The Design Index study, conducted by the British Design Council, measures the relationship between the effective use of design and share price performance. Its key finding is that the share prices of design-aware companies out-perform the FTSE 100 and FTSE All Share indices by more than 200 per cent.
The research identified publicly quoted companies that performed well in a number of design awards and tracked their share prices between December 1993 and December 2004. Design awards with robust criteria act as an external indicator of the way a company uses and values design. This resulted in a 63-strong Design Index of the most design-led companies and an Emerging Index of 103 companies.
For every £1 invested in design, businesses can expect over £20 in increased revenues.
For every £1 invested in design, businesses can expect over £4 increase in net operating profit.
For every £1 invested in design, businesses can expect a return of over £5 in increased exports.
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How DMI arrived at the number: The nonprofit partnered with Motiv, an innovation strategy firm, to create the DMI Design Value Index—a list of design-led, publicly traded U.S. companies that meet a set of six design management criteria. For example, the criteria stipulated that design had to be embedded within the company’s organisational structure; design leadership had to be present at senior and divisional levels; and there had to be a senior-level commitment to design’s use as an innovation resource and a force for positive change. The above-mentioned companies were the only 15 out of a pool of 75 that met DMI’s criteria. They measured the success of this design-led segment of companies against other companies in the stock market, and found that, indeed, those that put design first had a significant stock market advantage.
Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others that are thought of as seasoned growth industries have actually stopped growing. In every case, the reason growth is threatened, slowed, or stopped is not because the market is saturated.
The failure is at the top. The executives responsible for it, according to a Harvard Business Review analysis, are those who deal with broad aims and policies.
American economist and editor of the Harvard Business Review
The centrality of design skills to the practice of management has long been recognised. In 1969, Nobel Laureate Herbert Simon noted:
Value creation in the 20th century was largely defined by the conversion of heuristics to algorithms. It was about taking a fundamental understanding of a “mystery”—a heuristic—and driving it to a formula, an algorithm—so that it could be driven to huge scale and scope. As a result, many 20th-century organisations succeeded by instituting fairly linear improvements, such as re-engineering, supply chain management, enhanced customer responsiveness, and cost controls. These ideas were consistent with the traditional Taylorist view of the company as a centrally-driven entity that creates wealth by getting better and better at doing the same thing.
Competition is no longer in global scale-intensive industries; rather, it’s in non-traditional, imagination-intensive industries. The Rotman School of Management’s Roger Martin argues that in the 21st century, value creation will be defined more by the conversion of mysteries to heuristics—and that as a result, we are on the cusp of a design revolution in business.
In choosing where to play, you must consider a series of important dimensions, like geographies, products, consumer needs, and so on, to find a smart playing field. How-to-win choices determine what you will do on that playing field. Because contexts, like competitive dynamics and company capabilities, differ greatly, there is no single, simple taxonomy of how-to-win choices. At a high level, the choice is whether to be the low-cost player or a differentiator. But the how of each strategy will differ by context. Cost leaders can create advantage at many different points—sourcing, design, production, distribution, and so on. Differentiators can create a strong price premium on brand, on quality, on a particular kind of service, and so forth. Remember that there is no one single how-to-win choice for all companies. Even in a single market, it is possible to compete in many different ways and succeed. Choosing a how-to-win approach is a matter of thinking both broadly and deeply, in the context of the playing fields available to the company.
Action consistent with the how-to-win choice is vital. Cost leadership and differentiation have different imperatives that should lead to different sets of activities within the firm. Structuring a company to compete as a cost leader requires and obsessive focus on pushing costs out of the system, such that standardisation and systemisation become core drivers of value. Anything that requires a distinctive approach is likely to add cost and should be eliminated. In a differentiation strategy, costs still matter, but are not the focus of the company; customers are. The most important question is how to delight customers in a distinctive way that produces a greater willingness to pay.
Where to play [market] and how to win [design] are not independent variables. The best strategies have mutually reinforcing choices at their heart. As a result, it is not a matter of choosing where to play then how to win and then moving on. These two choices are intertwined and should be considered together: What how-to-win choices make sense with which where-to-play choices? And which combination makes the most sense for your organisation? From there, the next step is to understand the capabilities that will be required to support the where-to-play and how-to-win choices.
Under Lafley’s leadership, Procter & Gamble’s sales doubled, its profits quadrupled, its market value increased by more than $100 billion, and its portfolio of billion-dollar brands grew from 10 to 24.
Martin was named by Thinkers50 as the sixth top management thinker in the world.
With few exceptions, every job people need or want to do has a social, a functional, and an emotional dimension. If marketers understand each of these dimensions, then they can design a product that’s precisely targeted to the job. In other words, the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy.
Stephen Anderson writes: Consider how designers “skin” an information architect’s wireframes. Or how the term “eye candy” suggests that visual design is inessential. Our language constrains visual design to mere styling and separates aesthetics and usability, as if they are distinct considerations. Yet, if we shift the conversation away from graphical elements and instead focus on aesthetics, or “the science of how things are known via the senses,” we learn that this distinction between how something looks and how it works is somewhat artificial.
Aesthetics is concerned with anything that appeals to the senses—not just what we see, but what we hear, smell, taste, and feel. In short, how we perceive and interpret the world.
Perhaps more importantly, “aesthetics examines our affective domain response to an object or phenomenon” (according to Wikipedia). In other words, aesthetics is not just about the artistic merit of web buttons or other visual effects, but about how people respond to these elements. Our question becomes:
According to a 2002 study, the “appeal of the overall visual design of a site, including layout, typography, font size, and colour schemes,” is the number one factor we use to evaluate a website’s credibility. This makes sense. Think about how our personal appearance (our personal aesthetic) affects how people perceive us; or how product packaging influences our perception of the product inside. Why should we care about perceptions? Consider these findings from research presented at CHI 2007:
What is a brand but perceptions?
