Throughout my career in online marketing I have always believed that the things you can learn from other disciplines and industries tend to give the biggest advantages.
With this in mind, I have been doing some reading around behavioural economics and how knowing about why people make decisions can give us an insight into how we should market brands online.
The concept that follows is about satisficers and maximisers; people who settle for something acceptable compared with those who seek out something perfect.
Knowing about these concepts can and should improve your thinking in terms of strategy, copywriting, design, and anything else you care to practice as part of online marketing.
The examples used here show some classic thinking that can be adapted for use in the ever-expanding world of online marketing.
Conventional wisdom suggests that when humans make decisions they look for the best possible option and then decide to go with that one.
The work of the economist, Herbert Simon put forward the theory of bounded rationality that suggests this is not always the case.
By combining two words; “satisfy” and “suffice”, Simon suggested that we (as humans) often play the role of ‘satisficer’.
In contrast to people who look for the definitive ‘best option’ (maximisers), Simon suggested that humans struggle to gather all of the information required to successfully identify the best option to go with.
Not only that, but Simon suggested that even if we could gain access to all of the information required, our minds would not be good enough to process it.
The result of this? We become satisficers. Instead of wasting time and energy looking for the best option, we find an option that won’t be the worst and stick with that.
Vice Chairman of Ogilvy Group UK, Rory Sutherland is a big proponent of behavioural economics and its importance when working in marketing.
In a video filmed for edge.org Sutherland discusses the concept of satisficing and how it can explain the effectiveness of big brands. The example Sutherland uses is that of McDonalds.
When you arrive in a new town and are hungry you have a few requirements. Those requirements, for example, could be to satisfy your appetite and not get ill. In addition to these requirements you will also have a preference to eat something that you will enjoy.
Based on this, if you were able to find the absolute best restaurant in town it would do a good job of meeting your requirements.
All fine, except gathering the information to assess the best restaurant in a strange town that you have just arrived in is pretty hard, if not impossible.So, instead of gathering lots of information you just stop at the first McDonalds you see.
Sutherland suggests that there are probably better places to eat than McDonalds but McDonalds does come with one very important promise: it won’t be the worst place to eat.
Most people know what McDonalds is, they know what to expect, they know they will probably not hate whatever they order, and they know that it is unlikely to make them ill.
McDonalds is probably not the best but it is definitely not the worst.
Sutherland suggests this is part of the reason brands are so successful; their ability to convince people that they definitely won’t be the worst choice is an effective way to capture attention and custom.
Appealing to the tendencies of satisficers has been a successful strategy for a number of brands. Here are some good examples:
In 1962 Avis was the second largest car hire company in the market behind the market leader, Hertz.
Advertising agency, Doyle Dane Bernbach decided to embrace this underdog position by running a campaign called “we try harder”.
The message behind the campaign was this:
“When you’re only No.2, you try harder. Or else.”1962 Doyle Dane Bernbach campaign for Avis – We Try Harder
Two ads from 1962 Doyle Dane Bernbach campaign for Avis – We Try Harder
Boiled down to its core elements, the campaign is essentially explaining that Avis is a “small fish” and as such can’t afford to be bad.
The customer is left with the feeling that Avis definitely won’t be the worst car rental company to choose. That is usually a good enough reason to go with them.
In 1994 Jeff Bezos founded Amazon.
At the time, the thought of entering your credit card details into a website and waiting for your purchase to arrive sent shudders down the spines of even the most seasoned of bargain hunters.
20 years on and the work of Amazon has made it commonplace for company websites to regularly account for more sales than the bricks-and-mortar shops.
Part of this success is down to the fact that Amazon did such a good job of convincing the public that using ecommerce websites could be safe.
The result now is that small, specialist ecommerce websites can struggle to compete with Amazon because it did such a good job.
Let’s say you would like to buy a book. It can be found for the following prices:
Based on price, it is obvious where the best option is.
However, take security into account and Amazon comes with the big brand guarantee that customer service won’t be the worst and they are unlikely to forget about your order or neglect to send the book to you.
As a result, the satisficer in you may just swing towards Amazon because you can be sure it is not the worst option.
Apple’s iPhone has been a phenomenal success despite facing competition that often offers better products than Apple.
The Android operating system is used by a number of phone manufacturers and many of them have created devices that are technically better equipped than the iPhone.
Despite facing direct competition that when scrutinised by experts is better, the iPhone still sells. This is because Apple is a brand that has become synonymous with quality design.
Apple customers don’t care if what they are buying is not technically the best thing they can buy for their money. They only care that what they are getting is 100% guaranteed to not be completely rubbish. It reaches a required threshold and that is all that is required.
Android on the other hand struggles with achieving this status.
Having an understanding of how your customers make decisions is essential to success in marketing.
In a competitive market the default aim is often to convince your customer that you are better than your competitors and therefore that you are “the best”.
This approach can neglect the most important requirement; convincing your customer that you are not the worst option.
Learn about the fears your customers have and then create a service (or website) that addresses all of these fears.Offer easy ways to allow your customer to search using their own requirements and satisfy these needs.
To illustrate this point here’s one final example:
Imagine browsing for a new television, the options can be overwhelming.
Here are some of the options on the Currys website:
Unless you are an expert (maximiser) it is pretty hard to work out which options to go with.
Short of sitting down and trying out all of the different options, there is no way to tell which one is definitely the best. Even if you could do this, your memory probably wouldn’t be good enough to allow a comparison of this type.
The result of this is that we choose new TVs when we are satisfied that our choice will be acceptable and will meet our core requirements.
It will be big enough, the picture will be sharp enough and colourful enough, and the price will be affordable.
Creating a website to sell TVs? Maybe you should try appealing to this approach. Rather than listing all the options, describe what they will be good for.
Let customers search by requirements:
These categories allow people to satisfy their own core requirements.
Don’t always sell at 56” 4K TV with a 10 year warranty; sell a TV that will definitely fill a large room, impress your friends, and last a long time!
Satisficers love TVs that do that.