The Pseudo-Neuro Science of Business Thinking … Fast or Slow, Left or Right, Logic or Emotion, System 1 or 2

May 14, 2017

System 1 and system 2 thinking are two different ways of decision-making, popularised by Daniel Kahneman in his bestselling book “Thinking, Fast and Slow”. They are behavioral frameworks based on Psychological research, which ultimately theorized that we all think in two different and rather distinct ways.

System 1 … Irrational, emotional decisions. Our emotional instinctual brain.

This is where a customer makes an irrational decision, such as buying an iPhone when they already have a functioning phone. Or justifying a holiday. We all make system 1 decisions daily. System 1 decisions are made quickly. Everyday decisions tend to be made using system 1 decision-making.

System 2 … Rational decision making. Our rational and conscientious brain.

This is where customers are making logical decisions, we like to think we are logically making a decision, but many decisions are justified using system 1 decision making. These decisions are slow, well thought through, they are analytical and may be based on evidence and previous experience which is carefully considered.

System 2 decisions are still made on a daily basis, it helps when we have more time, for example, if something is less urgent we tend to make more type 2 decisions. However, time alone doesn’t fully account for type 2 decisions, I put off buying a new iPhone, only to want one more. When it came to me picking an ISA, my previous ISA had not matured so I had more time to research it and find the best rate, whilst deciding also to lock these funds away for another year. This decision was a system 2 decision-making process because it was based on logical thinking, weighing up a variety of options within the situation I was in.

Most people make system 1 decisions for the majority of their decisions and this is something marketers need to tap into, to get their approach right. I was previously convinced people make system 2 decisions with financial products, but sometimes people buy insurance out of fear, this is system 1 decision-making. People make them with holidays, grocery shopping, B2B services, you name it.

We’re not all completely irrational, but isn’t it system 2 decisions that encourage the sale? Whilst system 1 might be us trying to rationally convince our boss to buy us a training course or chatting with our partners reviewing the details of a savings account. System 2 tips us over the edge, imagine missing 1.5% earnings on that savings account, or not taking the training course that could get you a pay rise in a future job.

Brainjuicer, the research firm founded by John Kearon, has renamed itself System 1 Research. It says we need just three brand metrics.

  • Fame – if a brand simply comes to mind, it’s a good choice
  • Feeling – If a brand feels good then it’s a good choice
  • Fluency – If a brand is recognizable then it’s a good choice

Each of these metrics stems from behavioral science, namely the availability heuristic, the affect heuristic and the processing fluency heuristic.

To be successful brands need to come to mind first, feel good (for example a good choice, ethical, or whatever making it a good choice may be in terms of the product or service area) and must be recognizable in the industry.

A recent article in The Drum takes the discussion further, with particular relevance to brands and marketing:

What do we think of when we think about thinking? For most people, what immediately springs to mind is how we take in information, weigh that knowledge form conclusions, and change our minds if emerging data forces us to.

That conscious, active, energy-intensive form of thinking is where we think we make most of our decisions. In fact, the vast majority of our choices originate in the part of our brain that makes automatic, intuitively guided decisions – the section from which the term ‘no-brainer’ was derived.

Psychologist Daniel Kahneman won a Nobel Prize in economics for this concept, detailed in his book Thinking Fast and Slow. The instantaneous, gut-level decisions are made in what Kahneman calls System 1. System 2 is where humans do the deliberate, logic-based reasoning that we believe represents most of our thinking.

Much attention has been focused on System 1 – and deservedly so. This is especially true in advertising, as brands have a vested interested in understanding how to trigger the instantaneous reactions that emanate from System 1.

But System 1 is part of a sophisticated system of dual processing. And there is no System 1 without System 2, which has been largely overlooked in the clamor to tap into this trendy topic in ways that will help advertisers to win brand share wars.

The reality is that, without understanding what System 2 is and how it works in tandem with System 1, serious errors will be made in attempts to capitalize on these powerful dynamics. Because System 1 doesn’t exist in a vacuum, so mastering the art of motivating consumers to act requires an understanding of that interplay between it and System 2.

The defining feature of the System 2 brain function is that it takes work. Consciously absorbing information, understanding what it means, measuring its importance and relevance to us as an individual, contemplating options, reflecting on various outcomes – this is heavy cognitive lifting.

When we’re confronted with a new problem to solve, we believe we’re deciding based on facts. In fact, for all the work that System 2 thinking requires, its role is often to give rational justification for us to behave the way we wanted to behave all along.

For example, if our kids always drink good old traditional milk without putting up a fight, we know it’s the path of least resistance to get certain vitamins and minerals in their bodies. But if we’ve recently read a blog post about how nut milks are less damaging to the environment, this new information might give us pause to consciously consider whether or not to change this established purchasing habit. After all, if our System 1 intuition tells us that “people like me” care about the planet and give their children a sustainable diet, this new data forces our System 2 thinking to reconcile these two competing options.

This is where a brand can make sure they’ve made facts about and benefits of their product easily accessible. When we examine the milk carton and read about the grassfed cows and local farmers who thrive because of this brand’s ethical production, we can feel safe and justified in sticking with our usual purchase. In the absence of such information to feed our System 2 thinking, our decision might be at the mercy of our System 1 beliefs about “people like me.”

Ultimately, brands need to acknowledge and integrate System 2 dynamics when formulating their brand stories. This story informs everything from packaging and product development to promotions and advertising. Those rational “reasons to believe” will often be what consumers will cite, at least in their conscious thinking, as justification for the choice their subconscious thinking wanted them to make all along.

That’s because consumers don’t want to think of themselves as making decisions from anywhere but their most reasonable, logical calculations. Indeed, most people will tell you they’ve made carefully considered decisions about purchases both significant and trivial – from which car to buy to which milk to give their kids.

For advertisers, this could mean finding a way to get on consumers’ radar in the first place (that is, captivating their System 1 beliefs and biases), then weaving facts and product benefits into the overall brand story (appealing to their System 2 thinking). Attempting to enchant consumers’ System 1 thinking on its own, or making overtures solely to System 2 thinking, would fail to leverage the potential of how these two systems work together.

Apple is a company that does a superb job of maximizing the power of dual processing. While firmly cementing themselves in consumers’ System 1 thinking as the innovative, cool brand for both work and play-focused tech, they’ve also hit it out of the park on logical reasons to buy.

This goes beyond word-of-mouth buzz about the incredible features of the newest iPhone or how the processor on the new MacBooks blows away the competition. Apple’s advertising is a masterful example of adding to the brand story and wielding its power within System 1, as well as giving concrete, rational reasons to buy into that brand story with lots of cash. Even if you don’t need a new phone or laptop, you’re sure going to be tempted by their latest offering. Apple owes much of its success to leveraging dual processing to persuade those not even the market for new tech to buy it anyway.

There’s no tidy top ten list of brand actions to help advertisers become experts in these discrete systems. The first, most important thing is to understand how they work together to guide and decide the actions consumers take.

Without a grasp of how dual processing works, any undertakings to tap into it will be expensive exercises in not quite getting there. Pausing and taking a step back aren’t common actions in the fast-paced world of advertising. But when it comes to the complex cognitive duet played by System 1 and System 2, they are required.

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