“The approach most social scientists rely on in studying human choice doesn’t hold up.”
– You Are What You Choose, page 6
You Are What You Choose explores a new set of TRAITS (identified as Time, Risk, Altruism, Information, meToo and Stickiness) which explain the enigmatic decision making process. Authors Scott De Marchi and James T. Hamilton challenge pre-existing decision-making models such as Rational Choice Theory and Irrational Choice Theory derived from the field of economics. They also challenge marketing or micro-targeting based on demographic information, for some cases. In addition, the authors test the validity of their TRAITS model using multiple scenarios – from love to gambling.
"We believe that habits of the mind that people use to make decisions is essentially the same across many types of choices, reflecting what they value and how they reach decisions"
In the same way we develop habits, we also develop a mental-habit when in it comes to making decisions. Habits can give rise to patterns and with patterns one may be able to predict a course of action and/or outcome. Although there is no way to explain how individuals develop their decision-making process, the authors argue that this process is the underlying factor in making decisions – which in turn becomes a habit – as opposed to factors that may influence decision-making such as political affiliation, level of education, etc. In addition, the authors argue that the “habit” of decision-making can be uncovered based on where an individual falls along the spectrum of the above-mentioned six categories that make up the TRAITS model.
Time: Does the person value an output now or more so in the future?
Risk: Is the person risk-seeking or risk averse?
Altruism: To what extent does the individual value benefiting others?
Information: How much information does the person require prior to making a decision?
meToo: To what extent does the individual care about what others think of her?
Stickiness: Is he a loyal customer to a specific brand or willing to try anything?
Uncovering where an individuals falls within a TRAIT’s spectrum can lead to developing a model that predicts the choices each individual will make.
How You Choose Matters, Not Why
"To a large degree how you choose (i.e. what type of decision maker you are) matters more than what you are choosing"
Pay attention to how decisions are made as opposed to justifying why. Essentially, the process by which someone makes a choice is the important component, as opposed to what the final choice is. For example, two individuals who are carbon copies of each in terms of demographics, values, level of education and so on – essentially a marketer’s dream – can make very different choices when it comes to shopping for cars. Although both individuals have a lot in common that can be leveraged to design and deliver adverts, there is no guarantee that they will both come to the same decision – independent of each other – because they each possess a different process in making decisions. Identifying where an individual is in each category within the TRAITS model – Time, Risk, Altruism, Information, meToo and Stickiness – allows you to better identify patterns that are intrinsic to that individual’s decision-making process.
Using Traits to Predict Choices
"There are four strategic ways you use TRAITS: Algorithm, Cluster, Similarity, and Introspection"
If you have lots of consumer information, think about your product’s dimensions in terms of TRAITS to identify which TRAITS to focus on when modeling an algorithm that may predict who will use your product.
In a Cluster strategy, look at your existing customers and ask specific TRAITS questions. With the answers, you can extrapolate and place your customers in one of four-decision archetype: Gambler, Fan, Shopper, or Drifter. The Gambler thinks about the short-term benefits, sticks to his risky decision and doesn’t require much information and is low on Altruism. The Fan also loves risk seeking as well. However, she highly values information, cares about others, cares what others think of her and thinks about the future. The Shopper is pragmatic. He gathers information, looks at what others choose, isn’t necessarily loyal and focuses on today versus the future. The Drifter also likes to takes risks, but he doesn’t care much for having a lot of information, caring for others or what others think of him, and isn’t particularly loyal.
If you’re trying to influence a decision based on a similar type of choice exhibited in other areas of life, identifying a customer’s TRAITS can help craft your messages in a way that will appeal to them using the Similarity strategy.
I thoroughly enjoyed reading You Are What You Choose. It puts the “human” back into decision-making, because as individuals we are not classified strictly on factors such as age, postal code, etc.
TRAITS identified six dimensions by which individuals use to make decisions. The authors’ explanation comes off as a logical way of interpreting how individuals choose, versus what they choose. It comes as no surprise that not even TRAITS can explain everything! The authors point out:
“When it comes to love at first sight, about half of our respondents believed in it and half didn’t. Neither demographics plus microtargeting, nor party identification, nor even our TRATIS explained who believed in this phenomenon. There are some things beyond the reach of science.”
If decision-making is based on the individual’s TRAITS, will their TRAITS remain the same throughout that individual’s life span?