Neuromarketing: The new science of consumer decisions | Terry Wu | TEDxBlaine

Summary

This script explores the unconscious influences on our buying decisions, using studies like the wine store music experiment and the New Coke fiasco to illustrate how subtle cues and emotional connections sway choices. It delves into neuromarketing, showing how understanding the brain can optimize marketing strategies, with examples like Google's color tests and Amazon's website speed. The talk concludes by emphasizing the power of small, unnoticed details in decision-making, as seen in energy-saving emoticons and a urinal fly, encouraging finding 'your fly' for impactful change.

Takeaways

• 🎵 The study at a wine store demonstrated that background music can significantly influence customers' wine selections, with German or French music respectively promoting the sales of wines from those countries.
• 🙅‍♂️ Over 90% of shoppers were unaware that the background music influenced their choices, indicating that subtle environmental cues can affect our decisions without our conscious realization.
• 🤔 The script raises questions about the nature of decision-making, challenging the idea that all choices are made consciously based on facts, reason, and logic, and suggesting that emotions, feelings, and intuition play a significant role.
• 🥤 The New Coke story illustrates the power of emotional connection in consumer choices. Despite positive taste tests, the change in formula led to a backlash due to the emotional attachment people had to the original Coca-Cola.
• 🧠 A 2004 study showed that when people were told what they were drinking, their preference for Coca-Cola increased, highlighting the role of expectation and brand association in shaping our experience with a product.
• 💡 The script introduces neuromarketing as a field that combines neuroscience and marketing to understand consumer behavior and decision-making processes.
• 🧩 The limbic system, our emotional brain, is crucial for decision-making, as shown by the case of Frank, who struggled to make decisions after his emotional brain was damaged by a stroke.
• 📈 Google's experiment with different shades of blue in ad links resulted in a significant increase in revenue, demonstrating the power of subtle changes in user experience to influence behavior.
• 💻 Amazon's slight improvement in website speed led to a substantial increase in sales, showing that even minor enhancements in user experience can have a significant impact on consumer decisions.
• 👫 Invisible social influence, such as perceived popularity or scarcity, can shape our decisions, as seen in the cookie jar study where volunteers rated cookies higher based on the belief that they were in high demand.
• 🚀 The script concludes by emphasizing the potential for small, seemingly insignificant changes to have a major impact on decision-making, as illustrated by the use of emoticons on energy bills and the fly etching in urinals.

Q & A

What was the purpose of the study conducted at the wine store?

The purpose of the study was to determine if background music influenced shoppers' wine selections.

What did the study at the wine store find regarding the influence of music on wine sales?

The study found that when German music was played, German wines outsold French wines by a 3 to 1 ratio, and vice versa when French music was played.

What percentage of shoppers in the study believed that background music influenced their wine selections?

Over 90 percent of shoppers believed that the background music did not influence their wine selections.

What does the New Coke story illustrate about consumer decisions?

The New Coke story illustrates that consumer decisions can be heavily influenced by emotional connections to a product, rather than just taste preferences.

What was the outcome of Coca-Cola's introduction of New Coke?

The introduction of New Coke resulted in a backlash from customers who demanded the return of the original formula, leading to significant financial losses for Coca-Cola.

What role did emotions play in the New Coke failure according to the script?

Emotions played a crucial role in the New Coke failure as Coca-Cola overlooked the strong emotional connection people had with the original formula and its marketing as a feel-good product.

What does the 2004 brain study involving Coca Cola suggest about consumer behavior?

The study suggests that when people think of popular brands like Coca Cola, their brains activate areas related to emotions, memory, and thinking, indicating that these factors can unconsciously influence their experience with the product.

What is neuromarketing and why is it significant in understanding consumer decisions?

Neuromarketing is the application of neuroscience to marketing practices. It is significant because it helps understand how consumers make buying decisions and how emotions and intuition shape those decisions.

How did Google's testing of different shades of blue impact their annual revenue?

