How People Choose

Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

Tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com

How People Chooseby Shar VanBoskirk, April 14, 2015

For: B2C Marketing Professionals

KEY TAKEAWAYS

Marketers MisfireThe paradox is this: Firms take an increasingly scientific approach to marketing. But a barrage of digital technology provokes customers to apply less-rational decision-making processes, which makes their behavior more difficult to anticipate.

You Can Still Influence Customer ChoiceAll decisions inflict some degree of stress on the human brain. The key is to understand what influences different kinds of decisions under variable circumstances and how to use that knowledge to reduce choice anxiety.

Help People Choose Your Brand Based On Decision TypeEvery brand should aspire to become an anchor brand. But that’s not enough. Marketers should curate options, offset loss aversion, or facilitate the process, depending on what type of decision is at hand.

www.forrester.com

© 2015, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email [email protected]. For additional information, go to www.forrester.com.

FOR B2C MARKETING PROFESSIONALS

WHY READ THIS REPORT

Marketers miscalculate how consumers make purchase decisions. Why? Because the rapid adoption of digital technology gives marketers a false sense of precision about how they predict consumer behavior and adds stress to people’s decision-making processes. Humans are actually very irrational creatures; according to a Harvard Business School study, we make 95% of our purchase decisions with no active consideration at all. In this report, we use the primary dimensions that create stress for decision-makers — what’s at stake and available time — to narrow choices into four key decision types. Get people to choose your brand by marketing to the critical influences for each type of choice. The results will provoke personal branding, one-to-moment marketing, and a decline — that’s right, a decline — in advertising spend.

Table Of Contents

Marketers Miscalculate How People Choose

Humans Are Fundamentally Irrational

Decisions Create Anxiety

Digital Dials Up Distress

Reduce The Stress Of Decision-Making

Narrow Choices Into Four Decision Types

Use The Choice Chart To Prioritize

Help People Choose Your Brand

Invest To Be An Anchor Brand

Curate Common Considerations

Offset Loss Aversion

Facilitate Important Decisions

WHAT IT MEANS

Decision Analysis Will Change Targeting

Supplemental Material

Notes & Resources

In addition to interviewing users, vendors, and academics for this report, we applied data from Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada).

Related Research DocumentsMeasure Brand Resonance With The TRUE Brand Compass

The Power Of Customer Context

Will People Really Do That?

How People ChooseGet People To Do What You Want By Limiting Decision Stressby Shar VanBoskirkwith Carlton A. Doty, Sucharita Mulpuru, Anjali Lai, and Collin Colburn

2

5

8

14

13

APRIL 14, 2015

www.forrester.com

http://www.forrester.com/go?objectid=RES98281




http://www.forrester.com/go?objectid=BIO34






How People Choose 2

© 2015, Forrester Research, Inc. Reproduction Prohibited April 14, 2015

MARKETERS MISCALCULATE HOW PEOPLE CHOOSE

The age of the customer does indeed disrupt business strategy, but it increases customers’ tension as well. In Joni Siani’s book Celling Your Soul: No App For Life, one interviewee explains, “I have a weird anxiety about being online all the time.”1 Hyperinnovation introduces, and even imposes, more choices than ever. But with only 24 hours in the day and limited financial resources, most of us can’t really afford to explore all the options, even though we feel an awkward pressure to do so. In an environment where businesses are falling all over themselves to give customers their pick of cutting-edge considerations, most people rely on one search engine (Google) and one superstore (Amazon) and buy one of two phones (Apple or Samsung). Why?

■ Digital makes marketers think they are more accurate than they actually are. The availability of data and relative ease of marketing measurement today create a false sense of precision. Let’s face it: Even your most predictive analytics are limited to the data you have about your customers, and they cannot account for all possible outcomes. Alex Batchelor, chief operating officer of behavioral science research firm BrainJuicer, reminds us, “We are heavily influenced in ways we don’t understand and can’t predict.”

■ Marketers presume that customers choose rationally. Most marketing leaders tackle strategy based — whether they know it or not — on rational economic theory; that is, the notion that humans will compute the value of options and want more rather than less of a good.2 This seems reasonable, considering that humans have the mental faculties to learn multiple languages, invent complex machines, and puzzle out solutions to business problems. Yet we consistently choose poorly (see Figure 1).3 More than two-thirds of Americans are overweight.4 Personal savings have declined over the past 40 years, while spending continues to grow.5 And one-third of American adults hit the snooze button three times each morning, even though doing so makes them more tired.6


How People Choose 3


Figure 1 Humans Don’t Always Choose The Good Option

Humans Are Fundamentally Irrational

Humans are not, in fact, rational creatures; we make 95% of our purchase decisions with no active consideration at all.7 This doesn’t mean that people make only bad choices. It’s just that unlike computers, or Vulcans, humans:

