An evening with Mr. Sandeep Dayal

On Friday, July 22, we had a fascinating session by Mr. Sandeep Dayal, a marketing expert and currently the Managing Director of the Chicago based strategy consulting firm, Cerenti Marketing Group. He is the author of the latest bestseller “Right Between the Ears – How to Use Brain Science to Build Epic Brands.” The topic of the webinar was: Using brain science to build iconic brands.

This was the 64th session in the ICFAI Wise Views series, which is broadcast every Friday afternoon. All the recordings of the past webinars can be accessed at:

https://online.ifheindia.org/webinar.html

About Mr. Sandeep Dayal

Mr Dayal has worked with many of the world’s top companies to build some of the greatest and best-known brands. His clients have included global players like Conagra, Kraft, Abbott, Phillips, Unilever, Pfizer, AbbVie, Baxter, Scotiabank, Banco Santander, BMO, HSBC, Visa and MasterCard.

Mr. Dayal has co-authored articles in Marketing Management, McKinsey Quarterly, and Strategy & Business. He has been a visionary in predicting how marketing will change over the years. His articles have been cited more than 200 times by other researchers and authors. Much of the thinking presented in his new book has emerged from having worked closely with some of the world’s best-known brands. Under his leadership, Cerenti has been named to the Forbes’ list of America’s Top Consulting Firms for six years in a row.

Mr. Dayal has a Bachelor’s in Engineering from the Birla Institute of Technology & Science in Pilani, India and an MBA from the Yale School of Management in New Haven, USA. He lives in Chicago with his wife.

About cognitive branding

Brain science, already in use in other domains like public policy, economics and behavioral therapy, is being increasingly used to build iconic brands. Marketers are trying to understand how the brain works and use this knowledge to position and sell their products. As Mr Dayal put it, everything about branding happens between our ears.

The earlier paradigm was product differentiation. Today’s paradigm is brand differentiation. A brand is nothing but our perception of the product and its soul, i.e. its seen and unseen parts. Cognitive branding is all about tapping into the memories of our past experiences and the fantasies we harbour.

Mr Dayal recalled his BITS Pilani days. He and his friends would go through difficult exams every semester. Once the exams were over, they would get together to celebrate and consume Old Monk. So, for Mr Dayal, the rum is not merely a product. It carries memories of friends, and the relief and joy at the end of the exams. While in blind tests, the product may not be the best, for Mr Dayal, it is the best product in its category.

As Mr Dayal mentions in his book, “brands that rock the world are those that work the way our brain does. They hold the conscious and sub conscious keys that unlock sensations of the experiences and fantasies stored in our minds to make us happier and lure us to the brand. “

Brand experiences are stored in our memories as cognitive bundles. Each bundle contains information on how we interacted with the brand, what the stimulus and responses were, what choices we made and the actions we took. The next time we feel the stimulus in the appropriate context, the bundle is released in a flush. These bundles of experiences are released only when properly triggered. This is where cognitive branding comes in.

Cognitive Brand architecture

Cognitive branding is not the same as emotional branding, ie using an emotional pitch to build the brand. It is about tapping into the experiences and fantasies of consumers.

The cognitive brand architecture has three parts:

• Brand vibes: Does the brand give me a good vibe?
• Brand sense: Does what it says make sense to me?
• Brand resolve: Will the brand make me happier?

Brand Vibes

Brand Vibes serve to establish a deep and empathetic connection, a common chemistry, between the brand and the consumer. Brand vibes is all about empathy, chemistry and connection between the brand and the consumer.

Consider how Dove soap built a strong connection with consumers. Many beauty products used super models in their ads. But these super models didn’t resemble ordinary women and made them uncomfortable about their own looks. Dove launched a billboard campaign featuring “real” women of all types, big and small, brown and black, skinny and non-skinny. The campaign helped women feel confident about their own bodies. Nowhere did the ad refer to the soap or its cleansing properties. But the soap became No 1 in its category.

