We’re Moving to the New Customer Innovations Website

We are very happy to announce that Customer Innovations is moving to a new and updated home on the web.

You can find us at:  www.customerinnovations.com

The ideas and insights we’ve been sharing on this blog site have already been relocated to this new location.

Onwards and upwards,

Frank Capek,  CEO, Customer Innovations, Inc.

Outcomes-Based Experience Design

Chris O'Leary

Bridging the Gap Between Customer Experience and Business Outcomes

by Chris O’Leary, COO, Customer Innovations, Inc.

In the 25 years we’ve been helping companies design customer experiences, one of the consistent challenges has been to estimate the business impact of specific experiential improvements.  The fact is that many customer experience (CE) programs simply fail to make a compelling argument about the business value that will be generated by specific CE innovations. In the absence of a compelling business justification, executive support and sponsorship may be weak or even absent, orphaning the CE program and robbing it of the executive leadership it needs.

In their efforts to generate a business justification, Customer Experience (CE) managers frequently try two approaches.  Neither approach has been consistently effective in earning senior management support and sponsorship.

First, they may choose to rely on generally held beliefs about the value of customer satisfaction, engagement or Net Promoter Scores (NPS).  Often, this reliance highlights a correlation between these indices and some business outcome (e.g., revenue growth or market share), but treats it as though it was a causal relationship. (see: Keiningham et al., “A Longitudinal Examination of Net Promoter and Firm Revenue Growth,” J. Marketing, Vol. 71  July, 2007, pp. 39-51)

In addition to the confusion of correlation and causation, we’ve also seen many cases in which high satisfaction or NPS scores actually co-exist with declining revenues, market share, and profitability.  These measures reflect how customers feel about the company and not how the company may make customers feel about themselves.  As a result, they are poor predictors of how customers will actually behave.

The second approach, of course, focuses on generating cost savings and efficiencies, most often at the service touch points.  Unfortunately, service efficiency is almost always more important to the company than to the customer, and efforts to streamline or automate the touch points typically end up working against the quality of the overall customer experience.  (See:  The Customers’ Experience Does Not Happen at Your Touchpoints).

What is needed is a fundamentally new approach to focusing and justifying investments in customer experience innovation, one which directly addresses the core challenge of connecting specific experiential innovations with measurable business objectives.

For some time, we have been using a new approach to CE business justification called Outcomes-Based Experience Design, which represents a 180-degree change from common practices:

• Rather than trying to justify potential CE innovations by predicting or projecting hoped-for business outcomes, this approach starts by clearly defining the desired measurable business outcomes and working backward to identify the innovations required to generate those outcomes.
• Rather than relying on self-reported satisfaction, loyalty and NPS scores, this approach targets concrete business and customer behavior outcomes, both of which are measurable at the individual and the aggregate level.  Satisfaction, loyalty and NPS are interesting, but should NEVER be used to justify investment in experience innovation!

Rather than competing for attention, funding and time with other business initiatives, this approach anchors CE to the existing strategic priorities, which is where CE should have been all along.

Figure 1: Outcomes-Based Experience Design

As illustrated in Figure 1, the Outcomes-Based Experience Design approach introduces a new measurable outcome, Behavioral Outcomes that connects Experiential Outcomes and Business Outcomes.  Linking Experiential Outcomes and Business Outcomes in this manner enables CE program leaders to define and measure the specific business value that is being created, and this provide a rigorous business justification.

The model works in two directions.  The first direction, going right to left, illustrates the design relationship. When designing the experience innovation, one starts with the business outcome of interest, then determines the specific customer behavior that needs to be influenced, and then designs the specific experiential interventions that are required.

Second, the model illustrates the causal relationship going left to right.  The only way that CE innovation can create a business benefit is by influencing a specific change in customer behavior and choice-making.  The difficulty in business justification discussed earlier arises from the fact that it is so difficult to predict how customers in general will respond to different CE innovations, and even more so for specific groups of customers,

Outcomes-based Experience Design generates a host of critical benefits.  First and foremost, it positions CE innovation as a tool for achieving the priorities of executives and senior managers, NOT competing with those requirements.  Second, it provides metrics and measurability at each stage of the causal relationship.

Third, it allows companies to invest only in those innovations that will influence the target customer behavior, and stop investing in potentially expensive initiatives which may not matter to customers or for which they are not willing to pay.  Identifying (and terminating) uneconomic CE investments will often fund new investments that are far more impactful and that generate meaningful business benefits.

One final note:  This model is effective only if we understand how and why customers behave as they do.  Without the ability to link individual characteristics to the decisions and choices a customer makes, there is no way to design experiential interventions that will be effective in influencing the target behavior.  More important, there is no way to assure that  an experiential intervention targeting undesired customer behavior (e.g., attrition), will not adversely affect desirable customer behavior (e.g., retention, growth).

The necessary foundation of Outcomes-Based Innovation, therefore, is the ability to understand how and why customers make the choices that they do, and to use that information to influence those choices.  The scientific and methodological basis for this understanding has been previously discussed here (Getting Beneath the Voice of the Customer) and here (Customer Experience:  Beyond Better Sameness); practical challenges and applications will be discussed in the future.

