Consumer psychology, also known as consumer behaviour or behavioural economics, is the study of how people behave in consumption settings, particularly with regards to judgement and decision making.

I’ve always had a great interest in psychology, and I’ve even published pure psychology research in psychology journals. If there was a marketing marriage made in heaven, then it would be marketing and psychology. In my view, you can’t really be an effective marketer if you don’t have at least a fundamental knowledge of the consumer psyche.

In these blog posts I write about topics pertinent to how consumers make decisions and judgements. Probably my favourite subject.

Why Can’t I Get Anything Done?

People are working from home, but can’t concentrate. And it’s not the kids or the dog.

The last remnants of an analogue social life have been yanked away. For now at least. Of course, we’ve been replacing face-to-face communications with digital devices for a while now. But no one fully understood the privilege of real-world social encounters, until now.

When the lockdowns first started, many people were secretly pleased. They could get more done, save time for reading, or maybe take an online course. Those jobs where people could work from home were revered – wouldn’t it be great not having to commute!

Yet people are struggling. Our survey of workers new to working from home has discovered a pattern of idleness and inactivity. Why are people struggling to concentrate and get anything done?

There’s a lot of advice out there about avoiding distractions when working from home. The shrill of kids playing and barking dogs makes it difficult to get much done. But it’s not all about distractions. The fog of apathy is usually caused by anxiety. Everyone knows there’s a silent killer out there – but no-one knows how it will end.

According to psychologist Dan Grupe from the University of Wisconsin-Madison: “Uncertainty diminishes how efficiently and effectively we can prepare for the future.” Uncertainty fuels anxiety.

He goes on to say, “Unpredictable threat cues produce anxious risk assessment behaviour that is likely to persist until such uncertainty is resolved”.

Mary, a legal clerk from Brisbane, fits Dr Grupe’s explanation: “I just feel so unfulfilled at the end of the day, always doing less than I had planned. I keep thinking about what might happen.”

Some people are more affected by anxiety than others:

“It’s not just my work – I’m finding it hard to finish watching a movie! Never mind my plans to practice guitar. I’m actually falling behind” says Michael, a marketing assistant from Melbourne.

Anxiety doesn’t always induce apathy. In fact, a moderate amount of anxiety is good for performance. But it’s a ‘U’ shaped curve. Anxiety boosts our alertness up to a point before it begins to erode performance.

The problem starts when anxiety is too high or sustained over long periods. The result is restlessness, irritability, and procrastination. Eventually it leads to poor coping strategies, and messes with people’s ability to control their emotions. Animal researchers have observed strange behaviours when animals suffer sustained anxiety, including bite tendencies and compulsive licking. If you corner a stressed animal, they snap.

Strategies to Get Back Your Concentration

The dominant theory for why anxiety ruins our concentration suggests that anxiety uses up thought capacity by hogging brain resources. Our minds tend to wander to the same thoughts over and over, making it difficult to concentrate.

We can’t remove our uncertainty, but we can try to control our thoughts.

Think comparative thoughts.

People have a natural tendency to focus on the bad, and overestimate how likely a bad thing will happen to them. Thinking positive thoughts helps reduce anxiety, but it’s not easy when you’re constantly reminded of COVID-19 on the news.

One strategy to deal with our tendency to focus on the bad is to put things in perspective. Some people find that watching prison or war documentaries helps blunt the sharpness of their own predicaments. Others make a list of everything that’s good in their lives and compare it with the bad.

According to John Hopkins University data, the recorded mortality rate of COVID-19 in some countries could be over 10%. But remember that on average 90% of people who catch coronavirus survive, which doesn’t sound as bad as the Spanish flu which had a mortality rate of 50%. Making a habit of comparing your thoughts to more extreme circumstances helps you to keep things in perspective.

Staying social.

Humans are social animals, and it seems we’ve been forced into isolation. But we’re not completely blocked from being social. We can converse with others online, or even in pairs when exercising. One strategy that clinical psychologists use to help anxiety sufferers is getting them to express their ideals, values, convictions, identifications, and meanings. Expressing your feelings to others reduces the sting of those thoughts that are troubling you the most.

Use your social time to share your feelings and concerns, and you’ll soon find it easier to put those troubling thoughts aside.

Tackling the easy tasks first.

One of the unusual things about anxiety is that although it can impair your ability to concentrate, it can also improve the performance of habitual tasks that don’t require much thinking.

Divide your day into easy tasks and hard tasks. Get the easy tasks done first, or if you find yourself struggling on the hard tasks switch to the easy tasks. Feeling like you’re getting stuff done gives you a sense of purpose – and feeling a sense of purpose makes you feel more in control, reducing anxiety.

Live Healthy.

