Monday, January 14, 2008

How Customers Think

I had a quiet and lazy weekend. Accomplished little. May have been jet lagged from last week. Of course the doer in me beats me up for not pushing harder and getting more done. And I am off to a good start this week today.

I read a book called "How Customers Think, Essential Insights into the Mind of the Market" by Gerald Zaltman. It is a cross between a psychology book and a marketing book.

I was interested in this book because it talks a lot about understanding how and why customers buy. Clearly no business is successful without customers.

One challenge SYNNEX has is addressing needs of many different customers, many of which have different needs. What might be seen as essential for one customer is not even valued by another. I believe all companies are best for specific types of customer and the more within the target range a customer fits, the happier they are. And the opposite is true. Where I see dissatisfied customers, they normally do not fit the specific ideal customer type. We cannot be everything to everybody.

He uses many examples of optical illusion and how perception in some cases is more important than reality in the mind of the customer.

A more detailed review from David B. Wolfe follows (note what he says in the last paragraph):

Consumer research is a $6 billion business. But the ROI on research expenditures is being questioned as never before. This is ironic given that advances in information technology has vastly expanded analytic capabilities and increased customer data by an order of magnitude.

Jerry Zaltman s How Customers Think offers fresh insights into why companies are increasingly frustrated by consumer research. Drawing on contemporary brain research, he exposes fatal flaws in the hallowed premise in traditional consumer research that asking customers about their motivations is the best way to get clues about their future behavior.
Zaltman points out that surveys, questionnaires and focus groups fail to get behind the curtains of consciousness. This can prove fatal for a marketing program because at least 90% of mental activity that leads to perceptions, thinking and decisions takes place outside the conscious mind.
However, traditional research and marketing largely ignores the contents of the unconscious mind.

Why is this so, when contemporary brain research has learned that this is where motivations as well as perceptions and decisions originate? Because lacking an understanding of how minds work, researchers and marketers must depend by default on consumers conscious rational responses. However, disconnects between what consumers consciously think and what they feel at deeper levels often lead to marketplace failure.

Zaltman reconnects the emotional, feeling dimension of consumers minds (right brain as it were) with the perceiving, thinking (left brain) dimension of their minds to yield a holistic picture of customers minds.

Marketing often fails expectations because undue attention is given the contents of the rational left brain that respondents disgorge in traditional consumer research. Zaltman observes that researchers and marketers widely ignore the deep shadowy realm of motivating emotions because it is easier to record, process and analyze what consumers say directly about their needs and motivations.

Zaltman observes that recent brain research shows that emotional arousal is essential to the generation of sustained interest in a matter. Brain patients whose emotional capabilities have been destroyed while still having normal reasoning powers cannot determine whether one brand or another is best for them. Brand loyalty, it seems, is determined more by emotional responses than by rational analysis.

Zaltman shows how to get better guidance than direct questioning of them yields about what will stir consumers emotions. In doing this he addresses one of the most curious defects in traditional research and marketing: decisions are more often determined by the rules of statistical math than by tenets of behavior science. However, this should not be surprising because few marketers have grounding in how minds work. After all, a person can earn an MBA in marketing, even from online MBA programs, without a single course in behavior.

If the primary functional purpose of marketing is getting the attention of minds and influencing them to action, then it should follow that a deeper understanding of how minds work will make marketers more effective in doing that. However, with Zaltman s book in hand, one needs not go back to school for a degree in psychology to gain a practical understanding of how customers minds work.

A word of caution, however: This book is to be studied, not scanned. It does not offer the simple, sound bite-sized solutions that are so commonplace in marketing books and that make them quickly forgettable. Zaltman s book will not be forgettable to any person who makes a study of his book because he/she will experience a quantum leap in understanding how customers think.


At 10:15 PM, Blogger M T said...

I bought this book because it is phenomenal and recommended.

If you want to understand what motivates people, look at their past actions and purchasing patterns. Do NOT ask them their opinion.

More often than not, opinions are clouded through individual beliefs, morality filters, how they are feeling at the moment, false memories, and self-denial.

A focus group would indicate results better if each person was asked to fork over their hard earned money for the new product that they are considering...not how much their pupil dilates.


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