Understanding Consumer Persuasion Through the Lens of Neuromarketing with Roger Dooley

Well, I guess, you know, that is sort of a typical entrepreneurial journey story, because everyone is different. That’s what makes it typical. And normally, there is a lot of weird, sideways or diagonal motion. Things never proceed in a linear fashion, or rarely proceed in a linear fashion. True, after my one venture that I was talking about, my original partner and I exited the business where our third partner continued on, primarily in the B2B space, because our strength and interest really was in the direct marketing space. Part of our getting the bank off our backs was to wind down the catalog business, and we didn’t really see a good way of continuing in that business, so we separated from that.

After a little bit of sort of fumbling around with a couple of, you know, sort of an entrepreneurial search, like when suddenly you’re saying, “Oh, do…?” because it wasn’t this, you know, sort of carefully planned process, I co-founded a business in the IT outsourcing space. That business probably ran for, I don’t know, nine or ten years, most of that time independent. Then ultimately, we were acquired by a somewhat larger business, and I continued with them for a few years after that. That too was an education. We were there for the Y2K boom and then bust.

So, but after that, or while, really, while that was going on, I really got a few other things going. I’m always big on hobbies and side gigs, if only for your own amusement, if only to keep your mind stimulated and doing some other stuff. At that point, I really had a couple of other side gigs going back during that same time period. While I still had the other business going, we had my, well, my partner in that business, my original partner, had an e-commerce company that wasn’t getting a lot of sales, and he said, “Gee, can you help me figure this out, because it’s not going well?” I dug into SEO. This was in the really early days of SEO and search engine optimization. I did my homework for a while, and started working on his website. Or, actually, it was our website. He brought me into that on an equity basis, and we had like five times the traffic in a matter of months. At that point, SEO was relatively straightforward. Even then, it was always changing, but it wasn’t quite as complicated because the algorithms were simple. It’s just that they kept changing. You just had to sort of decode them and change what you were doing to adapt to them.

But nevertheless, we said, “Well, this is a service that we should offer to clients in our IT business because most of them didn’t get it.” And that got me into digital marketing, basically. We never were that successful in selling SEO services, primarily because we were so early. It was when people don’t know that they need you. Yeah, and you’ve got to explain to them why they need you. And they say, “Well, no, my web developer did that.” And you say, “No, your web developer didn’t do that. Look, look at your results in Google.” Yeah. And they go back and they beat on the web developer and say, “Okay, now they really did it.” Yeah, and you know, so like 12 months later, you have to go back and say, “Look, they really didn’t do it again.” Yeah, that was not a great success, but it did teach me a lot about digital marketing.

So, with a couple of other people who were college experts, I started a college admissions website to help parents and students through that process, because I had just gone through it with both of my kids. At that point, it was really arcane. There were very few good books on the topic. There were no good websites. So, we started basically an information site with a forum, and this ended up, over the years, becoming a rather sizable venture. It became the biggest site in the space. Ultimately, we were hitting 30-40 million page views in a good month, and we sold that to part of the Daily Mail group. I joined them for a while as their VP of Digital Marketing and tried to help them, sort of, they were a very good company with some very smart developers but didn’t have that sort of on-the-ground digital web savvy to figure out how to get the users to your site and how to keep them engaged. It was really a good marriage because they had a great ad sales force. They quadrupled my old company’s revenue in like, the first 12 months. It was one of those acquisitions that really, at least for a period of years, was a win-win. Both prospered as a result of it.

But, as yet, another little side thing I had going on. A few years after that, I saw neuroscience and marketing coming together, and there were certainly other people doing that. There were even a few early neuromarketing startups, then people who were offering neuromarketing services saying, “Okay, we’re going to take your advertisement variations, your two commercials, and we’re going to measure people’s brain activity, and we’ll tell you which one is going to sell more stuff.” Now, these early startups were either sketchy or just they didn’t really have their science very solid at that point, but nevertheless, it was clear there was something to work with there because up to that point, advertisers were relying on focus groups, on surveys. They were asking people, “Okay, what, which ad did you like better? Did you like ad A better, B better?” You know, and things like that. That really tells you nothing about, you know, what will actually do. Even if you ask people, “Do you think you would buy after showing different groups?” People’s ability to forecast their future purchases after seeing ads is really not very good. So, there was a lot of opportunity there.

