PowerPoint Presentation

NeuromarketingNew trends in neuro-sell and ecommerce

Ask people about there background.

What they do?

Have you heard about neuromarketing before?

Any psychologist in the room?1

My background

I did a degree of psychology and lecture science methodology at the university of Buenos Aires.I then study behaviourism applied to cocaine addiction and work with autistic child's.

At the same time I was making my living as a developer when personal computers arrive.I joined IBM, then move to a Microsoft Certification Centre to teach asp, .net vba etc.

Continue working as a therapist and a developer until I start traveling and decide to give up psychology.

I move to brazil where I work as a web developer for 5 years and then move to UK where I join the British Computer Society and then Bussiness Objects and SAP.

About 5 years ago I meet Mariano and we found Open-ecommerce together.2

About open-ecommerce

We are a small digital agency setup as a Social Enterprise about 5 years ago.

We specialize in ecommerce

Our main goal is to help people from different backgrounds to sell products and services over the web.

Our vision is to build an ecommerce school in south London.

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Our role in a e-shop development

By Swapnil Chafale

We have very different type of customers some have a big budget and normally come trough agencies and some other with a very small budget.Depending on the budget more people will be involve in the project: User Experience Designer (UX)User Interface Designer (UI)Front End DeveloperBack End DeveloperWeb DesignerCommunication Designer

In very tide budgets sometimes we have to play all roles.

Customers can have difference motivations to have an ecommerce but in general what they need from us are conversions.

Our main objective with our customers will be to increase there conversion rates and to do this we need to understand how marketing applied to e-shops works.

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Why people take the decision to buy something ?Basic NeedsConvenienceTo replace somethingScarcityStatusLower pricesName recognitionCompulsory PurchasePeer PressureReciprocity or GuiltEmpathyAddictionIndulgence

Ask people about what they think5

ModelsConsumer Decision Process ModelBlack Box ModelPsychoanalytic ModelLearning ModelSociological ModelNicosia Model (1966)Howard Sheth ModelAndreason Model (1965)Engel Kollat Blackwell Model (1972)Shethnewman Gross Model (1991)Consumer Behaviour

Consumer behaviour it blends elements frompsychology,sociology,socialanthropology,marketingandeconomics.

The science or art of convince people to buy your products or services.

Marketing is thescienceof choosingtarget marketsthrough market analysis andmarket segmentation, as well as understandingconsumer behaviorand providing superior customer value.

The origins of the concept of marketing have their roots with the Italian economistGiancarlo Pallaviciniin 1959

It attempts to understand the decision-making processes of buyers, both individually and in groups such as how emotions affect buying behaviour.

Traditional consumer research processes will research on representative group samples trough questionnaires and more anthropological approaches analyse the data and generate reports to help the marketers to create strategies.6

Are we rational?

In 1995 Antonio Damasio change the way we see emotions as fundamental component of rationality.Descartes' Error: Emotion, Reason, and the Human Brain, Putnam, 1994; revised Penguin edition, 2005

When individualsmake decisions, they must assess theincentivevalue of the choices available to them, usingcognitiveand emotional processes. When the individuals face complex and conflicting choices, they may be unable to decide using only cognitive processes, which may become overloaded.In these cases (and others),somaticmarkers can help decide.

Somatic markers are associations betweenreinforcingstimuli that induce an associatedphysiologicalaffectivestate. Within the brain, somatic markers are thought to be processed in theventromedialprefrontal cortex(VMPFC; a subsection of the orbitomedial PFC, OMPFC).These somatic marker associations can recur during decision-making and bias our cognitive processing. When we have to make complex and uncertain decisions, the somatic markers created by the relevant stimuli are summed to produce a net somatic state. This overall state directs (or biases) our decision of how to act.

This influence on our decision-making process may occur covertly (unconsciously), via thebrainstemand ventralstriatum, or overtly (consciously), engaging higher cortical cognitive processing. Damasio proposes that somatic markers direct attention towards more advantageous options, simplifying the decision process.

In 2002, Daniel Kahneman, along withVernon Smith, received the Nobel Prize in economics. Kahneman received his prize for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.

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Emotional Brainconscious vs unconscious

conscious unconscious or rational vs irrational

(we talking in scientific terms not the Freudian unconsciousmind of the psychoanalysis)

Most of neuroscientist agree that 95% of our thoughts, emotions, and learning occur without our conscious awareness.

Reptilian or the old brain is concerned with our survival. The old brain is constantly looking at the environment around us, deciding what is safe and what isnt. Its also the part of our brain that takes care of things automatically, such as digestion, movement, and breathing.

The Limbic brain is where emotions are processed. Its what causes you to feel things, and its the root of a lot of your impulse buying.

The new brain, or cortex, is the most recent structure. Language processing, speech, reading, playing music, listening to music, thinking thoughts.8

The new way to sell marketing?