Google found that one particular shade of blue increased the number of clicks on their ads, leading to an increase in annual revenue by 200 million dollars.

What impact did Amazon's slight improvement in website speed have on sales?

Amazon's slight improvement in website speed resulted in an increase in sales by over 1.7 billion dollars.

What is the significance of the urinal spillage story in the context of subtle influences on behavior?

The urinal spillage story demonstrates that even a small, seemingly insignificant change, like etching a fly target in the urinal, can have a significant impact on behavior by reducing spillage by 80%.

What misconceptions about neuromarketing does the script mention and what is the truth?

The script mentions misconceptions that neuromarketing is all about brain scans and mind-reading, and that it can be used to manipulate people to buy anything. The truth is that neuromarketing is about understanding consumer decisions and influencing them subtly, without mind-reading capabilities.

How do the findings from the energy company's use of emoticons on energy bills relate to invisible social influence?

The use of emoticons on energy bills to indicate energy consumption levels is an example of invisible social influence, as it subconsciously motivates customers to reduce their energy usage to avoid a 'sad face' and to match the 'happy face' of their neighbors.

Outlines

00:00

🎶 The Power of Background Music on Consumer Choices 🎶

This paragraph discusses a study conducted in a wine store to determine the influence of background music on shoppers' wine selections. It revealed that playing German music increased the sales of German wines by 3 to 1, and French music had a similar effect on French wines. Interestingly, over 90% of shoppers were unaware of this influence. The New Coke example illustrates the impact of emotional connections on consumer decisions, showing that even though blind taste tests favored New Coke, the emotional bond with the original Coca-Cola led to its failure. The study highlights the role of unconscious factors in decision-making and the importance of emotional connections in marketing.

05:00

🧠 Neuroscience in Marketing: Understanding Unconscious Decisions 🧠

The second paragraph delves into the field of neuromarketing, which combines neuroscience and marketing to understand consumer decisions. It emphasizes that approximately 95% of decisions are made unconsciously and that emotions are crucial for making decisions. The story of Frank, who suffered a stroke affecting his emotional brain, illustrates the difficulty of decision-making without an emotional component. The paragraph also highlights the effectiveness of neuromarketing in improving consumer experiences and reducing marketing waste, using Google's color optimization and Amazon's website speed improvements as examples of subtle changes leading to significant revenue increases.

10:03

🤔 Invisible Social Influences and Their Impact on Decision Making 🤔

This paragraph explores the concept of invisible social influence on decision-making, as demonstrated by a study where volunteers rated cookies based on perceived demand and supply. It points out that people tend to assume that if more people want something, it must be of higher quality or value. The paragraph also discusses how companies like Amazon use social proof, such as ratings and reviews, to persuade customers. It dispels misconceptions about neuromarketing, clarifying that it is not about brain scans or mind-reading, and emphasizes the importance of being aware of subtle influences that can dramatically affect behavior.

15:05

🎯 Small Changes with Big Impact: The Art of Neuromarketing 🎯

The final paragraph concludes with stories that demonstrate how minor adjustments can lead to significant outcomes. It starts with a humorous anecdote about urinal spillage and how a simple fly etching reduced it by 80%. The paragraph encourages finding 'the fly' in various situations, which represents the subtle yet powerful elements that can change behaviors and decisions. It highlights the importance of understanding the brain and decision-making processes to create impactful strategies, whether in marketing or other areas of life.

Keywords

💡Subliminal Influence

Subliminal influence refers to the effect of stimuli that are not consciously perceived but still influence behavior or decisions. In the video, this concept is central as it discusses how background music in a wine store subtly influences shoppers' selections, with German or French music promoting wines from the respective countries. This demonstrates how our buying decisions can be unconsciously swayed by subtle environmental cues.

