The Business of Choice

I get asked by a range of organizations (I've worked with NGOs) on how to architect choices in school cafeterias; how to make the people who offer family planning help, in East Africa, make it a more natural choice for them to support their communities by offering that help.

The great thing is that by understanding why people choose, [can be] such a helpful thing in so many fields. Everything that you said in your introduction is about making choices. Everything we do is a choice in some way or another.

And, in my particular work, what I'm looking at is every organization – to succeed – needs people to make the choices that support its objectives. That could be your customers choosing your brand or your service. It could be your employees – the people who you work with – making choices to work in a certain way or to adopt a certain process. It could be your partners, your business partners. And so really our success I think, as organizations (the way I like to talk about it is) our success is down to the choices of others. Our actions are important, but really what we're trying to do is get other people to choose in our favor.

Rachel Salaman: And I think it's worth mentioning at this point that your book is also useful for us choosers out there, because we're all consumers and choosers as well, aren't we? So, if we can get a bit of insight into why we're making the decisions we make, that's also really useful... gives it another dimension.

Matthew Willcox: Yes, it does and I think the great gift that I've got for myself out of the area of behavioral science – and writing about it and trying to understand more about it – is not that I necessarily make better choices, but I can even feel a little bit better about my bad choices.

And what I mean by that is, so often they are a product of human nature. And I think, before I was immersed in this field, I would blame myself. I would take my bad choices more personally. Now, that is not to say I am letting myself off the hook about them, but it does kind of help you not beat yourself up quite so much.

Rachel Salaman: And, actually, the first part of your book gives a thorough overview of human decision-making from our earliest history onward. What do you think are the main points here that might be useful background for our discussion?

Matthew Willcox: So, one of the great insights of the work of behavioral scientists, behavioral economists and decision scientists over the last 30-50 years or so is that humans use cognitive shortcuts to make choices. And this sort of deposed the idea that rational thinking was "the king."

And that's not to say that all of our decisions are fuzzy and emotional, but it is to say that, over the timeline of human evolution, just as our body has adapted with certain mechanisms, so has the way that we make decisions adapted using certain mechanisms. And those mechanisms have two characteristics.

One is that they are incredibly quick. They operate at a speed faster than conscious thought, they operate at the speed of neurons firing. They are like instinctive... like gut instincts. You feel them now. They have an immediate effect.

And the second thing is that they are energy efficient. They do not require massive calculation.

One of the things that many of us will remember from our days of studying, or even when we have to sit down and do an intellectual task, is how difficult it is. It is hard work.

So, these shortcuts we use, they have two characteristics – one is they are very quick and the other is they save energy. And they are very sticky. They are kind of things that have got humans to where we've got to, for better or worse, over the last 200,000 years.

So, one example would be how we are drawn to do things that we feel other people are doing and it's not something that you necessarily rationalize. The classic example is that you walk past a restaurant and there is no one in there, you kind of keep walking and you wait in the line or in the queue at a restaurant which is bursting at the seams, even though you are going to have to wait 30 minutes to get a table. We're kind of drawn... there is a sense that if other people are doing things, that is a safe thing to do.

Now, sometimes we will override that through rational thinking. But that is the first impulse, in many situations. It is not universal, it doesn't happen in every situation. It tends to happen more in situations where we might feel a requirement for some safety or some certainty. But, in those situations, it becomes an impulse.

Rachel Salaman: How much of our decision-making is conscious? And, if it's not, what is it? What do you call that – unconscious, subconscious, pre-conscious?

Matthew Willcox: Really, there's no real way of knowing. I think the safest thing to say is that most of our decision-making starts from a place of non-conscious thinking. It starts from a pre-conscious place... a place where we're using a shortcut.

Now, that's not to say that we are not going to override that with some rational analysis afterwards. Or, more likely, we will probably reinforce it with some post-rationalization afterwards. It's difficult to put a number on it and I encourage people not to. Suffice to say, I think it is the vast majority of our… the sense of academics who study these things is... we can't put a number on it, but most of our decision-making starts from a place of non-conscious processes.

