The Extra Factor
Humans are strange creatures. We’d like to believe that we are mostly rational and occasionally have bouts of irrationality (which we name ‘emotional’ moments), but the truth is that in fact we are predominantly emotional creatures that are occasionally rational.
This is the difference between System 1 thinking and System 2 thinking. Most of the time, we run on autopilot: we make decisions based on what we know worked in the past, that subsequently require the least amount of thinking.
System 1 is fast, automatic and unconscious, while System 2 is heavy, conscious and effortful. Most of the time, we run on System 1 - and that is the place from which most of our decision-making process stems.
That is why most of the learnings we get from behavioural economics should come as no surprise. Whenever we crack open a book such as ‘Predictably irrational’ or ‘Black swan’, we are faced with the undeniable truth that people do not act rationally.
We are influenced by earlier experiences, our own biases, other people’s behaviour and many other factors which have nothing to do with the rational decision-making framework we think we are operating under.
The third episode of our video series on Neuromarketing, called When Push Comes to Nudge, explores yet another one of these strange quirks in human behaviour. We’ve called it ‘The Extra Factor,’ and define it as the bias that influences people to perceive being offered more as being more valuable than the equivalent discount.
If you want to delve deeper into this interesting idiosyncrasy, watch the video. If you want to delve deeper into neuromarketing as a whole, check out our whitepaper...
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Here are our neuromarketing insights...
- The way in which marketers frame their offering radically impacts their conversion rates;
- Our new series, When Push Comes To Nudge, breaks down nudge theory and gives bite-sized insights for marketers to add to their repertoire.