Make Smarter Marketing Decisions: Reality Check Your Intuition with Data
What can brain scientists and economists offer that could help you as a marketer to make better, more profitable decisions?
Once you cut through the intellectual jargon and get to the heart of things, the answer is: “Quite a bit, actually.” We summarize a whole lot of research into some bite-size chunks for you here.
Your Two Brains – Spot Judgments and Slow-Cooked Decisions
In his award-winning bestseller, “Thinking, Fast & Slow,”?Nobel prize winner Daniel Kahneman tells us basically we have two brains (or more accurately, two “systems” in our brain): one that excels at making super-fast, spot judgements.?System 1, as he calls it, takes in copious amounts of data in a split second and helps us decide what we should do (think: “Hey, run from that lion crouching behind that bush!”). Meanwhile,?System 2?involves structured, deliberate, rational thinking. The two systems affect each other, as well.
Both systems serve a powerful purpose in our daily lives, and we need them both. Both are also flawed.
System 1 (intuitive, spot-judgements) allows us to perform what Malcolm Gladwell in his book “Blink“?calls “thin-slicing.” This is our ability to take a small slice of information and draw big, sometimes lightening-fast conclusions. But System 1 is subject to many well-documented cognitive biases. (Meaning: it is susceptible to error based upon how we perceive the world).
System 2 (deliberate, slow-cooked decisions) is also valuable, but imperfect. As humans, we are limited by what another Nobel prize-winning economist, Herbert Simon, calls bounded rationality. What Simon meant was that we are really not as rational as we like to believe, even when engaged in slow, rational, System 2 decision-making. Simon tells us that our decision-making quality is limited by the complexity of the problem, our own cognitive limitations, and the time needed to solve a problem. In other words, even when we engage in System 2 thinking, we often fail to find the optimal solution.
How Data Science Can Help
As marketers, we make hundreds of micro-decisions and several major decisions each week. We often rely on our intuition, which is needed, especially for our System 1-driven micro-decisions. This might include deciding which creative banner design to select, whether the sales department will like your new collateral design, or whether to go with Avenir or Bembo fonts for your newsletter. But when it comes to major decisions, such as deciding where to place our next physical storefront, whether our best customer is more of a Facebook or a Twitter person, or whether there is sufficient ROI in display ads – good marketers engage System 2’s help.
Trouble is, most marketers engage in this slow-cooked, System 2-style decision-making while still unarmed with the right data. Or just as often, they have the right data in front of them but they lack the know-how for data-driven decision-making, including:
1. integrating multiple data sources
2. selecting the right data to analyze
3. cleaning and preparing the data
4. transforming the data so it can be analyzed, through smoothing, aggregation, binning
5. mining and analyzing the data – finding meaningful patterns
6. turning the results into actionable recommendations
Even the most cognitively-unbiased, careful, masterful System 2 thinker who lacks these data skills will fail to reach an optimal solution to major decisions.
A Marketer’s Moment of Bliss
So how can we define that moment of bliss (that zen enlightenment, that satori) for a savvy marketer? It is that moment when?all?systems point toward a “go” in a certain direction, meaning:
System 1?– your intuition – tells you that the decision just feels right; there are no red flags
System 2?- your decision-making process – has been deliberate, sound – with the appropriate amount of time, resources, people, and tools applied in order to come to the right decision
Data-Driven Recommendations –?the data and accompanying analysis point in the same direction
This blissful moment, when achieved, feels at once solid and earthy – because it is so well-rooted in analysis – but at the same time empowering, energizing, and freeing. In this moment, you are now free of any second guessing about your decision. Sure, chance and circumstances COULD still throw you off course, but you will always have the peace of mind knowing that all systems – and the data – were in agreement and that you took effective action accordingly.
Now that’s a moment every marketer should experience on a regular basis.