Rachel Salaman: And I guess knowing that doesn't lead us to act in one way or another... it's just interesting to know.

Matthew Willcox: So, for us, as choosers, it's interesting to know. Sometimes, as I said, you can adjust afterwards and you can say, "Maybe I did that because my intuition took me towards that direction, but maybe I shouldn't be doing what everybody else is doing in this case, so I might change. That may not work out for me, so I might change what I'm doing."

From a business perspective, I think it is something that you can do something about. Or – when I say from a business perspective – from the perspective of an organization trying to encourage people to make certain choices. And I choose my words carefully because I think it is about trying to encourage people. And one of the important things about using behavioral insights in your work, is ethics is important in whatever you do. You have to make sure you're encouraging people to make choices that are beneficial for them.

There have been a number of cases where insights from behavioral science have been used to (whether the organizations knew of the scientific background of the ideas), but have been used to get people to sign up for loans with ridiculously high interest rates, because they dangle the carrot of today in front of people versus the long-term interest rates.

There have been, very often – I'm sure this has happened with you, Rachel – when you have tried to cancel something that you subscribed to... it is incredibly difficult. They create such friction to make it so difficult that in many cases people just give up. Again, using the idea that... an insight from behavioral science... which is we're drawn to things which are easy, but actually things that are more difficult we tend to put off. They can use that quite effectively to get you to not cancel your subscription. And these are called "sludges."

Richard Thaler, who wrote the book "Nudge," he talks about how little tweaks to the environment can guide people towards the right choices equals those nudges. But, equally, a little tweak to an environment can make the right choice more difficult for people... and he calls those "sludges." [1]

So, I think it's incumbent on all of us to make sure that we are not using these things in ways that do not lead to good outcomes or at least neutral outcomes for the chooser.

Rachel Salaman: Now, you include a chapter about how familiarity drives some of our choices, but we also like surprise. How does that potential contradiction work in real life?

Matthew Willcox: I mean, this is one of the delights of human nature. It is often paradoxical. So, familiarity is how – when things are familiar, just over time – they become safer to us, through our experience.

Work which was done probably 30 years' ago or so, looked at how – if you show people a symbol that they don't recognize (so in this case they took western research subjects and showed them Chinese symbols), and if you show them a symbol over and over and over again (you show it to them more often than you show them the other symbols) – they are more likely to associate that symbol with which they've become familiar, with good things. It is felt to have better meaning. It is felt to be a kind of friendlier symbol.

This work was done by Robert Zajonc. And he explained it... he said in evolutionary terms... he said if it's familiar, it hasn't eaten you yet. So, he was kind of taking us back to the savannah, which was that if that animal that you passed by seven times and you start to recognize, it's because it has not proven to be a threat. [2]

Sometimes that trust is misplaced, but certainly there is also a sense that when we see familiar things, we also feel better ourselves. It's not just that we feel better about those things, but familiarity around us can kind of improve our moods as well.

Surprise, again, has a potential evolutionary explanation. What surprise does is it encourages you to break out from that familiarity. So, a number of studies have shown things like, if you give people a jar of M&Ms or Smarties that are all the same color, they will eat less than if you give them a jar which has got many different colors in it.

An explanation for this could be that we seek new things and variety because, if we are dependent on only one source of something (the things we are familiar with), it may not be the greatest strategy for survival. And so finding new things and constantly looking for them (even though we rest and we depend upon familiar) is a way of making sure that we've got – should that familiar source go away – we have something else.

So, it's sort of like… again, these are traits that we've carried over the last 200,000 years as we sort of emerged into the savannah and became the species we are today. But it's interesting because we see these things in our behavior now. We see how, in some cases, we will rest on familiarity, but in other cases we're constantly looking for novelty and surprise.

