After several years of conference talks and articles on behavioral economics, most researchers now agree that consumers do not always know or can’t tell us the reasons for their own behavior, and that simple questioning can't get to these answers, especially not within the length of time available in a typical interview or focus group. In short, what people say is the easy part - it's what they're not saying that we really need to know.
The biggest challenge comes from our lack of self-knowledge: we have little awareness of how we think and what influences our decisions because most of our thought processes are hidden from us. This is particularly the case with certain categories like utilities and telecoms and financial services: a complex, multi-featured product with an infrequent purchase cycle limiting learning from experience, complete with potential financial consequences increasing the stakes for the decision.
We recently worked with a bank to understand people’s attitudes to overdraft fees, and how they should design their new overdraft proposition. The qualitative stage preceded a large quantitative study on price, new offers, and understanding the purchase funnel, and therefore we needed to ensure we tap into non-conscious decision-making processes in the qualitative work, too.
Many researchers and marketers would assume that such an important, high-stakes decision should mean consumers are highly involved in the decision and make their choices in a somewhat rational way. In reality, there are different types of consumer involvement – each with different behavioral consequences:
A consumer that is highly involved in the category will be aware of the range of alternatives available in the market and be more knowledgeable about the differences between products
A consumer that is involved with a brand has a more emotional connection which may manifest as lower price sensitivity and less critical processing of features and attributes (e.g. a passionate iPhone lover just wants an iPhone, regardless of the new features)
A consumer that is highly involved in the purchase decision is more likely to engage in a wider information search and comparison as well as pay more attention to attributes and features
With categories such as financial services or telecoms, the key difference is whether the involvement is enduring or situational: enduring involvement would be a consumer with a general interest in the category who is motivated to seek information about products, whereas situational involvement would be a consumer who only engages with information about a product at the point of decision making. This distinction has consequences for how much of the details of the decision we store in long-term memory, and makes it particularly challenging to understand decision-making in categories where most consumers are only involved in the purchase decision.
A typical approach might be a longitudinal, perhaps self-ethnographic approach to follow consumers on their purchase journey. However, several psychological studies suggest that monitoring people’s behavior changes what they do. Furthermore, a self-ethnographic approach would inherently rely on self-reports which are filtered through what we think we notice – a very conscious, rational method indeed.
Instead, we designed an approach that aims to increase participants’ metacognition – their own awareness of how they think – through a two-hour, three-stage session combining individual and group techniques. Each stage in the process included “upward step” activities designed to slowly crank up the contextual immersion and metacognition of our participants.
We began with four separate depth interviews were designed to understand consumers’ approaches to decision making. Using the free recall interview technique borrowed from criminal investigation interview methods, we asked participants to detail their last broadband purchase decision from start in their own words while drawing a timeline on paper. This technique allows us to challenge and clarify sequences of events and bring back less salient memories when participants fill in the gaps between the key milestones they reported.
After the interview, we then brought the participants together to play our adapted version of the Game of Life. In this decision-based, role-playing game participants were assigned an ‘avatar’ – a persona – which was a predetermined character derived from the customer segments in our client’s previous research. To enmesh themselves with their persona, the moderators asked participants to flesh out details of their ‘lives’: friends, family, job, hobbies. The game challenged the participants to make decisions based upon the real choices their ‘avatar’ would make in answer to scenarios we posed through the course of 5 days.
The projective ‘avatar’ insulates the participant from their defensive instincts by depersonalizing the decision-making compared to if they were answering questions through their own personal context. We also made their decision making more realistic by forcing them to make tradeoffs in the game between finding out more information about a potential product and “happiness points” as every time we look up information we use up time we could be doing something else – for example, playing with our kids or going to the cinema with our friends. By listening to the participants grapple with the choices, we learned what sources of information were most important to them and why.
We then moved to the final stage of the interview process, which was understanding their feedback on new pricing structures through concept testing. By this stage the participants had gained a significant amount of feedback and understanding of their own decision-making processes as well as those of others – in other words, their meta-cognition had been heightened to such an extent that they were now liberated from their rational mindset, and readily walking in the shoes of someone in the purchase window for a utility. Thinking about the concepts from their newfound perspective, we found participants’ engagement in the questions was higher, with spontaneous references to both their own point of view and that of their ‘avatar’ persona noted frequently.
All of this provided us with a rich understanding of the decision process, which fed into a far more comprehensively informed quant study and, ultimately, a sound pricing strategy for the client.