A sales pitch that relies on customers to make purchasing decisions based on rationale reasons only is overlooking a major factor in the buying process — emotion. In fact, recent research from behavioral economist show that most of the brain is dominated by automatic processes, rather than deliberate thinking. Meaning a lot of what happens inside the brain is emotional not cognitive. With this understanding, certain things begin to make more sense about selling success and brand power. If you look at the fast food industry from a rationale standpoint, you would most likely conclude that based on food quality and serving size compared to its competitors, McDonalds would be at serious risk at losing its number one position in the industry. But today, the golden arches have a firm grip on its leadership status and Wendy’s and Burger King continue to fight it out for 2nd place, a very distant second place. Why is this? Of course, being the world’s largest hamburger fast food chain helps. But we’ve seen industry giants fall before. Look at Sears. From the 1930s to 1950s it was the leading department store in the country. And before it opened a retail store, for 30+ years it was the king of the mail order catalog business; beloved by Americans of all ages. So how did its brand lose power and marketshare? How Sears failed is for another discussion on branding. But the point here is being the biggest does not guarantee unending success.
A great case study for showing the critical role emotions have on consumers’ buying decisions is presented in the book Buy-ology by Martin Lindstrom. In the mid 70s, the Pepsi-Cola Co. introduced the famous marketing campaign known as the The Pepsi Challenge. It was a very simple concept, Pepsi reps set up tables in malls and supermarkets all over the world, handing out two unmarked cups to all interested volunteers. One cup contained Coke and the other Pepsi. After taking the sip test, people were asked to pick their favorite of the two. When Pepsi’s marketing department finally evaluated and posted the results, the executives were very pleased. More than half of the volunteers claimed to prefer Pepsi over Coke. So, by all accounts (rationally thinking), Pepsi should be trouncing Coke all over the world. But it wasn’t. Why? Decades later, one expert’s opinion was that the sampling size impacted the decision. Pepsi was sweeter than Coke, and when presented in a smaller sample, the extra sweetness was a positive but at a regular serving size it was overkill. This is an interesting point that may have influenced results of the 70’s campaign. But that doesn’t explain why Pepsi did not at least have sales spikes for initial trial. Consumers would have to drink a good amount of regular servings to make the determination that Pepsi was too sweet. I think another study in 2003 tells the real truth behind why the rationale results of the Pepsi Challenge did not translate to greater sales and marketshare growth. Conducted in the Neuroimaging Lab at Baylor College of Medicine, researchers created a set up exactly like The Pepsi Challenge except this time the test subjects were told they were sampling Pepsi or Coke before they tasted it. The results: 75% of the respondents preferred Coke. The same taste test with the inclusion of the knowledge of what brand you were drinking changed people’s decisions. What this shows is the emotional connections to a brand influences the buying decision. As the people took sips in the Baylor College of Medicine test, the reaction to the product was infused by all the emotions that each person felt about the brand — logo, design, fragrance, print ads, childhood memories. All that stuff matters. And it factors in to which product they select for purchase.
In the 70s, The Pepsi Challenge took the brand clothes off both products and the results produced were totally based on rationale thought. But that’s not how consumers buy things. And we have seen by Coke’s sales compared to Pepsi’s, from the 70s to now, that more is at play— emotions. Emotions are the way in which our brains encode things of value. Companies (brands) that engage us emotionally will win the sales challenge every time.