What is neuromarketing? How your brain responds to branding

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“Nothing is as powerful as an idea whose time has come.” —Victor Hugo. Hugo wasn’t talking about how neuromarketing is set to transform the future of customer experience while closing the experience gap with the power of AI, machine learning, and the Internet of Things.

Obviously.

But the sentiment still applies.

The more neuroscientists learn about the brain, the more social psychologists understand about consumer behavior, and the more marketers can apply these insights to branding and building customer trust, the closer the time of realization regarding the power of neuromarketing gets.

Successful branding relies on emotional connection

As the experience economy transforms, successful branding is increasingly defined by engaging customer values and connecting emotionally. Neuromarketing insights will become increasingly valuable to the over 80% of companies who plan to compete mostly or entirely based on customer experience.

Combine these ambitions with the harsh reality of the experience gap, where 86% of companies believe that they deliver great customer experiences while only 8% of customers feel the same way, and the challenge becomes the opportunity.

Getting a realistic understanding of customer perception and behavior will drive the innovation responsible for closing the experience gap. It’s easy to see why the neuromarketing technology market and demand is forecasted to grow steadily through 2023 and beyond.

What is neuromarketing?

Neuromarketing is the scientific study of how the brain responds to branding and advertising. Neuromarketing uses insights from:

  1. Neuroscience
  2. Behavioral economics
  3. Social psychology

These insights are applied to measure and improve the effectiveness of different facets of marketing, including:

  • Product design
  • Branding
  • Marketing practices

What if you could see the neural light show when customers interact with your brand? What if you could see exactly how consumers respond to your marketing campaigns, sales teams, and customer service reps – or any aspect of your business? What areas of their brain light up when they talk to their friends about your company?

Deeper understanding and empathy for your customers will enable you to predict their behavior more accurately and deliver the best possible customer experiences.

Neuromarketing is bigger than creating catchy ads and compelling cues. Insights gained into human behavior can be applied across your organization, from achieving executive alignment to stronger cross-function communication and collaboration to improving employee and customer experience.

Psychology, neuroscience, and marketing walk into a bar…

Except this is no joke. If variations of that opening line flashed in your mind, then you just experienced part of your System 1 brain at work as it scrolled through your archive of associated impressions, ideas, memories, and emotions – all tagged and linked in areas of your neural network.

System 1 is powerful enough to have helped humans survive for millennia, and it’s still with us today – receiving and sorting sensory data, decoding and deciding what’s worth getting excited about and what’s not. Most of that happens at a preconscious level before rising to our conscious mind as a feeling, an emotion.

System 1 runs on sugar, heuristics (mental shortcuts), raw emotions, and good coffee. The most successful brands build their foundations here.

Why? Because our decision-making and action-taking are driven by all the feels from System 1. It’s not a new revelation, especially to marketers and anyone else interested in human nature.

In the 1970’s, Kahneman and Tversky studied how people actually make decisions. They illustrate our brain function and behavior as System 1 and System 2.

System 1 is emotional, instinctual, intuitive, associative, and has adapted to making quick decisions trained on habit by using heuristics or mental shortcuts to ease cognitive load and save time and energy.

System 2 is rational, slow, and deliberative, and often lazy; it’s happy to let System 1 do most of the work. System 1 is street smart and System 2 is book smart.

Traditional consumer models presumed a wholly rational customer who must be persuaded by thorough deliberation of the complete set of cold, hard facts and watertight practical logic.

In reality, people make decisions based on emotions and feelings at a nonconscious level, meaning we often can’t articulate why we make the choices we make.

System 1 processes sensory data, organizes impressions, and makes meaning by association. But the lack of conscious reasoning leaves it susceptible to the manipulative and potentially misleading effects of priming, environmental cues, and the weaknesses of biases guiding jumps to hasty conclusions and decisions.

This vulnerability has been known by marketers and psychologists for a long time. I wonder what part of the brain lights up with buyer’s remorse after a late-night splurge of impulse purchases. (Asking for a friend).

Yeah, but how does neuromarketing work? And does it work?

Some neuromarketing methods draw from current user experience research and biometric measurement technologies used to gather data through:

  • Eye tracking
  • Facial expression monitoring
  • Electrodermal activity
  • Response time
  • Respiration and heart rate to study physiological responses to stimuli

The contributions of neuroscience technologies such as electroencephalography (EEG), functional magnetic resonance imaging (fMRI), and magnetoencephalography (MEG) that monitor neural responses can show participant reactions that may remain unconscious.

Understanding the positive or negative reactions to sensory stimuli such as colors, sounds, and other qualities can help marketers and product designers adjust design and messaging to impact customers more effectively.

These technologies are not that new. And their potential for deep customer insight is not a new idea. Neuromarketing has been discussed in principle for decades, and testing has been going on since the mid-2000s.

Using EEG and fMRI machines to measure neural response, researchers have tested the effects of branding with big brands from Coca-Cola, Pepsi, Apple, and several others.

Frito-Lay wanted to grow their market share among women. Their research using fMRI revealed that the shiny packaging stimulated the area of the brain that produces feelings of guilt and shame. This insight led to packaging redesign to change the bags from a shiny finish to a matte finish, which increased sales.

Back again for the first time: A portrait of neuromarketing as a young discipline

Neuromarketing has not yet fully matured, but it has come a long way in just a few years. Another five to ten years could make all the difference. The prohibitive cost will come down as technology improves and firms compete. Results and actionable insights will grow more reliable, valuable, and attainable.

Some dismiss neuromarketing as useless because they see it as merely confirming what traditional marketing research already knows. Writing it off may be fair if the field is supposed to be fully mature. But neuromarketing is just now coming into its own.

Neuroscience and the technologies available to neuroscience and marketing continue to develop. This makes the confirmation of existing knowledge look a lot like confirmation of the potential for a more developed and mature neuromarketing.

A productive use of the meantime would be to figure out the inevitable ethical and regulatory questions including data privacy and security, especially with the GDPR and ongoing data breach scandals so fresh in our digital cultural memory.

The potential for neuromarketing to further innovate the digital transformation of business and elevate what it means to be an intelligent enterprise is vast. With an exponentially deeper understanding of your customers’ needs, wants, desires, intentions, and behaviors integrated into your already robust customer profiles, it’s hard to overestimate the competitive advantage afforded by this new dimension of customer insight.

Creating exceptional emotional experiences that are individualized on an unprecedented scale, in an appropriate and ethically transparent way that pleases your customers while understanding, respecting, and aligning with their values and their expectations – that’s the potential of neuromarketing to usher in the next generation of CX as the values and emotion economy continues to evolve. Closing the experience gap is only the beginning.

Shine in the moments that matter.
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Josh Maday
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Josh Maday

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