It’s a cliché: a healthy body makes a healthy mind. But it also reduces anxiety. There’s a tendency for people in lockdown to drink more alcohol, stay up later, and forgo exercise. But each of these contributes to anxiety, worsening your ability to concentrate. Try to set a healthy routine, and push yourself to get outside each day.

We are our own enemy

Silent threats attack by proxy. Catching COVID-19 will most likely put you off your work for a while. But so will merely thinking about catching it.

In ancient times the purpose of anxiety was to help us deal with predators. Anxiety energised us to fight or run away. But problems like COVID-19 are not something we can easily run away from. A small percentage of the world will unfortunately catch the virus. But many more will suffer from their thoughts.

Economic Suspension: What It Is and Why We Urgently Need It

It was only a month ago when Scott Morrison boasted about his plans to watch his beloved Sharks team play in the NRL. Since then, the country has been whammied with an unprecedented social lockdown. The result has been an economic catastrophe, with scenes of the great depression in colour as thousands joined queues outside Centrelink offices across the country.

In response to the crisis, Treasurer Josh Frydenberg advocated ‘cryogenic suspension’ as the solution, suggesting drastic and unprecedented planning was underway. The term cryogenic suspension was quickly replaced with ‘hibernation’, maybe because it sounded more friendly and less panicked. But perhaps more likely because it became clear that the government didn’t have the power to completely freeze everything.

What the government actually did was inject liquidity into the market, offering tax incentives, one-off payments, and subsidizing wages for jobs that were rapidly disappearing. These broad-based economic stimuli are like a turbo-version of the usual fiscal measures taken by governments during deep recessions. They’re designed to get consumers shopping again, thereby getting more money to businesses, and therefore more jobs to pick the economy up again.

But here’s the problem: This isn’t a normal recession. Normal recessions are caused by consumers losing confidence: Consumers spend less, buy cheaper options, and defer purchases to the last minute because they’re worried about the future. This time around consumers didn’t stop buying because they were doubtful about their future, they stopped buying because they were forced to stop.

Broad based stimulus packages to entice consumers to start shopping again won’t be as affective in today’s situation, because it’s not that consumers don’t want to go shopping, it’s that they can’t go shopping. Recent data from trend analysists Glimpse is consistent with the types of things you’d expect people to buy in a lockdown – home fitness equipment, bread makers, and external monitors for their laptops. That’s about the extent of it – things like holidays, cars, and even buying new outfits are either impossible or suddenly unnecessary, even if consumers had the money for it.

The current situation is not an economic slowdown – it’s a cultural and economic catastrophe that requires disaster relief measures that have never been tried before. The government is suffering a double whammy – on the one hand they need to salvage as much of the economy as possible, and on the other they have an expensive and resource intensive health issue to deal with. It’s starting to look increasingly uncertain they can adequately deal with both problems at the same time, especially if this drags on.

The bailouts we were given might look like they benefit consumers, but the reality is they are designed to prop up businesses, with the hope that when the health crisis is resolved the economy can be revved up again. But it’s a weak solution – citizens are losing their jobs en masse, fearful about keeping their homes, and dipping into their superannuation funds to pay bills they can no longer afford. The government can’t rely on consumer spending to soften the blow. Giving handouts to businesses so they don’t fire anyone is almost pointless if there are no customers for them to serve.

Josh Frydenberg actually had it right the first time – the correct solution is to completely freeze everything, or as he called it: cryogenic suspension. For literal preciseness, I call it complete economic suspension.

A complete economic suspension would mean immediately freezing all rents, loans, taxes, mortgages, and supplier invoices for a fixed period, likely several months. During this time, businesses and individuals do not need to pay any bills, and no interest is charged. Essentially the government freezes all economic activity, except for those activities necessary for survival. The government subsidizes basic needs including food and medical expenses, like they are doing now. But nothing else.

At the end of the hibernation, on a set date after the health crisis is contained, the economy is turned on. People go back to their jobs and start paying their bills again.

With a complete economic suspension, the government does not need to entice consumers to start shopping again using traditional stimulus measures. Critically, the freeze gives those who have lost their jobs and those businesses under threat valuable time needed to reorganise, reskill, and pivot. The world not only needs help to survive, it also needs time to adjust.

The alternative to not suspending the economy is grim. Likely the government will be forced to implement further fiscal stimulus packages, raising more debt and widening the poverty gap. Jobless rates will steadily rise as the inevitability of business closures accelerates over time.

It will be some time before Scott Morrison can ever boast again about his beloved Sharks. The real problem is not when things will get better, but how long it will take.

The former Prime Minister Bob Hawke, following Australia’s victory in the 1983 America’s Cup, famously said: “Any boss who sacks anyone for not turning up today is a bum.” The cheerfulness of his threat is unfortunately prophetic to what is desperately needed now for us to get through this. The government needs to suspend the economy now, before it’s too late.