So I started writing about using these tools of neuroscience to improve advertising, improve marketing, and so on, improved market research. What I found, though, was as I wrote more those articles, where I talked more about applying behavioral science, about tools that were accessible, not just to big brands like BMW or Coca-Cola, but accessible even to the smallest entrepreneurial startups. Where they could say, “Oh, okay, I understand the idea of scarcity, for example,” which is one of childhood as it goes back to the 1980s. You know, if I show that my product or service is a little bit scarce, then more people will buy it. And, you know, these days, we’re used to that thinking. Go to any travel website, go to Expedia or Booking or something about 40-47 scarcity cues, like, “There are only two rooms left,” or “42 people are looking at this right now,” or “In the last 24 hours, my God, even you may have only seconds left to book the room of your lifetime.” Click now. But, you know, these insights a few years back were, I mean, maybe not revolutionary, but they weren’t widely known.

So, I found that content was getting more traction than how you could put people in a $5 million FMRI machine and see which ad they like better. So that sort of steered my direction, and ultimately my blogging content and article content was sort of a mix of both skewing toward behavioral. And when Wiley approached me for a book, I really, after I started off writing a book a little bit more geared to the neuromarketing and applied consumer neuroscience type stuff, I decided that that was going to be a very limited type thing, and so I scrapped what I had and skewed much more in the direction of 100 short chapters on different pieces of scientific research or scientific principles that anybody could apply, and showed how they could apply that. Because I wasn’t coming at it from an academic perspective, but also from a hands-on guy who had multiple successful startups. So, that really resonated with people.

And my first book was Brainfluence, which is actually, even though that came out in 2011, it is still continuing to sell. And it’s not selling wildly now, but every month I get sales. I just had a couple of new different language translations options. So, it shows that those ideas are, no doubt, a lot more enduring than some of the sort of ephemeral neuroscience ideas that you know what happened two years ago is old news now, because the technology has changed. There’s new developments.

Well, Shane, I’ll take this a slightly different direction. Do you mostly listen to books? You mentioned listening to books several times. Is that your preferred consumption medium?

Yeah, well, that’s interesting. My challenge with, I like to listen to books too. The difficulty I have, of course, is that you can even, I often listen, say, like, at 2x speed. And, you know, it lets you finish a book faster, but a long book still takes quite a while to finish. And for doing the podcast, I often have to consume a book a week for that, plus other books I may not be doing a podcast about that I want to consume because I think they could be useful for me. So I end up having to do a lot of my reading on paper, or occasionally on Kindle. I tend to prefer paper, but I do like listening to audiobooks. But one challenge that I have, and I’m wondering if you’ve solved this, is taking notes or jotting stuff down because, like, if you’re driving, you know, you can’t really—I’m probably not going to jerk my car over to the side of the road to write something down on a pad, nor am I going to even mess with the audible interface to try and bookmark something that I’ll probably never find again. What’s—have you found a good solution for that? Because I know that I have heard really interesting stuff in books that, by the time I got back to my office or home, I’ve forgotten about and will never remember again.

One thing that I found that kind of works, although I don’t do it well enough, is I actually put a note app on my Android screen, so I don’t even have to open an app. I can just flip to my second screen or put it on my home screen and tap it to jot down a note. If I’m on a treadmill, walking—not running—but walking at a pace where I can do something with my hands without falling off, or if I’m walking on a street or sidewalk, I can take a very short note to jog my memory. I figured that if I can make a three-word note with a few keywords, like an author’s name, or if they mention a study done by a particular scientist or a company that did something interesting, just a few keywords will be enough for me to track that down, either in the book or in Google.

