Archive for the ‘Decision making’ Category

How Lazy Are You? – Decision Making and the Lazy User Model

On her latest adventure for TNI, Carol-Ann Morgan sets off in search of the Holy Grail, deciphering the complicated codes left by the puzzling world of decision makers.

Market researchers spend much of their time working on projects which seek to understand how buying decisions are made. There is no shortage of literature on the subject – academics have equally been seeking the answer to this all important question through their research. However, the nagging question at the back of everyone’s mind is whether or not we are chasing the unattainable – the Holy Grail. There are actually so many variables at play, and each decision maker puts them together in different ways for different decisions; based on the context and the relative importance of the decision. Additionally, how much of rationalisation of our decision is actually put in place post decision-making in order to maintain our own self image, equilibrium and esteem. All of these issues, well documented as they may be, have troubled me for years.

In my search for the holy grail (the answer is out there!) I came across the “Lazy User Model”. It rang true to so many decision makers I have spoken to throughout my career. The model, relatively recently developed (2007), tries to explain how an individual selects a solution to fulfill a need from a set of possible solution alternatives. The central tenet is that the user will select the solution which carries the least effort on the part of the user.

The starting point is the user need; only solutions which meet 100% of the needs are considered, thereby avoiding any wasted effort on solutions which require compromise. Coupled with this, only solutions which suit the user state ie the position of the user at the time, are considered. The user then limits consideration only to those solutions which are plausible. The user then chooses the least effort solution from the plausible options. Effort can be defined as the combination of cost (£) and time, plus the physical and mental effort required.

“My hypothesis is that it is that combination (lowest level of effort) that is, by far, the most important driver in determining how we select products / services from the “list” of choices that we have.” (Collan, M., 2007)

Fig 1: The Lazy User Model of Solution Selection

Collan and Tetford (2007, Lazy User Behaviour) developed their model with consumers and their selection of mobile phones and other technology related products in mind. I have observed this phenomenon amongst B2B decision makers when recounting, their approach to choosing new suppliers and new products during research focus groups and interviews. A degree of post rationalisation of decisions can mask this practice, but on closer examination of the data, it can be recognised.

They say no one ever got sacked for choosing IBM (or any well known, reputable brand for that matter), therefore, an aversion to changing anything that either works, or “should” work, could be a factor facilitating adoption of this model. Maybe if market researchers could establish a respondents’ attitude towards risk, and their effort expended on decision making it may throw more light on just how and why B2B decision makers choose new suppliers and adopt new products.

Posted in Carol Ann Morgan, Decision making, Thursday Night Insight |
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Keeping Your Ear To The Ground

Consulting with stakeholders has become increasingly popular, as both the public and the private sector apply principles of good governance to the way they operate. There is recognition that in order to maximise an organisation or a company’s success, it needs to look both inward and outward at those who are affected by the decisions it takes and the products it develops.

Many projects involve revisiting stakeholders after a period of time, using the relationship to maximum value to evaluate reactions to actions and to track perceptions. Corporations following this pattern are more likely to operate in harmony with those who are affected by their actions or who have a vested interest in their success.

Stakeholder consultation is therefore important insurance for the long-term effectiveness of an organisation, enabling it to build sustainable new directions and carry its audiences with it. In the latest white paper from B2B International, Carol-Ann Morgan makes the point that carrying out stakeholder research not only makes for a more informed, reflexive organisation that is responsive to the needs of its users and in tune with prevailing perceptions but also, with the sharing of both risk and reward that comes from stakeholder support, which corporations cannot afford to engage with their stakeholders?

To read the full white paper click on the following link – Keeping Your Ear To The Ground – Stakeholder Consultation

Posted in Carol Ann Morgan, Decision making, Stakeholder |
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Journey Into the Not-So-Unknown

In today’s Thursday Night Insight, Caroline Harrison comes across a great example of why market research pays dividends.

A recent convert to Wikipedia, I was checking out this popular encyclopedia website just the other day. Probably the thing I love most about a half-hour surf on this site is the weird and wonderful voyage of discovery you will experience, as you quickly lose interest in the topic you had originally gone to read up on and spot a far more intriguing word or phrase to click on, thus jumping to a completely different subject.

You might go on there to learn more about the life and times of Winston Churchill (actually, Sir Winston Leonard Spencer-Churchill, Prime Minister of the United Kingdom from 1940-45 and then again from 1951-55), but two clicks of the mouse later you can be learning about the origins of the kiwi fruit (not originally from New Zealand, as the name might suggest); a couple of clicks after that you’ll be fascinated to learn about the performance of Spain at the Olympic Games (115 medals in all since first participating in the 1900 Games), and a few minutes after you can lose yourself in the riveting topic of pop music in Ukraine (the 1990s saw an explosion in the Ukrainian Pop music world – apparently).

Indeed, such a bizarre ‘Wiki-journey’ the other day led me to a list of the world’s largest shopping malls. And it was here that something caught my eye and amused me greatly. Let me enlighten you.

The world’s largest shopping mall, with a gross leasable area of 600,000m2 (or 6.46 million sq ft), is said to be the New South China Mall in Dongyuan, China, a city of more than 10 million inhabitants. The mall contains sufficient space for as many as 2,350 stores. It also boasts seven zones modelled on international cities, nations and regions, and features include an 85-foot (25 m) replica of the Arc de Triomphe, a replica of Venice’s St Mark’s bell tower, a 1.3 mile (2.1 km) canal with gondolas, and a 553-metre indoor-outdoor roller coaster. It opened in 2005. It has been 99.2% unoccupied since that time.

