This week on The Whin Big Podcast, Katie speaks with Kenda Macdonald – founder of Automation Ninja. In this week’s episode, Katie and Kenda talk about how psychology and brain functions influence the way we make purchasing decisions.
Kenda also shares details on ‘the purchase formula’, the best way to go about email marketing and explains how social media fits into her marketing mix.
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Kenda’s business background
Kenda started her business journey back at university, where she was studying forensic psychology. She worked part-time for a marketing agency to supplement her income and found herself working on creating marketing campaigns and email automation at the same time as learning about the human brain.
With her insight into neuroscience, it soon became clear to Kenda why the marketing campaigns weren’t working.
“I could see why it was going wrong. None of the stuff we were creating (in marketing) was how the brain worked. We were doing some fundamental things that the brain just wasn’t going to go for – and the brain actively filters out.” – Kenda
The two main strands of Automation Ninjas
Kenda set up in business eight years ago, setting up her agency teaching clients how the brain works and the implication of how this psychology affects their marketing. This informs clients’ customer journeys – which in turn can be automated marketing activities.
The central part of the business focuses on consultancy – where Kenda and her team take clients through the customer journey process and match it against the awareness journey to create automated marketing activities to bring in leads and clients.
As well as providing consultancy services, the agency runs the Automation Academy – a monthly subscription for small-medium business owners to learn about behavioural marketing and automation so they can put it into practice for their own business goals.
Nurture sequences in email marketing
One of the services Kenda offers her clients is support in creating email marketing automation. Kenda mentioned the phrase ‘nurture sequence’ when talking about marketing activities, and Katie asked for clarity on what the term means and why it’s important.
“When you’re creating email marketing, a nurture series is one of the most important things you can do or any automation at all.” – Kenda
In email marketing, nurture series emails are an automated chain of emails triggered when someone signs up to your email list (usually when they download a lead magnet or freebie). The nurture sequence is designed to add value to the subscriber – offering value and insight to help them with the challenges. It’s important because it gives a good grounding for building a relationship, but it’s also essential for providing your subscribers context. And, as Kenda explains – without context, the human brain can’t make a purchasing decision easily.
Your brain and purchasing decisions
Kenda details a fascinating study conducted by a team of researchers at Stanford University (we’ve linked to it in the resources section). The study looks at the human brain concerning products and purchasing, and the findings show how the pleasure and pain systems of our brains light up in different ways when faced with a decision to buy something.
For Kenda, the study is fascinating because when it comes to pricing, our pain indicators light up in our brain – the same parts of our brain that deal with trauma, physical pain and grief. So it shows that our brains understand purchasing on a par with losing something significant. Your brain sees buying as pain.
It was from this brain activity that Kenda’s ‘purchase formula’ was developed. Researchers could judge who would make a purchase based on how the reward centre impacted the pain activation.
The purchase formula:
The net value of a product + the likelihood of someone buying (= is equal to) the amount of reward activation the brain has (minus) the amount of pain activation the brain has
So, according to the formula, you need to have MORE reward activation than pain activation to make a purchase decision.
Using the purchase formula in marketing
Someone buys when there is high reward activation and low pain activation, so as a business owner, you’re challenged to create less pain activation in your marketing. Traditionally, marketing focuses on solving problems and reducing pain points for potential customers and clients. According to Kenda – we don’t have much control over minimising issues because the human brain sees a price as pain. We can’t change that.
Her advice is to switch messaging to the area we have control over – reward activation. As business owners, we can increase reward activation by highlighting the positives. And the best way to do that is by nurturing your relationships.
“Nurture is fundamentally the most important thing you can do because nurture increases reward activation. The things that you can do to build relationships and increase the positioning of your brand, heightening that position in the brain – are the things you should be focusing on.” – Kenda
How the Automation Ninjas nurture clients
Katie was curious how Kenda puts nurture into her marketing activities. This is how it looks in the Automation Ninjas context:
Start with awareness
The focus is on a lead (customer) journey, which always starts with awareness. Kenda and her team create supportive, valuable and informative blog content to address the challenges their leads face when they are beginning to look for solutions to their problems.
Create lead magnets
The next step is to take their potential customer a little further along the journey – which involves creating lead magnets that go deeper into solving the problems they’re facing. People sign up to receive the lead magnets to help them solve or identify their problems.
These range in format from webinars, books, downloadable PDFs, spreadsheets and Q&A sessions. For Kenda, the focus is less on the design of the lead magnet and more on the challenge the clients are facing – and how aware (or not) they are of their challenge.
The team create dedicated nurture emails for each lead magnet, so when someone downloads their guide, they go into the specific nurture series. This short term sequence offers additional value and support around the problems the customer faces – identified by the lead magnet they have chosen to access.
Long-term nurture activities
The customer journey can take anywhere from six months to a year for Automation Ninja, so one nurture series won’t do the job. They send out a weekly email (which includes a piece of content valuable to their audience). This keeps the reward activation high whilst increasing the company’s standing as experts and leaders.
Then there is a monthly newsletter which is more updates about the business and other insight.
Kenda, Automation Ninjas and social media
Katie was curious about how social media fits into Automation Ninja’s marketing strategy – and it’s an area that Kenda knows needs more focus and attention. Word of mouth was her primary source of leads and clients when she first started until a potential client caught her out for not having the same marketing systems in place that she recommended.
“I couldn’t show them an example and realised that it wasn’t a great way to be. We started practising what we preached. And that meant running social alongside the blogging – which has always outstripped social for us.” – Kenda
Keep the conversation going with Kenda
Automation Ninjas on Instagram
Resources from this episode of The Whin Big Podcast
Paper from Brian Knutsford / Stanford University ‘neural predictors of purchasers’ study
Hack the Buyer Brain by Kenda Macdonald book
The Whin Big episode 92 (awareness journey podcast): 5 steps to understand your customers’ problems (and how to help them).
Marketing Automation tool: keap.com
If you’re interested in purchasing Keap through the Automation Ninjas, along with all the supporta and guidance they have to offer, you should get in touch with them directly.