26 Jul How Neuromarketing Can Ethically Grow Your Business
This is a guest blog post from Dan Russell, CEO of Agency Golden. If you’ve ever seen Mad Men, Dan is a lot like Don Draper’s tech-savvy twin. Old-school strategy, new-school tricks – and of course, great hair. Dan runs a marketing and advertising agency that applies neuroscience, behavioral economics, and social psychology to clients’ advertising campaigns. When he’s not running the business, he’s spending time with loved ones, traveling, mountain biking, and snowboarding.
A famous neuromarketing experiment took place in 1957. A researcher opened the doors of a movie theater to an unsuspecting audience. They expected to see the new release, Picnic, with their friends and family.
While seated in the theater watching the movie, the unsuspecting audience members were said to have been exposed to “subliminal imagery” flashing signs saying “Drink Coca-Cola” and “Eat More Popcorn.” These images were said to have been flashed at a small fraction of a second – imperceptible to the conscious mind, but still readable by our minds.
The researcher claimed there were huge boosts in Coca-Cola and popcorn sales. The release of his report threw the nation into a frenzy around brainwashing. Not long after, the researcher’s work was debunked and it was found that he had made it all up – but not before doing a lot of damage.
Beyond our control
Whether it’s subliminal advertising, hypnosis, or neuro-linguistic programming, communication techniques that hack our natural wiring for someone else’s gain are, in a word, scary.
What we forget too easily about, however, are the conversations we have on a regular basis which make use of that same natural wiring. Persuasive conversations to get what we want, calming conversations to console a loved one, or reprimanding conversations with a child are all using communication techniques dating back hundreds or thousands of years. Those same techniques are at the basis of what we today call “Neuromarketing,” the practice of applying neuroscience to marketing.
We’ve been using these techniques in our most emotionally charged – and most sensitive – of moments, but now that they’re in the open (and have a name), we’re forced to ask the question: how far should we go?
3 Simple Neuromarketing Strategies
For every unethical neuromarketing campaign, there is an ethical campaign. Having a code of ethics is an important starting point to determine which is which. But an even simpler way to use neuromarketing to your advantage is to look at ethical campaigns you’re currently running and find out what neuroscientific basis it has for succeeding.
Here are a few examples:
When you are exposed to a high or low number (an “anchor”) before any other number, you will have a tendency to produce suggestions that are higher or lower, depending on your anchor.
This effect is used every day in sales negotiations to “set” the opposing party’s bid. If your opening bid is $500 and your partner had $50 in mind, he’s much more willing to pay more than $100 than if you bid $75. Take this into consideration when you are pricing your products – do you have an MSRP? Do you discount? You may want to consider this (Amazon learned this a long time ago with its MSRP prices on every product).
Sunk Cost Bias
We have a tendency to continue investing in things we’ve already spent money on, even if they’re losing value.
This bias takes hold when we are sold an “upsell” to a product (an add-on to a car, for example) or when we are close to achieving a goal, even though we know the goal is meaningless (like finishing the last chapter of a book even if our friend tells us the ending).
This particular effect is useful in retaining customers in service businesses. Reminding them of the relationship you’ve built and how well you understand their business will help them stick around even if competitors approach them down the line.
Taking a small step toward a larger goal causes us to have a greater willingness to complete the larger goal.
Your lead generation strategy can start with a small step toward the goal of purchasing your services. What could be that small step for your business? In online advertising, this small step takes the form of a lead magnet – at a froyo stand, it’s a free sample. What’s your free sample? If you can figure that out, you can lower your cost per acquisition and improve your margins.
Getting Brought Up To The 21st Century
If we aren’t the businesses to bring neuroscience into the marketing world, someone else will – and they won’t have a code of ethics. If we educate ourselves on how our minds work, how we communicate, and how we persuade, we can begin to learn how to ethically grow our businesses by using science to our advantage, not fighting it.
Neuromarketing is the next step in the evolution of business growth. It’s time to be brought up to speed!
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