■ Need mental shortcuts. Rational theory presumes decision-makers have: 1) complete access to all the pros and cons of every option in a decision and 2) the ability to compare all criteria in all considered options. But as Daniel Oppenheimer, associate professor of psychology at UCLA’s Anderson School of Management, points out: “People don’t have the computing power to perform as they [theoretically] should. We can’t process through an exhaustive set of options, so we use mental shortcuts to help us make decisions.” These “mental shortcuts,” such as using common sense, rules of thumb, pattern recognition, or stereotypes, help narrow the scale of decisions like “which two-bedroom condo in Boston should I buy?”8 Mental shortcuts are also what make it so jarring when your grocery store rearranges its produce section.9

■ Preserve mental energy whenever possible. Thinking burns energy; your brain consumes 20% of the energy produced by your body. You are wired to preserve mental energy when you can to prevent anoxia or ischemia — brain damage brought about by lack of oxygen and glucose.10 This is why you process basic functions (breathing, blinking, or balancing upright) and habitual acts (driving, playing the piano, or buying toothpaste) without the calorie-guzzling, decision-making part of your brain getting involved.11

Source: Forrester Research, Inc. Unauthorized reproduction or distribution prohibited.122530

Haven’t you ever . . .

Taken a free gift at a conference even though you didn’t want it?Avoided a restaurant that didn’t have a large crowd?Eaten too much?Pressed snooze?Charged more than you can pay off on your credit card?Put off doing something?Ordered the fries instead of the salad?Slept instead of working out?Closed your eyes when sliding on a slick spot while driving instead of steering into the skid?Fired off an email you regret?


How People Choose 4


■ Cling to comfort. Nonobjective influences like emotions, relative comparisons, or societal virtues aid the heuristics we use to make decisions. But these biases actually developed to protect us from harm. Megan Kent, originator of the Brain Friendly Branding approach, explains, “Our intuitive sense of what is dangerous and safe is based on emotional comfort.”12 And psychologist Daniel Kahneman finds that the innate human optimism that leads us to overestimate benefits and underestimate costs also empowers us to endure pain, suffer loss, launch startups, and raise children.13

Decisions Create Anxiety

The notion of human irrationality is an interesting academic study. But how does it appear in actual decisions? Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada) reveals that big and small decisions create strain.14 In fact, decision-makers:

■ Stress over choices. Our online community members frequently use the words “stress,” “worry,” “anxious,” and “regret” when reflecting on both small and large decisions.15 For example, they say things like, “I was slightly stressed out about what to make for dinner this week.” Or, “I felt so anxious about not being able to decide whether to go to the gym or not.” And for some, stress continues even after the choice is made: “I doubted my new tablet purchase while I was waiting for it to arrive.”

■ Require validation. Perspective from others is the most commonly valued influence over choices, even for well-researched decisions. For example, as online community members reveal,

“When I was buying my new tablet, the most helpful research input was Amazon reviews.” And “To decide if I should undergo some medical treatment, I asked my friends, family, and an online support group.”16

Digital Dials Up Distress

It’s no surprise that the pandemonium of media and devices due to digital disruption only aggravates our natural anxiety about decision-making. In fact, digital distress makes us even less rational about how we choose.

■ Technology-induced multitasking strains your brain. Multitasking is unavoidable in our omnichannel reality — but we aren’t wired for it. MIT neuroscientist Earl Miller says, “When people think they’re multitasking, they’re actually just switching from one task to another very rapidly.”17 This reduces effective IQ by 10 points and increases the stress hormone cortisol. Technology behaviorist Linda Stone calls this a state of “consistent partial attention,” which provokes an artificial sense of constant crisis, which in turn compromises the ability to be creative and make decisions.18 Worse, checking off a decision feeds the brain’s pleasure center. So we prioritize petty choices over important ones to gain a faster sense of accomplishment.


How People Choose 5


■ Option overload creates decision fatigue. Marketing leaders might recognize the threat of scads of competitive options available to their target audiences. But the thousands of daily decisions we deal with — Should I answer or ignore this text message? Will clicking on this link be valuable? — also consume the calories we need for deeper thought. This leads to decision avoidance, loss of impulse control, and a rerouting of decisions into less-depleted autonomic centers of the brain that choose based on ingrained habits and desires for comfort, not logic.

REDUCE THE STRESS OF DECISION-MAKING

Welcome to your paradox. Digital disruption enables marketing leaders to be the most scientific they have ever been, while it also provokes customers to be less rational in how they choose. The key to advantage in this contradiction is to market to reduce decision anxiety rather than to coerce a transaction. Forrester’s customer choice chart helps by parsing choices against two primary dimensions that create stress for the decision-maker (see Figure 2).

1. How high are the stakes for the choice? Consider first the significance of the opportunity or liability of key decisions your audience makes related to your brand, products, or services. Remember that high-stakes does not mean highly rational. Emotion, not reason, often drives extremely high-stakes decisions — for example, whether a loved one should stay on life support.

