How to nail applied neuroscience

It won’t make them mind readers, but neuroscience is helping companies to understand customer behaviour in ways not previously possible

In a world where consumers have become accustomed to a best-in-class user experience, gorging themselves on the personalised recommendations and frictionless worlds of Amazon and Netflix, many companies are being forced to implement customer-driven digital transformation to survive.

Observing real-time customer behaviour, whether they are shopping in a store or how they navigate a website, is invaluable

To get closer to their customers, some companies are starting to recognise they need to understand the consumer’s mind better and are using the tools of neuroscience to understand what makes people buy.

Customer-driven digital transformation

To do this, businesses are turning to neuroscientists to augment what they can glean from traditional research.

Cristina Balanzo, director of Walnut Unlimited, which calls itself a human understanding agency, says: “What neuroscience is providing are complementary insights. It is an additional layer of understanding that it is needed to have a full picture so these companies need to change behaviours and shape attitudes.

Current user-experience testing is being explored through behavioural observation and declarative measurement. We know that beyond the click, our subconscious drives most of our habitual behaviour, so understanding the motives and emotions, which underlie these behaviours, is crucial to understand the real engagement with these online platforms. People cannot report everything that drives their behaviour.”

Anticipating changes in customer behaviour

Shopping has been revolutionised in the online era and it is forcing retailers to rethink what they thought they knew.

Take the familiar setting of the supermarket; retailers have long understood the power of manipulating the brain, whether that is by piping in the smell of hot bread or by arranging goods on shelves in a particular way.

Phil Barden, author of Decoded: The Science Behind Why We Buy and the managing director of consultancy DECODE MARKETING, says: “When you are navigating a store in the physical world, you learn the heuristics of shelf layouts. We know the brand with the most space is likely to be market leader. We learn that products on the top shelf tend to be more niche and premium, and those on the bottom shelf tend to be generic.”

Tapping into the online brain

The problem is that none of this translates into the online world. If you are a supermarket needing to implement a customer-driven digital transformation, you are going to need to learn the way the brain works when choosing products online.

Mr Barden says: “No one can ever be a mind reader and neuroscience cannot accurately say what people are thinking, but it can help explain behaviour. Observing real-time customer behaviour, whether they are shopping in a store or how they navigate a website, is invaluable.”

How products are perceived online needs careful thought. If you look at how most online sites present products, they do so with a single pack shot, which is very different from the real world.

“A lot of manufacturers are now manipulating the images specifically for digital representation such that the brand is easy to identify,” says Mr Barden. “It is not done to be duplicitous or to mislead, but purely to help people quickly find their regular pack or to choose between packs.”

The brain’s brand room

The brain also processes how it interacts with brands differently, according to Shazia Ginai, chief executive of Neuro-Insight.

“We use the analogy of a brand room,” she says. “For every brand you interact with, there will be a ‘room’ created in your brain for that brand. Your experiences in the offline world with that brand, whether TV, direct mail or retail, help furnish that room. If you have a bad experience with a brand, you get a badly furnished room.

“With digital, the way information is fed to you, it is usually in a situation where advertising is not the primary context. That doesn’t furnish the brand room, it turns the light on in that room. Those rooms sit in darkness until someone switches the light on.”

A customer-driven digital transformation has to recognise the difference and brands will have to do more to make sure the room is furnished before the light is switched on.

Looking ahead, applied neuroscience could lead to better personalisation, which is a goal of customer-driven digital transformation.

“You go to YouTube, watch a video and then the next recommendation is three more of the same thing,” says Thomas Z. Ramsøy of Neurons Inc.

What Dr Ramsøy potentially sees is a future when sentiment is monitored in real time and what you are offered is customised. He concludes: “There might be a natural limit. You can’t ask people to do a brain scan in their everyday life and then there is GDPR [data protection].”

Insights into customer behaviour

American DIY chain Lowe’s, with more than 2,000 stories and 300,000 employees, is the second-largest home improvement retailer in the world. Although it is nearly 100 years old, the company has not been standing still. In 2014, it launched Lowe’s Innovation Labs (LIL) to leverage customer-driven digital transformation.

Since its inception, LIL has created an augmented reality DIY tool called Holoroom, the OSHbot autonomous service robot, and 3D scanning and printing in-store.

The company called in applied neuroscience consultancy Neurons Inc, founded by Dr Thomas Z. Ramsøy of the Copenhagen Business School, to combine research into neuroscience, psychology and economics.

“We used eye-tracking in a variety of different cases to see how people responded to Lowe’s new innovation,” says Dr Ramsøy. “When you are using virtual and augmented reality, a lot of the time people find them beautiful, but confusing.

“One of the early things was to test the Holoroom. When people were told they were going to the Holoroom, they didn’t understand what was going on. We could see when we analysed the [eye-tracking] data it was something about the name itself. For the developers, the name played on a Star Trek analogy, but to customers it meant nothing.”