Noam Tractinsky, an Israeli scientist, was puzzled. Attractive things certainly should be preferred over ugly ones, but why would they work better? Yet two Japanese researchers, Masaaki Kurosu and Kaori Kashimura, claimed just that. They developed two forms of automated teller machines, the ATM machines that allow us to get money and do simple banking tasks any time of the day or night. Both forms were identical in function, the number of buttons, and how they worked, but one had the buttons and screens arranged attractively, the other unattractively. Surprise! The Japanese found that the attractive ones were easier to use.
Tractinsky was suspicious. Maybe the experiment had flaws. Or perhaps the result would be true of Japanese, but certainly not of Israelis. “Clearly,” said Tractinsky, “aesthetic preferences are culturally dependent.” So Tractinsky redid the experiment. He got the ATM layouts from Kurosu and Kashimura, translated them from Japanese into Hebrew, and designed a new experiment, with rigorous methodological controls. Not only did he replicate the Japanese findings, but the results were stronger in Israel than in Japan, contrary to his belief that beauty and function “were not expected to correlate”—Tractinsky was so surprised that he put that phrase were not expected in italics, an unusual thing to do in a scientific paper.
Donald Norman is an academic in the field of cognitive neuroscience, design, and usability engineering. His studies of emotion, conducted with his colleagues Andrew Ortony and William Revelle, Professors in the Psychology Department at Northwestern University, suggests that human attributes result from three different levels of brain mechanism.
Patrick Lynch summarises: In psychology, emotional reactions to stimuli are called affective responses. Affective responses happen very fast, and are governed in an automatic, unconscious way by the lower centres of the brain that also govern basic instincts (food, fear, sex, breathing, blinking, et cetera). Think of affective responses as the brain’s bottom-up reaction to what you see and feel. Cognitive responses are your brain’s slower, top-down, more considered responses. They’re governed by your personal cultural views, learning, experiences, and personal preferences that you are aware of and can easily articulate. Affective reactions assign value to your experiences; cognitive reactions assign meaning to what you see and use.
Affective and cognitive responses to visual stimuli are governed by a three-stage process in the brain, at visceral, behavioural, and reflective processing levels:
The visceral (“gut”) processing level reacts quickly to appearances. It’s the visceral reaction to web pages that researchers measure when they detect reaction times as fast as 50 milliseconds. It’s crucial to understand that these instant good/bad visceral-level affective responses are largely unconscious: it can take seconds or minutes to become consciously aware of your first, visceral reaction to a stimulus—particularly a stimulus as complex as a web page.
Behavioural-level processing involves the more familiar aspects of usability: it responds to the feel of using the site, the functionality, the understandability of the structure and navigation, and the overall physical performance of the site. At this level, users are consciously aware of their attitudes toward the behavior of the system, and their reactions (pleasure, for example, or frustration) play out over seconds and minutes as users interact with a site. It’s at this behavioural level that techniques such as eyetracking are most powerful and trustworthy, because they offer detailed moment-by-moment evidence of what users consciously decided to look at and do to fulfill a given task.
Reflective processing of reactions is the most complex level, and typically involves a user’s personal sense of a site’s beauty, meaning, cultural context, and immediate usefulness. Reflective processing often triggers memories and encourages pragmatic judgments about the overall aesthetic worth and value of what a user sees. Eyetracking and traffic logs are irrelevant at this level, but user interviews can give you insight into your user’s reflective judgments.
Visceral (affective) reactions can take a relatively long time to bubble up through layers of processing to enter conscious awareness at the behavioral or reflective levels, but that doesn’t mean that affective reactions don’t immediately influence thought. In fact, it’s the instant, pre-conscious pleasure of seeing a well designed page that makes you predisposed to find a beautiful design easy to use—an effect that lingers long after the slower, conscious behavioural and reflective levels of processing kick in and make you aware of how you feel about what you see.
The three levels in part reflect the biological origins of the brain, starting with primitive one-celled organisms and slowly evolving to more complex animals, to the vertebrates, the mammals and finally, the primates, of which we are a member.
Animals such as lizards operate primarily at the visceral level. This is the level of fixed routines, where the brain analyses the world and responds. Dogs and other mammals, however, have a higher level of analysis, the behavioural level, with a complex and powerful brain that can analyse a situation and alter behaviour accordingly. The behavioural level in human beings is especially valuable for well learned, routine operations. This is where the skilled performer excels.
At the highest evolutionary level of development, the human brain can think about its own operations. This is the home of reflection, of conscious thought, of the learning of new concepts and generalisations of the world. Sure, dogs can learn to do lots of actions, but they can’t think about them and come up with general knowledge in the way a person can.
The behavioural level is not conscious, which is why you can successfully drive your automobile subconsciously at the behavioural level while consciously thinking of something else at the reflective level. Skilled performers make use of this facility. Thus, skilled piano players can let their fingers play automatically while they reflect upon the higher-order structure of the music. This is why they can hold conversations while playing and why performers report instances of losing their place in the music and having to listen to their playing until they recognised the part: it was the reflective level that was lost, but the behavioural level did just fine.
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The story of the teapots illustrates several components of product design: usability (or lack thereof), aesthetics, and practicality. In creating a product, a designer has many factors to consider: the choice of material, the manufacturing method, the way the product is marketed, cost and practicality. How easy is the product to use, to understand?
What many people don’t realise is that there is also a strong emotional component to how products are designed and put to use. Norman argues that the emotional side of design may be more critical to a product’s success than its practical elements.