Behavioral Portraits and the Design of Influential Experiences

“Remember… you’re unique… just like everybody else.” Although, it may be a little funny to say it that way, thank heavens for diversity!  For as much as we all have in common, our lives are more interesting because we’re not all the same. We’re interested in different things, we like different music, we’re attracted to different kinds of experiences, and we have unique emotional reactions to the situations we’re in.

Over the past 25 years, Customer Innovations has worked with a wide range of leading companies on the design of products, services, and experiences that influence customers.  In the course of that work, we’ve helped clients understand how their customers’ think, what their customers’ feel, and how and why customers behave the way they do.  That insight is used to design things that really matter to customers; that make a difference in their lives; that are intuitive easy to navigate; and that influence behaviors that make more money for our clients.

In this post, I will describe one of the key tools we use to do this work, called a Behavioral Portrait.   A Behavioral Portrait is rigorous approach to understanding the important ways that different people are attracted to, engage with, and respond to different kinds of experiences.  It also explains why people have widely varying and highly individual emotional and behavioral reactions to the same experiences.  The Behavioral Portrait tool is used to identify key behavioral differences between different customer personae (for more information see the following posts: Personae Driven Experience Design and What is the Difference Between Personae and Segmentation?).

The Behavioral Portrait measures preferences in five major areas that have a profound effect on the design strategy for influencing customers sensitive to these preferences.  These areas are:

• Novelty Seeking. Describes the degree to which a person is attracted to, comfortable with, and exhilarated by new and unfamiliar experiences.  Novelty Seeking includes individual measurements for curiosity, impulsiveness, and extravagance.
• Harm Avoidance. Describes the ways a person engages with ambiguity, risk, and unpredictable interactions with people they don’t know.  Harm Avoidance includes individual measurements for anticipatory worry, fear of uncertainty, and shyness with strangers.
• Social Orientation. Describes a person’s preferences for social interactions and connections that influence their experiences and their lives. Social Orientation includes individual measures of introversion/extroversion, sentimentality, attachment, and dependence.
• Decision Style. Describes a person’s preferred mode of perceiving and interpreting information and then making decisions based on that information.  Decision Style includes individual measurements of perceptual breadth, detailed versus conceptual interpretation, and analytic versus synthetic decision-making.
• Behavioral Activation. Describes the unique ways a person initiates action, as well as, their degree of focus and persistence over time and in the face of obstacles. Behavioral Activation includes individual measures of energy, directedness, criticality, and single-mindedness.

Customers have different reactions to product, service, and experience design/  execution based on their preferences.  For example:

• Higher harm avoidant customers tend to get stressed about elements of the experience that are unpredictable, confusing, or seem risky.  Higher harm avoidant customers also tend to react more negatively to any embedded element in the experience that might be perceived as a “violation of justice.”  For example, in a restaurant, they will react more negatively if people seated after them are served before them.
• More socially oriented customers will go along with the behavior of others and will respond more strongly to social influence.  For example, more socially oriented customers will respond more positively to conservation programs that illustrate how their behavior compares with others (e.g., your electricity usage is 57% higher than the average for your neighborhood… or… the blue recycle bins are at the curb for every house on my street except for mine).
• Higher novelty seeking customers will tend to be the early adopters of the latest and greatest new technologies. They’ll tend to engage more readily with interesting information about products and services.  They’ll tend to experiment with alternative medicine.  Our research also indicates that they are more attracted to and more likely to return frequently to restaurants that offer a diverse experience or change up their menu.

We’ve found that by understanding the behavioral preferences for different customer personae allows us to design products, services, and experiences that engage a wider range of customers.   You do this by allowing for personae-sensitive pathways.  For example, you provide a high-novelty seeking pathway that customers can opt into if they desire that.  However, you don’t force the low novelty-seeking customers through that pathway because it’s likely to make them feel uncomfortable.

Customer Innovations has developed several tools for measuring these behavioral preferences.  These tools include:

• The full Behavioral Portrait tool – an 85-question instrument that takes about 12 minutes to complete and provides a reliable measure of an individual’s preferences across the 5 dimensions and 17 sub-dimensions described above.   This full Behavioral Portrait tool is used as part of in-depth personae development research.  It’s also used to provide rich feedback to individuals about their preferences.
• A streamlined Behavioral Indicator tool – a 17-question set that can be embedded in a quantitative survey in order to correlate a respondent’s behavioral preferences to their response to other questions about their experience, their attitudes, or their preferences for new product or service concepts.

If you have an interest in learning more about the approach outlined above or any of the associated tools, please let us know.

Customer Experience: Beyond Better Sameness

So… we’re ten years into the Experience Economy and, over that time, there’s been an explosion of attention and investment in creating and improving customer experiences.  Even in this midst of very challenging economic environment, it’s hard to find a company that isn’t either actively involved in or planning customer experience investments.   As the economy now starts to show signs of turning around, we’ve observed an increasing level of interest in getting closer to customers.

