- Neuromarketing as a field has been mostly unsuccessful in practice due to an insistence and over-dependence on complex, inaccessible scientific facts as opposed to simple truths and tools that are useful, actionable and applicable to most small businesses.
- For small businesses, competition is an ever-present threat with millions of new physical and digital brands launching into the market every year. How should you approach this new competitive landscape?
- Neuro-Analysis when properly executed with highly specified, strategic intent, and measurable objectives, can introduce the small business owner into the mindset of the competition and provide a subconscious edge for market success.
Research involving no less than 3000 multinational executives shows that achieving competitive differentiation posed a significant challenge to commercial growth and business expansion.
The essential nature of market competition is that it is ubiquitous. This nature is adequately addressed by managers who consistently display a penchant for assessing, understanding and outperforming the competition as these variables directly affect company performance.
For most of the modern business era, SMB managers relied on such tools as SWOT, PESTLE, CSF and the Five forces for strategic analysis of market success competition.
However, surviving today requires a willingness to deploy available resources to understand competitive intent and the hundreds of variable, neurological interactions and decide business outcomes over time.
This notion is echoed by entrepreneur and public speaker Gary Vee in his assertion that compels the listener to “Watch what I do, not what I say” – and his commitment to mining comment sections and consistently neuro-analyzing the commercial landscape.
Neuro-analysis For Small And Medium Scale Businesses
Contrary to the norm in neuro-marketing circles, specifying competitive threat does not necessitate the adoption and mastery of data-heavy methods and sophisticated biological tests such as FMRI or ECG.
While these technologies are useful and provide critical insight, most small businesses operate on a daily income and expense schedule and lack the necessary resources to benefit from using them in any way, shape or form.
Thankfully, despite obvious obstacles to neuro-analysis for small businesses, the strategic intent behind initiatives such as these can be driven primarily by the sheer volume of data available online (projected to reach 44 trillion gigabytes in 2020) as well as the neuroscientific techniques that allow managers to isolate key variables, track subconscious biases and specify the decision making parameters of the competition in real-time.
How Can Small Businesses Apply Neuroscience To Competitive Analysis?
For the most part, being aware of what variables to look out for and how to track change over time is enough to understand how competitors think about themselves and the market. The following variables are essential to this process.
Instant Gratification Index:
In this modern world of endless news feeds, constant beeping, and 5G connection speeds, consumers are unused to waiting: the average person is overwhelmed by about 34 Gigabytes of data every day and digital technologies have certainly accentuated the formerly increased pace of life.
This overload leads customers to take the path of least resistance more often than not and to take that same path many times over. Accordingly, recent MRI studies showed a correlation between instantly receiving an item and increased electrical activity in the midbrain. On the other hand, waiting for an item stimulated activity in the frontal cortex.
The significance of these results is more comfortable to comprehend knowing that the midbrain controls auditory and visual processing while the frontal cortex is responsible for conscious decision making.
In this regard, Frederick and colleagues coined the term “hyperbolic discounting” to define the tendency to prefer the most proximal reward as the time of both rewards gets closer. People may choose $110 in 31 days over $100 in 30 days, but it’s more probable they would settle for $ 100 over $ 110 tomorrow.
Brands like Coca-Cola have leveraged this neurological loophole through their ubiquitous distribution strategy, which spans across 200 countries and results in over 1.9 billion servings per day. Amazon also hiked its shipping costs by 43% to a whopping $9.6 billion to offer one-day delivery.
The following points can provide insight into competitors’ Instant Gratification Index:
- How quickly do their digital assets, e.g., websites, landing page load
- How many keystrokes are there between product discovery, the cart and checkout
- How widely available are the products in the most highly trafficked channels
- In physical locations, how long does it take to fulfill a queue
- How does your Instant Gratification Index compare to theirs
To discover the Instant Gratification Index, rank-order the speed of the following variables where
1 (slow) – 10 (rapid):
- Speed of digital assets delivery relative to others in competitive niche ~ 0 – 10
- Speed of Physical assets delivery relative to others in competitive niche ~ 0 – 10
- Product availability assets relative to others in competitive niche ~ 0 – 10
After completing this step, add the figures together and divide by (x = 3) to ascertain the mean. The concerned figure Instant Gratification Index.