Want to Get to know Someone Better? Our New Research Suggests Exercising Together Speeds up Bonding

There are times when we want to get to know someone quickly – perhaps on a date or an important  business meeting with a client. The problem is people are cautious and distrustful of people who ‘come on too strong’ or disclose too much about themselves too early in a relationship.

The key to developing strong relationships with others is reciprocal disclosure – in other words disclosing personal things about yourself. However, for the bonding process to work it requires reciprocation. If one person is disclosing personal information but the other isn’t, it may lead to regret, embarrassment, and even rejection from the other. The key to getting emotionally closer to someone else is mutual trading of more and more personal information over time, until eventually you know them well enough to share highly personal information, and even secrets.

Over the past three years we’ve been studying why people say things they later regret. In several experiments we found that people disclose more personal information about themselves directly after jogging on the spot for 60 seconds. The implications of these experiments suggest that reciprocal personal disclosures are more likely when both parties are physically exercising together.

The psychology behind how this works

From innocuous faux pas to more serious disclosures of secretive information, in each experiment we found that arousal explains tendencies to disclose personal information about themselves. So, what’s arousal, and why does it cause people to disclose personal things about themselves? Essentially arousal is the degree to which an individual is awake and alert. It is characterised by things like increased heart rate, increase blood pressure, and the secretion of endorphin chemicals in the brain.

Arousal also uses up so-called ‘cognitive resources’, — basically brain power. Because there are less conscious cognitive resources available for controlling what comes out of our mouths, our minds default to more automatic, and seemingly less considered, responses. Normally it takes some effort to conceal personal information about ourselves – we are careful and somewhat guarded about what we say. When we lose conscious control over what we say, it becomes more likely that we’ll disclose information that we would otherwise keep to ourselves.

The Implications

If I were going on a date, and I wanted to get to know someone, I would do a physical activity such as bike riding or ice skating. Same with a business meeting – golf would be preferred over lunch, if you can swing it that way. Of course there are other ways to loosen the tongue, such as drinking alcohol together – but exercising is so much healthier, and I think you’ll find your relationship grows in better ways with the exercise.

The full research is published in the Journal of Experimental Social Psychology, and can be found here.

Fidget Spinners – Why they’ve gone viral

“Daaad. Can eye have a fidget spinner? Please?”

Said my kids, and an estimated 2 million other kids last week.

This is something I haven’t seen in a long time. Sure, there have been several fads over the past couple of decades, but not like this. The biggest selling toy of all time–the Rubik’s Cube–sold approximately 350 million units. And now this… wow. This might be coming close.

So. Why have these things gone viral. Can we explain it?

To understand why fidget spinners have gone viral, we need to start with the basics: why things go viral. Most research in this area has looked at emotions. Simplistically, content that activates strong emotions gets shared, and the sharing causes it to go viral. More precisely, emotions activate physiological arousal (stop sniggering quagmire, psychologists use the word arousal differently), which in turn stimulates the amygdala (part of the brain), which controls social behaviour (gets people sharing).

Ah-ha! So fidget spinners activate emotions right? And that causes them to go viral right?

Kind of. Lets dig a little deeper.

Here’s the thing – SOME emotions activate arousal, and some don’t. It’s usually the strong ones that influence sharing (terror and intense excitement are two that get people blabbing pretty quick). Fidget spinners activate intrigue (try one – you’ll see). The question is: is intrigue an emotion? And if it is, –is it strong enough to activate this Amygdala thing, and kick something off to go viral?

Amazement is the gold standard when it comes to making something go viral, but it’s terribly difficult to activate.

To answer the first question: No, intrigue is not an emotion, it’s a feeling. A feeling is more complex, and may involve several emotions interacting. This is why not all things that are intriguing go viral — put simplistically, there are different types (complexities) of intrigue -some work, some don’t.

Intrigue starts with uncertainty, which activates curiosity, which creates apprehension (mild fear), which leads to amazement. It’s actually the amazement that causes the viral effect, not the uncertainty, and not the curiosity. Amazement is the gold standard when it comes to making something go viral, but it’s terribly difficult to activate. So how does the fidget spinner do it?

Usually intrigue is too mellow to activate sharing. But when the process of uncertainty and curiosity is prolonged, it results in apprehension and awe, that leads to amazement. That’s the key. The problem is prolonging the curiosity phase long enough so that apprehension and awe can develop (amazement) – that’s the tricky part.

To understand how to prolong curiosity to activate amazement (and thereby viral sharing), we have to revisit old school research on negative emotions.

For a long time, psychologists have understood that people tend to feel better about a negative experience after they share the story with others (usually people share negative emotions with people  close to them). It’s an old clinical psychologist’s trick – get the patient to re-live the negative experience to get them on the road to recovery. Why? Because the overwhelming anxiety experienced after a negative episode is caused by the negative experience running through the person’s head in a constant cycle. They can’t stop thinking about it, it’s emotionally exhausting, and the replay of emotions causes ongoing distress. The brain replays the experience over and over because of uncertainty.

