Persuasive Communication - How Audiences Decide. 2nd Edition

16 Understanding Rational Decision Making

the seller addressed their decision criteria. To make a good decision, that is, a fully informed deci-

sion, the car buyers must fi rst acquire comparative information about similar used cars and the fair

market value of that make and model as quoted in the Blue Book.

A common term for the comparative information audiences seek in order to evaluate the

responses to their decision criteria is benchmark. For example, a benchmark investors often use to

decide how well their stock portfolio is doing is the current value of the S&P 500. Investors know

something is wrong if the value of their portfolio has declined, while the value of the S&P 500 has

skyrocketed.

Some benchmarks are organization specifi c, such as predefi ned quotas and hurdle rates. Oth-

ers are audience member specifi c, such as comparisons to one’s own previous experience. The

benchmark most commonly used when audiences consider only one alternative and simply decide

whether to accept or reject it is the status quo.^71

Ultimately, audiences need comparative data in order to make rational decisions. When making

most decisions, a value, such as the price of a car, is good or bad only relative to another value, not

in the absolute. Relative, not absolute, levels of risk and return account for the decisions investors

make.^72 When choosing among investments, investors opt for different levels of risk and return

depending on the range of investments they have to choose from.

All types of audiences use benchmarks to make decisions. Expert auditors from large interna-

tional accounting fi rms compare their client fi rm’s performance and practices to industry norms

before making their audit decisions.^73 When asked to evaluate their MBA program, MBA students

compare their program to other MBA programs.^74 Patients’ reactions to information about risks to

their health depend on the comparative information that is available to them.^75 Not surprisingly,

patients tend to search selectively for comparative information that casts their health situation in

a favorable light.^76 Expert fi nancial analysts use a number of benchmarks to evaluate a company’s

current results, including the fi rm’s historical results, the current value of the S&P 500, competitor

results, overall industry results, and the state of the general economy.^77

The fi nding that audiences depend on benchmarks to make decisions has been especially robust

in the area of consumer decision making. Expert consumers actively seek comparative product

information from ads when choosing among brands with which they are not already familiar.^78

Consumers choosing among noncomparable items base their choices on abstract decision criteria

such as necessity and enjoyment.^79 These more abstract criteria allow consumers to make com-

parisons among otherwise noncomparable alternative products, just as they would if they were

choosing among comparable products. When evaluating a new product or a brand extension,

consumers tend to rely on prototypical products from the product category or on the parent brand

category as comparative standards.^80

Although audience members may be aware they are evaluating their options in relation to a

standard of comparison or benchmark, they are not always aware of the particular benchmark they

are actually using. Oftentimes, audiences unconsciously compare the current option to an option

they encountered earlier, even when the two options are noncomparable.^81 One study found that

tourists shopping at beachfront booths were willing to pay more for music CDs when sweaters

at a neighboring booth they just visited were high priced than when the same sweaters were low

priced.^82 This phenomenon is called anchoring and will be treated more fully in Chapter 5.

Audience Expectations About Benchmark Information

Audiences expect professionals to provide them with benchmark information. On the next page,

two excerpts from a board meeting of a simulated detergent manufacturing fi rm illustrate the

importance of benchmarks to an experienced audience.^83 MBA students comprised the top