Mr Dayal talked about two Indian brands with Empathy: Tanishq and Mia. Their ads did not talk about the product. They were targeted at working women who often felt slighted because many considered them to be doing well in their career only because they were women. The ads (The message: It is the last thing on my mind.) emphasised that they were doing so because of their talent.

https://www.youtube.com/watch?v=qymYx4EhTbc

The Tata Tea Jago Re ad is another example. The ad conveys the frustration of the common man with corrupt politicians and the sense of entitlement with which they move around. The values of anti-corruption and expecting accountability from politicians strike an empathetic chord with the consumers. We may find it difficult to become activists but at least we can awaken ourselves and demand more from our politicians.

https://www.youtube.com/watch?v=M5ECJrnqPcI

Brand sense

As explained by Nobel Prize winner, Daniel Kahneman, our brain works in two ways:

System 1 -Fast & easy: This involves a rapid and automatic response to stimuli. It is done without conscious knowledge or deliberation. It is not capable of doubt. It is based on experiences and biases. It is usually on target though it is sometimes susceptible to making mistakes. Example: Adding 2 and 2. Here, the brain makes decisions by relating to its past learnings and experiences. It is adept at responding to a situation based on the biases and beliefs accumulated over the years. The implication for marketers is that brands must align their messages to this pre-existing wisdom. Customers can then go with the flow.

System 2 -Slow & lazy: This involves a deliberate and logical approach and careful evaluation requiring focus and effort. It is done consciously, with analysis. It is capable of doubt and generates choices/options Examples: Multiplying 17 and 24, Parking in a narrow space. System 2 faculties are triggered when faced with more complex choices or high-risk situations. In a particular situation, when System 2 has done all the valuation, it will encode the experience into System 1 to save unnecessary processing efforts in the future.

System one easers: These are relevant when a brand’s proposition makes sense by going with the flow, aligning with the cognitive wisdom etched into the consumer’s brain. This is applied 95% of the time in making sense of choices.

Various cognitive biases influence the way in which we think and act. The eight most useful cognitive biases which marketers can leverage are:

• Loss aversion bias: The tendency to avoid a loss. The brand feels familiar.
• Anchoring bias: The tendency to be overly influenced by the first piece of information that we receive. The brand feels familiar. Marketers can enhance the perceived value of a product by providing customers with a strategically selected, superior anchor.
• IKEA Effect: The tendency to love something we have created. The brand feels authentic.
• Transparency Effect: We trust a brand when we feel that what we see is what we will get. The brand feels authentic.
• In-group bias: We have a bias for the group to which we belong. The brand makes us feel good.
• Choice Supportive Bias: We have a bias towards something we have bought or decided to buy. We focus on the positives and ignore the negatives. The brand makes us feel good.
• Occam’s Razor Effect:Bias for something simpler. The brand makes things easy.
• Herd Mentality Bias:Tendency to follow what others are doing. The band makes things easy.

The popcorn brand Act II leveraged the Anchoring Bias in one of its earlier campaigns. Act II promised to deliver theatre quality popcorn from our microwave in the comfort of our home. The brand is tagged to a high bar in the market, ie the wonderful time people have in a movie theatre. Named Movie Theatre butter, it also provides visual cues to consumers highlighting the connection to movie theatres. The product looks like an Oscar worthy hit release from Hollywood. (As other forms of movie viewing emerged, the campaign was revamped.)

An existing pharma product was losing market share to new products that promised superior performance. The company through its campaigns reminded doctors that they had already spent a lot of time and effort in treating patients with their drug. Why would they take a chance on something new? Thus, the campaign leveraged the loss aversion principle.

Guinness Beer In-Group Bias taps into the In group bias, the desire for belonging to something special. Consider the message used: “Dedication. Loyalty. Friendship. The choices we make reveal the true nature of our character. Guinness (Diageo). Made of More.” The Cognitive Thread is: “Guinness is a different kind of beer – one favored by people with character, purpose and authentic values.”

