For marketers, seeing into the minds of customers — and understanding exactly what they think, what they want and how much they’d be willing to pay — could be considered nothing short of miraculous.
Though companies can run focus groups or conduct surveys when designing new products, consumer preferences are notoriously hard to measure. After all, it’s hard for customers themselves to predict whether they might like a product that hasn’t been developed yet. And people lie — especially if asked about their guilty pleasures or embarrassing habits.
Ryan Webb, an assistant professor of Marketing at the Rotman School, is hoping to identify new ways to overcome some of these challenges. By blending neuroscience and economic theory in his research, Webb examines technologies that could be used for measuring consumer tastes and future choices.
“Designing a new product or marketing campaign is extremely difficult because we can’t see into the future and anticipate what people will think,” says Webb. “The challenge is finding ways to get at what people really want.”
Fortunately, scientists already know that the front part of the brain, or the frontal lobe, is where we make decisions, including deciding which products and services we prefer. And they have developed technologies, such as functional magnetic resonance imaging (or fMRI), that can accurately measure brain function and activity.
Unfortunately, the costs of running an fMRI test — these machine costs millions of dollars and trained staff are needed to operate them — make it impractical for business or marketing purposes.
“Designing a new product or marketing campaign is extremely difficult because we can’t see into the future and anticipate what people will think.”
—Ryan Webb, Assistant Professor of Marketing
Instead, Webb has explored a less expensive, more practical option: the Electroencephalogram, or EEG. For his research projects, which are often co-led with neuroscientists, study participants wear an ‘EEG cap’ that measures neural activity.
In one of his most widely cited studies, which was published in the Journal of Marketing Research, Webb presented participants with pictures of various consumer products and asked them to think about how much they were worth to them. He found these EEG measurements can be effective in predicting consumers’ future choices.
This work, which has been validated and replicated by other researchers, could have important applications in business.
Not only could EEGs be used to gather fairly accurate data on how individuals perceive products they can’t touch and don’t have experience with, says Webb, but these tests might even be good at predicting how consumers will respond to marketing campaigns and new products. Several market research companies, including Nielson, are already using these methods in market research.
“We need to understand what people value and how their minds work to make better business decisions.”
—Ryan Webb, Assistant Professor of Marketing
Still, we might need to do a bit more thinking before we use this technology widely in business.
“Potentially having so much access to the inner workings of a consumer’s mind means that ethical guidelines will need to be developed,” says Webb. Also, the technology can likely be improved upon: EEGs and fMRI tests have been shown to be about 70 per cent accurate at predicting customer preferences.
But Webb is hopeful and he has since expanded his work to look further into how price changes can affect — at a neural level — how an individual values particular items. He wants to better understand how people make errors in their choices — and how this might be related to the random fluctuations in neural activity.
“We need to understand what people value and how their minds work to make better business decisions,” says Webb.
Written by Rebecca Cheung | More Rotman Insights »