavioral change.
Psychological targeting relies on psychological models and theories to identify and categorize individuals based on personality traits, interests, emotions, and cognitive patterns. For instance, a commonly used framework for this type of Digital Phenotyping is that of the “Big Five” personality traits (despite the fact that this model is not without its critics):
- Openness to Experience: People with high scores on the openness to experience trait show interest and curiosity regarding a myriad of ideas, values, ways of thinking, and behaviors.
- Conscientiousness: Conscientious people are those who are very disciplined, structured, and who (always) strive to do what is right.
- Extraversion: Extraversion is the trait of being warm and enthusiastic in social interactions. Extraverts are usually also assertive and sensation-seeking in general.
- Agreeableness: People high in agreeableness want to be liked by others. Overall, they tend to be trustworthy, modest, and generous with their time and resources.
- Neuroticism: Neuroticism is related to how a person deals with negative emotions. It tells us something about how an individual acts and experiences the world around them.
This Digital Phenotyping is basically a form of psychological segmentation derived from mining people’s digital footprint. Other psychological factors such as motivations, needs, and decision-making processes can also be considered. As always with digital models of anything, it is however good to keep in mind that GIGO (Garbage In, Garbage Out) is also applicable here. So, only enrich the model with additional factors if you are sure, you have a sound methodological framework and good data in place.
Potential applications of psychological targeting for change managers: a fictitious use case
Let us imagine a luxury car brand, with the stated objective of trying to sell as many cars of its new EV model as possible. The push needed to bring this new model to market, especially in a context of increasing competition from China and elsewhere means that this manufacturer will have to reinvent itself almost completely.
One of the ways in which it will have to adapt is in its manufacturing process. The transition to producing an EV will require massive change and since existing production techniques will have to be adapted, this is the perfect time to further accelerate the digitalization efforts of the company.
To be able to make this transition, however, the change will need to be accepted by the entirety of its workforce. To aid them in this endeavor, our fictitious car manufacturer brings in a team with expertise in psychological targeting.
It then plugs this team into its existing change management unit and asks it to “feed” insights to change mangers who are working hard on the construction of a standard ADKAR change trajectory.
ADKAR is a change management model that provides a structured approach to guide individuals and organizations through successful transitions. The acronym represents the five key stages of change: Awareness, Desire, Knowledge, Ability, and Reinforcement. It emphasizes the importance of addressing the psychological and behavioural aspects of change, starting with creating awareness about the need for change, fostering a desire for the change, providing the necessary knowledge and skills to implement the change, enabling individuals to demonstrate the required abilities, and reinforcing the change to ensure long-term adoption.
The psychological targeting unit than sets up a questionnaire, which is spread across its employees (even better would be a link with Facebook profiles or other such sources of data, but given GDPR legislation, this type of intervention would be out of the question).
The goal would be to gather enough data to make a compelling psychological map of its employee landscape. This map could then be used by the change managers to navigate their way through various potential ways to implement their ADKAR phases. Let’s assume for simplicity’s sake that, based on a personality assessment, the available data shows that there are two main groups amongst the car brand’s employees:
- High extraversion and open to new experiences: Thrill seekers with a love of gizmos and performance.
- High in conscientiousness and neuroticism: People with a preference for safety and a vehement longing for reliability
By creating targeted change approaches that focus on the many possibilities of the new system and the speed at which it can operate for audience group one and another ADKAR trajectory focused on the reliability of the new tools and their inherent contribution to increasing safety in the work space the company could thus enthuse both groups of change recipients. Due to the careful examination of the data, the car brand was able to discern these two attractive blocks amongst its employees, learned how to better understand them and was also able to identify them (. With those three elements in place, the car brand could capitalize on its newfound information and reduce the change resistance amongst its two very different employees group who would have otherwise have been ill-served by more generic change trajectories which would please neither group.
Where Does Psychological Targeting Originate?
The practice of psychological targeting emerged with the advent of data analytics and the digital age. The availability of vast amounts of user data from online platforms and social media has fueled the development of psychological targeting strategies.
Through advanced techniques such as machine learning, data mining, and predictive analytics, marketers can extract valuable insights from the data generated by individuals’ online activities. These insights enable the identification of patterns, correlations, and preferences that form the basis of psychological targeting.
How to adapt Psychological Targeting to the world of work
These sophisticated techniques do not just play a role in the private sphere, however. While it is true that social media platforms play a significant role in gathering user data for psychological targeting. They are not the only source of data in town. Apart from the standard sophisticated surveys and such, which can be created from scratch at ever-more competitive rates, there are other ways to replicate the data from social media platforms used by employees in the private sphere.
What makes social media such an interesting source of information is the fact that you can mine everything from user interactions to interests, to likes, shares, and comments. All of which provide valuable information about individuals’ preferences and behaviors. The strict controls on privacy however, and the need to separate work and private life makes it difficult to include this source easily.
There is however a rather good replacement for it, which is used by more and more companies who have succeeded inmoving part of their internal life online through the creation of successful internal social media platforms and/or enterprise social networks (the latter term is the one we prefer and shall thus use).
In some organizations, enterprise social networks are set up without giving much thought to their strategic long-term use. These networks will inevitably have to fold over time as the platform will most likely not be embraced by the people inside the company.
As always, it is important to adopt and adapt tools based on a clear strategic directive. If the goal is to be innovative and fast, such an enterprise social network can be a real game changer. Aside from being properly set up to make the data harvestable, a company will also have to invest into being transparent about its intentions with the data and crucially, willing to share the accrued benefits that will come from a massive usage of the internal enterprise network.
