Decoded. The Science behind Why We Buy by Phil Barden

“Decoded”, by Phil Barden explains how a person makes buying decisions. The author argues that there are two systems of perception: hidden and explicit. He tells us how each affects a person’s perception and action.

Here are some excerpts from this book.

About Automatism

When a subject’s favorite brand appeared, the choice was made instantly, while the parts of the brain responsible for critical analysis and logical judgment were inhibited

Brands influence the purchasing decision: they act as a background for the product and thus influence the impression of the product

Two systems are involved in every decision: the hidden system acts as the autopilot, and the explicit system acts as the pilot. The joint operation of the two systems characterizes decision-making processes

Implicit associative learning helps us quickly and automatically make sense of signals we receive from the outside… Our choices and actions are determined not only by external signals, but also by our inner state

About Price and Value

The brain interprets price as an unpleasant feeling, hence our concept of price perception is far from rational… In addition to money, buyers also part with another resource - time

The logic behind purchasing decisions is based on a simple equation: net worth = pleasure - suffering. The higher the net value, the more likely the purchase… For people to buy, we need to increase the perception of pleasure and decrease suffering

The value of a product and its price are always relative, so we need to be able to compare to make decisions

Principle of Tangibility

Lego created this system: if you bring a package of constructor parts to a special screen in the store, an image of the assembled figure appears on top of the box… According to research, the more often a person touches the product, the more likely they are to buy it, so it is beneficial for the company to have customers carry packages to the screen. By showing people the finished construct, marketers made it more tangible, more valuable and, accordingly, increased sales

Mars realized that people don’t buy chocolate to eat something healthy, they buy it for the fun of it

About Perception and Action

There is a direct link between perception and action: perception can directly influence sales… Perception is an active process. The brain actively constructs what we perceive

The specifics of perception are as follows: The sooner we get pleasure and the more distant we are from the present moment, the more comfortable we are

When a participant recognized a familiar symbol, the tomograph noted activity in the areas of the brain where odor recognition occurs, even though there was no exposure to any odors in the present moment. Memories of them emerged in memory based on pre-constructed associative connections

About Attention and Power of Brand

To attract attention, brand or product signals must align with the customer’s goals. People “let in” our messages if they are consistent with their goals… If something is inconsistent with our implicit or explicit goals, we won’t give in to any entreaties… we won’t perceive anything at all

Our visual system is trained to notice and bring contrasts into focus. Without this we are unable to separate the object from the background… Buyers see products and brands mostly with blurry peripheral vision, so we should use signals that are effective even in blurry form

About Moment of Decision and Behavior

Proximity to the moment of decision is key to the effectiveness of marketing signals.

Interfaces… activate implicit decision-making mechanisms that lead to changes in behavior. When designing decision-making interfaces, ask yourself the following questions: which signals are more distinguishable at the time of purchase? What signals make suffering and reward real? Which signals need to change to improve the balance between value and cost?

About Stability and Planning

People choose a firm rate, even if it’s not the best option. In terms of monetarist theory, more than half of fixed rate customers in the telecommunications market would spend less if they paid for frequency of use. So why aren’t they doing that? People don’t know how much these services will cost them in the future, so they prefer to stick with predictable rate plans. If the telecom bill is higher than expected, that difference is greatly exaggerated in the customer’s mind. The cost of the service immediately seems excessive, and people try to prevent such situations in the future by choosing fixed rate plans so they know what costs are coming their way.

About Savings

Everyone knows to save for the future. So why doesn’t everyone do it? Let’s assess what value and cost signals we get when we make retirement savings. The only clear signal is the amount of money we will have to transfer into a retirement account each month. And each time we feel the pain of parting with that money.

  • Decoded, by Phil Barden
  • Ogilvy on advertising by David Ogilvy
  • The Undercover Economist by Tim Harford
  • Objects of Desire by Adrian Forty