Heuristics and Shopper Behavior Part 2

Heuristics are mental shortcuts or rules of thumb we use to make decisions. These observations offer insights into how consumers experience your product or service and how to increase its value in their minds. ­In our previous Heuristics and Shopper Behavior blog we discussed the Availability, Representativeness, Anchoring, and Attribute Substitution heuristics. We’re now going to look at the Social Proof, Hyperbolic Discounting, Loss Aversion, Binary Self-control, and Affect heuristics.

Social Proof Heuristic

We’re always looking for shortcuts to make decisions. One way to speed up a buying decision is to look at what others are doing. If someone else has bought something, it’s easier to justify making the same purchase. We buy the best-selling novel because everyone else is reading it, we make more of an effort to save energy if we are given comparisons to more energy-efficient households in our neighborhood.

Relevance to shopper behavior

Remind consumers of the success of your product, especially of local success and other people ‘like them’ who have been using it.

Hyperbolic Discounting and Emotional Forecasting Heuristic

Simply said, we prefer rewards now rather than in the future. For example, most people would prefer a prize of $100 now over $120 in the future. The future is uncertain and what if the reward doesn’t materialize? Also, our sensitivity to getting something sooner rather than later drops off over time. The difference between saying you will get it today or tomorrow is more powerful than the difference between saying you will get it in 100 days’ time and 101 days’ time even though the difference between the two is only one day. We also tend to remember how we felt about something at the end of an experience rather than at the beginning.

Relevance to shopper behavior

When planning offers and promotions make rewards instant. Scratch and save or immediate offers on a website are great examples of hyperbolic discounting.

Loss Aversion Heuristic and the Endowment Effect

We are more motivated by and sensitive to fear of loss than the prospect of gain. Taking this idea a step further, we tend to value things more highly once we already own them. If we buy something and don’t like it, we tend to stick with it for a certain period of time before returning it or throwing it away. To do so before would feel like a loss.

Relevance to shopper behavior

This is why ‘try before you buy’ schemes work. The perceived value of a product is increased if we already have it in our hands. Show consumers how a product or service can help them protect what they already have.

Binary Self-control and Impulse Purchases Heuristic

People find it easier and simpler to totally abstain from something than to try and moderate their consumption. Conversely, we tend to like to treat ourselves when our rational brains have been working overtime. In other words, if you want to achieve a desired outcome, make it easy for people to understand. Religious rules around fasting and restrictive diets are both examples of instances where the decision is made easier for us by making the rules easy to understand and simply telling us what not to do under any circumstances.

Relevance to shopper behavior

When promoting healthy products and services, try to help consumers kick their old habit by pointing out the benefits of total abstinence (or at least for a certain period of time). This makes the decision they need to make to solve their problem clear and easier to understand and increases the likelihood they will actually act. This works the other way as well. If you are marketing an indulgent product or service, consider the times and places where people are most likely to want a special treat. A good example is driving home from work at the end of a hard day, candy bars are prominently displayed at the gas station check out.

The Affect Heuristic and First Impressions

First Impressions are everything. Typically, we emotionally size up something very quickly (in a matter of milliseconds) and our judgments tend to be long lasting. If we begin with a positive impression of something, we tend to look for evidence to support our positive impression (same with a negative impression). Since this happens so quickly at the subconscious level, it’s hard to measure using questionaries and is better measured using nonconscious techniques such as implicit response methods.

Relevance to shopper behavior

The introduction of a new product, package or campaign needs careful consideration. Getting the overall look and feel correct is critical as this is what will be considered by shoppers in the first crucial milliseconds.

Heuristics help us to better understand shopper behavior. Understanding how shoppers decide what to buy and helping them through the steps is important. You can increase your chances of truly persuading consumers and driving them to action by considering heuristics in your next marketing campaign.

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