Human’s are biologically programmed to make sense of their surroundings (actually a survival mechanism). Like when you’re lying in bed at night and you hear a noise–probably you’re not gonna get much sleep until you get up and check it. Your brain needs to make sense of it and close the story. Traumatic experiences replaying in someone’s head is the brain working in overdrive to make sense of what happened — to close the story.

Fidget spinners prolong the curiosity in young minds by keeping the story open. Kids are particularly susceptible to this process, since they haven’t yet developed the skills to resolve the uncertainty that leaves the intrigue hanging. Their minds can’t make sense of what is happening in a fast way, and as a result uncertainty and curiosity lead to apprehension and awe, and ultimately amazement. The amazement activates sufficient arousal to activate the Amygdala. Endorphins and dopamine are released (another survival response funnily enough), which leads to social sharing between young minds.

 

Happy spinning.

Fidget spinner

Fidget spinner

How Social Currency drives Content Engagement

Think about how many jokes you’ve heard in your lifetime. Dozens? Hundreds? Now think about how many jokes you can remember. If you’re like most people, it’s a struggle to remember more than a few. Jokes are basically short messages that have gone viral, but they aren’t really that memorable. So if jokes are not that easy to remember, how do jokes survive and not just disappear?

It has to do with the speed of transfer. Jokes don’t just survive because they’re written down somewhere—most jokes have been around since long before the internet, and not everyone reads joke books. Jokes are spread by word-of-mouth—one person telling another. If people stop telling each other jokes, the joke will eventually disappear, unless of course someone reads it somewhere and begins telling the joke again.

It’s the word of mouth sharing of a joke that keeps it alive. The motive that causes word-of-mouth sharing is related to the emotion that the joke creates. Jokes are designed to be humorous, which explains why they’re shared. Someone will tell someone else a joke, to make them laugh. But why would an individual feel compelled to make someone else laugh, by telling them a joke? The reason is because all people have a desire to build something we call social currency.

Social currency is intrinsic value we use to help us interact with others, and build social status. When people respect or admire us, we have social currency. When we have social currency we have a good reputation, people respect us, and we feel sense of belonging. For example, one reason why men keep up with popular sports, even though they might not play the sport themselves, is so they can use sports knowledge as a conversation piece with other men. This earns them social currency by helping them build bonds based on shared interests. Building social currency is something all people desire to do, and therefore efforts to build and retain social currency control much of our behavior.

Social currency therefore acts as a powerful motivator for people to share information with others. People share a humorous image, a joke, an idea, a movie, or any other information if they feel that other people will appreciate their efforts to share something that has value. People appreciate others who share useful information, which results in the sharer earning social currency.

The order you read reviews affects your decision accuracy

I published in the Journal of Economic Psychology research showing how we might make more accurate decisions when purchasing online. Specifically, when we read positive reviews before negative reviews, our chances of making a regretful purchase are much higher than if we read negative reviews before positive reviews. Those people who read negative reviews first, before reading positive reviews, have far less likelihood of regret, and higher levels of satisfaction with the purchase down the road.

Let’s face it –we all read customer reviews online to help us make a decision on whether or not to buy. We assume customer reviews are impartial –obviously the vendor selling the product is not going to tell us their deficiencies –we have to learn what we might be in for from those who have already bought.

Our aim is to make an accurate decision about a purchase, because online what we see is what we get. But this method of evaluation is not perfect –we’ve all suffered regret after buying something online –even if we did our best to make an accurate decision by reading other people’s reviews. Many people assume it wasn’t their fault –there was no way they could have known without physically inspecting the product beforehand. There might be some truth to that, especially for ‘experience’ type goods (second hand cars, business suits), but there is another factor at play here that is impacting the accuracy of our purchase decisions online –our sub-consciousness.

When we are evaluating a potential purchase, our attitude shifts in real time dependent on the information we’re exposed to. For example, when reading negative reviews our attitudes move towards negative, and when we read positive reviews our attitude moves towards positive. However, we also know that our sub-consciousness plays a part in influencing our judgment. Some psychologists refer to this as having ‘dual attitudes’. Our subconscious attitude can influence our conscious attitude, without us being aware of it.

What my research has found is that a subconscious positive attitude can have a stronger effect on our conscious attitude, than can a subconscious negative attitude. For this reason, positive reviews tend to continue to influence our current judgments longer than negative reviews. And so, when we read positive reviews, our sub consciousness remains positive and continues to influence our judgments when we read negative reviews. The result is that when we read negative reviews they don’t appear to be as negative as they actually are. This in turn leads to a less accurate decision, and more chance of making a regretful purchase.

The solution to making a more accurate decision to purchase when shopping online: read negative reviews before you read positive reviews.