Research has shown that major life events can have an impact on micro decision making - the kind that affects brands, argues Richard Shotton.
In 1859 Samuel Smiles released his book, simply called Self-Help. Its launch was inauspicious: the author was unknown and no publisher was interested. Smiles was forced to self-publish and had the misfortune of releasing his book the same day as another, On the Origin of Species.
But despite this unpromising start, the book captured the imagination of readers in a way few others had. It sold more than a quarter of a million copies in the next 50 years, outsold only by the Bible.
The book has fallen out of the public eye, but some of Smiles’ ideas are worth repeating. In particular, his thoughts on habit. He famously said:
“To uproot an old habit is sometimes a more painful thing, and vastly more difficult, than to wrench out a tooth”
This idea chimes with modern day findings.
Psychologists recognise that we have so many decisions to make every day that we cannot weigh them all up in a fully considered manner. If we did, we would never get out of the house.
Princeton psychologist Susan Fiske sums up this situation by referring to humans as “cognitive misers”. Or, as her colleague Daniel Kahneman puts it rather more memorably, “Thinking is to humans as swimming is to cats. We can do it but we’d rather not”.
Consumers act as cognitive misers when shopping. Rather than weighing up each potential product on its many merits, we use shortcuts to speed up our decisions. And, as Smile noted all those years ago, one of the shortcuts we rely on most is habit. When faced with a situation of choice – as we are in every shop – we often make things easier for ourselves by picking what we chose last time.
An opportunity and a threat
If you want to keep customers, then habits can work to your benefit. People are likely to keep picking your brand until a disruption comes along. But if you’re trying to win new customers, it’s a problem. How do you persuade potential buyers to choose you when they don’t regularly weigh up the merits of the brands on offer?
Studying how habits are formed can also uncover ways to change them. And psychologists have shown that when people’s environment changes, they’re more open to changing their habits.
This finding is relevant right now, as we’re in the midst of major environmental destabilisation caused by social distancing.
But is that just conjecture? Why should changes to people’s environment uproot these habits? Let’s take a look at the evidence.
In 2017 I recruited 2,370 participants and asked them two questions. First, which life events they had undergone in the last 12 months. They were prompted with a list of nine life events, such as starting a new job or university, getting married or divorced or moving house. Second, we gave them a list of categories and whether they had tried new brands in each of them in the last year.
We found that in every category, the likelihood of trying a new brand was 2.5 times higher among people who had experienced a significant life event compared to those who hadn’t (21% vs 8%, respectively).
Importantly, life-events disrupted seemingly unrelated decisions. For example, divorce might lead to people trying new beer brands. Or retiring might boost the probability of switching make-up.
But why would life-events have such a big effect?
One explanation is that habits are only useful in a stable environment. Generally, doing the same thing over and over leads to sensible outcomes when conditions remain constant. But if those conditions change, then the habits lose their value. So, when someone’s environment changes it destabilises them. At the very least, it causes them to question many of their existing behaviours.
An alternate argument, sometimes known as the fresh start effect, is that people are reluctant to change because of a deep-seated desire for consistency with their past selves. Because of this need for self-consistency, personal landmarks become important. When we undergo a life-event we step away from our past selves. This loosens the grip of consistency and makes it more likely we’ll adopt new behaviours.
What’s this got to do with the current situation?
Social distancing is a major life-event. The end of social distancing will be too. Both these events will radically disrupt our environment as much, or more than, changing jobs, moving house or starting university. So, we should expect the scale of brand switches to be even larger than those seen in our research.
But more importantly, social distancing is happening to everyone. The life-events I have discussed affect small groups of people: in the UK, a quarter of a million people get married each year, nearly 400,000 move house.
But we’re all affected by the current crisis. So, a phenomenon that was previously of niche interest now has a value to all brands.
What should I do?
The main implication of all this is that the purchasing habits of your customers will be changing – and continue to change for a while after social distancing ends. Your customers are more likely to switch to your competitors, and your competitors’ customers are more likely to switch to you.
You want to land on the right side of this consumer fluctuation. Advertise now - and gaining new customers should be easier than pulling teeth.