The most basic goal of marketing is to influence customer buying behaviors, so understanding why customers buy is essential for successful marketing. A new edition of Decoded: The Science Behind Why We Buy, 2nd Edition (John Wiley & Sons, 2022) by Phil Barden provides a wealth of science-based insights on this critical aspect of human behavior.
Phil Barden is the Managing Director UK of DECODE Marketing, a consultancy that combines hands-on brand management experience with cutting-edge capabilities in cognitive and social psychology, neuroscience, and behavioral economics. Barden has over 25 years of marketing experience, having held senior positions at companies such as Unilever, Diageo, and T-Mobile.
In January of this year, I wrote that marketing success in 2023 and beyond would depend on marketers' ability to leverage the capabilities of technology and data science and effectively apply behavioral science principles that describe how people make decisions. Decoded is one of several books that address the vital psychological aspects of marketing.
What's In the Book
The main theme of Decoded is that advances over the past several years in the decision sciences have significantly increased our understanding of human decision-making and behavior, and thus enabled a more science-based approach to marketing.
Phil Barden clearly states his objective for the book in the preface, where he writes:
"The goal of this book is to share what I have learned on my journey about bringing decision science to life for marketing . . . We now have a framework, a language, and a growing body of knowledge to enable marketers to address the real drivers of brand choice . . . I want to empower the reader to harness this valuable knowledge and apply it to everyday marketing work."
Barden uses the first two chapters of Decoded to introduce the core cognitive mechanisms that drive customer buying behaviors and discuss some of the implications of those mechanisms for marketing.
In Chapter 1, Barden describes Daniel Kahneman's model of human decision-making, which holds that people use two types of cognitive processes to make decisions.
- System 1 is fast, intuitive thinking that operates automatically, quickly, and with little or no conscious effort.
- System 2 is slow thinking that consists of processes that are reflective, controlled, deliberative, and analytical.
Barden embraces the Kahneman framework and uses it throughout Decoded. He refers to System 1 as an autopilot and calls System 2 a pilot. Barden describes several attributes of the autopilot that are particularly relevant for marketers, including how it processes information and the role it plays in framing our buying decisions.
In Chapter 2, Barden focuses on the "neuro-logic" of individual purchase decisions. Neuroscientists have shown that when we encounter a product or service we perceive to be valuable, an area of our brain known as the "reward center" is activated, which causes us to "want" the product or service. When we see or hear the price of a product or service, a different part of our brain is activated, the area that "fires" when we experience pain.
Therefore, whenever we face a potential purchase decision, our brain performs a type of cost-benefit analysis that weighs the potential reward (value) and the price. Barden writes, "Our brain calculates a kind of 'net value' and if this is high enough, if the difference between reward and pain is great enough, then we buy."
In the remaining chapters of Decoded, Barden covers several other attributes of customer buying behaviors that have important implications for marketers. He also explains how marketers can adapt their approach to marketing to take advantage of these buying behavior attributes. For example:
- How human perception works, and how marketers can use established rules of human perception to optimize marketing activities. (Chapter 3)
- How the architecture of the "decision interface" influences purchase decisions. (Chapter 4)
- The critical role of goals in customer buying decisions. (Chapter 5)
- How to effectively implement a marketing strategy based on decision science principles. (Chapter 6)
Back in February, I published a post that included brief descriptions of four books that I called "required reading for marketers who want to leverage behavioral science principles in their marketing efforts."
When I published that post, I hadn't yet read Decoded. If I had, I would have included it in my required reading list.
Decoded is packed with valuable insights from beginning to end, which makes it a must-read for marketers. The book is particularly compelling because Phil Barden does an excellent job of connecting the sometimes arcane world of behavior science to pragmatic marketing issues and practices. Many of the examples he provides in the book involve real-world marketing situations.
Barden's writing is clear and engaging, but Decoded isn't a light read. The reality is, human decision-making is a complex, multifaceted phenomenon, and as Albert Einstein once said, "Things should be as simple as possible, but not simpler."
By now, most marketers are at least somewhat familiar with psychological concepts like "loss aversion" and "social proof," and many have heard or read about the power of defaults and other "nudges" to influence customer decisions.
The most important message of Decoded is that marketers have many opportunities to influence customer decision-making and buying behaviors, but success will require marketers to advance their understanding of human psychology and keep up-to-date on developments in neuroscience.