2. How much time does a user have to choose? The other critical contributor to how people choose is the amount of time they have available for the decision. Less time usually means more stress. A member of our online community illustrates this: “I wanted to make the right choice, but I felt rushed, confused, and unsure.”19 And Dr. Carl Marci, founder and chief science officer of Innerscope Research, warns that people making decisions under stress “tend to default to habit.”


How People Choose 6


Figure 2 The Customer Choice Chart

Narrow Choices Into Four Decision Types

Our self-preservation instincts still steer us to choose the least reckless option most of the time.20 But how we arrive at this conclusion, or when we vary from it, depends on the type of choice. Sorting decisions by the above two dimensions — what’s at stake and available time — reveals the key influences for four common decision types:

■ Routine. Habit, convenience, and price are critical drivers of low-stakes, low-time decisions, such as which office supplies to stock, what takeout to order, or where to buy gas.

■ Leisure. In contrast, users with lots of time in which to make low-stakes decisions, such as what to watch on demand or what birthday gift to buy mom, value recommendations and filters to prevent getting bogged down in possible options.

■ Urgent. Users facing immediate, high-stakes decisions, such as who should fix a leaking roof or how to handle a social media crisis, don’t have time to vet possibilities. They appreciate credibility, validation, and risk mitigation.


• What should I plant in mygarden?

• Which business card vendor should I use?• What songs should I download?

Ava

ilabl

e tim

e

Stakes

Low

Low High

Hig

h

Leisure

• How do I get the water out ofmy basement?

• Do I agree to emergencysurgery?

• How do we recover from a data breach?

Important

Routine Urgent

• Which office supplies should I stock?• Should I go to the gym tonight?• Where should I get gas?

• Should I stay at my current job?• Where should my family

vacation this summer?• Should I keep or replace Oracle?

Customers consider decisions based on two dimensions


How People Choose 7


■ Important. These decisions are planned and high-stakes, such as a family vacation, an engagement ring purchase, or an RFP process. Buyers have the time to compute the value of options when making important decisions.

Use The Choice Chart To Prioritize

Once you understand key user decision types, you can market to influence how people choose rather than to make them buy. The customer choice chart will help you:

■ Consider decision context. You can influence how people choose by understanding that customer context can make the same product a routine, leisure, urgent, or important decision (see Figure 3). If you’ve ever sat through a timeshare presentation that uses unnecessary urgency and pressure to get you to commit, you’ll know what we’re talking about!21 Those who prefer a less manipulative approach will like People Pattern, which matches individuals’ moods with online interactions based on social media cues. Shimmer uses wearables to track facial expression or body temperature in different situations. And Cheil Worldwide leverages big data technologies to create massive segmentation schemes based on environmental factors, user context, and business context, such as product release schedules.

■ Determine your primary choice type. Your products or services could land in all four buckets from time to time, but we’ll bet they’re most often in one or two of them. For instance, it would be uncommon for disaster recovery to be a leisure decision or for cereal buying to be an important one. 22 Sandwich chain Which Wich boosted online orders by 64% when it reset its web and media strategy to match the insight that people pick its sandwiches as leisure, not routine, choices.


How People Choose 8


Figure 3 Context Determines Decision Type

HELP PEOPLE CHOOSE YOUR BRAND

The customer choice chart illuminates the fact that stress factors vary from choice to choice (see Figure 4). In fact, the buying guides and thought leadership or video product demos that are so helpful to important decisions just interfere with urgent or routine ones. So which best practices should you apply to influence your customers’ decisions?

Invest To Be An Anchor Brand

There is no more important position to hold than being an anchor brand, no matter your industry or primary decision type. Anchor brands are reference points against which buyers compare every other option. And anchor brands are the go-to when a user just can’t make up her mind (which, remember, is most of the time). In a world obsessed with measurability, direct response marketing, and chasing experimental tactics, it might not be sexy, but we’re going to say it anyway:


“I need to get to a family funeral.”“I’m off to the monthly staffmeeting in Los Angeles.”

“I’m going on my honeymoon!”

Purchasing an airline ticket could be a decision made in four different contexts

“I’d like a fun getaway with the girls.”

Ava

ilabl

e tim

e

Stakes

Low

Low High

Hig

h

Leisure Important

Routine Urgent


How People Choose 9


■ Invest in branding. The brands that resonate with empowered customers are trusted, remarkable, unmistakable, and essential (TRUE).23 And they become this way by mapping to individuals’ values, not to values assumed for an entire population. For example, a diabetes medicine manufacturer positioned its brand differently in markets that valued the patient/doctor relationship compared with markets that valued the patient/medicine relationship.

■ Demonstrate your brand promise. How confusing that Slim Plus tea, the weight-loss brand of Dr. Stuart’s tea, has a cupcake on its packaging! It’s much less effort to choose a brand that manifests what it stands for. Extreme illustrations of this are merchants like Toms Shoes or Warby Parker, where a product purchase triggers the donation of a pair of shoes or glasses. But any brand can become visibly and functionally useful.24 For example, FedEx tracks temperature-sensitive packages in real time. And Lexus launched luxury lounges globally to showcase what its brand stands for through fine food, art, and music.

