Basics of Neuromarketing and Decision-Making
Why are consumers so hard to understand?
Maybe because they don't even truly know why they chose a certain product or a certain brand. This big mystery can be salved by a breaking science.
Neuromarketing. What exactly is neuromarketing?
It is a marketing or market research activity that uses methods and techniques of brain sciences. Brain science refers to a combination of at least three basic sciencefields. I refer here to neuroscience (the study of the human nervous system), behavioral economics (understanding situational influences on consumer choice and behavior) and social psychology (how people think and act in the presence of other people).
Neuromarketing studies have found that consumers appear to be just as bad at predicting what they will like as they are at predicting what they won't like. Brain science provides explanations, and neuromarketing provides some alternative approaches worth considering.
Why we make certain decisions
The human brain is known to be lazy. How so? It tries to limit the amount of cognitive activity needed to decide and act in the world, including deciding and acting as consumers and shoppers. In order to avoid spending too much mental effort, the consumer’s brain has a perfect balance between efficiency, familiarity, novelty and processing fluency. Let’s look at each component one by one.
According to Daniel Kahneman’s System 1 (the nonconcious mind) and System 2 (the conscious mind) model of mental processing, we employ a kind of limited rationality, using a number of judgment biases and shortcuts to make decisions. He calls this mental efficiency lazy control.
Naturally, the human brain is drawn to things that are familiar. It gives us a feeling of comfort and allows us to allocate less mental effort towards it. Have you ever wanted to give a second chance to a song in order to finally like it? Listening to it, again and again and again and FINALY liking it! Well this phenomenon is called the mere exposure effect! "The more often we're exposed to an object, the more familiar it becomes and the easier it is to process. As a result, we tend to like it more".
Novelty tends to catch our eye. We naturally direct our attention to new and interesting things. Why so? It is a function of prediction error. Our minds passively observe the world; it proactively predicts what it expects to see. In other words, if something violates our expectations, we tend to shift our attention towards the novel object. But, we have to be cautious. It is not automatically associated with positive emotional response. “On the contrary, the brain tends to approach novelty with caution1”. We need to create a positive connection. In order for a new product to be accepted on the market, it has to have just enough novelty to catch the consumer’s eyes and represent a familiar concept, in order to process it easily.
Processing fluency refers to the ease of processing, interpreting and understanding an object or situation. We interpret information that is easier to process as more true, persuasive and likable. Here are some tips to give your customers a good head start toward liking your new product. First of all, give it an easy-to-pronounce name. It was proven that companies that have pronounceable stock symbols, such as KAR, perform better. Second of all, aesthetically make sure to keep your visual (for example: a new ad) very simple. Objects that are symmetrical, with more contrast and more predictable patters are rated as prettier. Third of all, when presenting information, the format and display counts. Make sure to use short sentences, lots of white space and graphical illustrations.
According to Jeremy Smith in his article, 4 Facts About Decision Making That Will Improve Conversion Rate Optimization, costumers usually consider few options.
A characteristic he highlights is the fact that people tend to listen to data that confirms a decision that they have already made. This is called confirmation bias.
The image on the right, from The New York Times, demonstrates this concept perfectly. We can definitely say that, in this case, a picture is worth a thousand words. You might ask me: “can
I still convince or persuade a person in this mental state?” The reality is that most customers visit our website or shop knowing posteriorly if they will make a purchase, what general category of product they are looking for and at what price point they are willing to buy.
How can we overcome the confirmation bias?
Good news, neuromarketing has discovered that consumers do not have a rational way of making decision, as the traditional marketing research model. In fact, it is intuitive and can be overturned by presenting an emotional argument first. In this modern model, our brain uses habit, experience, and emotional cues as shortcuts to make decision. In addition, our purchase decisions are made spontaneously and without much deliberation. Changing the situation within which we shop can modify our preferences for products and brands.
Finally, people prefer to be confident and confortable with the decisions they make. It’s called cognitive dissonance. According to Saul Mcleod from Simply Psychology:
“Cognitive dissonance refers to a situation involving conflicting attitudes, beliefs or behaviors. This produces a feeling of discomfort leading to an alteration in one of the attitudes, beliefs or behaviors to reduce the discomfort and restore balance etc”.
For example, have you ever made an impulsive purchase and feeling bad about it after words and regretting? This feeling of discomfort is by some called buyer’s remorse or by others cognitive dissonance. In order to fix this state of mind, we resolve the inconsistency between our attitude and behavior by adopting a new attitude. One that is consistent with our behavior. In the case of regretting an impulsive purchase, you might have returned the article back to the store. Once we regain consistency, the discomfort in our brain fades away, and everything returns to normal. Problem solved. This section shows us the importance for companies to have very good cliental service, warranties or repair services depending on the industry.
For more details about the nonconscious mind of the consumer, you can consult the chapter 5 of Neuromarketing for Dummies.