I appreciated the response to my recent post on maximizing and satisficing mindsets.  So many of you had great comments and anecdotes to share.  This type of analytical tool—mindsets—seems to be of interest to marketers and researchers.  So, here’s another one: scarcity.

About a year ago I was presenting shopper insights research to a category management team from a retailer that serves low-income shoppers.  At one point, when I was describing shopper decision-making behaviors, a buyer said to one of the merchandisers, “our customers really are just stupid, aren’t they?  I guess that’s why they’re so poor.”  The merchandiser agreed.  I’ve replayed this scene repeatedly in my mind many times since, mainly because I remain so disappointed in my own reaction to this exchange—I didn’t say anything.  Maybe I was worried I could create an awkward situation, perhaps I didn’t want to jeopardize the relationship between the retailer and my client (an OTC manufacturer), maybe I was just too shocked to respond.  But I wish I had.  Because, the truth is, I knew that buyer was wrong.

Viewed from a distance, it’s easy to see low income individuals as making problematic, self-destructive decisions, such as poor adherence to medical regimens, bad time management, irrational financial choices, etc.  To a large extent, these behaviors are what perpetuate the cycle of poverty.  Similarly, people who are chronically pressed for time always seem to be behind, never able to catch up.

But low-income shoppers are NOT stupid.  Neither are they irrational.  Rather, their perceptions and behaviors are profoundly influenced by scarcity, and scarcity has its own logic.

Nearly all of us experience some sort of scarcity at some point in our lives.  There are seven general categories of resources for which we can experience shortages:

• Money

• Time

• Physical space

• Nutrition

• Water

• Allowable mistakes

• Socialization

Somewhere along the line you’re almost certainly going to find yourself short of at least one of these: you’ll be out of cash, underfed, lonely – whatever – and that will change you.  You’ll see things differently than you would if you had these things in abundance.  In other words, you’ll be in a scarcity mindset.

Here are some things you need to know about the scarcity mindset:

• It requires one to make constant, zero-sum tradeoffs—either you buy the big package of allergy medicine and get a great price per pill, or you buy the small package, pay a lot per pill, and have enough money for food this week. You can’t do both.  As the writer James Baldwin once observed, ‘being poor is expensive.’

• It makes one highly sensitive to required resources—you know you only have 31 minutes to get your kids up, dressed, fed and off to school. The five minutes your daughter just told you she needs to finish her homework simply will not fit into the morning routine.

• ‘Normal’ levels of scarcity are healthy; they enable focus and discipline. However, chronic, severe scarcity leads to tunneling—focusing on the scarce resource to the exclusion of nearly everything else.  Neurosurgeons are under enormous pressure in the OR—they have very little time to complete a procedure, and absolutely cannot make a mistake.  As a result, they tend to hyper-focus on the task at hand to the exclusion of everything else—such as trying that cool new surgical instrument they’ve been hearing about.

• Scarcity makes one less intelligent. Experimental psychologists quantify this effect at 13-14 IQ points, which can be the difference between average and gifted or average and deficient.  Behavioral scientists Sehdhil Mullainathan and Eldar Shafir (who have written a fantastic book about scarcity) famously demonstrated this while studying sugarcane farmers in India.  These farmers only get paid once a year, when they sell their harvested crop.  In the year that passes between harvests, testing shows their IQs drop substantially as they go from being rich to being poor.

• Scarcity taxes cognitive capacity and executive control (the ability to rein in our impulses), significantly reducing both. Dieters, who are, by definition, deliberately undernourished, have been demonstrated to have difficulty evaluating food choices and resisting their cravings (no wonder they can’t lose weight).

All of this leads consistently to sacrificing the future for the present—in other words – we become our own worst enemies. Here are some key implications for marketers and researchers:

• First of all, just think about scarcity. Ask yourself, is deprivation somehow influencing consumer perceptions and behaviors?  What resources are insufficient in consumers’ lives?

• If you’re a marketer, do you need to account for scarcity in your brand communication? Your pricing and packaging?  Your promotional tactics?

• If you’re a researcher, do you need to build this issue into your questionnaire or discussion guide? Getting people to talk about scarcity can be challenging.  They often have difficulty articulating what’s in short supply and how that affects them.  Personally, I’ve had good luck with sentence completion exercises like, “If I only had more ‘Of This’, I’d be able do to ‘More Of That’.”  This provides a structure in which a research participant can describe scarcity and its results.

Scarcity is a powerful mindset.  It’s a lens that changes—and sometimes distorts—how people see things and behave.   If we don’t account for it when trying to understand attitudes, perceptions and actions, we’re missing a big part of the picture.

