Market behavior, in its most simplistic form, is about buying and selling. As simplistic as it may appear, market behaviors are filled with complex GOAL-DIRECTED BEHAVIORS, activities and choices that ultimately drive buying and selling. Thus, the imperative for marketers today becomes getting a handle on how buyers do three related things:

How do buyers select goals? How do buyers pursue goals? How do buyers make decisions relative to goals? What the C-Suite and their teams are realizing today is the insights needed about buyers and their decisions are lying somewhere in the deep recesses of the buyer’s mind. Directly influencing decisions, whether they are high-stakes, transactional, or recurring orders. There are three revelations happening for senior leaders in marketing and sales, which are:

Big Data is exactly that. Lots of data but it can only provide a sliver of insights. Profiling information lacks in revealing behaviors and motivations Customer journey mapping can help you understand process but lacks in insights on what drives the path to purchase Limited Vision

On two separate HELPFUL conversation occasions in recent weeks, I had lengthy discussions with senior marketing leaders who were struggling with how to uncover deeper layers of insights. Here is how the first conversation depicted this struggle:

“I think where we are struggling is that even after we did what we think you are supposed to do, it just didn’t feel like we gained anything new. For example, we used a template and gathered data on things like initiatives and criteria but there wasn’t anything very revealing about that.”

Vice President, Marketing

The struggle depicted here is often times there is confusion on what exactly represents deep buyer insights. There is a resorting to conventional views of buyers. Resorting to standard views of attempts to GATHER INFORMATION about initiatives, success factors, and all things related to criteria. In addition, resorting to process. A belief that simply mapping a process will tell us everything we need to know. The second conversation revealed this depiction:

“We did the customer journey mapping exercise and frankly, I am not sure what the value is at the moment. If I were, to be honest, there was a lot of guessing going on in the room.”

Senior Director, Solutions Marketing

These approaches have proven to provide a limited vision on buyer decisions and behaviors leading to decisions. What they lack is understanding of the underlying goals driving decisions and insights into how these goals are pursued.

Buyers Pursue Goals

Mark Wilson, Senior Vice President of Marketing at Blackberry quoted the fact that sixty-two percent of executives are making decisions on gut instincts and emotions at the recent BMA 2015 conference. My hunch is this came from the Fortune Knowledge Group study I have previously quoted as well. The connection, which needs to be drawn here, is that gut instincts and EMOTIONS are often connected to the pursuit of goals.

To truly understand the underlying goals, motivations, and emotions of buyers, what matters most is insights into two often unarticulated, on the part of buyers, goal-directed aspects of buying:

End Goals: These are typically goals related to achievements and accomplishments. They are also characterized by desired outcome. Sometimes outcomes can be generally described or can be specific. For example, you can generally describe an outcome being one of a fully staffed team with a high degree of skills. Pursuit Goals: These can be called means goals and are related to how end goals are pursued. They can vary, shift, and there can be many pursuit type goals. For example, related to the above, a pursuit goal can be one of attracting the right level of skills in applicants. When you can uncover end goals related to buyer decisions and draw connections to pursuit goals, you are offered insights into goal-directed behaviors and choices. This is where true buyer insights reside. As the quoted depictions above indicates, they are not found in gathered information, which can be mischaracterized as insights, related to stated initiatives, criteria, process, and etc. These approaches have become problematic in companies pursuing buyer personas for insights into buyer decisions. Ending up with basic profiles and struggle as the above quote depicts.

Insights Into Buyer Decisions

To gain true buyer insights into buyer decisions, companies must excel at understanding the pursuit of goals driving decisions. How does this relate to the digital economy and new digital technologies, which have radically changed buying in the last decade? It relates in this way:

It means pursuit goals are constantly as well as radically changing due to different means and ways buyers can pursue end goals.

It also means companies and their senior leaders will need to shift their gaze towards gaining insights into not only pursuit goals, but also how they are constantly changing.

Insights drive ambitions. Give her some insight and ask her to make a decision.

It would be because investing in us achieved one of their GOALS.

What would that GOAL be?

information is dynamically routed during decision making.

information about the probability and magnitude of reward is provided by the target color and numerical cues.

the task-relevant signals were synced with choice signals and related to previous events were more robustly encoded following rewarded outcomes.

We favor actions that maximize reward.

A decision is not a real decision until it is a must; it is not a real decision until you feel it on your nerve endings. Once your shoulds have turned into musts, only then you have made a real decision.

I must change. I must stop wasting my money. I must work fewer hours. I must get rid of all this junk. I must eat healthier food. I must exercise. I must write more. I must read more. I must watch less TV. I must, I must, I must!

Your only exercise today is simple: make your Must List. What are your musts? What must change? What has brought pain into your life? What will bring great pleasure? Take as much time as you need and write down all your musts.

I must… I must… I must…

Say your musts aloud. Do you feel how much more powerful the musts feel compared to your shoulds? The Should List is weak, passive, lethargic. The Must List is strong, vigorous, energetic. The musts are alive—you must take action!

Of course, this first day isn’t even about taking action (we’ll take action every day after today), and yet Day 1 is the most difficult. Today is the day you must decide things must change. You know, at least intellectually, you are not happy with how things are in your life. But you can’t have it both ways: you can’t want it to be one way, when your actions are the other way; if your actions are not congruent with your desires, then you will never feel happy, never feel fulfilled, never feel content.

Take a look at your Must List. Put that list somewhere you will see frequently. Now stop everything you are doing and make a damn decision: make the decision to change your life—to live the life you want to live. Don’t just think about the change intellectually, feel it in your gut. (By the way, you can read our Must List when you get to Day 2.)

