Branding Fast and Slow

What the late Daniel Kahneman called ‘System 1’ in his best selling book Thinking Fast and Slow, has evolved through generations to protect us. System 1 is always on, able to register a threat in a fraction of a second and makes its best decisions when we are calm, happy and relaxed, in a state of ‘cognitive ease.’? However, because it is so much more readily accessible to our consciousness than rational analysis it can cause irrational decisions when misled.

‘System 2’ is analytic, self-control, the part of the brain that calculates, weighs up difficult comparisons and overheats during complicated problem solving. System 2 requires an active focus, it is slow, and only very reluctantly engaged, making it ‘lazy’. System 2 burns mental energy, shutting down other sensory functions which can lead it to miss things outside the field of focus.

?Kahneman examined the interdependent relationship between these two systems, looking for design flaws that generate irrational decisions.? The following 8 lessons are for brandowners looking to exploit these design flaws to generate increased market share.

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Lesson 1 – Don’t be afraid to be complicated

Kahneman characterises the analytical System 2 as an easily depleted, lazy, egomaniac with very little self-control desperately in need of a sugar hit – in short the ideal customer for many brands.? According to this characterisation,? anyone working long nights at the office, studying hard or struggling with a complicated problem,? is more likely to enjoy a sweet, indulgent product, and then – as a result of the ego depletion – move on to instantly gratifying products, like alcohol or fattening foods: student life instantly springs to mind.

Brands in the instant gratification business shouldn’t be afraid to engage System 2 and ask consumers to put in some effort. This ‘funny cleverness’? directly provokes the analytical brain, making it work whilst reminding it where to get the next natural sugar hit.?

?Lesson 2 – offer more not less

??“A bat and a ball cost ￡1.10. The bat costs ￡1 more than the ball.? How much does the ball cost?”

System 1 spits out the answer 10p and ￡1.00 but it is wrong.? Suggestive calculations are most frequently used by retailers who offer confusing promotions but the bat and ball question suggests offering added value – perhaps gift with purchase, or 25% extra? -? is more effective? because the added value is more likely to be overvalued by consumers.?? ‘25% extra free’ is a better promotion that maintains the price point for your brand and offers less to consumers than they think.

?Lesson 3 - Be the solution

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1-????? How happy are you?

2-????? How much money do you have?

Ask yourself these two questions and they initially seem unrelated. Now ask yourself question 2 first and you’ll find that, inevitably, your happiness is measured in relation to your bank account. Kahneman calls this ‘The Mental Shotgun.’ The intuitive, associative System 1 saves System 2 from a full evaluation of your overall happiness by relating the complicated happiness question to the easier one about your cash in the bank.

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Cosmetic and personal care brands use the mental shotgun to promise confidence. They ask the question? – How does your hair look? And then answer it with how confident do you feel? L’Oreal’s slogan both asks and answers the question? ‘Why should my partner value me?’ with its slogan “Because you’re worth it. “

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Lesson 4 – Continually Disrupt

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As the animal part of the brain, System 1 is always on the lookout for threats. To keep it from having to react to everything it sees, however, it quickly learns to ignore something new once it becomes familiar. New brands can only be disruptive in the short-term, then they quickly become a boring part of the landscape.? A narrow focus is the only way for brands to sustain their visibility. Often it takes the return of the brand’s originator to restore the disruptive vision -? Think Steve Jobs returning to Apple, or Howard Schulz at Starbucks.?? Sometimes the brand name can help. A brand like “Cillit Bang” – contains an explosive warning in its name. ?

Lesson 5 – Priming

Because of its well-evolved, hair-trigger sensitivity to the environment, System 1 is easily and continually being primed to respond. For example, think of the word SO_P. The missing letter is either an A or a U depending on if you’re primed to think about eating or washing.???? Priming can be mental or physical. Smiling actually makes you more likely to enjoy cartoons – Kahneman has his subject bite on pencils to provoke an artificial smile before assessing their enjoyment.

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Interestingly priming can lead to the ‘Lady Macbeth affect’.? Subjects asked to lie or misbehave, exhibit a clear preference for cleaning products. This priming is very specific: lying on the phone primes a preference for mouthwash and lying on email primes a preference for handwash.? Interestingly, priming people with images about money and possession tends to lead to more selfish and egotistical behaviour.

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Brands can use priming to teach consumers the behaviours that lead to a product usage occasion.??

Lesson 6 – Be the reason for the pattern

?System 2 is bad with small numbers, it tends to jump to conclusions rather than recognise random statistical anomalies for what they are. For example, in London during WW2 people assumed spies were living in unbombed areas rather than accept a series of random events. We cannot resist seeing patterns in random events.?

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Alcohol brands – think Bacardi - often promote themselves as the golden thread through a series of seemingly unrelated events – a party or international travel – to suggest that the brand is the explanation of a lifestyle.?

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Lesson 7 - Improbable prizes

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Impactful emotional imagery causes a reduced sensitivity to probability. When I ask you to evaluate what is better, a $60 prize or a bouquet of roses, the roses invariably leaves the more lasting impression. Brands that run sensational promotions – like Lynx’s ‘become an astronaut’ -? are harnessing our susceptibility to miscalculate the odds when a prize is easy to imagine.? Ideally, prizes should be very imaginative rather than a simple ‘cash win’.? Similarly, prizes should be presented as 1 in 1000 rather than in terms of a 0.1% percentage. It’s much easier to imagine your chances of 1 in 1000, but nobody can summon up 0.1%.

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Lesson 8 – Loss Aversion

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The cornerstone of Kahnemann’s work is Prospect theory, which can be broadly summarised as the recognition that people take more risk to avoid a loss than they would accept to achieve a gain. Our emotional System 1 is loss averse and this makes us act very irrationally, particularly in situations where the best option is to cut your losses.

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This loss aversion can be harnessed by brands. Especially brands that get their consumers to make small commitments.? Consider for example two people, one who bought tickets to a football match and one who was given them by a friend. If you consider which person is most likely to watch the game at home due to a blizzard, most people would say the one who received the ticket for free. They have nothing to lose, whereas the first person has invested in the ticket .

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Using social media, brands must try to get their consumers to invest, personally. That might mean sending in viral videos or committing to enter a competition, or it might mean entering their details on-line to receive a free sample. Commitment is a sunk cost that the consumer will be reluctant to write off.

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Conclusion

?I wrote much of this article back in 2014. Now it's obvious that the lessons of behavioural economics have been used to train algorithms that mine the flaws in our behaviour that Kahneman brilliantly quantified. Whether it’s the phrasing of a government campaign or the marketing practise of on-line retail:? decision making analysis is a growing subject and, with the power of machine learning and AI, human frailty is only going to be increasingly exploited by marketeers. Brandowners must watch this emerging science closely, harnessing the available lessons to ensure consideration when consumers make their final shopping decision, whatever system they use.

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Adam Bass, Golden Goose, [email protected]