3. The PFC: Home to the Executive Mind
The major goal of this book is to shine a light on the hidden influence of the habitual mind in customer behavior. However, the executive mind plays a critical role in most decision making, and marketers must understand how to work with both systems. Because the executive mind can think about only one thing at a time, it hands off routine decisions to the habitual mind. When the habitual mind encounters novelty, it engages the problem-solving abilities of the executive mind. When the executive mind becomes involved, it might take over the entire decision or make a small modification and then return control to the habitual mind.
Wendy Wood’s research shows that when habits are strongly formed, they control behavior more predictably than our intentions and goals. If you’re a betting person, bet on habits. But the executive mind is still quite powerful, and marketers and managers must understand its influence in all phases of product selection, product use, and product switching.
The cerebrum is the newest and, by far, the largest part of the human brain, fitting like a helmet over the limbic system and not quite encasing the brain stem. Although all the areas of the cerebrum are involved in processing information that is critical to successful marketing, our focus is restricted to the prefrontal cortex (PFC), the region of the brain just above your eyes. The PFC is the home of executive functions, including perception, problem solving, and imagination. It’s where the idea of “you” lives.
It’s difficult to resist using computer metaphors when discussing the brain because both are information-processing machines. A relatively new development in the World Wide Web provides a metaphor to describe the PFC: the mashup. A mashup is a Web application that combines data from other applications (actually, from application programming interfaces, or APIs) to create a unique representation of information. An early mashup combined Google Map’s API with crime statistics by zip code. Enter a zip code, and the mashup displays a map showing where crimes occurred.
The PFC works in much the same way, calling up and combining the vast repositories of information stored throughout the brain. This amazing capability provides the building blocks of language, art, culture, and civilization. It is also the source of our individuality: Even identical twins raised together will mash up their experiences and knowledge to create a unique sense of the world and of self.
Two mechanisms within the PFC strongly influence how information is mashed up: categorization and working memory. Discoveries in how we categorize and the role of working memory promise to radically alter our perceptions of branding, positioning, and advertising.
Imagine that you are planning a special evening with your significant other. Your internal representation of the nature of your relationship and the nature of the evening shape whether you choose to make an intimate dinner at home or make reservations at a restaurant. If you choose to go out, your goal will be to match the restaurant to these internal states—your date mashup.
You can approach this as a categorization-matching problem. The challenge is that restaurants can be categorized in a nearly infinite number of ways: by food type, cost, nationality, geography, past history, reputation, recommendation, ambience, and any combination of attributes. But how do we assign a specific restaurant to a particular category? Why is one restaurant reserved for special events and another chosen for a romantic evening?
As with customer satisfaction surveys and focus groups, asking the question gets you thinking about the answer, which obscures how the process naturally occurs. A specific kind of neuron in the PFC actually accomplishes the process of categorization.
From an evolutionary perspective, it is clearly advantageous for an animal to rapidly categorize another animal as a threat or a meal. Researchers at Massachusetts Institute of Technology (MIT) were able to demonstrate how this process occurs. They showed that individual neurons in the PFC of a monkey’s brain tune to specific categories. Monkeys were trained to recognize the generic concept of a cat (a house cat, a cheetah, and a tiger) and a dog (a German Shepard, a Pointer, and a St. Bernard) on a computer monitor. After training, one set of neurons fired when the monkey was presented with images of a cat, and another set of neurons fired when the monkey saw a dog on the monitor. This part of the experiment demonstrates what is referred to as the cell’s plasticity—its ability to learn.
Researchers then wrote a program that presented a morphed image that combined various percentages of cat and dog features. When the image was more than 50% dog, the dog category neurons fired. But when the image shifted to more than 50% cat, the dog category neurons were silent and the cat neurons fired. Other areas of the brain were monitoring the physical attributes of these chimeras, but the category neurons were all or nothing.
The categorization process is robust and flexible. On one hand, an object is either in or out of a category, but on the other hand, the category can evolve. We might learn to categorize birds as flying creatures, but we can accommodate penguins and ostriches. We can even create seemingly contradictory categories, such as sugar-free candy and low-fat ice cream. Let’s take a look at how category neurons impact our marketing efforts.
Several years ago, a maker of frozen dinners wanted to expand into the frozen desert market, launching a new ice cream with its familiar brand. The business case looked persuasive: The company already had the distribution channels (including refrigerated trucks), longstanding relationships with retailers, and millions of existing customers. They only needed to move a couple of freezer units over in the grocery store. Unfortunately for this company, the real distance they needed to move was not in the store, but in the executive mind.