When you are in a state of negative affect, feeling anxious or endangered, the neurotransmitters focus the brain processing. Focus refers to the ability to concentrate upon a topic, without distraction, and then to go deeper and deeper into the topic until some resolution is reached. Focus also implies concentration upon the details. It is very important for survival, which is where negative affect plays a major role. Whenever your brain detects something that might be dangerous, whether through visceral or reflective processing, your affective system acts to tense muscles in preparation for action and to alert behavioural and reflective level to stop and concentrate upon the problem. The neurotransmitters bias the brain to focus upon the problem and avoid distractions. This is just what you need to do in order to deal with danger.
When you are in a state of positive affect, the very opposite actions take place. Now, neurotransmitters broaden the brain processing, the muscles can relax, and the brain attends to the opportunities offered by the positive affect. The broadening means that you are now far less focused, far more likely to be receptive to interruptions, and to attending to any novel idea or event. Positive affect arouses curiosity, engages creativity, and makes the brain into an effective learning organism. With positive affect, you are more likely to see the forest than the trees, to prefer the big picture and not to concentrate upon details. On the other hand, when you are sad or anxious, feeling negative affect, you are more likely to see the trees before the forest, the details before the big picture.
— In other words —
In their recent book on behavioural change, Switch: How to Change Things When Change Is Hard, Chip Heath, a professor at Stanford Graduate School of Business, and Dan Heath, a Senior Fellow at Duke University’s Centre for the Advancement of Social Entrepreneurship, make three points right off the bat in introducing their new metaphorical framework for change:
We’re fundamentally schizophrenic about change; our hearts and minds often disagree. If you’ve ever set an alarm clock across the room to force yourself out of bed and prevent snoozing, you know exactly how much our conscious minds and emotional desires can be at odds.
Relying on your conscious mind to self-supervise change simply doesn’t work. Conscious attention is a precious resource that is quickly exhausted when used to overcome the emotional desires of our heart.
Environmental cues often have a profound effect on our behaviour and our ability to change—shockingly so. In fact, more so than most of us would ever guess.
Borrowing a metaphor from social psychologist Jonathan Haidt, the Heath Brothers bring these three points together by calling the heart—or affective mind—the Elephant, the conscious mind—cognition—the Rider, and the environment the Path. And within this framework, making hard changes successful requires three broad strategies:
In this case, the Rider is the logical, conscious part of you and/or the people you are hoping to change. Now, this much isn’t a revelation, but most people do manage to get this part wrong.
They get it wrong by expecting the elephant rider to be able to muscle the elephant into making the change against the elephant’s inclinations/will. Not gonna happen—at least not for long. Self supervision is a limited resource that’s too-quickly used up by brute force-of-will efforts.
So how does one more intelligently direct the rider?
Overcome paralysis analysis by finding the bright spots
Our conscious minds are really good at finding problems and analysing them. Unfortunately, this kind of negative analysis often works against us when it comes to making difficult changes. But we can better direct our conscious minds by using tools such as appreciative inquiry and positive psychology. These tools direct us to look for what’s working, rather than what’s wrong. Find out what’s working in spite of the negative obstacles and analyse why.
Make goals actionable by scripting the critical moves
Whether desired behaviour is easy and clear or just a little bit harder and more complex makes a huge difference when it comes to change. You have to move from inactionable to-dos and projects to well defined, doable, next actions. “Eat healthier” isn’t a next action. “Switch from whole milk to 1% and save yourself five bacon strips worth of saturated fat every time you drink a glass” is very actionable.
Point to the destination
Provide people with an imaginable, concrete, “big hairy audacious goal.”You want to put the rider’s power of analysis to work on figuring out how to get to a motivating destination or goal, rather than using analysis to resist the change.
The Elephant is the emotional, more instinctual part of you and/or the people you’re hoping to change. If your rider wants to get up early to go running, it’s your elephant that would much rather grab an extra hour’s worth of sleep.
Most people see the Elephant as the problem, but in the vast majority of successful change efforts, the Elephant was engaged as a driving force. Here’s how Switch suggests you do that:
Find the feeling
Chip and Dan Heath say it best: “…the sequence of change is not ANALYSE–THINK–CHANGE, but rather SEE–FEEL–CHANGE. You’re presented with evidence that makes you feel something … something that speaks to the Elephant.” Grab their hearts and their minds will follow. User-testing is often times as much about creating empathy for the end-user as it is about getting new usability data.
Shrink the change
It’s easier to tackle big problems if you’ve already got a bit of momentum on your side, so make the change feel doable by emphasising the momentum that’s already there or by setting up quick initial wins to create that momentum. My pet store gives me a free bag of dog food for every eight that I buy from them, but according to Switch, they’d be better off making the cards say every 10 bags and giving away two free punches in order to create that initial momentum; a carwash ran an A/B test on completion rates for cards using that technique and showed a 79 per cent improvement in completion rates.
Grow your people
People make choices either on a consequences/cost-benefit model or from an identity model. The first model is familiar to any copywriter familiar with WIIFM. Here’s how the second model operates, “In the identity model of decision-making, we essentially ask ourselves three basic questions: Who am I? What kind of situation is this? What would someone like me do in this situation? Successful change efforts work with and further develop the changees’ identities.
This section of the book introduces Stanford psychologist Lee Ross’s fundamental attribution error, which states, “people have a systematic tendency to ignore the situational forces that shape other people’s behaviour,” which causes us to “attribute people’s behaviour to the way they are, rather than to the situation they are in.”
In contrast, successful change efforts look to change the situation in order to change behaviour, rather than blaming the changee. Here’s how Switch recommends we do that:
Tweak the environment
Reduce friction for desired behaviour. Design situations, tools, procedures, forms, etc, so that it’s easy and intuitive to do the right thing and hard to do the wrong thing.
Create instant habits through “action triggers.” Mentally plan the action you want to take and the trigger for that behaviour and you can almost triple your success rate from simply planning the behaviour. In other words, saying, “I’m going to hit the gym everyday after my 2:00 meeting,” can be three times as effective as planning to “start working out tomorrow.” For more complicated habits, using checklists can help ingrain, script, and even trigger desired behaviour. You can also build triggers into the environment as well as make use of environmental cues in your messaging.
