Innovation Protocol

Intelligent Business Demands

Innovation Protocol

Intelligent Business Demands


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    Humans Aren’t Rational

    Humans Aren’t Rational Innovation Protocol Blog

    People will forget what you said … what you did, but people will never forget how you made them feel. — Maya Angelou

    There is a concept in economic and social studies called the rational actor theory. It suggests that, when confronted with a decision, people assess their options and then make the choice that is in their best self-interest. In economics, that self-interest is usually defined in terms of financial value or gain.

    The rational actor theory allows us to build models to study human behavior. The only problem with the theory is that we humans are not rational actors. We place higher value on things that are hard to quantify – feeling safe, feeling inspired, feeling sexy.

    It’s true that we do make some decisions based on rational criteria, in limited circumstances. Those decisions tend to be rote, and they tend to take place in categories where providers have not invested much in helping consumers understand how they should feel about their choices.

    The best thing your brand can do is give people a reason to believe. This requires you to abandon your marketing of highly imitable features and benefits – like product formulation, or delivery speed, or price promotions – and instead focus your communications on what your customer is announcing to the world when they choose you. Indeed, the only thing people pay a true premium for is how it makes them feel when they buy or use your product.

    After all, we are not rational actors.

    We are rationalizing actors.