Summary
- It's important to understand the psychological reasons that influence our decision making
- Many marketing tactics are built to get consumers to make decisions as quickly as possible by overwhelming us with emotional messaging so we don't activate our rational processes
- Behavioural change takes time and isn't easy
Amid spending season and a plethora of articles listing ways to control your budget these holidays, a Deakin University researcher warns there are no quick and easy solutions.
'There isn't a three-step solution to reducing your spending,' says Dr Paul Harrison, a senior lecturer and Chair of Consumer Behaviour in the Department of Marketing in Deakin Business School.
'Behavioural change takes time and isn't easy.'
So what can you do to avoid blowing your budget on Christmas presents, entertaining, summer holiday activities and the temptation of endless sales at this time of year?
What makes us spend so much money?
First, it's important to understand the psychological reasons that influence our decision making.
Dr Harrison, who's an expert on marketing and consumer issues, has been in the media a lot recently, talking about research investigating how the external environment influences the decisions we make, such as the layout of stores and supermarkets and the pressure to use cards rather than cash.
His own research focuses on emotional and rational behaviour, and how our biology and the environment interact to influence the way we make decisions. He also looks at how businesses exploit customers to the business' advantage and believes it's not good enough to 'just tell people to make better choices about what they spend their money on'.
Deakin Business School's Dr Paul Harrison
'People think education and information is a solution. It's not. It's well established in my research, and other research, that being informed about something doesn't necessarily change people's behaviour. Knowledge about what you should be doing doesn't, on its own, prevent you from doing the opposite.'
Our fixation on jumping to solutions before we understand the complexity behind our behaviour also doesn't help.
'We all have inherent psychological biases that have existed for millennia to get us through life,' Dr Harrison says. 'The human brain hasn't really changed much and neither has its biases and responses. But the context in which our brains operate has changed dramatically and so we have this Paleolithic brain alongside god-like technology.
First, ask 'why?'
'Nearly all these traps we fall into are exploiting a brain that's mostly useful but also gets us into trouble. Part of the difficulty is this expectation that we can overpower something that would take millennia to change. We're jumping from the problem to a solution without first asking, "why does this happen?"'
Many marketing tactics are built to get consumers to make decisions as quickly as possible by overwhelming us with emotional messaging so we don't activate our rational processes.
'The thinking brain requires significantly more energy than the emotional brain so we have a natural tendency to use our emotional brain. For important decisions, we need to fire up that thinking brain and really consider what's important to us,' Dr Harrison says, 'but to do that, we need to remove as many distractions and complications as possible.'
We can try to slow down the decision-making process and remove all the different stimuli that interfere with rational decision-making, like noise, bright lights, other activities and distractions.
'Marketers are very good at making us feel like something's missing from our lives and that the thing they're offering will fill that gap,' Dr Harrison explains.
Image: Andrea Piacquadio/Pexels.com
'Playing to our insecurities is the most powerful aspect of marketing because sitting underneath so much of our consumer behaviour is a desperate need to be noticed. To not be ignored. We want to be loved by our partner, our family, our friends, the community, the world. Nearly all marketing is built around convincing us that "this thing can make you loved".
Much of our consumption behaviour stems from this desire. Even buying gifts for others at Christmas is saying, 'please love me because I'm giving you this gift'. So is buying a lot of food to cater to everybody at Christmas dinner.
'You don't want to disappoint anybody because you want to be considered worthy of other people's love. And that's just what it is to be human,' Dr Harrison says.
'Marketers know what works, and they know tapping into emotional cues works much better than rational cues.'
No easy fixes
Human decision making is complex and much of it happens outside our conscious awareness. When we make decisions at an emotional level, a part of our brain quickly chimes in with a rational reason why we made that decision, so quickly, in fact, that we don't even register it. Very clever of our brains, but also not something easily sorted with a quick solution.
So is there any solution at all, even if it's not quick one? How do we avoid falling into the traps marketers set to get us to open our wallets or tap our phones? We can exercise a similar principle to eating healthily (another area where information and awareness struggle to change behaviour) and practice removing the temptation. If it's not in the pantry, it's difficult to eat it. If it's not in your wallet, it's difficult to spend it.
'I said as a joke in an interview once that you should keep your credit card in the freezer so you can think about whether you want something enough to spend time digging the card out,' Dr Harrison says.
'It sounds silly, but the point is if you keep your credit card in your wallet or on your phone, it's easier to get to, so it's easier to spend money. You need to make it more difficult for yourself.'
What else can we do besides making it inconvenient to spend money?
'Slow down the decision-making process,' Dr Harrison says. 'Remove yourself from the emotion of it. Ask others what they think about you purchasing that item. Consciously think "why do I want to save money? Will this thing I'm buying help me achieve that?"'
The text of this article is licensed under the Creative Commons Attribution (CC BY) 4.0 International
