Understanding Fast and Slow Thinking (System 1 and System 2)
To Answer What’s Keeping You Up At Night
What keeps businesspeople up at night? When you ask this question, the answers you get often revolve around a few core challenges. While the specific concerns can vary based on a person's role, they generally focus on people, profit, operations, and the future.
Running a business is a delicate balance of managing all these moving parts. To succeed, it's crucial to deeply understand how your customers make decisions. This means looking at both System 1 Thinking (the fast, unconscious decisions) and System 2 Thinking (the slower, more deliberate choices). By understanding these two cognitive processes, you can better shape your strategies and optimize other business areas, from sales to production, to drive success.
The last time we bought a home, we were evaluating what felt like 20 considerations for each property. In most people’s consideration set there is:
- Price of the property (down payment, interest rate, homeowners insurance, estimated cost of ownership, resell value)
- Location, location, location (close to work, schools, friends, stores, doctors, future development, etc.)
- Features of the home (size, number of bedrooms or bathrooms, garage, pool, condition, curb appeal, etc.)
- Sense of “Home” (security, comfort, feeling of belonging).
Due to the complexity of the choices, number of variables, and the price of the purchase, a home purchase tends to engage System 2 thinking.
In contrast, the last time I went to the store to buy toothpaste, I literally walked up to that section of the aisle and picked up the red package, checked it was the correct variety I usually buy of that brand and was gone in seconds. (System 1 thinking).
Essentially, System 1 Thinking is our brain's way of simplifying life, reserving System 2, or deep thinking, for more complex or critical decisions. Based on Daniel Kahneman's work in "Thinking, Fast and Slow, " System 1 is described as our brain's automatic, unconscious, and emotionally driven decision-making process, used for routine or habitual actions. Examples include brand loyalty based on childhood memories or instinctively grabbing a familiar product like a favorite brand of cola, cereal, or potato chips.
Whereas, System 2 thinking is a deliberate, conscious, and analytical process reserved for more complex, high-value decisions. This is the thought process consumers engage in when purchasing major items like a house, a car, or expensive electronics, where they carefully weigh options and features. Understanding how consumers use both types of thinking is crucial for diagnosing a brand's issues. There are 8 key research methods to help you understand each process.
Stakeholder and Subject Matter Expert Interviews: These interviews, which can include sales teams, store managers, chefs, or key opinion leaders, help uncover key issues and language. They're great for figuring out what questions need answers, and how experts believe shoppers pick brands or products. Are consumers making quick System 1 decisions, or more deliberate, System 2s? Many decisions blend both. It is important to set the stage for further research and strategy work.
Social Media Monitoring (including Product Ratings): By tracking conversations about your brand and competitors, you can spot overlooked issues or hot button areas. As you observe how consumers talk about brands and rate products, you'll gain insights into the type of decision-making at play—whether it's more unconscious System 1 or conscious System 2. This will deepen your consumer understanding and guide future research. It could quite possibly uncover unexpected problems. Are there "trier/rejectors" who've moved on?
Qualitative Research: (Can be combined with observational research): Qualitative research dives into consumers' deeper motivations. Why do they do what they do? In one-on-one interviews, moderators can thoroughly explore the purchase journey and decision-making process. They can uncover when and why a consumer first bought a category, which brand, for what occasion, and who introduced them to it. Understanding these elements reveals whether decisions are driven by System 1, System 2, or a combination, also impacting your branding, channel, advertising, package design, and pricing strategies.
Segmentation: This process identifies groups for new product development and messaging. Our StrategicImpact™ process (often applied to segmentation engagements) generally begins with qualitative research to uncover decision triggers and motivation, as well as improve the wording of questions for the quant questionnaire. Then, ideally the process is capped with an Activation Workshop. With expertise across all phases of segmentation, insights can be uncovered about product purchase behavior influenced by both System 1 (unconscious, quick decisions) and System 2 (conscious, time-intensive decisions) and woven into the segmentation to make it more relevant and actionable.
Choice Modeling: Choice methodology effectively measures both System 1 and System 2 Thinking, depending on how the task is presented. Respondents choose from 3-4 options on a screen, mirroring real-world shelves or bundle choices. They might consciously trade off factors like price or size, while unconsciously weighing elements like brand, packaging, imagery, or positioning. The results are then modeled to estimate real-world market share or take rates, providing realistic outcomes by aligning decision-making with actual shopper experience.
Advertising Evaluation: Some advertising excels at promoting habitual purchases (System 1), while others encourage methodical ones (System 2). The key is designing ads that fit your product's typical path to purchase. The quick selection of a product at shelf whether online or in-store measures System 1's impact. Slower selection and package side or back panel examination indicate System 2's impact.
Key Driver Analysis (KDA): When possible, incorporating KDAs into your quantitative research is a powerful way to understand the unstated motivations behind decision-making. It's a straightforward yet highly effective method for tracking the hidden drivers of purchase intent, recommendations, or satisfaction.
Biometrics and Other Physiological Response: These responses can be added to qualitative or quantitative research to further measure unconscious reactions. While they require additional time and budget, this investment deepens your understanding of System 1 decision-making, as these methods inherently capture unstated responses.
No matter whether your primary shoppers rely mostly on System 1 or System 2 Thinking, these eight approaches can help you diagnose the issues holding your product or brand back, and you can make necessary corrections.
What’s keeping you up at night? How can Fast and Slow Thinking (or System 1 and System 2) help answer your questions? We would love to connect.
Author
Bonnie Janzen
President
She drives growth for client companies by leveraging strategic consumer insights, innovation, and analytics to shape impactful marketing campaigns and new product development programs. Her consulting expertise includes guiding clients through new business concepts, mergers and acquisitions, including global expansion. She is particularly passionate about advertising and messaging research and plays a key role in the company's strategic direction.
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