More ‘System 2’ Thinking Is Needed

In this month’s marketing Sports we examine what Nobel Prize winner Dr. Daniel Kahneman called system 1 and system 2 thinking.

I had lunch recently with a longtime friend and colleague who I’ve often considered to be one of the smartest people I know. Having been on a whirlwind of qualitative research work recently, with a particular emphasis on how consumers make purchase decisions in the sporting goods and event sectors of our business, I was captivated by his strong endorsement of the book Thinking Fast and Slow by Nobel Prize-winner Dr. Daniel Kahneman, a behavioral economist. Of course, I picked up the book and have been plowing through it on parts of many cross-country flights over the past few weeks. It’s a fascinating read, one that hones in on how people make decisions and come to conclusions …a topic germane to researchers like myself who are constantly striving to get into the mindset of consumers.

Simply stated, Kahneman leverages decades of research that suggest most decisions can be classified as either “System 1,” which references the more quick, visceral, intuition driven type of decisions that Malcolm Gladwell paid homage to in Blink, and “System 2” decisions, which are more considered and cerebral. There was a great rebuttal book to Gladwell’s book, called Think, which as a “System 2” guy, I found both amusing and more thoughtful (pun intended).

So, which mode do you operate in? Kahneman provides a quick and amusing test, where he challenges readers to consider a simple math problem: A boy buys a baseball and bat for $1.10. The bat costs $1 more than the ball. How much is the bat? The more instinctive, System 1 thinker, quickly and incorrectly answers 10 cents. The right answer is five cents ($1.05 + $0.05=$1.10 and $1.05 is $1 more than five cents), which at the risk of sounding more like a math geek than I often do, I figured out across the lunch table by doing a quick quadratic equation in my head. I guess I’m glad that I stayed awake in seventh-grade algebra class.

But Kahneman’s point isn’t solely that one way of thinking is always right and the other is wrong. Rather, he and I would be apt to point out that oftentimes, it’s more revealing to understand better how people arrive at certain decisions, conclusions and pre-conceptions rather than what those conclusions are. Taking that type of approach can be quite instructive in building a better marketing or sales strategy and in making better strategic decisions. It makes sense in the former, because that type of consumer understanding can inform your marketing communications by revealing how much of a decision to attend a game or buy a product is driven by emotion rather than considered introspection. It may show that initial formation of a brand consideration set is driven by System 1 thinking, but ultimate purchase decisions follow a more deliberate System 2 approach.

In the sports business, such consideration is also relevant because it forces us as marketers to step back and ask ourselves whether we are reaching conclusions because they are convenient, easy to make, and follow popular convention, or if there has been true consideration of who the customer really is. I wrote an earlier posting here that reminded readers that we in the sports business aren’t always reflective of the customer we are targeting.

For a practical example, I only need to cite the overwhelming disappointment that sporting goods R & D people often express, when we are testing a new product, and even heavy users and avid participants in the sport totally mangle focus group discussions about the technical nuances of the latest equipment. Another recollection was how some former colleagues rushed to introduce QR codes and mobile applications which were all the rage among those of us in the marketing space, but still a far cry from what the typical 40+-year-old golfer was embracing five years ago.

Response/activation rates were predictably dismal once you considered who the customer really was and how his or her behaviors were aligned with the activation. Just last week, I was moderating a focus group that was exposing a number of potential concepts to consumers, that we intuitively suspected might be seen as pushing the envelope too far, yet our respondents were actually quite captivated.

The above examples demonstrate how too much “System 1” thinking can lead to poor consumer understanding and flawed sports marketing activation. I’m not trying to blindly and universally suggest that every decision needs to be exhaustively researched (though from a selfish standpoint, that would be great for business). Rather, I ask all of you to at least step back and challenge your pre-convictions. You might be surprised to learn what you think!