Rachel Salaman: So, how does that work in practice, if you take that insight and apply it to, say, a campaign?

Matthew Willcox: You know, there's a good example I talk about in the book, which is from Kraft Macaroni and Cheese. For many Americans, who are in their 30s, 40s and 50s now, it was a fond memory of childhood that they sort of might have continued eating as they got a little bit older. Kraft wanted to change their formula and they wanted to make their product more healthy. A product from the 70s and 80s had artificial colorings and preservatives in it and they wanted to actually take those out of it.

Now, when they went and did focus groups, people responded pretty badly to this. It was almost like they didn't want people messing with their macaroni and cheese. They felt the taste would change, even though the Kraft food scientists had come up with a way of making it taste identical... making this new version without the artificial additives taste identical to the older version.

So, what Kraft did was – when they launched this new non-preservative, non-additive version was – they didn't do any advertising or marketing about it at all. All they did was change the ingredients label and put the product out there. Six months later, they started advertising and their line was something like, "We'd love to tell you about our new recipe for macaroni and cheese, but you have been enjoying it for the last six months."

There were a couple of things there, I think. One is that they realized that familiarity here was really, really important. People weren't looking for novelty with their macaroni and cheese. It was a brand and product and usage occasion which was really all about familiar and what I knew.

The second thing – and this relates to a really important part of insights and behavioral sciences – is they realized that this new formula might create a sense of loss amongst their existing customers. And this gets into a really big and important area for most people who are trying to influence or trying to encourage people to make a choice of any kind – and that is that in every choice there is the potential for a loss in some way or another. And in every change there is the potential for a loss in some way or another. And this is important because a number of studies (I mean many hundreds of studies at this stage) have suggested that in (not all cases), but in many, many cases – almost most cases – people's behavioral response to a loss is greater than their behavioral response to a potential gain of the same amount. And, what I mean by that, is that the prospect of losing $100 is likely to have a bigger (or €100 or £100)... is likely to have a bigger change on your behavior than the prospect of gaining $100, euros or pounds.

You know, so this is important for a couple of reasons. As marketers, in particular... which is that so often we are so focused on what people might gain from what we have to offer. But, actually, to encourage people to choose us, we might do well to pay attention to what they may fear losing from making that choice. And that is exactly what Kraft did with macaroni and cheese. They realized that, if they were to signal that they had changed, then people might fear they were losing something of the old macaroni and cheese and may not be happy campers moving forward with the brand.

So, I think it's a sort of interesting interplay there. So the familiarity was important, but it's also a great example of a really fundamental feeling. I talk to my clients and the people I talk to about insights from behavioral science, which is this notion of always trying to understand what people might be losing in the choices that you need them to make.

Rachel Salaman: Yes, it's a very interesting point and I think in the book you talk about how scarcity plays into loss dynamics as well. Would you talk a little about that?

Matthew Willcox: Sure, so scarcity can be a real driver for people to choose a product. And, again, it's got an evolutionary background, and this is because of the idea of something going away, makes us really want to have it now. It's kind of like fear of missing out.

It's a really powerful driver, we see it used in all sorts of categories. I'm sure many of us will have done it. I've done it myself fairly recently when booking a flight. Suddenly the thing comes up and says, "Only three seats left at this price." And I know these things, yet I felt compelled to book it straight away, even though I know when they say, "There are only three at this price" there are probably another six for a dollar more or a dollar less. But nonetheless it creates that sense of urgency by saying, "This thing is going away."

And it's not surprising, when you think about where we've come from, as a species, that sort of getting resources before they ran out would have been... could have been a matter of life and death in many cases. So, again, it's something which is deeply embedded into our behavior. You see it in luxury brands because it has another effect there, which is, if you have managed to get something scarce, then you have resources and capabilities. Either you are brave or you are smart or you have wealth which enables you to do it. And those are sort of good markers in terms of mate attraction and status.

