A simple decision making process

In previous articles, we talked about some of the dimensions of human decision making and a matrix of motivations - both rational and psychological. In this article, we are going to deal with a simplified explaination of how we process these factors.

The model below illustrates the complex interactions that can occur in our decision making and subsequent consumer behaviour. After the initial stimulus, the consumer evaluates several criteria (consciously and subconsciously), becomes sufficiently motivated to make a decision, and then acts (purchases and consumes) in a way we can observe. 

Psychological and behavioural economics theory suggests there are two modes of thinking; ‘system 1’ thinking is instantaneous, intuitive, affective, associated with experience and requires little effort, whereas ‘system 2’ is slower, deliberate, controlled and evokes more conscious, purposeful, and logical decisions (it also takes a lot more effort).

For example, when choosing a dessert in a grocery store, a consumer may gravitate towards a tasty, sweet treat they know they have liked before. This will elicit positive emotions, requiring less deliberate thought. However, if presented with a healthier dessert alternative, this then involves system 2 thinking to consciously weigh up what one instinctively wants, and what is a more rational (healthier) choice.

Thus, it may be that emotional and psychological factors in system 1 are our initial cognitive responses when deciding. Then with further effortful mental attention and rational thought in system 2, we balance our thoughts to decide. However, this may not be a sequential process and in fact our emotional and rational considerations can occur simultaneously (although system 2 usually takes longer to reach a conclusion).

Furthermore, it has been suggested that consumers often make spontaneous or emotional purchases which involve fewer rational factors, and then go on to ‘rationalise’ this impulsive decision- a dynamic accounted for by our model.

Consumers who are more introspective i.e., are self-aware of their buying habits, are less likely to emotionally impulse buy, because it appears that the rational and more cognitive thinking feeds back into the psychological factors influencing decision making - we establis new habits and heuristics.

However, if consumers are continuously giving in to impulse purchases (in other words, functioning on habitual and unconscious system 1 processing), then perhaps a capacity for them to change and step out of these habits is needed if they are to avoid making uncontrollable and illogical purchases.

A pattern of consumer behaviour, based on familiarity, certainty, and trust at its core, can be difficult to break. Understanding the connections between psychological ‘wants’ and rational ‘needs’, could allow exploration of consumers’ openness to new experiences and lead to greater economic benefit for both.

Ultimately, our main conclusion is that decision making, and consumer behaviour is heavily driven by what consumers feel, as well as a multitude of other psychological and practical factors. If the other decision-making criteria are broadly similar between brands, it is how the consumer feels that will be the deciding factor.

Therefore, formulating methods to observe, measure and predict these predisposing factors will provide significant value to your brand in terms of revenue and competitive differentiation; it is for this reason that emotional intelligence, and especially cognitive empathy, within a business is so important: how can a brand meet a consumer’s emotional needs if it doesn’t know what they want, especially within ‘low touch’ channels like mobile or digital.

Finally, touching on an topic not covered in the whitepaper; there is a difference between 'moments that matter' and 'moments of truth', which is discussed in this article. Moments that matter rarely lead to an observable action, so they can be more difficult to analyse using traditional data science that moments of truth. A moment of truth is rarely 'caused' by the last interaction alone - it is often the final step in a sequence of interactions, most of which are invisible in the transactional record.

If you would like to know more about how to apply the findings of Anthrolytics’ whitepaper on this subject, or about delivering compassion with your brand’s competence, we would be delighted to arrange a personal briefing, just email Anthrolytics at success@anthrolytics.io