The Business of Social Games and Casino

Earlier this year, I wrote a post that highlighted ways behavioral economics could be applied to gaming, and I recently read a book that provided additional opportunities by layering on neuromarketing. I read Brainfluence: 100 Ways to Persuade and Convince Customers with Neuromarketing by Roger Dooley and while not the perfect book (it was more a collection of articles and many were not truly neuromarketing) it did provide some strong tidbits that you can use to optimize your product.

Neuromarketing is the science of studying the brain to predict consumer behavior and decision making in different situations. Neuromarketing includes the direct use of brain imaging, scanning, or other brain activity measurement technology to measure a subject’s response to specific products, packaging, advertising, or other marketing elements. Researchers use these tools to measure changes in activity in parts of the brain and to learn why consumers make decisions.

Based on this science, Dooley shows multiple applications not only for marketing but product design.

Neuroscience can help with your pricing strategy

Neuromarketing is particularly powerful in driving pricing strategy. Successful pricing strategy minimizes the pain caused in your customer’s brain while amplifying the pleasure. There are many areas of pricing where you should apply a strategy that minimizes this pain:

• Dooley shows that absolute cost (a high price) is not the only variable that causes pain. Instead, it is the perceived fairness or unfairness of the deal that creates the reaction. Noble Prize winning behavioral economist, Richard Thaler, showed that thirsty beachgoers would pay nearly twice as much for a beer from a resort hotel than for the same beer from a rundown grocery store.Thus, the price you charge must be perceived as fair. If it is more expensive than competitors, explain why it is a premium product.
• People do not weigh the current gratification versus future gratifications. Instead, they experience an immediate pang of pain when they think about the cost of an item (whether virtual or real). Dooley asks, “[w]hy do people love to prepay for things or pay a flat rate for things? Again, it mutes the pang of pain.”Thus, to minimize this pain you do not want to constantly be asking your customers to make purchases. According to Dooley, [t]he worst-case alternative is when you pay for sushi and you’re paying per piece. Or watching the taxi meter; you know how much every inch of the way is costing you….Selling products in a way that the consumer sees the price increase with every bit of consumption causes the most pain…. Avoid “drip-drip-drip” pricing structures that punish the buyer every time she does something.”
• Another way to reduce the pain caused by a purchase decision is moving the cost to the future and breaking it into smaller bits. A credit card reduces the pain level by transferring the cost to a future period where it can be paid in small increments. Dooley writes, “not only does a credit card enable a consumer to buy something without actually having the cash, but it also tips the scale as one’s brain weighs the pain versus the benefit of the purchase.”
• Bundling is another strategy to lower the pain that purchases cause for consumers. Cost is relative, it is not simply the cash value but it is the context around the deal. People can spend hundreds of dollars on accessories when buying a car with little pain, but a vending machine that takes 75 cents and produces nothing is very aggravating.Auto luxury bundles minimize negative activation because their price tag covers multiple items. The consumer cannot relate a specific price to each component in the bundle (cruise control, power steering, metallic paint, etc.) and thus the customer’s equation will change in determining if it is a fair deal or whether each item is worth the price to them.
• According to Dooley, “if you find yourself in a situation where, for cost or other reasons, the price of a product is likely to produce an “ouch!” reaction from your customers, see if some kind of a bundle with complementary items will dull the pain.”
• Another area of pricing strategy relevant to gaming is priming. Priming occurs whenever exposure to one thing can subsequently alter behavior or thoughts. Research conducted by my favorite behavioral economist, Dan Ariely, showed that by getting subjects to think of a random number, in this study it was the last two digits of their Social Security number, the price they were willing to pay was impacted by that random number. A higher random number led to higher prices. Thus associating the price of an item with a high number would make the virtual good or item you are selling appear cheaper.
• Another application of neuromarketing to pricing is by offering huge potential reward for a purchase. According to Dooley, a “Stanford University study shows that big potential rewards produce big responses, even if they are unlikely outcomes. In other words, our brain is very responsive to the size of the reward and far less sensitive to the probability of actually receiving that reward.The clear message is that it’s the magnitude of the grand prize that is the most important factor in a giveaway. When choosing a topline prize, think big—even if the odds are lower, people will respond better if there are more zeros at the end of the number. Here are a few ways to maximize the prize value: Concentrate the prize budget on one prize. Use a play-off system or other approach to permit a huge prize with tightly controlled probability of awarding it.”
• Pricing not only impacts monetization but customer satisfaction. A higher price frequently assists customers in percieving a product as being higher quality. According to Dooley, studies found that “wine thought to be more expensive really does taste better at the most fundamental level of perception. The important aspect of these findings is that people aren’t fibbing on a survey; that is, they aren’t reporting that a wine tastes better because they know it’s more expensive and they don’t want to look dumb. Rather, they are actually experiencing a tastier wine.”

Creating trust

In many businesses, including iGaming, building trust is critical. Neuroscience points to several techniques that can help create this bond with your customers.

