Ever wished you could read your customers’ minds? The rapidly evolving field of neuromarketing is getting us closer than ever before. Katharina Kuehn, head of neurostrategy and innovation, chief strategy officer at The Winning Group helps us understand the way people think and make decisions.
What are powers of deduction? Sherlock Holmes offered Dr Watson a masterclass when Watson handed him a pocket watch. It belonged to your brother, who inherited it from your father, Holmes told Watson. He was careless, and had good prospects. Naturally, Watson was astounded. But to Holmes, the dented watch shouted its story of a careless owner, and its quality was an obvious sign of wealth.
This kind of deductive reasoning isn’t just a fiction. Where Holmes backed up his reasoning with scientific methodology steeped in the early days of forensics, these days neuroscience uses technology like eye-tracking, functional magnetic resonance imaging (fMRI) and Electroencephalography (EEG), to quantify consumer behaviour.
Scientists like Katharina Kuehn, head of neurostrategy and innovation and chief strategy officer at The Winning Group, are getting down to the nitty gritty of why customers might prefer red cars or why we post-rationalise impulse purchases.
In the war for attention, marketers have turned to neuroscience to better understand how the human brain works and how we make decisions.
For Katharina, it’s not magic. It’s the data of emotion. Holmes’ pocket watch story still applies.
“If you find someone very competitive that’s wearing an expensive watch, you’ve got a good guess that they are influencers and opinion leaders,” Katharina says. “I’ve always thought this the most fascinating topic to think about in the world. We’re very lucky that now we’ve got new methodologies and new ways of understanding the brain. It’s a rapidly evolving field.”
Neuromarketing employs scientific methodologies, and as an in-house neurostrategist, Katharina works with brands at the very beginning to develop the concept, positioning and strategy, and define the unique and relevant space that they want to own in somebody’s mind.
So, how powerful are these techniques? Recent examples from Brexit and Trump campaigns show this kind of thinking can operate on a global scale. According to Katharina, there are specific elements that made those campaigns so successful.
“Understanding different personality types and their needs and drives, and then micro-targeting the messaging to those types,” Katharina explains. “Actually exactly meeting them where they are based on a profound understanding of what their needs and fears and drivers are.”
It’s easy to assume that as consumers we’re expert decision makers able to take in all the data points, process, and then come out with the optimal result. Katharina explains this is not the case at all.
“I think it’s quite healthy for all of us to realise these dynamics, and to realise how we actually make decisions,” she says.
Tune in to this episode of the CMO Show marketing podcast as Katharina and host Nicole Manktelow touch on Jung’s colour theory, Plato’s paradigm and whether red really does go faster.
The CMO Show production team
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Participants: Hosts: Mark Jones and Nicole Manktelow
Guest: Katharina Kuehn
NM: I’m here with Katharina Kuehn, who is Head of Neurostrategy and Innovation, the Chief Strategy Officer at Winning Group Neuromarketing. Katharina, is it possible? Neuromarketing, it’s a thing.
KK: It’s a thing, it’s become a thing. I did believe it was impossible seven years ago when I tried to bring it to Australia, but it’s becoming a thing.
NM: Okay, so we’re detecting an accent here. You hail from Germany?
KK: Yes, all the way over from Munich.
NM: tell me Katharina, how did you get into this field? I mean, what is it that interested you about the mind?
KK: Growing up as the child of two psychotherapists, I guess I was always interested in what goes on in the mind.
NM: My God, you never stood a chance, did you?
KK: You don’t stand a chance, no, and you need to discuss everything, and you need to understand everything and the why behind it. And I think I’ve always, growing up, had a fascination with that. And then later on at uni I started studying psychology and marketing, and then as with many things we could reconstruct in hindsight how brilliantly we steered our career towards whatever we’re doing, but the truth is it was just one afternoon I was at the pool with my friends, and there was a lecture on at uni, non-mandatory, in the evening, by one of the neuromarketing pioneers in Germany at the time, and I decided to go there, although no one else wanted to join me, they were all carrying on swimming. And so I went there and met Dr Haeusel, who I then later on started working with, because in that one hour lecture that I attended more or less by accident, he changed my entire worldview. He changed my entire knowledge about how humans actually make decisions, and blew my mind. So I walked up to him and started working in his team, and was fortunate enough to be training with him. So that’s how I got into it.