As the Hilton case teaches us, if you can set up a system in such a way that people actually see that the spoils of war are shared, they will quickly become enthusiastic adapters. This in turn can create a virtuous circle, as more benefits can be unlocked over time by adding more data into the platform.
What are the Uses of Psychological Targeting
Psychological targeting finds applications in various domains, harnessing its potential to create highly tailored and impactful Change trajectories.
In marketing, psychological targeting allows for the creation of personalized advertisements that resonate with specific segments of the target audience. For example, an online retailer can analyze customers’ browsing and purchasing history to identify their preferences and recommend products tailored to their unique tastes.
Political campaigns also utilize psychological targeting to tailor their messages and influence voters. By understanding voters’ personality traits, values, and concerns, political campaigns can deliver messages that appeal to specific segments of the electorate. This approach aims to sway undecided voters or reinforce the support of those already inclined towards a particular candidate or party.
Furthermore, psychological targeting is employed in e-commerce to customize the user experience and enhance engagement. Online platforms analyze user behavior, such as click patterns, time spent on product pages, and past purchases, to deliver personalized product recommendations. This approach not only improves customer satisfaction but also increases the likelihood of cross-selling and upselling.
Finally, as we have focused on throughout this article, the insights that make psychological targeting such a powerful tool in the political sphere or in the field of marketing can also be used to create detailed change trajectories who take care to curate message content and form into a format that is easily digestible for people in various segments of the target audience.
What Are the Dangers of Psychological Targeting?
While psychological targeting offers benefits, it also naturally raises concerns regarding privacy, manipulation, and potential societal risks. We have already seen how far it can spiral out of control in the case of the Facebook–Cambridge Analytica data scandal, where practices were employed that according to many in the academic community clear the threshold for coercion and deception. The elimination of these type of bad actors can only be achieved when everyone is mindful of the dangers.
The extensive collection and analysis of personal data for targeting purposes raise ethical questions regarding consent, data security, and privacy. Individuals may be unaware of the extent to which their personal information is being utilized, and the potential for misuse or unauthorized access to sensitive data can erode trust between consumers and organizations in the long-term. The rapidly expanding academic and popular literature on Surveillance Capitalism as defined by Prof. Shoshana Zuboff in her eponymous book of that name from 2019 shows just how far this damaging trend has already set in.
Another concern is the potential for psychological manipulation. By tailoring messages to exploit individuals’ psychological vulnerabilities or biases, change managers can influence their emotions, beliefs, and behaviors. This manipulation raises ethical questions about the boundaries of persuasion and the potential for abuse, particularly in the context of political campaigns and other sensitive domains.
Moreover, psychological targeting has the potential to reinforce echo chambers and polarization. By delivering personalized content that aligns with individuals’ existing beliefs and preferences, there is a risk of creating filter bubbles that limit exposure to diverse perspectives. This can contribute to societal fragmentation and hinder open dialogue and understanding.
On a purely business front, you also always must wonder whether the investment in psychological targeting has a good business case. Human psychology is notoriously complex, so if it is not done properly, it might introduce unnecessary static into the equation. If you are working with an existing set of stakeholders, you might be better off just looking at their past change resistance or compliance and not bother to include personality statistics.
How To Mitigate the Dangers Associated with Psychological Targeting?
Given the dangers we outlined above, it is worth mentioning the various guidelines recommended by experts to ensure that psychological targeting does not become predatory. The best and most important guarantee, as always, is a strict commitment to ethics. It should always be clear that having the power to use something does not mean that it therefore immediately becomes okay to implement. Always be respectful to your end-users. Try to treat them fairly and strive to minimize risks.
Furthermore, it is very important to avoid creating the feeling that you are duping the end-user into something. It is thus important to be very transparent about what data you will gather, how you shall do it and what the benefit to both the company and the end-user is. We would therefore recommend starting with privacy as a default and have all the additional services be the result of opt-in procedures (which would of course require you to spell out very clearly what the stated intent is of the policy or service you are asking the end-user to opt-in to).
The goal in all of this should be for the personalization efforts to be recognized and appreciated by stakeholders, in the same way personal service is valued by people being served in their favorite cafés and restaurants.
By being transparent about why you want a customer’s data, you are also going through a valuable thought experiment yourself. Not only can you as an individual ask yourself whether you would be okay for your loved ones to use these services, you would also become very much aware of what data you are asking for precisely. It should be a best practice that you never harvest more data than you actually need, as hovering up unnecessary data is both costly and a breeding ground for abuse.
Conclusion
Psychological targeting is a potentially powerful approach that enables change managers to tailor their messages based on individuals’ psychological characteristics, preferences, and behaviors.
On that front, we can confirm that if it is implemented correctly (with the right ethical framework and transparency in place), there is innate value to be found by enhancing engagement, improving resource allocation, and delivering personalized experiences. The “hype” in this case was therefore not completely misplaced.
However, concerns surrounding privacy, manipulation, and societal risks necessitate careful consideration of ethical guidelines and regulations to ensure responsible and transparent use of psychological targeting techniques.
If your company does see the need to explore the value of psychological targeting, try to approach it as you would do an open innovation program (for more information about Open Innovation, read our in-dept guide). Your company, the technological partner you have hired to set up the psychological targeting and the end-user whose data you want to harvest in return for offering personalized services should all be seen as equal partners in the endeavor.
Innovation & Change Manager
Our Author
After having amassed a wealth of experience in Innovation & Change Management, Arjan joined SteepConsult to support our transition towards an innovative, solution-oriented, and sustainable future. As our in-house intellectual, he enjoys sharing his knowledge with customers and colleagues alike.
Reference List
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