The first is reciprocity. Dooley writes, “[w]ant your customers to trust you? Show that you trust them! The concept revolves around that seemingly magical neurochemical oxytocin, which is a key factor in forming trust relationships.”

You also need to stress that you are trustful. According to Dooley, “[r]esearchers found that placing the following statement at the end of an ad for an auto service firm caused their trust scores to jump as much as 33 percent! — ‘You can trust us to do the job for you.’”

Neuroscience research also showed listening to customers directly increased their perceived trust. The customer needs to believe his or her concerns are being heard, and you can accomplish this not only face to face (which is impractical for customers of most games or apps) but with phone calls or web chats.

Building this trust also insulates your business. Almost every customer relationship is tested some time. For customers and players to not only work through the issue but still promote your company, you must invest the time in cultivating the relationship before that relationship is put to the test.

Asking your customers what they want is counter-productive

Dooley begins by showing how neuroscience confirms the challenges with market research. I have written about The Risks of Market Research and better research options, and Dooley explains that neuroscience investigation has shown that 95 percent of our thoughts, emotions, and learning occur without our conscious awareness. Given that customers do not know why they make choices 95 percent of the time, research efforts asking them questions are doomed. Dooley writes, “although there are conscious and rational parts in most decisions, marketers need to focus first on appealing to the buyer’s emotions and unconscious needs.”

Neuromarketing to build a loyalty program

I have always been a big advocate of loyalty programs, having started two at game companies that both vastly exceeded expectations, and Dooley shows how neuromarketing can also help improve the performance of these programs. Dooley points to several factors needed for an effective program:

• The underlying product or service must be at least comparable to the competition
• Neuroscience also points to the need to show people progress. The mere illusion of progress caused people to buy coffee more frequently. In one study, the group that started with apparent progress on their card bought coffee more frequently than the empty-card group. When building your program, you should not only allow players to progress to better tiers but also give them a head start on their first goal.
• The rewards offered must be attractive to the consumer.
• Brand preferences and other factors may undermine loyalty programs. “Switching costs” may increase loyalty to the current brand and reduce the impact of competing loyalty programs.
• Purchase frequency must be high enough to keep customers engaged.

Neuromarketing research shows that even when the value of loyalty points is less than the value of a real-money price difference, the consumers are often persuaded by the loyalty points (this fact is reflected in airline frequent flier programs valued at more than the underlying airlines).

Brands Matter

Another key learning from neuromarketing is that brands matter. As marketing, especially in the gaming industry, focuses on performance marketing (advertising where you pay based on a customer’s specific action, such as downloading your game), opportunities with brand marketing are often neglected. Dooley, however, presents data that branding does have a strong impact on customer’s perception of your game. If your customer believes a product is better, it will be better.

He shows that a lack of action or even attention does not mean an ad has no impact. The presence of familiar things, even if the customer (or potential customer) is unaware of the exposure, makes them feel better when they see or play the product. Dooley writes, “the key point for marketers is to keep your brand visible even when people don’t seem to be paying attention.”

Additionally, branding increases the social value of your product, both generating more usage and more referrals. According to Dooley, “[i]n neuromarketing terms, our brains are hardwired to want to be in one or more groups. Brands that can be positioned to put their customers into a group will find that their efforts will be enhanced by their customers’ own need to belong…. [Neuroscience experiments] led to the theory of social identity, which states that people have an inherent tendency to categorize themselves into groups.”

Branding that drives social identity then drives passion. Passion brands are those with which consumers form an emotional attachment and recommend enthusiastically to their friends. Your customers can sense the passion of your people, even if they don’t process it consciously.

Neuroscience also shows that branding should not be confined to one sense, ie. the written word, but should appeal to as many senses as possible. Research cited shows that brands that appeal to multiple senses will be more successful than brands that focus on only one or two. While it is hard for a gaming product (or any app) to appeal to all five senses, by thinking in multiple sense you can create stronger branding. For example, you may want to associate songs or sounds with your product. Dooley writes, “consistency is the key in building the sensory aspects of your brand. Consistent use is the key to effective audio branding. Constant repetition breeds familiarity, whether it is a cell phone chirp or a variation on Rhapsody in Blue.”

Use neuromarketing to improve your advertising creative

Branding is not the only area neuroscience helps marketing. Neuromarketing provides multiple ways to create more effective copy.

