How Your Purchasing Decisions Are Made: An Introduction
The way we think about the way we think is flawed.
We like to think that our brains are perfect logical machines, processing information and spitting out a response. From this perfect logic, we have (in our perception) reasonable emotional responses. Our emotions can inform our logic, though. If I’m in a bad mood, then it becomes easier to assume that bad things are happening to me. When things are going well, then I might be more optimistic in the same scenario. In both cases, I’ll be able to rationalize both conclusions.
This leaves us in a perpetual state of back and forth between how we feel and how we think. Which is great. Without this loop, we probably wouldn’t get anything done. If we took no logical shortcuts, we’d find ourselves in constant decision paralysis.
Especially in the age of the internet.
Heuristics, Biases, and Why We Need Them
A heuristic is a logical shortcut where we take an answer to a problem, and use it to solve other problems in the future. For example, if you’ve found that it’s easier to put your pants on one leg at a time, you will continue to do that when putting your pants on. You likely won’t consider any other method, consciously or unconsciously.
A bias is a logical shortcut where we make decisions based on our emotional response, then apply logic afterward. Whether biases are useful or not is under contention, but most everyone has them. Biases come as a result of a heuristic, or when emotion otherwise overcomes logic.
Heuristics allow us to make decisions quickly. When a heuristic comes into play, it’s allowing us to skip over options that we probably don’t need to consider. Given a choice of ways to put our pants on, we will choose to put them on one leg at a time. It’s a good idea, it works, now we have time to get coffee before work. Awesome.
The more options there are, the more useful heuristics become. There are only a few different chocolate bars in any given store, so a heuristic there isn’t saving more than a couple minutes. The heuristic that tells us how to greet someone, comparatively, saves a lot of time and awkwardness.
In recent years, heuristics have become more useful than ever because there are so many options for almost everything that we do. Given that we’re fed constant information on the internet from 3.2 billion people, trying to think a decision through completely is almost impossible.
The internet is constant noise. Buy this, go there, watch that.
Heuristics cut through all of that, yelling, “Don’t listen to that, go here.”
How Heuristics and Biases Are Exploited
Unfortunately, heuristics aren’t perfect. They have two major issues: they’re pretty shallow, and frequently wrong. If someone asks why we put our pants on one leg at a time, we’ll probably say, “I don’t know.” And if we’re in a situation where we need to put both legs in at the same time, we’ll try it our way first. When it doesn’t work, we’ll feel stupid.
Enter biases. Now we feel stupid for what we do and we aren’t sure why we do it, so it’s time to get rationalizing.
“Well,” we say, “I like to put my pants on one leg at a time. And I don’t like putting on pants any other way.”
Now, logic is leaving the situation, and problems are created. Now, we’re going to live a life dictated by our biases, and we’ll have no idea that it’s happening. We can’t see the change happen.
Some people can, though.
I learned a lot about heuristics and biases in Psychology 101. I learned a little bit more about them in therapy. But I learned most of what I know in marketing classes.
If you’re trying to sell someone something, you need to know why they buy, and people buy with biases. I didn’t buy my new computer because it was the best gaming computer on the market, I bought it because it confirmed my idea of who I am. If I was trying to sell it, I would talk about the type of person it could make you. You’d probably buy it.
In the internet era, it’s especially easy to exploit biases. With the amount of information in the world, it’s easy to hit the right places with the right content. It’s easy to see where exploitable people are hanging out, and what they’re buying into. Demographics are found in milliseconds. Messages are sent out in droves.
To garner trust, all someone has to do is permeate the places that you can trust. They dress up like your friend, because they know why they like your friends. They pitch their products like a good idea, because they know what a good idea is to you.
When sincere, marketing is great. I’d be hypocritical to say it isn’t. The issue is that insincere marketing has a sincere veil on it now. Marketers aren’t concerned with reality, they’re concerned with perception. So the perception of sincerity is key. Thus, we need the hashtag “ad,” because marketers took sponsored posts far in the social era. When influencers are your friend, you won’t notice that you’re being influenced.
Perception is your reality, and it’s easy to distort.
Cognitive Behavioral Therapy for Your Wallet
Sometime in the 20th century, a new type of therapy was born: CBT, or cognitive behavioral therapy. If you have struggled with mental health in anyway, you either know of the idea or should. The basic version is this: if we can change how we think, we can change how we feel.
To do this, we need to understand that our feelings influence how we think — we need to understand our biases. If we’re depressed, for example, we might see a significant confirmation bias at the root of it all. Because we feel bad, we look for things to confirm how bad we feel. Suddenly, a small problem can send us spiraling down.
If we feel poorly, we will think, “Oh no, I had trouble putting my pants on. I’m a complete idiot.”
A therapist would tell us to rewrite that thought. Try, “I had some issues with my pants this morning, but it wasn’t a big deal,” and you’ll feel better about yourself.
When we understand the logic and emotions that comprise our thoughts, we can bend them to our will. We can take control back from them. Cognitive behavioral therapy has been shown to work miracles, having more of an impact on depression and anxiety in most patients than anything else.
So, what if we applied the same concept to the way we make decisions online?
Slant.co is working to peel back the curtain created by good marketers selling bad products. Our peer review system lays out information in a way that is suited to the reality of your needs, and not the perception of them. There’s less emotion here than there is on any other online marketplace.
In this series, we’re going to peel back our own curtain a bit. We will discuss the heuristics and biases that come up when we make purchasing decisions, and how they can be combated. This is cognitive behavioral therapy for your wallet, and a step towards buying only the best.
