Diving into the ‘why’ of consumer behaviour
Neuroscience has become a rapidly emerging tool for marketers to understand the choices and preferences of consumers. Leading up to her appearance at the Online Retailer Conference, Marketing spoke with Katharina Kuehn, director and co-founder of RDG Insights and one of Australia’s first and leading neuro-marketing strategists about tapping into the non-conscious minds of consumers, and Australia’s place in what is a global trend.
Marketing: What will you cover in your lecture at the Online Retailer Conference?
Katharina Kuehn: Basically, I’m a neuroscientist and I specialise in understanding customers emotions and subconscious minds, and how they drive attention, perception and behaviour. My presentation will be about understanding how sellers can meet the non-conscious needs of today’s customers, and how they can quickly gauge their attention and attraction and to their brand and product.
I take them through how attention and perception works in the brain, and how resellers can implement strategies and tactics to target that better. Because we know that we’ve got less than three seconds to keep people on our site, which means we have to be very fast, which means we have to understand how our minds focus, to make sure we don’t lose those visitors.
Then I’m going to take the audience through a couple of basic dynamics of human behaviour that can be used to instantly increase the persuasive power online, on a website to increase conversion.
M: Do you think that’s an area that’s lacking on the retail side of things?
KK: Absolutely, the whole field of neuroscience and understanding the brain better is a very new area. It’s only really come up in the last 10 years, where we’ve got new tools and methodologies to actually look into the brain more directly rather than asking tradition research survey questions. Along with that it’s a whole new world of opportunities, so naturally retailers haven’t all adapted them yet, so there’s lots of opportunities to take those strategies and tactics on board more.
M: Where do you think the way forward is for the field as it becomes more prevalent.
KK: We will see – we’re already starting to see – many more retailers and brands using neuro-scientific methodologies in combination with classic market research methodologies to understand the minds of their customers better. There were a number of reports out this year that place neuro-marketing as a top trend for 2016.
It’s a very strongly growing field. I think we’ll see more and more retailers moving from treating their customers as average general demographics to understanding their personality types and their emotions better. So we’ll see a shift from treating every customer the same, to emotionally based targeting. We will also see more retailers using methodologies that understand non-concept perceptions of customers to their brands. And to see what actually happens in the brain as they watch our messages or what size, or what advertisement, will become much more predictive in the marketing that we do going forward.
M: In simpler terms, how do we actually go about doing that? What’s the methodology about getting into people’s minds and working out the way they think?
KK: There’s a range of different methodologies available today, from SMRI, to biometric measurement, and we’ve got a couple of tools that measure people’s implicit reactions to marketing stimulus. For example, when I ask you a question, and you take too many seconds to respond yes. When I ask you if you liked my speech and you go ‘…. yes’ then I can say ‘that took too long, that person’s not really convinced about their response at an emotional level.’ That’s exactly what we measure. We measure people’s split second response time, to determine the level of truth and emotional conviction about their response. That’s highly useful to understand. When we ask ‘do you think our brand stands for this or that, or do you trust our brand?’ Then people are excited to say ‘yes, yes, yes’. What we really need to understand is if they’re convinced at an emotional level, because it’s the emotions at the end of the day that drive customer behaviour.
M: So it eliminates the guesswork?
KK: It is more accurate, it is also more predictive, because it dives into the ‘why‘ behind people’s behaviour. In the past we were really good at observing the what and how of customer behaviour, now neuroscience uncovers more and more of the why. Why do people make the decisions they make, why are they attracted to the brands they’re attracted to?
Also how we can understand their personality types better. Not everyone is the same, we all have different unique personality types and these personalities determine what we’re attracted to and what we’re not attracted to.
In the past, retailers, and still a lot of retailers determine their target market as, let’s say, ‘main grocery buyer, 35 year old female, medium income.’ That really doesn’t tell us anything about what people aspire to, which website experiences they are looking for, what inspires their actions, what motivates them. So, to understand that we have to dive into their minds and understand their emotional personality profiles, and that’s what we do as well.
M: Are Australian retailers starting to use this effectively, or are we lagging behind?
KK: I think Australia’s lagging behind on that trend. We started this business here when I worked with one of the neuroscience pioneers over in Germany 10 years ago. He was one of the founders of neuro-marketing applications for business. A lot of German and American retailers and brands adopted this trend 10 years ago.
Five years ago I came over to Australia and imported a whole lot of methodologies from Germany and started working with it here, and the uptake at the beginning was very, very slow. We found that it was a completely new field for a lot of clients we were talking to. We did a lot of educating the market. Now we really feel like, since last year I’d say, people have a much better understanding of it, and are following it.
M: Why was Australia reluctant to jump on?
KK: I think it has to do with the competitive intensity, historically. I think that Australian retailers more and more need to look at ways to stay ahead of the curve, to compete with international retailers, who often are very sophisticated.
The competitive pressure has increased so much, that they are looking at more and more innovative ways to target their marketing and to reach their customers and audiences. Over the last 12 months there’s some interest. Recently, Australian retailers have increased their marketing spend by 37%. That is a strong signal for me they’re actually investing to try and engage with their customers. They’re investing more and more to get the attention and wallet of the customers in this increased competition. They’re spending more and they’re looking at new ways to do things. Along with that, comes curiosity to understand customers better, and how we can truly understand them at a more emotional level.
M: Given that technology is constantly evolving and technology plays a big part in this field, do you think that by being behind by a few years, the rapid evolution of technology puts us at a disadvantage in the global marketplace?
KK: I wouldn’t go as far as saying that Australia’s lagging behind on all fronts. I think we’ll see a lot of really great innovators and retailers coming out of Australia. We see a lot of sectors leading in terms of technology. The banks are a really great example, where they are in fact ahead of the curve, when we compare the banks here to the banks in Germany, for example. When it comes to technology, a lot of people are doing really great, and trialling really great and new things.
We’ve just completed our global innovation study for this year. There’s a couple of innovation cases as well coming out of Australia that are really exemplary and leading for the world as well.
M: Please give us some background on how you became interested in the topic.
KK: When I was a psychology and marketing student, I came across a lecture from Dr. Hoyses who was a founder of the approach that we work with. One of the marketing pioneers from Germany. I attended a lecture and I was immediately hooked. It was, to me, a whole paradigm shift, from treating consumers as rational beings, which was the normal paradigm by then in marketing and business studies, to someone being there saying ‘no, we are tiny, irrational, emotional beings, and if we want to understand consumers then we need to understand emotions, and the non-conscious mind’.
For me, that was a real eye opener, I was hooked, this was exactly what exactly what I was going to do for my career. I started working with him for many, many years, over in his business in Germany. I started working with him and researching. I came out to Australia because I saw an opportunity to bring his thinking and bring these methodologies to the local market here. It’s been a great journey.
M: Have you seen any major changes in though patterns behind the methodology, or anything like that?
KK: Yes. As with any new and evolving field, it’s evolving at a really rapid pace. We’re just at the beginning of learning about the human brain, the human mind, and inventing methodologies that can actually more precisely measure what’s going on, and interpret that. I think we have to all be honest and say, ‘it’s very early days, we’re starting to discover new findings, almost every week’. With the technology advances, we have a lot of progress in that field, and it’s definitely very exciting.
Katharina Kuehn will be speaking at Online Retailer Conference on 16-17 March at Melbourne Convention & Exhibition Centre