I’ve heard of some people who buy all three versions of the book. They listen to the audiobook, have the paper book because they like the tangible aspect, and buy the Kindle version because it’s searchable. I don’t like Kindle for consuming that much, except when I’m traveling. When I’m traveling, it’s obviously great because you don’t have to carry books with you. But otherwise, I prefer paper. The big advantage Kindle has is that it’s searchable. If you remember somewhere in the 350-page book, the author mentioned a particular place, person, or study, you can find that without flipping through pages trying to remember. I think it was on the page halfway through… So, that’s really an advantage. Sometimes Google Books can serve that purpose too. It doesn’t work for every book, but for books indexed in Google Books, you can track down where something appears in the book. That will be a cue to find out what you need to know.

Well, I guess you know, that is sort of a typical entrepreneurial journey story, because everyone is different. That’s what makes it typical. And normally, there is a lot of weird, sideways or diagonal motion. Things never proceed in a linear fashion, or rarely proceed in a linear fashion.

True, after my one venture that I was talking about, my original partner and I exited the business, and our third partner continued on, primarily in the B2B space, because our strength and interest really was in the direct marketing space. Part of our getting the bank off our backs was winding down the catalog business. We didn’t really see a good way of continuing in that business, so we separated from that. After a little bit of fumbling around with a couple of entrepreneurial searches—when suddenly you’re saying, “Oh, do I…” because it wasn’t a carefully planned process—I co-founded a business in the IT outsourcing space. That business ran for, I don’t know, nine or ten years, most of that time independent. Then, ultimately, we were acquired by a somewhat larger business, and I continued with them for a few years after that, and that too was an education. We were there for the Y2K boom and then bust.

While that was going on, I had a couple of other side gigs. I’m big on hobbies and side gigs, if only for your own amusement or to keep your mind stimulated. At that point, I had a couple of other side gigs going. Back during that same time period, while I still had the other business going, my partner in that business, my original partner, had an e-commerce company that wasn’t getting a lot of sales, and he said, “Can you help me figure this out? It’s not going well.” I dug into SEO—this was in the really early days of SEO—and did my homework for a while. I started working on his website (or actually, it was our website). He brought me into that on an equity basis, and we had like five times the traffic in a matter of months. At that point, SEO was relatively straightforward. Even then, it was always changing, but it wasn’t as complicated because the algorithms were simple. It just kept changing, and we had to decode them and adapt.

We said, “Well, this is a service we should offer to clients in our IT business because most of them didn’t get it.” That got me into digital marketing. We were never that successful in selling SEO services, primarily because we were so early. It was when people didn’t know they needed you, and you had to explain why they needed you. They’d say, “Well, no, my web developer did that.” And we’d say, “No, your web developer didn’t do that. Look at your results in Google.” And they’d say, “Well, okay.” And they’d go back and beat on the web developer, saying, “Okay, now they really did it.” But 12 months later, you’d have to go back and say, “Look, they really didn’t do it again.” That wasn’t a great success, but it did teach me a lot about digital marketing.

With a couple of other people who were college experts, I started a college admissions website to help parents and students through that process. I had just gone through it with both of my kids, and at that point, it was really arcane. There were very few good books on the topic, and there were no good websites. So we started an information site with a forum, and this ended up, over the years, becoming a rather sizable venture. It became the biggest site in the space. Ultimately, we were hitting 30-40 million page views in a good month, and we sold that to part of the Daily Mail group. I joined them for a while as their VP of Digital Marketing to help them, because they were a very good company with some very smart developers but didn’t have the on-the-ground digital web savvy to figure out how to get the users to their site and keep them engaged. It was a good marriage because they had a great ad sales force. They quadrupled my old company’s revenue in the first 12 months. It was one of those acquisitions that, for a period of years, was a win-win. Both prospered as a result.

