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BEESY is a top-rated insights agency applying rigorous behavioral science solutions to unlock competitive opportunities and advance commercial outcomes for our clients.  Through our deep expertise in the behavioral sciences, marketing strategy and customer insights, we have developed research solutions that solve key challenges across healthcare/biopharma, and consumer packaged goods (CPG).
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At BEESY’s core is the identification of the hidden drivers that impact most decision-making. By going beyond the surface-level (traditional research), we uncover true causes, influences, and triggers that activate change and create better outcomes for our clients. Our methodologies are centered around behavioral audits, qualitative, quantitative and sales & marketing consulting.
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Consumer: Innovation, Package Testing, e-comm/omni-channel, Premiumization, Claims/Message Testing, Journey/Tracking, Behavioral Segmentation, B-Sci Audit/Playbook
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Pharma/healthcare: Journey & Segmentation, New Product Development/Testing, Understanding & Changing HCP/Patient Behavior, Messaging & Communications Testing.
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Whether you are looking to win in the new digital connected world, acquire an edge over competition, or uncover new behavioral science ideas to create change -- BEESY has highly-actionable solutions for you. Reach out to us so that we can discuss how BEESY can help solve your next challenges!

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<p><span style="font-weight: 400;">Memory-based decisions are dominant when choices are limited. Forty years ago, when there were four soda brands and two stores in the neighborhood, consumers could memorize options and recall what was needed. In the current landscape, where a surplus of soda options exists, it makes memory-based choices less relevant.</span></p>
<p><span style="font-weight: 400;">As the environment gets increasingly complex, our brain doesn’t have the capacity, nor the care, to remember soda options. As a result, humans have learned to cope with this problem in two ways: </span></p>
<ol>
<li><span style="font-weight: 400;">Ignoring information</span></li>
<li><span style="font-weight: 400;">Outsourcing decisions, or what cognitive scientists call, “cognitive offloading”.</span></li>
</ol>
<p><img decoding="async" class="aligncenter wp-image-24352 size-full" src="https://greenbook.org/mr/wp-content/uploads/2020/05/Screen-Shot-2020-05-15-at-2.40.56-PM.png" alt="" width="1072" height="394"   /></p>
<h3>Cognitive Outsourcing — Great Choices, Little Effort</h3>
<p><span style="font-weight: 400;">Cognitive outsourcing sounds like a futuristic term out of Star Trek, but in reality, we have performed this mental function for decades. Have you ever counted on your fingers instead of using your head? Or have you used a calendar to remember an important date instead of storing it in long-term memory? Cognitive outsourcing is relying on technology, people, or the environment for cognitive functions to reduce the demand on our brain, which helps humans make good enough choices while using less mental energy.</span></p>
<p><span style="font-weight: 400;">3 particular areas humans outsource:</span></p>
<ol>
<li style="font-weight: 400;"><b>Technology</b><span style="font-weight: 400;">: We Google definitions instead of remembering them. Facebook reminds us of people’s birthdays. Smartphones keep track of numbers. Netflix tells us what we like to watch. Automatic monthly subscription services like Dollar Shave Club, provide products so that we don’t have to remember to buy a razor.</span></li>
<li style="font-weight: 400;"><b>People</b><span style="font-weight: 400;">: We use Amazon reviews to make choices, instead of looking at product features. We ask trusted friends for fashion advice instead of searching for ourselves.</span></li>
<li style="font-weight: 400;"><b>Environment</b><span style="font-weight: 400;">: We don’t remember the snack aisle in the grocery store, but we know how to get there once we are in the store. Structural cues such as a building, landmarks, slopes in the terrain, signage, or any structural feature can alleviate our need for memory. </span></li>
</ol>
<p><img decoding="async" class="aligncenter wp-image-24353 size-full" src="https://greenbook.org/mr/wp-content/uploads/2020/05/Screen-Shot-2020-05-15-at-2.40.50-PM.png" alt="" width="1208" height="296"   /></p>
<h3>More Cognitive Outsourcing = Less Need for Memory</h3>
<p><span style="font-weight: 400;">The shift from “memory-based choice” to “cognitive outsourcing” is driven by two factors: 1) an increased accessibility of technology (e.g., technology at our fingertips) and 2) proliferation of brands, products, benefits and choices (cognitive overload). Our brain adapts to these changes not by trying to remember different products and distinctive features, but instead, by “outsourcing” choices to the environment to minimize the burden on our brain.</span></p>
<p><i><span style="font-weight: 400;">The demand for cognitive resources has intensified, making it less likely to use precious mental real-estate for brand names.</span></i></p>
<h3>Marketers Listen Up! Mental Availability and Brand Salience are Fading Concepts</h3>
<p><span style="font-weight: 400;">Brand salience, </span><i><span style="font-weight: 400;">the propensity of a brand to be thought of in buying situations,</span></i><span style="font-weight: 400;"> is an important factor for brands, but it is not the complete picture. Investing resources on building salience and mental availability has three issues…</span></p>
<h3>1.  Memory is not a Pre-Requisite to be Chosen</h3>
<p><span style="font-weight: 400;">Many iconic brands possess a privileged place in memory, but being accessible or salient during consumer choices is not a pre-requisite to be chosen. We are increasingly witnessing small, unheard of brands and new start-ups are winning over consumer choices compared to the top of mind iconic name brands. Being remembered and top of mind at buying occasions can help but it is not a necessary condition for being chosen!</span></p>
<h3>2. Memory is Reactive</h3>
