As markets become more competitive, products need to find ways to differentiate themselves and find more effective ways to connect with consumers. Advances in neuroscience are helping build a deeper understanding of the role that emotion plays in our decision-making, with important implications for brand management. Forty two days after a baby is conceived, the brain develops its first neuron. Some three months later, there are 100 billion neurons in the brain. 120 days before birth, the neurons start to create strands, called axons, that connect with each other to form synapses. By the time a child is three every one of these 100 billion neurons has created 15,000 axons. The relevance of this? Well, it gives an insight into the complexity of the brain and how it functions. It also demonstrates how science is developing our understanding, in turn developing our knowledge of the ‘softer’ aspects relating to our emotions. Breakthroughs in neuroscience have confirmed that people are primarily emotional decision-makers. Leading neuroscientist Antonio Damasio studied people with injuries that had damaged the part of the brain where emotions are generated, finding that these people could no longer make decisions. Damasio concluded that ultimately, all decisions are emotionally based.

One only has to look to the world of sport to witness the power of emotion. Who can forget the 2006 World Cup Final in which Zinadine Zidane, the French star, was sent off for head butting the Italian player, Marco Materazzi. Consider the rational facts – Zidane is at the very height of his career playing in arguably the most important match of his life. He is poised to retire from international football on a high. However, in response to an insult whispered in his ear by the opposing defender, his emotions got the better of him better of him and he responded aggressively, resulting in a red card. Yet, for all this understanding, business still finds it difficult to talk about emotion.

This is surprising when one looks at the financial data. According to Standard & Poor, in 1982 some 62% of the value of the S&P 500 related to tangible assets such as buildings and stock. By 1998 this figure had decreased to just 15%. In addition to the value of intangibles such as trade marks and IP, a good proportion of the remaining 85% was attributable to the value of the ‘brand’, an important component of which is emotional satisfaction.

Rarely discussed, emotion is locked away while rationality reigns supreme. But in this age of oversupply, product parity and commoditisation, business needs to forge deeper emotional connections with its consumers. Most businesses have yet to grasp this, let alone act on it.

Yet business success depends on understanding and harnessing the central role emotion plays in how people decide which products meet their needs. Emotion is critical to success in three areas; driving decision-making, bringing brands to mind at the point of decision and causing the motivations that drive our behaviour.