KK: So limbic insights is an umbrella term for a range of methodologies that start with understanding the limbic system in the brain, right. So the limbic system in the brain is really that part that is responsible for emotions processing. And it’s also the part of the brain that’s responsible for human decision making. It’s actually quite fascinating to think that for ages marketers have tried to sell customers the features and the benefits, you know, and the logical backups and so on. But the interesting thing is that the limbic part of the brain has no capacity for language, it’s not analytical. But it controls behaviour. So if we give people the facts and figures, we’re not influencing their behaviour, because the limbic part of the brain that influences behaviour has no capacity for that.
NM: So even if we give them the case studies, somebody’s experiences, somebody’s heartfelt, you know, emotions, well, the story usually brings emotions, but it’s not the story itself?
KK: It’s the emotions that are transported in the story, obviously, but these things are important, but they are used in a different way, they are used for post-rationalisation, right. So consumers take decisions very quickly and non-consciously in the limbic system which works 200 times faster than the rational mind. And then they rationalise them afterwards. So I’m sure that’s never happened to you, but some other crazy person that you know, you’re going for a walk on a Saturday and suddenly you get dragged into a store and you come out with a handbag, and…
NM: Never happens.
KK: …then you explain at home the reasons for why you really needed the handbag. So that’s an interesting example of where we’re very good at coming up with reasons in hindsight, but most of the time we’re not really aware of the true reasons of our own behaviour. And that actually brings us to a very interesting topic of why traditional market research has its obvious weaknesses, right, because if we do ask people what they want, why they want it, and what they intend to do in the future, we really only get very limited insights, because 95% of the time we never get our environment, and that includes our stores and websites, non-consciously and based on emotional shortcuts.
NM: I am now starting to wonder what – in my cupboard, everything that I’ve bought, whether I’ve bought it for emotional reasons, and then – like the packet of biscuits, and then looked at the nutritional chart on the side to see whether or not it was in keeping with an excuse.
NM: So this is really like trying to put a lens over consumer behaviour, and trying to find a reason why certain things work, or how you can influence people to make certain decisions, am I correct?
KK: Absolutely. It really starts with a fundamental understanding of how the human brain works and how we make decisions. And I’ve always thought that was the most fascinating topic to think about in the world, and we’re very lucky that now we’ve got new methodologies and new ways of understanding the brain, and it’s a rapidly evolving field, it’s very exciting.
NM: Well, all my little nerd nerves are tingling right now, so this does sound pretty exciting and nitty gritty. Why have I got an image in my head of someone with sensors all over their skull, and maybe eye tracking to see where their eyes are moving on screens, or what signage is working? How do you measure this stuff? What are we getting at?
KK: There’s a broad range of methodologies, right, that are designed to get different insights, outcomes, from, as you say, eye tracking, trying to understand where people are looking, to EEG and FMRI where we’re trying to see what activates in the brain when people are exposed to certain stimuli, all the way to measuring their reaction times, the split second response times to certain attributes or stimuli, to understand their non-conscious emotional associations, to using neuropscyhographic personality profiling, which is a methodology that I work a lot with, where we’re really understanding different emotional drivers and needs for different customer types. And how we can ultimately design more effective messages, brands, experiences.
NM: Oh my God, this sounds a lot like lie detector tests and all sorts of amazing – it sounds fascinating. How is this being applied here in Australia?
KK: The applications are varied. So obviously you can apply it to improve the efficiency, optimise marketing messages and advertising. At the Winning Group currently we apply it around how we design our brands, from the look and feel and the strategy of the brands, how we match certain offers to certain target markets, right down to how we design the user experience or the customer experience in the stores, to be really highly tailored and catering to different people’s needs.
KK: I think what’s enabled me to bring them over here was more a sense of adventure, of trying to see what we could do with it over here. It really comes from a very innate desire to understand humans, to understand their behaviour, to understand their decision making. And originally I used it working with the founder of one of the methodologies I was describe, limbic, the personality profiling tool, worked with him over in Munich consulting to large manufacturing companies in terms of how they would communicate their brands, how they would design their brands. So that’s the origins of the approach is really in…
NM: In manufacturing?
KK: …consulting to manufacturers on brand positioning strategy.