<p><span style="font-weight: 400;">Being thought of in buying situations</span><i><span style="font-weight: 400;"> (brand salience</span></i><span style="font-weight: 400;">) hinges on customers 1) having a need, </span><i><span style="font-weight: 400;">then</span></i><span style="font-weight: 400;"> 2) recalling a brand in a buying situation. Newer marketing tactics are not passively waiting for customers to get into a “<a href="https://www.greenbook.org/marketing-research/segment-needs-drive-design">need state</a>” but instead are creating needs for customers. Proactive marketing should not wait for customers to get to the store or shelf, but leverage new channels, technology, and the power of social influence to generate new buying occasions for their products. Instead of fighting for the “moment of truth”, brands are creating new buying occasions in the mind of the consumer (proactive) instead of being remembered (reactive).</span></p>
<p>A “memory-centric” focus on marketing will be one step behind the competition. Brands are fighting a war of cognitive resources that will never be won with memory in the future. To many incidental, momentary cues can impact decisions.</p>
<h3>3. Memory is a Poor Investment</h3>
<p><span style="font-weight: 400;">Brands exhaust resources to boost brand salience and mental availability with the hope of increasing the </span><i><span style="font-weight: 400;">probability</span></i><span style="font-weight: 400;"> of being chosen. However, the marketing required for a brand to be thought of in buying situations is like pushing a boulder up a mountain or trying to squeeze six people into a VW bug. It’s hard and can be a waste of resources. If consumers consult with their memory for buying, brands are not making it easy enough for customers to choose them. There are limited time and space in the buying cycle for effortful memory.</span></p>
<p><span style="font-weight: 400;">Investing in brand salience can increase the probability of purchase, however, it’s important to consider 2 things:</span></p>
<ol>
<li style="font-weight: 400;"><span style="font-weight: 400;">the </span><b><i>amount of marketing spend</i></b><span style="font-weight: 400;"> needed to get your customer base to recall your brand at a moment that matters (sustained over time)</span></li>
<li style="font-weight: 400;"><span style="font-weight: 400;">the </span><b><i>probability</i></b><span style="font-weight: 400;"> </span><b><i>increase</i></b><span style="font-weight: 400;"> of being chosen from memory investments</span></li>
</ol>
<h3>What Should Marketers Do?</h3>
<p><span style="font-weight: 400;">Memory is not dead, but limited. The fight for limited mental real estate has diminishing returns for marketing. Marketers should move beyond “memory-based marketing” (e.g., brand salience, mental availability) toward working with how consumers outsource their cognitive resources. Instead of plowing resources to force-fit your brand into the minds of consumers, brands should reduce the cognitive burden of being chosen.</span></p>
<p><b><i>The goal of winning consumer choices via outsourcing is making it cognitively easier for customers to choose your brand.</i></b></p>
<ol>
<li style="font-weight: 400;"><b>Understand — How can/are consumers outsourcing their decisions.</b><span style="font-weight: 400;"> What technology, social influencers, or environmental cues facilitate choices for your category?</span></li>
<li style="font-weight: 400;"><b>Identify — Opportunities to Circumvent Memory. </b><span style="font-weight: 400;">What can we impact to circumvent memory-based choices to prompt purchase? Think about new occasions, new jobs to be done, new channels to communicate.</span></li>
<li style="font-weight: 400;"><b>Execute — Make your brand easier to Choose</b><span style="font-weight: 400;"> — cognitively fluent to process (simple communication, heuristics, fluency devices), easier to choose (reduce complexity at the shelf, piggybacking, distinctive assets), and physically easier to buy and use (e.g., less packaging, DTC, subscribe, Auto-pay, reorder)</span></li>
</ol>
<p><img decoding="async" class="aligncenter wp-image-24350 size-full" src="https://greenbook.org/mr/wp-content/uploads/2020/05/Screen-Shot-2020-05-15-at-2.38.11-PM.png" alt="" width="1396" height="1154"   /></p>


Marketers Listen Up: 3 Reasons Mental Availability and Brand Salience May Be Failing You

<p>Innovation success is largely achieved by getting customers to adopt as quickly as possible. Despite businesses relentless focus on innovating new features, benefits, and solutions, they forget the #1 issue preventing the adoption of new products – changing customer behavior.  What stands in the way of adoption is the consumer resistance to change.  Therefore, innovation success is highly reliant upon <em>reducing consumer resistance to change</em>. This article reveals the plague of new product success the <strong>“Pro-change bias”</strong>, and <strong>uncovers the 3 factors</strong> needed to optimize the uptake of new innovations.</p>
<figure><img decoding="async" class="CToWUd a6T" tabindex="0" src="https://ci4.googleusercontent.com/proxy/PzLtPBIZuRwz3UWJAlUeT_tt1wC0lKZrowtQHaRT6o5CUvwHMkD6R9-OJAXKRtDvsnWHUzXfsGn3yxAzyuof13qucM87BhGBotwPQPXB0M5vHDp0p_bGfA=s0-d-e1-ft#https://cdn-images-1.medium.com/max/1600/1*e7Lnj8hzpQ-r7GxuiGi6Pw.png" /></figure>
<h3></h3>
<h3>Pro-Change Bias is Preventing Innovation Success</h3>
<p>My mother was having issues with her phone bill so I took the initiative to call AT&amp;T to find a resolution. While on the call the AT&amp;T service rep mentioned an upgrade to the account to save $80 a month. My natural reply was “Ok&#8230; so what’s the catch?” He said, “no catch, AT&amp;T upgraded its networks 8 months ago and we&#8217;re offering customers better packages at lower prices — no changes to our plan and no hidden fees.” My mom perceived a change and avoided the ‘upgrade’ missing out on over $900 in savings a year.</p>
<p>My mom&#8217;s behavior to not adopt the new plan and additional savings illustrates the potent <strong>human tendency to strive for consistency and status quo rather than to continuously search for, and embrace new</strong>. Even if adopting a new behavior is as effortless as saying “yes”  change still involves uncertainty which makes it psychologically hard. Innovation implies new, change and different causing friction on mental and behavioral routines and ultimately customers not adopting innovation and sticking with what they are used to.</p>