This company had successfully created a strong but specific brand position with customers—its brand was narrowly described around the concept of frozen dinners. When customers saw the company’s brand, they thought mashed potatoes and gravy, not chocolate ripple. The company’s hopes for increased profits melted.
How unfair it seems that Healthy Choice is able to move effortlessly all over the grocery. Not only is it in the frozen dinner and ice cream freezers, but it’s also in the cookie, soup, and cracker aisles. Healthy Choice created a broad category in the working memory of the executive brain around the idea of healthful food. Its success comes from creating a convenient shortcut for weight-conscious customers.
Understanding how customer segments create categories is essential for branding and positioning. The cell phone was launched in 1983, creating a new product category. One estimate by a prestigious research company predicted that the total market for cell phones by the year 2000 would be only 900,000. The researcher’s mistake was to categorize the cell phone as simply another phone. The actual number of cell phones in the United States at the end of 1999 was almost 100 million.
When Apple introduced the Newton in 1993, the very clever device primarily struggled because it didn’t lend itself to easy categorization. Several other manufacturers came out with electronic organizers, but not until the Palm Pilot emerged did the category of personal digital assistant (PDA) catch on in a meaningful way. The Newton was brilliant, but it was so far ahead of its time that it was not around when the PDA category became firmly but briefly established.
The PDA did not die as much as it morphed into a new category. When Palm, RIM, and others combined the functionality of PDAs with cell phone capabilities, another new category emerged: the smartphone. When that category was established in the executive minds of business customers, Motorola, Samsung, HTC, and others could gain instant traction by calling their new devices smartphones as well.
Success in creating new categories is elusive, especially for technology companies. Intel and Microsoft have spent millions promoting tablet computers and Ultra Mobile PCs (UMPCs), but neither idea has caught on. Similarly, e-books, Internet appliances, and pen computing have struggled for acceptance. Anybody remember the clear rage of the 1990s that brought us see-through Crystal Pepsi and Miller Clear?
How your product is categorized is critical to your success, but it is only partially under your control. By understanding the rules that customers use to make their category judgments, a company can position its brand appropriately. Most companies attempting to create a category fail. For every Apple iPhone, a hundred Audreys (3Com’s short-lived Internet appliance) have failed.
How often do you return to a cookbook while following a recipe? Your answer reflects how well your working memory functions. Working memory enables us to hold on to information long enough to decide what to do with it. If you have ever tried to remember a phone number just long enough to dial it, you know the utility and frustration of working memory. Researchers used to think of this cognitive function as simply short-term memory, a stepping-stone to long-term storage. It is now believed that working memory is a separate function that not only holds on to ideas, but also actively manipulates them in the PFC to solve problems.
As we communicate with customers, whether trying to sell something or explain how a product operates, we are making demands on their working memories. Patricia Goldman-Rakic pioneered our understanding of working memory and its location in the PFC. She called this area the blackboard of the mind, and she described the process as holding certain data “online” so that the working memory can retrieve and manipulate information from other areas of the brain to form new associations at subsequent steps to solve problems. Goldman-Rakic was a brilliant researcher with a tenacious spirit, and her contributions were recognized across the disciplines of psychology, psychiatry, and neuroscience. Tragically, she was killed at 66 while absentmindedly crossing a busy street near her home in Connecticut, her attention undoubtedly on her research.
Many of our marketing efforts fail or succeed as they come to fruition in the working memory of the PFC. Can a potential customer retrieve your brand from memory to consider your company as a solution to the problem she is currently facing? Does your online ordering system overly tax customers’ working memory, causing them to abandon their carts before check out? Virtually all our product, promotion, and distribution choices impact our customers’ ability to process our offer in their working memories.
Working memory varies significantly among individuals, which is another area where very bright people can make critical mistakes by assuming that their customers think like they do. It’s better to assume that your customers would prefer to minimize the need to consciously attend to your products and service. Countless companies have installed automated voice-response systems at the front end of calls into customer service. If you offer more than three or four choices, you have already exceeded the comfort level of most customers’ working memory.
Working memory is a finite resource that customers use to compare your company’s offer with their needs. The more complicated your message or the more abstract your promise, the more you tax your customers’ working memory.
For executives, managers, and marketers, the brain’s dual nature goes a long way to explaining many of our most persistent challenges. We might like to think that the implications of these new insights can be easily transferred into our existing business models, but, unfortunately, that is not the case. We have built our corporations on a flawed understanding of customer behavior. It isn’t enough to put up posters saying, “Be the Customer’s Habit” and “Beware: Use of Our Product May Be Habit Forming.”