Now is the boom of neuromarketing or neuroeconomics book sales.

Some years ago neuroscience books use to be at the academic sections in the bookstores and move to the best sellers shelfs.

Neuromarketing is all about understanding how our brains work, and employing that understanding to improve both our marketing and our products

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How we know about the brain

How to study the brain.

http://faculty.washington.edu/chudler/hist.html

Evolution of the neuroscience 90s the decade of the brain.

The Decade of the Brain was a designation for 1990-1999 by U.S. president George H. W. Bush as part of a larger effort involving the Library of Congress and the National Institute of Mental Health of the National Institutes of Health "to enhance public awareness of the benefits to be derived from brain research".

The BRAIN Initiative (Brain Research through Advancing Innovative Neurotechnologies, also referred to as the Brain Activity Map Project) is a proposed collaborative research initiative announced by the Obama administration on April 2, 2013, with the goal of mapping the activity of every neuron in the human brain Based upon the Human Genome Project, the initiative has been projected to cost more than $200 million per year for ten years.

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fMRI (Functional magnetic resonance imaging)

Functional magnetic resonance imagingorfunctional MRI(fMRI) is afunctional neuroimagingprocedure usingMRItechnology that measures brain activity by detecting associated changes in blood flow.[1]

The primary form of fMRI uses theBlood-oxygen-level dependent(BOLD) contrast

fMRI is based on the idea that blood carrying oxygen from thelungs behaves differently in a magnetic field than blood that has already released its oxygen to thecells. In other words, oxygen-rich blood and oxygen-poor blood have a different magnetic resonance.

https://www.youtube.com/watch?v=BmQR57V5TVU

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Functional magnetic resonance imaging

This is a type of specialized brain and body scan used to mapneuralactivity in thebrainorspinal cordof humans or other animals by imaging the change in blood flow (hemodynamic response) related to energy use by brain cells.[3]

Since the early 1990s, fMRI has come to dominate brain mapping research because it does not require people to undergo shots, surgery, or to ingest substances, or be exposed to radiation, etc.[4]Other methods of obtaining contrast are arterial spin labeling[5]anddiffusion MRI.

The MRI machine is an expensive piece of equipment (costing between $500,000 and $2 million)12

EEG (Electroencephalogram)

Electroencephalography(EEG) is the recording ofelectricalactivity along thescalp.

EEG measures voltage fluctuations resulting from ionic current flows within theneuronsof thebrain.[1]

In clinical contexts, EEG refers to the recording of the brain's spontaneous electrical activity over a short period of time, usually 2040 minutes, as recorded from multipleelectrodesplaced on thescalp.

Diagnostic applications generally focus on thespectral contentof EEG, that is, the type ofneural oscillationsthat can be observed in EEG signals.13

EEG

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Biometrics

biometrics measurements of physiological responses in the body:

Respiration ratesEye movementsblinkinggalvanic skin responseFacial muscle movementBody movement

Many traits that lend themselves to automated recognition have been studied, including the face, voice, fingerprint, and iris. 15

Key points in Neuromarketing

Not everybody agree

Erik Du Plessis in his book The branded mind complains about the over-claiming over the experiment done on marketing using fMRI or EEG.

He also brings the term neurobullshitting

MRI predicts the decision of buy as good as self-reports.

My personal view we have to be careful to extrapolations in science.16

Pay = Pain

Researchers at Carnegie Mellon and Stanford Universities used fMRI to see the effect of payment light up the pain centre of our brains.

Bundling Minimizes Pain more for the same price

Fairness or unfairness of the deal (experience at post office)

My experience at the oxford street shop.

In brainfluence Roger Dooley advice not to sell as a sushi chef

Credit as painkiller (letthemtalk, credit cards, paypal, skype)

Minimize pain, (cruises, love film, eat as much you can) no sushi style

Buying shipping 2 prices ?

Dont show the money, money as priming (boodles) take the prices from home page.?

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The use of a decoy to promote a productOffer A:$59 Internet Only Subscription (68 chose)$125 Internet and Print Subscription (32 chose)Predicted Revenue $8,012Offer B:$59 Internet Only Subscription (16 chose)$125 Print Only Subscription (0 chose)$125 Internet and Print Subscription (84 chose)Predicted Revenue $11,444

Predictably irrational by Dan Ariely

A decoy product or offer can be used to make another product look like a good value.

According to Ariely, decoys change behaviour when a subject is choosing between alternatives that are more or less equally attractive.

He gives an example of choosing between a trip to Rome and a trip to Paris, both of which include free breakfasts. One might expect a slow decision making process with a more or less even split between the two alternatives.

Ariely suggests that introducing a decoy, a trip to Rome with no breakfast, would make the original trip to Rome more attractive, and that given those options the trip to Rome with breakfast would handily beat the similar Paris trip.