<blockquote><p>To market successful innovations, we need to shift our thinking from why customers adopt to why they resist.</p></blockquote>
<p><strong>To Overcome the Pro-Change Bias </strong>we need to brush aside the assumption that consumers are being “open” and “willing” to change and embrace the fact that consumers strive to maintain their deep-seated habits. We can overcome the pro-change bias by finding <strong>The Innovation Sweet Spot…</strong></p>
<figure><img decoding="async" class="CToWUd a6T" tabindex="0" src="https://ci5.googleusercontent.com/proxy/jSdCqIhe-nKDlpHad706PicUUrOb8atJdR-xL47nxcY3S8m0cZjYuseucdkbUevEJHxzuUsjZOIKFkaqCR-U7-YpIZEXkEvqrubRy0j6EknO-UuuhQRM7g=s0-d-e1-ft#https://cdn-images-1.medium.com/max/1600/1*RUq8Q6h3J_7Zz8VZpHtlsw.png" /></figure>
<h1>Finding the Innovation Sweet Spot</h1>
<h2></h2>
<h2>1. Show Value</h2>
<p>Most innovations are designed to add value above the current state of affairs in the market. Yet, most face the challenge of communicating their value in an environment with overwhelming choices and shrinking attention spans. To be considered and chosen, consumers need to quickly and intuitively see the value of the new product. Without a motivational incentive, consumers are not likely to pay attention and end up choosing their routine brands. To capture customers dwindling attention spans by focusing on <em><strong>multi-sensory engagement to</strong></em> <strong>help customers see, feel and experience new innovation value</strong>. Consider these two approaches to helping customers see value…</p>
<ol>
<li><strong>Tell Stories</strong>.  Craft a relevant story of value that resonates with your customers.  Amazing how Apple takes an excessively priced iPhone and threads together a compelling narrative that results in more buying and upgrading their phone each year. Features and benefits matter but stories wrap the new product into a cultural narrative that helps sell the larger value proposition.</li>
<li><strong>Engage Senses.</strong> Customers perceive and experience value through all five senses and the more we communicate to all senses can provide rich experiential benefits to help customers see and feel value.</li>
<li><strong>Use Heuristics.</strong> Heuristics are mental shortcuts that help customers process information and make quick choices. For example, by adding green to packaging can symbolize natural or healthy – relevant features valuable to customers. Finding the cues that customers use to choose can help communicate the value of the product and win the war at the shelf.</li>
</ol>
<figure><img decoding="async" class="CToWUd a6T" tabindex="0" src="https://ci3.googleusercontent.com/proxy/cAUgPwrwA2M9T2IiThBFmVKdaN5ZadqlUV57w97w8cG9iv5WCLYocX7s7oGdm1okby9umzwDjeM2Ly_Yk5VxwZsFh_840HQIARVuzWg5nKamIYP5tbPxci2ZMg=s0-d-e1-ft#https://wildbluetech.com/wp-content/uploads/2016/12/Promenade_img03c.jpg" alt="Image result for candy aisle experience" /></figure>
<h2></h2>
<h2>2. Leverage Existing Habits</h2>
<p>Our brains are wired to preserve our habits and daily routines. Most new products disrupt routines. With the human tendency to strive for consistency rather than continuously search for and embrace new products, brands should focus on planting innovations into customers existing routines. For example, instead of P&amp;G launching another effortful step in the laundry process, gracefully tucked the Downy In-Wash Scent Boosters into the laundry routine, creating one of the most successful product launches in the past decade. <img decoding="async" class="aligncenter size-full wp-image-23966" src="https://wp.greenbook.org/mr/wp-content/uploads/2020/03/unnamed.png" alt="" width="660" height="188"   /></p>
<p>&nbsp;</p>
<p>By understanding customers&#8217; behavioral patterns, brands can effectively position new products to enhance customers&#8217; lives as opposed to add friction. The ability to disrupt a consumer habit and adopt a new and likely unfamiliar product innovation is possible but psychologically harder. Therefore, to increase the odds of adoption the focus is not to disrupt our daily life habits but to show how innovations work with customers&#8217; existing habits.</p>
<p><img decoding="async" class="CToWUd a6T" tabindex="0" src="https://ci4.googleusercontent.com/proxy/2x4RslhXx27_OUhhvdddah2iwzWzKbhvk8kNltj4YOXCk62LwxmcrleZTT39VkSbCHoqI5aK7lxY0p1DQ8K1ui2pPh44kYXcjv1n6dKUpZUidgtL=s0-d-e1-ft#https://jasonmartuscello.com/wp-content/uploads/2020/02/image.png" alt="" width="2582" height="1152" /></p>
<h2></h2>
<h2>3. Reduce Risk.</h2>
<p>New simply means risky. Whether it’s a new soda – will it taste good? A new smartphone – are the features good? Or the new clothing brand–will my friends approve? Customers face crippling uncertainty with adopting products they are not used to or familiar with. Therefore the goal to accelerate adoption is to reduce risk and uncertainty with the new innovations.</p>
<p>Customers perceive risk on many levels beyond economic risk (is the new computer worth the price). New products have <em><strong>social risks</strong></em> (what will people think of my new outfit?), <em><strong>physical risks</strong></em> (health consequences of soda) and <em><strong>psychological risks</strong></em> (how will this product make me feel?). Making benefits to ‘innovations’ crystal clear is necessary but insufficient to accelerate adoption. We need to also appeal to deep human needs of safety and security by removing uncertainty and risk.</p>
<h3>Tactics to reduce uncertainty…</h3>
<ul>
<li><strong>Analogies</strong> – Facilitate consumers’ assessment of new product benefits (e.g., Airbnb of Car rentals, Tide Pods of Dishwasher)</li>
<li><strong>Perceived popularity</strong> – Helps consumers’ make it feel widely adopted and ‘normal’ to buy (e.g., #1 rated mattress)</li>
<li><strong>Reviews</strong> – Helps show other consumers’ are using and satisfied with the product (e.g., 5,000 – 5 stars reviews)</li>
<li><strong>Categorization Cues</strong> – Helps consumers to better understand the new product’s features (e.g., a new product with familiar benefit)</li>
<li><strong>Product Demonstrations</strong> – Help consumers to familiarize themselves with the new product’s characteristics</li>