💡New Coke

New Coke was a reformulated version of Coca-Cola introduced in 1985 in response to market pressures from Pepsi. The video uses New Coke as a case study to illustrate the power of emotional connections in consumer decisions. Despite positive taste tests, New Coke failed because it disregarded the deep-seated emotional bond consumers had with the original Coca-Cola, showing that decisions are not solely based on rational factors like taste but also on emotional associations.

💡Neuromarketing

Neuromarketing is the application of neuroscience to marketing practices, aiming to understand how the brain responds to marketing stimuli and to influence consumer behavior. The video presents neuromarketing as a field that studies the unconscious processes behind decision-making, emphasizing the importance of emotions and intuition in consumer choices. It highlights how insights from neuroscience can be leveraged to create more effective marketing strategies.

💡Emotional Connection

Emotional connection is the bond or attachment formed between consumers and a brand or product based on feelings and memories. The video explains that Coca-Cola's marketing had imprinted positive thoughts, feelings, and memories in consumers' minds, which contributed to their preference for the original formula over New Coke. This emotional connection is a key driver of consumer loyalty and decision-making.

💡Unconscious Decision-Making

Unconscious decision-making refers to the process by which choices are made without conscious deliberation, often based on emotions, intuition, or past experiences. The video emphasizes that a significant portion of our decisions, about 95% according to the script, are made unconsciously. This is illustrated through examples like the New Coke failure and the impact of background music on wine selections.

💡Limbic System

The limbic system is a set of brain structures involved in emotions, memory, and survival instincts. In the video, it is mentioned as the 'emotional brain,' responsible for feelings like love, anger, and fear. The script uses the limbic system to explain the role of emotions in decision-making, as seen in the case of a man named Frank who had difficulty making decisions after his emotional brain was damaged by a stroke.

💡Consumer Experience

Consumer experience encompasses all interactions and perceptions a consumer has with a product or service. The video discusses how neuromarketing focuses on enhancing consumer experiences at an unconscious level to influence decisions positively. Examples include Google's use of color to increase ad clicks and Amazon's website speed improvements to boost sales.

💡Social Influence

Social influence is the effect that others have on an individual's behavior, attitudes, and decisions. The video describes a study where volunteers rated cookies higher simply because they were told others desired them, illustrating the power of social influence. This concept is used to explain how Amazon uses customer ratings and reviews to persuade potential buyers.

💡Emoticons

Emoticons are small icons used to express emotions in digital communication. In the video, an energy company's use of emoticons on energy bills to indicate energy consumption levels is highlighted. The emoticons, a subtle cue, led to a significant reduction in energy use, demonstrating the impact of small, seemingly insignificant factors on behavior.

💡Urinal Spillage

Urinal spillage refers to the unintended mess created when using a urinal. The video shares a humorous yet effective story about how etching a fly target near a urinal reduced spillage by 80%. This example illustrates the power of subtle cues in changing behavior and serves as a metaphor for finding small, impactful changes in decision-making and marketing.

💡Game Changers

Game changers are elements or strategies that significantly alter the dynamics of a situation or industry. The video encourages finding game changers in decision-making and marketing by understanding the brain and how it makes decisions. It suggests that often these game changers are subtle,不起眼的, elements that can have a profound impact when leveraged correctly.

Highlights

Background music in a wine store influenced customers' choices, with German music promoting German wines and French music promoting French wines.

Over 90% of shoppers were unaware that background music influenced their wine selections.

The study raises questions about the nature of buying decisions, whether they are consciously based on facts or unconsciously based on emotions.

The New Coke fiasco in 1985 showed that even positive taste tests couldn't save a product without an emotional connection to consumers.

Coca-Cola's marketing slogans and celebrity endorsements created a feel-good experience that was more than just taste.

Neuroscience research has shown that about 95% of decisions are made unconsciously, and emotions play a crucial role in decision-making.

The limbic system in the brain is responsible for emotions and is key to understanding consumer behavior.

A case study of Frank, who suffered brain damage affecting his emotional brain, illustrates the difficulty in making decisions without an emotional component.

Neuromarketing combines neuroscience and marketing to understand consumer decisions and influence them effectively.