KK: in a perfect world you really actually start with it. You actually start and design your brand, your product, your message, your website with the audience in mind, because then you’re in full control from strategy to creative execution to match the product and the audience.
KK: I think social media is a very extreme example of where, as we all know in marketing the scarcest resource and the currency is attention, and really trying to exploit human attention, optimise for, maximising the attention span people have, or the time they spend with us, that’s their number one goal. And I think social media in particular have applied strategies quite effectively over the last year, sucking people into more and more and more of screen time.
NM: And it’s increasing the desire to give over that attention, not necessarily creating more capacity for attention, is it?
KK: Yeah, yeah.
NM: So you’ve got to make it more important than the next thing.
KK: Absolutely, absolutely. It’s a war for attention. And the methodologies are becoming better and better, yes.
NM: A war for attention, gosh, I love that. Tell me, in the B2B space, is there application for this? I can understand how we have to talk to consumers and attempt to get consumers to love our products, and to have a desire for them, and then maybe to go search for the reasoning after that. But in big business we often have many people making decisions and attempting to use certain frameworks to make those decisions. How does emotion fit in here?
KK: It’s an interesting question actually. B2B is highly relevant, because really if we think about it, wherever we encounter human beings, wherever human beings or human beings in groups are involved, neuroscience plays a part, because it’s always about the human being and making a decision. Obviously in a B2B context you’ve got a range of decision makers, and that in itself is interesting. How do humans behave in social interactions, right. But again, we are facing humans, not machines, so there’s definitely an application for it in B2B, but understanding the different personality types that are involved in the decision making, and what actually drives their decision making, or how they would influence the process of the decision making in an organisation then becomes more important
NM: In the B2B environment. You know that there are going to be large organisations with numerous people with different stakeholders discussing this. How can you give yourself that edge?
KK: This is a super interesting question, right. I think first of all it’s always useful to identify who the influencers, who the opinion leaders and who the followers are. And that in a way is actually the exact same way we’re trying to introduce new products and innovations in a B2C context. Because they are different personality types, and different personality types play different roles in a social environment. So one concept that’s relevant for that is Rogers bell curve of the law of diffusion of innovation. It identifies.
NM: I know it well. Sorry. Yes please, do explain it.
KK: It identifies different personality types, and how they respond to new ideas or buying new products. And so in a B2B context you would do well to identify those opinion leaders which are typically people that have a high status in the social group, they are strongly driven by the dominance dimension in the limbic brain, high testosterone, so if you find someone very competitive that’s wearing an expensive watch, you’ve got a good guess that they are influencers and opinion leaders. And but they are also early adopters of new ideas and new technology. So it would be good to identify these people, because they would be very influential in the decision making process. And then you’ve got other people that tend to wait until an idea, a concept or an agency is proven, its success is proven, and then they are what we call the followers of the herd, or harmonisers. They actually always look for social proof.
NM: Harmoniser sounds nicer, doesn’t it?
KK: Harmoniser’s a very nice term. They’ve got a lot of what we call the cuddle hormone oxytocin in their brain, so they would always seek consensus in the group, and they would agree to adopt something once it’s tested and proven. So one technique you would apply there to convince them is to take them through case studies of how others have achieved similar things, and social reviews for example are important to communicate with them.
NM: So who in Australia is approaching you or your team particularly, at that early level?
KK: I mean, now that I’ve come out of the world of consulting, I’ve done this for 10 years, so I built a consulting business over in Sydney for a number of years, applying it to a wide range of industries from fashion, to automotive, to banking, which was fascinating. Now no one’s approaching me anymore, because I’m now Australia’s first in house neuroscientist at the Winning Group, and so now we really apply it to our own portfolio of brands. But we actually did also work with the government and the Centre for Behavioural Economics to help them improve their energy efficiency messaging and labels to actually get more people to use energy efficient products. And we did an experiment and a test on our website to help that cause.
NM: Okay. So this is the label that you get on your white goods that has the stars?
KK: Absolutely, yes.
NM: That tells you whether or not it’s energy efficient, or just how much energy it’s going to gobble up?
KK: Yeah, yeah.
NM: And what was the work you did with them, what did you achieve?