Rachel Salaman: The chapter on "Social Proof," as you call it, is fascinating. So, if a government tells people their neighbors are paying taxes, they're more likely to pay their own. How solid is this idea in your experience? And is it true no matter the country or culture you are talking about?

Matthew Willcox: So, Social Proof can be incredibly powerful in situations where there's a requirement of safety. You're either uncertain or you're not sure if you're making a safe choice, and it suggests levels of certainty and safety.

And, in terms of countries, I think humans are social animals, but there is some evidence that it may not work as well in more independent cultures, as it does in more interdependent cultures. But this is really about how it's framed. This is about how you use it.

Sometimes we see messages that suggest to people that other people aren't doing this thing. So, one of the examples that I talk about in my book is... I live in the San Francisco Bay area where it's a wonderful place to live, but one unfortunate thing is the occasional earthquake. And so you can buy earthquake insurance. But a number of years ago, the California Earthquake Authority was sending around a flyer saying, "Only 12 percent of Californians have earthquake insurance." That is not a good message if you want people to take up something that relates to safety. It's basically saying not having it... you are suggesting that not having it is a safer option just because not many people are doing it.

Rachel Salaman: Now, professional communicators sometimes say that "content is king," meaning that what you say – your content – matters most. In your book, you add to this with the idea that "context is queen." So, what kind of context are we talking about here?

Matthew Willcox: So, context is such a broad term. And I mean it that... when we typically talk about content, it might be the message that an advertiser is putting forward, it might be the words and the images in their add-on line or their TV commercial or whatever it is. And that's a very marketer-centric perspective.

Context is what the person who is receiving that message is seeing and feeling around it. It could be an adjacent article, it could be what has happened before, it could be something which is happening in the background. For example, there's a study from a number of years ago that was done in the wine section of a supermarket, that had different background music playing when people were shopping for wine. And what they found was that when music was more obviously French, with accordions and clichéd French soundtrack music, people were more likely to buy French wines. When it was more Germanic, more "oompah band-like," people were more likely to buy German wines. [3]

So, it's sort of the things that frame a choice, but it can be our mindset going into a choice as well. It can be that we're in a hurry, which has a huge effect on our decision-making, or that we're hungry. So, it's sort of all of those things that can affect a choice. And the reason I use that heading – "If Content is King, Context is Queen" – is really just thinking about chess, where the king is the important piece on the board, but the most powerful piece on the board is the queen. And the queen has the ability to go in many more directions and do many more things than the king... and it is really kind of that.

So, you have your content, but what surrounds it? What comes before it? What is in people's minds, as they approach a decision, can change how that content will actually work. We're all more focused on what we can control than what we can't control. And, as marketers, your content is the thing that you create. It's a thing that you can have absolute control over. But, really sort of understanding where it's going to live in the world and how that's going to affect it and shape it and change it, is incredibly important.

Rachel Salaman: Now, not surprisingly, feeling good about our decisions means that they'll stick. What are ways for marketers, or anyone in the business of persuading, actually, to spark that positive feeling authentically?

Matthew Willcox: There's a great term (which was a term that I didn't know about when I wrote the first edition of the book and I was able to incorporate in the second), which is "decision-making self-efficacy." And this is really when we feel confident about the choices that we make, when we feel we have the capabilities to make those choices, when we feel that we've done – in some cases – the work to make those choices. But it's just, generally, this notion that we feel we are well-equipped to choose.

But there are ways that you can do this. Sometimes they become... and one of the things that my wife was saying just the other day is, "Oh, I cannot buy something now without getting a survey from people asking me what I thought about it." And she has now got "survey fatigue." But one of the reasons that organizations might be doing that is going through the process of evaluating a choice actually will often make you feel better about the choice, if it was a somewhat positive experience.

Another thing... little quizzes are fantastic. So, doing little quizzes about products and about their usage or their category. So, asking people about, sort of, what uses the most data – streaming a video or streaming a song? Most people will know it's streaming a video, but answering that correctly makes you feel more expert in the category and better equipped to go and make a decision if you were buying a mobile phone service.