One of the famous campaigns of Diageo showed a group of people on wheelchairs playing basketball. After the game, all the players walked away except one who was strapped to the chair. Not all of us will drop into a wheelchair to play with a disabled friend. But it is something we would all wish to do. By drinking Guinness (Diageo), we feel that we are part of the group.

Staples/HEB System 1 leverages the Occam’s Razor Bias, ie the belief that the simpler answer is better. Staples ran a major campaign around an outsized “Easy” button. The ad showed people in difficult everyday situations. In each case, the button would appear magically and pressing it would save the day. Consider the message used: “Wouldn’t it be nice if there was an easy button for life? Now, there’s one for your business. Staples. That was easy.” The cognitive thread running through the ad is: You have bigger things to worry about than office supplies. Leave that to Staples and keep it simple.”

A big part of the powdered beverage Tang’s appeal was that kids and mother would be involved in the preparation of the drink. More than an affordable fruity drink, it promoted bonding between mothers and their children.

System 2 deliberators:

These apply when a brand’s proposition makes sense only upon proper deliberation. This approach looks to inject new cognitive wisdom in the brain. Here are 8 deliberators that marketers can use for changing behaviours:

• No brainers method: Amplify the value. The aim is to show that the value obtained by using the brand is far greater than its cost. We can amplify the value of the brand so much that there is no need for a detailed ROI calculation. This is how Uber disrupted the taxi market and Netflix the movie rental market.
• Pleasure prediction method: Amplify the value. We make the benefits of the brand more vivid. This method has been used to full advantage by pharma companies. The message is: If the drug is consumed, not only will the patient become better but also be able to do all the amazing things she is currently not able to.
• Fight or flight method: Lower the risk. This approach makes the customer face the uncertainty head on and resolve it. In Amgen’s ad for Embrel, a little child voices the mother’s fears of becoming disabled due to arthritis. These methods must be handled carefully so that the message is received favourably by the consumers.
• Flirting method: Lower the risk. We can encourage the customers to try out the product and feel good about it.
• Examine the evidence method: Provide reasons to believe. Sometimes, the customers may feel that the brand is overpromising. In that case, pointed evidence has to be provided.
• Survey method: Provide reasons to believe. Here the customers are encouraged to discover the truth for themselves by interacting with other customers. The survey method is commonly used by marketers of consumer financial products. Prudential has used this method to encourage consumers to be more realistic in their financial planning.
• Reframing method: Change the context. Marketers can give customers a new way to think about the brand.
• Reattribution method: Change the context. Marketers can clear up matters where customers feel that the brand is responsible for something undesirable.

Consider how a jeweller used the flirting method. In one shopping trip in Jaipur, Mr Dayal’s wife was allowed by the jeweller to take home all the three necklaces she had shortlisted. Then she could return the ones she did not like. Mrs Dayal tried out the necklaces and got compliments from her friends and family. Finally, she decided to buy two of them.

Consider Patek Philippe which uses the Reframing Method: it educates consumers how to think about choice. The ad conveys that buying this expensive watch is not an expense, but an investment in an inheritance asset. The ad does not talk about the accuracy or the beauty of the watch. It conveys the legacy. As one of the campaigns says you never own a Patek Philippe. You look after it before passing on to the next generation. The owners of the watch will be remembered for their success in life.

Brand Resolve

Brand resolve is the intrinsic motivation to shrug off indecision or indifference and buy the brand. People will buy the brand if it makes them happier. The key insight is that human beings pursue happiness without ever being perfectly happy. Once they achieve a degree of happiness, it decays off quickly and they are back to square one. Thus, there are many opportunities for marketers to make the brand promise greater happiness to consumers.

Intrinsic motivation is based on the self-determination theory propounded by Edward Deci and Richard Ryan in their extremely popular book "Intrinsic Motivation and Self Determination in Human Behaviour.'' This theory displaced the popular notion that people are motivated based on rewards and punishments. They found that intrinsic motivation is driven by three universal needs: autonomy, competence, and relatedness. If we can satisfy one or more of these needs, people will feel happy.

