What every marketer needs to know about neuromarketing

In this guest post, branding expert Dr Peter Steidl says neuromarketing will change the face of marketing, and without it, campaigns will lag behind competitors that have embraced this new way of thinking about consumer behaviour and branding.

 

I am not talking about lab tests that deliver reliable but limited information about how consumers process marketing stimuli such as ads, logos or package designs.  Rather, I’m referring to the application of neuroscience concepts in a strategic context. In other words, how marketers can benefit from the latest insights into how consumers think, feel and, and most importantly, make purchase decisions.

The application of neuroscience lifts the effectiveness of marketing, brand, communications, shopper marketing, pricing and innovation strategies – including, of course, social and other digital media strategies.

To give substance to this claim, let me present a very brief overview on three important neuroscience insights, highlighting a number of important marketing implications.

Insight 1: consumers have two parallel circuits in their mind, one for thinking and one for doing

Nobel Prize Laureate Daniel Kahneman simply called them System 1 and System 2, although marketers may want to think about these circuits as the consumer’s ‘doing’ and ‘thinking’ minds, respectively.

In System 1, the person’s non-conscious ‘doing’ mind, we find memories of past sensory stimulations (such as ads, purchase and consumption experiences, word-of-mouth, etc), emotions, rules of thumb, stereotypes, archetypes, associations, visual images, spontaneous behaviour (such as impulse or habitual buying), intuition, non-verbal communications and more.

Harvard professor Gerald Zaltman suggests that 95% of purchase decisions are made by the non-conscious ‘doing’ mind.

System 2, the person’s conscious ‘thinking’ mind, facilitates thinking by providing working memory to process verbal messages, to evaluate the cost-benefit of options, and to plan ahead (eg. preparing a supermarket shopping list). This is the system that responds in surveys and group discussions when consumers try to explain why they do the things they do.

The ‘doing’ mind is fast and powerful and can do millions of things concurrently.  Importantly, the ‘doing’ mind decides which of the billions of sensory inputs the brain receives will be stored in memory. To do this, the ‘doing’ mind has to assign meaning and value to these inputs, as it has to decide which existing memories the new memories are to be linked to.

The ‘thinking’ mind, in contrast, is slow and can only focus on one task at a time.

Not surprisingly then, to be successful marketers typically have to make an impact on the ‘doing’ mind that is driving most purchase decisions.

Here are just three important implications:

First, System 1 marketing – marketing activity aiming at the consumer’s non-conscious ‘doing’ mind – is of particular importance when consumers are:

  • repeat buying,
  • buying something that is not of great importance to them,
  • are under time pressure,
  • suffering from information overload,
  • not particularly interested in the matter, and
  • unsure how to decide (eg. in a situation of commoditisation or complexity).

 

These criteria apply to the majority of purchases consumers are likely to make during their lifetime.

Second, measuring the effectiveness of advertising and other marketing initiatives on the basis of recall, stated purchase intentions, or statements about how the campaign has changed how consumers feel about the brand is not just unreliable but potentially misleading. The fact is, consumers do not know what is happening in their non-conscious ‘doing’ mind, yet that’s where the success or failure of your campaign is being decided!

Third, don’t project the likelihood of consumers buying your new product on the basis of group discussions or interviews. Consumers simply don’t know what they will do – that’s why 85% of new products fail, despite having been researched in group discussions and surveys.

 

Insight 2: the brain is designed to avoid thinking by using shortcuts to make purchase decisions

The ‘doing’ mind influence extends even further. Having been designed to help us survive in a hostile natural environment, the ‘doing’ mind has developed energy preservation strategies. And as the brain – which accounts for only some 3% of body weight – accounts for approximately 20% of all energy consumed, the ‘doing’ mind seems to have focused on finding ingenious decision shortcuts that eliminate the need for thinking.

