Using neuroscience to conduct customer research
Customer research, at its core, aims to understand what guides consumers' buying decisions. The more you understand your customer the better you’re able to market to them, promoting the products they want, gaining competitive intelligence, and proactively identifying shifts in purchasing intent and behaviour. Actionable customer research is indispensable for sustainable revenue growth, with top-performing retailers demonstrating a 55% higher retention rate than those who do not focus on voice of the customer (VoC) research.
Unfortunately, traditional methods such as interviews or surveys rely on retroactive, often unreliable data. This kind of self-reported data faces many issues of validity, people are often incapable of articulating why they do things or how they would behave in the future. This bias is exacerbated by demand characteristics when the participant forms an interpretation of the question’s purpose and subconsciously changes their behaviour to give the ‘correct answer’. Whilst this approach can help retailers understand customers’ opinions and desires in relation to specific products, it is vital to tread new paths and add new value by targeting the subconscious mind. This is where the ‘neuromarketing’ approach can be useful.
Behavioural economists often aim to explain seemingly ‘irrational’ financial decisions by appealing to psychology and neuroscience to investigate neural bases of decision predictability and value. This interdisciplinary effort to combine brain imaging with established economic theory is working to expand our understanding of financial decision making and has a clear application to retail customers.
Findings like this can directly help marketers decide where they should be focusing their e-commerce strategy.
As we have discussed in blog posts before, psychological studies have proven immensely useful in developing our understanding of the modern-day customer. When using neuroscientific methods to ask these psychological questions, retail researchers can access consumers' sensorimotor, cognitive, and affective responses to specific stimuli. Mobile neuroscience methodologies allow marketers to perform explorative customer research by asking open questions that go beyond typical hypothesis-driven research. For example, The Deloitte Neuroscience Institute (DNI) conducted multiple studies looking at the impact of web design, branding, and promotions. This post aims to provide some insights and examples generated from this kind of approach.
Economics, psychology and neuroscience can each benefit from taking account of the insights that the other disciplines have to offer in understanding human decision-making. For example, one study of this type used Magnetoencephalography (MEG), a functional neuroimaging technique for mapping brain activity, to observe people making 90 shopping decisions between products from familiar and unfamiliar brands. They discovered that the right parietal cortex was strongly activated when choosing between a familiar brand against two non-familiars. Whilst this may seem irrelevant to economists, neuroscientists understand that this area of the brain is involved in internal attention and visual memory, which may imply that participants were visually ‘holding’ the image of the familiar brand in their mind in order to make an intentional comparison.
Customised commercial banners interrupted the vital decision-making process along the journey to conversion and actually decreased the conversion rate.
Findings like this can directly help marketers decide where they should be focusing their e-commerce strategy; here the study suggests that brand awareness helps simplify consumer decision making and makes it easier to make faster decisions. As a result, companies know to invest in building their brand awareness using brand recall surveys, tracking direct traffic metrics, and improving SEO as an acquisition channel.
More recent studies have used functional MRI (fMRI) to test established economic paradigms in lab settings. One theory that is well suited to investigation-by-fMRI is that potential gains and losses are evaluated independently (i.e. by different brain areas), and, more specifically, that financial decisions are guided by emotional biases. These are presumably related to brain activity in regions involved in the processing of positive and negative emotion. For this study, subjects were shown pictures of different products with the opportunity to purchase. After a short interval, the price of the product was displayed. Importantly, the paradigm separated three periods in time: product presentation, price, and decision, allowing the investigators to map neural pathways through the entire financial decision-making process.
Three areas of the brain were identified as most important;
- Product preference correlated with the activation of the nucleus accumbens (NAcc). This area of the brain is implicated in reward processing. It consistently responds to the anticipation of monetary gain and other rewards. NAcc activation while viewing the product predicted the later decision to purchase it.
- In contrast, greater activity in the insula was associated with the decision not to purchase. Like the NAcc, the insula has been linked to anticipation of monetary loss, pain, and emotionally aversive pictures and may play an analogous role to the NAcc in producing an appropriate behavioural response in risky or disadvantageous situations.
- Finally, medial prefrontal cortex (MPFC) activation was greatest when the price of the product was lower than the price individuals were willing to pay. This is consistent with data showing that the MPFC tracks the difference between expected and actual outcome in monetary reward tasks.
These results suggest that emotional regulation plays a significant role in mediating if a customer values a purchase as ‘risky’ or not. This is consistent with economic research that looks at high involvement purchases when a consumer has to buy a product or service that is expensive or that poses the risk of significant emotional consequences if a mistake is made. If a retailer is selling these kinds of products, whether they are expensive or there are many alternatives, they need to focus on using this consumer involvement to build brand loyalty and lead to a transaction. The focus should be on giving consumers all the information they need to make a purchase decision in favour of your brand. This information should differentiate your brand from competitors and include the benefits and advantages of a product, lowering the impact of any cost-associated risk.
The DNI conducted a study looking at customer perceptions of online shopping websites. They used an eye-tracking device to record eye movements and took Electroencephalographic (EEG) brain recordings to provide insight into their emotional responses towards certain elements of the website. As opposed to traditional customer research methods, which might focus on general website navigation, these methods allow researchers to identify key elements of websites that acted as sales drivers or which aspects had a confusing or discouraging influence.
EEG is a method of directly measuring brain activity of a participant and enables researchers to understand unconscious emotions and cognitive processes. In this context, it can be used to measure the attractiveness of customer stimuli and intuitive attention flow. Eye-tracking also works to identify a customer’s natural gaze path and areas of interest on the website.
Researchers focused on typical customer touchpoints of an online retail shop including the landing page, product search, product presentation, marketing communications and promotions, payment, check-out and delivery. This led to the discovery of actionable insights.
- Avoid redundant or disruptive elements on the landing page, customers find too many elements to be confusing.
- Customised commercial banners interrupted the vital decision-making process along the journey to conversion and actually decreased the conversion rate.
These kinds of findings can be a lot more reliable than traditional research conducted over the phone or email, where many customers are rushing and not providing accurate or honest depictions of their intentions. Whilst it is understandable that not all retailers will be abandoning their current methods of customer research and replacing them with brain imaging laboratories, the field of neuroscience has a lot to offer in terms of actionable insights. Similarly, as more data privacy legislation is introduced and more customers reject these practices, studies making use of brain imaging could provide an alternative path for understanding the subconscious intent behind shopping decisions.