Matthias Heid is co-founder of Wunder.ai, a Berlin company that teaches empathy to artificial intelligence in order to improve the online shopping experience. We asked him why neuromarketing is currently at such a premium, and why the emotion economy matters to companies.
Mr Heid, when people first hear neuromarketing they think about measuring brain activity. Is this the reality?
Basically neuromarketing is the science of how advertising and communication works. Essentially what happens in the brain when the consumer observes things, and how they observe these things. How are the observations pre-filtered and evaluated in their subconscious, through the limbic system, before they arrive in their consciousness? Recent findings in neuroscience have thrown up valid information about the mental information flows in the customer's mind - such as, for example, the importance of the limbic system in decision-making. Using this knowledge for your brand is what neuromarketing is all about.
If companies want to include neuromarketing in their marketing strategy, how can they best do this?
The concept of neuromarketing is not new. It has been practiced for about 15 years in qualitative market research. The goal of neuromarketing is to find out how a particular brand is positioned with the customer and what emotions it evokes. This can best be illustrated with a car example: BMW is a brand, for example, that focuses on performance, speed and status. VW is a brand which resonates for families with children. Depending on your budget, the Mercedes brand has a similar effect and evokes a feeling of safety while driving.
It is about the things that happen in the customer's mind when they experience certain brands. Incidentally, the same applies to products. If you look at Apple, for example, then the products are not just successful because of their usefulness, but above all because of the emotions they evoke in the customer. The aesthetic design, the functionalities or even the ease of use - all these are subconscious factors that play a role in the purchase decision and that are of importance for neuromarketing. If companies now incorporate neuromarketing into their marketing strategy, they must bring cognitive sensing into an operationalized, calculable form. We call this 'cognition engineering' and apply it to all key determinants of decision-making, such as emotions, activities, styles and preferences.
You just mentioned Apple. Do you have any other positive examples of companies which employ neuromarketing skillfully?
Neuromarketing has been used skillfully for many years in advertising. The communication strategies of many companies can skillfully stimulate the conscious and unconscious desires and preferences of consumers.
In the B2B area, I find Salesforce do it very well. For example, they sell very strongly via visions, work a lot with imagery and put the customer firmly in the foreground. It's important to understand that neuromarketing works so well because visual stimuli are absorbed by the limbic brain, whereas cognitive skills for human speech are developed later and are therefore not processed in the limbic system. That's why strong imagery is so important to marketing. All companies that present themselves strongly with images have understood this concept very successfully. Sixt is also a good example of this: the company uses pictures extremely successfully and reduces any text to a minimum.
At the same time, however, we also see that companies are struggling to bring this kind of positive stimulation to the subsequent stages, i.e. engagement and conversion. While broadcasting / advertising with a one-size-fits-all message the audience selects itself, brands have to hit the right nerve of the individual customer by the point of engagement at the latest. This is a challenge that is not easy to master.
With Wunder.ai you have dedicated yourself to artificial intelligence. To what extent can the company support with regards neuromarketing?
At Wunder.ai we bring three concepts together: neuromarketing (ie the questions "How are things perceived in the brain?" and "how are synapses activated to generate emotions?"), 50 years knowledge of cognitive science ("How are decisions made?") and new information technologies.
When you hear talk of artificial intelligence these days you often hear the buzzwords machine learning or deep neural networks. For us, artificial intelligence is basically intelligent automation in connection with X. For us, this X is the knowledge of existing contexts, in our case long-standing research on customer decision factors when shopping. In my opinion, it does not help companies to learn things through machine learning which they already knew. Unfortunately, this is quite often the case. We give our technology – the AI - the knowledge of neuromarketing, psychology and consumer behavior, incorporating it into our technology and scaling it out. So we have created an empathic artificial intelligence that can derive current behavioral motives from a user’s behavior on a website. We read the user's brain, so to speak, and build a deep psychographic real-time profile from it. This data can then be used in personal digital customer interaction.
Can you describe this empathic artificial intelligence in more detail?