This is, I think, an interesting point because it becomes about, "How do you help the chooser feel more expert?" Rather than, as marketers have done for generations, focusing your efforts on making yourself seem like the expert.

It's not to say that people don't want experts and authorities. But just spend a little bit more of that time equipping your chooser to feel like they are making better decisions... to feel that they have (to use the phrase) "decision-making self-efficacy," to feel that they are equipped well to make the choices that you would like them to make.

Rachel Salaman: We've heard a lot about why people choose what they choose, with a lot of practical examples, which is great. But, at what point does applying this knowledge become manipulation in your view? I know we touched on ethics earlier, but what's your view of that?

Matthew Willcox: Richard Thaler, in his book with Cass Sunstein – his book "Nudge" – talks about how we are all "choice architects." [4]

So, what he means is that everything you do or don't do is affecting choices in some way or another. And I think the example he gives (I won't get it 100 percent right) is, say you are trying to encourage people to eat a healthy choice in a cafeteria... one thing you can do is you could move the apples in front of the Mars Bars or the Snickers Bars, and have them so they're well-lit. And there's evidence, if you do that, people are more likely to take the apples.

So, is that manipulation? The word manipulation in a scientific sense is you're changing the nature of the frame. So, yes, it is a form. But he would equally argue that, if you don't do anything, you're also affecting a choice, because if you know that can help – by just leaving things as they are – and you have the power to change it, you're guiding people towards a different kind of choice. So, he says, there's no neutral, really, in the world of choice architecture.

I think it gets to a personal point... it becomes one of ethics. And most people, by and large, want to do the right thing. Also, if you're responsible for a brand or the output of an organization, there's a potential backlash in doing the wrong thing. So, I think people are generally guided to do the right thing because of their innate morality, but also because of the potential consequences – whether that is legal or social – of appearing manipulative in some way or another.

Rachel Salaman: We've covered a lot of ground in this discussion. What do you think is the most significant takeaway for marketers and non-marketers alike?

Matthew Willcox: So, I think one is something we've touched on, which is the importance of understanding what might people fear losing by moving to where you need them to move to... by embracing the behavior you want them to embrace or by choosing or continuing to choose or stopping from choosing (whichever it is you're trying to do), because there's always going to be something there.

A second thing is something we didn't touch on that much, which is the importance of comparisons. When we're trying to get people to make choices, we tend to think about the choice in isolation. We think about how good the option we're giving people is. But, actually, if you put us in front of one washing machine and you ask us to assess its capabilities, we kind of don't do very well. But, if you put two different machines in front of us, we will be able to compare one to the other. We will probably not stop until somebody tells us to stop doing it, because suddenly we have a frame of reference.

This is an important thing because the way the brain works is not to say, "What is this new choice?" It is actually to say, "What is this like that I know before?" And that gets into many of the things we've talked about. It gets into familiarity, but really, importantly, it gets into ease. And the ease thing here is that it is much easier to play off an existing mental model we have, an existing sense of something we have... and apply that to the new thing, than it is to create something new from the ground up.

I'm fascinated by the area of how people choose and it's such a rich area in terms of understanding human nature, and why we do what we do. And, perhaps even more importantly, why we don't do what we don't do. And it's just a great topic to be interested in. But it is absolutely critical for any organization who is trying to encourage somebody to embrace a behavior or to make a choice (and that's what all organizations have to do) – it's really important for them to understand how these factors, how these decision-making shortcuts, how human nature affects the choices that they need people to make.

Rachel Salaman: Matthew Willcox, thanks so much for joining us today.

Matthew Willcox: You're welcome, Rachel, and it was a pleasure to talk to you.

Rachel Salaman: The name of Matthew's book again is, "The Business of Choice: How Human Instinct Influences Everyone's Decisions." I'll be back in a few weeks with another Expert Interview. Until then... goodbye.

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