There’s no denying that behavioural science is a hot topic. It’s a blueprint to better understand - and more critically anticipate - human behaviour and decision making. 

As the title of Rory Sutherland's book on behavioural science suggests, when it goes well it can be business “Alchemy”. That’s why understanding it can be so beneficial and important. 

The following is an excerpt from the first chapter of our new book, Atmospheres That Sell - Using Behavioural Science To Create Branded Atmospheres in Retail & Hospitality. 

Learning something broadly unfavourable about yourself can be hard work, even if it’s true. Maybe especially if it’s true. I think that’s perhaps why the practice of behavioural science (also known as behavioural economics) has had such a slow uptake within the business world. For all that it has existed for decades now, with a track record of Noble-prize winning work, at its heart is an unfavourable truth about human nature which throws uncertainty to neatly measurable KPIs and ROIs. And accepting this, alongside its many related conclusions, has added a certain kind of friction to its use.

The unfavourable truth

Imagine a couple deciding which house to buy. Anyone who has done this before knows this is no small task - it takes a lot of ‘deep thinking’, right? A house purchase is perhaps accepted as one of THE biggest decisions you’ll ever make and, as such, I am using this here as a proxy for the single most integral moment to exercise our superior rationality and logical decision-making skills. After all, most aren’t in the market for buying a ‘good enough’ house, everyone wants to have THE BEST house. We are making a highly important decision, for the highest utility, with our very best logical decision-making powers. Aren’t we?

So, the couple has seen a good selection of houses and has narrowed it down to two. The shortlisted houses are: 

House A: A cheaper house that is a good size, not in the best location but with a great garden and loads of potential.

House B: A bigger house in a perfect location, no garden and much more expensive (and it needs a lot of work), but with a nice front door.

This is a decision my partner and I had to make a few years back. Here’s how we approached it: We debated and debated until we decided we'd go to town on an Excel spreadsheet, create a list of things that are important to us and measure each house against the criteria. Things like closeness to a good school, feeling of space, nice location… In effect, we made a weighted factor model and scored each house against the important factors. (My partner runs a research organisation where they do this kind of work often, so she’s very good at it.)

House A scored best overall. By a BIG margin. Was that it? No. After more debating, we decided that the scoring system was potentially a little biased based on the factors we measured against and too simplistic to give a good measure (we could change ‘garden’ to ‘potential for nice outside space’, for example, and change the scoring from out of 5 to out of 10). So, we did it again with a more comprehensive and ‘less biased’ scoring system.

House A won, again.

Guess which house we bought? Secretly, we both just really liked house B with all its grand features (and nice front door), and maybe we even liked the idea of it being expensive and needing work. We bought house B.

A year later we sold the house because we found it needlessly big and couldn’t overcome the lack of garden. No matter how much we tried to put a positive spin on the driveway as ‘potential for nice outside space’, it wasn’t the house for us. So much for logic-driven, utilitarian decision making.

The truth is that humans are wildly illogical beings (or at least, their decisions often appear to be illogical) that run far more on core yuk, ouch, yum drivers than the sophisticated set of decision-making tools we like to think we have, be they morals, logic or something else. This sore truth is confounded by the fact that we also have a pitiful lack of self-awareness to even know we’re making illogical or irrational decisions, with a kind of guttural subconsciousness much more akin to an untamed animal than a highly intelligent superior being. (At the time of buying the house, we were quite convinced that we’d make a good and balanced decision.) There you have it, the unfortunate truth. But let’s dig into it a little deeper.

Ever seen 'which is darker?' illusions like this one…

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So, which is darker? A or B?

Your brain is pretty sure that A is darker, right? I mean, it wouldn't be an illusion if that was true. Actually, they are the same colour and here is the proof.

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I like using this example because it efficiently teaches us some important things about ourselves. The first thing is that we don’t perceive the world perfectly. Where we think we’re seeing the world in full, detailed and accurate measures, the truth is that our perception is quite imperfect and highly susceptible to influence. It’s this critical perceptual gap that behavioural science helps us to fill as it focuses entirely on how we actually perceive and behave as opposed to how we like to think that we perceive and behave.

The second important factor that this illusion shows is that we are incredibly motivated to believe that our perceptions are accurate. Now that you know the two squares are the same colour, you should be able to correct your earlier assumptions, however, no matter how hard you look at that first image and tell yourself that they’re the same colour, your brain will simply not let you see it.

This combination of the two matters: 1. We perceive the world imperfectly, and 2. We’re good at pretending we don’t. This is the full unfavourable truth. And for all that they make the practice of marketing and business more challenging, behavioural science is here to help and bring order back to our unscrupulous decision-making brains. 

Now, if you weren’t already feeling a little sheepish about your brain and its ability to make strong rational and utilitarian decisions, take a look at what Professor of History and Philosophy of Science at The University of Melbourne, Cordelia Fine, wrote in her brilliantly illuminating book ‘A Mind of Its Own’; “… your unscrupulous brain is entirely undeserving of your confidence. It has some shifty habits that leave the truth distorted and disguised. Your brain is vainglorious. It’s emotional and immoral. It deludes you. It is pigheaded, secretive and weak-willed.”

Ouch, thanks, Cordelia.

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To find out more about the world’s first behavioural science book specific to retail and hospitality, head here.