The response to the blog articles I’ve been writing for several months has been quite gratifying. Thanks for all the questions, comments and suggestions people have emailed, posted and texted. One request that I’ve gotten repeatedly is for tools and techniques that can be used right now. So, I’ve decided to write a few pieces about mindsets. These are underused concepts that can take your understanding of marketing and consumer behavior issues to a much higher level.
So, let’s talk about maximizing and satisficing mindsets. Herbert Simon, the Nobel Prize winning economist, introduced the concept of satisficing in 1956. For those of you who think you’ve already caught two typos, not so! ‘Satisficing’ is a word—it’s Simon’s concept of seeking an adequate, rather than optimal, outcome. Technically, this is called the ‘theory of bounded rationality’ which questioned the then-accepted wisdom among economists (and still accepted today) that individuals always seek an optimal outcome. It points out that there is a significant cost to continued assessment and information gathering once one has identified a satisfactory solution. The problem is that this cost is difficult to quantify.
If you want to see this in real life, go to an electronics store and watch people shop for TVs. You’ll be able to distinguish very easily between those who seek the television with the very best picture quality vs. those who just want the cheapest set that’s good enough to watch Hogan’s Heroes reruns. Simon theorized that people tend in general to be one or the other—maximizers or satisficers— in terms of their overall disposition. However, keep in mind any particular decision-making challenge can influence one’s mindset. For instance, a person seeking the very best TV may later visit a grocery store where he’ll buy store brand breakfast cereal because … “it’s good enough.”
Why should we care about this? Because, in my experience, marketers tend to assume a maximizing mindset when trying to understand and describe consumer decision-making processes. We take for granted that individuals seek to maximize quantifiable economic utility in all situations, and lose sight of the fact that often this isn’t at all how people behave. This assumption can significantly skew our research results, and so we need to stop making it. For instance, when talking with vacationers about a recent trip, instead of asking them what was the best part of it, ask them instead just to name some of the things they enjoyed. There’s nothing wrong with following up with a question that asks them to identify their favorite, but answering it should be optional. Similarly, every time I see a survey questionnaire that asks respondents to rank brand attributes or experiences, it makes me uneasy—why are we assuming that this is how an individual perceives this issue? Forcing people into a maximizing mindset creates the risk of generating data that appears to be meaningful, but actually quantifies nonexistent perceptions. A better approach would be to ask individual respondents to rate those elements, and then to derive a ranking across the entire dataset.
So here’s my big tip: when delving into consumer attitudes, perceptions or decision-making, one of the first things you should do is establish the respondent’s operative mindset. This isn’t difficult. If you’re conducting qualitative research, simply ask people to describe their desired outcomes … “what are you hoping for here?” In quantitative research, it’s a simple matter to begin with some questions that give people an opportunity to describe their mindset – “on a scale of 1 to 5, with 1 meaning ‘OK is fine’ and 5 meaning ‘I want the very best,’ what is your goal for this purchase?” Beginning with inquiries like these will enable you to understand the respondent’s intentions and state of mind, thus establishing a context for understanding their attitudes, perceptions and behavior.
One final thought: these principles can be applied to circumstances outside of market research. When evaluating alternatives in business situations, remember to ask yourself if it’s worth the time and effort needed to identify the optimal solution or course of action — it very well might be, as long term success is often contingent upon excellence. However, occasionally it’s appropriate to identify a sufficient solution, thus enabling you to move ahead more quickly. And as for your personal life, it’s well documented that satisficers are generally happier than maximizers. Everything in your life doesn’t have to be perfect– seeking ‘the best’ is often a fool’s errand, and contentment can often be found in adequacy.
