Marketers: Your Customers Think Fast; You Can Be Faster

This is your brain on marketing.

Thanks to findings in neuroscience, we now know much more about how our brains process messages.?But marketers have been slow to incorporate those findings into their campaigns.?They know that marketing influences consumer behavior, but rarely do they understand why or how it does so.?We often see skilled marketers unable to explain or replicate the "magic" of a successful campaign, CFOs unable to justify new marketing investments, and CMOs uncertain about how their efforts will contribute to growth.?The result is underinvestment in marketing activities that drive long-term sustained growth and competitive differentiation.

Marketers also struggle to answer key questions, such as:

• What core customer needs or occasions should my brand be targeting??How do I shape my campaigns to ensure my brand wins in key moments of choice?
• What is the role and opportunity of branding in a decentralized, digital world, when different audiences have different experiences?
• How should a challenger brand try to disrupt an incumbent, and how should an incumbent answer that challenge?
• How much investment will be required to drive share over several years??

In this first of a series of articles, BCG will share new research and thinking on how marketers can tackle these questions.

Insights from Behavioral Economics and Neuroscience

The fields of cognitive neuroscience and behavioral economics are vast and continue to develop, but marketers can start with a few basic concepts, as popularized by Daniel Kahneman and Amos Tversky, among many others:

? "System 1" involves decision processes that are fast, associative, and mostly unconscious.?These processes rely on associations built from experience, observation, or repeated references.?System 1 plays a role when you’re on your phone in the grocery store and can choose a cereal box without pausing the conversation

? "System 2" describes slower, analytical, (semi)-conscious decision processes, such as when we look at side-by-side feature comparisons or use significant time and attention to evaluate options.?An example would be if you put your phone down and compare two cereals based on nutrition information or cost per ounce

? Pre-frontal cortex (PFC) - This region just behind the forehead is a kind of controller deciding when and where to invest cognitive attention.?Among its many tasks, it rapidly estimates the effort versus reward of different decision strategies that range across System 1 and System 2.?If you notice that you grabbed the wrong cereal, the PFC may focus your attention away from your phone conversation to correct the mistake.

Exhibit 1: Three fundamental components in decision-making that matter to marketers

Most marketers focus on System 2.?They develop creative messages highlighting a product's features, benefits, price, or promotion.?Many successful marketing tactics influence the PFC to invest attention toward System 2 decision making ("Are you getting the most from your car insurance?").?Most measurements, such as surveys with forced-choice comparisons or questions on "consideration" or "awareness," likewise dwell on System 2 processes. With advanced analytics and in-depth consumer insights like BCG’s Demand Centric Growth , we can understand what truly drives consumers’ needs and choice when leveraging System 2 processes.

While winning on System 2 is important for brands, marketers are neglecting the considerable opportunity to strengthen consumers’ System 1 brand associations and preferences.?As many CPGs have discovered, a product’s mental and physical availability – and the context surrounding consumers in their moments of choice – matter as much for share growth as strong promotions and price point.?For a brand that already has a strong unconscious association in consumers’ minds (mental availability), marketers may be better off focusing on making the product ubiquitous and effortless to obtain (physical availability).?They need to create customer journeys and experiences that encourage the PFC to favor System 1 decision-making processes process – defaulting to a consumer’s gut, instinctual choice rather than entertaining persuasive messaging from challenger brands that invite further attention.

Building Up a System 1 Brand

How do you get your brand into System 1 in the first place??That comes from consumers’ consistent experiences, observations, and references.?Consistency and frequency – when measured objectively – are table stakes; you also need to align with consumers’ needs and decision context. That’s how you differentiate your brands and accelerate those visceral associations built through brand marketing.?Across hundreds of Demand Centric Growth cases, we have learned that the brands consumers view as most aligned to their needs, within a specific demand space, tend to win the greatest share of those occasions.?

Marketers need dedicated System 1 measurement and ongoing experimental approaches in order to boost the impact of campaigns and complement their efforts to bolster System 2 appeal. First Fast Response (FFR) is a simple test where respondents think of an occasion for using a product.?The marketer gauges how easily and quickly a brand comes to mind as a solution in that specific occasion.?The FFR metric incorporates the time and perceived effort to produce the answer, as well as how confident respondents feel about their instinctive answers.?The stronger the FFR metric, the more likely a brand has significant System 1 associations that could lead to instinctive decisions in a real setting?– which correlates with the likelihood of purchase in the future.?The sales impact of higher FFR is a relationship that varies by brand and category.

This is not a binary choice: investments to raise FFR, which include many traditional brand campaigns, will also complement System 2 oriented campaigns.?Two consumers with different cognitive states may benefit from very different messages and experiences that address System 1 and System 2, so marketers need both kinds of outreach.

?Where to Invest Your Marketing Dollars

That means investing in both demand space oriented brand campaigns, leveraging consistency and frequency to establish associations within System 1, and awareness and consideration campaigns, to win over other buyers using System 2.?The former should emphasize experimentation and optimization with FFR as a key metric.?In today’s digital world, different audiences may be targeted with different messages. The FFR metric can be measured and managed by demand space and by audience.?Marketers can thereby focus messaging on consumers' differentiated needs within specific demand spaces and boost the brand’s mental and physical availability in those occasions.

Marketers can also use FFR to assess a brand’s potential to challenge an incumbent leader.?If the latter has a strong FFR score, then dislodging it in the minds of the consumer is going to be tough.?The challenger might instead market toward specific audiences and demand spaces that have a neutral or unfavorable association with the incumbent.?Precise targeting and tailored messages will be essential in that case.

This article only scratches the surface of how neuroscience can be applied to marketing.?These findings are a powerful reminder that marketers can develop novel approaches based on cognitive concepts and signals.??

Exhibit 2: The best marketing action depends on a consumer’s associations with a brand

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About the Authors

David Ratajczak is a Managing Director & Senior Partner based in BCG's Atlanta office. Lauren Taylor is a Managing Director & Partner based in Dallas. Mario Simon is Managing Director & Partner based in New York. Gaby Barrios is a Partner & Director in BCG's Center for Customer Insight, based in Paris. Leonardo Fascione is a Principal based in New York. Kelly Kutas is a Knowledge Expert for Customer Demand & Innovation, based in Chicago.