Google's experiment with shades of blue in ad links increased annual revenue by $200 million by influencing user behavior.

Amazon's slight improvement in website speed increased sales by over $1.7 billion, demonstrating the power of subtle changes in user experience.

A study showed that a simple emoticon on energy bills reduced energy consumption by almost 3%, highlighting the impact of subtle cues on behavior.

Urinal spillage was reduced by 80% with the addition of a fly target, an example of how small changes can have significant effects.

Neuromarketing is not about brain scans and mind-reading, but understanding consumer behavior and decision-making processes.

The field of neuromarketing is still in its infancy but has the potential to greatly influence consumer experiences and business outcomes.

The talk concludes with the message to find one's 'fly', a subtle yet powerful factor that can lead to significant impacts when leveraged correctly.

Transcripts

[Applause]

about 20 years ago a group of

researchers did a study at a wine store

they want to find out if source

background music could influence

shoppers wine selections here's what

they found on a days when they played

German music German wines also French

wines by 3 to 1

and on the bass when they play French

music French wines also German ones by 3

to 1 but here's a kicker

they asked shoppers if the background

music influenced their wine selections

your profit could guess over 90 percent

of shoppers say no this study shows that

our buying decisions can be influenced

by something so subtle that we don't

even notice the study also raises some

important questions how do we make

buying decisions you will make decisions

consciously based on facts reason and

logic we're doing make decision

unconsciously based on emotions feelings

and intuition next I'd like to share

with you harrowing conscious emotions

influence our decisions

you remember New Coke here's a story

behind New Coke in 1985 Coca Cola was

losing market share to Pepsi perhaps he

had been telling coca-cola by claiming

that in blind taste testing more people

preferred Pepsi over coke coca-cola

decided to improve the taste by changing

his formula it came up with new coke

over 200,000 people taste test New Coke

or whelmingly people preferred New Coke

over the original coke but more

importantly people prefer New Coke over

Pepsi with a lot of confidence coca-cola

rolled out new coke but very quickly

this sweet drink turned into a bitter

pill that cost coca-cola tens of

millions dollars angry customers started

protesting around country demanding the

original coke back anxious customers

start hoarding Coke products left on

store shelves

coca-cola headquarters received about

8,000 angry phone calls a day he can

help asking

how could 200,000 people get it wrong

what did coca-cola miss what coca-cola

missed was a strong emotional connection

people had for nearly hundred years coke

had been marketed as a feel-good product

their marketing slogans included have a

Coke in the smile I like to buy the

world a coke celebrities like Elvis

Marilyn Monroe and the Beatles were the

face of coca-cola if you don't feel well

have a coke Coca was more than a sweet

beverage drinking coke had to become a

feel-good experience that feel-good

experience involves thoughts feelings

and memories while drinking coke seems a

bit complicated doesn't it the study

pops in 2004 shows how Coca Cola's

marketing has imprinted our brains with

good thoughts feelings and memories in

this study volunteers for a 13 litre

coke were Pepsi while their brains were

scanned to find out which part of the

brain became active

the researchers start out with blind

taste testing like the Pepsi challenge

they were able to replicate the result

the Pepsi challenge that is slightly

over 50% of volunteers preferred Pepsi

over coke no surprise there then the

research has made a slight change to the

Pepsi challenge the volunteers were told

exactly what they're going to drink

before taking a sip it's no longer blind

taste test anymore

suddenly 75% of volunteers prefer Coke

over Pepsi more surprisingly while

they're drinking Coke the emotional part

of the brain the memory part brain and

the thinking part of the brain became

their active in sharp contrast this

elevator brain active the pattern was

not observed while they're drinking

Pepsi with the study tell us the study

demonstrates what happens in our brains

unconsciously when we think of popular

brand like a Coca Cola

the study also demonstrated that our

thoughts feelings and memories can

unconsciously change our experience with

a product this is exactly how the

unconscious might influence our choices

the fast feelings and memories evoked by

the coca-cola brand are the strong

emotional connections people have and

coca-cola missed those strong emotional

connections when they reduce this iconic

drink to just taste this is why New Coke

