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