One final thought: there’s also such a thing as an abundance mindset.  It can cause just as much dysfunction in perceptions and decision-making as scarcity.  I’ve done a lot of research among high-net worth individuals, and they often seem to be every bit as irrational as low-income people, just in different ways.

Dads, and their role in society and the family, are changing.  Schools have noticed it.  I, as a researcher who regularly conducts studies specifically among dads, have noticed it.  And marketers have noticed it.

Dads are becoming increasingly important to marketers, with good reason.  They play a crucial role in purchasing and family decision-making, and ignoring them could be bad for business.  However, marketers and advertisers continue to make the same mistakes with dads that they’ve been making for decades, including:

• Treating them like moms

• Treating them like other men

• Treating them like dads of the past

• Treating them like idiots

Having done research among dads for many years now, they continue to surprise me.  They continue to change, and the pace of change seems to be increasing.  Some of these changes are widely reported – such as their greater involvement in parental and household tasks and greater involvement in family decision-making) – while others are less well-known.  Here’s one, for instance; dads feel much more pressure lately to be nurturers as well as providers, and these pressures clash with each other.  As noted clinical psychologist Dr. Gail Winbury has observed, “fathers feel they’re being encouraged to attach emotionally to their children to a much greater degree than even a few years ago.”  And this pressure brings internal conflict—while they’re expected to be nurturers at home, dads still feel clear pressure to leave the house every day and slay dragons.

Winbury again: “Fathers are profoundly conflicted.  They’re receiving complex and often contradictory messages.”  These messages come through the media and their own social networks, and create a sense that nothing they do will ever be entirely correct.  As one recent focus group participant dad observed to me, “I feel like, no matter what I do, I’m going to be told I screwed up.”  

So, here’s what I think marketers need to do:

• Stop making outdated assumptions. Realize that fathers today bear little resemblance to dads of the past, that they’re significantly different from moms in their attitudes and behaviors, and they don’t like being portrayed as being clueless.  The biases and misconceptions that marketers continue to build into their marketing strategies and tactics toward dads often render them ineffective.

• Do some research. Get to know the dads of today.  This can be done in a variety of ways.  Qualitative tools and custom quantitative approaches are worth the resources.  In addition, social media listening and syndicated data can also inform your understanding of dads.  But, as with the previous point, be careful of the assumptions you might be making when conducting this research.  Also, bear in mind that, as dads continue to change, you’ll probably need to refresh this research regularly.

If marketers really listen to dads, avoid stereotypes, and are sensitive to the tightrope fathers are being asked to walk, they can become an important stakeholder to a brand.

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.

I recently came across something called Brandolini’s Law.  It was first stated in 2013 by Alberto Brandolini, an Italian software engineer, and it says that the amount of energy needed to refute bullsh*t is an order of magnitude greater than the energy required to produce it.  It’s also called the Bullsh*t Asymmetry Principle.  Mr. Brandolini is hardly the first person to notice this.  Winston Churchill is often credited with having observed that “a lie gets halfway around the world before the truth has a chance to get its pants on.”  (In a beautiful irony, it seems that this attribution itself is BS.  The remark was probably made by Cordell Hull, FDR’s Secretary of State, but people continue to credit it to Churchill.)

If Brandolini is correct that accurate information is at a fundamental disadvantage to nonsense, this has significant implications to market research.  I often find that one of the most important priorities I face when conducting research is avoiding jumping to conclusions.  I know my clients struggle with this as well.  It’s unsurprising that this is a challenge.  We are pattern seekers by nature, and so we look for explanations when presented with data.  Humans are also naturally uncomfortable with not understanding something, and will sometimes prefer a bad explanation to no explanation.  From an evolutionary standpoint, these traits have clear value.  However, in this modern world, they don’t often serve us well.  And exacerbating that problem is the fact that we’re usually under pressure to deliver findings and implications as quickly as possible—often on the spot.

With market research, rushing to judgement can work against you—particularly in the case of qualitative approaches, which allow us to watch findings accumulate over time.  If you’ve ever sat in a focus group back room, or observed an online bulletin board, you’ve had the opportunity to see data be created in real time.  Not only is it important to resist drawing conclusions before all the information is in, but, once you do have the data, it’s wise to give yourself some time to mull things over – psychologists call this ‘consolidation’ – before forming opinions.  Doing so too hastily can lead to poorly-thought-out implications and unsound recommendations.  And once these flawed ideas are articulated, they can spread like wildfire, and abandoning or revising them after the fact is nearly impossible – hence Signore Brandolini’s observation.