failed for this brain study we can see

how marketing influences our emotions

and our decisions without our awareness

this is where neuroscience means

marketing welcome to new marketing new

markings and new signs consumer

decisions he studies how men will make

buying decisions and how our emotions

and intuition shape our decisions but

why the markers are paying attention to

our emotions intuition and unconscious

mind here are some of the reasons over

the last few decades neuroscience

research has confirmed that about 95

percent our decisions are made

unconsciously during the same time

medical studies have shown that without

emotion we simply cannot make decisions

inside the human brain there are many

highly specialized areas each area has

unique functions some areas are response

we're seeing some are were hearing some

are for tasting and this larger the

brain color in blue is what we call the

limbic system is our emotional brain our

emotions depend on this part of the

brain our love compassion optimism pride

joy happiness as was anger fear anxiety

embarrassment guilt and sadness our

Center in this part of brain

neuroscientists often learn more about

the brain when something goes wrong here

we have Frank he had a stroke the stroke

damaged a large paralyze his emotional

brain what's going to happen to him what

you will see as a Frank will have a very

difficult time making decisions even the

simplest decisions when he goes to a

grocery store to buy breakfast cereal he

will agonize over the decision whether

he's to choose we these Cheerios were

conflicts without his emotional brain

being fully functional he simply cannot

make that decision

every purchase involves decision making

both neuroscience and marketing can help

us understand how make decisions and

will influence our decisions

there's mirrored between the earth

science and marking has given birth to

neuromarketing but why does new Merton

matter every year nine of the ten new

products fail about a hundred billion

dollar spend on marketing are wasted the

main reason that traditional marketing

fails to pay attention to consumers

unconscious emotional experiences this

will happen to new coke if we can avoid

wasting so much money on - marketing

both consumers and businesses went with

newer marking to focus on creating

better consumer experiences and it does

work first like to share with you how

Google captain's user's unconscious

behavior to maximize his revenues we'll

have seen Google as before the links in

these ads are colored in blue every time

you click on these blue links Google

makes money naturally Google wants a

huge surtout click on these ads more

often we know that color can impact our

emotion in our behavior the question

Google asked was whether a subtle change

of color in these bull links could

changes users clicking behavior several

years ago Google test is close to 50

shades of blue in these links wanting to

find out if certain shades of blue with

general more clogs one shade of blue did

10 or more clicks by adopting that color

Google increased annual revenue by 200

million dollars this is a power new

marketing if you know what clicks with a

brain you can apply that knowledge

create better customer experience a

better customer experience and transfer

into a stronger bottom-line this is why

new marketing works next like to share

with you how a slight a notable speedy

improvement by Amazon increase the sales

by over 1.7 billion dollars according to

Amazon a one

of a sunken speeding pumaman songs

website can you increase the cells by 1%

consciously we cannot beat at one tenth

of second difference but unconsciously

our brains notice it by speeding up the

website ever so slightly Amazon quiz a

better customer experience that better

customer experience generates more sales

this is Paul Daniel marketing Google's a

notable change of a color makes a click

more or amazons and notable speed

improvement makes a buy more what does

that tell us about our decision making

our way in total control our decisions

were the influenced by something so

subtle that we don't even notice the

study published in 1975 shows how

invisible social influence can shape our

decisions in this study volunteers were

asked to rate quality and price of

cookies from two jars one jar had cane

cookies the other one had only two

volunteers were told the cookies in the

jar with only two laughs were in high

demand in short supply now surprisingly

those cookies were read as a hiring

quality in price because it was believed

that more people wanted them what is

surprising that all the cookies used in

the study were identical we tend to

believe is something's won by more

people it must be good and valuable why

is this invisible social influence so

persuasive it's because decisions create

uncertainty we feel safer by phone

decisions made by crowd this is a

natural bias in our brains Amazon

