Humans Are Irrational – Here’s Why Your Business Should be Too

Humans Are Irrational – Here’s Why Your Business Should be Too


By Collette Eccleston, SVP Behavioral Science, and Ben Gaddis, EVP Digital Product & Experience, published in The Drum.

For many businesses, it can be difficult to resist that gut instinct to “batten down the hatches” at the first sign of trouble. But playing it safe isn’t what makes a brand recession-proof. The truth is that times of uncertainty can offer one of the best opportunities for your brand to make new connections with customers – that is, if you’re willing to think outside of the box.

If you’re a car rental company in bankruptcy, would buying 100,000 Teslas make any sense? Anyone would find it to be completely irrational and totally reckless. Yet Hertz made this decision as part of its bigger vision, which in turn led to a remarkable turnaround for the company in just over a year.

Like something straight out of a science fiction movie, Hertz now owns the largest fleet of autonomous vehicles. Thanks to a $4.2bn investment, Hertz has managed to propel itself ahead of the pack in a race to transform the car rental industry.

Hertz’s recent move shows that decisions that may seem irrational on the surface can often pay off. So, why do the rest of us judge irrationality as a flaw in human behavior? Irrationality in our professional lives is often exactly what’s needed to unlock the next million-dollar idea.

To be irrational is to be human

Running your business on rationality alone assumes that the people you serve are also rational. Humans make tens of thousands of decisions each day – most of which are not driven by logic at all. It’s our gut instinct that gives us the ability to quickly assess how we feel about the many choices that cross our paths.

That’s not to say rational considerations such as affordability don’t matter. For example, if someone needs a pair of shoes, they might select the $24.99 pair over the $25.99 one. It’s only a dollar less, but they could rationalize cost savings as the motivator. What about choosing a pair of shoes priced at $100 more? Emotion becomes the motivating factor in making that purchase. This is where behavioral science and psychology shed some light.

The four fundamental human needs – belonging, appeal, security and exploration – are a helpful lens for interpreting the motivation behind certain behaviors. When seen through this perspective, splurging $100+ on a pair of shoes starts to make sense; it just follows a different set of motivations. For example, this pair of shoes might unlock a consumer’s need to be a part of a community (belonging) or improve their confidence (appeal). Perhaps they find security in paying a little more for a brand they trust (security). Maybe they’re drawn to an innovative design that promises to boost performance (exploration). This is where an otherwise thrifty customer might be tempted to replace a functional need with a pair of high-end kicks.

Humans simply are not rational beings, so it makes little sense to appeal to consumers through rational means alone. It takes tapping into unconscious and emotional needs – irrational needs – to change behavior and benefit brands. By embracing irrational thinking, we expand what is possible in the process of designing products, services and experiences for our customers and employees.

Irrationality belongs in business – especially during a recession

Some of today’s most successful brands were built on once irrational concepts. And in fact, we’ve seen how times of uncertainty can provide the best opportunity to take that calculated leap. Airbnb is one such success story.

During the Great Recession of 2008, the brand got its start by tactically driving consumers to do something we’ve all grown up being told not to – enter a stranger’s home. Since then, Airbnb has not only been successful in effectively changing the industry and our cities, but also consumer minds and habits.

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