How Companies Learn Your Secrets (Part 2)
To understand this a little more clearly, consider again the chocolate-seeking rats. What Graybiel and her colleagues found was that, as the ability to navigate the maze became habitual, there were two spikes in the rats’ brain activity — once at the beginning of the maze, when the rat heard the click right before the barrier slid away, and once at the end, when the rat found the chocolate. Those spikes show when the rats’ brains were fully engaged, and the dip in neural activity between the spikes showed when the habit took over. From behind the partition, the rat wasn’t sure what waited on the other side, until it heard the click, which it had come to associate with the maze. Once it heard that sound, it knew to use the “maze habit,” and its brain activity decreased. Then at the end of the routine, when the reward appeared, the brain shook itself awake again and the chocolate signaled to the rat that this particular habit was worth remembering, and the neurological pathway was carved that much deeper.
The process within our brains that creates habits is a three-step loop. First, there is a cue, a trigger that tells your brain to go into automatic mode and which habit to use. Then there is the routine, which can be physical or mental or emotional. Finally, there is a reward, which helps your brain figure out if this particular loop is worth remembering for the future. Over time, this loop — cue, routine, reward; cue, routine, reward — becomes more and more automatic. The cue and reward become neurologically intertwined until a sense of craving emerges. What’s unique about cues and rewards, however, is how subtle they can be. Neurological studies like the ones in Graybiel’s lab have revealed that some cues span just milliseconds. And rewards can range from the obvious (like the sugar rush that a morning doughnut habit provides) to the infinitesimal (like the barely noticeable — but measurable — sense of relief the brain experiences after successfully navigating the driveway). Most cues and rewards, in fact, happen so quickly and are so slight that we are hardly aware of them at all. But our neural systems notice and use them to build automatic behaviors.
Habits aren’t destiny — they can be ignored, changed or replaced. But it’s also true that once the loop is established and a habit emerges, your brain stops fully participating in decision-making. So unless you deliberately fight a habit — unless you find new cues and rewards — the old pattern will unfold automatically.
“We’ve done experiments where we trained rats to run down a maze until it was a habit, and then we extinguished the habit by changing the placement of the reward,” Graybiel told me. “Then one day, we’ll put the reward in the old place and put in the rat and, by golly, the old habit will re-emerge right away. Habits never really disappear.”
Luckily, simply understanding how habits work makes them easier to control. Take, for instance, a series of studies conducted a few years ago at Columbia University and the University of Alberta. Researchers wanted to understand how exercise habits emerge. In one project, 256 members of a health-insurance plan were invited to classes stressing the importance of exercise. Half the participants received an extra lesson on the theories of habit formation (the structure of the habit loop) and were asked to identify cues and rewards that might help them develop exercise routines.
The results were dramatic. Over the next four months, those participants who deliberately identified cues and rewards spent twice as much time exercising as their peers. Other studies have yielded similar results. According to another recent paper, if you want to start running in the morning, it’s essential that you choose a simple cue (like always putting on your sneakers before breakfast or leaving your running clothes next to your bed) and a clear reward (like a midday treat or even the sense of accomplishment that comes from ritually recording your miles in a log book). After a while, your brain will start anticipating that reward — craving the treat or the feeling of accomplishment — and there will be a measurable neurological impulse to lace up your jogging shoes each morning.
Our relationship to e-mail operates on the same principle. When a computer chimes or a smartphone vibrates with a new message, the brain starts anticipating the neurological “pleasure” (even if we don’t recognize it as such) that clicking on the e-mail and reading it provides. That expectation, if unsatisfied, can build until you find yourself moved to distraction by the thought of an e-mail sitting there unread — even if you know, rationally, it’s most likely not important. On the other hand, once you remove the cue by disabling the buzzing of your phone or the chiming of your computer, the craving is never triggered, and you’ll find, over time, that you’re able to work productively for long stretches without checking your in-box.
Some of the most ambitious habit experiments have been conducted by corporate America. To understand why executives are so entranced by this science, consider how one of the world’s largest companies, Procter & Gamble, used habit insights to turn a failing product into one of its biggest sellers. P.& G. is the corporate behemoth behind a whole range of products, from Downy fabric softener to Bounty paper towels to Duracell batteries and dozens of other household brands. In the mid-1990s, P.& G.’s executives began a secret project to create a new product that could eradicate bad smells. P.& G. spent millions developing a colorless, cheap-to-manufacture liquid that could be sprayed on a smoky blouse, stinky couch, old jacket or stained car interior and make it odorless. In order to market the product — Febreze — the company formed a team that included a former Wall Street mathematician named Drake Stimson and habit specialists, whose job was to make sure the television commercials, which they tested in Phoenix, Salt Lake City and Boise, Idaho, accentuated the product’s cues and rewards just right.
