How We Shortlist Our Buying Decisions Through Search

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Ready, Set, Research

Let’s do a little mental exercise. Let’s imagine you have a new baby on the way and you need to buy a car seat. You’re a first-time parent, so this is new territory for you. What will you do?

Well, obviously, a car seat is a purchase that is very important to you. Being a protective, conscientious parent-to-be, hardwired through millions of years of evolutionary development to protect your young, this is not a decision you make lightly. You’re going to spend some significant time researching your purchase.

In addition, you have never bought a car seat before. You probably have no idea what brands are available or which ones are recommended. So you, like almost everyone else in the world, will turn to a search engine. And in doing so, you will come to a purchase decision in a way that is radically different from any previous path you have ever taken. Today, I’d like to explore the nature of this difference, and why it is so fundamentally important to search marketers.

So Many Seats, So Little Time…

Keeping to the car seat example, which car seat is the right one for you? There are dozens of car seats on the market. While we would like to be able to say that we carefully considered each one and optimized our decision, we just don’t have that much time to invest. This is the concept of bounded rationality, pioneered by cognitive psychologist Herbert Simon.

Before Simon, we commonly believed that humans came to optimal decisions in a rational manner, based on the information provided. Under this model, individuals take all the data that is accessible, weigh pros and cons, and use their cortexes to come to the best possible outcome.

…And So We Satisfice

Simon, in effect, said that this model placed too high a cognitive load on us. In many cases, there is simply too much information available, so we have to make choices based more on heuristics, cutting the available information down to a more manageable level. He called this “satisficing,” a blend of “satisfy” and “suffice.”

Today, we have never had more information available. At the click of a mouse, we can access huge amounts of information. There is simply no way to process it all and come to rational decisions. And this brings us to the concept of bounded rationality. In essence, we are more rational about some decisions than others. It depends on a number of factors, including risk, emotional enjoyment, and brand self identification.

Think of it as a chart with three axes. One axis is risk. We put more rational thought into decisions that expose us to greater risk. In consumer decisions, risk usually equates with cost, but in the case of the car seat, risk is represented by your child’s safety. We’re going to put a lot more thought into the purchase of a car or, in this case, a car seat, than that of a candy bar.

Another axis is emotional enjoyment. This is a risk/reward mechanism to most decisions, and if the reward is one that is particularly appealing to us, we tend to be swayed more by emotion than rational decision. The final factor, and one that is usually buried somewhere in our subconscious, is how we use brands or products to define who we are. Now, usually no one will admit to being defined by a brand, but we all are, to some extent. This touches on the cult-like devotees that some brands develop (Harley-Davidson, Rolex, BMW, Apple, and Nike all come to mind).

With our car seat purchase, because the risk is so high, kicking into gear our parental protective instincts and all that comes along with them, this will be classified as a highly considered purchase. Bounded rationality says that there are boundaries to the amount of rational thought that we can and we want to put into decisions.

When We Turn to Search

The use of search tends to plot somewhere along this three-dimensional chart. If risk is high and brand identification is low (the probable scenario with our car seat), there is a high likelihood that search will be used extensively. If risk is low and brand identification is high (e.g., buying a soft drink), there is almost no likelihood that search will be used. In this case, the two factors usually work inversely to each other. Emotional enjoyment is not as directly tied to search activity. We will do as much (or as little) searching for a purchase that will give us great enjoyment as for one that won’t.

It is interesting to watch how these factors impact search intent and behavior. Satisficing leads to a classic sort of search behavior – what I call I category search – where we use fairly generic, non-branded queries that broadly define the category we’re looking at. In this case, we would launch a query like “baby car seats” or “safest car seats.”

In classic “satisficing” behavior, you want to cut your research workload by setting basic eligibility criteria. In the case of the car seat, the sole criterion is probably how safe the car seat is, as determined by a credible third party like Consumer Reports. We will satisfice by taking the four or five top-rated seats and then spend more time rationally comparing these choices. We arbitrarily create a “cut off” point by using one or two criteria and reduce our consideration set from dozens of car seats down to just a few.

Filling the Memory Slots

Why did we do this? It comes down to the cognitive channel capacity of our working memory. Working memory is where we store temporary information we need to keep handy for the task at hand. Neurologically, the structure of this type of memory is different from our long-term memory. Think of working memory as a whiteboard and long-term memory as writing something in a personal journal.

Working memory is, by its nature, meant to be temporary; therefore, there are limits on it. George Miller found that the channel capacity of our working memory is roughly seven pieces of information, give or take a couple. The capacity varies depending on the type of information, but generally speaking, we have a very limited number of slots available.

These natural capacity limits imposed by our working memory play out over and over in hundreds of daily activities. We tend to prefer to make our choices from three or four alternatives. More than that and we find it hard to make a choice. By the way, this is true for our interactions with search results as well. The average search page offers you 15 – 20 choices. That’s far too many to consider all at once. It’s over our channel capacity. So we satisfice on the search results page as well. We start in the upper-left corner, and we start making our choices on the page, three or four listings at a time. We scan the first four listings, deciding if any of them are relevant. If not, we continue this pattern down the page.

Satisficing on the SERP

Why is satisficing important to the search marketer? Because we see search used constantly as an extension of our satisficing behavior. Remember, the threshold we set to make the satisficed short list is not that rigorous. It is usually based on a couple of easily identified criteria, which are often defined by the nature of our query. We satisfice through search – for brands that find themselves the subject of frequent search activity, this is vital to understand. What we see on the search results page alone will often give us enough information to start creating our shortlisted consideration set. Being on the page, especially in the top few listings, is critical.

Recently, my company Enquiro conducted a study with Google (http://www.enquiroresearch.com/brand-lift-of-search.aspx) to try to understand this effect more fully. We used fuel-efficient cars as our subject and Honda as our test brand. We showed results from Honda in various locations on the search results page, to see how this impacted the formation of a consideration set. When the test brand appeared in both key locations (top organic and top sponsored) we saw a 2.2 times lift in brand recall over the brand showing in the side sponsored location alone.

Along with this, we saw a 16% lift in brand association (i.e., what brands come to mind when you think of fuel-efficient cars) when the test brand was in both locations. Just as importantly, we saw a similar decrease in brand association for brands not appearing in the results, creating a 42% gap between our test brand and their competitors. This means that Honda not only improved their odds significantly for making the satisficed short list by appearing in the search results in key positions, they actually knocked competitors off the list.

Remember, satisficing is done quickly and with minimal rationalization. We have developed a trust in search engines, and if they choose to bring brands to the top in a generic query (i.e., car seats, fuel-efficient vehicles), that is often enough for us to put them on the short list. Search is quickly becoming our satisficing filter for almost any purchase under consideration. It helps us to short list the long tail of consumer choices down to the few that we want to spend more time researching.

Making the short list in an individual’s quest for a product or service is as vital to search as is making the interview short list in a highly competitive job search for your dream job. Finding ways to satisfice searchers so your products wind up on an individual’s short list is not easy, but the rewards make the effort well worth it.

About the Author

Gord Hotchkiss is the Senior Vice President of Mediative (which acquired Enquiro, the company he co-founded) and past director and chairman of SEMPO. He is a well-known speaker and a pioneer in understanding search user behavior. Gord is also a regular columnist with MediaPost and Search Engine Land, presents at all the regular industry shows, and is a popular keynote speaker. He is also the author of The BuyerSphere Project: How Business Buys From Business In A Digital Marketplace.

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