Is the Desire For Your Jeans in Your Genes?
“The name Pavlov may ring a bell; but will the name Darwin transform modern marketing?”
Did you get your blue eyes from your father; your preference for salty snacks from your grandmother; and, your lust for new Levi’s 501CT from your great-great-great-great-great-great grandfather? The answer to why, when and how customers shop, in fact the answer to why economic theory and fact frequently disconnect, may lie in the study of 100,000 years of human evolution.
Rose drives a New York City taxicab for a living. And, like most cab drivers has set a self-imposed mental target income for each day. Yesterday was a beautiful sunny day and most New Yorkers took advantage of the weather by walking, rather than riding; this meant that Rose worked a 16 hour shift when fares were scarce. Today is raining and business is brisk, Rose will reach her “target” within 4 hours — and go home early. This behavior is totally irrational according to economic theory and modeling.
Rose receives an envelope in today’s mail. A compelling teaser catches her eye, “You can save 1000 baby seals by opening this letter.” She is skeptical, and annoyed, yet opens the package to discover a wildlife calendar — that she has no intention of using — and a sheet of 20 reply addresses (hers) with photos of adorable seals on them. Direct marketing gurus have targeted her for this offering based upon a variety of database items, trigger events, and previous behaviors. These experts have discovered tactics of timing and patterns of phrasing that increase the likelihood of Rose responding to this offer with a donation. What they don’t know is why their tactics affect Rose’s behavior. This question is being answered by understanding the genetic and social evolution of human behavior.
The calendar in Rose’s envelope was placed there in recognition of the illogical social psychology precept of “reciprocal altruism.” When Rose walks through an airport and a Hare Krishna fund-raiser offers her a wilted carnation that she has no interest in, the fund-raiser knows that making the offer dramatically increases the odds of her making a donation, regardless of whether or not she accepts the flower. In fact, studies show that if she does accept the flower she will subsequently throw it out in the next trash receptacle, where another Hare Krishna would take it out, clean it off, and re-use it. The same concept applies when telemarketers are taught to ask, “How was your day?”
Modern direct marketing models, in fact all fields of models of economic behavior, are based upon the assertion that consumers will act logically, predictably, and consistently. Here’s the rub: Consumers are rationalizing rather than rational.
Most, if not all, purchasing decisions are guided by adaptive behaviors that evolved over hundreds of thousands of years. These behaviors are part of our “human nature” having evolved long ago to solve problems faced by our ancestors. Further, these behaviors — honed in “hunter/gatherer” environments — are now out-of-place in contemporary society and result in behavior that appears confused or conflicted. Consumers therefore base their decisions upon hard-wired (neural) shortcuts and various cues taken out of context and consequently make apparently irrational purchasing decisions. Clever marketers may take advantage of this irrationality. However, consumers will act irrationally whether manipulated, or not. Understanding what motivates consumers to acquire something is valuable to both consumers — to help align themselves with their conscious objectives, and to marketers — whose objectives may be less noble.
Economist Richard Thaler, among others, has noted that many consumers segregate their funds into mental accounts like “discretionary income’’ or ‘’savings’’ and justify different spending behaviors from each. Rose will gladly blow her winnings from a football pool, a mentally ‘’frivolous’’ account, even while she scrupulously hordes every dollar she earns driving the cab in her mental “savings” account. Rational behavior modeling would contradict that thinking.
Behavior, even at our most rational moments, and despite all best efforts to the contrary, is powerfully influenced by our innate “emotions”. The anatomy of our brains processes emotions faster and separately from non-emotional thought. Studies show that we process deep intuitive evaluations of “good” or “bad,” even before we have a chance to “rationally” think about them. This instantaneous emotional evaluation system helps us to make quick decisions based on shortcuts when we under stress, overwhelmed with sudden information, or quite the opposite, have insufficient input. We call this quick decision system “instinct.” These instinctual behaviors can be artificially triggered by out of context events, such as sale pricing, testimonials, and “expert” advise.
In violation of accepted economic theory, studies show that people are more concerned with changes in wealth than with their absolute level. Moreover, most people are ‘’loss averse,’’ meaning they experience more pain from losses than pleasure from gains. Consumers regularly respond to “limited offers,” “25% discounts” — even false ones, offers from “authority” figures, testimonials and other direct marketing tactics. These — seemingly irrational — behaviors may have literally evolved over thousands of generations in “the wild” as survival adaptations.
To fear the loss of a needed resource — water, shelter, or food — over desiring the acquisition of additional quantities of the same resource, beyond that which is required, makes rational sense — in the proper context. To follow the behavior of others like ourselves, or to be sensitive to the loss of something previously available to us are behaviors would evolve through “natural selection,” for they increase the likelihood of survival. That these behaviors are universal across all demographic groups of all nations adds further proof of their genetic origins.
“There is compelling evidence that human behavior is significantly channeled by our genes.” This according to Terence Burnham’s Harvard Business School Ph. D Thesis, “Because of these genetic constraints, human behavioral biology has the potential to resolve several fundamental economic quandaries that are caused by the lack of a precise description of human nature.” According to Dr. Burnham, the way our customers perceive and respond to economic and marketing stimulus has a strong genetic component.
I would argue caution regarding the literal genetic theory of shopping. More likely, shopping behavior is not based upon our literal “genotype”; pure biological genetic structure. Rather, we are hard-wired with a “phenotype”, a composite of our physical nature along with environmental and cultural factors. The conflict lays in one hundred thousand years of genetic evolution, which is adapted to hunter/gatherer survival, now applied to one hundred years of modern retail stimulus. Our predisposed evolutionary “instincts” are now discombobulated.
Nonetheless, there are practical marketing implications for these theories. TV shopping and sale racks emphasize a rapidly diminishing supply of items, items highly desired by our peers. “Buy now, while supplies last” should not be a motivator to acquire an item one does not normally desire; yet, it is. “I’m not a doctor, but I play one on TV,” should not provide credibility for the spokesperson regarding pain relievers, yet, there again, it does.
The new research being conducted on evolution and social behavior is robust and compelling for economists, direct marketers, and business in general. Deep within every customer there exists an ancient database of behavior triggers just waiting to be mined. The name Pavlov may ring a bell; but will the name Darwin “evolutionize” modern marketing?
(c) David J. Katz, New York City — August 31, 2014