Autonomy: We want to be free to make our own choices and shape our destiny. Consumers must feel like they chose their brand and were not manipulated into choosing it.

Many pharma brands leverage this principle. They convey to customers that by consuming the drug, patients can get back control of their life and not have to be dependent on others.

Competence: We want to get better at things and feel better in the process. We tend to buy things that help us be better than our peers and earn respect in the workplace or in social circles. We may experiment with new things to learn and develop ourselves.

In one case, a pharma company noted much to its surprise that neurosurgeons were favourably disposed to a drug that had to be administered in a complicated way over several hours. This is because these surgeons believed that they could advance the mastery of their art by learning and practising a new technique.

Relatedness: We thrive on social connections. We want to be part of something bigger than ourselves. We want to make the world a better place for others as that helps us to connect with people even more.

Consider MasterCard. The message is: “Priceless” Relationships with others/sense of belonging as a goal. The card can be used for the good of the family, e.g., to buy a TV so the family can watch together. Thus, MasterCard became a good way to pay for the things that really mattered. The message: Every time you use your Mastercard you are enriching your relationships. Mastercard’s campaign was not about the card. It was about what people could do with the card to enhance their connectedness with the people around them. Recall the famous tagline:” There are some things money can’t buy. For everything else, there is Mastercard.”

National Car Rental used control and autonomy as a subconscious goal aspiration. National Allows you to choose any car. After the Ad campaign, even in the highly competitive airport locations, the market share went up by 5%.

The US Navy chose Competence/Identity as a subconscious goal aspiration. The Navy was struggling with its recruiting. The people joining the navy were mostly those with few other career options. The challenge was how to get people intrinsically motivated to join the navy by appealing to their sense of competence/self-worth. The “From the Depths to the Stars – Forged by the Sea” campaign promised to deliver on the fantasies of who you could be: “People have big dreams … just don’t know how to get there. Just because I’m a mom, people think I can’t do this” There was a 90% increase in completed applications.

https://www.youtube.com/watch?v=6Q7fxXKpu1E

Q&A
On his personal journey

Mr Dayal has more than 25 years of experience in marketing. He has gone through different facets of marketing- analytics, functional branding, emotional branding, etc. During his stint with McKinsey, he became well versed with thorough analysis.

In the 2000s, Mr Dayal noticed during the first internet boom that people were not embracing online banking or shopping despite the clear benefits. That prompted him to understand the psychology of customers. Those days, B Schools were not teaching much psychology. So he plunged deeper into the subject and became an independent consultant. Over several years, he has learnt a lot about brands and customer psychology. His book is a record of his experiences working with brands, both successes and failures.

Later in the Q&A, Mr Dayal added that traditional, functional, emotional, and cognitive branding will coexist. Students should be familiar with all these aspects of branding. The traditional approaches to branding are not irrelevant. Cognitive branding only expands the possibilities. We must learn the basics of product differentiation, value proposition, functional and emotional branding, etc. Helping people used to the traditional approaches embrace cognitive branding must be done carefully. We must find a bridge between the old and the new. We must explain the new approaches in a way that makes sense to people. We should not be in a hurry. Ultimately, it is about expanding the horizon and generating more ideas and picking the one that is likely to be a winner.

On the name Cerenti

While choosing the name for his company, Mr Dayal had to consider both brand positioning and practical considerations. The name Cerenti suggests something cerebral and implies action through wisdom. At the same time, he needed an URL which was ideally of 7 letters. This is because US phone numbers have 7 digits.

On the impact of technology on brands

Despite the advances in technology, the notion of branding will not go away. Branding will continue to be important. However, technology provides new ways of communicating, distributing and delivering goods and services. The metaverse will be a big deal. As technology improves, virtual reality will meld with actual reality and influence the brain in powerful ways. Technology will make us see the world differently and shape brand experiences. Technology will shape perceptions. Ultimately, perception is the reality when it comes to branding. Thanks to social media, we are also seeing more peer reviews and interactions among customers compared to the one-way communication of the past.

