Background
A debate has been going on for many years as to whether humans are rational or emotional when making decisions. In a review of the rational perspective, Joseph Persky, who wrote about the ethology of homo economicus, or “economic man,” argues that this latter term has been in use for a long time and can be traced back to 1888.[1] Since then the term has been used extensively, including by noted authors such as Peter Drucker and Keith Stanovich.[2] [3] Persky argues that “in contemporary usage, the essence of economic man lies not in what he picks, but in his rational method for making choices” (arguably his decision making).[4] Researchers, in striving to understand rational decision making, have often attempted to capture algorithmic calculations of how decisions are made.
There is a contrasting view to that of rational thought, namely that humans are driven by emotions with all the vagaries this entails. Smith identifies Thomas Brown as having coined the term “emotion” for the first time in the early 1800s, so the emotional and rational debates both have a long history.[5] Dan Ariely’s article in the Harvard Business Review entitled “The End of Rational Economics” succinctly captures the transition from the rational view of human behavior to an emotional view of human behavior. In his article, he posits the view that “we are emotional, myopic and easily confused and distracted.”[6] As managers, we would probably want to talk to rational customers rather than to the distracted, confused, myopic and emotional customers that Ariely alludes to. But evidence suggests managers would be foolish to ignore the emotional side of their customers.
Besides the rational/emotional debate, there are other theories as well. Researchers such as Daniel Kahneman and Amos Tversky have proposed the Prospect Theory which suggests that decisions are made according to heuristics and biases based on perceived potential losses and gains, decisions that are neither fully rational nor fully emotional.[7] Robert Cialdini, “the six principles of influence,” and Richard Thaler, “predictably irrational,” are other notable researchers that have contributed to this debate.[8] [9] In fact, there is still an extensive debate that is raging around the drivers of human behavior. The Harvard Business Review article, “From ‘Economic Man’ to Behavioral Economics,” provides an excellent summary of this debate.[10] This article’s aim is not to contribute to this debate, but rather to acknowledge the view that human beings operate with a combination of both rationality and emotion and, indeed, that the two perspectives depend on each other, as has been suggested by Damasio with his somatic marker theory.[11] Given that humans are also subject to the caprices of emotions and not just rationality, the article takes the stand that capturing the emotional responses of consumers to marketing stimuli is important in implementing successful business strategies that increasingly speak also to the emotional side of consumers, and not just to their rationality.
The need to capture emotion
In the process of understanding emotions in human behavior, the challenge has been to capture an honest measure of the emotional reactions of humans and it is therefore no surprise that the debate on the emotionality/rationality of humans has entered the realm of neuroscience. While Ariely suggests that explicit observation of behavior can provide a clue to emotional state, observations alone are not enough.[12] For example, a shopper in a store who considers a particular product and then decides not to buy, does not reveal the implicit emotion that may have gone into making the decision. It may be that the individual was in fact emotionally strongly “turned-on” by the product, but decided for other (rational?) reasons not to buy it. Thus behavior only reveals the end-state of a process of decision making. However, when asked about their emotions, humans are inclined to under or over emphasize their emotional state, or even to deny that they have an emotional response to a given topic or stimulus; that is, they are not always aware themselves of their motivations. Instead, it is argued, focus needs to be placed on studying the actual emotions linked to decision making and their beginnings in the neural network that is the brain. This is where neuroscience comes into the picture.
The technologies
The increasing ease of use, coupled with the falling cost of modern neuroscience technologies has made the measuring of subconscious emotional response to marketing stimuli a reality. These technologies include electroencephalography (more commonly known as EEG which measures brainwaves), eye tracking, pupillometry, galvanic skin response (a measure of skin conductivity caused by sweat), emotion recognition from facial analysis, thermography and heart rate analysis (all of which can be grouped together as psychophysiological measurement tools). These technologies—see the figure below—have contributed to a growth in the use of neurosciences in the business and marketing fields, and is revealed by the growing number of articles in the fields of neuropsychology, neuroeconomics, neurofinance, neuromanagement, neuroergonomics and neuromarketing.
One broad aim of the neurosciences is to understand, amongst other factors, how the human neuro-system—comprising the central and peripheral nervous systems—works in facilitating decision making, from a rational and/or emotional perspective. As far as measuring emotion is concerned, the psychophysiological measurement tools mentioned above have been shown to be quite effective in revealing the subconscious and emotional side of humans. The reality is that when we are excited or emotional, our pupils dilate, our heart rate increases, our brainwave patterns change, we sweat ever so slightly, our faces flush giving off heat, and our facial expressions change. These are almost instant reactions to the stimuli we are presented with and these responses happen in hundredths or thousandths of a second and are difficult to hide. The abovementioned technologies enable us to track and analyze these responses and, when combined with verbal answers to questions that have been posed to customers or when these same customers are presented with evidence of their reactions to stimuli, researchers are able to interpret these responses in a meaningful way that can ultimately influence strategy. It is important to emphasize the important role of qualitative insight in understanding consumer’s neuro- and psycho-physiological responses to the stimuli they have been presented with. This is the value currently of neuroscience to business and marketing strategy.