So, here are some practices I follow to avoid this problem:

• I make a point of distinguishing very clearly in my own mind between the tasks of determining what I have heard and considering what I think it means.

• While I’m conducting research, and for at least a few days afterward, I restrict myself to the first task, and hold off on the second. I strongly encourage my clients to do the same.

• I’ll often schedule a debrief call with clients a few days after the research, the express purpose of which is to allow ourselves to engage in the second task.

• I consciously give myself permission to change my mind about things in the days following the research.

• I also strongly encourage all members of the research team to disagree with each other and me. As George Patton used to say, “If everyone is thinking alike, then somebody isn’t thinking.”

One final point. It’s important to bear in mind when looking at quantitative research results that the information you’re reviewing is incomplete.  As we all know, quant gives you a lot of ‘what,’ but not much ‘why.’  It’s qualitative that will provide the story behind the numbers.  So, before you start drawing conclusions based on quantitative data, try to work some qualitative information into your analysis.

I’d love to know your thoughts on this topic.  Feel free to email me or leave a comment on the blog.

Recently, I was reviewing data on keyword searches conducted on Google regarding qualitative research.  Here’s what I learned – a lot of people don’t seem to understand what qualitative research is, how it differs from quantitative, and how it can add value.  This is consistent with my own recent experience.  Many long-standing clients who are experienced research professionals increasingly find themselves defending the necessity of qualitative to their colleagues in marketing, top management, finance and corporate purchasing.  They’re constantly forced to respond to remarks like, “what can this stuff tell me that the numbers can’t?”

Whenever I hear about this, I think about the McNamara Fallacy –  named for Robert McNamara, Secretary of Defense for John F. Kennedy and Lyndon Johnson, and architect of Johnson’s escalation of the Vietnam War.  This phenomenon was described by pollster Daniel Yankelovich – a man who made his living quantifying things – in the early 1970s.  It describes a progression of thinking that starts reasonably, and ends up in near total dysfunction.

Step 1: Measure what can be easily measured.  Nothing wrong here —we should be quantifying what we can.

Step 2: Conduct an analysis that is either based entirely what can be measured, or that assigns estimated or arbitrary values to those things that can’t be.  Nothing inherently wrong here either, as long as you remember the limitations of such an analysis.  But it’s also risky, as it can easily lead to…

Step 3: Decide that what you can’t easily measure is unimportant.  Yankelovich says, “This is blindness,”  and, it will take you right to…

Step 4: Conclude that what you can’t easily quantify doesn’t exist.  Yankelovich calls this “suicide”.

This fallacy is named for McNamara because of his approach in Vietnam, in which he decided that objective, quantitative measures – most notably body counts – would be a proxy for success.  McNamara’s focus on these metrics told him the US was winning the war.  But by 1968, it was clear that the numbers were telling a misleading story.

The lessons here:

• Numbers provide essential information. However, by themselves, they only tell what can be quantified – that something can’t be quantified doesn’t mean it’s non-existent, or that it isn’t important.

• The numbers themselves must be questioned. Had Bob McNamara taken a closer look at the body count figures he was receiving by using tools that dig beneath numbers to help them tell a more accurate and enriching story, he might have interpreted them very differently.   It’s important to remember that every data point represents something: a person, an event, a memory, a perception, and so on.  If we are to truly understand the numbers in aggregate, and make good decisions as a result of that understanding, it is imperative that we spend time looking at those things the numbers represent.  This is where qualitative tools –  such as conversation, observation and creative exercises – can add so much value.

• It’s valuable to remind ourselves periodically why we use metrics in the first place. We do this to simplify—to make something understandable that might otherwise be too complex to grasp.  However, we must be very careful in our selection of metrics, as every measure contains assumptions about causality.  McNamara and his staff assumed – obviously incorrectly – that there was a causal link between success and killing more soldiers than then enemy.

Today, it seems we may have forgotten the cautionary tale of Robert McNamara.  With so much data available to us – and it’s often of such high quality –  we can forget the power of data lies in the stories it tells and the humanity it describes.  And it’s qualitative tools that help us find those stories and that humanity.  Often, we are presented with qualitative and quantitative as an either/or decision.  But this is a false choice.  The two must work together to uncover the truth.  And so we – as those who are responsible for interpreting data for the purpose of informing decisions – must always remember to dig deeply into that data and the assumptions that underlie it by creating research approaches that meld numbers and stories.