Rally the herd
In other words, get social proof working for you rather than against you. Public display of performance can help with this. So can clustering the chief evangelists and proponents for change so that they can see the commonality of their perceptions and beliefs.
Keep the switch going
Encourage and celebrate steps taken toward the goal in order to build momentum. Get a flywheel effect going if you can. Make it easy for customer praise to reach front-line employees.
The phenomenon that the output of the neuronal system is more than the input is termed a gestalt. A good example is the use of icons in text messages, ☺ or ☹. Or, it deosn’t mttaer in waht oredr the ltteers in a wrod are, the olny iprmoetnt tihng is taht the frist and lsat ltteer be at the rghit pclae. The rset can be a toatl mses and you can sitll raed it wouthit a porbelm. Tihs is bcuseae the huamn mnid deos not raed ervey lteter by istlef, but the wrod as a wlohe. This is what your brain does all the time, and you have no control over it. You are not even aware that this is what you are doing. You have no control over your senses (other than that you can close your eyes, but when they are open you cannot stop them from seeing).
There is a continuous flow of stimuli from your senses to the brain. These all start a process of neuronal recruitment. This process of recruitment is based on the state of the synapses (thresholds), which is based on your experiences (memories). People are surprisingly unaware of how this happens to them.
Because of the way a person’s expectation can recruit neurons to form gestalts, which are the precursor to conscious awareness, branding affects the phenomena we experience through our senses, such as sight, sound, and taste.
If until recently academic psychologists have been reluctant to accept the power of the unconscious, so have others in the social sciences. Economists, for example, built their textbook theories on the assumption that people make decisions in their own best interests, by consciously weighing the relevant factors. If the new unconscious is as powerful as modern psychologists and neuroscientists believe it to be, economists are going to have to rethink that assumption. Indeed, in recent years a growing minority of maverick economists have had great success questioning the theories of their more traditional colleagues. Today, behavioural economists like Caltech’s Antonio Rangel are changing the way economists think by presenting strong evidence that the textbook theories are flawed.
Rangel is nothing like what most people think of when they picture economists—theorists who pore over data and build complex computer models to describe market dynamics. A portly Spaniard who is himself a great lover of the good things in life, Rangel works with real people, often student volunteers, whom he drags into his lab to study while they taste wine or stare at candy bars after having fasted all morning. In a recent experiment, he and his colleagues showed that people would pay 40 to 61 per cent more for an item of junk food if, rather than choosing from a text or image display, they were presented with the actual item. The study also found that if the item is presented behind Plexiglas, rather than being available for you to simply grab, your willingness to pay sinks back down to the text and image levels. Sound weird? How about rating one detergent as being superior to another because it comes in a blue-and-yellow box? Or would you buy German wine rather than French because German beer hall music was playing in the background as you walked down the liquor aisle? Would you rate the quality of silk stockings as higher because you liked their scent?
In each of these studies, people were strongly influenced by the irrelevant factors—the ones that speak to our unconscious desires and motivations, which traditional economists ignore. Moreover, when quizzed about the reasons for their decisions, the subjects proved completely unaware that those factors had influenced them. For example, in the detergent study, subjects were given three different boxes of detergent and asked to try them all out for a few weeks, then report on which they liked best and why. One box was predominantly yellow, another blue, and the third was blue with splashes of yellow. In their reports, the subjects overwhelmingly favoured the detergent in the box with mixed colours. Their comments included much about the relative merits of the detergents, but none mentioned the box. Why should they? A pretty box doesn’t make the detergent work better. But in reality it was just the box that differed—the detergents inside were all identical. We judge products by their boxes, books by their covers, and even corporations’ annual reports by their glossy finish. That’s why doctors instinctively “package” themselves in nice shirts and ties and it’s not advisable for attorneys to greet clients in Budweiser T-shirts.
In the wine study four French and four German wines, matched for price and dryness, were placed on the shelves of a supermarket in England. French and German music were played on alternate days from a tape deck on the top shelf of the display. On days when the French music played, 77 per cent of the wine purchased was French, while on the days of German music, 73 per cent of the wine purchased was German. Clearly, the music was a crucial factor in which type of wine shoppers chose to buy, but when asked whether the music had influenced their choice, only one shopper in seven said it had. In the stocking study, subjects inspected four pairs of silk stockings that, unbeknownst to them, were absolutely identical, except that each had had a different and very faint scent applied to it. The subjects “found no difficulty in telling why one pair was the best” and reported perceiving differences in texture, weave, feel, sheen, and weight. Everything but scent. Stockings with one particular scent were rated highest much more often than the others, but the subjects denied using scent as a criterion, and only 6 of the 250 subjects even noticed that the stockings had been perfumed.
“People think that their enjoyment of a product is based on the qualities of the product, but their experience of it is also very much based on the product’s marketing,” says Rangel. “For example, the same beer, described in different ways, or labelled as different brands, or with different price, can taste very different. The same is true for wine, even though people like to believe it’s all in the grapes and the winemaker’s expertise.” Studies have shown that when wines are tasted blind, there is little correlation between a wine’s taste and its cost, but that there is a strong correlation when the wines are not sampled blind. Since people generally expect higher-priced wine to taste better, Rangel was not surprised when volunteers he recruited to sip a series of wines labelled only by price rated a $90 bottle as better than another wine in the series that was marked as costing just $10. But Rangel had cheated: those two wines, perceived as disparate, were actually identical—they were both from the $90 bottle. More important, the study had another twist: the wine tasting was conducted while the subjects were having their brains scanned in an fMRI machine. The resulting images show that the price of the wine increased activity in an area of the brain behind the eyes called the orbitofrontal cortex, a region that has been associated with the experience of pleasure. So though the two wines were not different, their taste difference was real, or at least the subjects’ relative enjoyment of the taste was.