Figure 1: Examples of psychophysiological measurement methods
However, it needs to be noted that research into understanding neural decision making and the impact of emotions on decision making is still in the early stages. In other words, we can track emotional response to stimuli, but understanding exactly how emotion influences decision making is still being investigated. This is notwithstanding the fact that actually quite a lot of research by some of the world’s best neuroscientists has gone into this topic; that is, researching emotion (and for that matter, rationality). Much of this research is based on functional magnetic resonance imaging (fMRI) technology—the large, cumbersome and somewhat restrictive million-dollar machines used to peer deep into the brain; fMRI is not proposed here as a tool of choice for the average firm exploring the use of neuroscience in their business strategy. The research into brain decision making and exactly how emotion influences this decision making, is still largely exploratory in nature, and not yet definitive or conclusive (the theory is still in the modeling and theory-building stages). But the theory is growing in clarity.
Applications
The fact that the emotional reactions of consumers (and even managers and staff) to stimuli can be tracked using the relatively affordable technologies identified in the figure above, is a good starting point for leveraging value from strategies that are able to draw on these emotions. For example, a South African neuromarketing firm has helped a local winemaker create a new wine by tapping into the winemakers’ subconscious emotional responses to the wine-tasting experience (clearly, this experiment could be extended to include consumers).[13] The Association of Magazine Media in New York has published a white paper on how neuroscience reveals why print magazine advertising works.[14] Their research shows that the haptics of reading, involving our sense of touch and motor skills, “…tap the very deep neural structures that we developed along with language itself.” An Australian bank, UBank, used EEG to explore their customers’ “future selves.”[15] Theories suggest that individuals consider their “future self” a different person. Tapping into neuroscience, Ubank enabled their customers to explore a mental picture of their future self in order to make better financial decisions today for the future. Again in Australia, Millward Brown, a specialist brand, media and communications research firm, used neuroscience to correctly predict the Australian federal elections.[16] Although, a traditional direct survey depicted one candidate as the likely winner, by using neuroscience the non-conscious emotional responses of voters instead pointed to another candidate, the eventual winner. Research by Nielsen shows that neuroscience provides a “deep, clear view into…real-time reactions of consumers…at the sub-conscious level of the mind.”[17] Their research suggests that, while neuroscience alone can predict with 77 percent accuracy the likelihood of an advertisement lifting sales volume, when combined with verbal reporting by participants, the accuracy increases to 84 percent.
The above examples highlight the power of tapping into the emotional responses of consumers to select a jingle, an advertisement, a product or a brand over another. Given the high cost of advertising or investing in production lines or redesigning packaging, it makes economic sense to test emotional response to advertisements, products, or packaging before spending large amounts of money on flighting the advertisement, or going ahead to manufacture the product, or redesign the packaging concerned.
As a final example, these same tools can be used to better understand the emotional response of managers and staff to one another, or to customers. Understanding the emotions that play out when humans interact with each other, can point to the need for training or for the development of systems or processes that ensure better relations between staff, and between staff and customers.
Recommending a way forward
Thus the aim of this article is to bring neuromarketing into focus for managers. It is suggested that with a relatively small investment, organizations can tap into the emotions of their customers to help organizations to choose between product, packaging, promotional, or branding options that best link to the emotions of customers. This insight into the emotional response of customers can also be used to tweak the promotional messages companies use, or to measure the effectiveness of advertisements, to capture and keep the attention of viewers on some element of branding, or to draw on customers’ senses to enhance the sales message. The research evidence suggests that this insight will facilitate more customer-orientated and profitable strategies in the long run. In this regard:
- There is a lot of hype, with “neuro” attached to every other word—a lot of this is about selling a service or idea, or making an ordinary solution sound special, scientific, or definitive. Be careful of amazing claims by service providers offering neuroscience solutions—are these claims backed by hard, scientific evidence that you can believe? Be equally careful about draping “neuro” over your products to entice customers—they will quickly see through this.
- Few organizations are in a position to establish their own neuro-lab. A top-end lab could cost over a hundred thousand dollars, but an open-source lab could cost as little as ten thousand dollars (but that is not including the specialist skills needed to run the lab). Instead, work with advertising agencies or market research firms that are already linked up with a neuro-lab, or turn to a specialist lab or perhaps even your local university that has such a lab.
- Viewing a human being as entirely rational or entirely emotional in the process of decision making is a misnomer. Current thinking suggests that both processes are involved in decision making and this is backed up by research in this area. Clearly, emotions do drive decisions, but humans still make rational, considered decisions as well; “emotionality” has not usurped rationality.
- Using psychophysiological tools and measurements to support your strategic marketing decisions will help you better understand the process of decision making on the part of your customers. As the neural decision-making field is still in its infancy, support any “brain evidence” you are offered, with traditional research including behavioral research. Be cautious in adopting neuroscience in your organization, but at the same time it would be a mistake to ignore this up and coming field.
- Be aware that there is no one-size-that-fits-all approach in neuroscience. Different cultures, communities, and consumer demographics will react differently to the same stimuli.
Conclusion
In conclusion, organizations are urged to cautiously take up the reigns of neuroscience in order to “speak” more distinctly to the emotions of their customers. To tap into customers’ emotions, organizations need to undertake research now into how their customers react to the stimuli the organization plans to draw on in its business and promotional activities. Measuring emotional response to stimuli using psychophysiological measurement tools and methods such as eye tracking, EEG, galvanic skin response, etc., is currently very achievable. Managers should talk to local experts and explore ways that they can tap into these neuroscience technologies to establish a competitive advantage for their respective organizations. Neuroscience is happening now. To ignore it would be to lose out on competitive opportunities now and in the future.