99.2% unoccupied??? So, we have here the world’s biggest shopping centre, but there have been more or less no shops (less than a dozen, I understand) in it for the past five years, and presumably very few shoppers either. Not exactly fit for purpose, is it? In fact, it sounds like it was an unbelievably bad idea in the first place.

Now I don’t want to sound like a broken record, once again hammering home the need for market research, but surely a little planning and investigation might have revealed this looked likely to be a white elephant of elephantine proportions?

Apparently, some people fault the mall’s location in the suburbs of Dongyuan, where it is only practical to travel by car, as the primary reason the mall is largely unoccupied. Dongyuan itself does not have an airport, and there are no major connecting highways adjacent to the mall’s location. Yes, all of these do sound like potential problems which should have been taken into consideration. But did the mall’s planners not also talk to the local population about whether they would be interested in shopping in a new mall? Did they not think about whether good public transport links would make a difference to visitor numbers? Did they not ask major retailers whether they would want to open another branch of their store in this new shopping centre? There are just so many things that should surely have been researched thoroughly before investing millions and millions of dollars in building what could conceivably be dubbed the world’s worst shopping mall, never mind the world’s biggest.

For companies too, there is no point in having huge scale, ambitious plans for seemingly amazing products or out-of-this-world services if they are not practical, affordable, attainable or required. Do your market research! Find out if there is a market for your proposed brainchild – and I mean really find out. The money and time it takes to do this will all be worth it when you are able to go ahead and launch your fantastic vision successfully. And, trust me, it will definitely be worth it when you realise you actually had better not go ahead and spend all that money on developing, packaging, promoting, distributing and launching your idea after all!

Posted in Budgets, Business Development, Caroline Harrison, China, Decision making, Thursday Night Insight |
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Chicken Biryani and B2B Marketing

Paul Hague this week reflects on how an understanding of the decision making process in everyday life helps us to better understand and influence the decision making process of our prospective customers.

I was out for dinner the other evening with a colleague and we were eating in an Indian restaurant. The restaurant had the usual extensive menu we have come to expect in such places. Now I’ve got to thinking that restaurants would be an excellent place to segment people. Who takes the lead and calls the waiter? What do people look for when choosing a meal? How influenced are they by price, the specialties and variety? How much information do they need to make their choice? How decisive are they? Do they stick to their choice or does it get changed at the last minute?

My colleague sat happily chatting and would never have looked at the menu if I hadn’t suggested that we take a couple of minutes to look it over and place our order. After a good five minutes of puzzling she quizzed the waiter about every type of rice on the menu, enquired how the sauces were served, and queried the provenance of just about every meat and fish dish. Then, just as I thought we had game, set and match, she called the waiter back and chose something completely different. A man from Mars would, without hesitation, have put her into the bucket of ditherers.

And the man from Mars would have been completely wrong. I know this person well and she is a high-flying consultant in human resources. She commands a daily rate that makes my eyes water and is courted by some of the largest corporates in the country for her decisive advice. With her considerable riches she has recently moved into a palatial new home, bought a sizeable Mercedes as her main car and a little Citroën as a runabout. How is it that a powerful woman who can instruct a board of directors on what they should do to avoid mass disruption in a workforce and who can readily invest thousands of pounds in bricks, mortar and metal, cannot order a chicken biryani?

This paradox got me thinking about decision making. How do we choose things? How do we decide what actions to take from something as simple as a meal in a restaurant to an investment in a company?

Every decision is driven by a need – an objective, if you like. Somehow our brains synthesise the available information and guide the best course of action; the decision. It may appear strange that the decision to buy a house, the biggest investment most of us ever will make, is often based on a couple of visits to the house, an hour or two walking round it and some dodgy advice from an estate agent. If we analyse the cost per minute of the house investment decision versus the cost per minute of the chicken tikka masala decision, we see a difference of at least 1,000 to 1. It is clearly out of proportion.

So what is going on? When we buy a house or a car, we very quickly narrow the options down to just five or six choices with our final selection based on a critical issue. In the case of the Indian meal, there is an overload of information. There may be little to choose between the different meals and, let’s face it, any of the options would be reasonably acceptable. There is too much choice and too much information to synthesise for a very modest return.

I am reminded of a story that I heard years ago about Tootal, who used to be one of the largest manufacturers of ties in the UK. Tootal had a range of ties that was so large it would have embarrassed Sainsbury’s toothpaste display. They reduced it to the 35 best sellers and lo and behold, sales increased and profits rocketed. They made decision making easier; they simplified choice.

The insight I share with you is one of the most crucial in b2b marketing. We need to help customers make their choice – and we need to make sure it is in our direction. To do this we need to understand how our customers are different, we need to recognise their different needs and, now the difficult bit – we must be strong in simplifying our offer so that it resonates better than any others with what they are looking for. If we do this, our products will stand out, they will be snapped up by those who like them and, of equal importance, they will be rejected by those who are looking for something else. And we will all get home earlier.

Read more about the subjects touched in today’s Thursday Night Insight in our following white papers:

Why Is Business-To-Business Marketing Special?
Market Segmentation in B2B Markets

Posted in Decision making, Leadership, Management, Needs, Paul Hague, Thursday Night Insight |
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