STUCK IN THE ‘50s
Man walks into a bar. Barman says, “What’ll it be?” The man thinks, “too early for whisky so definitely beer. Beer One’s for sophisticated people; Beer Two’s the laughing, joking beer. Beer Three’s the Out-On-The-Town Beer. Beer Four will show how cultured I am and Beer Five, my masculinity. I’m here to watch rugby, so...”
“Beer Five. And some biltong, please.”
There’s no punchline. Judging by much of the advertising we’re exposed to, this is how marketers believe we make decisions. Even though it’s a theory of decision-making refuted over sixty years ago.
Until the 1960’s, this Classical Decision Theory was the definitive account of how we make up our minds. We were seen as Homo Economicus; rational beings, fully informed about all the options available and infinitely sensitive to distinctions among them. With this information, we then made rational judgments and selected the best choice.
The end began with the discovery that when deciding, real humans were far from rational. Instead, we used “Sub-optimal Strategies” such as Satisficing (choosing the first option that matches basic minimum criteria) and Elimination By Aspects (ruling out options based on individual criteria until only one remains) to help us make even non-trivial decisions.
By 1982, Classical Decision Theory was consigned to history. The psychologists Amos Tversky and Daniel Kahneman published Judgment Under Uncertainty, a collection of articles explaining their Prospect Theory, which was awarded the Nobel Prize for Economics because of its profound impact on the traditional economic categories of choice, decision and value.
Starting with the basic tenet of Prospect Theory: we’re actually more motivated by the prospect of loss than the prospect of gain – the fear of losing R10 is roughly twice as motivating as the prospect of gaining R10 – the articles outline the basic drives that guide our decisions. And none are in the least bit rational.
Heuristics are rules-of-thumb developed by the brain to lighten its cognitive load reduce the mental effort needed to make a choice by reallocating mental resources from distracting issues to more important ones. When a driver is faced with the prospect of kids running into the road, wayward taxis, lights turning red, beggars who may be thieves and a 15-word billboard, it’s pretty clear which one of those will be regarded as the distracting issue.
Just two of the Heuristics discovered, the Availability Heuristic and the Recognition Heuristic, should have changed the entire field of advertising. But, forty years after they were discovered, you’ll still struggle to find a brand that takes them into account.
The Availability Heuristic operates on the principle that the more easily information about something can be brought to mind, the more important that information must be and therefore the more easily swayed by it we are. You can think of it, therefore it must be important.
Are there more words in English that begin with ‘R’ or that have ‘R’ as their third letter? If your answer is words that begin with ‘R’, you probably made use of the Availability Heuristic to get that answer. Because your brain can reel off a list of words beginning with ‘R’, but not so many with ‘R’ as the third letter, the presumption is that the same holds true in reality.
But it doesn’t. And it’s also not true for ‘K’, ’L’, ‘N’ or ‘V’; all of them are more likely to be the third letter of a word than the first.
The lesson for advertising? Recall is paramount. Make those things you want someone to use for decision-making vivid and very easy to recall i.e. readily available, with repetition or visual language. Make those things you don’t want decisions based upon vague, abstract or complex.
Gerd Gigerenzer, from the Max Planck Institute, has dedicated years of study to the Recognition Heuristic –something we recognize is automatically deemed more valuable than something less familiar – and even encourages its use for better decisions.
For instance, Turks completely unfamiliar with English Football were almost as accurate as English fans in predicting the outcome of a Manchester United vs Shrewsbury game. Most Turks, recognizing only Manchester United, opted for a home win while the English found themselves deciding the outcome based on form and many other factors. 63% Of Turks were correct. Only 66% of the English were. The Recognition Heuristic is a strategy we’ve learnt because, generally, it pays to just go with what you know.
Research into brand choice and how such decisions are made shows the Recognition Heuristic is used by nearly 75% of shoppers and that our instinct to supply our customers with informative, engaging advertising isn’t always the best option. Ask Benetton. Its infamous campaign showing just the brand name with images of corpses and AIDS patients was designed to do nothing more than build brand name recognition with the expectation that, come buying time, customers would go for the brand they recognized most.
They did. Benetton became one of the five most recognized brands in the world – more famous even than Chanel – and grew sales by 1000%.
Research into Heuristics offers marketers a choice: ignore it, continue to talk to customers the same way you always have, and get filtered out as a distraction. Or embrace the theory, discover how distraction can actually be used to your advantage, and get the drop on your competitors.
Now there’s a choice that shouldn’t require much thought.
