Are You Making The Right Decisions?

by Colin Shaw on June 1, 2018 No comments

Can you tell me the average length of a rain poncho without Googling or asking Alexa?

Don’t worry, few people can. Nonetheless, it is a critical piece of information when you want to buy a rain poncho and need to choose a size. Without it, however, you can still make a decision—and as customers we often do this—by simply substituting in another question and answering it. It’s called a substitution heuristic, and it is how customer make up their minds about you.

heuristic is a scientific term that describes how we use shortcuts in our thinking to help us make decisions or solve problems. A substitution heuristic means we replace a difficult decision with one that we consider easier to make, and then use the answer to the easier decision for the difficult decision also. Most of the time we use a substitution heuristic without realizing we did it.

My colleague Professor Ryan Hamilton of Emory University explained it with an example from a study about substitution heuristics and rain ponchos (hence, my question at the open). Researchers at MIT asked people as they were leaving a science museum to participate in a survey. One of the questions had participants imagine it had started to rain and they had an opportunity to buy a poncho in a small, medium or large. The length of the ponchos varied in the scenario by the group of people the researchers asked, but always were available in the three sizes. What the researchers found was that in all groups the people bought ponchos relative to how tall they were, i.e., the shortest people bought the shortest one and the tallest people, the longest, etc. The longest poncho in any of the groups was around 42”.

However, the average length of a poncho is around 50” to 52”. As Professor Hamilton says in our recent podcast on substitution heuristics, they were buying “comically short” rain ponchos that would not cover them up and keep them dry.

The people in the survey were unable to answer the question about what size poncho they needed because they didn’t know how long ponchos should be. So, respondents in the study substituted a different question they could answer, e.g., “How tall am I?” With that answer, the survey participants could then select a poncho they would buy in the scenario, and subsequently catch their death, apparently.

Now, armed with the information that all the ponchos were too short, you might think those participants were silly. However, we do the same thing when we buy a new smartphone. Phones come with different amounts of storage. When choosing, the proper way to decide is to determine how much you store on your phone now and choose the new phone accordingly. However, few of us have any idea how much we store on our phones. So, we guesstimate. I remember when I bought my last phone getting into some really ridiculous suppositions about which phone I should buy, e.g., “how much storage does the software take? ,” and “how many apps do I have?” There are too many bloody variables, so I just picked the biggest one.

How to Help Your Customer Guesstimate

You should never assume your customers are answering the questions you are asking them, and that they are answering them the way they should with rational and objective cognitive analysis. We ask them things all the time that they are not equipped to answer, like what size rain poncho they need or how many gigs of storage their phone should have. Instead, you should figure out what substitute questions are they asking.

So, how do you figure that out? Here are two ideas:

Ask them: One way to determine what questions customers substitute when faced with a decision in your customer experience is ask them. Many tools exist from market research experts that can help you determine how customers tackle the decisions you present.

Take an Outside-In approach: Another way, if you lack the resources or timeline for an investment in robust customer research is to take an outside-in approach to your customer experience. What I mean by this is to walk the experience as if you are a customer. If you sell shoes online, go buy a pair of shoes online. If you sell insurance, present yourself for a new policy. Walking a mile in your customers shoes will tell you exactly where the experience decisions rub, and how you satisfy these moments with an adequate answer.

When you know what question your customers are substituting in your experience, you can then help them get to the answer you want. For example, in politics you often don’t know as much about the two candidates that you should. Maybe all you know is one is an outsider and one is a career politician. Or one is a maverick and one is the incumbent office holder. So, when it’s time to vote you should be making a decision based on where the candidate sits on the issues, but instead you choose based on the description of the candidate you like best, or maybe even just party lines. The campaign manager then would be wise to sell the candidates’ description more than their voting history to earn your vote.

Same goes for cars. For anyone who has purchased a car, it can be overwhelming trying to compare all the makes and models and car features. So, many of us choose something much easier to decide upon, like color. I like the red one is a lot easier to consider for many of us than how many liters the engine has. Another substitution heuristic for car buying can be the brand. For example, I like Hondas because they are reliable and I cannot easily recall any examples of people having problems with their Honda. (This is also an example of a “halo effect,” but that’s a different blog.) This substitution is the whole reason that there is a thing called “brand.”

Understanding substitution heuristics is important for understanding how your customers make decisions because we use them all the time. We use them when we buy a car, vote for candidates, and even when we buy imaginary rain ponchos. Substitution heuristics help us make a complex decision accessible; and they result in pretty good choices most of the time.

Do you have a substitution question you use when making a difficult decision? Please share it with us in the comments below.

If you enjoyed this post, you might be interested in the following blogs:

How We Make Decisions—Prospect Theory

Why Customers Make Strange Decisions

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX.

Colin ShawAre You Making The Right Decisions?

Join the conversation