FMRI research helps marketing mortgages
The case of a Dutch intermediary
Leslie Hogeveen is the marketing manager at De Hypotheker: an independent Dutch company that advises its clients on mortgages and insurance. In 2013, Dutch legislation dramatically changed the market for its products. Facing a gigantic marketing challenge, Leslie turned to Neurensics for advice, based on fMRI. He shares his new lessons with us.
Why the preference for neuroresearch instead of more conventional ways of exploring the market, such as qualitative or quantitative market research?
“One of our questions was: how much will a client be willing to pay for advice about his mortgage? Before the legislation changed, we helped people find a good mortgage - one that suited their personal situation and had a favorable interest rate. Usually, the financial institute providing the loan would pay us a fee for our intervention. This fact was communicated clearly, but consumer s did not feel that they actually had to get out their wallets and pay. In the new situation, we are no longer able to accept a fee for our services. We must offer the client a quotation before he can use our services - and that is not a small sum of money. Clients will have to pay for our advice and intervention: which will cost them € 1495 each . The question was: are they willing to do this? And what arguments will justify such an expense? I knew that standard research, with questionnaires of focus-groups based on self-report, would not provide us with realistic answers.”
Why couldn’t you trust people to report their feelings and behavior openly?
“When asked, every respondent will state that he is highly interested in the conditions of his mortgage. He or she will claim to study the interest rates, to bargain about the value and to be very much aware of pricing. In practice this is often not true: many people spend more time gathering information about a new camera than exploring the possibilities of a mortgage. Many clients visit one of our offices at the moment that they have found a pleasant property and want to put in an offer for it. At that point they want to know things like ‘How much money can I borrow?’, ‘What would this mean for my personal financial situation?’ and ‘What would happen if I lost my job?’. Their aim is to buy the home of their dreams, and what they want from us are clear answers, really fast. Clients don’t want to be confronted with complex explanations about the actual funding of a property and all the work that has to be done to get this right in both the financial and the legislative sense. This means that the majority of our clients behave in a way that is very different from how they say they do.”
Was it hard to convince your management and colleagues of this new approach to marketing research?
“Well, in the beginning I did not really understand what they were doing myself. So I asked Neurensics to use me as a test subject for one of their projects. That meant that they actually put me in the scanner and let me experience a session. I personally passed through the state of calibration that takes about 15 minutes, answered the questions and worked on their tasks in the fMRI. Afterwards, they shared their measurements and results with me. Some of the results were exactly what I expected beforehand, others were very different. This experience convinced me that Neurensics would really be able to get a grasp of consumers’ emotions and reactions in the brain. The session was followed by some tough discussions with our in-company market researcher. His main objection was the small sample size. Normally, we would run a questionnaire with about 500 people; here there were only 32. He was also a bit anxious about the quality of the data: Neurensics shared their measurements but he could not check how they were interpreted himself. These are real issues, but at the same time I felt convinced that the subconscious mind is very important for buying decisions and that fMRI was the right tool to provide such insights.”
You developed your campaign with help of fMRI. What did you learn from it?
“As a marketer, I want people to respond positively to my proposals. But which proposal will work? We developed a series of adcepts, which are rough versions of advertisements, working with stock photos and a basic layout, to test this on consumers. To reveal what the reaction of consumers is, Neurensics calculates a so-called brain quotient, an indicator for the intention to buy. It shows to which extent the relevant areas in the respondents’ brains are activated by a specific marketing stimulus: the adcept. We used 14 different adcepts with varying messages. The pictures show two adcepts that did not perform well. In the first picture we refer to what people report they do in traditional research: we want to loan money, but without all the bother. The image shows a couple that is calculating and studying information. Another adcept refers to the financial crisis and claims that we’re not a traditional bank. The fFMRI-research made clear that these claims did not convey a positive feeling to our own clients or to potential future clients.”
Figure 1 Two adcepts that were not appreciated by consumers
“The study showed that potential customers will not react favorably to advertisements that reflect negative emotions such as ‘being worried’, ‘financial risks’, ‘traditional banking is not trustworthy’ or ‘a headache’. Even if we solve these problems for them, it does not make them feel positive about our brand! Luckily, we also found a range of adcepts that work quite well with our clients and prospects. These adcepts referred to positive emotions. Claims such as ‘super service’, ‘huge range, low prices’ and ‘carefree living’ did very well. The following illustration shows two examples of adcepts that were highly appreciated.”
Figure 2 Two adcepts that were highly appreciated by consumers
These insights were used to develop a campaign. What was the crucial learning you used in developing the campaign?
“The results of the research provided interesting data but I also found the discussions with Neurensics very enlightening. It became very clear that values such as ‘security’, ‘reliability’ and ‘convenience’ are crucial to our clients. But we also learnt that it is extremely important to be positive: we care, we have a wide offering, the best price and we are conscientious. I also felt the need to be authentic: a perfect looking and glossy campaign will not attract our target group. They want to see real people. Our advertising agency advised us to work with the theme of ‘real stories’. This means that we depict normal, everyday people who are enjoying their lives, they are carefree and happy. We made four commercials with real clients who talk about their personal experiences. We tested them against other prizewinning, campaigns and they performed equally or better than the predicted effectiveness suggested by the Effie index, which means they did very well..”
You also tested written texts in the fMRI, and examined how people experience the way you position your brand in personal interviews with the advisor.
“To be honest, the testing of positioning in interviews did not reveal much because of a time-delay problem in measuring. However, testing the text was very inspiring. We let people read the plain text in the scanner. Some texts elicited highly positive reactions - for example, ‘online access to your mortgage data at all times’, ‘easy and clear explanation of legislation’, ‘your advisor has a high level of expertise, ‘maximum security and ease’. An analysis of the texts shows that people appreciate promises about security, control, ease of use and of course price. We also discovered that certain texts will discourage people from using our services. Phrases such as ‘a contract without small print’, ‘we are very explicit about what we do’, ‘we check your data precisely’ and ’no hidden costs’ will not work. I am very happy with the choices we made. In recent years, house sales in the Netherlands have fallen dramatically, but our sales figures have remained stable. This means that we have grown our market share in a highly competitive market. We have also adapted successfully to the changing legislation. At the moment, people feel very insecure. But they are willing to pay for a company that gives them a relaxed feeling about their life.”
What Is ‘De Hypotheker’?
De Hypotheker is a Dutch company, founded 28 years ago by two men with a background in the construction industry. They saw the opportunity for an intermediary party to operate in the mortgage market: connecting the parties offering loans for housing to the people who need one. Consumers approach the company for more than just a mortgage: they also want advice on their personal financial situation. They naturally want to know how much they can borrow, but most clients also need the assurance that the required monthly payments will leave enough financial space for their personal needs. It is also important that unemployment or other, unexpected future developments will not force an owner into selling his home. De Hypotheker therefore also offers insurance policies to cover these eventualities. These products are sold in small stores on high street locations , operated under a franchise agreement . In 2013, the Netherlands numbers 150 locations, each of which is owned by an independent entrepreneur, who works for his own risk and gain.
Gepubliceerd in Neuromarketing Theory and Practice nr 7, Tijdschrift van de Neuro Marketing Science and Business Association: www.nmsba.com