At Quester, consumer stories have always been the foundation of the strategies and insights we develop for clients. Recently, one of our friends in the industry, Susan Fader, recommended Narrative Economics by Robert Shiller. Throughout the book, Shiller outlines that there are popular narratives that affect economic behavior, and that through the study of these behaviors we improve our ability to anticipate and prepare for these economic events. In addition, he compares the spread of pandemics to how narratives become viral in society. While historically we have often relied on economic experts to predict how events will affect economic behaviors, Shiller argues that the true driving impact of narratives lies in the thinking of the masses.
The narratives Shiller identifies in his book are incredibly powerful and often have a large effect on economic events. Once these narratives gain enough attention and momentum, they influence the decisions that companies and individuals make. To give a recent example, Shiller points to the narrative around Bitcoin. This is a narrative that continues to develop over time. When it was released, there was a small group of individuals who viewed Bitcoin as a peaceful rebellion against current monetary systems. Through its growth and people’s conversations, Bitcoin’s narrative has continued a meteoric rise around the idea of investing in a technology of the future and getting rich while doing so. There are certainly still elements of a mass vs. an upper class narrative, but it has become more than that today.
Key Propositions of Economic Narratives & Parallels to Consumer Insights
While we know there are more stories than we could ever understand, not all of these stories become narratives. According to Shiller there are 7 key propositions for economic narratives to form:
- They can be slow or fast. Big or small.
- Important economic narratives may comprise a very small percentage of popular talk
- Narrative Constellations have more impact than any one narrative
- The economic impact of narratives may change through time
- Truth is not enough to stop false narratives
- Contagion of economic narratives builds on opportunities for repetition
- Economic narrates thrive on human interest, identity, and patriotism
Through the rest of the book, Shiller continues to examine popular economic narratives that influence the economic and cultural landscapes. What is truly fascinating isn’t that the narratives exist, but that they often repeat themselves with new individuals taking the lead roles.
In reviewing Shiller’s work around economic narratives, it is easy to draw parallels to the work we do in Consumer Insights. We find, deeply understand, and leverage these narratives to fuel innovation pipelines, develop brand positioning/strategies, and more. These industry focused narratives can be found in an unsolicited manner via forums, social media platforms, product reviews, etc. (listening) or they can be gathered when we survey consumers (asking). Once the sources for the narratives are identified, there needs to be an immersive deep dive into understanding the nuances, context, and ways in which the individual stories are being told that form the narrative. In fact, Shiller also argues for the use of linguistics to understand economic narratives:
“Narratives take the form of sequences of words, which makes the principles of linguistics relevant. Words have both simple, direct meanings and connotations, in addition to metaphoric use.”
While we have often talked about what we do at Quester in terms of linguistically analyzing consumer stories, what we are really doing is analyzing these stories at scale to understand where they converge and diverge to provide a full narrative for brands. This contextualization is important and can only be achieved through a True Linguistic Analysis. What emerges is a strong understanding of narrative clusters and the ultimate impact they have on people’s purchasing behaviors … a smaller scale version of narrative economics for our clients.
If you get a chance, we highly recommend reading Shiller’s Narrative Economics. He puts forth a compelling case for understanding narratives as a key influencer of behavior, which should be of interest to any insights professional. Understanding people and narratives is an ongoing, ever-changing pursuit as summed up by Shiller: “The story of our times and of our personal lives is constantly changing, thereby changing how we behave.”
