Are we irrational or just lazy when making consumer decisions?

Heuristics are mental shortcuts that optimise human judgement and decision-making, but they can also lead to bad decisions, especially those involving consumer behaviour.

We are not ‘irrational’ when making consumer decisions; in fact, we have evolved to become active decision-makers. Psychology researchers [1] argue that people often find rapid solutions on the base of heuristics.

Heuristics are commonly known as an automatic and intuitive cognitive process, like mental shortcuts or rules of thumb, which allows quick decisions when an optimal judgement is impractical to make, or when there is a high level of uncertainty. Heuristics represent a process of answering a difficult question based on familiar answers, as mental shortcuts ease the cognitive load of the decision-making process. This means that the brain, like a computer, will then require less processing power.

However, human reasoning usually deviates from formal logic (e.g. syllogistic reasoning) and, as a consequence, heuristics may lead to bad decisions as people are unaware of frequent biases. For example, the decision to buy one high-sugar and high-fat lunch has no significant long-term impact but making that same decision every day can lead to weight gain and increase the risk of cardiovascular diseases [2]. If hundreds of thousands of people make the same decision, then in the long-term, there is an obesity epidemic [3], eventually overloading the national health service. This example suggests how one simple consumer decision based on heuristics can lead to a massive problem. That said, here is a common type of heuristics that influence human decision-making and consumer behaviour.

Availability

Availability heuristics refers to judgements based on the ease with which relevant facts come to mind. The brain is not ‘lazy’ and it draws conclusions based on the frequency of past events. The more an event occurs, the more likely the brain will make future decisions based on reoccurring experiences, including consumer purchases.

However, easily recalled events, especially rare ones, create more availability biases in everyday judgement. For example, in a psychology study [4], participants were divided into two groups, and each group listened to a list of 39 names. In the first group, the names on the list comprised of 19 famous men and 20 less famous women; whereas in the second group the list comprised of 19 famous women and 20 less famous men. After listening to the list, some participants had to write down as many names as they could remember; others were asked whether the list contained more names of men or women.

The results indicated that participants recalled more of the famous names (12 out of 19) than the non-famous names (8 out of 20). That is, famous names were more mentally available. Also, 80 out of 99 participants judged the gender category that contained more famous names to be more frequent. (e.g. the people who received a list of 19 famous women and 20 famous men reported that there were more women than men in the list). These findings suggest that people make proportion estimates by assessing the ease with which examples becomes available in their minds. When a category was easier to remember (because of fame), it was judged more frequent, even when it was not the case.

How could brands apply availability heuristics to encourage (green) consumer behaviour? Recently, sponsoring (micro-)influencers online has surged as an opportunity to build brand awareness with less cost compared to the cost of producing a TV ad.

Let’s suppose a sustainable brand of stainless steel water bottle wants to increase sales. Given their marketing team’s knowledge of availability heuristics, sponsoring sustainable influencers is an advantage. Simply because influencers show up frequently in the target audience’s feed; thereby increasing the brand’s mental availability. But there is a catch.

The insight about availability refers to the long term consumer behavioural change compared to a one-off purchase from a TV campaign with a celebrity (e.g. Mariah Carrey & Walker’s crisps 2019 Christmas campaign). The latter may encourage one-off purchase, but the former contributes to consumers brand assessment and behavioural shift.

There is a neurobiological process that supports the argument for availability heuristics over one-off campaigns. Synaptic plasticity is a neurobiological process by which specific patterns of neurological activity result in changes that contribute to learning and memory [5]. For example, the more consumers are exposed to influencers, the more familiar they get with influencers’ personality, behaviour and sponsored products. Ultimately, consumers develop a stronger emotional and neurobiological connection with the stimulus (i.e. the brand). This biological process takes time, and long-lasting behavioural changes require continuous reinforcement.

Below, is an example of how brands, like Klean Kanteen and KeepCup, could work together with influencers, such as Candice M Tay.

Candice M Tay is a sustainable fashion influencer based in Toronto, Canada.

Conclusion

Consumer behaviour is not irrational. Heuristics are mental shortcuts allowing individuals to make quick decisions in everyday life. However, the availability of information influence consumers’ decision-making process. Moreover, availability heuristics can transform into a relevant strategy for brands shifting consumer behaviour rather than convincing individuals of a one-off purchase. Overall, heuristics are beneficial to human judgement and decision-making and given time and effort, one can overcome biases and develop sustainable consumer behaviour.

References:

[1] Tversky, A., & Kahneman, D. (1974). Judgment under uncertainty: Heuristics and biases. science, 185(4157), 1124-1131.

[2] New York Institute of Technology. (2017, October 31). Western diet linked to vascular damage, prediabetes: Could short-term exposure to the average American diet increase one’s risk for developing diabetes and cardiovascular disease?. ScienceDaily. Retrieved March 26, 2020, from www.sciencedaily.com/releases/2017/10/171031111454.htm

[3] World Health Organization (WHO) https://www.who.int/nutrition/topics/obesity/en/

[4] Tversky, A., & Kahneman, D. (1973). Availability: A heuristic for judging frequency and probability. Cognitive psychology, 5(2), 207-232.

[5] Hebb, D. O. (1949). The organization of behavior; a neuropsychological theory. Wiley.

Photo by Victoriano Izquierdo on Unsplash

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