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

[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

Channel: TEDx Talks

Views: 521,090

Keywords: TEDxTalks, English, Business, Advertising, Behavior, Brain, Marketing, Neuroscience, Psychology, Science

Id: UEtE-el6KKs

Length: 17min 13sec (1033 seconds)

Published: Thu Jun 06 2019