Rethinking Transactional Decision Making

Today's fast-paced digital world and the changes of the last two decades have transformed the way businesses interact with their consumers and how marketing and media decisions are made has changed dramatically. The increased use of analytics, algorithms, and big data has enabled companies to make quick transactional decisions, often at the expense of truly understanding their customers and the Who and the Why behind the What.

Diversity in friendship united by a passion for music (Photo by Alex Lawton at Gijón Sound Festival 2023)

Only a few years ago, Data-driven decision-making was the final frontier of consumer understanding and today has many merits, having become a huge addition to improving business performance.  However, in that digital and data race I feel some very important aspects of how brands relate to people may have been left behind along the way.

So today I feel there's an increasing need to balance these masses of quantitative data about “users” or “consumers” with genuine qualitative insights about real people.

Here's why I think we should also be focusing more on Insights about “real” People:

1. The Limitations of Transactional Decision Making

While transactional data can provide invaluable insights into consumer behavior, it merely captures a snapshot of a customer's journey. This approach often misses the broader context, leading to decisions that might optimize one transaction but fail to build long-term customer trust, advocacy, and loyalty or understand the deeper needs and aspirations of the person behind the buyer.

2. People (“Humans”) are More Than Just Transactions

Every transaction represents a story from a living person, an emotion, a need, or a desire. By focusing solely on the transaction, businesses risk dehumanizing their customers and reducing them to mere data points. But when we prioritize understanding the stories behind the numbers, we pave the way for genuine connections and long-lasting relationships.

3. Embracing Emotional Intelligence

Emotional intelligence, empathy, and human understanding cannot be captured through transactions alone. Companies that value and incorporate these elements into their decision-making processes are better positioned to create memorable experiences for their customer, which in turn build value and growth in the mid and long term due to repeat purchases and advocacy.

4. Building Trust

Consumers today crave authenticity because people are – and like to feel – authentic. When businesses prioritize real insights about people and create personalized one-to-one group experiences based on genuine understanding, they can build a deeper sense of trust and connection with their customers. This is something that transactional data alone cannot achieve, ever.

5. Complexity of Human Needs

People have multifaceted needs, desires, and emotions that often interplay in unexpected ways. They depend on moods, mindsets, past experiences, and external hence uncontrollable situations and stimuli.  A singular focus on transactions can't capture this complexity. By deepening our understanding of customers as real-world individuals with unique stories who belong to a number of larger groups of like-minded people in the digital and physical worlds, businesses can cater to these nuanced needs more effectively.

6. Adapting to Changing Times

In a rapidly changing world, relying solely on past transactions to predict future behavior can be risky. By fostering genuine relationships and understanding the evolving needs of the customers, businesses can be more agile and adaptive to changing circumstances. To put it bluntly, everything changes very fast, and the pace of change is now hyper-accelerated by technology.  However, people ourselves, with our fears, joy, phobias, tantrums, emotions, and capability to love or hate have not changed that much at all.

7. Long-term Growth over Short-term Gains

While transactional decisions might offer short-term gains, they often come at the cost of long-term growth. By focusing on real insights about people, businesses can create strategies that ensure sustainable growth over time.

So I truly believe that while it's undeniable that transactional data has revolutionized the way businesses operate, it's vital to remember that at the heart of every transaction is a human being. By moving away from a purely transactional mindset and embracing genuine insights about people, businesses can foster meaningful relationships, create memorable experiences, and ensure lasting success in an ever-evolving marketplace.

Thanks for reading: comments/contributions/additions are very welcome!