At its most basic, our solution is comparable to going into a retail store where there is a salesman who can at best rate me through 30 seconds of observation and through experience quickly knows what I want in the store and how he should deal with me. The seller sees if I am a targeted shopper, if I’m open to new things or if I really do not want to buy anything. Then he optimizes my shopping experience for me. If he realizes that someone is here who has already-formed preferences, then he serves them. If he thinks that the customer himself does not really know what he wants, he offers inspiration, possibly also a coffee, doing some small-talk to discover potential interests, and helping the client to discover new things. These are all very human things that are not yet adapted in today's ecommerce. Websites are still very flat, one-directional and actually work only based on rules. Everyone gets the same experience to a large extent. Perhaps here and there the image changes a bit, but in principle, everyone gets a promotional code, everyone gets the advertising banner blended in. The previous approaches to improve the digital experience through pure machine-learning based personalization software do not, in my opinion, really move us forward. Often I also see the use of allegedly individual discounts, which further reduce the already low dealer margin, or suggestions of similar products that do not really inspire the customer.
Through our empathic deduction, we can see what mood the customer is in, recognize his buying motives and know where they originate. With this knowledge, companies have new possibilities to empathize with customers, to arouse their emotions, to use the right image material and to put customers in a good mood. Last but not least, you can now even explain to each customer individually which products fit the currently perceived personality and needs. This "love" feature for empathic ecommerce personalization is currently extremely popular.
However, not every company - especially start-ups - has the resources to undertake extensive neuromarketing. What are your basic tips for such start-up companies?
What we also learned as a start-up, for example, is the importance of one's own values and how important it is to define one's own goal. What is the raison d'être of the company? Why are we here? What do we want to achieve?
Neuromarketing is not so much about the material value, but rather about the emotional component. What kind of feeling do I want to create for my customer? And what does the company want to do in the world? People do not remember what you said, but how you made them feel. As a startup, I have to internalize this. Customers still buy mainly for emotional reasons: Is the company trustworthy and does it represent what I, as a customer, also want? It's not just about building the best technology, but about the overall purpose. What positive emotions can I create for the customer?
Often one also reads the advice that good storytelling is important and in marketing you should be talking about the why. This also plays into this. Above all, it is important that the pictorial language and neuromarketing provide a coherent picture in the end.
Are there any insights in neuromarketing that surprise you as an expert? And do you have a succinct example?
Yes definitely! Consumers are continually developing. Certain things that had an effect 15 or 20 years ago do not necessarily apply today. Therefore, in my view, it is always advisable to regularly look for the latest findings from psychology and marketing science. Among others, there is the Journal of Marketing or the Journal of Consumer Research, where again and again the moderating effects of purchasing decisions are brought into focus. The customer always buys in a certain environment and, depending on what his context looks like (perhaps as family man or single), the decision-making processes are also influenced. The more knowledge I have about the context of the customer and the more I can take it into account, the more I will understand it digitally. So it pays to look into such journals now and again to see just what according to the latest research the risk factors are that I should bypass in my marketing & customer management strategy.
How much has changed in the years you've been working with neuromarketing? Does the perception of advertising / marketing ultimately depend on the zeitgeist?
Funnily enough, we actually included the theme "New Zeitgeist" in our pitch deck. We believe that the increasing digitization and the opportunities offered by artificial intelligence will particularly attract companies that place a strong emphasis on trust, empathy and transparency. We already see that the subject of convenience and simplicity is currently wearing off. In ecommerce, every customer is now accustomed to one-click shopping and same-day delivery - these practices are expected by the consumer as standard. Today, companies are more likely to score points by being open, transparent and empathic with the user. As we live in an oversaturated society, we will also see companies dedicated to overarching societal goals and values. Even the younger generation of consumers will be much more conscious and aware of such things. This buyer often looks much deeper and closer into a company before buying. There are experts who think that we are going in the direction of the emotion economy: after ten years of automation, mass emails and retargeting, they attest to the consumer's fatigue. The emotion economy is now increasingly about building a trusted relationship with the customer.
An example from the German automotive industry would be Daimler, who are already quite far in terms of this emotion economy. It's also worthwhile to take a look at how their CEO Dieter Zetsche, or perhaps his PR team, communicates externally on his personal LinkedIn profile, how he puts his young teams in the limelight and explains the processes in the company. Here you can already see a significant culture change in the company.