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29 Dec 2011

Consumer Psychology & Freud’s Rebirth

There is no place that the revisiting of our unconscious urges are taken more seriously than in retailing. The Economist article “Retail Therapy” appearing in the December 17, 2011 edition gives a great historical accounting of the rise and fall . . . and rise again of the application of Freud in business which Ernest Dichter is noted for introducing. As the article asserts:

Every week seems to yield a new discovery about how bad people are at making decisions. Humans, it turns out, are impressionable, emotional and irrational.

Increasingly, researchers are finding Dichter’s assessment that “most people have no idea why they buy things” to be correct.

Of course, “Sigmund Freud argued that people are governed by irrational, unconscious urges over a century ago.” However, as we saw earlier, it took science almost a hundred years to acknowledge that the subconscious existed. Meanwhile, “businesses were recognizing the limits of quantitative studies . . . which offered little genuine insight into how customers behaved.” Said more directly, you can’t rely on customers to tell you what they might buy.

The failures of online dating showed this truth as well as research into people’s internet surfing habits. The Atlantic’s article, “Learning to Love the (Shallow, Divisive, Unreliable) New Media,” which appeared in its April 2011 demonstrated that it’s “not what [people] say they want, nor what they ‘should’ want, but what they choose when they have a chance.”

If this applies to purchases, it also applies to all decisions. Names can affect decisions about scientific grants, and information that judges know is wrong can affect their decisions. So, if people don’t behave and choose as they said they would, we have no one to blame but ourselves for not looking deeper into the real emotions powering us.


4 Responses

  1. ‘we have no one to blame but ourselves for not looking deeper into the real emotions powering us ”

    true. But…what do we do with those emotions once we recognize them?

    It’s fine on a personal level. I can examine my decision and think “I made that purchase out of envy. I don’t admire envy, I’d rather do something else with my money.”

    But in business…it’s someone else’s emotional decision. and what can the individual do about that?

    1. Mike Lehr

      The first step is accepting that they exist. They are a function of your personality, so in many ways they are your personality. Still, don’t shoot the messenger. If you make a purchase out of envy, don’t try to rid yourself of envy. For instance, fear is a negative emotion but depending upon the situation it can be very valuable. But if you get rid of it, then it can no longer warn you of danger.

      So, in your example, I wouldn’t get rid of envy, I would try to address what triggered the envy and deal with that. Perhaps that envy is saying, “Murphy, you really should be interacting with this person in a different way. She does not have your well being at heart.” Even your comment, “I’d rather do something else with my money,” gives insight into what the solution is. Perhaps donating that money to a worthy cause or person would help overcome whatever triggered the envy (http://blog.omegazadvisors.com/?p=2291).

      Yes, it’s another person’s emotional decision. We can still influence it as long as we don’t try to control it. We learn about the other person, appreciate that she is making certain decisions because that is the way she is. In some cases, no matter what we do, it’s fundamentally against someone’s nature to make a decision that goes against that nature.

      Related to this is having the right expectations. These things take time. Just because the sun comes up doesn’t mean ice instantly melts. The hottest part of the day isn’t at noon, but at 4pm. Realize too, that when that ice breaks, it will often be very sudden. Translating, this means we are talking about building relationships . . . which naturally takes time. So, it’s important that we have a long-term perspective as to how we would like to influence all the important relationships in our lives. Then, work every day doing the little things that will advance the ball in that direction, realizing that some days will ebb and others will flow. Just because the tide is coming in doesn’t mean there aren’t waves that ebb against this tide.

      Again, thank you for your thoughtful comments, Murphy.

  2. You make a good point about the power of the unconscious mind. As a consumer psychologist specialising in online behaviour I spend a great deal of time educating retailers about the instant decisions made by people who land on their websites. The companies often appear to think that people are making conscious deliberations about their purchases. Yet consistent research shows this is not the case. Furthermore, when I start mining into their website analytics they have the data on their own website which shows this.

    1. Mike Lehr

      Yes, Graham, you’re right. I find the same. My question is why do they continue to believe this even in face of the facts? One answer is that people often believe that their perceptions are the facts, so it’s quite likely they believe the analytics are wrong or being wrongly interpreted. Another answer, which runs deeper, forces them to acknowledge that people react unconsciously. Of course, in order to acknowledge this, they will have to acknowledge that they themselves might react unconsciously. All of this flies in the face of the centuries old idea of “free will.” If we react unconsciously to stimuli, how can we claim free will? In other words, in order to acknowledge the facts you present, they have to acknowledge that they might not have as much control over themselves as they would like to believe. These are just a couple of reasons. There are more. Again, thank you for your observations and comments. I appreciate them.

      Take care,

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