Mindful of the subconscious edge
by Professor Gemma Calvert
To the uninitiated, pleasing consumers and managing people are the straightforward bread and butter of any business. Yet there is plenty of evidence that companies are not doing anything like as well as we might suppose. In any given decade since the 1970s, half of the Fortune 500 companies disappear, while current market research figures estimate that 80 per cent of all new product launches fail within three years. And as if that is not challenge enough, companies today need to keep pace with rapid changes in technological innovation, market upheavals and constantly shifting consumer needs brought about by globalization.
On top of external market forces, today’s local and global businesses face customers who now expect remarkably high levels of service. Companies that fail to meet these standards can expect to have their inadequacies exposed at the touch of a tweet. Such is the stress imposed on employees of service-based companies, that many are reporting staff turnover figures as high as 100 per cent per annum. For service-based economies such as Singapore, this is a very sobering statistic.
Against this dramatic backdrop of continuous change and uncertainty, one thing remains relatively constant. It is, of course, the human brain. Bound by the slow time course of evolution by natural selection, it provides a point of stability amidst today’s constantly shifting landscape. Importantly, insight into the rules which govern its behaviour is now beginning to confer businesses with the ability to impose order on their otherwise challenging internal and external processes, and to predict with much greater accuracy how their customers and employees will behave.
It’s all in the mind
Over the past few decades, neuroscientists have made unprecedented progress in understanding the workings of our minds and illuminating central truths about human nature.
The ability of the latest neuroscientific tools to look ‘inside the head’ during normal behaviour has induced a step change in our understanding of how people function, what makes them behave the way they do, how decisions are formed and acted upon, and how social interactions influence behaviour (often subconsciously) in the supermarket, the home and the workplace.
Although our brains are fantastically adaptable, they are not infinitely flexible devices, possessing biases and limitations that reflect their biological evolution. To put another way: How did we expect to progress in understanding and managing human activity without understanding the nature of the central device that produces all progress and innovation in technology, business and society?
Power of the subconscious
Of many new revelations, perhaps the most fundamental involves a heightened appreciation of the power of the subconscious, and the balance between the ‘implicit’ world of the subconscious, and the ‘explicit’ world of the conscious.
Neuroscientists now believe that as much as 90 per cent of brain activity is subconscious. While operating below our conscious awareness, these brain processes influence and determine a vast amount of our behaviour. Contrary to Descartes’ supposition of the dominance of the (conscious) rational mind, brain research reveals that it is our emotions and not thoughts that instigate our choices. Our subsequent explanations are mere post-hoc rationalisations of our behaviour.
So how can companies tap into this growing body of knowledge about the human brain and apply these insights to better understand their customers and improve their own internal management structures?
Traditional market research tools, which involve asking consumers what they want or whether they are likely to buy a new product, seldom accurately predict their subsequent purchasing behaviour. To quote the late advertising guru David Ogilvy, “Consumers don’t think how they feel, they don’t say what they think and they don’t do what they say”. This problem is even more pertinent in Asia, where cultural norms surrounding appropriate levels of openness make it even more difficult to tease out what people really think or feel.
Brain scans and more recently, scalable and cost effective web-based behavioural tests, which tap into consumer’s implicit thoughts and emotions at timescales too brief for the conscious brain to interfere, have found that consumers’ subconscious brain responses are better predictors of what people will remember when listening to marketing messages, and how they will act upon these advertisements.
This new approach to market research, which also allows companies to capture consumers’ subconscious responses about the feasibility of new products, existing brands, packaging designs and planned advertising campaigns is termed “neuromarketing”. It is now being used by companies both large and small worldwide to reduce new launch failures and to gain competitive advantage through greater predictability of consumer behaviour.
Neuroscience is also making significant contributions in the areas of leadership and management. Brain research has revealed that our social motivations are governed by the principle of minimising threat and maximising reward.
For example, when a human being senses a threat, the brain reacts by focusing its resources on minimizing the threat, leaving it less able to deploy resources required for creative thinking and problem solving. Perceived threats also inhibit the ability to think laterally, reducing vital “Aha!” moments of insight.
Factors that provoke a threat response include excessive micromanagement, and spur-of-the-moment brainstorming sessions where senior management expect junior employees to come up with groundbreaking ideas in front of a large audience. Understanding these “threats” and replacing them with positive actions that underpin reward responses, such as increasing perceptions of fairness, autonomy and self-worth, will release untapped creative potential, enhance positive outcomes, and substantially reduce absenteeism and staff turnover.
With the customer in mind
Brands survive not only because the companies behind them are soundly based and profitable, delivering on consumers’ desires and needs. Rather, they also depend on that ethereal space between supplier and customer, where trust, empathy and understanding play a pivotal role in determining success or failure.
In a recent study of 1,600 consumers and service providers across four different countries, we found that the quality of a customer service interaction can have a significant impact on an individual’s well-being and mental state. Receiving excellent customer service builds trust, reduces stress and increases loyalty. More surprising was the observation that providing great customer service is associated with similar positive outcomes for the service provider: reduced heart and breathing rates, lowered stress, and feelings of happiness and pride.
By understanding how this positive feedback loop operates, companies can use these insights to motivate their service staff to provide excellent customer service. After all, it will directly benefit themselves in terms of overall levels of stress reduction and consequently job satisfaction.
Neuroscience is pervading every aspect of the commercial world and is set to change the way we understand and undertake business. This knowledge about our intimate human desires, needs, motivations and decision-making processes abounds and companies which want to gain competitive advantage should take on board the lessons and insights provided by brain science.
The writer is a visiting professor at Nanyang Technological University’s Nanyang Business School and a senior fellow of the Institute on Asian Consumer Insight. She is one of the foremost pioneers of neuromarketing and founder of the world’s first neuromarketing agency, Neurosense.
Published in The Business Times on 20 May 2014. This is part of an ongoing series View from an NTU professor.