Neuromarketing: How Retailers Get in Your Head
When Thomas Rotthowe, MBA ’93, DBA, walks into his local Starbucks in Munich, Germany, he sees more than a coffee shop—he sees a retail environment tailored to underlying processes in the customer’s brain. An expert in neuromarketing, a new field that focuses on consumers’ brain patterns during purchase decisions, Rotthowe’s work represents an innovative approach to marketing and heralds a shift in the way manufacturers, retailers, and marketers do business.
The science behind neuromarketing, only a decade old, contradicts previous assumptions. “The old thinking in consumer brain research asserted that we make our decisions rationally,” Rotthowe explained. “Emotion was thought to be the opposite of rationality, and something that interfered with rational decision making.” But when researchers at Gruppe Nymphenburg, the brand and retail consulting firm Rotthowe co-owns and serves as a managing partner, used MRIs to create brain scans of consumers during the decision-making process, the results told a different story. “Scans showed a lack of brain activity during most decisions, which tells us that the brain was not making the decision consciously.” Instead, the research revealed that the limbic system, the part of the brain responsible for emotions and memory, makes 70 to 80 percent of decisions.
According to Rotthowe, it’s a simple matter of energy consumption. “Conscious decision making takes more energy than unconscious decision making, so as a survival mechanism, our brains use the limbic system to reduce the workload.” Like a computer with a sleep mode, the brain looks for an opportunity to shut off.
Brand loyalty presents an example of this process at work. Entering a new retail environment can trigger the release of adrenaline and the stress hormone cortisol—essentially a fight-or-flight reflex. However, interaction with a familiar, trusted brand can reduce stress on the brain by making the buying decision automatic. On a larger scale, entering a trusted retail environment can neutralize buying stress by triggering calming neurotransmitters like dopamine and oxytocin—thus, the penchant for habitually buying the same products and shopping at the same stores.
For businesses, this new understanding of emotion-based decision making changes the game. “We have always known that emotion played a role in consumer choices,” said Ilene Smith-Bezjian, DBA, dean of APU’s School of Business and Management. “But the discovery that most purchase decisions are made completely unconsciously at an emotional level will have a broad-reaching impact on the way products are packaged, displayed, and marketed.”
Rotthowe asserts that companies should not segment and market their products based on traditional demographics like age and income, but rather by emotional response personality types. “Prince Charles of Wales and Ozzy Osbourne are both 64-year-old males with incomes of over $1 million a year. Do these two people have anything in common?” Rotthowe said. “Are they likely to be drawn to the same products and make decisions in the same way?”
As a result, Rotthowe’s consultancy has developed the Limbic™ personality map, a tool that divides impulses into emotional quadrants that underlie people’s choices and influence subconscious reactions to their surroundings. The map connects emotional responses to neurotransmitters in the brain—cortisol, dopamine, and testosterone—and divides customers into seven personality types—adventurer, performer, disciplinarian, traditionalist, harmonizer, open-minded, and hedonist. By appealing to these types in product design, marketing messaging, packaging, and retail design, businesses can more accurately speak to customers in a manner that resonates with them and meets individual needs.
In the Starbucks example, the dominant colors of green, brown, and white appeal to the harmonizer, traditionalist, disciplinarian, and open-minded personality groups, which in a study made up 73 percent of the German population. The messaging and packaging of the Starbucks experience appeals to emotions related to harmony, nature, care, openness, tradition, and security. “Neuroscience has confirmed that brand management is all about creating emotions around a product. Starbucks even sells products in supermarkets—the emotional connection to the brand is so strong that you want to take it home with you.”
Despite neuromarketing’s effect on the bottom line, Rotthowe stresses that it impacts more than just sales—it creates a mutually beneficial experience for both businesses and consumers. “We look at the shopping experience from the customer’s point of view, and ask, ‘What motives and needs drive them to shop here, and how can we conform to those expectations?’ It’s not just about making things nicer and more colorful,” Rotthowe said. “When you go to a discount store, you don’t expect artsy displays or complexity of products. It’s about matching the customer’s expectations on an emotional level in order to decrease stress.”
In fact, this reflects Rotthowe’s strongest recommendation to the 20 APU undergraduate international business students who visit him in Germany each year as part of L’APEU, APU’s Europe Summer study abroad program. “You have to think about your customers and their needs and expectations first, then think about what superior products or services you can provide,” Rotthowe said. “You can innovate, but innovation has no meaning without the buyer. Put the consumer’s needs and motives on the top of your priority list, and ask yourself, ‘How can I make the process more comfortable and convenient to the shopper?’” Neuromarketing provides businesses with new tools to create value and make the customer more comfortable. “And as Sam Walton of Walmart said, ‘It’s the customer who pays our wages.’”
Posted: December 3, 2012