The Science of Revenue – The Link Between Great Branding and Terrible Pain

If marketers want to drive business, they need to think about how the brain works – why do consumers make the decision to think about, try, use, and stay with a brand?

In the CMO Club Virtual Roundtable, The Science of Revenue – The Link Between Great Branding and Terrible Pain, roundtable leader, Paul D’Arcy, SVP Marketing at Indeed, discussed how the unconscious plays a critical role in human decisions.

Three interconnected ideas are key for marketers:

  • Where ideas live in the brain
  • How emotions influence memories
  • The surprising link between branding and pain

“For all of this, the focus on memory is setting people up to make decisions to choose your brand or to choose your product as a key part of the strategies that are proven to drive long-term growth,” he said.

As marketers think about driving revenue, they should recognize that this equals driving decisions, D’Arcy said. To do that, understand from where in the brain these decisions emerge.

By age 21, the brain has stored 100-times the content of the entire Encyclopedia Britannica, he said. This includes images, feelings, memories, emotions, thoughts, sounds, smells, and sensations of touch.

“Each time you make a decision, you sort through all of this information,” he said. “And you do it incredibly fast.”

There’s conscious processing that a person is aware of. At the same time, processing takes place at the subconscious level as well. The conscious takes place at about 50 bits per second, whereas scientists estimate the unconscious takes place at 11,000,000 bits per second.

“Scientists realize 95% of decision making is subconscious,” D’Arcy said. “It’s why there’s so much bias in the decisions we make in so many things we do.”

“This is also why advertising works. We chose things that come to mind”

D’Arcy points to a McKinsey & Company report, which found that when people make a purchasing decision, 69 percent choose one of the brands that comes to mind, while 31 percent choose a new brand – and this is true across all categories.

McKinsey also reports that, when looking category to category, the most predictive index of growth for a business is the rate of consideration for that business, over market share, D’Arcy said. If people think about you all the time, and you have small share, you’ll grow quickly; whereas, if people don’t think about you, but you have high share, it’s going to stay the same or shrink.

“For us, in categories where people may not be thinking about us, we’re running demand and activation programs over and over again to get people to move – research shows that’s a pretty inefficient way to drive growth,” he said.

Consumers are driven much more by unconscious urges than they believe, D’Arcy said. Emotions are driving both purchasing behaviors and decision-making in general.

As an example, D’Arcy talked about how he’s fallen on a daily run, and his body both feels pain and triggers emotions if the pain is significant enough. While the two may seem unrelated, researchers have found the triggered emotions are a hacking mechanism from the body that helps people remember the pain in the future.

The link between advertising and pain is such that “the body has evolved to leverage the same mechanism to avoid the repeat of pain that advertisers have hacked to build long-term memory and to drive brand preference and sales. The common denominator: Intentionally triggering emotion to create long-term memories,” he said.

At Indeed, marketers thinking about driving growth are thinking at the same time about how to trigger emotion to link to their product in their advertising.

Businesses, especially public companies, can maintain too much focus on the short-term, however, they need to manage both the short- and long-term to be effective. Marketing is no different. Marketing communications serve two primary purposes: Sales activation and brand building.

Sales Activation:

  • Exploits mental brand equity
  • Generates sales now
  • Tightly targeted
  • Short term
  • Persuasive messages

Brand Building

  • Creates mental brand equity
  • Influences future sales
  • Broad reach
  • Long term (creating long term memory)
  • Emotional priming

“It’s important to have a balance of two types of marketing,” D’Arcy said.

Brand effects are the main driver of growth over time in most organizations, he said. In some businesses that comes from advertising, while others, for example Facebook or Tesla, it may come from viral effects or public relations. For those who advertise, emotional ads and brand effects are proven to be significant drivers of long-term growth, he said.

A survey looking at 43 television commercials weighing the emotive power of those commercials with the favorability shift found that infusing marketing campaigns with emotive power is essential to long-term brand building and short-term sales activation.

Emotional advertising is even effective in “high research categories” where consumers expect themselves to be rational, D’Arcy added.

“If we like a brand, we tend to believe the positive information we come across when researching it, and, unless we are given overwhelming reasons to choose another brand, we will go with our feelings,” he said. “Our mind has already ranked them based on a set of brand associations.”

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