<li><strong>Mental Simulation</strong> – Help consumers to align the new product with existing usage patterns</li>
<li><strong>Warranties</strong> – Removes perceived risk (e.g., Cancel anytime, No-question asked returns)</li>
</ul>
<figure></figure>
<figure><img decoding="async" class="CToWUd a6T" tabindex="0" src="https://ci5.googleusercontent.com/proxy/xXeB4BhJgZVLgATd42rrGW4-jpLFQ8hMvS5cDlxQkvQobnhteAbqdrwhcsH5TNYp8VtC4GUFkYrCfIDaL7_OWGpiWAdD61gV9xJKh9rDcmZrH3y4JbgT_g=s0-d-e1-ft#https://cdn-images-1.medium.com/max/1600/1*WYhbpL0JAHM_ruptHHqFWw.png" /></figure>
<p>By applying behavioral economics we can accelerate adoption and diffusion to achieve the breakthrough success of innovations. Success hinges on our ability to communicate, at a conscious and subconscious level, that innovations</p>
<ol>
<li>Adds incremental value</li>
<li>Enhances existing habits</li>
<li>Reduce the risk associated with a purchase</li>
</ol>
<p>Stated differently, we need to shift our thinking from “<strong>why customer adopt”</strong> to “<strong>why they resist innovations</strong>”.</p>


Accelerating Innovation Adoption with Behavioral Economics

<div><em><strong>Editor&rsquo;s Note:</strong> Jason Martuscello&rsquo;s article on Premiumization earlier this year was one of the most popular blog posts so far this year. Now, Jason extends the thinking behind the concept by writing about specific deployment strategies that can be employed by different brands. </em><em>This is a really interesting read for both marketers and researchers.</em></div>
<hr>
<div>
<p>In the widely popular blog <strong><a href="https://www.greenbook.org/insights/brand-strategy/premiumization-the-key-to-brand-growth"><em>Premiumization: The Key to Brand Growth</em></a></strong>, we discussed how big brands are losing customers to private label and store/retail brands (e.g., Amazon &ldquo;Basics&rdquo;, Target&rsquo;s &ldquo;Good &amp; Gather&rdquo;, Whole Foods &ldquo;365&Prime;). Traditional approaches, such as penetration and cost-cutting or being different and distinct, are no longer enough to grow in mature markets. We discussed the solution CPG is embracing to win over customers and create sustainable growth. Through the 5 Paths to Premiumization, distinct social, biological, psychological, evolutionary and emotional reasons, brands can get customers to pay premium prices for products.</p>
<h3>Premiumization Part 2: Is All About How&hellip;</h3>
<p>Although premiumization is becoming the widely accepted solution for growth, integrating it has been less than straight forward. Should we add new features or benefits? Should we change the name? Update the packaging? Not change anything? Maybe remove something? Underlying each specific question, the theme is the same&hellip;Clients are all asking, &ldquo;How do we start to premiumize?&rdquo;</p>
<p>Premiumization Part 2 uncovers a systematic approach for actioning premiumization. We provide a starting point to guide premiumization efforts through prioritizing low cost, least effort changes to add perceived customer value and command margin increases. Before introducing the four approaches to premiumization, we highlight 3 barriers to premiumization&hellip;</p>
<h3>Premiumization Does Not Start with Innovation</h3>
<p>Innovating products is one way to get customers to pay more for products, and it is almost always also a guaranteed way to drive up costs and eat into the premium margin. The key is to not lose sight of the fundamental premise of premiumization, by adding things out of the gate. Starting with innovation is like trying to start a profitable business with loads of debt. Before layering on costs, we have to consider alternative ways to premiumize before adding features and benefits.</p>
<h3>Premiumization Is Not About More Revenue But Raising Perceived Value</h3>
<p>Many brands are exploring product combinations, increasing pack sizes or offering twin packs which may drive short term sales but can diminish premiumization efforts. Effective premiumization is about increasing customer perceived value to earn more money per unit of product sold (contribution margin). Be cautious about strategies that drive sales, as they may counteract premiumization efforts. For example, twin packs or larger sizes give the perception of &lsquo;value&rsquo; and diminish pricing power. The end goal is to drive value and get customers to choose your brand over private label and retail/store brands and pay more for it.</p>
<h3>Price Elasticities Are Guides, Not Complete Price Tools</h3>
<p>Some say if you increase the price, you will lose your volume. I say if you don&rsquo;t increase your price you will lose your business. The point of premiumization is to understand what customers value and will pay premiums so we can effectively raise prices. The point is not to get rid of economic tools but to complement them with the psychology of how customers choose.</p>
<h3>4 Strategies to Premiumize:</h3>
<p>Premiumization is about increasing the perceived value of the product while minimizing the brands&rsquo; costs in doing so. To facilitate an actionable path to create brand value with premiumization, we created a systematic approach to guide efforts that breaks down into four strategies:</p>
<p><strong>Strategy 1:</strong> Just Raise the Price<br><strong>Strategy 2:</strong> Reframing the Value Proposition + Increase the Price<br><strong>Strategy 3:</strong> Innovate Existing Products + Increase the Price<br><strong>Strategy 4:</strong> Innovate New Premium Priced Products + Increase Price Across Portfolio</p>
</div>
<p><img class="aligncenter size-large wp-image-23201" src="https://greenbookblog.org/wp-content/uploads/2019/10/Screen-Shot-2019-10-07-at-10.58.11-AM-1024x673.png" alt="" width="1024" height="673"></p>
<div>
<h3>Strategy 1 &ndash; Just Raise the Price</h3>
<p>More and more global brands, such as Nestle, Unilever, Hershey, and Mondelez, are increasing prices to premiumize and protect their reputation from private labels. To command a price premium, the easiest and often overlooked way is simply just raising the price. In a rational world, a price increase needs to be &ldquo;justified&rdquo; by consumers, but despite decades of self-report surveys telling us price is a key purchase criterion, behavioral science suggests otherwise.</p>
<p>Here are three reasons a price increase alone may be justified.</p>
<ol>
