Neuroscientists have an expression: “You can take people out of the Stone Age, but you can’t take the Stone Age out of people.”
Consumers today may seem remarkably evolved, with their tablets, mobile phones, smart watches, fitness trackers and virtual reality headsets. But the truth is that deep inside our brains, we share much in common with our ancestors. Consumers living in the Digital Age still have many of the same psychological triggers that drove decisions back in the Stone Age.
Over the course of millions of years, humans have become hardwired for certain behaviors. We will take the path of least resistance. Perceived threats activate the fight-or-flight response. The ability to cry — particularly important to babies — is an innate survival instinct.
What can neuroscience tell financial marketers about how to get consumers to a open checking account or meet with a financial advisor? Quite a bit actually. Banking providers can use behavioral science to increase products per household, grow wallet share, and reduce attrition rates by engendering feelings of loyalty.
Here are just a few ideas to use cognitive programming and create that rush of feel-good dopamine chemicals that get consumers primed to act.
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Taking Mental Shortcuts
People are faced with a vast array of choices every moment, every single day — from what to have for lunch, to whether or they want to listen to Pop Rock or Smooth Jazz on their commute home. All this mental work can be exhausting, but luckily humans have streamlined the decision-making process through mental shortcuts.
These shortcuts — developed over millennia — allow us to conserve mental energy, explains Nancy Harhut, Chief Creative Officer at HBT Marketing.
The person next to you on the train sneezes. You automatically say “bless you” without really thinking about it. That’s the type of “decision default” that is hardwired into the human brain, Harhut says.
“The human brain doesn’t like to work hard,” Harhut explains. “It’s impossible for us to weigh every bit of information before making a decision. By leveraging these mental shortcuts, you can increase response rates.”
Mental shortcuts, known in psychology as heuristics, act as a way for the brain to conserve energy and work more efficiently. These little tricks and “rules of thumb” allow us to quickly make judgments and solve problems, known by psychologists as “cognitive biases.”
One such heuristic Harhut likes to single out involves testimonials and word-of-mouth referrals.
“Consumers rely on other people’s authority as a decision-making shortcut,” she says. “It’s a way to feel secure about a purchase when we don’t have the time to research every angle on our own.”
And then there is “pain aversion.”
“Social scientists have found that people are twice as motivated to avoid pain as to achieve gain,” she explains. “That could impact how you write a headline or offer.”
Here are some other mental shortcuts financial marketers can exploit:
- Availability Heuristic – Occurs when people make judgments about the probability of events based on the ease with which examples come to mind. This shortcut operates on the notion that “if you can think of it, it must be important.” For example, when asked to rate the probability of a variety of causes of death, people tend to rate more “newsworthy” events as being more likely because they can more readily recall examples from memory. For instance, people rate the chance of death by homicide higher than the chance of death by stomach cancer, even though death by stomach cancer is five times more common than death by homicide. Another instance of biased ratings is the relative overestimation of plane crash deaths in comparison to car-accident deaths.
- Escalation of Commitment – The phenomenon where people justify increased investment in a decision based on the cumulative prior investment.
- Representativeness Heuristic – Where people assume commonality between objects of similar appearance. If A and B appear similar, then A and B must have similar characteristics (e.g., value, quality). Can be useful when making comparisons with competitors, or drawing analogies.
- Familiarity Heuristic – Where people assume that the circumstances underlying past behaviors still hold true for the present situation, and that any past behavior correctly applies to the new situation. This mental shortcut is especially prevalent when the individual experiences a high cognitive load.
- Anchoring and Adjustment – Describes the common human tendency to rely too heavily on the first piece of information offered (the “anchor”) when making decisions.
- Naïve Diversification – Refers to the phenomenon that people, when asked to make several choices at once, tend to make more diverse decisions more so than when making the each decision separately.
( Note: Nancy Harhut will share the secrets of neuromarketing at The Financial Brand Forum 2018. )
The Four Power Words
Harhut offers four words that have been tested by researchers to increase readership and action. She recommends using these words at the beginning of a headline, title or email subject line.
1. New. The word new activates our feel-good brain chemical dopamine—the same chemical that controls our brain’s reward and pleasure centers. Dopamine also regulates response so not only does it feel good, but it causes us to take action. Don’t limit yourself to “new;” use all the words that evoke novelty including “now,” “announcing” and “introducing.”