On sensory branding

Branding guru Martin Lindstrom in his very popular book " Brand Sense: Sensory Secrets Behind the Stuff we Buy” explains how companies use the five senses to sell products to consumers.

Mr Dayal explained the use of sensory branding in the context of a dog food which was offered online on a subscription basis. The ad did not talk about the dog food at all. Viewers could only hear the slurping of the dogs (noise made while consuming the food) in the background. Only dogs were shown, and viewers could make out that they were enjoying the food. Brands like Mastercard are also using sound and taste to promote themselves.

On celebrity branding

During a press conference as part of Euro 2020, the famous footballer Cristiano Ronaldo removed two Coke bottles from the table and instead preferred to drink water.

https://www.youtube.com/watch?v=x2ZLS1V3iMw

Superstar endorsements are often used to promote brands. People feel that by using the brand they will get closer to the superstar. But there are risks involved here. The superstar may do something wrong or shameful or unethical. It is important to understand the essence of the brand. The brand is not about the superstar but what the superstar represents. Thus, Nike’s Just do it campaign inspires people to do something in life. Things should be ok if we stick to the core or the essence of the brand.

The brand must be bigger than the star endorsing it. Celebrities must be aligned with the brand and not the other way around. If the brand does not have intrinsic strength, it will rise and fall with the superstar. In its successful campaign in Indonesia, Pediasure was promoted using a child celebrity. But the child was going to grow into an adult. The brand had to move beyond the star.

When we use emotional branding, the brand must be woven into the story. Sometimes, people may remember the story and the emotions but forget the product advertised. This phenomenon is called focalising. When glamorous stars are used, especially in sexually charged ads, people may remember the star but the brand recall may be minimal.

As Mr Dayal mentions in his book, we must be careful about ensuring that the intensity of emotions around the storyline supports but does not overwhelm the main idea behind the brand itself.

On how to brand agricultural exports

We should try to create experiences and memories around the product. For example, we can associate basmati with a region.

On the use of neuro marketing in BFSI

We can wire the brain and see how different parts of the brain are lighting up and understand what people are thinking in their mind. Insurance and other financial services companies can use these techniques to understand people better and come up with better ad campaigns.

On how street vendors can create memorable experiences

Meeting customer expectations is not enough. We must exceed them to create special moments. It is elements of positive surprise that get wired into our memory and become part of our brand experience.

As far as the customer experience is concerned, what matters are really the peak and the ending. Waitresses leverage this principle to their advantage. They increase their tips by using two simple techniques. They ask customers how the special of the day (the peak of the experience) was. When presenting the bill, (end of the experience) they put a small note with a smiley, addressing the person by name.

Street vendors should think of creating such special moments and thereby create memorable experiences for their customers. They also have great opportunities for sensory branding using smell, taste, etc.

On the role of cognitive branding in the workplace

The same principles applied in consumer branding can be applied here. Employers like the Tatas already have a strong brand. They are in fact a generational brand that draws their strengths from the phenomenal contributions towards nation building, of the founder Jamshedji Tata. Companies like Apple and Google have an instinctive appeal. New employers can use the principles of cognitive branding to their advantage.

On the rise of Tik Tok

The idea of short videos is important and appealing. These videos can tap into the brand’s fantasies and experiences. Tik Tok has effectively created a new channel of communication and given rise to the trend of micro influencers who are far more attractive in terms of ROI than celebrities. This is because micro influencers while having a smaller following have a deeper connect with their followers. Fears of the Chinese government misusing the data on Tik Tok exist. But that does not take away the intrinsic value of this new medium to engage with customers.

On the role of cognitive branding in education

We must understand the prewired beliefs of people about education. We should not try to fight these beliefs but rather align with them. We must try to understand what students are looking for: Star faculty? Tie ups with foreign universities? India has a rich tradition of gurus. In fact, the term Guru is owned by us. There is a belief that certain things can be understood only with the guidance of a guru. Educational institutions must make themselves indispensable by positioning themselves as gurus.