HELSINQI CREATIVE

Second-order decision-making

Monday, 26 July 2010

Whose idea was it in the first place to consider consumers — or, really, anyone, come to that — as rational agents making decisions based on fact and logic? It's encouraging to see people discussing behavioral economics and the distinction between (what people claim as their) preferences and real behavior. But hey, is this really anything new? The great advertisers have always understood this, if only intuitively. (Spoken like a creative, right?)

The distinction is between self-image and actual behavior, and what a distinction that is. This is where hands-on experience in Zen or any real mindfulness practice provides an edge in insight. The takeaway there is that it is exceedingly difficult to know oneself with any clarity and that preferences are fickle and contextual, so that asking people what they like is flawed at best. Unless you really know how to deconstruct the results of that inquiry. The corollary is that preferences are accoutrements not unlike Rolexes or Air Jordans, which wrap us in a comfort zone of reifying self-image but which ultimately evaporate like phantoms in the cold light of day and cede to the hard habits of actual behavior.

What does all this have to do with marketing? Only everything, and it's what these bloggers — Bulik, Rubinson, Rubinson — are chewing on with respect to behavioral economics.

If market research is about discovering preferences — in artificial circumstances at that (where "We tend to study preferences at times that are divorced from a respondent being in a need state." 1) — then it is barking up only one of the right trees, and misidentifying it at that. The crucial tree is the behavioral one, the decision tree.

And vis-à-vis that tree, Joel Rubinson has a most thought-provoking post on second-order decision strategies. The nutshell is that people make preliminary decisions about how they will make a substantive decision, in order to simplify byzantine decision-making processes. These preliminary, or second-order, decisions are made, say, while bicycling to the store, when the consumer decides she's going to buy whatever's cheapest, or stick to her favorite brand, or what have you. It's a self-defense heuristic against the hassle of complicated first-order decision-making in the aisle, faced with an embarrassment of choices.

This suggests very different meta-strategies for high-profile national brands vs. price-positioned store brands, and so forth. But hey, just read Rubinson's post on Marketing insights into how we decide.

And then, let's just be done with this preferences of the rational consumer silliness.

Addendum: Malcom Gladwell on spaghetti sauce. At about 10:00, it's all about the "we don't know what we want," we hold on to a self-image. And, a strong caution against universalism, in favor of diversity.