The experimenters found that they can double the sales of an expensive offer by simply adding another similarly priced offer that was inferior in quality.

One study used fMRI scanning to see what happened in our brain choosing between options shows that 2 equally attractive option caused the subjects to display irritation due the difficult of choosing.

When a less attractive option it is given make it easer and more pleasurable to decide.18

Mental BoxesWe take decisions in relative terms

Mental boxespeople would spend 15 minutes walking to save $7 on an $18 item but wouldnt take the same 15-minute trip to save the same amount on a $455 item.

according to Loewenstein the negative activation produced by cost is relative

People make different choices depending on what the default answer is, or whether the description emphasizes what one can gain or what one can lose.

Kahneman, Daniel and Tversky, Amos. "The Framing of Decisions and the Psychology of Choice" Science 211 (1981), pp. 4538, copyright 1981 by the American Association for the Advancement of Science.

Much depends simply on how the choice is worded. For example, consider the hypothetical scenario* in which

"an epidemic is likely to kill 600 people if left untreated".

Scenario 1Test subjects were told that:Treatment A will save 200 people, andTreatment B has 1/3 chance of saving 600 people and 2/3 chance of saving nobody.An overwhelming majority opted for Treatment A, whichguaranteed a positive outcomefor 200 people. (Even though it meant 400 people would surely die.)

Scenario 2Test subjects were given the same data, but phrased in a negative way, i.e:Under Treatment A, 400 people will dieUnder Treatment B, there is a 1/3 chance that nobody will die and a 2/3 probability that all 600 will die.In this scenario, the overwhelming majority chose Strategy B. They were willing to risk the possibility of a larger negative outcome, to avoid theguaranteed negative outcome of 400 people dying.Note that scenarios 1 and 2 areexactly the same. They're just worded differently. Yet the respondents reached exact opposite conclusions. So be careful how you word your options!

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Anchoring effect

In many situations, people make estimates by starting from an initial value that is adjusted to yield the final answer.

The initial value, or starting point, may be suggested by the formulation of the problem, or it may be the result of partial computation. In either case, adjustments are typically insufficientthat is, different starting points yield different estimates, which are biased toward the initial values. Judgment Under Uncertainty by Kahneman, Slovic and Tversky

If you move up to a nice car or a big house, a nice computer or an expensive smartphone, you become anchored and find it difficult to back move down later, even if you should.

When you haggle over the price, you are pulling away from the anchor, and both you and the dealer know this.

Theanchoring effect can also slip in unannounced. Big numbers bring big sales.Arley and the Social Security number experiment.

Habana sample at the airport. Hiding the anchor with a different product.

Research shows that having too many choices reduces sales, due to a sort of paralysis of analysis.

Jeniszewski and Uy studies pricing. Avoid round numbers it is better 805.50 than 800.

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One thing at the time

Energy travels to the brain via blood vessels in the form of glucose, which is transported across the blood-brain barrier and used to produce adenosine triphosphate (ATP), the main currency of chemical energy within cells.

When we are thinking different areas of the brain light up and generate

The easier you make it for the brain to receive and absorb your message the better.

Keep it simple (the apple success is a clear example)

There are fMRI studies that shows that older brains were worse at suppressing irrelevant information.

In his bookEmotional Design, Don Norman describes why attractive things work better.

He explains how attractive products trigger our creativity and ultimately expand our mental processes, making us more tolerant of minor difficulties. What he is saying is that attractive products make problem-solving easier, which makes them absolutely essential.

User experience designer Walter Aarron in Designing for Emotion defines emotions as the lingua franca of humanity, the native tongue that every human is born with.

He describeshow important emotional experiencesare because they make a profound imprint on our long-term memory and create an experience for users that makes them feel like theres a person, not a machine, at the other end of the connection.

Normans three levels of visual design and introducepractical ways to build emotioninto a website.Visceral levelBehavioural levelReflective level

A website usually includes several elements that can make a design more personal and that can be regarded as emotion carriers. Some of these are obvious, such as colors, images and shapes. Others are not so obvious, such as humor, recognition, dissonance, tone of voice and engagement.21

Free is better than a bargain

FREE! is more powerful than any rational economic analysis would suggest.

When Amazons French division moved from charging a negligible shipping fee of 20 cents to free shipping, their sales dramatically increased.

If you want to sell more of something, use that power.

Want to spark sales of a product? Try offering something for FREE! with it.

Want to get the widest possible sampling of a new product?

Use a FREE! sample.

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People look to others to see what they should do

In the book Neuro Web Design: What Makes Them Click?, Susan Weinschenk reveals how to design web sites that appeal to the unconscious mind in order to move people to action.

Social ValidationPeople look to others to see what they should do.

