Marketing Mind Shift - Part 3

So here we are, at part 3 of this series of blog posts - hope you enjoyed it so far and I hope it made a dent in your marketing universe as well. We've seen how our brains make purchase decisions, we've seen also how context and the environment influence our purchase decisions. In this part we'll learn to to tweak our tools to influence consumer behaviour.

Optimise the path to purchase

The decision interface makes the difference. The decision interface is the sum of all elements that emit signals the brain perceives.

The commonly held view is that to change behaviour, you have to change attitudes first. This is wrong.

Value perception and decision making are influenced not only by what is presented but also by how it is presented. Interfaces can change behaviour without changing minds because they change the context of decision making.

Actions do not merely reveal preferences but rather create them. Attitude follows actions

Actions do not merely reveal preferences but rather create them. Attitude follows actions. This approach (decision interface optimisation) is actually the optimisation of the path to purchase: to increase perceived value and/or lower perceived barriers. E.g: car wash stamps with 2 already stamped drove more positive behaviour than empty cards. Framing the task as one that has already been started and is incomplete rather than one that has not yet begun leads to people being more committed to completing the task and moreover, complete it more quickly.

Another interesting fact is that prices activate the pain area in the brain, therefore prices without Eur sign performed better.

Lots of studies show that communicating what others do in similar situations has the power to change behaviour. The power of social norms increases if we relate them to the target audience as closely as possible (occupants of this room reuse towels).

Avoiding loss is value more highly than gaining something of the same monetary value. Loss aversion is one of the major barriers to people switching brands or adopting something new. The risk of losing something can be exceeded only by offering something twice the value.

Rules for tweaking interfaces:

  1. Tangibility - tangible and perceptible signals
  2. Immediacy - the autopilot prefers immediate rewards compared with future rewards
  3. Certainty - the autopilot prefers that safe, certain choice.

Tangibility - which signals are tangible along the purchase decision process? Which signals make reward and pain tangible? Which signals should be changed?

Window displays

Product displays 

Large price displays

Post purchase gifts…….

Immediacy - I want it now! How great is the distance in time and space to the tangible perception of value and cost? How can this distance be reduced (value more immediate) or increased (pain/cost further in the future?)

The shorter the distance to a product, the higher the value (no products behind displays).

Hyperbolic discounting - we have a very high discount rate for the future compared with the here and now.

Certainty - how big is the perceived certainty of value and cost?

Signals of scarcity increase the perceived value. “12% off, max 4/customer” works better than “12% off”. “12% off max 12/customer” worked even better because 12 acted as an anchor”. If a thing is in short supply and don;t know when it will be available again, our tendency is to hoard.

We value things we already own.

Flat rate bias. People often prefer flat rates even though they are not necessarily the optimal choice. 

The fact that we value the safe choice also explains our preference for for defaults. We very often go with whatever the default is because in most cased the default works fine. Also, it allows the brain to operate on autopilot, saving mental energy.

Applying this in store and online (see Groupon product page).

Adding focuses attention on increasing the price, whereas subtracting is all about reducing the costs. Implication: starting with a large nr of components or features and allowing consumers to scale down from there leads to the acceptance of a higher-priced product than starting with a basic product and asking consumers to build up from it. (pizza study, car study).

Lessons

  • How can we turn touch points into decision interfaces that work in our favour?
  • Our value propositions need to be perceivable though the senses and tangible, immediate and certain.

Goals

Wanting and liking are regulated by different neural circuits in the brain. We like the old bookstore, but we buy books from Amazon.

Willingness to pay: the more relevant a product or service is for an active goal, the higher the expected reward the and more we are prepared to pay. Neuroscientist call this the goal value. It is thanks to this goal value that our brain is able to decide which of the two completely unrelated things, or which competing brands we prefer. 

Only the number 1 brand in the consumer’s goal ranking will be chosen. It is not sufficient to be in a relevant consideration set. it’s important for a brand to be number one regarding specific occasions, or regarding a specific reward such as “attractiveness” in luxury lipstick or care. Consumers choose the brand with the highest fit to their dominant goal in a given situation.

Goals are a key concept to understand why we buy what we buy. Products and brands are instruments with which consumers achieve goals. The job the product is hired for. 

Job-defined markets are much larger than category-defined markets. Marketers who are stuck in the mental trap that equates market size with product categories, don’t understand whom they are competing against from a consumer’s point of view.

The consumer goal - not the customer or category - is the fundamental unit from which to define the market and inspire marketing strategies.

Goals drive attention

Products that promise to do the job best, get most attention. To achieve stand-out of our ads and impact on shelf we have to understand the goals consumers try to achieve with our products. Goal-based attention implies that the brand that springs to mind (top-of-mind) will depend on the consumers active goals. For positioning, this means that we have to link our brand to a relevant goal that is not yet owned by another brand.

Goals are assessed implicitly, by system 1, outside awareness.

Brands serve consumer goals

From a brain POV, brands are treated as objects, not as people with personalities. Therefore, brand personality is sort of the wrong concept to bet on. We do not buy body lotion because we want to become authentic or reliable. We buy body lotion because we want to pamper ourselves, to slim down, to have soft skin etc.

The nature of the relationship between consumer and brand is not that of an interpersonal relationship. Consumers buy the instrumentality of the brand.

We buy expected goal achievement

The reward centre of the brain is triggered particularly strongly based on expectation (opening the lid on a yoghurt pot). It is the rewards that we expect to get that drive valuation and hence motive the purchase.