Growing trends and realisations would assume provocation of more innovative and more aggressive ways to market products. Then why are major players in the industry still utilizing these age-old models of marketing strategies that seem to work time and time again?

The answer lies in the field of neuromarketing. Using fMRI’s, researchers are able to measure changes of activity in different parts of the brain in response to marketing stimuli.

These studies revealed that these “age-old models” are hardwired into our brains. What this means for consumers is that some tricks cannot be learned; they are innate and appeal to the sub-conscious of the consumer.

In the article “The power of FREE”, neuromarketing expert Roger Dooley describes the effectiveness of the word “free”. Based on research conducted by behavioural economist Dan Ariely, Dooley uses the “Free kisses and Bargain truffles” experiment to affirm its power.

The experiment shows an astounding difference between consumer’s behaviour towards something being extremely cheap to costing nothing. Dooley concluded that “free” is far more effective than “almost free”, even when the price differential of two products were near identical (1 cent vs. free).

Neuromarketing research affirms the effectiveness of these older models. Consumers may be growing more weary of traditional marketing trickery but they are helpless against strategies that continue to allude them purely because they appeal to a level outside of the consumers controlled awareness. But this is no new trick for major players like Amazon – who have been using neuroscience to influence consumer behaviour for years.

amazon

Even for vigilant consumers, this page may appear very typical at a glance, however closer inspection reveals an abundance of neuromarketing strategies that bypass subconscious defences. Our very own mischievous little friend “FREE” is outlined above.

--And that’s just “FREE”. Dooley also notes other Neuromarketing strategies that pervade even the simplest of components. Consider the perception of price for example.

When spoken, the more syllables a price has the more expensive it will appear. This is due to the fact that we primarily encode magnitudes of price aurally. The same could be applied to the usage of comma’s and decimals to delineate thousands and cents respectively.

Adding a comma to price values induces longer syllabic representations because preference is given to expressing it in full notation.

price

Consider for example a price displaying $1,788.00, one would express this verbally: “one thousand seven hundred and eighty eight dollars”, whereas $1788 could just be “seventeen eighty eight”.  

Although the perception of price is primarily an auditory representation, it is far too soon to disregard the influence of visual representation. 

Notice above that by adding a decimal followed by the representation of the cents value contributes to the magnitude of the perceived price because it adds to the visual length of the price itself. By adding more figures, one could easily mistake the price to be larger than it actually is if the decimal is missed.

Similarly minimizing the currency symbol, especially so that it is smaller than the figures, reduces the visual length of the price. Thus diminishing its perceived magnitude by way of visual representation.  

Making a product appear scarce is another marketing strategy that many of us are quite familiar with. How many times have you visited a site that advertises a sale that is “one day only!” – only to find that that exact same product is still on sale the following week?

Apparent scarcity can backfire dangerously, especially if the offer is facetious like in the example above. 

Using scarcity can be a powerful marketing tool if it is used correctly. It is important to follow through with the restrictions of the offer as to eliminate hesitation or doubt. Consumers need to know that the offer is real in order to instil a sense of urgency.

catch

Catch of the day uses pertinent labels like “ALMOST GONE” and “SOLD OUT” to validate a sense of urgency and scarcity of the other items.

When a product or offer is scarce, it becomes more appealing to consumers. While many of us may think that this appeal derives from the pleasure we gain from values of rarity, neuroscientific study suggests that it is in fact our fear that is the greater motivator.

The study, “Frames, Biases, and Rational Decision-Making in the Human Brain”, reveals that our choices are greatly influenced by the manner in which the options are being presented, more precisely, we inherently avert from the option that pertains to a sense of loss.

Dooley summarizes the study:

If I gave you $50 with the following two choices, what would you do?

  • Keep $30
  • Gamble, with a 50/50 chance of keeping or losing the whole $50

An experimenter posed that question to subjects, and found that 43% of the subjects chose to gamble. Then the options were changed to:

  • Lose $20
  • Gamble, with a 50/50 chance of keeping or losing the whole $50

Same thing, right? In fact, though the dollar amounts are the same, with these options, 62% of the subjects chose to gamble. Expressing the first option as a loss caused a 44% jump in the number of people avoiding that choice! (The purely rational choice, of course, would be the non-gambling option, since the average value of the gambling choice is $25 vs. the certain $30) 

For the first experiment, keeping the $30 is the most favourable option because it does not harbour any risks; the $30 is essentially guaranteed. The gambling option is the unfavourable option because it poses greater risk; it would be considered the loss to be averted in this case. 

Unlike the first experiment, the second experiment presented the first option as the unfavourable selection by changing the framing of the sentence. Although opting to lose $20 is the same as keeping the $30 out of the initial $50 received (the offset is identical), it is considered to be the unfavourable choice because it is posed as a loss. Subjects chose gambling, which still remains to be the greater risk, to be the favourable selection in this case.

This experiment proves that people base their decisions on inherent aversions to loss, more so than rational decision-making. The fear of loss is a greater motivator than the persuasion of gain

hoursmins

So how does this tie into the concept of scarcity? By making an offer scarce, we are also presented with two options. To purchase, or not to purchase. Not purchasing is positioned as the unfavourable option in this case because it results in potential loss, loss of an offer that we have initially received. The other option then, to purchase, must be selected in order to avert from loss. It is this innate loss aversion modal which ultimately prompts us into buying.

Major players like Amazon utilize Neuromarketing research to gain a better understanding of the strategies that influence their consumers on a sub-conscious level. As consumers continue becoming well versed with traditional marketing strategies, new techniques that bypass rational defences and appeal to systems that are hardwired to our brains are being developed with respect to consumer evolution. Not all older models have seen their final light of day however, as some such as “the power of the word FREE”, the perception of price, and effect of scarcity are put under the scope of neuroscientific study and are proven to work almost indefinitely.  

Further Reading