The Future of Marketing Research
The Future of Marketing Research
An emotional survey without panelists
People almost always buy based on emotion and then justify their purchases with logic after the fact. Emotion is what really drives our purchasing behaviors and also, our decision making in general.
Sure, we compare prices and spend some time reading about the products we consider buying, but when the time comes to make a decision, we rely on our feelings over our thinking, according to recent studies.
Scientists have uncovered that people feel first and think second. The emotional part of the brain can process information in about one-fifth of the time that a rational-cognitive process requires.
Emotions also have a large impact on brand loyalty, according to the Tempkin Group. In a study conducted in 2016, they found that when individuals have a positive emotional association with a specific brand, they are 8.4 times more likely to trust the company, 7.1 times more likely to purchase more, and 6.6 times more likely to forgive a company’s mistake. Nielsen released another study in 2016 which reveals that ads with an above-average emotional response from consumers produced a 23% increase in sales compared to average advertisements. The Harvard Business Review has also stated that a positive emotional bond with a company is more important to consumers than customer satisfaction.
For many years, the ability to know what is going on in the consumer’s mind was, and still is, the Holy Grail for anyone in marketing and business. Marketers and advertisers strive to create an emotional engagement that makes their audience more susceptible to notice, remember, share, and buy their products.
System 1 vs. System 2: understanding human thinking.
Dr. Daniel Kahneman, the founding father of modern Behavioral Economics and Nobel Prize winner, was the first to coin the terms System 1 and System 2 thinking as part of his life’s research that focuses on understanding how we think and make decisions. The central thesis is a dichotomy between two modes of thought. System 1 is below the conscious threshold: fast, intuitive, and emotional, and includes thoughts, such as which pasta sauce to buy for dinner, whether to change lipstick colors, solving 2+2=, and driving a car on an empty road. System 2 is slower, reliable, logical, and conscious and includes thoughts, such as comparing two washing machines, which college to attend, which house to buy, changing a career, 17 x 24 =, etc.
Contrary to a popular belief, consumers aren’t as logical as we might like to believe. Ninety-five percent of human purchasing decisions are made emotionally and quickly in System 1. Uncovering and understanding the System 1 response, below the conscious threshold, has significant implications for marketing, market-fit, branding, and sales.
Winds of Change
During the last decade, a major shift in marketing research tools and applications have become available with the use of Internet applications and digital technologies that are both faster and more accessible; however, the core methodology for market research remains untouched. Companies still use System 2, the rational, logical conscious part of the brain, to decode the emotional, impulsive consumers’ thinking of System 1. They hire hundreds of people, ask them questions, people need to interpret the questions, and give answers. In short, they use System 2 to decode the emotional, impulsive System 1, and it doesn’t work.
This means that the most essential layer of emotional data is missing from a company’s decision-making process.
The total amount spent by companies on market research in 2018 (ESOMAR) was nearly $80B. Eighty-six percent of the research is quantitative and uses panels and polls to evaluate the market. The market segments that invest most in market research are: non-durables, 23%, media and entertainment, 15%, and pharmaceuticals, 13%.
Companies such as Procter & Gamble, Unilever, Coca Cola, PepsiCo, etc. spend a few hundred million dollars per year on market research These individual companies have hundreds of consumer brands, and their products do not change that often. Marketing and sales are, therefore, key drivers of success, and deep consumer insights can make a large difference.
New Paradigm: Emotion DNA™
Our latest research, using Artificial Intelligence and Machine Learning, has revealed surprisingly strong ties between a person’s taste across various domains. In other words, a person’s taste in music, for example, can be used to predict the relationship patterns of the person’s taste in other domains, such as food, fashion, faces, and movies. These patterns are unique to each individual and do not tend to change. We call it Emotion DNA™.
Affective Markets learns the Emotion DNA™ of thousands of people, representing System 1’s patterns for a population. This representation allows us to help our clients by predicting the level of emotional acceptance of the market of their ideas, branding identity, marketing messages, and products.
Affective Markets applies Emotion DNA™ for various applications, such as benchmarking the emotional acceptance of a category, mapping the competition, color testing, identifying target audiences, packaging evaluation, branding identity and marketing messages, marketing, advertising creative materials, measuring cultural differences, validating concepts, and new ideas.
Affective Markets’ AI-driven insights are used by top brands all over the globe to improve sales and ensure the success of new product launches.