The first ad showed a woman complaining about the smoking section of a restaurant. Whenever she eats there, she says, her jacket smells like smoke. A friend tells her that if she uses Febreze, it will eliminate the odor. The cue in the ad is clear: the harsh smell of cigarette smoke. The reward: odor eliminated from clothes. The second ad featured a woman worrying about her dog, Sophie, who always sits on the couch. “Sophie will always smell like Sophie,” she says, but with Febreze, “now my furniture doesn’t have to.” The ads were put in heavy rotation. Then the marketers sat back, anticipating how they would spend their bonuses. A week passed. Then two. A month. Two months. Sales started small and got smaller. Febreze was a dud.
The panicked marketing team canvassed consumers and conducted in-depth interviews to figure out what was going wrong, Stimson recalled. Their first inkling came when they visited a woman’s home outside Phoenix. The house was clean and organized. She was something of a neat freak, the woman explained. But when P.& G.’s scientists walked into her living room, where her nine cats spent most of their time, the scent was so overpowering that one of them gagged.
According to Stimson, who led the Febreze team, a researcher asked the woman, “What do you do about the cat smell?”
“It’s usually not a problem,” she said.
“Do you smell it now?”
“No,” she said. “Isn’t it wonderful? They hardly smell at all!”
A similar scene played out in dozens of other smelly homes. The reason Febreze wasn’t selling, the marketers realized, was that people couldn’t detect most of the bad smells in their lives. If you live with nine cats, you become desensitized to their scents. If you smoke cigarettes, eventually you don’t smell smoke anymore. Even the strongest odors fade with constant exposure. That’s why Febreze was a failure. The product’s cue — the bad smells that were supposed to trigger daily use — was hidden from the people who needed it the most. And Febreze’s reward (an odorless home) was meaningless to someone who couldn’t smell offensive scents in the first place.
P.& G. employed a Harvard Business School professor to analyze Febreze’s ad campaigns. They collected hours of footage of people cleaning their homes and watched tape after tape, looking for clues that might help them connect Febreze to people’s daily habits. When that didn’t reveal anything, they went into the field and conducted more interviews. A breakthrough came when they visited a woman in a suburb near Scottsdale, Ariz., who was in her 40s with four children. Her house was clean, though not compulsively tidy, and didn’t appear to have any odor problems; there were no pets or smokers. To the surprise of everyone, she loved Febreze.
“I use it every day,” she said.
“What smells are you trying to get rid of?” a researcher asked.
“I don’t really use it for specific smells,” the woman said. “I use it for normal cleaning — a couple of sprays when I’m done in a room.”
The researchers followed her around as she tidied the house. In the bedroom, she made her bed, tightened the sheet’s corners, then sprayed the comforter with Febreze. In the living room, she vacuumed, picked up the children’s shoes, straightened the coffee table, then sprayed Febreze on the freshly cleaned carpet.
“It’s nice, you know?” she said. “Spraying feels like a little minicelebration when I’m done with a room.” At the rate she was going, the team estimated, she would empty a bottle of Febreze every two weeks.
When they got back to P.& G.’s headquarters, the researchers watched their videotapes again. Now they knew what to look for and saw their mistake in scene after scene. Cleaning has its own habit loops that already exist. In one video, when a woman walked into a dirty room (cue), she started sweeping and picking up toys (routine), then she examined the room and smiled when she was done (reward). In another, a woman scowled at her unmade bed (cue), proceeded to straighten the blankets and comforter (routine) and then sighed as she ran her hands over the freshly plumped pillows (reward). P.& G. had been trying to create a whole new habit with Febreze, but what they really needed to do was piggyback on habit loops that were already in place. The marketers needed to position Febreze as something that came at the end of the cleaning ritual, the reward, rather than as a whole new cleaning routine.
