Controlling the Clicks: What Marketers Can Do to Inform and Influence in the Age of the Internet
The Internet has drastically changed the consumer purchasing experience. With seemingly unlimited access to information and the availability of instant purchasing, consumers now have the resources they need to become entirely self-directed. Clearly, this poses an adapt-or-die threat to marketers with something to sell. Less obviously, total choice may not help consumers, either.
In this analysis we will show how the economic model of the consumer as rational actor is incomplete. We will expose the human side of the consumer, explaining how non-rational factors, namely emotional and instinctual forces, have more influence in purchasing decisions than we realize. Finally, we will argue that marketing to the fully- human consumer represents an opportunity not only to increase profits, but also to further the consumer’s happiness, promoting brand loyalty and repeat purchase.
Understanding the Emotional Drivers of Consumer Choice
In their recent book, Nudge: Improving Decisions About Health, Wealth and Happiness, University of Chicago Professors Richard H. Thaler and Cass R. Sunstein divide the human choice-making machine into two systems: the automatic system and the reflective system.
The reflective system reacts to observable, often quantifiable, information. Our inner statistician, it works with hard facts, setting them in order so that a rational decision can be reached.
As anyone who has ever shopped for a car knows, purchase decisions, no matter how expensive or important, are never purely rational. This is where the automatic system comes in. It responds directly to the look and feel of the product, to quality, to desirability. Furthermore, it doesn’t leave all the number-crunching to the reflective side of the brain. As Thaler and Sunstein show, the automatic system is highly susceptible to being swayed by comparison to what the consumer already knows. Questions such as, “Is it faster than the car I have?” or, “Does it get better mileage than my neighbor’s car?” are handled by the automatic system.
Think of looking at the full moon on a clear night. When it hangs low over the skyline, it appears huge and close, far larger than the buildings over which it looms. A few hours later, riding high in the sky, far from any basis of comparison, it’s a small, distant place. Measure it at both points in its climb against your thumbnail, and you’ll find that it’s no larger or smaller, no closer or farther away. The only thing that has changed is its relation to the skyline, the benchmark by which we judge it.
The Automatic System and Purchasing Behavior
The emotions hold great sway over consumer purchasing behavior. Often triggered by a product’s presentation, content, or associated purchasing process, emotions create two flaws in consumer behavior, purchasing inertia and inappropriate product selection.
Even when presented with a product that fits their rational criteria for product purchase, consumers may stubbornly stick to what they’ve got. A number of underlying psychological and emotional forces contribute to this behavior:
- Unrealistic Optimism: Consumers are unrealistically optimistic about the future, causing a failure purchase products that will meet their needs over the long haul.
- Status Quo Bias: Consumers tend to identify with the status quo, sticking with it like sports fans who identify with and continue to root for a losing team.
- Loss Aversion: As Thaler and Sunstein show, consumers must foresee a gain twice that of the potential loss in order to risk changing a status quo. A competing product, then, must be seen as twice as good as the one that’s already in place.
- Option Aversion: As the number of options consumers receive increases, consumers are less likely to utilize product information, make accurate purchasing choices, or engage in any final purchase. When overwhelmed with choices, people may simply stop choosing.
- Inappropriate Product Selection: Once consumers decide to make a purchase decision, they have only taken the first step. Having only decided to decide, their path to purchase remains fraught with other emotional dangers. This can lead to inappropriate product selection, which should be of great concern to marketers.
If consumers choose a product that doesn’t work for them, they may become dissatisfied, posing a risk to the long-term customer relationship. With the advent of peer-review websites and merchant sites, such as Amazon, this leads quickly to bad reviews – and the inevitable damage control. Factors leading to inappropriate product selection include:
- Temptation: Consumers are drawn to products that may not be in their best interest in the long run, but satisfy some short-term desire. This is important in products that require short-term costs and long-term benefits; specifically health care, financial planning, and long-term education plans.
- Social Pressure: Accepted and widely held beliefs may be perceived as true, and can mislead consumers to an incorrect choice. Marketers must bear the burden of what everybody knows, even when what everybody knows is wrong. What’s more, consumers tend to go with the crowd, basing their purchases on the opinions of their friends, family, and even unknown Internet reviewers, regardless of what’s actually best for them.
- Service Mapping: Long term service utilization patterns are difficult to predict. Without guidance, consumers may become lost, unable to figure out how to get to the future that they want to secure.
Crafting a Choice Architecture
In a marketplace full of small differences, marketers have limited sway over the matters of substance that appeal to the rational mind. By giving a nudge to the consumer’s automatic system, marketers can drive business on factors unrelated to the actual content and pricing of their product. They accomplish this through choice architecture.
To define a product’s choice architecture is to shape the consumer’s understanding of a product and its segment, gently guiding them through the decision process to an outcome that is satisfying for them and profitable for the company. Choice architecture does not take away choice; it makes choice possible by editing out factors extraneous to a successful outcome.
Choice architecture includes:
- Product packaging
- Structure and choice of information
- The pricing of the product relative to its competitive set
- The service utilization structure, and the purchasing experience
A successful choice architecture will satisfy the rational system, but play to the automatic. To pull it off, marketers must take the following three steps:
- Clarify the marketing message by unifying it with the brand’s image. In the Internet age, it is of paramount importance to present a top-quality, secure, and unified web presence. To the Internet consumer, you’re only as good as your website.
- Simplify the purchasing process. Make it easy through the use of “default” enrollment options, creation of standardized packages, quick enroll and automatic reminders for instant renewal.
- Equip the consumer with all the pertinent product and company information, but no more. Satisfy the rational system without overwhelming the emotions by keeping communication open, clear, and limited to the most important factors.
We contend that a well-crafted choice architecture benefits not only the marketer, but the consumer. By narrowing the consumer’s choices to the most appropriate options, satisfying their reflective selves with the most salient facts, and providing a clear, simple path to fulfillment, marketers can give consumers the freedom not simply to choose, but to choose well, building customer loyalty and increasing satisfaction over the long term.
Ron Cappello is the founder and CEO of Infinia Group, a brand strategy and design firm based in New York City. He can be contacted at 212-463-5101 and firstname.lastname@example.org.