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Understanding Consumer Decisions: Key Insights and Strategies

At the heart of business success lie the decisions of your potential clients. Success hinges on whether they choose your product, gauging if the value exchange aligns with their expectations—what they provide versus what they receive. Several factors influence these decisions, including a client's emotional state when making the decision, their financial standing, and how well this choice aligns with their persona. Let’s delve deeper into insights from various books and videos about human decision-making.

BJ Fogg's Behavioural Model

BJ Fogg, founder of the Behaviour Design Lab at Stanford University, has a three-part model: Motivation, Ability, and Prompts.

Motivation answers the question: what drives people to act? It encompasses sensation (pleasure and pain), anticipation (hope and fear), and belonging (social acceptance and rejection). For instance, you're more likely to finish a task if the consequence of not doing so is getting fired (avoiding pain). Similarly, you might buy a product because "everyone else is," especially within close-knit social circles, to avoid feeling left out.

Ability refers to the ease of performing an action, factoring in time, money, physical effort, mental effort, and routine. For example, if a product is convenient and affordable, like a cooler bag priced at R50, a customer might purchase it without much premeditation. However, a coffee shop located out of a person's regular route might lose potential customers because it doesn’t fit into their routine.

Prompts are triggers that initiate action, such as a Facebook notification nudging you to browse or the allure of a daily croissant from a shop you pass regularly.

When combined, these factors drive people to take action. Learn more about how to apply these concepts in the video below:

Decoding Decisions - Think with Google

Post-COVID, Google embarked on an experiment analysing online user behaviour. They set up marketing campaigns for fictitious brands, incorporating strategies like category heuristics, authority bias, social proof, the power of immediacy, scarcity bias, and the allure of free offerings. The results were startling. Despite these brands being unknown to the audience, these six strategies significantly influenced consumer behaviour. Here's a breakdown of each strategy:

  1. Category Heuristics: The inclination to decide based on simple labels, e.g., buying a product because it's branded "organic."

  2. Authority Bias: Trusting endorsements from perceived experts, like celebrities or influential bloggers.

  3. Social Proof: Conforming to the choices of peers or relying on popular opinion.

  4. Power of Now: Valuing immediate gratification, such as purchasing because of a sale or free shipping.

  5. Scarcity Bias: Prioritising limited products, driven by a fear of missing out.

  6. Power of Free: Being swayed by complimentary gifts or offerings.

These principles resonate with the teachings from the widely acclaimed book, ‘Influence’. Integrating these biases into marketing strategies can decisively swing consumer choice in your favour.

Influence by Robert Cialdini

Robert Cialdini's seminal book "Influence: The Psychology of Persuasion" delves into the psychology underlying people's decision-making processes. Cialdini, drawing from extensive research and his own experiences, identifies six key principles of persuasion: reciprocity, commitment and consistency, social proof, authority, liking, and scarcity.

Each principle underscores a specific psychological trigger that nudges people towards a particular action or decision, often without them being overtly aware of the influence.

In the realm of marketing, these principles have proven invaluable. For instance, the principle of reciprocity—where people feel obligated to return a favour—can be seen in marketing strategies that offer free samples or trials. Consumers, having received something for free, are often more inclined to make a purchase as a form of reciprocation. Similarly, the scarcity principle, which taps into the fear of missing out, is frequently employed in limited-time offers or 'flash sales', urging consumers to act quickly or risk missing out on a product or deal.

Furthermore, the principle of social proof, rooted in the idea that people look to others' actions to guide their own, has been amplified in the age of digital marketing. Online reviews, testimonials, and influencer endorsements are powerful tools that businesses leverage to sway potential customers.

Cialdini's "Influence" serves as a foundational guide for marketers aiming to craft strategies that resonate with intrinsic human behaviours and biases, ensuring their messages are not just heard, but also acted upon.

Robert Sapolsky: Behave

In "Behave: The Biology of Humans at Our Best and Worst," Robert Sapolsky offers a comprehensive exploration into the intricate facets of human behaviour, weaving together insights from neuroscience, genetics, psychology, and other disciplines. He delves into the myriad factors—from genes to cultural influences—that shape our actions and decisions, asserting that human choices are complex outcomes of a cascade of biological processes. Sapolsky's holistic perspective highlights that decisions are seldom the product of a singular, rational thought, but are rather influenced by a multifaceted interplay of internal and external stimuli.

For marketers, "Behave" serves as a compelling reminder of the multi-layered nature of consumer decision-making. Recognising that consumers' choices are influenced not only by the immediate environment but also by deeply entrenched biological and psychological factors can pave the way for more nuanced and effective marketing strategies. By understanding and considering the vast array of stimuli that influence consumer behaviour, from emotional triggers to societal norms, marketers can craft campaigns that resonate on a deeper, more instinctual level, thereby heightening their impact and efficacy.

Influencing Decision Probability

As illustrated, consumer decision-making isn't straightforward. Our role as marketers is to utilise the resources at our disposal to enhance the likelihood of prospects choosing our product over competitors'. By analysing data, we can better discern which principles are more effective in specific industries.

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