KK: So it’s a multi-stage project, but the first one was really to try and see how we could use behavioural economics to improve the label design so people would actually first of all understand the message more clearly, because it’s relatively confusing and doesn’t mean much to people at the first glance. So how we could actually improve the label design so it works as a shortcut, which visual signals are meant to be. And then second of course that would be a second stage is to improve the colour, coding and so on to really match the message we’re trying to get across.
NM: So I think the red stars probably might just say danger as well as anything else.
KK: Yes, exactly.
KK: So colours are actually a very interesting field in terms of neuromarketing, because as I think Carl Jung said that colours are shortcuts into our subconscious minds, and one of the strongest signals we can use. And of course every colour has a non-conscious subliminal association and emotional trigger. So if we use colours in branding, marketing or product design, we need to be very aware of the non-conscious effect they have on the customer perception.
NM: Are there colours that are just a no-go, no matter what the product?
KK: Always depends on your goals, right. So red of course is primarily, and that is true across different cultures, because it’s actually hardwired, right, colour is the sight of blood, it’s fight or flight, so it’s non-consciously associated with speed, danger, error messages, right.
NM: Go faster stripes on your car.
KK: Exactly. Red actually does go faster, which is why Porsche uses it very effectively for their racing cars, yes.
NM: That’s fantastic.
KK: Yeah, I think what we do have to say is that neuromarketing and neuroscience is a fairly new field, right, so there are issues to scale and cost issues, because some of the methodologies are really quite expensive, and some of them are hard to scale when you’re trying to understand larger populations or larger sample sizes. And so I think these are two of the challenges you encounter. And then of course the whole process of when something is new to actually get to a standard of how results are interpreted and what different things actually mean, and I think that’s the role of industry bodies like the neuromarketing science and business association, to actually define standards across the entire industry that everyone then can understand and measure against.
NM: And because without that it’s basically one person’s opinion, your interpretation of a variety of these tools that you’ve gathered together.
KK: Yeah. And I mean as with everything, a new industry also attracts neuro-cowboys, and I think there’s lots of people who jump on the bandwagon, and obviously it’s a fascinating topic and they like to talk about it.
KK: But there is this joke that almost when you put a slide of a brain up that it seems more credible, and that is actually also a neuromarketing tactic, the same as showing two digits behind a number increases the perception of precision in the research results, right. There are all these things. But I think it’s very important that we actually get to standards that can be reproduced and that are reliable and measurable and standardised.
NM: Does this account for why we put lab coats on people whenever they’re talking about pain medicine or, you know, health, various…
NM: I could be very sceptical about health benefits are different products, but there’s always someone in a lab coat.
KK: Yep, absolutely. It’s a good halo effect.
NM: Can we talk about irrational behaviour?
KK: Love that topic.
NM: Do you?
NM: Why do you love this topic?
KK: Because I think if you have a bit of humour with your own behaviour then it just becomes fascinating, the more you understand about just how irrational we are, and how we love to believe we’re incredibly rational, then everyday life becomes extremely entertaining.
NM: Alright, this is, this is the handbag story again, isn’t it, this is going into the shop to, I’m not really going in there to buy something, and then I do, right.
KK: Yes, absolutely, absolutely.
NM: Could we, could we extend it to irrational policy making, things that don’t seem right amongst broader groups?
KK: Absolutely, absolutely. I think that is actually one of the big opportunities that now comes from the field of – and I’m not making this about neuromarketing now, it’s actually neuroscience and decision science. That we come to a much more realistic view about ourselves as human beings, where the old Plato’s paradigm that we are rational decision makers, we are in control of our decisions, and we’re able to actually take in all the data points, almost like an AI, take in all the data points and then come out with the optimal result. This is not the case at all, and I think it’s quite healthy for all of us to realise this, these dynamics, and to realise how we actually make decisions to probably become a bit more aware and be more in control of what’s actually happening, and be less at the mercy of people pulling us left, right and centre with evermore sophisticated strategies.
NM: Do you have a view on the way – I mean, does this inform your politics? Does this inform the way we make public policy?
KK: I think this is a very, in a way a sad success story of neuromarketing in recent times. Brexit and Trump in fact got delivered by the exact same methodologies that we are using, understanding different personality types and their needs and drives, and then micro-targeting the messaging to those types, actually exactly meeting them where they are based on a profound understanding of what their needs and fears and drivers are.