1. Use a familiar feeling visual. If you present a viewer with a familiar image or situation, that person’s brain will automatically predict what will happen next. This will allow your customer to fill in the story.
2. Do not use a familiar feeling visual. Conversely, if you insert an unexpected image, word, or event, it will grab the audience’s attention to a much greater degree than had the predictable occurred.
3. Use a word or phrase in a new way.Just as you can jolt someone’s attention by using an image in an unexpected way, you can do the same with copy. Take a word that people know, and use it in an unexpected way.
4. Create a savings message. A study found that exposing consumers to a “savings” message caused them to spend more than when they saw a “luxury” message.
5. Numbers over percentages. The brain reacts stronger to real numbers, not percentages. Rather than 25 percent off of a $100 item, say $25 off.
6. Use the word Free. According to Dooley, “FREE! is more powerful than any rational economic analysis would suggest. If you want to sell more of something, use that power. I often see department store offers such as, “Buy one pair of slacks at regular price, get a second pair for only one penny!” That may sound clever — ’ Wow, pants for just a penny!’ — but I think free will outperform the penny offer. Want to spark sales of a product? Try offering something free with it. Want to get the widest possible sampling of a new product? Use a free sample.”
7. Use the word New. Neuroscience has shown that the appeal of NEW! is hardwired into our brains. Novelty activates our brain’s reward center.
8. Create personal stories. To engage potential customers, write a vivid story involving your product or brand. Include action, motion, dialogue, and other aspects that will activate different parts of your customers’ brains. Turning a testimonial into a personal anecdote will greatly increase its impact. Adding a name, a face, and a story will play to the way our brains evolved and be more convincing and more memorable.
9. Strategically decide between simplicity and complexity. Asking customers to make simple decisions work out best if you are selling a complex product like an automobile, give the customer a simple reason to buy your product.

Fonts are critical

Another area where neuromarketing helps is in appearance. The way people perceive information can be affected intensely by how simple or complex the font is. In one experiment, readers of a promotion in a simple font were more likely to make a commitment than if the font was complex. In a similar experiment involving a sushi recipe, subjects who saw the instructions in a simple font believed that preparation would take 5.6 minutes, while those who read the directions in a more complicated font, expected it to take 9.3 minutes.”

Font can then drive your conversion rates. As Dooley writes, if “you need to convince a customer, client, or donor to perform some kind of task, you should describe that task in a simple, easy-to-read font…. Since the perception of lower effort is related to the concept of cognitive fluency, you should also make the type size easy to read and use simpler words and sentence structure.”

Simpler is not always better, though. If you are selling a costly product, describing it using a hard-to-read font will suggest to the viewer that more effort went into creating that product. Further neuroscience research shows that the additional effort required to read complex fonts leads to deeper processing, and ultimately better recall.

The important point is that the font you choose should support what you are trying to achieve. It may not be obvious if a simple or complex font is best, so test both, and understand what drives the desired behavior.

Use images of people

Neuromarketing also reinforces the value of incorporating images of faces in your product and marketing. According to Dooley, a “face in your ad will attract attention, but be sure the face is looking at what you want the viewer to see — your headline, a product image, or whatever is key. Viewers will examine the face, and then subconsciously be drawn to what the eyes appear to be looking at.” Images are another area where testing makes a huge impact, different images, different looks will have varying impact; it is worth the effort to test various images and angles to optimize influence.

Tactics for optimizing your landing page or website

Neuroscience can help you design your website or landing pages. Dooley writes, “[r]esearchers … were stunned to find that showing users an image of a website for a mere 50 milliseconds — that’s just a twentieth of a second — was sufficient for them to decide how appealing a website was. 1. The 50-millisecond rating for visual appeal correlated highly with ratings given after much longer exposures. 2. The visual appeal rating was found to correlate highly with other ratings—whether a site was boring or interesting, clear or confusing, and so on.”

Part of the impact on getting the website correct is confirmation bias. Confirmation bias amplifies the power of the first impression. Once your minds forms an opinion, you easily accept new information that agrees with that opinion but reject contradictory information.

Reciprocity also impacts effectiveness of websites. Requiring a user to give up contact data before viewing good content is a reward strategy. Most users, however, will not complete a form even for a reward. Instead, a reciprocity strategy can work better; give people something they want prior to asking for their information.

Neuromarketing shows where not to put important items. Dooley writes, “what’s the worst place to put your logo, and where do advertisers most often put their logo in print ads, TV spots, and direct-mail pieces? The answer is the same: the lower right corner, an area dubbed the corner of death.” Thus, it is critical to understand what parts of your site customers are likely to notice and which ones they will ignore.

Finally neuroscience shows that your website or landing page design should incorporate the age of your customers. According to Dooley, using “fMRI scans to examine younger and older adult brains during memory tasks, … both young and old brains were able to activate their brains effectively for building memories but the older brains were far worse at suppressing irrelevant information…. [F]or marketers hoping to appeal to baby boomers and seniors: Keep the message obvious. Use an uncluttered layout for copy and images. Include some white space around the message. Avoid distractions like running screens, sounds, and animations.”

Key takeaways

• Neuromarketing, using brain imaging, scanning, or other brain activity measurement technology to measure a subject’s response, shows you can price more effectively by minimizing the customers pain, by not forcing them to make multiple purchase decisions, spreading out the cost or bundling items.
• Neuromarketing also shows you can improve customers’ trust by trusting them and specifically telling them you are trustworthy.
• It also shows that branding forms an emotional attachment you’re your customer and prompts them to recommend you enthusiastically to their friends