How Habits Undermine Marketing
This chapter is from the book
This chapter is from the book
This chapter is from the book
While driving to a meeting on the outskirts of Atlanta on a beautiful spring afternoon, I had the disconcerting experience of being unable to recall the last 10 miles of highway. Apparently, I had successfully navigated a 4,000-pound car at speeds in excess of 70 mph, responding to hundreds of cars around me, without any conscious control of my actions for at least ten minutes. This experience, familiar to most of us, illustrates the power and scope of the unconscious mind.
I was particularly aware of this phenomenon on a bright April day because I was on my way to a meeting with a client to discuss the pervasive role of habits in influencing customer behavior. This common example of driving on autopilot makes it easier to understand that we do the same thing in almost every phase of our waking life.
When we think of what it means to be human, we typically think of the attributes of our conscious mind—our ability to remember facts and faces, to solve complex problems, to create art and science. Indeed, our memories of the events of our lives create the sense of our personal identity. Yet for all the conscious mind’s remarkable abilities, neurobiologists and cognitive psychologists contend that the unconscious mind controls as much as 95% of human behavior.1 The conscious mind decides to go to a meeting—the unconscious mind drives the car.
It seems counterintuitive that the massive amount of conscious processing power sitting atop our bodies should just be along for the ride. However, from an evolutionary perspective, significant benefits exist from just such an arrangement. This twin mechanism enabled our Serengeti ancestors to hunt for food without becoming food. Today these dual processors make it possible to talk on a cell phone while we drive.
Although multiple names have been given to the two distinct types of mental processing, in this book, we refer to the part of the brain where conscious cognitive processing occurs as the executive mind. We call the region of the brain responsible for unconscious processing the habitual mind.2 The executive mind is where we consciously store and retrieve memories, create intentional thought, and logically solve problems. The executive mind can think about both the past and the future.
The habitual mind handles a vast array of functions, from regulating your heartbeat and body temperature, to storing thousands of responses to previously learned behaviors. The habitual mind is guided by the past but lives in the present.
Our understanding of the brain has been revolutionized in the past two decades. Through both clever laboratory experiments with animals and new technologies that enable us to look inside a working human brain, what we have learned during the last 20 years challenge much of what we thought we knew. Although these insights contradict basic assumptions in disciplines as divergent as psychiatry and economics, nowhere are the implications more profound than in marketing.
A quick review illustrates the point.
New Product Failure
Roughly 80% of all new products fail or dramatically underperform expectations. Although this metric varies between industries and services, the cumulative performance across all products and services represents a staggering indictment of marketing.
The plight of the Contour provides a good example of new product failure. In an effort to create a “world car,” Ford Motor Company spent $6 billion to create a line that featured a compact model called the Contour, which debuted in 1995. The automotive press immediately validated the vehicle. Car and Driver put the Contour on its Top 10 list from 1995 to 1997. Edmund’s named the Contour’s SVT sporty edition its most-wanted sedan under $25,000 in 1999. Yet a scant five years after introduction, Ford killed the Contour due to a plunge in what had already been lackluster sales.
In another questionable move, Ford introduced two cars to take the place of the highly successful Taurus, which annually vied with the Honda Accord and Toyota Camry for the number one position in U.S. sales. The company replaced its perennial best-selling car with the Fusion, which is slightly smaller than the Taurus, and the 500, which is slightly larger. Combined sales for the two vehicles were a fraction of those for the Taurus at the height of its market domination. But rest assured that Ford went to exhaustive lengths in marketing research, focus group testing, and development of a multimillion-dollar ad campaign before it decided to replace its top-selling car. (By the end of 2007, the Ford 500 was transformed back into the Ford Taurus—only the nameplate was changed.)
One of the easiest jobs in the world is to criticize decisions that have yielded bad outcomes, and Ford certainly received its share of critical press. But the Detroit automaker is hardly unique. Thousands of new products and services are launched each year, yet only a handful will have any meaningful impact on a company’s long-term profitability and survival. A prevailing attitude considers it impossible to predict with any accuracy which products will catch on with customers and which will be greeted with a shrug of indifference. Whenever people say “Let’s throw a bunch of stuff on the wall and see what sticks,” they are getting ready to waste a lot of money. It’s hard to imagine any other area of business that would tolerate such dismal results.
Chapter 5, “Marketing from a Habitual Perspective,” explains the source of customer apathy to most new product introductions, from television shows and movies to snack food and consumer electronics. At this point, it is important to understand that, for a product to succeed, it must first make a connection with existing concepts stored in the unconscious. The habitual minds of customers and potential customers must go through a physiological change to accommodate a new concept and a new brand. This is a process, not an event, and it cannot be successfully circumvented simply by spending money on advertising or getting good placements in stores.