■ Protect your position. Did we mention that everyone should strive to make their brand an anchor brand? This means that if your brand is one, fight fiercely to save your spot.25 Spend on loyalty programs, shelf space, and brand awareness to ingrain your brand.26 Don’t force rationality; Tropicana sales plummeted 20% when it changed its iconic product packaging and disrupted buyers’ (irrational) purchase process based on pattern recognition.27 And experiment responsibly. Adam Petrick, global director of brand and marketing for Puma, warns that digital distracts marketers just as it does consumers. “Use technology with caution. When we got too wrapped up trying to do new things, we stopped proving our brand values and slowly disappeared out of user consideration.”

Figure 4 Stresses Vary By Choice Type


Distinguishing between options Recommendations or new developments

Chooser challengesChoice type Key choice influences

Leisure

Important Limited access to data Guidance

Routine Unconscious response Habit, brand, or price

Urgent Uncertainty Confidence or risk mitigation


How People Choose 10


Curate Common Considerations

Customer experience professionals have made an effort to limit clutter for years.28 But it’s worth introducing this concept into marketing strategy, particularly if you want to influence leisure choices or choices made under time constraints. One ConsumerVoices member explains why: “I felt overwhelmed during the decision process because there were so many different models to choose from.”29 A few practices can help:

■ Marshal the options. Limiting alternatives is the most straightforward way to eliminate the anxiety associated with too many choices.30 Apple focuses users and developers by offering just 50 SKUs. And retailers like Acumen Brands personalize emails with offers based only on past behavior.31 But variety isn’t inherently bad just because choice clutter is stressful. 32 Campbell’s shifted shopper attitudes to positive when it reorganized the soup aisle without axing assortment.33

■ Coddle curiosity. One hard part about marketing to irrational customers is that while too much choice overwhelms us, we lose interest when there isn’t enough. Accommodate overstimulated, hyperadoptive consumers’ “diminishing half-life of delight” by methodically adding to your product experiences.34 Or innovate in small ways that are adjacent to your original concept.35 As leisure decision-makers have plenty of time to feed their curiosity, if you don’t nurture it, a disruptor will. Consider Zillow, which provides users with better real estate data than most realtors can, or yogurt brand Chobani, which sabotaged every incumbent’s product strategy when it introduced packaged Greek yogurt into the United States in 2009.

Offset Loss Aversion

Choice is hard because it often means considering something new at the expense of the old — an effort that humans are hard-wired to avoid.36 For lower-stake purchases, we can refer to this insouciantly as buyers’ remorse. But for urgent decisions, the fear of making the wrong choice can be paralyzing. A few practical efforts can help assuage users’ natural loss aversion and get them to choose your brand:

■ Constitute confidence. Someone facing emergency surgery doesn’t have time to deliberate. To choose with confidence, she needs available, honest, accurate information and a recommended course of action. Translated into a marketing scenario, this means investing in objective content that is optimized for search engine visibility. Deloitte, KPMG, and Mercer each employ an editorial board to certify the market research studies they use in thought leadership. And in its Glass Is Life campaign, Owens-Illinois earned media impressions through social media mentions from consumers, external experts, and events.37




■ Remand regret. Ben Gaddis, chief innovation officer of agency T3, reminds us, “People don’t repeat decisions they regret.” Zappos outsmarted buyers’ remorse with its guaranteed return shipping. The same philosophy applies to urgent decisions. Car request app Uber adds about 40,000 drivers a month to keep up with demand for its driver ratings and reviews, ride-cost estimates, arrival time information, and digital receipts.38 And ratings and reviews are such a valued decision input that Amazon is adding them to its home services business.

Facilitate Important Decisions

Remember two key points when you influence important decisions. First, treating routine, leisure, or urgent decisions like important ones does not reduce chooser stress — it causes it. And second, even though these are the most rational choices we make, people need guidance for high-stakes, planned decisions, not just information. In the words of one online community member, “I did research online and by word of mouth, but I wish more guidance had been accessible to me.”39 Marketers who have grasped these principles:

■ Participate in users’ decision process. We’ve initiated your effort here with our customer choice chart, but you can’t stop there. Mercedes-Benz USA used journey maps to determine how to shift the role that dealerships played in a car-buying process that had moved primarily online. And multiple methods exist now to help you study the motivations behind user behavior (see Figure 5). McKinsey recommends observing buyers as they move through their consideration process.40 Harvard Business School professor Gerald Zaltman introduced a method that applies collaging to capture user sentiment and process.41 And pymetrics, a Harvard/MIT startup, uses games to learn how people instinctively choose.