NM: I just got a chill.
KK: Yes, absolutely. And that is where you do think if you have these powerful tools, and these tools are neutral, right, they’re not good or bad, they’re just more effective than approaches have been in the past. But of course in the hands of the wrong people, then they can do a lot of damage.
NM: Where would you like to see these – I have to do it, I have to say it, with great power comes great responsibility. Okay, there you go, I’ve said it. Where would you like to see these skills employed more?
KK: I would – I think one major application is to educate everyone, absolutely everyone on their own mind, on their own personality, on their own inclinations and their own fears, right, because I think that way we can all be way more empowered around the decisions that we make. And then secondly of course for good causes that actually advance the whole of humanity, whether that be environmental matters, social matters, I think they are great examples, for example from [Diana Riley] around organ donations, how you can encourage organ donations. It turns out the power actually lies in the person designing a form, whether the ‘yes’ is pre-ticked or not.
KK: It’s shortcuts like this, right, and if we use them to advance the greater good of humanity, I think we’ve got a pretty good chance and a pretty exciting future ahead.
NM: now we are data driven, and we want a lot more support behind all the decisions we make, and the content that works, and we want to know what’s driving our customers, and we want to make sure that every time they interact with us that they’re getting as much out of that interaction as possible. So there’s layer upon layer of analytics and data and touch points and all of this kind of stuff. Then we introduce neuromarketing, and at what levels, I mean, can you get swamped with this, is it, are there too finer details, too many inputs for you to work your craft?
KK: I think that’s one of the most criticised things about big data at the moment, right, that we all have millions and millions and millions of roles and data, yet we struggle to make meaning out of them, and we struggle to actually use them in a way that further our goals. And I think that’s actually where neuromarketing, neuroscience is not an additional layer, it’s actually one that helps us, it’s almost like a lens to understand what is going on. Because if we just use behavioural data, we can see the what and how of behaviour, but we still don’t understand what’s going on, what’s driving this behaviour. And I think that’s exactly the role of neuroscience and neuromarketing to understand the person, the human behind the behaviour, and what motivates that particular behaviour.
NM: So a lot of companies will be collecting the what and the when and the how much, and all of that, but they won’t know that they might – they might even have access to some of the indicators for why already.
KK: Yep. Yep
NM: Is that part of your process, if you were, or anyone in your position would go through and say “Right, look at the data, and now let’s look for clues”.
KK: Yes, absolutely. But we go one step further, we actually do start with understanding the human being behind the behaviour and then interpret against that. So we do use it as a lens, because…
NM: So you’re doing some empirical research on people?
KK: All the time, yes, all the time. We’re doing, we’re doing personality profiling, and we’re also doing the observation of behaviours that help us understand the personality behind it. So it’s very fascinating. And I think as businesses, coming back to the paradigm of how we look at humans and decision making, a lot of businesses still treat their customers but also their employees almost like Robocops, like rational decision makers, when the reality is we’re emotional, we’re more like Homer Simpson, maybe, and so for the customer, experiences we’re designing, I feel we’ve moved from treating every customer the same, which is absurd, if you think how different we all are and how different our needs are, to putting them into demographic buckets. But I mean what does it tell you if someone is 40 years old and is the main grocery buyer, right? So we’ve moved to at least clustering them into demographics, to following around their behaviours and trying to understand based on behaviour. But that in itself still is missing the critical component, which is understanding the human behind the behaviour. And I believe especially as everything becomes more technological, if we want to design technologies and experiences that actually resonate with humans, we need to focus again more on understanding the human that we’re actually trying to speak to.
NM: Because past behaviour doesn’t necessarily inform…
KK: Predict future behaviour.
NM: That’s right. So you’ve got to understand the motivation, you’ve got to understand emotion. Is it just, is it a little too blunt, is it a little unsophisticated to simply change your marketing to be more emotional?
KK: Absolutely. I mean, that’s the idea, right, just turn up the emotional music…
NM: Yeah, turn it up to 11.
KK: …show a baby, and then show a pretty face, and that’s the emotional marketing. I mean, at the worst. Yes, I think it has to go much deeper than that. I tend to think of it as neurostrategy, right, rather than neuromarketing, because I really believe that it starts with the concept, the positioning and the strategy. So we need to define what is the unique and relevant space that we want to own in somebody’s minds? And that somebody we need to define who they are, at an emotional, non-conscious personality level. And I think this is how it needs to start. And then of course everything you do is an expression of who you are trying to speak to. And that’s to match who you’re trying to speak to.
