What do guns, burglar alarms, and condoms have in common? Their sales all boomed in 2009, with condom sales jumping 22% over the same period in 2008. But why?
When you are told repeatedly that the world is buckling under the weight of a financial crisis, the first line of defense is to save whatever money you have. That sets a whole new train in motion. Suddenly your local retailer around the corner loses revenue from your less-frequent visits. They are forced to lay off staff, who in turn are spending less, and in fact are no longer buying your products. It becomes a cycle somewhat akin to a self-fulfilling prophecy. We're told it's a crisis. We stop spending. They stop spending. Everyone from producer to retailer suffers. And the economic meltdown keeps on melting.
As sophisticated as we have come to believe we are, we need to remind ourselves that we're not that far from our evolutionary relatives--primates who live our lives taking care of the most basic needs--food, sex, sleep, and survival. In an atmosphere of fear, we tend to revert back to our basic needs, and this may explain why we're stocking up on condoms, buying weapons, and installing burglar alarms.
A recent neuroscience study shows that fear is a far bigger driver than we would ever care to admit. Fear of losing our job, fear of not being able to make the kids' school payments, fear of ending up in the proverbial gutter. These thoughts are scary enough to bring on an instant anxiety attack. When we're operating in survival mode, fear and sex become our two main drivers.
When President Johnson ran his "Daisy" TV commercial, which threatened voters with nuclear annihilation if he wasn't elected, the voters hated it. George W. Bush tapped into a similar zeitgeist in 2004. His commercial, showing wolves crossing the border as stealthily as terrorists, he instilled the self-same dread and fear. Both TV commercials aimed to knock us square on the amygdala, the region in our brain responsible for generating fear. Voters spoke of their dislike for both commercials, yet what brain scans showed was that as a consequence of these ads, voters favored the politicians that would best "protect" them.
From the very first days of the U.S. recession, all three big car manufacturers announced unheard-of discounts to shift their stock. They continue to offer their cars at cost, and despite this, nobody's buying. The problem is not the cars, but the proposition which has failed to take the fear factor into account. People who fear for their jobs are hesitant about spending money on a big-ticket purchase. The Korean car manufacturer Hyundai took this cautious mood into account and began and offering very real assurances. They say,
“Buy any new Hyundai, and if in the next year you lose your income, we'll let you return it.”
In just a month Hyundai increased its sales by more than 20% in the U.S. alone. You may wonder if the company's sitting with a lot of returned stock. Well, as this goes to print, supposedly only two cars have been returned.
You cannot build brands in a recession unless you are able to manage fear. It's essential that you understand how fear works, and consequently how it affects purchasing behavior. Fear is often as irrational as everything else in our lives. When a plane crashes, the airline industry allows for 10% less traffic in the weeks that follow. Yet you don't have to be a statistical genius to know that the chances of a second plane crashing shortly after are substantially lower than before. Irrational propositions become more powerful than ridiculously high discounts.
Over the past months, a flurry of new banks have opened their doors for business. They have no track record, no established history, and no known personnel. Their proposition is straightforward: We're new. We have no links to Wall Street. We're here to serve you. Consumers are finding this immensely attractive. Yet, I'm sure we'd agree that a similar proposition a couple of years ago would not have stood a chance.
So what can we learn from neuroscience to help us cater for a market reeling in the depths of a financial recession? How can we continue to build brands?
I offer three ways to do this.
- Turn Bad News Into Good News - A standard approach in this situation is to address consumers' problems. And people always have problems. The fact is we rarely know what we want, but we have no trouble pointing out our difficulties. For example, no one knew they wanted an airbag, but everyone agreed they wanted safer cars.
It's therefore important to ask yourself what sort of problems are consumers facing during this economic recession? There are many. People have had to cut back on travel and if they can afford to still take a holiday, well, it's much cheaper to keep it local. Which might explain why those French perfumes are still selling--they offer a whiff of Paris. And if you can no longer afford expensive dining, you can always supplement your home-cooked meal with an after-dinner Lindt chocolate. We're increasingly reluctant to invest in the share market, but we're happy to put our money in gold.
Convert problems into assets for your brand.
- Add a Practical Dimension Equation - No matter how much money you may have in the bank, or how secure your employment may be, it's now fashionable to save your money and buy everything at a discount. What can a brand owner do? Particularly in light of the fact that a discounted brand typically takes seven years to recover!
