by ScientialUnderstanding the Market: How Neuromarketing Can Improve Your Marketing Strategy
“Neurophysical measures can provide profound insights into human behavior, particularly regarding decision-making processes.
- Physiological measures, such as electrocardiograms, eye tracking and facial recognition software
- Neurophysiological measures, as electroencephalography, functional magnetic resonance imaging and functional near-infrared spectroscopy
- Behavioral measures, in particular surveys and self-reports
These impressive, highly developed methods are not always available, mostly due to a lack of resources. Whereas a more than adequate volume of previously collected data is accessible online, providing a suitable source to deploy brand new strategies.
By analyzing unconscious behavioral patterns, neuropsychology and, specifically, neuroanalysis could support a change of direction in strategic intent: a scientific approach to marketing based on extensive knowledge about how decisions are made can be a significant move for a small, growing business trying to stand out.
Fast and slow thinking
Marketing environment is facing a challenging shift as a result of digitalization. Customers are now exposed to a significant amount of data. New digital supports, more complex functions, and increasing exposure to information are changing both competitive and customer behaviors.
Due to this change, and the interpretive problems with data-driven business models, the range and usefulness of strategic planning projections are becoming shorter, and less meaningful relative to market realities.
Thus, a change of direction in selling processes may be needed. To better understand customers’ buying patterns, it could be useful to elaborate more on decision-making processes. According to the psychologist Daniel Kahneman, two separate systems elaborate thoughts about making a choice:
- System 1 supports rapid, instantaneous decisions; it works automatically and out of individual control.
- System 2 sustains rational, aware thinking and allocates attention; in consequence, its action is way slower.
Studies confirm that decisional behavior can happen without the involvement of attentional activation. Similar proofs can lead one to conclude that decision-making relies on emotional, unconscious thinking. On the other hand, digital buying supports and information availability change: the way customers decide and increase the frequency of rational thinking. The perception of endless opportunities may cause confusion and therefore blind the emotional system. In this case, having too many options leads customers to abandon the purchase.
In one study from Columbia University, researchers observed different groups of customers’ buying patterns: the unaware subjects were exposed to a randomly assigned assortment of jams. While a higher percentage of potential customers was attracted to the more extensive jam selections, only 3% of them decided to purchase one in contrast to a percentage of 30% buyers for the smaller selection.
These findings are consistent with a specific concept: simplifying the selling process and shortening customer exposure to data to achieve a less frustrating customer journey.
A scientific strategic plan based on the provided data may include the following actions:
- Decreasing the steps required to get from product to cart
- Optimizing landing page loading
- Reducing time customers spend in a queue, in the case of physical locations
- Checking product availability in most popular channels
A two-way path to action
As stated before, decision-making can rely largely on unaware, emotional processes. Hence, acknowledging customers’ emotional drives is fundamental to understanding how to trigger and reshape their decisional behavior. A widely applicable neuropsychological approach is Damasio’s Somatic Marker Hypothesis.
According to Damasio, the act of choosing can stimulate a low-level affective activation, inherently to the estimated outcome. The association between behavior, emotion and the physiological response associated with both of them will generate a so-called somatic marker.
Somatic markers are stored in long-term memory systems. Consequently, the existence of a previously evoked somatic marker can influence further decision processes associated with the same stimulus or outcome. Moreover, Damasio states that the arising of the somatic signal is neurologically involved with two separate subcortical projections:
- The afferent path allows emotional centers, such as the amygdala and basal ganglia, to communicate with the ventromedial prefrontal cortex; this path is the neurological support to the emergent physio-emotional response.
- The efferent path leads sensory and contextual data from the ventromedial prefrontal cortex to the amygdala; this process is mostly conscious and requires an attentional modulation to associate the stimulus with the correspondent emotional reaction.
When a somatic signal is evoked, there is no different path involvement; thus, decision processes become quick and emotion-driven. Consequently, monitoring customers’ emotional state provides inestimable insights to more valuable strategic planning.
Ways to estimate customers’ emotional response about the buying process may include:
- Tracking emotion with physiological measures, such as facial recognition software and eye tracking
- Evaluating available data about a specific customer segment
- Collecting behavioral data with surveys regarding customers’ attitudes, feelings and behaviors regarding the product
Gaining a broader and more precise prospect of buyers’ emotional landscape provides an essential index to address a business’s strategic intent towards the most appropriate emotional triggers for the considered audience.
Gain and loss in perspective
Nevertheless, customers are prone to similarly make an illogical decision in the case rational thinking is involved. In this regard, Kahneman and Tversky stated that people are more inclined to choose based on perceived gains and losses in relative terms, rather than analyze the overall context.
The two psychologists introduced the most common concept of risk aversion: the tendency of deciding to avoid the worst outcome instead of striving for the best one. In addition, they integrated their theory into a non-linear mathematical function known as value function: the most rational choice is estimated by the perceived value – or utility – from different outcomes given their probability.
When launching a new product, challenging established norms of behavior among customers comes with the same vitriol and resistance of an especially difficult competitor. To modify current buying patterns, learning how to efficiently apply risk aversion may be a crucial step. It’s relevant to recognize how to enhance product value by reducing customers’ prediction of eventual loss.
Some crucial steps in this matter may be:
- Knowing what your key customers consider to be most important aspect of your product or service
- Being sufficiently aware of key customers’ most significant pain points
- Organizing actions that solve customers’ existing pain points
Neurophysiological and digital psychology research is a valuable source in planning strategic intent. In fact, in spite of a physical lack of measurement tools, the wide availability of online information can facilitate small businesses to gain the most relevant neuroanalysis assets.
Hence, analysis of behavioral, physiological and neurophysiological data provides precious data about what buyers want and how they make a decision. Similar insights are decisive in optimizing customers’ journey as with conducting competitive analysis. In fact, competition is necessary for corporate progress. Without it, striving for higher levels of efficiency, productivity and profitability would be meaningless.”
Read on: https://www.business.com/articles/neuromarketing-and-strategy/