Today is the best day of your life, because today is the day everything changes: Today is the day your shoulds turn into musts. Today is the day you decide to take action. Today is the first day of the rest of your new, simplified life.

Should is easier to acknowledge. I should ask her out.

Now let's turn that into a MUST: I must ask her out.

Now you must add a REASON: I must ask her out because I want to hang out with her all the time.

Making decisions is an important aspect of conversations in collaborative work. In the context of meetings, the proposed argumentative models, e.g., in Pallotta et al. (2005) and Rienks et al. (2005), have specified decisions as an essential outcome of meetings. Whittaker et al. (2005) have also described how reviewing decisions is critical to the re-use of meeting recordings. For example, a new engineer who just get assigned to a project will need to know what major decisions have been made in previous meetings. Unless all decisions are recorded in meeting minutes or annotated in the speech recordings, it is difficult to locate the decision points by the browsing and playback utilities alone. Banerjee and Rudnicky (2005) have shown that it is easier for users to retrieve the information they seek if the meeting record includes information about topic segmentation, speaker role, and meeting state (e.g., discussion, presentation, briefing).

Step 1: Identify the decision to be made. You realize that a decision must be made. You then go through an internal process of trying to define clearly the nature of the decision you must make. This first step is a very important one.

Step 2: Gather relevant information. Most decisions require collecting pertinent information. The real trick in this step is to know what information is needed, the best sources of this information, and how to go about getting it. Some information must be sought from within yourself through a process of self-assessment; other information must be sought from outside yourself-from books, people, and a variety of other sources. This step, therefore, involves both internal and external “work”.

Step 3: Identify alternatives. Through the process of collecting information you will probably identify several possible paths of action, or alternatives. You may also use your imagination and information to construct new alternatives. In this step of the decision-making process, you will list all possible and desirable alternatives.

Step 4: Weigh evidence. In this step, you draw on your information and emotions to imagine what it would be like if you carried out each of the alternatives to the end. You must evaluate whether the need identified in Step 1 would be helped or solved through the use of each alternative. In going through this difficult internal process, you begin to favor certain alternatives which appear to have higher potential for reaching your goal. Eventually you are able to place the alternatives in priority order, based upon your own value system.

Step 5: Choose among alternatives. Once you have weighed all the evidence, you are ready to select the alternative which seems to be best suited to you. You may even choose a combination of alternatives. Your choice in Step 5 may very likely be the same or similar to the alternative you placed at the top of your list at the end of Step 4.

Step 6: Take action. You now take some positive action which begins to implement the alternative you chose in Step 5.

Step 7: Review decision and consequences. In the last step you experience the results of your decision and evaluate whether or not it has “solved” the need you identified in Step 1. If it has, you may stay with this decision for some period of time. If the decision has not resolved the identified need, you may repeat certain steps of the process in order to make a new decision. You may, for example, gather more detailed or somewhat different information or discover additional alternatives on which to base your decision.

Decision analysis is the discipline of evaluating complex alternatives in terms of values and uncertainty. Values are generally expressed monetarily because this is a major concern for management. Furthermore, decision analysis provides insight into how the defined alternatives differ from one another and then generates suggestions for new and improved alternatives. Numbers quantify subjective values and uncertainties, which enable us to understand the decision situation. These numerical results then must be translated back into words in order to generate qualitative insight. Humans can understand, compare, and manipulate numbers. Therefore, in order to create a decision analysis model, it is necessary to create the model structure and assign probabilities and values to fill the model for computation. This includes the values for probabilities, the value functions for evaluating alternatives, the value weights for measuring the trade-off objectives, and the risk preference.

Once the structure and numbers are in place, the analysis can begin. Decision analysis involves much more than computing the expected utility of each alternative. If we stopped there, decision makers would not gain much insight. We have to examine the sensitivity of the outcomes, weighted utility for key probabilities, and the weight and risk preference parameters. As part of the sensitivity analysis, we can calculate the value of perfect information for uncertainties that have been carefully modeled.

There are two additional quantitative comparisons. The first is the direct comparison of the weighted utility for two alternatives on all of the objectives. The second is the comparison of all of the alternatives on any two selected objectives which shows the Pareto optimality for those two objectives.

Complexity in the modern world, along with information quantity, uncertainty, and risk, make it necessary to provide a rational decision making framework. The goal of decision analysis is to give guidance, information, insight, and structure to the decision-making process in order to make better, more 'rational' decisions.

A decision needs a decision maker who is responsible for making decisions. This decision maker has a number of alternatives and must choose one of them. The objective of the decision-maker is to choose the best alternative. When this decision has been made, events that the decision-maker has no control over may have occurred. Each combination of alternatives, followed by an event happening, leads to an outcome with some measurable value. Managers make decisions in complex situations. Decision tree and payoff matrices illustrate these situations and add structure to the decision problems.

Simplification

Building a decision model

Testing the model

Using the model to find the solution

It is a simplified representation of the actual situation

It need not be complete or exact in all respects

It concentrates on the most essential relationships and ignores the less essential ones.

It is more easily understood than the empirical situation and, hence, permits the problem to be more readily solved with minimum time and effort.

It can be used again and again for like problems or can be modified.

once a rare event has been identified, the main concern is its consequences for the organization

Risk is the path to reward?

What works as opposed to what is smart.

Real intelligence means results vs book-learning which you've now completed..

Cognitive risks are rarely real. If you can get over your cognitive fears then you'll find them as illusions.

The key to successful value investing is buying assets when the perceived risk is greater than the real risk. It’s equally important to avoid assets when the perceived risk is less that the real risk.

This familiarity principle helps deal with the fear associated with high-risk situations. By practicing an activity, humans can become used to the risk and manage the fear that arises in risky situations

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