■ Guide at points of stress. Through research, T3 finds that influencing “the right decision” is about providing data critical to users’ particular pain points while also removing extraneous information. For example, it has created a quote process for Allstate that customizes risk prevention tips for a specific home, which increases the likelihood of a quote request. And B2B marketers match the content they produce to their buyer types: white papers for tech buyers; lower-cost infographics for business buyers.42

■ Support irrational influences. Smart marketing leaders understand that even important decisions cannot be wholly rational. Don’t you know someone who’s bought a car based on how she felt in the driver’s seat? You want to appeal to user emotions during and after buyers’ decision processes to influence them to choose and encourage them to buy again. Mercedes-Benz gave dealers iPads to demonstrate sophisticated car features and to prevent inconsistent sales experiences that might turn buyers off. L.L.Bean famously accepts any return at any time for any reason. And Ritz-Carlton Hotels specialize in the surprise-and-delight department: Anyone for free ice cream at the pool?




Figure 5 Advanced Research Methods Reveal User Influences


Eye tracking Monitors eye movements to locate what catchesusers’ attention, how fast, and for how long

ZMET Encourages users to take, draw, or collect imagesthat represent their thoughts and feelings

Facial coding Tracks the movement of individual muscles in theface to categorize emotion

Implicit associationtesting

Detects a person’s automatic association between concepts and memories

Research method Method explanation Possible providers

Biometrics Studies heart rate, skin conductance, motion, or respiration as indicators of emotional engagement

EEG Measures electrical activity along the scalp produced by neurons firing

fMRI Notices regions of the brain in use by observing changes in neural blood flow

Voice analysis Uses speech features to infer emotional state

Neuroscienceresearch firm (e.g.,

InnerscopeResearch,

Olson Zaltman,and BrainJuicer)

Observation Watches users behave in varied circumstances

Public expression

Values-based surveys

Mines social media for self-expressed indicators of mood

Maps survey responses about life valuesto behavioral data

Digital agencies with design background (e.g.,T3 and Manifest Digital)

Analytics platform thatanalyzes motivational

drivers (e.g., Resonate,People Pattern, and

Boomtrain)




W H AT I T M E A N S

DECISION ANALYSIS WILL CHANGE TARGETING

Decoding how people choose is unfamiliar territory for most marketers. We think efforts to influence key decision types mean more targeting, but not always to the end customer.

■ Branding gets personal. Influencing choice requires tuning into decision profiles — a customer dimension beyond standard demographics, behaviors, and attitudes. Done right, decision profiles will be fluid, based on users’ positions in their customer journeys and their immediate context.43 The smell of the complexity of this data scheme will attract data sharks like Acxiom or Experian, and their packaged solutions will work for most marketers. But firms in hypercompetitive markets like consumer goods, retail, or consumer electronics will bring decision-profiling in-house to differentiate.44 The result? Broad-based branding like Nike’s slogan Just Do It tailors to thousands of variations, such as “don’t let us down” or

“push yourself,” to match decision profiles.

■ One-to-moment replaces one-to-one marketing. Marketers love personalization because it applies big data technologies to scale one-to-one communications. But two things upset the one-to-one future: 1) External factors, particularly friends and family, weigh heavily in decisions and 2) hyperadoptive consumers become numb to routine offerings, even relevant ones.45 Ben Speigel, a managing director at GroupM, calls for a return to the “flea market” experience, where people delight in finding something unexpected.46 We think personalization tools can help marketers pull this off by scaling from one-to-one marketing to one-to-moment marketing. Expect MyBuys or RichRelevance to develop advanced solutions that can prime influencers and determine the right context for the exponential number of moments that are critical to an individual’s decisions.47

■ Surprise! Ad spending declines. Let us explain. We’re entering a decade where marketers don’t have the expertise to distinguish good partners from neural marketing carpetbaggers. (If you need some help debunking pseudo-neuroscience, there are blogs that do that.)48 And consumers face added privacy concerns about who can do what with their mood data and brain scans. This spells a perfect opportunity for personal identity and data management (PIDM) services — like Amazon, Apple, or MasterCard — to start filtering promotions and content and even curating products for consumers.49 When they do, acquisitions budgets will dive as marketers spend with PIDM intermediaries to lock in preferred-partner status in their replenishment networks.




SUPPLEMENTAL MATERIAL

Survey Methodology

For this research, we leveraged insights from Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada). In this qualitative market research online community (MROC) of approximately 2,000 general-population US, UK, and Canadian online adult consumers, we explored consumers’ attitudes, emotions, and behaviors regarding different types of decisions they make.

For Technographics® Clients: How To Get More Technographics Data Insights

Forrester’s ConsumerVoices Market Research Online Community Q1 2015 (US, UK, Canada), of approximately 2,000 general-population US, UK, and Canadian online adults, includes many additional questions and parameters by which you can analyze the data contained in this report. If you wish to subscribe to Forrester’s Consumer Technographics services or learn more about the MROC, please contact your account manager or [email protected]. If you are an existing Technographics client, please contact your data advisor at [email protected].