<li><strong>Customers Rarely Remember Prices</strong>. In a famous Journal of Marketing study, researchers found that 50% of customers could not correctly name the price of items they had placed in their shopping cart just seconds before being interviewed. Even for frequently purchased products, more than 50% of customers have no idea about prices paid. Limitations in price knowledge open the opportunity to premiumize.</li>
<li><strong>Higher Prices Signal Better Products.</strong> When sorting through cluttered shelves, customers often skip comparing product benefits and look for price to infer quality. Price serves as a &lsquo;mental shortcut&rsquo; for quality. Higher prices relative to category competitors signals &lsquo;I am better&rsquo;, making the choice, in many cases, easier for customers.</li>
<li><strong>Trusted Brands are Safer Choices.</strong> With more product choices, the risk and uncertainty with changing a choice make reputable brands the safe choice and worth an extra price.</li>
</ol>
<p>Strong brands that have relevant value propositions should consider the upsides and consequences of just raising prices. However, many brands cannot sustain raising prices alone due to market conditions (declining share, lack of relevancy, intense competition, etc.). For example, Heinz, a declining brand that is losing relevancy, should look to strategies 2, 3 or 4 to premiumize.</p>
<p><img class="aligncenter size-large wp-image-23202" src="https://greenbookblog.org/wp-content/uploads/2019/10/Screen-Shot-2019-10-07-at-10.58.23-AM-1024x388.png" alt="" width="1024" height="388"></p>
<h3>Strategy 2 &ndash; Reframe the Value Proposition + Increase the Price</h3>
<p>Many legacy brands got where they are because they are really good at what they do. We all want the next big breakthrough innovation but what most brands need to premiumize is to increase relevancy with customers&rsquo; evolved expectations. For example, customers don&rsquo;t just wear clothes for looks but now also for comfort. Food is now eaten for taste but also to not kill our waistline. And cleaning supplies should not only clean but not spread chemical warfare on our kitchens.</p>
<p>Premiumization strategy 2 is about small, subtle changes in framing the value proposition to increase relevance with customers&rsquo; evolved expectations and command price premiums in doing so. Refreshing a package label, adding heuristic buying cues, curating a more relevant value statement, or simplifying cluttered labels are some of the executions used to reframe the offering. To premiumize via reframing the value proposition consider:</p>
<ul>
<li><strong>Using the 5 Paths to Premiumization to Identify Untapped Value:</strong> Customers don&rsquo;t just pay extra for more features or benefits. We identified 5 distinct drivers that are based on fundamental needs that customers are willing to pay more for which can be utilized to create and frame new value for customers.</li>
<li><strong>Communicating Value both explicitly and implicitly:</strong> Reframing the value proposition can occur via implicit and explicit product marketing cues without actual substantial product changes. For example, by adding green or brown color accents to packaging brands can cue healthy (implicitly), or by directly communicating &ldquo;natural&rdquo; or &ldquo;non-GMO&rdquo; (explicit) can simplify choice and capture premium price points.</li>
</ul>
<p>By finding new value hooks via the 5 Paths of Premiumization and communicating the product better delivers on them (both implicitly and explicitly) you can create new value.</p>
<p><img class="aligncenter size-large wp-image-23203" src="https://greenbookblog.org/wp-content/uploads/2019/10/Screen-Shot-2019-10-07-at-10.58.34-AM-1024x504.png" alt="" width="1024" height="504"></p>
<h3>Strategy 3 &ndash; Innovate Existing Products + Increase the price</h3>
<p>The third way to premiumization is by innovating products to add more value and increase the willingness to pay. Innovating, through adding new features or benefits, is an easy way to create perceived value, but faces 2 challenges that need to be overcome:</p>
<ol>
<li>How do we create additional features/benefits (perceived value) at the lowest cost? Adding significant costs to products (even if customers pay more for them), offsets the purpose of premiumization. Remember, the goal of premiumization is to increase perceived value and willingness to pay at the lowest possible cost to increase margins on every unit sold.</li>
<li>How do we execute and communicate that new value? Once a new feature/benefit is uncovered, what is the best way to frame and communicate the new benefit to drive willingness to pay? For example, fat-free may be what is valued but the difference between 99% fat-free and 1% fat can significantly impact the perception of value. Premiumization execution matters!</li>
</ol>
<p>Before brainstorming sessions or adding features or benefits, deeply understand the 5 Paths to Premiumization to understand what customers are willing to pay more for. By identifying the path customers are willing to pay more for in your category and not addressed by competition can create sustainable competitive advantages.</p>
<h3>Strategy 4 &ndash;&nbsp; Innovate New Premium Priced Products + Increase Pricing Across Portfolio</h3>
<p>The fourth premiumization play is to add premium products to the portfolio and increase the pricing of the existing product lines. The net result is the premiumization of the portfolio. The new high price point product introduction halos the other products in the portfolio and adds equity to the current line.</p>
<p>For example, in 2014 Nike took this strategy, innovating new athletic footwear at premium price points and prices started increasing on other items in their portfolio.</p>
</div>
<div><img class="aligncenter size-large wp-image-23204" src="https://greenbookblog.org/wp-content/uploads/2019/10/Screen-Shot-2019-10-07-at-10.58.45-AM-1024x483.png" alt="" width="1024" height="483"></div>

Premiumization: The Key to Brand Growth Part 2

<p><strong><em>Editor&rsquo;s Note: </em></strong><em><span style="font-weight: 400;">This post is part of our Big Ideas series, a column highlighting the innovative thinking and thought leadership at IIeX events around the world. Jason Martuscello will be speaking at IIeX North America 2019 in Austin, TX. If you liked this article, you&rsquo;ll LOVE IIeX North America. Click <a href="https://iiex-na.insightinnovation.org/">here</a> to learn more.&nbsp;</span></em></p>
