People make decisions all day every day, but how often are they measured, considered and with intent? What influenced you to read this post — do you consider that decision to be yours alone?
Understanding how people make decisions is crucial for providing good digital solutions, and it’s something we take a lot of interest in at Etch. All too often problems are solved with what seem to be rational assumptions — but here’s the problem, people often aren’t rational.
1 - The path of least resistance
In countries where organ donation is opt-in the rate of donation plummets; in countries where it’s opt-out they reach near 100% donation rates. Surprisingly this pattern is most prevalent not with trivial decisions, but important ones — because it’s a difficult decision that carries a lot of mental effort — it’s easier to not make a decision. The path of least resistance (or the principle of least effort) is often a key factor when making difficult decisions; like buying a mortgage or renewing your insurance policy.
Image source: Dan Ariely (2008)
2 - The decoy effect
Even when a decision is measured and considered we’re very easily manipulated. Asymmetric dominance (or the decoy effect) is a phenomenon leveraged to influence buying decisions. This is the process of including an intentionally unappealing option to encourage a buyer to choose between two products — the option most similar to the inferior alternative becomes the favourite.
The decoy effect in action
3 - Price anchoring
Price anchoring is a form of priming that also takes advantage of our desire to make comparisons. Often the value of a product is measured by comparing it to other, similar products, not by making a value judgment on the product itself. A £1 widget might be expensive, but if all the other widgets cost £2 then it becomes a bargain. Importantly, establishing this point of comparison isn’t just about whether or not a customer will buy a product, but it also impacts their satisfaction with the purchase — everyone likes getting a good deal.
Is £34.99 really a good deal for an inflatable flamingo?
4 - Ownership
Psychological ownership is another interesting bias that can be used to help drive a purchase or increase loyalty. The more a user invests in a product or brand the more ownership they feel over it; whether it be through product customisation or allowing them to view a product within a more personal context. Given this sense of ownership not getting what they’ve invested in feels like a loss.
Now the room won’t quite be the same without it
This helps demonstrate how important user research and usability testing can be— as behaviour is difficult to predict and can be affected by many factors.
So as well as accounting for these cognitive biases when designing products we can harness these principles for good. By understanding how and why people make decisions we can ease their journey and the burdon placed on them by options we provide; thereby improving their experience and increasing the likelyhood that they become a user, customer or advocate.
Hopefully it was a conscious choice for you to read this post, and if you enjoyed it then consider picking up a copy of Predictably Irrational — a fantastic exploration of decision making by behavioural economist Dan Ariely.