Across several years working with brands in and around the hospitality industry – ResDiary, Comcater, Smartpay, Tomkin, McCain – a pattern emerged that I didn’t expect.
The best operators were not the most rational buyers. They were the most consistent ones.
Every purchasing decision – a booking system, a payment terminal, kitchen equipment, dining ware – was evaluated through a single lens: does this improve the experience for my customer? Not the margin. Not the integration. Not the contract terms. The customer’s experience first, and everything else negotiated from there.
That kind of embedded decision-making principle is what behavioural economics is actually describing when it talks about heuristics. Not irrationality – but a consistent mental shortcut that simplifies complex choices. The hospitality operators who survived, and then thrived coming out of COVID, were the ones whose shortcut was clear. It also taught me something about how I engage with my own clients and prospects – showing up with the customer’s experience in mind, not just the brief.
Marketing strategy often assumes that buyers behave rationally. Alternatives are evaluated, information is weighed, and the most compelling offer wins.
In practice, decisions rarely unfold that way.
Anyone who has worked closely with sales teams will recognise a different pattern. A proposal is chosen not because it is objectively superior, but because the firm presenting it feels familiar. A safer option is selected even when the potential upside of change is greater. An internal stakeholder champions one vendor over another, and the rest of the group follows their lead. Weeks later, the decision is justified with language that sounds logical, even though the logic came after the choice.
This gap between how decisions are expected to work and how they actually occur is precisely what the field of Behavioral Economics set out to explain.
In the 1970s, researchers such as Daniel Kahneman and Amos Tversky demonstrated that people do not make decisions by carefully calculating optimal outcomes. Instead, they rely on mental shortcuts – heuristics – that simplify complex choices. These shortcuts are efficient, but they also introduce predictable biases.
For marketers, this insight is more than academic. It challenges one of the quiet assumptions behind much strategic planning: that if the value proposition is clear enough, buyers will evaluate it objectively.
Behavioural economics suggests something else entirely. Decisions are filtered through psychological tendencies that shape how information is interpreted, which options feel safe, and what ultimately appears “reasonable” in the moment.
These behavioural patterns also explain why strategic intent often breaks down in practice — a theme explored more deeply in Why Marketing Strategy Fails, which examines why well-constructed strategies frequently fail to translate into outcomes.
The Bias Layer
Once you begin to look at marketing decisions through the lens of behavioural economics, familiar patterns start to make more sense.
Take the tendency to remain with existing suppliers or solutions. Even when a new option offers clear advantages, organisations often hesitate to change. This is commonly described as status quo bias – the preference for existing arrangements simply because they are familiar.
Layered on top of this is loss aversion. Research consistently shows that losses are felt more intensely than equivalent gains are enjoyed. For a marketing leader, choosing a new agency or campaign approach carries reputational risk that may be easier to avoid than defend.
Decision-making rarely happens in isolation. Within organisations, the influence of perceived expertise also plays a role. Authority bias describes the tendency to place disproportionate weight on the opinions of individuals who appear knowledgeable or senior. Read more about the complications of understanding a buying party.
Finally, there is the availability heuristic – the tendency to rely on information that is most easily recalled. Recent experiences or memorable stories often shape judgement more strongly than broader evidence.
Individually, these biases appear simple. Together, they create a powerful filter through which marketing decisions are made.
Consider a firm evaluating a new agency proposal. The incumbent provider has delivered acceptable results for years. A new agency presents a stronger strategic case, but adopting it would mean departing from the status quo. The risk of failure feels more immediate than the potential benefit of improvement. The incumbent agency has built trust with senior stakeholders, reinforcing authority bias. Meanwhile, a previous negative experience with another vendor remains fresh in memory, strengthening the availability heuristic.
Seen through this lens, the decision becomes understandable. The existing relationship is maintained not necessarily because it is objectively superior, but because the psychological forces shaping the choice favour stability.
Strategic Consequence
Much marketing strategy is built on the assumption that buyers evaluate alternatives rationally.
Value propositions are sharpened, comparisons are clarified, and additional information is provided in the belief that stronger evidence will produce better decisions.
Behavioural economics suggests that decisions rarely unfold this way.
Instead, choices are filtered through biases that shape how risk, familiarity and credibility are perceived. A proposal may be rejected not because its argument is weak, but because it challenges the status quo. A safer option may be selected because the downside of change feels more immediate than the upside of improvement.
From this perspective, many marketing strategies fail not because the strategy itself is flawed, but because they are designed for a rational decision process that rarely occurs in practice. Equally important, is a considered approach to what success looks like, and how it’s measured.
Understanding behavioural bias does not eliminate it. But it does clarify the environment in which strategy operates.
The organisational layer of this problem becomes even clearer when examining how decisions are made collectively. In most B2B environments, purchases are rarely made by individuals alone but by groups with competing incentives – a dynamic explored in the essay The Buying Party.
References
• Daniel Kahneman – Thinking, Fast and Slow
• Amos Tversky – Prospect Theory research
• Richard Thaler – Behavioural Economics Nobel Prize
• Herbert Simon – Bounded Rationality