Posted on: Monday 19th of September 2011
So far in this series of blogs starting here, I’ve talked about ‘better decisions’ without actually defining what a better decision looks like.
When talking to people about it, most instantly assume I mean a more rational decision i.e. better price, better quality, better functionality, etc. The next step of the argument goes like this: “Ah! But people don’t really make decisions like that!” For example, “people say they made this decision for this or that rational reason, but actually they were using gut feelings”.
So the first thing about a better decision is that it may, or may not be, more ‘rational’ depending on what the decision-maker wants to achieve. Perhaps the individual wants to invest/waste money being frivolous, or asserting status, or boosting their confidence, or feeling safe and secure. Like beauty, ‘better’ is in the eye of the beholder. A better decision helps the individual achieve a desired outcome, whatever that desire is – even if we might not approve of it.
Roadblock Number 1 This is important because, at some level or other, decision-support services involve a degree of agency: they are acting on behalf of, or on the instructions of the individual. And that rides slap bang into today’s prevailing marketing persuasion paradigm – that the purpose of marketing activities is to influence and change consumer attitudes and behaviours in favour of the marketer. For most traditional businesses that makes helping individuals make better decisions an immediate No-No. “Why on earth would we want to do that, if all it does is help potential customers choose one of our rivals?”
The resistance doesn’t stop there. Those who do entertain the notion, quickly run into three further roadblocks.
Roadblock Number 2 The next objection goes thus: It’s all very well talking glibly about people making decisions, but often they don’t know what they want. They need marketing – persuasion – to tell them. For example, writing in the Financial Times a few years back, Maurice Saatchi opined that “People do not know what they want until a brilliant person shows them” (the brilliant people being advertising agencies, of course).
Roadblock Number 3 Even if people do know what they want, it’s difficult and complex for them to express these priorities and preferences, in a mass way, and in a way that suppliers can respond to. This is about the mechanisms and processes of communication.
Roadblock Number 4 Finally, who is going to pay for all this? If the decision-support service is acting on behalf of the individual, then individuals need to pay them for their services. But the chances of their doing that, aside from a few special occasions, are very small. The only way services like this are going to be paid for is via advertising, which takes us back to Roadblock Number 1.
For these reasons, most people dismiss the notion of a market, or industry, of decision-support services ever taking off. If the service doesn’t fall at Roadblock 1, it will fall at Roadblock 2, or 3, or 4.
At first glance, this seems like a compelling list of objections. They’re not. Each one is a straw man, as I’ll show in later blogs. Right now, let’s just ask the question, ‘what would happen if a series of innovations in technology and business models cleared all four roadblocks at the same time?’
Then they would open up a highway to rich new sources of value – like opening up a trade route to a new continent. As I said, I’ll return to the details later, but for now I just want to make the central point. This is precisely what’s happening right now with the decision making market. The once-insuperable obstacles to the flowering of this market are evaporating and a new continent of opportunities is beginning – just beginning – to be explored.