Marketing to the Rationally Irrational

Photograph by yellowdog/Gallery Stock

My daughter recently got engaged to a terrific young man. One reason I like him so much is that he took the respectful step of asking for my blessing before he proposed. During our conversation, when I asked him to articulate the reasons why he loves my daughter, it struck me that he didn’t simply itemize her good qualities. Instead, he conveyed a deep sense of their compatibility that couldn’t be explained solely in rational terms.

Anybody who’s walked down the aisle knows what he was talking about. There may not be a single decision that’s more high-stakes than choosing a spouse, and while no one should enter into marriage blindly, there’s simply no way to reduce the decision to the purely rational. Yet that’s what people claim to do every day with a host of other choices, particularly regarding the products and services they buy.

True, choosing a toothpaste doesn’t require quite as much commitment as getting married, nor does selecting a restaurant, buying a car, or even investigating what college to attend. Yet we tend to rationalize each of those decisions based on logical reasons. Ask someone why they bought what they bought, and they’ll give you an answer that sounds perfectly sensible. But it’s not how things work in the real world; as with a marriage proposal, very few decisions any of us make can be fully quantified.

That said, of late the pendulum has been swinging the other way, toward what might be called a fallacy of irrationality. It’s fashionable these days to opine on how random and irrational consumer decisions can be. But that, it turns out, is just as much of an overstatement. Just because something isn’t rational doesn’t make it irrational (the word itself sounds so judgmental).

Choices that aren’t based exclusively on reason and logic are extremely common, no less legitimate, and in many cases better than decisions arrived at through extensive reasoning. In fact, research published last year from Cornell University psychologists demonstrates that subconscious feelings often lead to better decision-making when people choose cars, apartments, and vacation destinations.

It’s not easy to say why, because the nonrational part of the brain works in mysterious ways. In a 2007 Harvard study, for example, hotel room attendants who were told they were getting a good workout and burning lots of calories at their jobs actually lowered their body fat and blood pressure at greater rates than those who weren’t told that, revealing how expectations can play a role in physiology.

Similarly, in 2011, University of Michigan psychologists found that students’ enjoyment of a variety of Hershey’s Kisses was much greater when they were told the flavor they were eating was “the last one” rather than “the next one.” And a 2009 Caltech study demonstrated that people believe expensive wines taste better, even when the prices of Cabernets normally priced from $5 to $90 were randomly mixed. These studies reveal an interesting link between expectations and perceived value.

Other research has shown that placebos—those inert substances used to test the efficacy of something else—can themselves reduce depression, increase fertility rates, and even moderate the symptoms of Parkinson’s disease. While placebos do nothing biologically, it appears in many cases that they do indeed affect physiology (placebo is Latin for “I shall please,” an apt etymology).

All of which brings up a few interesting questions. Is the value of something in the thing itself, or in the benefits (real and perceived) it provides? Why is a “perceived” benefit any less valuable than a “real” benefit? And how do consumers’ rational calculations interact with their nonrational instincts to lead them to the choices they make? We don’t fully know, but professor Gerd Gigerenzer of the Max Planck Institute for Human Development sums up the state of our current understanding when he says “neither extreme of hyper-rationality or irrationality captures the essence of human reasoning.”

Indeed. We all use intuitive and subconscious—nonrational—shortcuts every day. We call them instinct or hunches or gut feelings because we don’t know what else to label them. But simply because we don’t understand how they work doesn’t mean they aren’t legitimate and valuable functions of our miraculous minds.

In his book Thinking, Fast and Slow, cognitive psychologist Daniel Kahneman distinguishes between what he calls “System 1” thinking, in which people make quick, intuitive decisions based on emotions and imagery, and “System 2” thinking, which is more logical and rational. Sometimes System 1 wins the day, and sometimes System 2 does; most often they work in tandem. That would explain the old marketing maxim that people buy on emotion and justify with facts.

Professor Gigerenzer’s work suggests that intuitive decisions are often the better of the two, because a quick “good enough” decision is often of higher value than a slow “perfect” decision. He also submits that excess information can make a decision worse by hindering our ability to focus on its most critical aspects, citing sports as an example.

“Consider how players catch a ball,” Gigerenzer says. “It may seem that they would have to solve complex differential equations in their heads to predict the trajectory of the ball. In fact, players use a simple heuristic. When a ball comes in high, the player fixates the ball and starts running. The heuristic is to adjust the running speed so that the angle of gaze remains constant—that is, the angle between the eye and the ball. The player can ignore all the information necessary to compute the trajectory, such as the ball’s initial velocity, distance, and angle, and just focus on one piece of information, the angle of gaze.”

That’s a mouthful, and while I don’t understand the physics of a fly ball, I don’t have to—precisely Gigerenzer’s point. As marketers, we don’t have to plumb the mysterious depths of the mind as we go about pitching our brands. But we should neither presume consumers are making fully rational calculations based on articulated benefits nor dismiss their abilities to take intuitive shortcuts based on experience, emotions, and aesthetics.

We have a long way to go before we fully understand how the mind works. In the meantime, suffice it to say the marketplace is neither a courtroom nor a crapshoot. It’s more like a carnival, through which people are as likely to find their way by the sights, sounds, and smells they encounter as they are by a map. If in our marketing efforts we pursue a balance between fact and feeling, we’ll ensure they can both appreciate the experience and enjoy the ride.

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