Gavan Fitzsimons is R. David Thomas Professor of Marketing and Psychology at the Fuqua School of Business, Duke University and co-chair of MSI’s March conference, “Behavioral Economics and Beyond: Insights and Applications.” He spoke with COO Marni Clippinger in February. Below is an edited version of his remarks.

1

Brand is still king.

Brands are still the central most powerful organizing force in the consumer lives of most people. They play roles that no one had ever imagined, offering a sense of community and means of self-expression and identity; they are even crowding out other things that have served those functions traditionally. The most startling is religion: we find that when we simply activate a brand in people’s minds by, for example, asking them to talk about a favorite brand, it weakens their commitment to religion and actually makes people believe less in God.

I grew up playing soccer and Adidas was a really important brand for me. If you activate Adidas for me, I think of all the people I played soccer with, the community of people that I belonged to. For someone else, it could be Tide detergent or Diet Coke or Ford.

People claim that brands are not nearly as strong as they used to be, but in my mind that couldn’t be further from the truth. Brands are incredibly powerful in the life of a modern-day consumer, more so than most of us realize.

2

Far more occurs outside of conscious awareness than most marketers would like to admit.

When you run an advertisement, your customers know that you’re attempting to persuade them. They have defensive mechanisms to filter advertisements so that they have limited impact. But when you get exposed to a brand outside of conscious awareness—through what I call “brief brand exposures”—there’s no defensive or filtering screen. These non-conscious mechanisms have a huge impact compared to conscious pathways.

If you don’t stop to think about it, but a brand just catches your eye, boom, it activates the positive associations in your mind and you go from there. One of your favorite brands is on the shelf in a movie, and before you know it, you’re having a Diet Coke as you watch the movie.

Our communications system has traditionally focused on deliberate interaction with customers; I’m not suggesting that they should stop. There are places for the traditional 30-second spot. If nobody has ever heard of your brand, you may well want to build those associations. We just need to shift more resources over to these brief brand exposure contexts.

Consider the allocation of $4 million for a Super Bowl spot versus $4 million spent over a whole bunch of product placements in televisions and films or in a low-profile public transit setting (for example, on a wall as you speed by on a train). For brands that have been around for many, many years and have very rich associative networks, these brief brand exposures can be tapped into very fruitfully.

3

Customers love to resist.

Many people have a “reactant” trait. When their freedom to choose is threatened, they do everything they can to reassert it. If you encourage these people to go down path A, their default reaction will be to go down path B. It’s happens in relationships all the time and it happens between firms and customers.

In my opinion, the worst advertising campaign ever was the “Just Say No” campaign to discourage kids from using drugs. Teenagers are the most reactant population in the world! If you tell teens not to do something, their automatic impulse is to want to do it.

In the lab, we looked at the effects of unsolicited recommendations. Imagine you are shopping for a new suit and you’re torn between navy and black. The salesperson says, “I think that you look fantastic in the blue suit.” Many of us would then choose the black.

The challenge for firms is to make customers feel like they’re part of the decision-making process. Progressive Insurance, for example, solicits your insurance needs, and then not only offers you a quote for their insurance policy but tells you what their key competitors would charge. They essentially shift to become a consultant that you have engaged rather than an insurance agent.

4

Think beyond the individual. 

For most of the history of marketing, we have focused on the individual as our unit of analysis. But what percentage of people who buy beer consume all of it themselves? It’s a tiny percentage; most of the time, people are buying it for their loved ones, for friends at a party, etc. as well as for themselves. This is true in most categories in a grocery store as well as in other businesses.

We’ve oversimplified for too many years. Even frequent shopper data was at the level of the household. So we assumed one person was making all the decisions. We have been “assuming away” an incredibly important piece of the equation!

I think decision making for others is a really promising new space where we can learn an enormous amount about what people are looking for and help fine-tune the buying experience as well as the way that we provide information to our customers.

For example, we’ve recently found that couples who have higher brand compatibility have higher levels of life satisfaction. So if I’m Procter & Gamble or any CPG firm, I want to think about all parties in a household making a brand choice. Can I connect one to the other and encourage families to make consistent choices? We know that’s going to lead them to be happier—and probably happier with our products.

5

Aligning external influences is key. 

Many external factors influence consumer choices, but firms are often reluctant to “manipulate” the customer’s environment or sensory experience through environmental cues like ceiling height or room temperature. The result is that customers are making choices in a context where these influential factors are randomly thrown at them rather than consciously or strategically controlled.

The room is going to be at a certain temperature. There are going to be emotional or non-emotional cues. Firms would be better off making sure that those factors align in a way that helps the customer make the choice that they’re going to be happiest with. Because if they make a choice that they’re happy with, they’re going to come back.

Disney might be the best example. Disney World offers an incredibly structured, controlled experience; there’s nothing natural about any of it. And yet every one walks away thinking, “Wow! What a great family experience!” That’s because Disney has thought through how the sound, the feel, the smell, the pace all come together in a strategic way so that customers have a predictable, positive experience.

Every firm should attempt to do that for their customers. It’s a huge undertaking, and oftentimes there are factors outside the firm’s control in the distribution channel. But that doesn’t mean that we should throw our hands up and walk away.

Think about your typical toothpaste-buying experience. You go to the store, you go to the toothpaste section and there are 200+ tubes of toothpaste. It’s a visual assault; it’s not pleasant in any way.

Imagine that the experience could shift so that when I walked into that environment, I could say, “I’d like to see all of the options in a whitening, breath-freshening baking soda toothpaste.” Two options come up and I see the prices and the brands and I make my selection. That strikes me as curating the environment to create a really positive experience for a customer.