Ever since the days of Ernest Dichter, the Austrian- American psychologist and marketing expert who pioneered the application of Freudian psychoanalytic concepts to the study of consumer behaviour, marketers have been trying to tap into the human subconscious to influence consumers.
Now armed with the technology to measure brain impulses, neuromarketing claims to be able to learn what emotions consumers are experiencing and what memories are being stored. And some of the world’s biggest companies are turning to neuromarketing as a new way of convincing consumers to buy their products. Google, Facebook, McDonald’s, Unilever, Procter & Gamble and GlaxoSmithKline are all adopting this brain scanning technology to help them understand what motivates consumers and turns them into buyers.
Neuromarketing bridges the study of consumer behaviour with neuroscience. Professor Gerald Zaltman, was the first to use functional magnetic resonance imaging (fMRI) in marketing research in the late 1990s. The term neuromarketing was coined in 2002 by Professor Ale Smidts, and the first neuromarketing conference was held in 2004. In just a few years neuromarketing has gained increasing authority over previous ways of researching consumer behaviour. Indeed in 2011 NeuroFocus, a pioneer of neuromarketing and one of the biggest players in this booming industry, was acquired by the global measurement and analytics firm Nielsen, a clear sign of the interest this field of market research is attracting.
According to one of the leading thinkers on neuromarketing Roger Dooley, the author of Neuromarketing and Brainfluence, neuromarketing is based on the notion that 95% of all our thoughts, emotions and learning occur before we are ever aware of it and that marketers are actually only talking to 5% of their customers’ brains. Neuromarketers claim to be able to find out what kind of marketing hits that other 95% of the brain in the right way.
So what are some of the key research findings of neuromarketing? Outlined below are six of the areas that receive the most attention in business and marketing circles.
The Paradox of Choice
Dooley believes that an overload of options may actually paralyse people’s decision-making processes resulting in choice fatigue. The research often cited to highlight this point is the jam study which was carried out by Professor Sheena Iyengar in a California gourmet market, where her team set up a booth of samples of Wilkin & Sons jams. Every few hours, they switched from offering a selection of 24 jams to a group of 6 jams. On average, customers tasted two jams, regardless of the size of the assortment, and each one received a coupon good for $1 off one Wilkin & Sons jam. 60% of customers were drawn to the large assortment, while only 40% stopped by the small one. However 30% of the people who had sampled from the small assortment decided to buy jam, while only 3% of those confronted with the two dozen jams purchased a jar. Iyengar concluded that having fewer options makes it easier for consumers to make decisions and complete tasks.
Building on this study, a team of researchers at Stanford University found that an excess of choices often leads consumers to be less, not more, satisfied once they actually decide and are often left with a nagging feeling they could have done better. Less is more is the conclusion of the research.
The Power of Free
Professor Dan Ariely, author of Predictably Irrational, believes that a preference for “free” is a feature that is hardwired into our brains. Ariely’s research found that “free” is far more effective than “almost free.” He argues that this is true even when the price differential of two products were near identical (e.g. 1 cent vs. free).
Professor Robert Cialdini, agrees with Ariely. In his book Influence: The Psychology of Persuasion, Cialdini explains the pervasiveness of giving out free samples in marketing through the concept of reciprocity. Reciprocity is a strong factor in human behaviour. As such a small favour can produce a sense of obligation to return a much larger favour. Giving free samples creates a reciprocal relationship with the consumer, who then feels obliged to buy the product next time, he argues.
The Use of the Senses
Neuromarketers believe that music, design visuals and smells can all affect consumers buying decisions. For example, the University of Leicester conducted an experiment in a local wine shop. On one day the shop played French accordion music, on the next it played German oom-pah music. On the first day French wine outsold German wine by five bottles to one, on the second day German wine outsold French by two bottles to one.
Likewise, in his book, Buyology – Truth and Lies About Why We Buy, author and columnist Martin Lindstrom explains how his team used both fMRI and Electroencephalography (EEG) technologies to study what was really going on in the brains of consumers as they watched commercials and thought about brands. Lindstrom believes that advertising works best when it bypasses people’s cognitive defences through the use of sensory data – such as sounds, fragrance, touch, tastes and visuals – that appeal to the brain.
The Perception of Price
How the consumer perceives price is another important area for neuromarketers. Professors’ Elger and Weber conducted an experiment using fMRI where people were shown products as well as the price for the product. Some of the products were cheap, others were overpriced. In addition, some of the products—regardless of whether they were cheap or overpriced—had been marked with a discount tag. The researchers established that every time a discount tag was shown, the brain’s reward system was activated whereas the part of the brain that prevents us from making irrational (purchasing) decisions was deactivated.
Studies at Cornell University also showed that restaurant patrons tended to be more price-conscious when dollar signs appeared alongside the prices on menus. However if there was just a numerical digit—no dollar symbol and no decimal point—then spending went up. The research team’s advice is to not put the currency symbol on menus.
Dooley makes a similar observation in Brainfluence. When spoken, the more syllables a price has the more expensive it will appear. The same applies to the use of commas and decimals, for example using $2500 rather than $2,500.00. In addition, minimising the currency symbol so that it is smaller than the figures reduces the visual length of the price thereby diminishing its perceived magnitude.
The Fear of Loss
Making a product appear scarce can be a powerful marketing tool to instil a sense of urgency to the buying process according to neuromarketers. Dooley suggests that is because our fear of loss rather than gain is the greater emotion. For example, in an experiment people were given $50. They were then asked whether they would prefer to keep $30 or lose $20. Even though the dollar amounts were the same, the majority chose the ‘keep $30’ option. Researchers found that people base their decisions on an inherent aversion to loss so the fear of losing out on a bargain or offer is a greater motivator than the persuasion of gain.
The Use of Storytelling
The writer Maya Angelou once remarked, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” Neuromarketers agree with this and believe that when rational thinking conflicts with emotion, emotion wins. As such the use of storytelling allows you to connect at an emotional level with your customers. Research has found that linking ideas to commonly known stories leverages previously established neurological path in the consumer’s memory. Studies show that when absorbed in a story, people detect fewer inaccuracies and inconsistencies. However, when reading dry and factual content, people seemed more critical than when reading a story. From this, neuromarketers conclude that consumers do not make decisions on the basis of pure logic alone.
So does neuromarketing actually work? Some critics argue that neuromarketing relies on the belief that brain scans somehow reveal the “real consumer” despite the fact that no benefits have ever been demonstrated over traditional consumer behaviour research. These critics take issue with neuromarketing research that purportedly demonstrate consumer behaviour is fundamentally irrational and driven by needs hardwired into our brains. For them studying brain activation does not provide an explanation, it only provides a new level of description for what we already know is happening.
This is very true. Neuromarketing alone is unable to explain consumer behaviour. Neuromarketing always needs to be supported by other disciplines like psychology and sociology. In reality there is no such thing as a magic “buy” button in our brain nor can consumers be manipulated into buying things that offer no value to them at that time. For all the possible insights neuromarketing may bring, consumers are still independent, rational individuals who will ultimately make their own decisions about what they want to buy.
This article was first published in Marketing NZ