A few years after that, I saw neuroscience and marketing coming together. There were certainly other people doing that. There were even a few early neuromarketing startups offering neuromarketing services, saying, “We’re going to take your advertisement variations, your two commercials, and we’re going to measure people’s brain activity and tell you which one will sell more.” These early startups were either sketchy or just didn’t have solid science at that point. But it was clear there was something to work with because, up to that point, advertisers were relying on focus groups, surveys, and asking people which ad they liked better—“Did you like A better or B better?” That really tells you nothing about what will actually work. Even if you ask people, “Do you think you would buy after seeing this?” their ability to forecast their future purchases after seeing ads is really not that good.

So, there was a lot of opportunity there. I started writing about using neuroscience tools to improve advertising, marketing, and market research. What I found, though, was that as I wrote more, those articles where I talked about applying behavioral science—about tools that were accessible not just to big brands like BMW or Coca-Cola, but even to the smallest entrepreneurial startups—gained more traction. For example, one principle, scarcity, was already well-known in the 1980s. If I show that my product or service is scarce, more people will buy it. These days, we’re used to that thinking. Go to any travel website, go to Expedia or Booking, and you’ll see scarcity cues—“Only two rooms left! 42 people are looking at this now! You may only have seconds left to book the room of your lifetime!” But these insights were not widely known a few years back.

I found that this content was getting more traction than discussing how to put people in a $5 million FMRI machine to see which ad they liked better. This led me to shift my focus. Ultimately, my blogging content and article content was a mix of both, but skewed toward behavioral science. When Wiley approached me to write a book, I started off writing one that was more geared toward neuromarketing and applied consumer neuroscience. However, I decided that this would be a very limited type of book. So, I scrapped what I had and shifted to 100 short chapters on different pieces of scientific research or principles that anybody could apply, showing how they could use that. I wasn’t coming at it from an academic perspective, but from a hands-on perspective, having multiple successful startups. That really resonated with people.

My first book was Brainfluence, which, even though it came out in 2011, continues to sell. It’s not selling wildly now, but every month I get sales. I just had a couple of new language translations released. So, it shows that these ideas are more enduring than some of the ephemeral neuroscience ideas that have come and gone.

So, I sent it by Priority Mail somehow, and again, a high-friction experience. It took the post office about eight days from the point I dropped it in the mailbox to actually scan it in and get it on its way so that by the time the company got it, it was already past year-end. I was hoping to get it closed out in one fiscal year. It’s either this is driving me crazy, believe it or not, then I get another piece of mail from them saying, “Sorry, the signature did not match the one we had on file that God knows when that signature was from, probably 25 years earlier. Would you please get a notary to sign this with you so that we could verify that you’re actually you? I still haven’t done it yet. This process has been going on for like, a month and a half. I guarantee you that if I had gone to one of these modern FinTech firms, I could have accomplished this transaction electronically with, you know, just a few emails, maybe DocuSign, if necessary. You know, whatever it took, with no hassle at all. But this is why, you know, companies that are not looking at their very, very most nimble competitors are going to get crushed.