Optimizing for Instant gratification can position a product or service as the path of least resistance and increase its selling performances.
Customer Sentiment Tracking:
Customer sentiment is, without a doubt, one of the most critical variables for competitive behavior. As a result, keeping tabs on what customers are saying and how they feel about competitors can provide valuable insight into competitors’ mindset itself and how to deploy resources that effectively counter their initiatives.
In a world where, according to BrightLocal, consumers skim through or carefully peruse an average of ten (10) reviews before making a buying decision, keeping track of the consumer’s emotional state is a surefire way to discover loopholes and blue oceans that can be exploited for market success.
The key to understanding the importance of sentiment tracking from a neuroscientific perspective is that it drives and incites social proof, a widely-known phenomenon by which people are more likely to converge on a course of action when it is shared by others.
Social psychologist Muzafer Sherif asked subjects sitting in a dark room to estimate how much a pinprick of light was moving. The light was actually stationary but people believed it was moving due to an autokinetic effect.
When the experiment was repeated in groups a week after, it was observed that the group would tend to converge on a shared estimate even if it was vastly different to those that they had given earlier.
Applying social proof theory to marketing can lead to consider that positive reviews reduce the social cost of consumer behavior and rapidly increase the overall value of the exchange as a result.
Brands such as ASOS, and Shopify have excelled by stimulating cognitive ease and maintaining an excellent instant gratification index through finest shipping services and end to end marketplace coverage, respectively.
This success is revealed in the heavy review data sets (100,000 reviews between them) available online. These days, customer sentiment tracking can be automated by using web scrapers such as Octoparse for data collection and the NPS technique, which is a distinctive tool for discerning customer loyalty over time.
In assessing the value of customer sentiment, tracking for sentiments that evoke customer assent or dissent in the context of their market exchanges and looking out for the following aspects of competitors will provide some insight:
- Searching for their ranking on popular review sites such as Trustpilot
- Analyzing the volume and the quality of their social commentary
- Searching for the three words that appear more than once in the commentary volume across platforms
- Studying the way their customer sentiment changes from one social platform to another
- Evaluating how are their responses to negative queries framed (positive/negative/absent)
Color Tracking:
In the delicate art of product and service marketing, identifying and honing in on the right emotions can spell the difference between success and failure. As far as emotions are concerned, very few tools are more powerful than the color wheel.
In a world where 85% of consumers self-report that product/service colors affect their purchase decisions, color-tracking successful competitors can help understand how they are winning and provide breakthrough ideas.
In her research on Brand Personality, Stanford Professor and Psychologist, Jennifer Aaker delineated the five main aspects of brand personality into the following; sincerity, competence, ruggedness, sophistication and excitement.
The key to color-tracking is to find out the following:
- Identifying what colors do the most prominent brands in your industry use
- Studying how competitors use colors on their product/service packaging
- Analyzing what emotions and aspect of brand personality are associated with those colors
- Tapping into similar emotional cores in communications
- Isolating consumer segments that can be stimulated by using a different set of colors
Conclusion
On a final note, these tools can provide when applied correctly the subconscious data sets necessary for targeted action and trump the legacy data collection models that rely on historical data, case analysis and unrealistic mathematical projections. Besides, the core-insights for solving customer’s most pressing problems are derived from analyzing the ever-present competition. Competitive analysis and the synergic action of the above-mentioned strategy can be the most effective approach to proceed in that direction.
Compete, strive, and reach your full potential.
References
Aaker, J. L. (1997). Dimensions of Brand Personality. Journal of Marketing Research, 34(3), 347–356
Frederick, S., Loewenstein, G., & O’donoghue, T. (2002). Time Discounting and Time Preference: A Critical Review. In Journal of Economic Literature (Vol. 40, Issue 2).
Sherif, M. (1935). A study of some social factors in perception. Archives of Psychology (Columbia University), 187, 60.