How Marketing Tricks You, and How to Beat It
We are the United States of Stuff Buyers. Seventy percent of our gross domestic product is tied to consumption. But these days, many of us are also short on cash, either literally or psychologically.
If we aren't looking for work, we suspect we might be soon. Investment portfolio balances are missing zeroes. Our capacity to consume, according to recent economic indicators, has been trampled.
It's the season to buy, though -- for Mom, Dad, the kids, Grandma, Grandpa and Uncle George. So this seems like the perfect time, with our shrinking capacity and willingness to spend, to ponder new evidence about why we buy what we buy, how retailers attempt to get us to buy more, and how we can be smarter with our money.
With the help of digital imaging like MRIs, scientists have made big strides toward understanding how our brains deal with financial decisions. Martin Lindstrom's fascinating new book, "Buyology: Truth and Lies About Why We Buy," gets to the bottom of our buying habits, particularly our obsession with certain brands.
Lindstrom, a marketing guru who advises everyone from fast-food companies to drugmakers, partnered with Oxford scientists to conduct a three-year, $7 million study scanning the brains of 2,000 people while they were shown various marketing strategies. What they found surprised them. In one of the most startling examples, the researchers scanned brains while the subjects were exposed to images of popular brands and religious icons.
Lindstrom wrote: "The room went dark and the images began to flicker past: A bottle of Coca-Cola. The Pope. An iPod. A can of Red Bull. Rosary beads. A Ferrari sports car. The eBay logo. Mother Teresa. An American Express card. The BP sign. A photograph of children playing. The Microsoft logo."
When Lindstrom and the researchers analyzed the results, they noted that strong brands fired up activity in parts of the brain controlling memory, emotion and decision-making. That was expected. But then they compared those results with what happened when the subjects looked at religious images. To their surprise, "their brains registered the exact same patterns of activity," Lindstrom wrote. "Bottom line, there was no discernible difference between the way the subjects' brains reacted to powerful brands and the way they reacted to religious icons and figures."
This essentially means that when people line up outside Apple stores for the latest iPhone, they are not just hankering to get the latest gadget -- they are pretty much having a religious experience, too.
Another interesting insight into brands concerns our feelings -- yes, feelings -- when we sip a Coke. Lindstrom cites a study showing that when people know they are drinking Pepsi, the ventral putamen, a region of the brain that responds to appealing tastes, gets fired up. But the brain's response to Coke, which has for years inundated the world with advertising associating the beverage with warm memories of childhood, etc., was different. Not only was the ventral putamen activated, but so was the medial prefrontal cortex, responsible for higher thinking and discernment.
What does that mean? When we drink Coke, we get a certain warm and fuzzy feeling -- the emotions Coca-Cola has spent billions of dollars to create in advertisements. "Emotions are the way in which our brains encode things of value, and a brand that engages us emotionally -- think Apple, Harley-Davidson, and L'Oreal, just for starters -- will win every single time," Lindstrom wrote.
I asked Lindstrom whether he suspected that retailers and companies would lean on these associations in tough times -- he said yes -- and what shoppers could do to control themselves more. The advice was remarkably simple: Pay closer attention to what's happening.
He suspects that retailers, particularly grocers, will rely heavily on deals citing "limited quantities, act today!" He has done interesting studies with cans of soup. If they are priced $1.95 per can one day, the sales will be fairly standard. But the next day, if they are priced $1.95 with a tagline saying "maximum 8 cans per customer," sales surge. The offer triggers survival and hoarding behaviors in shoppers. Shoppers think the deal is so good that they should take advantage before others do. And for shoppers worried about losing their jobs, they think they should strike while they can.
Another way to avoid spending too much: Don't shop hungry. Not just for food, but for everything. Lindstrom said studies show that when we are hungry, we buy more. Again, our hoarding behaviors are triggered. He thinks retailers know this and will take advantage of it either by offering food during sales or by infusing the atmosphere with piped-in smells triggering hunger.
Perhaps the most important, and surprising, bit of advice Lindstrom offered was to physically change our shopping patterns. Many of us follow the same path through the grocery store or shopping mall, and when we do that, our brains essentially start to operate on auto-pilot. It's sort of like being on a long drive on a familiar stretch of road and you look up and think, "Did I just miss a stop light?"
When we shop that way, we don't pay close enough attention to how retailers and brands entice us to buy. So: Instead of always starting at the Gap, for instance, start on the other side of the mall and work your way there.
"You are waking up from the dream," Lindstrom said. "You are much more alert. You will also be more tired because you are using your brain more."