These shortcuts are typically presented under the heading of behavioural economics and include priming and a wide range of judgment heuristics. Here are some examples:

  • Encourage consumers to first buy fruit and vegetables on their supermarket shopping trip and they will spend more on packaged goods because of the feel-good factor,
  • the sound of a cork coming out of a bottle and wine being poured into a glass, played in a bottle shop, will lift wine sales. Similarly, a very faint lemon smell in a restaurant will boost seafood sales – but only in cultures where seafood is often served with a slice of lemon, 
  • too much choice is likely to lead to the consumer withdrawing altogether, (ie. not buying at all),
  • if you want to sell a triple patty burger, put a five patty burger on the menu. Or, like The Economist, The Age newspaper and undoubtedly many others have done, introduce a subscription category that makes the one you want to actually sell more attractive, and
  • when going through the specifications of a new car with a buyer you will sell more features when starting with a fully specified model and ask the buyer to take options off to reduce the price, rather than the usual approach of adding options to the base model.

 

There are literally hundreds, if not thousands, of case studies illustrating how the non-conscious mind drives consumers down the route of shortcuts by triggering judgment heuristics or by simply letting primes drive the purchase behaviour.

Consumers using these shortcuts often display irrational behaviour but while this behaviour may be irrational it is predictable, because the majority of consumers will react in similar ways when a judgment heuristic is activated or a marketer has primed their decision.

 

Insight 3: the marketer’s challenge is to shape the consumer’s brand memory

It should be obvious by now that a marketer needs to invest into developing a positive, emotionally strong brand memory that is linked to one or more of the consumer’s goals. However, while this seems obvious, current practice is often not aligned with this principle.

Especially when it comes to social media many marketers believe they have a success on their hands when they look at thousands, possibly millions, of ‘likes’, views, comments and so forth – ignoring the fact that these may relate to the promotional exposure rather than to the brand itself.

Take ‘Dumb Ways to Die’, the most awarded advertising campaign ever, which was supposed to reduce the number of significant safety incidents associated with the Melbourne rail system. It enjoyed a massive number of downloads, viral sharing, likes and so forth – but the safety statistics in the first six months after the campaign broke showed the worst performance for a decade. Clearly, the ad created an ad memory, but this ad memory was not linked to the memory of how to behave.

Similarly, there are numerous examples of viral and social media campaigns that engaged a large number of consumers but did not have a material impact on sales.  The reason: the ad memory was not linked in the consumer’s mind to the brand memory.

It is important to ensure at all touch points that the brand plays a central, emotionally engaging role. If that’s not the case, you may get consumers involved but they won’t end up buying your brand.

 

Summary of key points

Adopting a neuroscience perspective I would argue that the principle task is not marketing management, but memory management.

As the flowchart shows, the non conscious ‘doing Mind’ is responsible for screening sensory inputs including ads, visual images such as logos, product or package designs, emotions, consumption experiences and so forth, and deciding what to place into memory.  To do that, it must assign value and meaning to the sensory inputs to be able to link new memories to appropriate established memories.

Sensory inputs may trigger judgment heuristics and prime the decision-making process, which again is a process that takes place in the consumer’s non-conscious ‘doing’ mind.

Whether the purchase decision is  impulse or habitual or deliberate, it is clear that even for considered purchase decisions the non conscious mind has most likely shaped these decisions through heuristics and primes.

It follows that marketers need to know how to trigger judgment heuristics, how to prime consumers and, most importantly, how to make sure touchpoints result in memories that carry the desired qualities. Most importantly, ‘touchpoint’ memories have to be linked to the brand memory to impact on purchase decisions.

The good news is that applying neuroscience insights in marketing is neither complicated nor difficult. It is just a matter of integrating our understanding of how consumers think, feel and make decisions with well-established marketing concepts and tactics to lift their effectiveness.

Dr Peter Steidl is the founder of Neurothinking.com and an adviser to corporations and advertising agencies. The second edition of his book Neurobranding, shortlisted as the best marketing book 2013 by the European Expert Marketer Magazine, will be released at the end of March. He is also co-author of the recently published Neuromarketing for Dummies (with Stephen J Genco and Andrew P Pohlmann). He can be contacted via peter@neurothinking.com