The basis of economics is rational thinking. You would expect that many businesses follow the simplistic notion that consumers choose products which they prefer. That behind every purchase there is evidence of logical decision making, and complete insight which underpins are choices. Yet how rational was the last decision you made? The truth is, there are more factors which influence our decision making as opposed to just rational thinking.
In fact there are numerous factors, which may be completely unrelated to the core issue. These factors act as powerful influences which subconsciously taint our choice and consumption. However these factors are difficult to define, and many businesses struggle to keep up with the ever changing irrationality of the human mind. The vast majority of the time, companies may overlook the emotional and social attachments to brand simply because the functional benefits are easier to sequence and wrap one’s arms around, yet these emotional factors are not tangible.
So perhaps instead of enhancing and changing the product (which is normally more costly), companies should think of more emotive ways to display what they already have. We often use past experiences and what we think we know as rules of thumb in order to make decisions. This is knowns as heuristics. This allows us to come to conclusions more rapidly and simultaneously minimize deep thinking; this is often a seamless brain process which we may not even be aware is being carried out.
By understanding these heuristics, marketers can use them to their advantage. Information and experience can be refracted through a prism of belief. For example if you give a person the same glass of wine, they will often be persuaded that it tastes better when poured from a £100 bottle than a £10 bottle.
With Christmas sales around the corner, many shops will play on these elements of irrationality. A 30% discount is often harder for consumers to calculate. By changing the offer to a 3 for 2, the average shopper will put an extra 2 items in their basket. The consumer feels like they have gained a free item, but have actually spent more than if they had gone for the 30% discount.
Another interesting example of human irrationality is the poster campaign which the NHS set up in order to reduce the number of people who miss appointments. Yet the campaign actually had the reverse effect. By publically acknowledging that so many people skip appointments, it normalized the behavior, and therefore ended up increasing the amount of no shows. This is called norming heuristics.
Overall, when planning marketing strategies, considering statistics and data is vital and so is the psychology of consumers. For we are not systematically generated, therefore do not assume rational thought as it is irrational thought which drives us.
By Shermeen Saud