Emotions and decision-making As the emotional area of the brain is larger than the rational, our brains process more emotional activity than rational. Signals that run from the emotional to the rational brain outnumber signals running in the opposite direction by a factor of ten to one. We decide with our hearts and then rationalise our decision with our heads. At the root of why we do this lies what French psychologist G. Clotaire Rapaille calls the ‘Intellectual Alibi’ - the ‘good reason’. So for example, in the world of luxury, brands, we may buy a BMW because ultimately we worry about what the neighbours may say. However, we provide ourselves with a ‘good reason’, an intellectual alibi, by saying that the purchase is down to rational reasons such as the resale value or reliability. This has profound implications for marketing. Consumers tell researchers the reasons they prefer one product over another, but businesses are actually building growth strategies around their ‘intellectual alibis’. The real reason people make choices – the emotional truth – is being largely overlooked. As far back as the late 19th Century this was acknowledged by banker J.P. Morgan when he said: ‘A man makes a decision for two reasons, the good reason and the real reason’. Anyone who has sat in on focus groups can relate to that! To truly influence people’s purchase intent, emotion needs to be put at the heart of the strategy. The role of memory Memory, and therefore brand recall, is also emotion-based. The memory and emotion centres in the brain are next to each other. We remember something when a connection is made between the two. Aristotle likened the brain to a wax tablet – memories make an impression in the wax. Everything we remember is only remembered because it has made an emotional impression in our brain. Emotional memories are vital in the context of what we pay attention to and how we choose. Damasio’s research highlighted the presence of what he calls ‘Somatic Markers’ to describe how we assign (mark) our experiences as either good or bad. Familiar sights, sounds, smells and sensations, easily activate these markers and creating these kinds of markers is key to brand success, because without them a brand won't even be considered. Relating this to my own experience, when I was five I had a teacher who always had daffodils on her desk. Well, probably not always but such is the power of my memory that it seemed that way. Every time I now smell daffodils I am transported back to that time and all of its associated positive memories. As Elizabeth Loftus, an American psychologist and expert on human memory says ‘Memory is malleable and it is relatively easy to change it’. Our emotions Emotions determine the quality of our lives. However, when defining the emotional benefits of brands true emotions become clouded with business jargon and category values. ‘Warm’ isn’t an emotion, neither is ‘trust’, nor ‘friendliness’. There are many definitions of emotion but Dr. Paul Ekman, Professor of Psychology at California Medical School, provides a good benchmark: ‘An emotion is a set of sensations experienced… briefly… about something that matters.’ Our emotions happen to us – we do not choose them. They are positive or negative – never neutral. Positive emotions awaken in response to anything (real, imagined or potential) that brings us closer to realising our goals in life. Negative emotions awaken in response to anything that takes us further away. Brands can be built around either – the desire for positive emotional outcomes or the desire to avoid negative feelings. There are many ways to categorise emotions but the most common is to group them as Primary and Secondary. The primary emotions are usually agreed as being love, joy, anger, sadness and fear, and they can be broken down into other variations on each theme: Love (affection, liking, compassion…) Joy (enjoyment, bliss, amusement, thrill, relief…) Anger (annoyance, frustration, disgust, envy…) Sadness (hurt, grief, humiliation, pity, sympathy…) Fear (terror, panic, uneasiness, worry...) Emotions can also blend to become other emotions (Zeitlin and Westwood 1986). For example nostalgia is a blend of happiness and sadness; naches (pride in the achievements of your kids) is a blend of pride and love. Emotional Competitive Advantage Of course it’s vital to give people a rational reason for choosing one product over others (the intellectual alibi which will justify our decision) but ultimately brands are about the anticipation of emotional outcomes. Brand equity can, in effect, be boiled down to ‘emotional anticipation’, and the stronger this is, the bigger the competitive advantage.

At Brandhouse we call this Emotional Competitive Advantage. To drive Emotional Competitive Advantage one must identify a brand’s Proprietary Emotional Benefit. This term, coined by Brandhouse founder Mark Wickens, is when a brand owns an emotional benefit that the consumer can’t get from any other brand. It is a unique statement of ‘something good the brand helps me say about myself by using it’ that actively supports the consumer’s aspirational selfmodel. At the heart of any brand with an Emotional Competitive Advantage is a strong Brand Story.

Brands such as Apple and Nike have a clearly defined Brand Story that is told across all their touch points. For example, Apple’s story is all about technology being cool and simple. This doesn’t just manifest itself in the design and functionality of its products but also in the service ethos to be found at an Apple store.

The ability to pay at the display rather than queuing is one example of this. In our 2009 study, The Brandhouse Emotion 100™, we set out to measure the Emotional Competitive Advantage of 100 leading brands in the UK.

The study, produced in conjunction with The Centre for Brand Analysis, was the result of an empirical survey conducted amongst a nationally-representative sample of 2,000 UK consumers. Although it is increasingly acknowledged that positive emotional connections between brands and consumers generate higher loyalty, support price premiums, defend brands from aggressive competition and create a buffer in economic downturn, there had, until now, been no systematic study of the issue and the emotional factors and mechanisms at work.

By conducting a detailed analysis of seven key emotional dimensions along which brands connect to their consumers, it is possible to determine the precise nature of the ‘Emotional Competitive Advantage’ that some brands have over their rivals – and what those rivals need to do if they are to improve their prospects.

One of the key findings is that it isn’t always the ‘showy’ emotions that matter most. In relationships with brands – as in many other areas of human interaction – those that offer steady contentment often retain more long-term loyalty than those that seek to provide high levels of novelty and excitement. Even in the most price-driven sectors, it is almost impossible to become a significant national player without an overall positive score on all seven emotional dimensions. In developing a methodology for measuring Emotional Competitive Advantage there is now an approach for managing it for the benefit and growth of brands. The intangible has now become tangible. Emotion sells.