The answer is simple. Add a practical dimension to the equation. One only needs to look at a hardwearing boot like Willeys to see that this manufacturer of sturdy reliable footwear is clocking up big sales. A well-designed jacket, that just happens to be reversible, could tip the balance in favor of the consumer who perceives they're getting two coats for the price of one. The fact may be that the consumer is buying the jacket because they love the design--yet in recession times, the practical dimension is the deal maker.
- Systematically Remove Fear - Hyundai did it. And a stream of new banks are doing it. Both have succeeded in identifying why consumers are reluctant to spend. Once this is understood, then you can harness it and build a better product by addressing the fear and finding a way to eliminate it. You sales may be down. But do you know why? People are certainly buying less, and explanations like, "Well, there's a recession going on out there," are not helpful. What's important is to understand the fundamental role of fear, and then turn it around to strengthen your brand. Some of the world's most enduring grocery brands were built on the back of the Great Depression. Each one turned the threat into an opportunity.
There's no reason why you shouldn't be able to do the same.
COMMENTARY: It never ceases to amaze me how consumers, or clients for that matter, mentally sabotage themselves out of making a decision for fear of making that decision. It's the fear of the unknown, and those inner demons that reside in our subconscience that create emotional barrier's that are genetically built into us.
Not only is there fear before a customer finally acts and makes the buying decision, but there is fear after they make the buying decision. The latter is commonly referred to as "buyer's remorse". This is one of the qualities that make human beings so unique.
I am always looking for answers, trying to find the tipping point, the event or situation, that make human beings overcome their fears and trigger a buying decision This became such an obsession that about six years ago, I discovered neuromarketing, a new field of marketing that studies consumers' sensorimotor, cognitive, and affective response to marketing stimuli. In short,
"Our unconscious mind -- not our conscious mind -- drives how we respond to ads, brands and products and, ultimately, drives all our buying decisions. Customers don't really know why they buy what they buy, which is why traditional market research fall short."
That's an interesting concept, and scary one, if there ever was. The idea that consumer's "don't really know why they buy" is a difficult concept to grasp, and goes against every marketing, sales concept or teaching I have known. There is definitely something to this, and may help explain why so many major brand's are hiring neuuroscientists to help them identify the consumer "hot buttons" and develop their advertising content.
It gets a bit technical after this, but here goes:
According to neuroscientists, there are 3 main parts to the brain, each functioning as a brain unto itself. These "three brains" - nestled inside one another -- are as follows.
- The "Human" ("New," or outer-most) Brain: Most evolved part of the brain known as the cortex. Responsible for logic, learning, language, conscious thoughts and our personalities.
- The "Mammalian" (Middle) Brain: Also known as the limbic system. Deals with our emotions, moods, memory and hormones.
- The "Reptilian" (Old) Brain: Also known as the R Complex controls our basic survival functions, such as hunger, breathing, flight-or-fight reactions and staying out of harm's way.
While neuromarketing is still a young field with many unanswered questions, one finding is clear.
The reptilian, or "old," brain drives your customers' buying decisions.
According to Erik du Plessis in The Advertised Mind
, the "old" brain rules all rapid decision-making. Market researcher and Chairman, Archetype Discoveries Worldwide, Clotaire Rapaille said in a PBS interview -- "The Persuaders" -- that ...
"The reptilian always wins. I don't care what you tell me intellectually. Why? Because the reptilian always wins."
To strengthen your brand, loyalty and sales, you must understand your customers' "reptilian hot buttons." A "cortex" message -- such as "Buy my product because it is 20% cheaper" -- doesn't buy customer loyalty. It all comes down to who triggers the first reptilian reaction. That's why Coke, after all these years, continues to dominate the market.
The "Reptilian Brain" and Profits: 7 Critical Insights You Must Know About How and Why Your Customer Buys
Our "old" brain often overrides our voice of logic and drives all buying decisions for reasons beyond our conscious awareness. To influence your customer's buying decisions, you must learn how the "old" brain operates and speak its "language." Below are 7 key insights about the old brain that can add to your bottom line.