Companies Interviewed For This Report

BrainJuicer

Cheil Worldwide

Innerscope Research

Megan Kent Branding Group

Mercedes-Benz USA

Nintex

People Pattern

Puma

T3

University of California at Los Angeles (UCLA)

ENDNOTES1 Source: Joni Siani, Celling Your Soul: No App for Life, CreateSpace Independent Publishing Platform, 2013.2 These principles are the work of Adam Smith, known to many as “the father of classical economics.” He

published his research and beliefs in a massive two-volume work titled An Inquiry into the Nature and Causes of the Wealth of Nations, often referred to as The Wealth of Nations, which is outlined at this site. Source: Library of Economics and Liberty (http://www.econlib.org/library/Smith/smWN.html).

3 The questions on this graphic were inspired by the book Switch. Source: Chip Heath and Dan Heath, Switch: How To Change Things When Change Is Hard, Crown Business, 2010.

4 Obesity rates in the United States have more than doubled since the 1970s. Source: Food Research and Action Center (http://frac.org/initiatives/hunger-and-obesity/obesity-in-the-us/).




5 The US personal savings rate has fallen sharply over the past 40 years and remains low, at 4.8%. Source: Peter G. Peterson Foundation (http://pgpf.org/Chart-Archive/0063_personal-savings). The US gross domestic product (GDP) is at record levels. Source: Trading Economics (http://www.tradingeconomics.com/united-states/gdp).

6 Hitting the snooze button doesn’t actually help us feel more rested, according to this article. Source: Sophia Breene, “Why the Snooze Button Is Ruining Your Sleep,” Greatist, October 14, 2014 (http://greatist.com/happiness/snooze-button-bad-for-sleep).

7 Harvard Business School professor Gerald Zaltman says that 95% of our purchase decision-making takes place in the subconscious mind. Source: Manda Mahoney, “The Subconscious Mind of the Consumer (And How To Reach It),” Working Knowledge, Harvard Business School, January 13, 2003 (http://hbswk.hbs.edu/item/3246.html).

8 On April 5, 2015, Trulia listed 488 two-bedroom condos available for sale within the city limits of Boston, Massachusetts. Happy hunting! Source: Trulia (http://www.trulia.com/for_sale/Boston,MA/CONDO_type).

9 Barry Schwartz studies the conundrum of option organization in The Paradox of Choice: Why More Is Less. Not only are we biologically unable to collect and process through all of the information available to inform our choices but also, psychologically, our inability to do this creates anxiety. Source: Barry Schwartz, The Paradox of Choice: Why More Is Less, Ecco, 2003. Watch Schwartz explain his research in this video. Source: Barry Schwartz: The Paradox of Choice, Ted (http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice?language=en).

10 Your brain is your most energy-hungry organ, as this article explains. Source: University World News, “The brain – Our most energy-consuming organ,” May 11, 2013 (http://www.universityworldnews.com/article.php?story=20130509171737492).

What damage can occur when the brain lacks needed energy? Find out here. Source: David Attwell and Simon B. Laughli, “An Energy Budget for Signaling in the Grey Matter of the Brain,” Journal of Cerebral Blood Flow & Metabolism, May 1, 2001 (http://www.nature.com/jcbfm/journal/v21/n10/full/9591146a.html).

11 In his book Blink: The Power of Thinking Without Thinking, Malcom Gladwell posits that our “adaptive unconscious” — the part of our brain that manages the automatic tasks that we need to function — can also help with our decision-making by providing immediate situational responses. Source: Malcolm Gladwell, Blink: The Power of Thinking Without Thinking, Back Bay Books, 2007.

Book excerpts are available at this site. Source: Blink, Malcolm Gladwell, gladwell.com (http://gladwell.com/blink/).

12 See how Megan Kent’s approach can help you create a brand that appeals to your customers’ rational and emotional sides. Source: Megan Kent Branding Group 2013 (http://www.megankentbrandinggroup.com/about-megan/).

13 Dan Lovallo and Daniel Kahneman, “Delusions of Success: How Optimism Undermines Executives’ Decisions,” Harvard Business Review, July 2003 (https://hbr.org/2003/07/delusions-of-success-how-optimism-undermines-executives-decisions).

http://pgpf.org/Chart-Archive/0063_personal-savings

http://www.tradingeconomics.com/united-states/gdp

http://www.tradingeconomics.com/united-states/gdp




14 The specific questions we posed to the market research community were as follows for big and small decisions: “Every day, we’re faced with numerous decisions — some are more serious than others. Here, let’s reflect on any big decisions you’ve made recently and that you worked through the thought process. 1) Think back to a serious or high-stakes decision you’ve made recently (for example, bought a house, changed jobs, sought medical treatment, etc.). What was the choice you had to make, and what was the context? 2) What resources did you turn to when making the decision (if any) and why? 3) How long did your decision process take, and why? 4) How did you feel during the decision process and after you had made your choice? Please be as descriptive as you can. 5) What do you wish you’d had (either physically and/or emotionally) when making your decision, and why?”

15 In fact, these terms appear 74 times in about 200 comments. Source: Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada).

