On the second episode of our three part neuromarketing series on B2B Growth, we discuss why neuromarketing matters in B2B.
Last episode, I discussed with Dr. Michael Platt what neuromarketing is. In this episode, I'm joined by Dr. Uma Karmarkar from UC San Diego, and Dr. Ming Hsu from UC Berkeley. We go more into neuromarketing, regarding the science about decision-making and cues from B2C that B2B companies could use.
About My Guests
Dr. Uma Karmarkar is an Assistant Professor at the School of Global Policy and Strategy. She also holds a joint appointments at the Rady School of Management at UC San Diego.
Dr. Ming Hsu is an Associate Professor of Business Administration at the University of California Berkeley and also holds appointments at the Haas Business School as well as Berkeley's Neuroscience Institute.
Dr. Karmarkar was trained in neuroscience and has worked around others to understand how cells in our brain use information to think. This leads into how we make decisions. She shifted her career from biology to more of a path studying psychology and how the brain uses information to make choices.
In addition to the neuroscience training, she started incorporating marketing application regarding how people think about information when making a buying, investing, or even career decision. Basically the science of when we are given multiple pieces of information and have to make a choice.
She looks at neuromarketing as an opportunity to leverage both the differences and commonalities of results to apply to business decisions. The idea is that there are a useful, defined set of things that help us make choices, and then taking this insights and merging them to the reality of the world. Understanding this and acknowledging the nuances of neuromarketing from both sides of the spectrum allows us to answer, "What is most relevant to us?"
Dr. Hsu received his PhD from Cal Tech in Neuroeconomics. His experience has revolved more around neuroscience and how it applies to economics. In his opinion, the grand ambition of neuroscience is reverse-engineering the human mind and understanding the behavior that the brain exhibits.
To him, neuromarketing is the science of decision-making, both conscious and subconscious.
Have You Ever Seen Any Instances of B2B Companies Using Neuromarketing to Make Decisions?
According to Dr. Hsu, there's a lot of received wisdom from generations before about what matters in B2B marketing. One of the recent areas about his "top of mind" research. In recent years, there's a lot of pushback from finance, accounting, and data-driven marketing folks who can't measure "top of mind". For example, "If you can't show me the ROI, then why do I care?"
Selling on lore and brand name is MUCH harder than it's been in the past because of this.
According to Dr. Karmarkar, B2B naturally seems more rational..."Speak to your customer and pivot from there"...but realistically, it's largely to do with price. Additionally, in her experience talking to organizational behavior groups, interpersonal relationships explain why there can be a lengthly negotiation process.
This is proof that in B2B, there's more components involved than price.
Most technology companies are moving to a self-service model, similar to B2C. Now, you can come in, try the technology, and see if it works for you.
So, Which One is Better...Self-Service Models or Talking to a Rep?
According to Dr. Hsu, there's clearly some balance that needs to be struck. The B2B world is naturally behind the curve with where that should be. The advantage of an analytic-driven sales process is the ability to sell the experience, like many companies pride themselves on, by talking to someone.
But then there's instances where you have a really basic question you want to ask someone, and no one from the company is picking up. This is frustrating to say the least, so it really comes down to understanding the brain, and knowing when to use self-service or a representative. These are the newer questions that we're only scratching the surface of.
According to Dr. Karmakar, we have qualitatively differently questions that have to be answers when the price is the primary consideration, versus the product being the primary consideration. When it's the price, it's more, "Is this item worth it?' Whereas product is, "Do I like it?" They're not quite the same thing...and when considering functional elements for a company making a B2B purchase, it's "How will this benefit my company?"
The failure points are different in the price versus product realm as well and can go both ways.
Can Increasing Price Create Even More Appetite For a Product?
There is a brain signal, according to Dr. Karmakar, that correlates with the value of a transaction. It's also very easy to justify individual versus group decision making. For instance, if you make a choice, it's either your own purchase or it comes back to the company or group your work with.
According to Dr. Hsu, there's a natural security and conservatism revolving around the value of the product. You care about what can the product do to make your business better and to improve your career. While price can increase the perceived value of a product, the product has to have a proof of value associated with it in the first place.
How Can B2C Apply to B2B?
This is important about the insights that both B2C and B2B want, according to Dr. Hsu. For instance, in B2B, there's a lot a need that reports are accurate and not subject to implicit biases about the survey takers. One of the values of neuroscience is being able to value some of these poor insights, without having to ask explicit questions.
All in all, B2B and B2C face the same challenges in terms of investing in brand value, and the neuroscience behind B2C an be applied to B2B in many cases. The only difference is understanding group thinking versus an individual's.
What About Sensory Marketing?
According to Dr. Karmarkar, the difference between digital interaction and physical interactions are tremendous. Not only do you see the message with a letter, but with a physical element, you are holding something. From a direct mail perspective, you add in a layer of information and interaction that the brain is holding.
You can think of it in terms of attention. There's no default coding, but because people pay more attention to it, people associate that with your brand and adds another layer to their memory. Marketers have an opportunity to provide more linkage with tactile advertising.
According to Dr. Hsu, there can be multiple messages associated with the postcard. Lots of B2C companies have highly integrated messaging campaigns, and B2B companies don't do this as much. You'd be better off leveraging associations, for example, more timely and personable messaging.