Thursday, November 20, 2008

Buyology: Truth and Lies about Why We Buy

When you enter a wine store, what makes you purchase a particular wine? Is it fully a rational and logical decision, or is there something underlying that decision, something less readily identifiable? Do you really know why you buy a certain wine?

Wineries, marketers, distributors and others often take surveys or set up focus groups to try to determine the reasons for why people buy specific wines. The results of these surveys and focus groups often determine where millions of dollars of advertising and marketing is allocated. Yet they may be wasting most of that money, relying on inaccurate results.

For a deeper look into these issues, you might want to read Buyology: Truth and Lies About Why We Buy by Martin Lindstrom (Doubleday, 2008). The book details the results of an extensive neuromarketing study and those results are quite intriguing. This is a fascinating book that I would highly recommend to anyone interested in marketing.

The book begins with some amazing figures concerning marketing. In 2007, corporations spent about $12 billion on market research in the US alone. That does not include the expenses involved in marketing an actual product, which are about $117 billion. These are huge amounts but does all that money lead to beneficial results? Most of the time it does not. Eight out of ten new product launches fail within the first three months. So billions of dollars of marketing are wasted on failed products. Obviously many marketers are doing something significantly wrong.

Despite the prevalence of surveys and focus groups, they are not truly reliable predictors of why people buy what they do. The book alleges that approximately 90% of our buying behavior is actually unconscious. That means that our buying decisions are much less rational than we think, that there are more subtle factors involved, matters we do not fully realize. We might think we buy wines for one reason, when that may not be true.

Though you might not want to believe it, your emotions play a significant role in your buying decisions. “Because 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.” (p.27) Do any of the wines you buy engage you emotionally? I previously posted about a study involving wine labels with animals that seems to support that our emotions are involved in wine buying decisions.

One way for products to form a deeper emotional connection with consumers is through the use of rituals. Such rituals provide "...an illusion of comfort and belonging, stability and familiarity." (p.99) That could be partially a reason why many people prefer wines with corks, the ritual of using a corkscrew providing an emotional connection. A screwcap lacks such a ritual and may not then connect as emotionally.

Buyology: Truth and Lies About Why We Buy has much more information about marketing and it is well worth checking out. What really stands out to me is that traditional marketing often is unsuccessful and those companies which innovate, which seek to connect emotionally with their potential customers, may have the best chance of success.

This certainly applies to wine. There are many thousands of different wines available so which wines will succeed? How can a new wine stand out among the crowd? How can a wine store connect better with its customers?

It could even apply to our blogs. Do we connect emotionally with our readers?

4 comments:

Bradley Cooper, Winemaker said...

Thanks for that. Very timely with my wife and I ready to launch our own label very shortly.
Perhaps I should opt for a critter on the label?
:)

Taster B said...

Wow. Amazing stats on how much money is spent on failed marketing. Food for thought...

Richard Shaffer said...

Richard:

Nice review!

Love the piece about rituals! I think people are emotional and social creatures and we want to "play" together even as grown-ups.

The best marketing is about giving people new ways to interact and connect amongst (and maybe even within) themselves!

Richard Shaffer

Joel said...

Thanks, this is a good pointer that I'll have to read. Also tells me I'm not approaching the right customers for my consulting practice!! Hahaha!