Oh yeah, well, this… yeah. I mean, you know where else we see this a lot? Not just, it’s not just in financial companies. It’s in internet service providers—legacy ones. It’s in wireless companies. It’s in exactly what I would label cable TV companies, satellite companies. They have very similar processes where they make it as difficult as possible to get out. They entice you in with really cheap offers, then they count on inertia—that you will forget that you signed up for this 12-month expiring deal that was costing you 50 bucks, and now it’s going to jump to 120 bucks, and you’re not going to notice for a while. I mean, this is so counter-customer. Then, when you actually go to change it, you can’t do it easily. You can’t just jump online and select a new plan. You’ve got to go through voice menus. You’ve got to go through the first customer service representative, who will then, ultimately, if they fail to prevent you from canceling, refer you to a second retention specialist, who will redouble their efforts. You know, to me, I visualize anything I encounter like this as sort of a dial. Imagine like, oh, a meter, like the old analog meters you had on your car, like your speedometer—where it’s either this is good for the customer or good for the company. Now, occasionally you get a win-win, right? Sometimes you improve a process and it’s, hey, it saves the company money, and it’s great for the customer. But often you see processes like these that benefit the company. Because you’re right, Shane, they do reduce cancellations. They do reduce people who say, “Cash in a policy,” take their money out of their bank account or something because of the difficulty. People forget about it, or they say, “Well, I’ll do that tomorrow.” Before you know it, a month has gone by and they don’t want to deal with it. Yeah, and it’s a hassle. So they know that works, but nevertheless, they do that, even though it’s not good for the customer. And often this penalizes the customer. I mentioned internet service providers. I had signed up for a faster plan at some point and never really checked my speed. My speed would seem adequate, but maybe a year later, I was doing some network improvements. I was putting in a new router and moving my routers around. So I said, okay, I’m gonna check my speed all around different parts of my house and office, and I found that I was maxing out at way less than I was paying for. And so first I had a horrendous experience finding out what I was paying for. I said, “I think I’m paying for 200, but I’m just gonna jump on and check.” I ended up having to spend 20 minutes in a web chat with a customer service rep and having to track down a four-digit code from a billing statement in order to find out from the rep what service I was paying for. She couldn’t just tell me, “You’re on Plan X,” probably because Plan X was secret. You know, it’s like, for stupid people or something. Yeah, we got this guy on Plan X. We don’t want him to know he’s on Plan X. So anyway, finally she tells me, “Yeah, you’re on 200 meg,” and I said, “Fine.” I go back and I start checking my network. Even at the head end, I’m only getting half that, so I call up tech support. I get a problem. I say, “Oh yeah, your modem can’t handle that speed.” Well, it’s not my modem. You gave me the modem. I’m paying you some ridiculous price, paying like 10 bucks a month for a modem that won’t handle what they said. Now, you know, the ethical, the correct thing would have been to say, “Roger, by the way, thanks for upgrading your account. We see that you’ve got this modem that’s not going to handle that speed, so we are going to ship you a new one, and you’re going to continue paying 10 bucks, but you can change it out and recycle the old one or send it back to us, or whatever. However they want to deal with it.” Do they do that? No. In fact, I read an article about this. I think it was written maybe by Bloomberg or CNBC or somebody, one of the business networks. And when the reporter was writing about this stuff, she checked her own cable bill and found out that there was a $5-a-month charge on there for something that was included in the base package. She called them up and said, “Oh yeah, we can remove that. It’s in your base package.” But you know, they’re willing to let it ride as long as they could. And to me, this is what UX experts call a dark pattern. You know, where you rely on customer inertia, customer lack of knowledge to take advantage of them. You know, where they are paying for something that they are not getting or that they don’t need to pay for, and you know it and they don’t. And yet, to me, that is why these companies, as soon as they get competition, are in big trouble.

Yeah, Shane, I’ll give you one more lesson. I think that is important for our audience here, and that is, you know, you mentioned the customer service rep, the telephone rep, the chat rep, and they are, I think, often victims as much as the customers are. For sure, most of the time, they have tried to help. They’ve been courteous. They’ve worked within the constraints of the company. Yeah, they have. I’ve run into a few exceptions, but most of them have really done the best they could to try and help me solve my problem or fix whatever it was I needed fixing. But it’s the companies that put them in the position they’re in.
Oh, yeah. And, in fact, that one, you know, that horrible chat experience that I had, it was an absolute waste of time for me and for something that should never have even required a chat interaction. That should have been available to me once I was logged in. And, you know, afterwards, I did one of these things—would you like to complete a survey about your experience? And I never do those. You know, who’s got time for that? But I’m thinking, okay, yeah, I want to tell them about my experience. At this point, I was so aggravated. Yeah, I figured it’s going to be something like net promoter score, you know, would you recommend us to somebody else? And, you know, if there was like, a minus one for “Hell no, never.” You know, you’d have to kill me first—click it twice. Yeah? You know, then that’s what I was going to click. Instead, you know what they did? They asked me, “Would you deal with this customer service representative again? Was your customer service rep courteous?” There were like two questions about the rep—all about, you know, sort of like a net promoter score for the human that you interacted with. And then, you know, was she courteous? And then finally, they gave me 1000 characters to talk about the customer service rep and anything that she did right or wrong that I wanted to comment on.