16 Source: Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada).17 Source: Daniel J. Levitin, “Why the modern world is bad for your brain,” January 18, 2015 (http://www.

theguardian.com/science/2015/jan/18/modern-world-bad-for-brain-daniel-j-levitin-organized-mind-information-overload).

18 Linda Stone explains her “attention project” here. Source: “Continuous Partial Attention,” Linda Stone (http://lindastone.net/qa/continuous-partial-attention/).

19 Source: Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada).20 Despite having evolved over millions of years to be cautious about new things, more people are adopting

more new product experiences more rapidly than ever before. Digital disruption makes it possible for disruptors to build product and service experiences that are free or nearly free. See the “Will People Really Do That?” Forrester report.

21 In an example more bothersome than sitting through a 2-hour timeshare pitch, executives at The Body Shop admit using emotional manipulation to motivate employees. Source: Adam Grant, “The Dark Side of Emotional Intelligence,” The Atlantic, January 2, 2014 (http://www.theatlantic.com/health/archive/2014/01/the-dark-side-of-emotional-intelligence/282720/).

22 Shoppers don’t like to waste time on everyday decisions, so they tend to buy familiar brands without reading the labels or checking the prices. Source: Lorraine Heller, “Nielsen study decodes supermarket shopping behavior,” Food Navigator-usa.com, August 27, 2007 (http://www.foodnavigator-usa.com/Suppliers2/Nielsen-study-decodes-supermarket-shopping-behavior).

23 The four attributes of a TRUE brand — trusted, remarkable, unmistakable, and essential — directly influence brand preference, referral, and premium pricing and ultimately build brand resonance. See the

“Measure Brand Resonance With The TRUE Brand Compass” Forrester report. 24 Demonstrating your brand promise is at the heart of utility marketing. See the “Create Marketing Your

Customers Can Use” Forrester report.









25 Use the effort that Boston residents apply to claiming parking spots in winter storms as a guide for how aggressively you should preserve your anchor brand position. While we don’t condone fistfights or car vandalism, we would love you to show some Boston Strong spirit to fight for your brand’s spot in consumers’ minds. Source: Julie Xie, “Boston’s Space-Saving Tradition Explained,” Boston.com, January 22, 2015 (http://www.boston.com/cars/news-and-reviews/2015/01/22/boston-space-saving-tradition-explained/DVrAKS9BJGBk3QCHgx12FK/story.html).

26 Treat your loyalty program as one of several tools — alongside customer experience, brand experience, customer service, and product development — that collectively address and foster customer loyalty across the organization. See the “Be A Loyalty Company, Not A Company With A Loyalty Program” Forrester report.

27 In response to a 2009 insight that consumers thought orange juice contained added sugar, orange juice brand Tropicana redesigned its packaging to highlight its healthy ingredients. But all the new packaging did was make it so hard for buyers to find Tropicana that the brand had to launch a website, howdoyoufindtropicana.com. After two months of falling sales and aggressively negative social media buzz, Tropicana returned to its former packaging. Source: Colleen P. Kirk and Karen A. Berger, “Tropicana: Social Media Teach Marketers A Branding Lesson,” Journal of Critical Incidents, The Society for Case Research, 2011 (https://goodpackagedconsumers.files.wordpress.com/2012/10/67737660.pdf) and Stuart Elliott, “Tropicana Discovers Some Buyers Are Passionate About Packaging,” The New York Times, February 22, 2009 (http://www.nytimes.com/2009/02/23/business/media/23adcol.html?pagewanted=1&_r=3&adxnnlx=1427911040-Fl1JQCYOGpbEAuknpqgtsQ).

28 Good customer experience strategies are based on scenario design, which asks and answers three questions: Who are your customers, what are their goals, and how can you help them accomplish those goals? See the

“Scenario Design Unifies The Splinternet Customer Experience” Forrester report.29 Source: Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada).30 This is another argument that Barry Schwartz makes in his research. Source: Barry Schwartz, The Paradox

of Choice: Why More Is Less, Ecco, 2003.31 This case study is available through Sailthru. Source: “Acumen Brands: Case Study,” Sailthru (https://drive.

google.com/file/d/0B4rjJSKINJsgZzNqRW55c0Z1Qk0/view).32 Source: Barbara Kahn and Brian Wansink, “The Influence of Assortment Structure on Perceived Variety

and Consumption Quantities,” Journal of Consumer Research (http://foodpsychology.cornell.edu/pdf/permission/2004/Assortment_Structure-JCR_2004.pdf).

33 Barbara Kahn explains how Campbell’s applied her research on assortment structure in this paper. Source: Barbara E. Kahn, “Global Brand Power: Leveraging Branding for Long-Term Growth,” Wharton Digital Press, 2013 (http://www.responsemagazine.com/response-expo/global-brand-power-leveraging-branding-long-term-growth-whar).

