Decoded – The Science Behind Why We Buy

I love behavioural economics and Decoded: The Science Behind Why We Buy is everything I expected from Phil Barden. Great summary of all the scientific and behavioural economics research applied to marketing.


First illumination: the definition of brands as frames.

Without the brand frame, products appear identical; brands implicitly influence (in our autopilot) the perceived value of products and product experience through framing.


2nd enlightenment: ‘attitudes follow actions’.

This is based on self-herding – when rather than copying what a bunch of other people in a public space are doing, we refer to our own actions in the past for implicit guidance eg. The next time I’ll choose a product I will value it more highly simply because I chose it last time.  

This is the a powerful alternative to traditional thinking that behaviour change requires a prior change in attitudes.

Accordingly, increasing trial (ie. penetration) is a means to influence attitude towards a brand because behaviour result in attitude changes. This is a huge opportunity for serices brands especially, where the value delivered is mostly intangible and frequency of interaction is low.

3rd understanding: ‘process endowment’

Framing the task as one that has already been started and is incomplete rather than one that has not yet begun leads to people being more committed to completing the task and moreover they complete the task more quickly.

Customers with the pre-stamped card were twice likely to buy the additional 8 car-washes compared to those with the free stamps


4th wisdom: ‘hyperbolic discounting’ well-known to behavioural economists

We have a very high discount rate for the future compared with the here and now. Which explains that the offer of $100 today may be preferred to the promise of $120 next year.

5th insight: Adding focuses attention on increasing price whereas subtracting is all about reducing costs.

Loved the experiment of a loaded pizza where customers were asked to remove toppings vs base pizza where customers had to add toppings: in the first scenario customers ended up with twice as any ingredients!


Note to myself for my next price proposal:

“Starting with a large number of components or features and allowing consumers to scale down from there leads to the acceptance of a higher-priced product than starting with a basic product and asking consumers to build up from it.”

6th learning: brands are objects to the brain, they are not people with personality traits.

So in our briefs, if we start to use the sentence “By purchasing the brand/product our customers want to be, have, do…” and we fill in our brand values, we can easily check whether or not our positioning is a goal-based value positioning. ie. what are the goals that consumers want to achieve with our product.

7th realisation: the implicit goal systems in our brain


The 2 most basic motivational drivers are prevention and promotion; beyond these rudimentary motivations, we built more sophisticated ‘Big 3’ human motivations up them:

  1. Security – the panic and fear system
    • The goal here is to strive for being cared
  2. Autonomy – the rage system (driven by testosterone)
    • The aim is to be superior to others, be high in hierarchy and overcome resistance
  3. Excitement – the seeking system (based on dopamine)
    • The goal is to avoid boredom

If we supplement these 3 goal types with their hybrid forms, we 6 motivational territories:

  1. Security: care, trust, closeness, security, warmth
  2. Enjoyment: relaxation, light heartedness, openness, pleasure
  3. Excitement: vitality, fun, curiosity, creativity, change
  4. Adventure: freedom, courage, rebellion, discovery, risk
  5. Autonomy: pride, success, power, superiority, recognition
  6. Discipline: precision, order, logic, reason



Supplement this with How cultures around the world make decisions

and If you want it, you might get it. The Reticular Activating System explained


The Reticular Activating System (RAS) is a bundle of nerves at our brainstem that filters out unnecessary information so the important stuff gets through.

The RAS is the reason you learn a new word and then start hearing it everywhere. It’s why you can tune out a crowd full of talking people, yet immediately snap to attention when someone says your name or something that at least sounds like it.

Your RAS takes what you focus on and creates a filter for it. It then sifts through the data and presents only the pieces that are important to you.

Some people suggest that you can train your RAS by taking your subconscious thoughts and marrying them to your conscious thoughts. They call it “setting your intent.” This basically means that if you focus hard on your goals, your RAS will reveal the people, information and opportunities that help you achieve them.