You know, they throw the human, their own person, under the bus. Because I’m sure a lot of people just say, “Yeah, she was horrible.” So aggravated with the company.

It’s not her fault. You know, it’s crazy. But I think the reason they don’t ask is because the people that the marketing managers that create those surveys, they know what the answers would be bad. They don’t. They don’t want their CEO to see those answers. You know, what’s our net promoter score this month, after people talk to our customer service reps, you know? Well, it’s actually three out of ten. They know it’s going to be horrible. So instead, they ask these other innocuous questions, where they can say, hey, people like they like our people pretty well. We’ve had a few low-rated ones. We got rid of those, so we’re getting better.

You know, there are so many that I could recommend, Shane, and so many authors that I know personally, that I would love to recommend in their books, but I’m going to just mention one that did not necessarily get a lot of acclaim when it came out, but to me, has some great lessons in it for businesses of any size, and that is Trust Factor by Paul Zak. He is the oxytocin researcher who discovered the “hug hormone,” oxytocin. He discovered the hormone, but he found that it was the hormone of human trust.

What he and his team did was some research on high-performing companies, and they went into a variety of companies—high-performing companies and low-performing companies—and they did a bunch of employee surveys to ask about employee attitudes, and among other things, about trust between employees and each other, employees and their boss, employees and the company. They also took thousands of blood samples, and what they found was that high-trust companies were high-performing companies.

This wasn’t just what they found in the surveys. Those surveys correlated with the blood samples. The higher-performing companies had higher levels of oxytocin in the blood of their people. So, to me, this is a finding that can’t be overlooked. It’s not something that’s soft or squishy or fluffy where, yeah, people like where they work, so they say they trust the people there. It was actually greater trust in these companies.

So, when you can implement policies that show you trust your people more, they will trust you more. And this doesn’t matter if you are a five-person company or, you know, a 500,000-person company. Admittedly, big companies tend to have more processes and more procedures because one time somebody screws up, they do something wrong. And so now you put a procedure in place to make sure that nobody can ever do it wrong again, not realizing the effort that’s wasted for all the people that would do it right, and even the minimal cost if once in a while somebody does do it wrong, you know it’s not going to crater the company.

When you can look at things from that context of, “If I trust people a little bit here, what’s the downside for me?” Is it bad? A bank couldn’t say, “Well, we’re going to do a thing with our safe and we’re going to put our money on the counter and let people, you know, just keep track of their own stuff.” That definitely would not work. That’s not too much trust.

But, you know, look at Amazon. When I return something to Amazon, maybe I take it back to a locker or back to UPS. Most of the time, when I get back to my home or office, by the time I check my email, they have credited my account for my return. Incredible, because they saw that, “Okay, Roger dropped that box in there.” Now, they don’t know what’s in it. It could be empty. I could have put a brick in it. The product could be mangled beyond belief, but I said that it was in good condition. You know, they don’t know that, but they trust me because they know that a) I have proved myself to be relatively trustworthy in the past, according to their algorithm, I’m sure, and b) even if, for some reason, I did decide to be dishonest on that one occasion, it wasn’t going to affect their bottom line that much.

So, it was an acceptable risk for them. Probably, if I was returning a $5,000 big screen TV or something, they might want to see the thing before they credited my account. But, you know, by trusting people, they increase trust. This is one big reason, Shane, why Amazon is such a trusted brand. They trust the people that are dealing with them, and that trust is reciprocated.

The best jumping off point is rogerdooley.com. That’s where I have my podcast. I’ve got links to my social accounts there and other stuff. neurosciencemarketing.com is my older site where my neuromarketing blog is located and on social I am most active on LinkedIn and Twitter and Roger or Roger Dooley, pretty much I am those things on all social media, but those places are where I’m most active. So I look forward to connecting with people. I do enjoy connecting with folks and continuing the conversation that we’ve started here.

I hope so Shane! It’s been a lot of fun. Time really flew.