Getting Attention for Unrecognized Brands

I’ve recently come to see consumers’ preference for recognized brands as akin to what animal behaviorists call neophobia: avoidance of the new. The neophobic response can be powerful, more so than managers already imagine. Research shows that customers may prefer a recognized brand even if it has clear shortcomings—even if, in certain circumstances, it’s dangerous. Consumers in a recent study believed that airlines whose names they recognized were safer than unrecognized carriers. On the whole, this belief persisted even after participants learned that the known airlines had poor reputations, poor safety records, and were based in undeveloped countries. In other words, a lack of recognition was more powerful than three simultaneous risk factors. That’s neophobia. Here’s another example of neophobia. In a laboratory taste test, unwitting participants preferred a better-tasting peanut butter only 20% of the time when it wore an unfamiliar brand label but liked a worse-tasting product 73% of the time when they thought it was a recognized brand. Consumers’ awareness runs deep: Images of highly familiar brands have been shown to activate specific areas of the brain. In general, if you assume people will follow a simple rule—“In a choice between a known quantity and an unknown quantity, I’ll take the one I know, even if there’s something wrong with it”—you’ll be surprisingly accurate in predicting customers’ choices in a variety of markets. Over the past decade, my former colleagues at the Max Planck Institute in Berlin and I have studied this rule, which we call the recognition heuristic. Neophobia is certainly understandable. It saves people the effort of weighing the facts. Moreover, it can reduce risk because much of the time, it works. Well-known brands are often popular for a good reason: quality. But neophobia makes life difficult for managers of relatively unknown brands—that is, of most brands. Recognized brands tend to do well even if they don’t fully meet customers’ needs, while unrecognized brands don’t even get tried. It’s possible to alleviate neophobia, however, and here are a few strategies managers can use without spending millions on advertising: Give buyers time. It has been shown that if people make choices when they are under time pressure, they are more likely to favor recognized alternatives. If you want customers to choose your unknown brand, don’t force them to respond quickly. Try to position unfamiliar products in store “havens” where potential buyers have time to stop and compare features. In a B2B setting, get on the prospect’s calendar early in the sales process; a purchasing committee that knows you can’t use a lack of recognition to eliminate you. Provide comparison tables. It’s wise to list the features of an unrecognized brand side by side with those of the more familiar competition. When customers can easily compare features, they rely less on recognition to make choices. When they can’t compare, though, they’re more likely to turn to recognition as a rule of thumb. Change the category. If you present a customer with an unfamiliar product in a category full of familiar offerings, recognition will kick in, to your product’s disadvantage. Why does the talented but unknown ad firm win sales when it presents itself not as an “advertising agency” but as a “viral-marketing specialist”? Two reasons. First, clients don’t view lack of recognition as a negative if they think there is a good reason for it, so specialist agencies are forgiven for being unknown. Second, among specialist firms, it’s likely that the competitors are unrecognized, too. When buyers can’t use recognition to discriminate, they are forced to consider other pros and cons. Managers usually reach first for advertising and public relations when trying to raise a brand’s profile. Those tools are expensive, and in order to be effective, they must reach potential customers on many separate occasions. By contrast, salespeople can artfully use time, feature comparisons, and category framing at little or no cost—and they can do so during the sale, when it may be too late for advertising to have an effect.

Getting Attention for Unrecognized Brands

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