Online ratings and reviews are a very powerful way to influence behaviour.

We will do what others are doing. We will be drawn to belong, says Weinschenk

The principle of social proof is connected to the principle of liking: because we are social creatures, we tend to like things just because other people do as well, whether we know them or not. Anything that shows the popularity of your site and your products can trigger a response.

Undercover Marketing or Stealth marketing (sony ericson)

Bridge of the parliament Cap game where it's hidden the ball, Oxford street perfume experiment and how they cheat people.

We feel anger when we think something that happened to us is wrong, unfair, and undeserved.23

Limited availability

The effect of scarcity in decision making

If there is limited availability of something, we assume it is more valuable, and we want it even more.

We see this scarcity invoked all the time on e-commerce sites. Last one in stock or limited time only are familiar phrases.

Restricting information to members only or charging a fee are other ways to add value to your content.

If something is inaccessible or forbidden, then we really want it!

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Similarity

We find it easier to like those we are similar to or those who we perceive to share our background or values.

In order to persuade people, the stories and photos on a web site need to match the target audience or reflect who the audience wants to be.

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Tell stories

First time I hear about stories in ILN I didnt understand what he was talking about.

When we think about a story we actually think in pictures and visual images.

Susan Weinschenk in neuro webdesign say: Stories and pictures on a web site are the most powerful ways to get and hold our attention and persuade us to take action.

Because our brains are built to process pictures, and we think in pictures, presenting information as pictures is the most efficient way to present information to people.

Inkavital: Customer ask if they could give the money to this little kid.

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Authority

Most people have heard of the famousMilgram experiments, in which volunteers were convinced to continue delivering what they thought were incredibly painful electric shocks to unseen subjects, even when they could hear (faked) screams of pain. The presence of a man in a lab coat telling them to continue was enough to earn the compliance of nearly all the volunteers.People appear hard-wired to respond to authority (or the appearance of authority). How can you use this to sell?

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scarcity

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authority

Predictably irrational by Dan Arely

Carnegie Mellon University economics and psychology professor George Loewenstein

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Social validationFree delivery

Bibliography:

Du Plessis, Erik. 2011. Branded Mind, The : What Neuroscience Really Tells Us About the Puzzle of the Brain and the Brand. London: Kogan Page Limited.Este es el que habla un poco encontra de los otros. Esta online.---------------------------------------------------------ROGER DOOLEY. Brainfluence 100 WAYS TO PERSUADE AND CONVINCE CONSUMERS WITH NEUROMARKETING. New Jwrsey: John Wiley & Sons, Inc.

Este lo baje en la compu vaio sino online estoy sacando muchas cosas

-------------------------------------------------------------------------------------------------Pradeep, A. K. anio. The buying BRAIN, Secrets for selling to the Subconscious MindLo tengo como ebook en la tablet---------------------------------------------------------------------TitleNeuroeconomics : decision making and the brain [electronic resource]AuthorGlimcher, Paul W.

para tener en cuenta

Predictably irrational by Dan Arely

Carnegie Mellon University economics and psychology professor George Loewenstein

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SimplicityEngaging emotions

Rebecca wanted a very clean site to avoid distraction and bring the attention to the products.31

AnchoringScarcity

Bibliography:

Du Plessis, Erik. 2011. Branded Mind, The : What Neuroscience Really Tells Us About the Puzzle of the Brain and the Brand. London: Kogan Page Limited.Este es el que habla un poco encontra de los otros. Esta online.---------------------------------------------------------ROGER DOOLEY. Brainfluence 100 WAYS TO PERSUADE AND CONVINCE CONSUMERS WITH NEUROMARKETING. New Jwrsey: John Wiley & Sons, Inc.

Este lo baje en la compu vaio sino online estoy sacando muchas cosas

-------------------------------------------------------------------------------------------------Pradeep, A. K. anio. The buying BRAIN, Secrets for selling to the Subconscious MindLo tengo como ebook en la tablet---------------------------------------------------------------------TitleNeuroeconomics : decision making and the brain [electronic resource]AuthorGlimcher, Paul W.

para tener en cuenta

Predictably irrational by Dan Arely

Carnegie Mellon University economics and psychology professor George Loewenstein

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A/B Testing

A/B testing is a simple way to test changes to your page against the current design and determine which ones produce positive results.

It is a method to validate that any new design or change to an element on your webpage is improving your conversion rate before you make that change to your site code.

Bolg about how to setup http://www.creare.co.uk/ab-split-testing-magento-with-google-analytics-cro#installing

Google analytics and experimenthttps://developers.google.com/analytics/devguides/platform/experiments-overview

Free magento modulehttp://www.magentocommerce.com/magento-connect/catalog/product/view/id/19086/s/creare-magento-ab-split-testing-2377/33

Thank you!!!

Any questions?