<p><em><strong>Update:</strong> Looking to learn more about premiumization? <strong>Check out <a href="https://www.greenbook.org/insights/research-methodologies/premiumization-the-key-to-brand-growth-part-2">Part 2</a></strong>.&nbsp;</em></p>
<hr>
<h3>Problem: Growth of Private Label &amp; Store Brands</h3>
<p>Private label and retail brands are radically shifting the competitive landscape.&nbsp; Brands such as Amazon &ldquo;Basics&rdquo;, Walmart &ldquo;Great Value&rdquo;, Wholefood&rsquo;s &ldquo;365&rdquo; and Target&rsquo;s &ldquo;Market Pantry&rdquo; are increasingly becoming mainstream alongside household staple brands.&nbsp; Customers are finding fewer and fewer reasons to pay premium price tags for &lsquo;big-brand&rsquo; names. Established, trusted and routinely purchased products are being traded for &ldquo;good enough&rdquo; category equivalents.</p>
<p><img class="aligncenter size-full wp-image-22063" src="https://greenbookblog.org/wp-content/uploads/2019/02/ketchup-graphic.jpg" alt="" width="630" height="286"></p>
<p>More and more customers are questioning forking over the extra cash for Charmin, Cottonelle or Quilted Northern when cheaper toilet paper like Amazon&rsquo;s Presto get the <em>job done</em>.&nbsp; Why should customers pay more for Heinz ketchup when alternative bottles of ketchup bearing identical ingredients are a fraction of the price? Even if the ketchup is &lsquo;better&rsquo; customers are likely not going to easily and intuitively see the difference.&nbsp; The point is, customers are getting smarter and less willing to pay premium prices for a just a &ldquo;brand name&rdquo;, fancy packaging and brand characters.&nbsp; So, what is the solution?</p>
<h3>Being Different is Not Enough&hellip;</h3>
<p>With busy schedules and information overload, customers have no time to sort through the choices available and rarely see value differences between products.&nbsp; Should I choose toothpaste that freshens breath, whitens my teeth, or prevents gingivitis? Is Fluoride good for me? Does natural toothpaste even work?&nbsp;Peppermint or spearmint? &nbsp;Brands work effortlessly to differentiate from other products, by creating &lsquo;distinctive assets&rsquo; making products easy to remember and recall at the moment of purchase.</p>
<p>Interestingly, what brands want, and customers actually do are at odds. As brands work tirelessly to show differences between products, customers are automatically oversimplifying and chunking them into buckets. &nbsp;With little time or energy for customers to perceive differences, a brand&rsquo;s goal of simply being different is not enough to fend off private label competition.&nbsp; Customers don&rsquo;t want to wade through and evaluate the difference, they want an immediate and intuitive solution.&nbsp; Mere difference is no longer enough.</p>
<p><img class="aligncenter size-full wp-image-22064" src="https://greenbookblog.org/wp-content/uploads/2019/02/tp-graphic.jpg" alt="" width="1980" height="988"></p>
<p>&nbsp;</p>
<h3>The Key to Brand Growth&hellip; Premiumization</h3>
<p>It is becoming widely accepted for legacy brands to turn to the science to premiumization to overcome competitive pressure from store/retail brands and private labels.&nbsp; Premiumization is simply a means of getting customers to pay higher prices for a brand or product. &nbsp;It&rsquo;s about stretching the category norms upwards and creating a demand for customers to pay higher category prices. &nbsp;When we say premium, we are not talking about luxuries like Gucci or Prada, but rather reasons why customers would be willing to pay more for products. &nbsp;For example, if the average category price for a roll of toilet paper is 0.84 cents premiumizing toilet paper is getting customers to pay 0.89 per roll.</p>
<p><img class="aligncenter size-full wp-image-22062" src="https://greenbookblog.org/wp-content/uploads/2019/02/graph.png" alt="" width="1956" height="978"></p>
<h3>Premiumization Delivers Value to Customer, Growth to the Brand</h3>
<p>Premiumization can be understood similar to brand equity. &nbsp;If brand equity is the commercial value that is derived from customer perception, then premiumization is the vehicle from which that value is achieved. &nbsp;At the heart of premiumization is the understanding of how customers perceive and assign value. &nbsp;Merely tracking awareness and intention measures is not enough to inform actionable business decisions.&nbsp; Instead, focusing on what drives price premiums in a category allows strategic and actionable paths to move the commercial needle.&nbsp; &nbsp;Based on an extensive review of the behavioral science literature we have identified 6 key pathways to command premium prices from a customer. &nbsp;The paths are not just rational product attributes or functional benefits, but the deep social, psychological and emotional reasons customers pay premium prices for products.</p>
<p><img class="aligncenter size-full wp-image-22088" src="https://greenbookblog.org/wp-content/uploads/2019/02/martuscello--e1551141499721.jpg" alt="" width="1024" height="267"></p>
<p>&nbsp;</p>

Premiumization: The Key to Brand Growth

<p><i><b>Editor’s Note: </b>I have an inherent distrust of the GPS in my car.  Maybe I’m becoming a cranky old guy, but I feel it’s better to really learn a route than to passively follow my car’s instructions.   Jason Martuscello argues that such “cognitive offloading” is an inherent component of our modern world, and marketers should embrace it.  Further, market researchers need to account for this feature as they work with models of consumer decision making.</i></p>
<hr />
<p>Every time I go to the store, it seems like my choices are multiplying. Buying cookies is no longer as easy as picking chocolate chip, oatmeal or Oreos. We now have double stuffed, thin, gluten free, fat-free, low sugar…the list goes on. Whether it’s cookies, colas, cars, or clothes — the volume of brands and products has proliferated making it incomprehensible for customers to process information and make choices. This is bad for business! Luckily, behavioral science has a solution…</p>
<p><img decoding="async" class="aligncenter wp-image-21712 size-full" src="https://wp.greenbook.org/mr/wp-content/uploads/2019/01/Image1-1.png" alt="" width="974" height="739"   /></p>
