- How does the psychology behind the decision-making process influence decisions?
- What triggers impulse purchases?
- What unconscious narratives happen during a shopping trip?
Heuristics are mental shortcuts or rules of thumb people use to make decisions. When market research observes heuristics, it offers insights into how consumers experience a product or service and how to increase the value in their minds. In our previous Heuristics and Shopper Behavior blog, we focused only on availability, representativeness, anchoring, and attribute substitution heuristics. Now, we are looking at Social Proof, Hyperbolic Discounting, Loss Aversion, Binary Self-control, and Affect heuristics.
Social Proof Heuristic
The brain is always looking for shortcuts to make decisions. One way to speed up a buying decision is to observe the decisions others make. If someone else has bought something, it’s easier to justify the same purchase mentally. For example, someone purchases the best-selling novel solely because everyone else is reading it, or someone else may make more effort to save energy because their neighborhood has more energy-efficient conscious households.
When observing shopper behaviors, pay attention to the different personas that buy the product, and even competitors’ products, to inform brand messaging. Remind consumers of the product’s success with other consumers: of other people ‘like them’ who have used and loved the product, and local success. Measuring the social reach accompanied by customer insights within the market research process taps into this powerful heuristic.
Hyperbolic Discounting and Emotional Forecasting Heuristic
Have you seen the marshmallow challenge? A child is offered one marshmallow right now, but if they wait for someone to return, they can receive two marshmallows. The child’s struggle not to eat the marshmallow now is a hyperbolic discounting and emotional forecasting heuristic. Most humans prefer instant gratification rather than the potential benefits that can come in the future. Surprisingly, most people would choose a prize of $100 now over $120 in the future. The future is uncertain – our subconscious minds think, what if the reward doesn’t materialize?
The sensitivity to receive something sooner rather than later will drop off over time. To say someone will receive this today or tomorrow is more powerful than to say that someone will receive this in 100 days or 101 days, even though the difference between the two scenarios themselves is still only one day. People are more likely to remember how they feel about something at the beginning of an experience rather than after the experience as their emotions fade.
Pricing is a heavily researched topic in most brands’ market research process. When planning offers and promotions — make rewards instant. Scratch and save or immediate discount offers on a website are great examples of hyperbolic discounting.
Loss Aversion Heuristic and the Endowment Effect
People are more motivated and sensitive to fear of loss than the prospect of gain. Take this idea further; humans value items more highly once they own them. When someone buys an item and doesn’t like it, they may stick with it for a certain period of time before returning it or throwing it away — to do so before this particular time would feel like a loss.
This is why ‘try before you buy’ techniques work. The perceived value of a product increases once it is in the consumer’s hands. Before implementing market research, it’s essential to know how to show customers how the product or service protects what they already have.
Binary Self-control and Impulse Purchases Heuristic
People find it easier and simpler to abstain from something than moderate their consumption. Conversely, humans will treat themselves when the rational brain operates in overtime. Whatever the desired outcome, make it easy for people to understand and do.
Religious rules regarding a fast and a restrictive diet are examples that make the decision easier for the individual. The rules are easy to follow and tell the person what not to do. That is why impulse sales can be driven when there are no rules such as merchandising candy bars at checkout.
Brand messaging should be precise — this will make the customer’s decision clear and straightforward. When the customer seeks a solution to their problem, this will increase the likelihood they will purchase the item because they don’t have to work hard to understand how the brand can help them. A good example of this is “Snickers really satisfies” when a shopper is hungry as they are checking out at a gas station, Snickers is an appealing option. It’s a good idea to include brand message testing in the market research process to ensure the message you want to get across resonates with the audience.
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 questionnaires and is better measured using nonconscious research techniques such as implicit response methods.
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 to understand the decision-making process by providing the effects the psychology of the brain has on decisions. When heuristics are considered in the market research process, we can understand shopper behavior. Shopper insights provide understanding of how and what steps shoppers take to decide what to buy. Through an understanding of Heuristics, you can gain a deeper understanding of the motivations of your shoppers.
Traditionally, marketing research relied on people’s stated attitudes and behaviors to make decisions about customers, consumers, and products, as well as marketing and advertising strategies.…