Who is defining your brand: economists vs. humans

WRITTEN BY DAN SALVA

There is a long held idea held in economics called the Rational Choice Theory. It basically states that people will make prudent and logical decisions. The idea is that people will always make decisions based on ‘maximizing utility’. That means they will make calculated decisions that always result in the best outcome.

It is a nice and tidy idea that economists developed to help explain our world. It’s perfectly rational. And that’s the problem. As the field of behavioral economics has shown us in the recent past, we are anything but rational in our decision making. Who among us doesn’t have a few nuts hanging in their family tree that disprove Rational Choice Theory on a grand scale?

While it’s easy to assign this phenomenon to those outliers, the truth is that we all display this tendency. We make decisions based on emotions. In fact, the part of our brain in charge of our emotions is also in charge of decision making! It is simply part of being human.

Who is defining your brand: economists vs. humans

I’ve written in the past about branding that describes who you are and what you do (the neophyte end of the branding spectrum). While these are the important rational basics, they don’t have the power to fully unlock the potential branding can offer when an organization acknowledges we aren’t rational decision makers.

This happens when branding expands its role to help people understand the benefit that the brand offers to their lives. This is not the rational, utility-maximizing sort of information that old-school economists theorized ruled our decision making process. Rather, it recognizes our more powerful motivations. This human-centered approach taps into our desire to be excited and inspired. 

This advanced approach to branding tends to emerge as organizations become more sophisticated. But there is nothing stopping brands at any time from shifting their efforts to this benefit-driven, human-centered approach. Those that do quickly discover what the economists have learned. We are messy, irrational decision makers. And that’s an awesome thing.

 

Dan Salva is a co-founder of Will & Grail, with more than three decades of experience in brand marketing and developing and implementing go-to-market strategies. He can be reached at dsalva@willgrail.com.