Book Review: Predictably Irrational
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I realized as I finished reading Predictably Irrational (Dan Ariely) that it's has been a long time since I've shared a book review on this blog. It isn't that I've stopped reading, more that I've gotten lazy in sharing. Some great books I've read recently and would recommend are: How Now Shall We Live? [Chuck Colson], I Am America (And So Can You!) [Stephen Colbert] and Super Crunchers [Ian Ayres]. These are more tied to my personal interests, but they are all a great read.
Predictably Irrational kept coming up on some blog/podcasts that I read/listen to so I figured I better grab it and check it out for myself. The book is an amazing set of studies and research diving into the fact that we make a lot of decisions in an illogical fashion, but somehow we are extremely regular in our bad decision making.
It is hard to pick a favorite example of this, but one of the most obvious is the concept of "free". We all know that people love free stuff, but the extent to which this is true is amazing. In their experiment, they offered a Hershey kiss (so-so chocolate) for free and a Lindt truffle (quality chocolate) for $0.14. 69% of the participants went for the free item, even though the truffle was a much greater discount/value. (Of course read the book for the full experiment and analysis).
While this is interesting, the crazy part for me is that even though I just read the book explaining how irrational our decision-making can be, when I got a coupon for a free pop at the local gas station, I took it with full intention to use it. Then even after I talked to my wife about this book and the fact that there is no way I'd stop if they were offering me $0.69 in cash (the value of the coupon), I still will probably stop to get my free pop. Completely irrational!!
How can we use this as marketers? Just remember that traditional economics and pure supply & demand doesn't cover this kind of irrational behavior. We all make illogical decisions on impulse or as part of larger patters and marketers need to be on the front end of these decisions to connect and keep our predictably irrational customers using our products over the competition.
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