Customers don’t buy on logic. They buy on emotion.

by Tony Fannin, President, BE Branded

When we begin working with new clients, regardless of size, they often want to market with technical information, logic, and facts. They believ that if they can just explain the facts and features, there is no reason why people would want any other product/service except theirs. It’s the logical choice. That is also the reason why they believe so heavily on word of mouth and “just letting the product sell its self”.

What many don’t understand is that we consumers don’t buy with logic. If that was true, there would only be one or two players in each market category offering the best product at the lowest price. In other words, complete commoditization. If there is a clear, superior product/service at the perfect price point, there would be no need for anything else. We’ll, we people rarely use logic when making our purchase decisions. We use logic as a means to justify our choices which makes us look like we are being objective.

I came across an article recently that makes the same point. It is in Bloomberg Businessweek. The article is called “The New Normal. American consumers are cutting back. Except when they’re not.” They point out that Americans, when polled, are saying they are cutting back. And they are still spending, too. They eat out less. They shop more at WalMart and Costco. But, they are also standing in line to buy the new iPhone 4 and the $600 iPad. They cut back on spa treatments, but will still keep their daily $3 lattes. The article sites many real life examples about how people say they are cutting back, but refuse to quit spending in other areas. For example, a couple in Tulsa Oklahoma said they were cutting back on eating out and shopping sprees, but they decided to go to Vegas, shop at the Fashion Show Mall, and spending a great deal on their vacation. “We’ve pulled out all the stops. We’re staying at the Bellagio.” This behavior is called the new abnormal. It’s the schizophrenic economy.

In this new abnormal, people still buy brands that make them feel good. Whether the economy is up or down, consumers are still looking for a justification to get what they want. Buying is more about emotion and less about logic. The article describes this behavior as “post-rational” justifications for their extravagant purchases. Columbia porfessor Ran Kivetz states: “At the end of the day people are saying, ‘There is still risk. I gotta cut back.’ But this is not a typical one-year recession. Life has to have some normalcy. I have to have some luxuries.”

Consumers are still spending, but they are more emotion driven than ever before. This is the schizophrenic part. Logic has nothing to do with how or why they spend. It’ all about fulfilling an emotional need within themselves. Cut back on buying Ivory soap and Crest toothpaste for generic brands. It is these same people who are seen juggling iPhone 4’s and a Starbucks venti latte. Insightful marketers understand they need their brands to fill those emotional needs and to be part of their consideration. The more logical and “cold” your brand and product seems, the more you are at risk of being part of their “cut backs”. People don’t buy iPads because they need them, it’s because of the emotional value they get from them. Then, after the purchase, they use logic on why they needed to buy it in the first place. (Footnote: Apple announced record revenues for the quarter ending June 26. Starbucks announced record same-store sales growth. The largest increase since second quarter 2006.)

The main point is delivering on a strong, emotional promise helps shield brands from being too commoditized and part of the list of “things I can do without” and on the list of “things I won’t give up”. Great brands are emotional. Commodities are logic only. As with most logic, that can be easily thrown out the window in favor of an emotional “must have”.

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