understand this bias very well uses

biased persuade to spy imagine in any

new coffee maker

how does Amazon help you decide first

you want to see a four star rating then

over 5,000 customer reviews and or 1000

questions answered then number one

bestseller all this information is based

on other customers opinions this

information comes before you see the

price and the free shipping offer

Amazon persuaded by using this invisible

social influence most people have not

heard of a newer marking yet but if you

ever bought anything Amazon you've been

persuaded by Amazon's new marketing

techniques newer marketing is still in

its infancy but there's no sort of

misinformation one big misunderstanding

is that your mark is all about brain

scans and mind-reading in 2011 the New

York Times pops a letter claiming that

iPhone users had a romantic love for

their phones here's evidence cited by

the author a pre instructor called

insular cortex let up doing brain scans

when a small number I phone users saw

their phones no self-respecting

neuroscientist would have drawn that

conclusion because the same brain

structure also lights up we see

something disgusting

one brain structure can become very

active for many different emotional

responses what do you call a

mind-reading brain scan a brain scan

some snake oil salesmen claimed that

Newmark is all about findings brains by

button by pressing that buy button you

can persuading anybody Anytime Anywhere

to buy anything until the cows come home

why does this claim also sound like a

scam because it violates a basic

principle persuasion if seems too good

to be true it is to be true

Noura marketing is about buying

decisions but the impact has reached far

beyond them because ultimately is about

human decisions we're all decision

makers through our lifetime we'll make

millions and millions decisions some

decision can be very difficult even

life-changing over the last 10 years I

had come from many gut-wrenching

decisions should I leave a stable job to

work on my own business how do I care

for my aging parents who are six six

thousand miles away in a different

country how do I support someone who

battles depression from your marking we

have learned that our decisions are not

completely within our control there are

many invisible influences that shape our

decisions without our awareness being

mindful that vulnerability give us a

more power not less our decision can

have a lasting impact on other people's

lives from newer marketing we have

learned that something very subtle

contained our behavior dramatically what

does it take to safety enough energy to

power all the homes in Minnesota and

Iowa it's not creating a massive

government program we're switching to

all you lightbulbs we're upgrading for

energy-efficient appliances is a tiny

emoticon in a 2007 study an energy

company printed a tiny emoticon energy

bills to tell customers about their

energy consumption a happy face meant

lower energy consumption the neighbors a

sad face meant higher

consumption the neighbors given how

powerful the invisible social influence

can be is now surprising that our

decisions it's not surprising that our

neighbors in the behavior can impact

ours what is surprising that all these

these tiny emoticons reduce energy

consumption by almost three percent

that's enough energy to power all the

homes in Minnesota and Iowa who would

have thought something so subtle can be

so powerful now this subtle cue is

showing up in our lives here is any bill

NGO I recently received it has a happy

face I'd like to close my talk with one

more story this story has some bathroom

humor

it's about urinal spillage when a guy

stands for on urinal he often does his

business mindlessly and aimlessly

spill it happens they cost money to

clean it up in 1990s the amsuman airport

came up with a brilliant solution all

they did was to etch the image black

line near the training urinal when guys

see that black light they start aiming

at unconsciously that reduces spillage

by 80%

well other than my poor case of humor

was the point I like this story because

this fly serves a good metaphor when you

search what what touches people's hearts

and minds you want to find game changers

if you understand how the brain works

you guys know how people make decisions

you can find a game changer that has a

huge impact the most fascinating thing

is very often this game changer is

something we don't even pay attention to

it can be something very subtle like a

background music and wine store a slight

change of color by Google noticeable

Expedia Mumbai Amazon a tiny emoticon on

your energy bill or a fly as a target

once you find some sacado

by following your science the impact

will be anything but subtle you want to

make a positive impact you want to make

you want to help others thrive here's

something I encourage you to try find

your fly and thank you very much

everybody thank you

you