How can a brain conclude that one beverage tastes better than another when they are physically the same? The naïve view is that sensory signals, such as taste, travel from the sense organ to the region of the brain where they are experienced in a more or less straightforward fashion. But as we’ll see, brain architecture is not that simple. Though you are unaware of it, when you run cool wine over your tongue, you don;t just taste its chemical composition; you also taste its price. The same effect has been demonstrated in the Coke-Pepsi wars, only with regard to brand. The effect was long ago dubbed the “Pepsi paradox,” referring to the fact that Pepsi consistently beats Coke in blind taste tests, although people seem to prefer Coke when they know what they are drinking. Over the years, various theories have been proposed to explain this. One obvious explanation is the effect of the brand name but if you ask people whether it is all those uplifting Coke ads they’ve seen that they are really tasting when they slurp their beverage, they almost always deny it. In the early 2000s, however, new brain-imaging studies found evidence that an area of the brain that neighbours the orbitofrontal cortex, called the ventromedial prefrontal cortex, or VMPC, is the seat of warm, fuzzy feelings such as those w experience when we contemplate a familiar brand-name product. In 2007, researchers recruited a group of participants whose brain scans showed significant VMPC damage, and also a group whose VMPCs were healthy. As expected, both the normal and the brain-damaged volunteers preferred Pepsi to Coke when they did not know what they were drinking. And, as expected, those with healthy brains switched their preference when they knew what they were drinking. But those who had damage to their VMPC—their brain’s “brand-appreciation” module—did not change their preferences. They liked Pepsi better whether or not they knew what they were drinking. Without the ability to unconsciously experience a warm and fuzzy feeling toward a brand name, there is no Pepsi paradox.
The real lesson here has nothing to do with either wine or Pepsi. It is that what is true of beverages and brands is also true of the other ways we experience the world. Both direct, explicit aspects of life (the drink, in this case) and indirect, implicit aspects (the price or brand) conspire to create our mental experience (the taste). They key word here is “create.” Our brains are not simply recording a taste or other experience, they are creating it. We’d like to think that, when we pass up one guacamole in favour of another, it is because we have made a conscious choice based on taste, caloric content, price, our mood, the principle that guacamole should not contain mayonnaise, or any of a hundred other factors under our control. We believe that when we choose a laptop or a laundry detergent, plan a vacation, pick a stock, take a job, assess a sports star, make a friend, judge a stranger, and even fall in love, we understand the principal factors that influenced us. Very often nothing could be further from the truth. As a result, many of our most basic assumptions about ourselves, and society, are false.
American physicist, author, and screenwriter
Robert Dilts, a leading consultant in the field of business leadership, has a proven model that establishes the impact of meaningful differentiators. Dilts’s clients have included Apple, World Bank, Hewlett-Packard, Ernst & Young, Lucasfilm, and more. From his esteemed work, he has developed a behavioural hierarchy that he calls the “neurological levels,” inspired by the work of anthropologist Gregory Bateson and his “logical levels of learning” construct. This prioritised framework demonstrates how the mind relates to the world around us and the relative influence of that relationship on changing our behaviour.
At the highest and the most impactful neurological level is spirituality. This level focuses on the vision of the bigger picture, our connection and contribution to something greater than self, and our feeling of interconnectedness and unconditional devotion to a higher cause. Spirituality reflects the bigger soul-searching question at the heart of religious philosophy, Why are we here?
The next level is identity. This level encompasses our personal mission, our sense of self in relationship to others and our personality and inner purpose. It challenges us to think and act and reflects the question, Who am I?
The next neurological level comprises values and beliefs. These are perceptions that we hold to be true about the world and the things that are significant and relevant to us—including our desires and motivations. They answer the question, What is important to me? These include attitudes about the product and one’s lifestyle.
Below that is the level of behaviour, or What do I do? These include shopping habits and purchasing behaviours, the types of media with which you engage, and activities that you do professionally or in your spare time.
And on the lowest level are the external dimensions of behaviour, or the environment in which we live. These are reflected in the questions Where? and When? Think of this as the various places and times you encounter the brand or its messages, such as in your living room where you see the actual television commercials, or the point-of-purchase, buy one get one free promotions, or the eye-catching package designs that you find on the shelves of your local supermarket.
As you go up the hierarchy, the levels become more psychologically encompassing and therefore more impactful. The higher you go, the impact on behaviour will become more abstract and unconscious, but it will also be more influential in changing actions. Conversely, the lower you are on the hierarchy, the more tangible and conscious the behavioural result but the lesser the influence on changing behaviour. In addition, a change at the higher levels automatically influences and reorganises the levels below it. If you want to change someone’s behaviour at a specific level, it is best to focus your efforts on the level or levels above it. Einstein’s belief that “no problem can be solved from the same level of consciousness that created it” is central to this model.
For instance, if you change the perception of a brand at the levels of spirit and identity, it automatically shifts the levels below, altering the audiences’ values, beliefs, behaviours, and environment. The devotion to Harley-Davidson and Apple is a dedication to the brands that is spiritual in nature and a reflection of who you are as a person. When you buy these powerful brands, you automatically become part of a better club and a bigger mission. Brand purchasers are empowered with a sense of belonging to a higher cause and an aspirational and exclusive group. And once you see yourself as a Hog owner or a Mac guy, it affects many other things about you, including what you believe, what is important to you, the people you relate to, where you hang out, and what you do.
The problem is marketers spend most of their effort and resources on the lower rungs of the hierarchy, the what, where, and when of consumer behaviour. They focus on what consumers say in market research, what the product does, and what words or images to use in the ad explaining its benefits. They then spend their time and effort determining where and when to run those messages in media plans.