1. The old brain is driven by emotions. Our old brain operates on autopilot -- ie., a stimulus response mechanism. Emotions are automatic responses to sensory stimuli. The smell of coffee, the sound of the ocean, the view of a setting sun ... all trigger an unconscious emotional response. Emotions play a similar critical role in our buying decisions. Business Pundit (www.businesspundit.com) reminds us that "in an oversupplied economy, customer feelings drive purchase decisions and profitability. Your new imperative is to assess and appeal to your customer's feelings. Welcome to The Feelings Economy." Key lesson: The more senses you trigger and associate with your products/services, the more you will appeal to your customers' emotions and influence their buying behavior.
2. The old brain "decides" on the basis of the gain vs. pain tradeoff. The two basic drivers of all behavior and decisions are: to seek pleasure and avoid pain. According to Kevin Hogan, author, The Science of Influence, "most people react to the fear of loss and the threat of pain in a much more profound way than they do for gain." Consumers focus more on not getting hurt over the need to feel great when making decisions. "They overemphasize the importance of pain by about 2.5:1 in decision making." How to overcome your customer's "distorted" gain vs. pain trade-off? Key lesson: Marketing guru, Seth Godin illustrates through his Joy/Cash Curve that high value purchases often trigger increasing amounts of buying pain. His solution: add more joy and pleasure to the buying process, such as he did in his work with Lexus. According to Godin, when you make buying pleasurable, you actually reset the customer's "value meter." How are you adding more joy to your buying process?
3. The old brain is highly influenced by beginnings and endings. Research confirms that the beginning and ending of an event or experience alters our perception of the entire experience. Our initial impression becomes the "filter" for how we perceive what is to follow. The most recent experience leaves a final impression with greater weight. Key lesson: In marketing, for your message to be accepted, it is critical to leave a strong first impression -- like a compelling story, a big smile, etc. Also, if a customer has a pleasant or unpleasant experience with your product or company, that most recent experience will influence future purchases more than all other experiences combined. What impression are you leaving with your prospects in the first few seconds or words? How has your last customer contact enhanced or jeopardized repeat sales?
4. The old brain is visually oriented and responds rapidly to images.From the moment we are born, we are able to see shadows and associate meaning to them. In communications, we are told that 65% of our how our message is received is through our physiology (or visual cues). Study after study has shown that someone's first impression of you is based on your physical appearance. In each instance, it is our old brain rapidly responding to visual cues, not words. Words are the realm of the "new" brain and are secondary in the buying process. Key learning: Enhance and deliver your core marketing message visually -- eg., the design of your product, images in an ad, external packaging, etc. Where can you visually strengthen your brand and emotional connection with customers?
5. The old brain perceives the "pain of buying" in relative, not absolute, terms.
Neuroscience tells us that the "pain" in the old brain is most activated with price. Not in absolute terms but rather in relative terms -- such as fairness vs. unfairness, or alternative uses of dollars. Therefore, how you present or frame your prices could be driving customers away. How can you minimize activating the pain trigger with your price?
6. The old brain understands only what is tangible, physical and concrete.
According to Patrick Renvoise, author, Neuromarketing: Is There a 'Buy Button' in the Brain?
, the old brain is constantly scanning for what is familiar and tangible. It does not understand numbers or abstract terms, like "integrated approach" or "comprehensive solution." Key lesson: To speak to the old brain, you must use tangible "benefits" -- ie., what a customer will see, feel, hear, taste or smell as a result. Eg., a promise of "greater happiness" is gibberish to the old brain. Instead, tell your prospect how he/she will wake up every morning with a smile. Or use metaphors (such as referring to your service as the "Cadillac" offering) to make your benefits more tangible.
7. The old brain's control over buying decisions varies from culture to culture.
According to market researcher, Clotaire Rapaille, some cultures are very reptilian, such as the American culture. Americans want instant gratification. They have a bias for action. Other cultures -- such as the French and German -- are more cortex, control-oriented. Their bias is thinking over doing. Key lesson: Adapt your marketing communications to each culture and what part of their brain drives buying decisions. Use emotional appeal with Americans; use logic with European cultures.
While neuromarketing is still in its infancy, it has the potential to revolutionize the way we market our products/services. The most important point is to use it for the right reasons. That is, as a way to better understand your customers and ultimately to better serve them. When used in this way, it can have a dramatic impact on your bottom line.
Courtesy of an article dated April 19, 2011 appearing in Fast Company and NeuroMarketing: Top 7 Insights
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