How effort, trust, and cognitive load determine modern market share
TL;DR
Consumers don’t make decisions the way marketers think they do.
They optimize for effort, clarity, trust, and risk, not just product specs.
In an era where information is abundant, switching is effortless, and AI systems reduce cognitive burdens, Consumer Economics—not marketing tactics—is now the real driver of digital performance.
This article explains why Consumer Economics is the first and most fundamental lever in the Five Strategic Levers model.
1. Why Consumer Economics Must Replace Traditional “Journey Thinking.”
Most companies still build digital strategies on one broken assumption:
That consumers make rational, linear decisions.
They don’t.
Decades of behavioral science show that humans make decisions using heuristics—shortcuts that minimise:
- effort
- uncertainty
- cognitive load
- perceived risk
This is why Consumer Economics is the first lever in the Five Strategic Levers model.
Consumers today behave like economic agents optimising four variables:
- Effort cost — How much energy does the decision require
- Cognitive cost — How hard it is to understand
- Trust cost — How confident they feel in the choice
- Risk cost — What happens if they’re wrong
AI, search, and digital experiences either increase or decrease these costs.
Your job as a brand is to reduce all four.
2. Information Abundance Changed the Consumer’s Math
George Stigler argued that reduced information cost reshapes markets.
Today, the cost of acquiring information is close to zero — but something else happened too:
Information abundance created cognitive scarcity.
Consumers aren’t short on information—they’re drowning in it.
According to a recent survey from the Pew Research Center, 81% of U.S. adults feel overwhelmed by online information volume.
This cognitive overload makes brands that emphasise clarity and low friction win.
As Liz Reid (Head of Search at Google) said:
“The other thing that’s going on is there’s a behavioral shift … they are going to short-form video. They are going to forums … they’re going to user-generated content a lot more than traditional sites.” Source: Search Engine Land
Implication:
Consumers reward clarity, simplicity, and effortless understanding.
- Clean category pages win over noisy ones
- Products with clear explanations outsell those with complex specs
- Brands that reveal fees upfront outperform opaque competitors
- AI answers are rapidly becoming preferred decision tools
In the Five Levers model, this is the Cognitive Cost Curve—the more complex you are, the less likely you are to win.
3. Younger Consumers Don’t Choose Based on Attributes Alone
Younger audiences (Gen Z, younger Millennials) evaluate brands across broader dimensions:
- transparency
- ethics/values
- identity alignment
- social proof
- authenticity
- friction (effort cost)
- explanation clarity
- reliability
- speed
Not just price, availability, and features.
Commenting on this, Liz Reid said:
“Instead of ‘I want a dress for the wedding,’ ‘I want a dress for the wedding that is made by a merchant with the following values … is also red and is short’.” Source: Search Engine Land
This shift is massive.
Traditional marketers optimise pages.
AI users optimise confidence.
This becomes a core part of the Consumer Economics lever.
4. The Economics of Friction: Why Effort Kills Demand
Every extra click, scroll, form field, ambiguity, or delay increases effort cost.
And effort cost is now the most powerful predictor of demand capture.
Research supports this:
- Google UX analysis: Friction is the #1 predictor of abandonment
- HBR (2020): “Reducing effort is directly correlated with increased loyalty and decreased churn.”
- McKinsey: “AI-powered next-best-experience capabilities can increase revenue 5-8% and reduce cost to serve 20-30% when companies use decision-layer AI to sequence interactions.”
If you reduce friction, you reduce:
- decision fatigue
- comparison effort
- evaluation time
- switching temptation
- abandonment
This is the heart of Consumer Economics. I have been ranting about this for many years. My most recent post, “Stop Adding Friction: Make It Easy for Me to Give You Money“
It also becomes the foundation for the rest of the Five Levers.
5. AI Is Redefining Consumer Choice
AI systems are not just tools—they’re now decision layers in the consumer journey. My good friend Jeremy Sanchez’s Open Letter to the C-Suite explains this.
McKinsey explains:
“AI-powered next-best-experience capability … delivers the right interaction at the right time and place, shifting from push-marketing to decision orchestration.” McKinsey & Company
And in an agentic future:
“AI agents … won’t just assist—they’ll decide.” McKinsey & Company
That changes the economics of choice:
- Consumers outsource decision-making to AI
- Brands compete for explanation clarity
- Visibility is no longer just about ranking
- Interpretability becomes a competitive throttle
The brand that reduces the cost of the machine to interpret them wins.
In other words, your site, content, and architecture must be model-friendly.
This shifts the consumer optimization function:
From:
“Which option do I choose?”
To:
“Which explanation gives me the most confidence?”
Brands that win are those AI finds easiest to understand and most trustworthy.
6. The Consumer Economics Levers
Here are the core economic variables your digital ecosystem must optimise:
1. Effort Cost
Minimise clicks, forms, redundant steps, unclear paths, and delays.
2. Cognitive Cost
Simplify explanations, use clear language, structure content clearly, use schema, and predict user questions.
3. Trust Cost
Amplify social proof, expert signals, transparent policies, identity alignment, and quality cues.
4. Risk Cost
Minimise the consequences of being wrong: refunds, guarantees, clear commitments, simple decisions.
Every successful web experience reduces these four costs.
Every poor experience increases them.
7. How Consumer Economics Ties to Web Effectiveness
When Consumer Economics is strong:
- conversions increase
- bounce rates drop
- AI explanations improve
- search/visibility signals strengthen
- loyalty deepens
- switching behaviour drops
- share of answer grows
This is why Consumer Economics is the first and most foundational lever.
If you skip this, none of the other levers (Search, Behavioral, Information, AI) will perform.
8. Setting Up the Next Lever: Search Economics
Now that we’ve explained why consumers behave as they do, the next logical question is:
How do algorithmic systems allocate visibility based on those behaviours and signals?
That’s what Search Economics (the next article) addresses.
We will explore:
- eligibility vs ranking
- interpretation cost
- structure and schema as cost-reducers
- share of the answer
- visibility vs inclusion
- AI engines and authority