In an article written by Martin Lindstrom for Ad Age about brands and religion, he questions whether “brands manage to create their own religion by, coincidently or deliberately, adopting triggers and tactics from the world of religion.”
Lindstrom, named one of the 100 most influential people of 2009 by Time, partnered with neuroscientists and, via fMRI, analysed brain function in response to both iconic brands as well as religious symbols. What he discovered was that the same regions of the brain were activated in Christians and powerful brand (Apple, Harley, Guinness) fans. Other less powerful brands did not produce the same effect.
To find out what it is that set these certain brands apart, he interviewed 14 religious leaders from around the world to determine the components behind these brands’ success. He discovered that all of the brands with fanatical followings employ these characteristics:
Think Weight Watchers. This amazing community of more than two million is run almost exclusively on peer advice and support. Without a peer community, Weight Watchers would not exist. Needless to say that sense of belonging is always a strong component of any religion.
Steve Jobs’s powerful vision for the Apple Company dates back to the mid-1980s. He said, “Man is the creator of change in this world. As such he should be above systems and structures, and not subordinate to them.” This vision was referring to computers, but 20 years and a few iPods later; it still applies, and will probably still be relevant in 20 years’ time.
If we play a game of association and I say Coke, more than likely you’ll say Pepsi. This rivalry has gone on for so long it’s now legendary. A former executive at Coca-Cola once stated that going to work was like going to war. In fact, the chances are that Coke would not be what it is today if there was no Pepsi. The rivalry has forced both brands to grow and perpetually challenge one another for market leadership.
Authenticity is hard to define. Is Las Vegas or canned laughter authentic? Without thinking you may initially answer no, but a reconsidered answer might just be yes. Are the Olympics authentic? This answer to this is unambiguously yes, because it contains the four defining components of authenticity. It’s real, it’s relevant, and it has rituals and is part of a story. More and more brands are required to be authentic—just like religion.
In world where everything is changing so quickly, consistency is the king. You know how to operate your smartphone, you know how to order a sandwich at Subway, and how to navigate Apple’s Mac OS. It has all become a branded routine, which, if changed, is likely to hurt the brand more than if the logo was to disappear. The fact is that more and more brands realise the importance of brand consistency, not only in terms of its graphics, but also in terms of every aspect that represents the brand.
Search Harley-Davidson on the Internet and you’ll find 521 websites dedicated solely to the fine art of polishing the motorcycle’s engine. To outsiders this would sound pedantic, but for the true Harley-Davidson fan this knowledge is a must. Perfection is the brand, just as Apple’s fine sense for details or Louis Vuitton’s extreme focus on quality has made the brands what they are today.
As the market place becomes more and more crowded simple yet powerful symbols are taking over—an instant and global language. Apple was first to implement the desktop’s famous trash bin and the greeting smiley when the computer was turned on. Every single Apple icon passes the ultimate test of being singularly associated with Apple, even when they stand alone.
Have heard about KFC’s 11 secret spices? What about Coca-Cola’s secret recipe? Are these stories true or not? Regardless of the truth they create mystery and add yet another dimension to the product.
If you remove certain rituals from a small group of powerful brands you’ll soon notice their power disappearing. Take for example Corona beer and the lime in the bottle neck. How would the Olympic games fare without the flaming torch relay? The fact is not many brands leverage the power of ritual, yet so much of religion’s power is based on this very aspect.
Imagine for a moment walking into a temple, a church, a synagogue or a mosque. Each one offers a unique sensory experience. There is incense and bells, incantations and candles. The world of branding can learn a lot from this. Some brands get it right. A visit to Disneyland can quickly draw you in to another world. As flagship stores become more commonplace, the sensory appeal is becoming more prominent.
What’s missing and makes the difference in generating a “religious” following is the originality and creativity that each of these brands bring forward in the execution of their outstanding advertising and marketing components. At all consumer touch points these brands bring at least seven of these elements into view to help mould the customer experience and view of the brand.
Whether we like it, or not, the world of branding is becoming increasingly inspired by the world of religion. Religion offers a powerful roadmap for how branding can evolve over the years to come. All we need to do is take a look at the ancient ingredients that make up religious followings. In some cases this is so powerful that the brand becomes more than a brand. It becomes a way of life.
New research demonstrates that the power of rituals goes even further—they can increase our perception of value, too. In other words, if employees perform rituals as part of their jobs, they are likely to find their jobs more rewarding. And if consumers use a ritual to experience your product, they are likely to enjoy it more and be willing to pay more for it.
In one study, participants tasted chocolate, either ritualistically (i.e., with the instruction to break the bar in half without unwrapping it, unwrap half the bar and eat it, and then unwrap the other half and eat it), or as they normally would.
Those who performed the ritual reported finding the chocolate more flavourful and enjoying it more. They also took more time to savour it, and were willing to pay nearly twice as much for more of it.
In another study, the researchers found the same pattern of results for a decidedly less glamorous food: the carrot. This time, participants used their knuckles to rap on the table, took deep breaths, and then closed their eyes before eating the carrot. And yes, that is weird. But it still made them like the carrots more.
“Rituals Make Us Value Things More,” Harvard Business Review
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Some people believe that squeezing a lime into a Corona beer is a time-honored Mexican custom that came about to enhance the beer's taste. The most commonly accepted version of the Corona-and-lime ritual dates back only to 1981, when, reportedly on a bet with his buddy, a California bartender popped a lime wedge into the neck of a Corona to see if he could start a trend.
This simple act, which caught on like wildfire, is generally credited with helping Corona overtake Heineken as the best-selling imported beer in the U.S. market.
The somatic marker hypothesis proposes a mechanism by which emotional processes can guide (or bias) behaviour, particularly decision-making. This hypothesis has been formulated by Antonio Damasio.
