The Difference Beween Private and Public Decisions Consumers Make

It always amazes me how people arrive at certain decisions, what makes them select an alternative in regards to the environment they were exposed to while being at the final stage of buying behavior. And it is not a novelty that private choices, thinking and actions are very different from the ones we do in public – meaning those choices are very visible and easily to be judged, evaluated by the other people who’s opinion we value or rely on. Thus, instead of plunging into the consumer behavior magazines to seek the answer to the question that was burning my head all week, I turned to psychology and sociology studies by Wharton scholars.

I had an assumption in my mind that regardless of the difference in the private state of mind and public image we portray – the two worlds invariably overlap or feed off each other, thus similarities occur – unless we have a case when both worlds almost never coincide, interact or see each other. I do not plan to get too into the psychoanalytical aspect of it, but in the psychology field – they call it a “split personality” syndrome, very rare occurrence, but quite possible – when the two worlds do not have a chance to integrate. Extrapolating on that definition, we can easily see why private and public choices could be totally opposite to each other. As an example, a consumer can appear to be predisposed to one type of behavior and share the reinforcing thinking that favors his private choice (let’s say of consuming some type of media that is prevalent in one environment he mostly resides in). At the same time, he/or she might take an opposite selection while being surrounded by other people where his/her the choice is quite visible.

How do we marketers – find the consistency in the behavior of the users we study? Obviously, we have to observe them from the both sides, in both worlds. What if we do not have that privilege? What to do next?

According to the research in the decision-making process by Mark Pauly (Wharton Business School), “Private behavior more closely follows expected utility models, while public decisions move in the opposite direction. “ Thus, when the choice is private – we pick what is best and most beneficial for us, when the choice is public – we tend to make choices that contradict the most expected utility choice (even if it might be indicative as a value for a group of folks that would benefit from it as well) or make decisions that do not make sense! Go figure! Pauly proves his point by illustrating the decisions consumers make in relation to health care products (insurance) – “People avoid deductibles publicly, but prefer to pay them privately. They want their insurance companies to pay for their preventative care even if it might be cost effective for them to pay for it themselves. “

Even though the example included health care products, I believe one can see the “light” for the topic in discussion for other services we provide and promote or decisions we make while building our lives. The key reasons for this divergence include:

1. Misperceptions of Value
2. Reputation
3. Benefits Distribution

As I see it, there is no other way around it but trying to get into the both worlds. Perhaps, ask our customers invite us into their worlds and see if we can decipher behavioristic patterns that are universal or similar for both worlds? Why do that you might ask yourself by reading this far? Well, to be truly successful in our field – understanding your users, clients, and customers – is the key. Understanding them and catering to their needs by adjusting our products and services in time– is the marketing nirvana we all try to reach. What does our scholar suggest in this case?

- Watch for public-private divergence. If we look at our own decisions, in any case that involves both public and private decisions – we should try to examine the question through both lenses. “For a public decision, especially when there are reputational issues at stake, consider if you would make the same decision in a private situation. Also, look at whether the decision really provides the highest expected utility.”

- Expect that people will not do as they say. This recommendation allows you to better predict and anticipate consumer behavior. People would say one thing in public, but be willing to accept a very different option in private. Understanding that allows you to tailor your communications based on the environment your user currently has chosen to interact with you. Will people actually follow their public positions in private decisions? Is there a way to allow your customers make the decision you advocate that still preserves their reputations? Explore the last question and you can be rather successful despite this truth of life!

- Look for redistributable mechanisms. If we devise our programs when the benefits are funded by the group and redistributed by the need of some members of the group to another – see how it can affect the decisions of your individual buyers and what efficiency you can gain in the process. Consumers are more prone to agree to participate in the shared benefits plans where redistribution process exists, as one man’s garbage can be another’s treasure while both of them pay for the “membership”. Look for those opportunities!