KK: So we know there are seven different personality types in the world that we can differentiate based on their limbic drivers.
KK: You can’t say “This is your business demographic, they’re all like that”, right, so that’s the power user, what is a power user. You will have different personality types amongst this group that you might have defined as power users. And so then it becomes interesting to think about which channels, which messages can you actually personalise to that one individual, right. So where do they touch your brand, and how do you want to talk to them when they get there? And not only what are the products you are offering or the services, but how do you frame them, how do you visually display them, and the whole package.
NM: Wow, that sounds intense. That sounds like a little bit more than your sales funnel diagram.
NM: before you go, – I’m not sure if anyone’s warned you about this, but we have…
KK: They have.
NM: Oh they have? It’s the rapid fire questions.
KK: Yes, go ahead.
NM: What are you grateful for?
KK: A million things. I think gratefulness is the key to happiness. But above all my sister and my parents.
NM: Oh, that’s so kind and sweet. Do you like rain?
KK: I love rain. I love rain, running in the rain, singing in the rain, I love rain.
NM: In the movie of your life, who would play you?
KK: My sister. She looks identical, only 10 years younger.
NM: What’s your greatest career fail?
KK: I don’t know if I can think of a great fail, because I always think the more you fail the more you learn and grow and the more painful it is the better sometimes, in hindsight though. But one of the biggest failures I can actually think of was when I was working as a waitress, as a – when I was still at school, and I actually managed to pour six litres of dark wheat beer over a guest at the lunch table.
NM: You meant to do it surely?
KK: No. And he said “Young lady, I think you are a bit too fast for this profession”. Yep, learning.
NM: Beach or mountain?
NM: What’s your best ever career advice?
KK: If someone tells you that you can’t do something, go do it.
NM: I like it. Summer or winter?
KK: Both. I love them both.
NM: Who’s your hero?
KK: I think there are many heroes. Heroes, for me heroes are people that are pioneers in whatever it is they do, and they don’t get stopped by everybody else telling them they can’t do it.
NM: If you weren’t doing what you currently do, what would you be?
KK: A philosopher.
NM: What did you have for breakfast?
KK: Three espresso shots.
NM: Three espresso shots?
KK: Mm hm.
NM: Okay, that’s good. You’re talking not anywhere near as fast as I thought you might be on three espresso shots. What would you rather have had?
KK: I’m super happy with three espresso shots.
NM: If you could change one thing about the marketing industry, what would it be?
KK: I think we’re moving into a great direction. I like that science is becoming more important, replacing buzzwords and opinions.
NM: Oh, if only, if only. They’re still buzzwords.
KK: Yeah, maybe, maybe, maybe I’m detached from reality now, because I’m not in consulting anymore. But yes, I think we do, I think we are going into a great direction, using more science and more evidence to make decisions rather than opinions.
NM: Do you ride a bike?
KK: Yes, got a mountain bike.
NM: What’s your greatest frustration?
KK: The limited brain power we have as human beings, right, that we can only ever perceive 40 out of 11 million bits of information that try and enter our senses every single second, and sometimes I’m walking around realising just how limited my brain power is and that frustrates me.
NM: I’m not sure I’m up to 40.
KK: I’m sure you are. We all are. We’re all the same, 40.
NM: Because it doesn’t feel like 40.
KK: The magic number.
NM: What was the last conference you went to?
KK: Last conference was our own in Queenstown where we presented to all our suppliers. Other than that, before, the Global Marketing World Forum which is always a highlight in the calendar every year which was in London.
NM: Oh, that sounds nice. Dogs or cats?
NM: Favourite book?
KK: Thinking Fast and Slow is probably one of the evergreens.
NM: Makes sense. If you had to change your first name, what would you change it to?
KK: I’d change it to Kat, to be short.
NM: Awesome. I think you’ve done that. Job done.
KK: Yeah, job done.
NM: Kat Kuehn, neuromarketer, whizz, thank you so much for joining us on The CMO Show. It’s been a pleasure.
KK: Thanks so much.