A model for the physical basis of consciousness might run something like this: A stimulus, in the simplest case an object in the outside world such as an orange, triggers a series of diverse, idiosyncratic connections in the cortex—for example eat, seeds, diarrhoea, first peel.
The strength and extent of these connections depend on experience. Such connections are long-lasting and not very flexible. Thus there would be a reasonable infrastructure for learning certain associations, the basis for enduring significance of objects around us—for example, the intrinsic properties for relating to the taste or the method and consequences of eating oranges. In addition, whatever degree of arousal happens to be prevalent at the time will ensure that a certain amount of particular amines is released within the cortex and that the amines modulate very large groups of neurons to be potentially more excitable. Wherever neurons are modulated, for a temporary period, to respond easily and sensitively to the corralling signals from the group of associated neurons, a gestalt forms, and a unique consciousness is generated for that moment.
If arousal is high, the gestalts forming will be small due to a rapid turnover. They will be readily formed but also easily displaced by the formation of new competing assemblies, which are themselves quickly displaced in rapid succession. Earlier news of a promotion might make me so excited that I would be barely aware of oranges in a shop window before being distracted by the sight of pineapples. On the other hand, if arousal is more moderate, a stronger epicentre, due to a louder or brighter external stimulus (a screeching cat) or a cognitive trigger (the prospect of promotion), will be needed for a gestalt to form at all.
The orange will be an effective epicentre only if it happens to have temporary significance, perhaps by my hormones signalling that I am thirsty, in conjunction with no competition plus time to recruit an increasing number of associations which would become stronger, like a flame burning out along a network of fuses.
These types of associations could include a trip to Morocco, my mother’s tales of the lack of oranges during World War II, and so on. They would deepen my consciousness of the orange as I stared at it in the window. Anyone seeing me would conclude that I was concentrating on the orange.
Strength (recruiting power) of the epicentre (of neuronal clouds) might interact with arousal to generate three different situations.
For gestalt formation and for consciousness, it is very important if arousal is low, medium, or high.
When arousal is high and the epicentre strong then only small gestalts are formed because of the rapid imposition of new epicentres bombarding our senses due to high arousal and the constant exposure to new aspects of the external world, themselves due to the attendant high degrees of restlessness and movement.
Now imagine a situation where the converse applies. We are readily distracted, less aroused, but the focus of our consciousness is still strong. In such cases, when arousal levels are more moderate, gestalt formation is larger because the epicentre acts as a raindrop in a puddle where the ripples are unopposed. We are paying attention, deeply conscious of a specific object.
In the third situation arousal is low. Because we are asleep and the epicentres are completely internally driven, and thus weak, gestalts are again small. Consciousness is composed of mere fragments: We are dreaming.
British neuroscientist, writer, broadcaster, and member of the House of Lords
It is generally accepted that the brain functions best at a mid-range of arousal, but needs periods of low arousal (sleep) and periods of high arousal.
It is especially gestalt formation that is affected by the level of arousal of the brain. At low levels of arousal, gestalt formation is sluggish. It is as if one gestalt dominates the brain and competing gestalts cannot “get attention.” At high levels of arousal, gestalt formation is very high and it is as if everything becomes a consciousness, making it hard to think about any one thing at a time. A good way of describing this is that one is living inside a fireworks display where every gestalt becomes a consciousness and the previous one has disappeared before one can give it any attention.
The important point for marketing is that moods form a background feeling against which emotions play. The mood that we are in will have a strong effect on our emotions: whether we experience an emotion when we see something and what form that emotion has. The emotions we experience could also have an effect on our mood. There will be an interaction between our bodily homeostasis and the mood we are in.
What all animals do is to work continuously at adjusting their level of arousal. There are many ways that we try to calm ourselves—not only by sleeping regularly, which is hormonally induced, but also by listening to music, being in a calm environment, eating, being sociable, behaving in an introverted way, and so on. There are just as many ways that we increase our levels of arousal: playing, visiting Walt Disney World, moving faster, having sex, etc.
Brands are marketed mainly on one of two platforms: 1) the brand will make you feel less bad, i.e. avoid or solve homeostatic or mood problems; or 2) the brand will make you feel good, i.e. reward you in some way. Whilst one can philosophise about whether feeling good is just a result of not feeling bad, the biological basis for feeling good is different from the feeling bad system.
Dopamine moments might be one of four types:
A major objective in research, especially qualitative research, has to be to identify such moments—dopamine-inducing moments.
Once one has a good hold on such dopamine moments and the feelings that the moment evoked one can start to build this into the brand promise and make it the basis for the creative approach. In the above four situations, such moments must be credible for the brand.
One can easily understand that the dopamine system is the most important system as far as brand marketing is concerned. All you have to do is make sure that your brand releases more dopamine when the consumer thinks about the brand than any other competing brand. In fact, this might be the definition of the objective of all marketing activity inside this developing era of neuromarketing.
People become hungry in the same way, by hormones affecting the hypothalamus. People will choose the way they solve this problem by way of their frontal lobes considering alternatives and setting in motion plans (choices). But this is where the similarities end. People’s choices will depend on their memories (experiences). For different people the available (considered) options will evoke different dopaminic memories, and this will influence their choice. One seldom has the option of having (say) a chocolate. One can only have a brand of chocolate. This is where the dopaminic memories come into play.
This will also be so for your “solution” not only of food type, but also of financial institution, brand of motor vehicle, brand of bicycle, brand of travel, brand of holiday, and all decisions—mainly because for all decisions you need to decide on a brand.
A further influence on your decision is the type of personality that you are. There will be a big interplay between the consumer’s personality type, the personality type the consumer wishes to project, the memories (experiences) that that personality type is exposed to, and the type of experiences that the specific personality type finds gratifying (dopaminic).
