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Are our purchase decisions rational?

tdh purchase decisions

The human being is such, due to his ability to make rational decisions that are not attributable to a purely emotional or physical / survival state. Despite this, every day we act irrationally on more than one occasion; What is the reason behind that?

How many times have you walked into a supermarket intending to buy a bottle of milk for then coming out with two bags full of products realizing you forgot to buy what you were there for?!

If you feel considered, likely, you often act instinctively during your buying decisions. From a neuromarketing analysis it’s been discovered that only 5% of human thought takes place in the conscious (rational) mind and that the remaining 95% takes place in the subconscious governed by emotional factors. Taking that into consideration we must recognize the critical role of emotions while trying to understand consumer behaviour; whether it is to perceive a feeling of achievement or sensation of security, our actions are always conditioned by our emotional system.

According to what Maslow theorized in his pyramid of needs, humans perform actions related to physiological needs only to satisfy primordial necessities: hunger, thirst, fatigue, etc. while on all other occasions they act according to reasons that he divides into:

  • Security needs: It refers to a need for security, be it financial, family, physical, etc.
  • The affiliate needs: It refers to the need for love, friendship and social union.
  • Needs for Recognition: Connected with success, respect and self-recognition.
  • Needs for Self-Realization: At the highest point of the pyramid there are the needs more distant from the physical needs, such as morals and ethics.

This subdivision allows us to understand how in modern society most of our decisions are not connected to a need for survival but rather to a system of beliefs created on a cultural level. It is from this assumption that Behavioral economics acts; this science that combines aspects of economics, such as microeconomics, with psychology and neuroscience believes that many financial decisions start from irrational impulses rather than being consequences of rational thoughts. In such a sense, many economic phenomena are produced as a consequence of various psychological, social and cognitive factors which affect our decision-making and, consequently, the economy.

Companies today, thanks to new sophisticated tools in their possession and the development of science such as consumer behaviour, cognitive psychology and neuroscience known more than ourselves what moves us. As written by Martin Lindstrom (one of the world’s foremost expert in branding) in his book BrandWashed, much of our adult tastes and preferences have their origins in early childhood.
According to the author at 7 years old we already have shown our preferences for certain brands or products. Additionally, Martin is a strong advocate for a comprehensive sensory marketing strategy. He strongly believes that brands nowadays need to be recognized by every sensation that interacts with our five senses. A brand can no longer be just a logo, on the contrary, it must be able to be independent of it.

As highlighted by another neuromarketing expert, Roger Dooley, in his book BrainInfluence; it’s impressive that 75% of humans emotions are generated by what we smell. Given the fact that the olfactory and sensory systems are integrated with the limbic system where emotions are generated. In the book the author describes the Nike case study, where the brand submitted the same shoe one with a floral smell and one not, to two different groups of customers, obtaining 85% more preferences for the one with a floral smell.

True is that many times our behaviours are dictated by perceptions that come into our brain without really noticing them.
In the buying phase, for example, many factors always come into play. Try to think about the last time you bought a service or a product. Why exactly that? Why didn’t you buy the competitor’s one? Have you been under an influence of some kind?

There are products that we buy routinely and are functional to the purpose for which we have to use them, in this case, we often opt for the cheapest one. On the other hand, there are purchases that we make for the value that the item or service is worth, as we feel represented and believe in the brand that sells them to us. For this kind of purchases, we are willing to spend large sums and the price is not a deterrent, on the contrary, it can provide greater value to the perception of the product. When we launch ourselves into an expensive purchase, in the post-purchase phase, when swiping the credit card, there is always the activation in our brain of a sensation of pain; in this phase the good seller will be able to reassure us in any way by listing the aggregate value of the product, thus validating our purchase choice and ultimately increasing a feeling of awareness in ourselves and trust in the brand. When we launch ourselves into an expensive purchase, in the post-purchase phase, when swiping the credit card, there is always the activation in our brain of a sensation of pain; in this phase the good seller will be able to reassure us in any way by listing the aggregate value of the product, thus validating our purchase choice and ultimately increasing a feeling of awareness in ourselves and trust in the brand. If you think about it for a moment, it makes you reflect, the more we spend the more we are willing to spend; indeed for particular categories of products, think of wine, the price is an important determinant in the quality of the product and we are almost looking for the most expensive product to validate the correctness of our choice.

neuromarketing how to detect consumers gspot kivilcim kayabali salesbrain 6 638
Source: SalesBrain

Our brain is constantly subjected to cognitive biases of social and emotional types. An interesting experiment conducted by the neuromarketing company NeuroFocus found that the key moment in the appreciation process in Yogurt consumption was not when the consumer tasted the product but rather when he removed the aluminum cover from the package. At that precise moment, areas of the brain related to pleasure were activated.

Increasingly sophisticated tools of Neuroanalysis allow us to investigate human behaviour in relation to certain external stimuli. Neuroscientific analysis and its implementation in marketing studies is often very expensive and not always easy to implement. There is, however, to consider the profound growth that these neuromarketing tools are having during the last years in big companies.

Neuromarketing can represent an enormous competitive advantage for those who can afford it.

  • It can allow a company to test the feelings of its customers about a product before launching it on the market.
  • It can decipher the impact of certain advertising campaigns on brand perception.
  • Can analyze online and offline consumer behaviours with certain post-purchase and pre-purchase situations.

It should be considered that even before the implementation and definition of this discipline numerous intellectuals lingered in the investigation of cognitive biases that influence them psychologically.

One above all is certainly Robert B. Cialdini who in the book The Psychology of Persuasion describes the weapons that influence the human psyche.
1- The law of reciprocity relies on the fact that when we are offered something often then we are willing to give something in return.
This concept is applied by brands in their marketing every day, think for example of the free testers in the salami counters in the supermarket. Consider your proactive predisposition regarding the purchase of a product as a result of a free food offer.

2- Commitment and Consistency. Cialdini in this case explains a fascinating experiment about people in the racetrack that found that they are much more confident of their horse’s chances of winning just after placing the bet than they are immediately before laying down that bet.
Of course, nothing changes about the horse chances of a win but in the mind of those bettors, chances improve significantly.
This is because once we have taken a choice we found personal and interpersonal pressure to behave consistently and in coherence with that decision.

3- Social Proof. We are led to do what friends, acquaintances and people we respect do.
Think for example when you ask a friend for a restaurant recommendation or when you see a product sponsored by your trusted influencer; such social proof has a strong influence on your preference.

4- Liking. We are driven to react positively to a request coming from a person we respect and whose principles and values ​​we share. Think for example of the impact that a request from a good-looking person with your mother’s name could have. Probably in your mind, the association would be such as to take no for an answer impossible.

5-Authority.
It refers to the fact that we tend to trust and rely on who we perceive as publicly recognized. Think about how we trust the advice of a doctor or the opinion of a virologist on the subject of health and diseases.

6- Scarcity. This powerful influencing tool is often used in marketing to accelerate and increase sales, deals are often offered online with a time limit to which we often react with an urgent need to hurry up in the purchase so as not to miss the “opportunity”.

To sum up, as described by Cialdini and the other experts cited in this article, the human psyche is weak and often a victim of numerous conditionings by which it can be profoundly influenced if it fails to recognize their strong attraction. As consumers, we must remain aware of the strong conditioning to which we are subjected every day and not allow them to influence our purchasing decisions, in order to remain people and consumers more rational as possible.

Our actions are the result of our perception of the world and its influences on us.

Sources:

  • BrainInfluence – Roger Dooley
  • The Psychology of Persuasion – Robert B. Cialdini
  • BrandWashed – Martin Lindstrom

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