Hyperbolic Discounting and Emotional Forecasting Heuristic Have you seen the marshmallow challenge? A child is offered one marshmallow right now, but if they wait for someone to return, they can receive two marshmallows. The child’s struggle not to eat the marshmallow now is a hyperbolic discounting and emotional forecasting heuristic. Most humans prefer instant gratification rather than the potential benefits that can come in the future. Surprisingly, most people would choose a prize of $100 now over $120 in the future. The future is uncertain – our subconscious minds think, what if the reward doesn’t materialize?
The sensitivity to receive something sooner rather than later will drop off over time. To say someone will receive this today or tomorrow is more powerful than to say that someone will receive this in 100 days or 101 days, even though the difference between the two scenarios themselves is still only one day. People are more likely to remember how they feel about something at the beginning of an experience rather than after the experience as their emotions fade.
Loss Aversion Heuristic and the Endowment Effect People are more motivated and sensitive to fear of loss than the prospect of gain. Take this idea further; humans value items more highly once they own them. When someone buys an item and doesn’t like it, they may stick with it for a certain period of time before returning it or throwing it away — to do so before this particular time would feel like a loss.
This is why ‘try before you buy’ techniques work. The perceived value of a product increases once it is in the consumer’s hands. Before implementing market research, it’s essential to know how to show customers how the product or service protects what they already have.
People find it easier and simpler to abstain from something than moderate their consumption. Conversely, humans will treat themselves when the rational brain operates in overtime. Whatever the desired outcome, make it easy for people to understand and do. Religious rules regarding a fast and a restrictive diet are examples that make the decision easier for the individual. The rules are easy to follow and tell the person what not to do. That is why impulse sales can be driven when there are no rules such as merchandising candy bars at checkout.
Brand messaging should be precise — this will make the customer’s decision clear and straightforward. When the customer seeks a solution to their problem, this will increase the likelihood they will purchase the item because they don’t have to work hard to understand how the brand can help them. A good example of this is “Snickers really satisfies” when a shopper is hungry as they are checking out at a gas station, Snickers is an appealing option. It’s a good idea to include brand message testing in the market research process to ensure the message you want to get across resonates with the audience.