When people see an advertisement they have seen before they recognise it. The word “recognise” means exactly that: re + cognise. The process of recognition not only involves interpreting what is on the screen, but includes how people feel about it.
The audience were interpreting their environment—in this case the screen. The process of interpreting involves recruitment of neurons based on previous experiences. If an advertisement has been “cognised” before this experience then this is what the recruitment of neurons is based on. The gestalt that forms is more than the mere flickering fast-forward images with no sound. The gestalt that comes to mind includes how the advertisement made the people feel before. This process of neurons being recruited, as we know, increases the limens of the synapses, i.e., reaffirms the memories of themselves.
We know from neuromarketing that memories are laid down by experience and reinforced by experience. We know that the memory laying down happens because of interpretation of the environment and that the mere interpretation reaffirms memories. Am I suggesting that any exposure is good? No. Any memory laid down in a situation where the body feels negative will create a negative soma.
Re-cognition is not a bad thing; in fact, it is a very good thing because it lowers the limens of the advertisement’s memories.
The gestalts that develop are based on the state of the limens in my synapses. When everything else is equal, the gestalt with the lowest limens will become the dominant gestalt.
The way that a brand becomes the one with the lowest limens will be by way of being the brand I mostly use, or the one that has made me aware of it most over recent time.
For re-cognition to work, the consumer need not be exposed to the full 30 seconds of a 30-second advertisement. We have shown how fast the brain is at recognising something. In the cats–dogs experiment this is achieved in one-tenth of a second. Inside that time frame your memory presents to your consciousness a lot of what it knows about what you are seeing (e.g., the developing gestalt includes much more than what you have been exposed to). The mere activation of these synapses lowers the limens. Ron Wright reports that this might be as fast as 800 milliseconds.
Simply: if no memory has been formed, then there is nothing to refresh.
The somatic marker theorem proposes that the memory system lays down memories of experiences in terms of the body’s feelings, and that these memories, like any other memories, are used to interpret. This happens for the interpretation of everything that is around us and what we have to take decisions about. Since most of what we need to take decisions about is brands, it happens for all brands all the time.
This soma is a “feeling” and has a positive or negative valence. The important point is that the consciousness becomes aware both of the feelings and of the functionality of what it is being presented with. By “feelings” I mean “How will the brand make me feel?”
Fishbein, borrowing from the economist Adam Smith’s theories about utility, proposed an operational model whereby utility can be derived from brand attribute data. He postulated that:
Utility of brand i = sum of (its perceived attributes × the importance of the attributes)
Utility of brand i = brand soma + sum of (its perceived attributes × the importance of the attributes)
The constant for brand i is simply:
The model sort of worked some of the time.
The Fishbein model has not been disproved. The problem with the model is mainly that when a brand is big it gets associated with all the positive attributes more than a smaller brand. [See; salience.]
Advertising (promotion) does two things:
Over time the general effect increases the brand’s fame while the specific effect increases the brand’s position in the consumer’s mind. From the perspective of research it is very important for management that both these effects are measured.
In psychology, priming refers to the ability of our minds to react to certain stimuli with increased sensitivity as a result of prior experience. For example, if you first see the word yellow, you will be slightly faster to recognise the word banana because these two words share a close relationship in memory. When one node of the associative network of memory is activated, it warms up another nearby node, making it easier and faster to retrieve that information. Priming is believed to be an involuntary unconscious phenomenon because it occurs outside of conscious awareness and does not depend on the conscious retrieval of information. It relies on implicit non-declarative memory, rather than on explicit declarative memory that we can recall consciously. Research has shown that priming can play an important role in how we make decisions.
Since all of our past experiences differ, we each create our own unique set of personalised and malleable, implicitly learned associations. These learned associations often take precedence over rational evaluation. Melanie Dempsey of Ryerson University and Andrew A. Mitchell of the University of Toronto conducted research that exposed participants to made-up brands paired with a set of pictures and words, some negative and some positive. After seeing hundreds of images paired with several fictitious brands, the subjects were unable to recall which brands were associated with which pictures and words, but they still expressed a preference for the positively conditioned brands. The authors of the study labelled it the “I like it, but I don’t know why” effect. In a follow-up experiment the participants were presented with product information that contradicted their earlier impressions, offering them reasons to reject the products they had been conditioned to like, but they still chose the brands associated with the positive imagery. Factual information to the contrary did not undo the prior conditioning, suggesting that their product selections were driven more by unconscious conditioning rather than rational analysis.
In order to effectively brand a product you need a reference point, some sort of context out of which to identify the meaning and value of the product. Einstein’s theory of relativity is a good example for understanding not only the laws of physics but also the laws of cognition and marketing. When it comes to brand perceptions, there are no absolutes. Brands are never perceived independently of other relations, as the mind is always evaluating brands relative to something else. Without this contextual comparison you simply have no sense of its worth.
The manner in which you present brand information has primary influence on how the message is received. This framing effect creates a cognitive bias that can make the same information feel different depending on how the facts are spun. By shifting the focus of attention from the positive to the negative, marketers are able to slant the emotional colouring on top of the literal facts. This is why negative political advertisements predominate, honing in on obscure, often personal and emotionally charged transgressions of the opposing candidate, rather than talking about the bigger issues and the facts at large. And it is also why we get excited when we hear about a steak that is touted as being 90 per cent fat free, and think twice about the same steak when it is claimed to contain 10 per cent fat.
Without a meaningful associative frame of reference [e.g., the National Pork Board’s “The Other White Meat” campaign] you simply don’t have a brand. Association determines your brand’s worth while context determines the meaning of those associations. It is not just what is inside of the Tiffany gift box that determines the value; it is the box itself, the context in which the message is delivered, that helps to create the greatest value, making the ring and your brand shine all the brighter.