How You Choose

What coffee shop will you choose? What CD will you finally purchase? What magazine off the very busy newsstand will you plunk money down for?

These basic questions drive online and offline marketing, including web copy and content decisions. But these questions are not simple. We make choices based on emotions. But the real nitty gritty of those emotions and their triggers are still being explored. AdAge’s article Behavioral Economics Helping Marketers Better Understand Consumers touches on this very subject and how some experts in psychology are becoming strategic players in the marketing and business worlds.

Two books I’ve recently read are worth a glance if you’re at all interested in the deeper side of behavioral economics and how it applies to business.

  • Priceless, by William Poundstone does a fantastic job of proving time and time again that price anchoring works and underscoring the fact that no matter how “practical and sensible” we think we are, human nature really drives our buying choices and decisions. “[T]he phenomenon of “anchoring,” [was] discovered by Amos Tversky and Daniel Kahneman. When people don’t know what a fundamentally new product should cost, they are strongly influenced by the first price they encounter.” –Priceless Blog
  • The Art of Choosing, by Sheena Iyengar is less about marketing and business and much more about how we navigate choice in the 21st century. Iyengar delivers some revealing studies that show how people react when choices are very limited or limitless, as well as how culture, region and ethnic background can all profoundly affect choice and freedom. Read between the lines on this one and you may cull some great business insight.
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