<p>&nbsp;</p>
<h3>Old Marketing: Building Deep Mental Associations</h3>
<p>For decades marketers have focused on proverbially “getting into the customer&#8217;s mind.” Whether it’s positioning, building associations or refreshing memory structures — the focus has been on owning precious ‘mental real estate’ to be thought of and chosen in the moment of truth!</p>
<p>While it is nice to be Kleenex or Coke but in today’s society, the reality is we no longer need to be “top of mind” or “always accessible” to be consistently chosen. With technology at our fingertips, our reliance on the brain to make brand choices is diminishing. This is good because our brains can’t keep up with an overwhelming number of options. As brands have increased 10-fold in the past 20 years, our brains information storage capacities have not increased to accommodate.</p>
<p>Our brain’s fascinating solution to overcome information constraints has been our creative mental ability to cognitively offload information.</p>
<p>&nbsp;</p>
<h3>Cognitive Offloading: The Future of Marketing</h3>
<p>Have you ever counted on your fingers? Used Google Maps for directions? Or googled a movie review? This is cognitive offloading. Cognitive offloading is not relying on your brain for processing, remembering, deciding or acting. Instead we ‘offload’ cognitive functions to the external world — mainly technology, environment, or social.</p>
<p>My ex-girlfriend used to get furious at me for never remembering our anniversary date. I never felt the need to remember when I could simply store the date in my iPhone and automatically be reminded — no memory needed! What’s interesting is that I still remember the phone number of my first high school girlfriend. We all can relate to how we used to remember information which now we have the technology to outsource our memory. For example, we use Facebook to offload remembering friends’ birthdays and use Google maps instead of remembering directions. With the rise of technology, we no longer have to remember information, and it’s actually quicker, more efficient and easier to outsource cognition.</p>
<p>The times have changed, things we once had no choice but to remember are now being transformed by our brain’s creative capacity for offloading cognitive functions to phones and the environment.</p>
<p>&nbsp;</p>
<h3>How Brands can help Customers Cognitively Offload?</h3>
<p>In my recent AMA talk, I highlighted the 3 key opportunities for outsourcing cognition. Outsourcing is accomplished by looking at the activities in the customer journey and seeing how we can 1) reduce information processing, 2) simply decision-making and 3) making easier to act. Outsourcing mental activities can be achieved by using technology, environment or people. Let’s look at some brilliant execution of each of these…</p>
<p><img decoding="async" class="aligncenter size-full wp-image-21713" src="https://wp.greenbook.org/mr/wp-content/uploads/2019/01/Image3-1.png" alt="" width="974" height="516"   /></p>
<p>&nbsp;</p>
<h5><strong>Reduce Information Processing</strong></h5>
<p>There are many ways marketers can help customers offload cognition but one of the most powerful is the social proof of customer reviews. If 10,000 people like it, I must like. We all are familiar with making decisions for Amazon purchases without even looking at the product, but just reviews. 5 stars signals the safe choice. Another example is with taking pictures of our food. Customers are less looking to menu’s and outsourcing information from photos (think yelp or stored photos in our smartphones. Infusing customer reviews into our websites and on packages is a powerful shortcut to outsource cognition to others helping short-cut our decision time.</p>
<p><img decoding="async" class="aligncenter size-full wp-image-21714" src="https://wp.greenbook.org/mr/wp-content/uploads/2019/01/Image4-1.png" alt="" width="974" height="316"   /></p>
<h5><strong>Simplify Decision-Making</strong></h5>
<p>The rise of the Dollar Shave Club and other subscription services are powerful examples of making decisions easier. Instead of dealing with choosing amongst 40 variants of razors on a weekly basis, the Dollar Shave Club put the razor business on auto-pilot. It removed the cognitive burden of remembering to buy and having to choose a razor. Sharp move!</p>
<h5><strong>Make Easier to Act</strong></h5>
<p>Disruptive businesses like Uber and Door Dash are not growing because of superior “products” but by removing the unnecessary burden of having to move. They simply remove (exerting energy) physical action from the equation. Call it outsourcing action. Consumers want to move less and businesses that capitalize on helping customer be more efficient are reaping massive benefits. Think about it — Uber is removing steps, Amazon is removing clicks, Apple is removing eyeball movements. How are you appealing to our biological need to conserve energy? Make customers move less = business win!</p>
<p><img decoding="async" class="aligncenter size-full wp-image-21716" src="https://wp.greenbook.org/mr/wp-content/uploads/2019/01/Image6.png" alt="" width="974" height="287"   /></p>
<p>For more on “Making Effortless” be sure to check out The Emerging Customer Value Proposition is Shifting from Price…to Easy &amp; Effortless.</p>
<p>In an increasingly complex information environment offloading cognitive processes and painful parts of the customer journey is rapidly becoming the key to marketing success. Should we discount the value of building memories? Absolutely not! But we should consider our relative focus on making information, choices and behaviors easier for customers.</p>


Offloading Cognition: The New Behavioral Science Approach to Winning Customers

<h4>Has Dual Systems Thinking Run its Course?</h4>
<p>“System 1” and “System 2” has been the dominant paradigm embraced by market researchers to interpret decision-making. Breaking down the brain into two distinct ‘systems’ has been extremely helpful for simplifying the complexities of cognition by dividing the brain (e.g., unconscious/conscious, fast/slow, automatic/effortful, intuitive/deliberate) but it has some limitations&#8230;</p>
<ul>
<li>Does not account for context (e.g., decisions change relative to a context)</li>