The company printed new ads showing open windows and gusts of fresh air. More perfume was added to the Febreze formula, so that instead of merely neutralizing odors, the spray had its own distinct scent. Television commercials were filmed of women, having finished their cleaning routine, using Febreze to spritz freshly made beds and just-laundered clothing. Each ad was designed to appeal to the habit loop: when you see a freshly cleaned room (cue), pull out Febreze (routine) and enjoy a smell that says you’ve done a great job (reward). When you finish making a bed (cue), spritz Febreze (routine) and breathe a sweet, contented sigh (reward). Febreze, the ads implied, was a pleasant treat, not a reminder that your home stinks.
And so Febreze, a product originally conceived as a revolutionary way to destroy odors, became an air freshener used once things are already clean. The Febreze revamp occurred in the summer of 1998. Within two months, sales doubled. A year later, the product brought in $230 million. Since then Febreze has spawned dozens of spinoffs — air fresheners, candles and laundry detergents — that now account for sales of more than $1 billion a year. Eventually, P.& G. began mentioning to customers that, in addition to smelling sweet, Febreze can actually kill bad odors. Today it’s one of the top-selling products in the world.
Andrew Pole was hired by Target to use the same kinds of insights into consumers’ habits to expand Target’s sales. His assignment was to analyze all the cue-routine-reward loops among shoppers and help the company figure out how to exploit them. Much of his department’s work was straightforward: find the customers who have children and send them catalogs that feature toys before Christmas. Look for shoppers who habitually purchase swimsuits in April and send them coupons for sunscreen in July and diet books in December. But Pole’s most important assignment was to identify those unique moments in consumers’ lives when their shopping habits become particularly flexible and the right advertisement or coupon would cause them to begin spending in new ways.
In the 1980s, a team of researchers led by a U.C.L.A. professor named Alan Andreasen undertook a study of peoples’ most mundane purchases, like soap, toothpaste, trash bags and toilet paper. They learned that most shoppers paid almost no attention to how they bought these products, that the purchases occurred habitually, without any complex decision-making. Which meant it was hard for marketers, despite their displays and coupons and product promotions, to persuade shoppers to change.
But when some customers were going through a major life event, like graduating from college or getting a new job or moving to a new town, their shopping habits became flexible in ways that were both predictable and potential gold mines for retailers. The study found that when someone marries, he or she is more likely to start buying a new type of coffee. When a couple move into a new house, they’re more apt to purchase a different kind of cereal. When they divorce, there’s an increased chance they’ll start buying different brands of beer.
Consumers going through major life events often don’t notice, or care, that their shopping habits have shifted, but retailers notice, and they care quite a bit. At those unique moments, Andreasen wrote, customers are “vulnerable to intervention by marketers.” In other words, a precisely timed advertisement, sent to a recent divorcee or new homebuyer, can change someone’s shopping patterns for years.
And among life events, none are more important than the arrival of a baby. At that moment, new parents’ habits are more flexible than at almost any other time in their adult lives. If companies can identify pregnant shoppers, they can earn millions.
The only problem is that identifying pregnant customers is harder than it sounds. Target has a baby-shower registry, and Pole started there, observing how shopping habits changed as a woman approached her due date, which women on the registry had willingly disclosed. He ran test after test, analyzing the data, and before long some useful patterns emerged. Lotions, for example. Lots of people buy lotion, but one of Pole’s colleagues noticed that women on the baby registry were buying larger quantities of unscented lotion around the beginning of their second trimester. Another analyst noted that sometime in the first 20 weeks, pregnant women loaded up on supplements like calcium, magnesium and zinc. Many shoppers purchase soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths, it signals they could be getting close to their delivery date.
As Pole’s computers crawled through the data, he was able to identify about 25 products that, when analyzed together, allowed him to assign each shopper a “pregnancy prediction” score. More important, he could also estimate her due date to within a small window, so Target could send coupons timed to very specific stages of her pregnancy.
One Target employee I spoke to provided a hypothetical example. Take a fictional Target shopper named Jenny Ward, who is 23, lives in Atlanta and in March bought cocoa-butter lotion, a purse large enough to double as a diaper bag, zinc and magnesium supplements and a bright blue rug. There’s, say, an 87 percent chance that she’s pregnant and that her delivery date is sometime in late August. What’s more, because of the data attached to her Guest ID number, Target knows how to trigger Jenny’s habits. They know that if she receives a coupon via e-mail, it will most likely cue her to buy online. They know that if she receives an ad in the mail on Friday, she frequently uses it on a weekend trip to the store. And they know that if they reward her with a printed receipt that entitles her to a free cup of Starbucks coffee, she’ll use it when she comes back again.