34 Credit goes to Forrester analyst Tony Costa for developing and labeling this concept.






35 An adjacent possibility is a stable next stage in evolution or innovation that can act as a segue to the next adjacent possibility. These adjacencies are usually not linear or even obvious. Yet, accumulated over time, they led to things like sight and flight — some of the biggest innovations ever. See the “Innovating The Adjacent Possible” Forrester report.

36 Our brains are wired to assume that change comes at a price. In the world of tradeoffs, scarcity, and zero-sum games where humans have evolved, any new thing we adopt — whether a fashion, a technology, or an idea — requires us to give up something old to make room for the new. See the “Will People Really Do That?” Forrester report.

37 Great marketing content fuels the demand generation engine, boosts brand visibility, and attracts buyers interested in the problems your company can solve. But when marketers publish promotional information masquerading as thought leadership, these efforts produce unremarkable results. What’s needed is a chief-marketer-level focus on the purpose, commitment, and processes required to make the thought leadership component of content marketing a companywide story, not just output from the marketing team. See the

“Nurture Thought Leadership To Nurture Your Brand” Forrester report.38 Read more about Uber’s remarkable growth rate. Source: Chris O’Brien, “Princeton economist explains

why we should all stop worrying and learn to love Uber,” VentureBeat, January 22, 2015 (http://venturebeat.com/2015/01/22/inside-ubers-staggering-u-s-growth-40000-drivers-joined-in-december-and-average-19-per-hour/).

39 Source: Forrester’s ConsumerVoices Market Research Online Community, Q1 2015 (US, UK, Canada).40 Source: David Edelman, “Secrets of the Irrational Consumer,” LinkedIn, February 13, 2015 (https://www.

linkedin.com/pulse/secrets-irrational-consumer-david-edelman).41 Source: Daniel H. Pink, “Metaphor Marketing,” Fast Company (http://www.fastcompany.com/33672/

metaphor-marketing).42 Lead-to-revenue marketers must build the engagement strategy to lead buyers through their journeys. But

there’s no one right way to do this: Some buyers prefer to engage with a sales rep who can help them create and evangelize a vision; other buyers want to educate themselves through professional contacts and peer-created content; and yet others are comfortable doing research on vendor websites. See the “Shift Focus To The Customer Life Cycle To Take L2RM To The Next Level” Forrester report.

43 Context is key to the future of marketing, as it helps create relevant interactions between a marketer and customer in specific moments. See the “The Power Of Customer Context” Forrester report.

44 As the technology to examine qualitative data becomes scalable and accessible, firms will turn to researchers with experience in analyzing behavioral ecology, sociobiology, and cognitive psychology to help them understand what makes consumers tick. Joint degrees between business and medical schools will prosper. See the “Brief: The Marketing Technology Meet-Up” Forrester report.

45 Hyperadoption leads to hyperabandonment. See the “Will People Really Do That?” Forrester report.46 Spiegel believes that as a society, we should start thinking about how can we recreate and promote

true moments of discovery — getting a broad exposure to everything that is happening in the world.














Source: Ben Spiegel, “The Death Of Discovery,” CMO, December 19, 2014 (http://www.cmo.com/articles/2014/12/17/the_death_of_discove.html).

47 Forrester’s research on the mobile mind shift addresses the criticality of mobile moments: Mobile moments are becoming a battleground for customers’ attention. If you serve the needs of a customer or an employee in that moment, you can win their business and their loyalty. If you fail, an entrepreneurial company will step in and fill the need for you, disrupting your business in the process. See the “Re-Engineer Your Business For Mobile Moments” Forrester report.

48 Here’s one blog you can visit. Source: NeuroBollocks (https://neurobollocks.wordpress.com/).49 We think the businesses that currently manage much of your digital data — like Amazon, Apple, or

MasterCard — will become personal identity and data management (PIDM) services that filter promotions and content for you. See the “US Digital Marketing Forecast, 2014 To 2019” Forrester report.




Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. 122530

Forrester Focuses On B2C Marketing ProfessionalsConsumers are more empowered than ever before. You must

understand their changing behavior, and optimize marketing

spend across online and offline channels, using new media and

technologies to win and retain those customers.

About ForresterGlobal marketing and strategy leaders turn to Forrester to help

them make the tough decisions necessary to capitalize on shifts

in marketing, technology, and consumer behavior. We ensure your

success by providing:

nData-driven insight to understand the impact of changing consumer behavior.

nForward-looking research and analysis to guide your decisions.

nObjective advice on tools and technologies to connect you with customers.

nBest practices for marketing and cross-channel strategy.

FOR MORE INFORMATION

To find out how Forrester Research can help you be successful every day, please contact the office nearest you, or visit us at www.forrester.com. For a complete list of worldwide locations, visit www.forrester.com/about.

CLIENT SUPPORT

For information on hard-copy or electronic reprints, please contact Client Support at +1 866.367.7378, +1 617.613.5730, or [email protected]. We offer quantity discounts and special pricing for academic and nonprofit institutions.

mailto:[email protected]

www.forrester.com

How People Choose

Documents

Transcript of How People Choose