<li>Does not account for time (e.g., decisions are anchored in time and space)</li>
<li>Not mutually exclusive (e.g., habits are automatic, yet can be conscious)</li>
<li>Does not fully account for social influences or emotions</li>
</ul>
<p>But don’t take it from me. In a recently published series of articles in the premier <em>Journal of Consumer Research,</em> the most respected cognitive, social psychologists, and consumer neuroscientists (many of which were once proponents of systems thinking) concluded…</p>
<p><em>&#8220;Dual-process conceptualizations (“system 1/system 2”) may be inherently misleading, arguing that it is better to view behavior as the result of deep interactions among conscious and unconscious processing. There seems to be consensus for the view that dual-process accounts of behavior, although popular and generative, may be approaching the end of their lifecycle.” (</em><a href="https://academic.oup.com/jcr/article/44/2/276/3858915"><em>Poehlman &amp; Williams, 2017</em></a><em>)</em></p>
<h4>Cognitive Neuroscience is Changing What We Know About the Brain</h4>
<p>Breakthroughs in cognitive neuroscience are transforming much of what we know about how the brain functions which has tremendous implications for marketing and consumer insights. The conventional model of cognition had positioned the brain as a “passive receiver” of information with a linear path of information flow &#8211; we perceive, we process, we act. However, neuroscience has repeatedly demonstrated our brain does not passively wait for information, but rather is “always active”, automatically and continuously, predicting the incoming streams of input before they arrive to prepare us for action (<a href="https://www.cambridge.org/core/journals/behavioral-and-brain-sciences/article/div-classtitlewhatever-next-predictive-brains-situated-agents-and-the-future-of-cognitive-sciencediv/33542C736E17E3D1D44E8D03BE5F4CD9">Clark, 2013</a>).</p>
<p><img decoding="async" class="aligncenter wp-image-20619 size-full" src="https://wp.greenbook.org/mr/wp-content/uploads/2018/05/Screen-Shot-2018-05-18-at-11.40.31-AM.png" alt="" width="902" height="460"   /></p>
<p>Since our brains always active, we are endless learning machines, continuously collecting experiences and sensory inputs, which form the foundations for our predictions (anticipations, expectations).  In other words, our predictions are a result of internalizing repetitive, routine, and statistical regularities in the environment to make fast and effective decisions.</p>
<p><em>“We are not cognitive couch potatoes idly awaiting the next ‘input’, so much as proactive predictavores nature’s own guessing machines forever trying to stay one step ahead by surfing the incoming waves of sensory stimulation.”  – Andy Clark, Professor, University of Edinburgh </em></p>
<p>With our endlessly active brains, continuously making predictions, it helps optimize precious cognitive resources by attending to what is important in our immediate environment. A good way to think of brain functioning is like “Google search” constantly anticipating our searches as opposed to a slow, hard drive loading our stored memories. In short, our brain is always active, constantly making predictions on multiple spatial and temporal scales to help navigate an uncertain future.</p>
<ul>
<li>Watch top neuroscientist discuss this new science in her <a href="https://www.ted.com/talks/lisa_feldman_barrett_you_aren_t_at_the_mercy_of_your_emotions_your_brain_creates_them#t-193351">New 2018 TED Talk</a> or recently published book <a href="https://www.amazon.com/How-Emotions-Are-Made-Secret/dp/0544133315/ref=tmm_hrd_swatch_0?_encoding=UTF8&amp;qid=&amp;sr=&amp;dpID=41MpHd1rBxL&amp;preST=_SY291_BO1,204,203,200_QL40_&amp;dpSrc=detail">How Emotions are Made</a>.</li>
<li>For a scientific treatment on this topic (Friston-free energy principle, Bar-visual cognition, Buckner-default mode network, Barsalou-grounded cognition; Barrett-constructed emotion).</li>
</ul>
<p><img decoding="async" class="aligncenter wp-image-20620 size-large" src="https://wp.greenbook.org/mr/wp-content/uploads/2018/05/Screen-Shot-2018-05-18-at-11.41.42-AM-1024x389.png" alt="" width="1024" height="389"   /></p>
<h3>Where Behavioral Science is Heading</h3>
<p>Is System 1/System 2 still relevant? Yes. However, neuroscience is advancing the dual systems paradigm.  Behavioral science is moving beyond a consciousness-centric perspective (deep), and focusing on a broader range of causal drivers that are highly relevant for marketers and insights to understand, predict and change behavior. This major shift is making behavioral science more applied by providing a broader, holistic picture of customer behavior that is grounded in context and time, two underappreciated drivers of decision-making. Other important developments include:</p>
<ul>
<li>How situations/context change decision-making (grounded cognition, exteroceptive feedback).</li>
<li>How social influences and network effects guide decisions.</li>
<li>How perception of time change behavior (psychological distance, temporal discounting).</li>
<li>How spatial altitudes/different heights impact decisions (spatial distances).</li>
<li>How energy/fatigue influence decision-making (ego depletion, willpower, interoceptive feedback).</li>
<li>How thinking about the future impacts present behavior (simulations, anticipations).</li>
<li>How uncertainty moderates emotions and choice.</li>
</ul>
<p><i>Editor’s Note: This post is part of our Big Ideas series, a column highlighting the innovative thinking and thought leadership at IIeX events around the world. </i></p>
<hr />
<ol>
<li>Clark, A. (2013). Whatever next? Predictive brains, situated agents, and the future of cognitive science. Behavioral and Brain Sciences.</li>
<li>Williams, L. E., &amp; Poehlman, T. A. (2016). Conceptualizing consciousness in consumer research. Journal of Consumer Research.</li>
<li>Poehlman &amp; Williams, (2017). The Case for Considering Consciousness Second: Response to Baumeister et al.; Plassmann &amp; Mormann; Sweldens et al. Journal of Consumer Research.</li>
<li>Vatansever, D., Menon, D. K., &amp; Stamatakis, E. A. (2017). Default mode contributions to automated information processing. Proceedings of the National Academy of Sciences.</li>
</ol>


Is “System 1” & “System 2” Still Relevant for Consumer Insights?

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