2. You. Humans are attracted to things that remind them of themselves. Instead of “I” and “we,” try the power of “you.” Too many marketers use the word “we” to collectively represent their organization — e.g., “what we believe.” This pronoun actually reflects a self-centered perspective. You’re emphasizing what you think, what you feel, when really it’s the audience you should be caring about. What do they think? How do they feel? That’s why it’s better to shift the perspective around from “we” to “you.” Instead of saying, “We treat people right,” you should say, “You’ll be treated right,” or “Treating you the right way,” or just “Treating you right.” It makes the message more personal, and helps the audience identify with the message
3. Secret. Researchers have found that humans are more attracted to things that they think are rare or hard to find. They call it the “scarcity principle.” Simply put, humans place a higher value on an object that is scarce, and a lower value on those that are in abundance. People also love feeling like they have something that others don’t, whether that’s inside knowledge or a collectible item. You should look for opportunities to add verbiage such as “limited time offer” or “special benefits to platinum customers” to your marketing campaigns to connote exclusivity.
4. Free. Who doesn’t like something that’s free? Come to find out, our brains are instinctively drawn to the word; our primordial brains are intrinsically attracted to things that take little- to no effort. Back in the Stone Age, life was hard and everything took work. Any shortcuts that helped simplify life and save time could mean the difference between life and death. While the consequences aren’t quite the same in the Digital Age, consumers still appreciate it when they can obtain something without having to sacrifice time, energy or money.
Word Order Matters
Harhut relays a study by researchers at the University of Geneva that found that word order has an amazing impact on people’s reaction to a simple sentence.
When researcher asked the question, “Can you smoke while you pray?” An overwhelming number (96%) of people said no. But, when they asked, “Can you pray while you smoke?” 97% of people said yes.
In scientific terms it’s called “framing,” and Harhut says how you position things means everything. For instance, one marketer simply changed “$5 fee” to “small $5 fee” and saw a 20% uptick in conversion.
People also have a yes/no bias. They are less likely to say “no” when both options are presented. So you can present consumers with both “yes” and “no” options — e.g., “Yes, I’d like to save more” or “No, I’d rather not lower my mortgage payment.”
If you have a marketing campaign that isn’t getting the type of response you had anticipated, take a close look at word order. Make a change and test it. You may be surprised by the results, notes Harhut.
Release the Dopamine
Dopamine is associated with addictions to a wide range of drugs including nicotine and heroin. Dopamine is also triggered through a combination of challenges, achievements and rewards. That’s one reason why reward credit cards have surged in popularity getting rewarded feels good because it releases a rush of dopamine.
But, as Dr. Wei Ke, Managing Partner for Simon Kucher & Partners and adjunct professor at Columbia Business School points out, reward cards can be expensive for banks and credit unions to offer. The good news is that the reward doesn’t have to be monetary to get a dopamine release.
Ke says you can get similar brain chemical activation by creating a game that challenges consumers and then rewards them with something as simple as points or achieving different levels. Ke uses the example of Pokémon GO. Why would people wander around trying to catch Pokémon? There’s no monetary reward but yet millions of people play to level up. Catching a Pokémon—playing the game (the challenge), finding the Pokémon (the achievement) and leveling up (the reward) feels good.
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Ke explains how such a game might work at a bank or credit union. When a consumer visits your website, present them with a jigsaw puzzle with each piece representing one of your product offerings, such as checking, savings, financial advice or auto loans. Consumers are enticed to complete the puzzle by signing up for a product. The reward is visually seeing the puzzle put together, although in this case, says Ke, it makes sense to offer some sort of monetary reward such as a price reduction depending on the number of products used.
Every good game has three parts: challenge, achievement and reward. Financial institutions tend to focus more on the reward and not enough on the challenge and the achievement.
Ke and his two co-authors describe how a German bank significantly increased cross-sales and product usage. The game was simple: a consumer is presented with a game board that shows the products the bank offers, what products the consumer has with the bank, and how much they are engaging with each product. Each product has three levels. Consumers earn bronze, silver or gold levels depending how much they use the product. If they log into their online banking account daily, they can work up the levels.
The game took some time to implement, but the ongoing running of the game was simple. As long as there is a challenge, achievement and reward, those Dopamine chemicals run amok — whether tracking Pokémon or signing up for a checking account.
( Note: Dr. Wei Ke will expand on these ideas in his session at The Financial Brand Forum 2018. )