Despite the attention paid to customer experience, with a few exceptions, people are no happier with their experiences as customers today then they were 10 years ago.  It’s as if the majority of customer experience efforts have produced little more than “better sameness.”   Better sameness is doing what you’ve always done… and what pretty much all your competitors do… a little bit better and faster; providing friendlier customer service, incrementally faster response times,  a more appealing retail environment, a more streamlined web catalog and ordering processes, etc…

The problem is, customers don’t perceive these incremental differences.  If you’re looking for a competitively relevant improvement, you need to do something that actually grabs the customer’s attention and positively influences how they feel and what they do.  These are the only things that actually improve your competitive differentiation.  Moving beyond better sameness demands doing something that isn’t just a difference in degree; it demands doing something that’s a difference in kind.

For examples:

Southwest and JetBlue represent a difference in kind experience compared to the other major US-based airlines;

Umpqua Bank represents a difference in kind financial experience is a sea of highly undifferentiated consumer banks;

Wegmans, and Nugget Market is a difference in kind experience compared to most other major grocery retailers.

Unless what you’re after is better sameness…

…the most common tools for improving customers’ experiences are insufficient ! !

This includes:

Customer Satisfaction Measurement: Most companies ask customers for subjective evaluations of the company’s or product’s performance on the assumption that these expressed attitudes drive behavior, such as repeat purchases or positive word of mouth.  Unfortunately, decades of research into the correlation between evaluations and subsequent behavior show, although the link exists, it tends to be relatively weak.  Most customers who switch said they were satisfied.  Satisfaction is not an emotional state that powerfully drives behavior.  In order to get beyond better sameness, companies need to surface how the the experience influences customers’ perceptions and feelings about themselves not the company.

Voice of the Customer Insight: Listening to customers is critical for gaining insight into their lives, their goals, their needs, as well as, their frustrations, feelings, and behaviors.  However, as Henry Ford said, “If I asked customers what they wanted, we’d just have ended up with faster horses.”  In addition, what customers say they want is not often well-correlated with the deeper goals and subconscious factors that influence their behavior.  In many cases, what customers say they want is inconsistent with what ultimately drives their behavior… leading companies to invest in the wrong things.   Getting beyond better sameness involves engaging customers in fundamentally different kinds of conversations and getting beneath the surface of what they say to understand their deeper goals and the experiences they’re having.

Touchpoint Mapping and Service Level Improvements:  Touch point mapping is a highly company-centric activity.  Customers’ experiences do not just happen at your company’s touch points.  Customers follow an end-to-end set of activities that make sense to them given the goals and needs they’re trying to address.  You can’t understand and meaningfully improve the customers’ experience by just looking at and incrementally improving service levels at your touch points.  As customers go about their busy lives, they rarely pay attention to or act on any of the incremental service improvements at the existing touch points.  Getting beyond better sameness involves creating high contrast, signature experiences that get customers’ attention, influence how they feel, and shape the story about what you stand for.

Training and Motivating Front-line Service Employees:  Having engaged, well-trained, and motivated service employees is important.  However, a lack of training and motivation is rarely the real issue behind a poor experience.  The experience customers’ have with any organization is the product of behavior that emerges from a complex organizational system. The root of that behavior is a leadership, management, measurement, and cultural environment that reinforce “unwritten rules” inconsistent with employees doing the right thing for customers.  Focusing on training and motivating employees without surfacing and addressing the unwritten rules is like hacking at the leaves rather than striking at the root of the problem.  Getting beyond better sameness involves surfacing the unwritten rules and leadership and management beliefs and behavior that constrain the experience.

Creating positively and profitably influential experiences, that go beyond better sameness, requires a more fundamental shift in perspective.  You have to focus first on how customers HAVE experiences… not on how your organization or product DELIVERS experiences.  This includes being very clear on:   What are customers really trying to accomplish?  What influences the pathway they follow in pursuing those goals?  How do they actually construct preferences and make choices along that pathway?  How does the process make them feel about themselves?  How does the experience influence the relationships they care about?  In most cases, understanding how customers HAVE experiences, leads to a completely different set of strategies for creating experiences that really make a difference for customers and the business.

Customer Innovations follows a unique Cognitive-Affective-Behavioral Engineering approach that enables companies to design products, services, and experiences from the mental model of the experiencer… not just the mental model of the company.  Over the course of 25 years track we’ve helped leading organizations realize bottom line results of 10-25% in the form of increased retention, incremental sales, reduced acquisition costs, positive word of mouth, higher price realization, and improved productivity of customer-facing operations.

The Customer Innovations approach is driven by three toolsets deliberately structured to push companies beyond better sameness:

• Behavioral Portraits – Generates deep insight that enables you to understand why customers behave as they do and identifies the most important behavioral drivers for specific groups of customers.
• Trigger Analysis – Surfaces how people perceive, interpret and evaluate their experience and identifies the specific customer interactions that elicit positive or negative behavioral responses.
• Influence Strategies – Designs the product, service, and experience interventions needed to influence customer behavior and creates the mechanism for consistent delivery of those changes.

Getting Beneath the Voice of the Customer

Doesn’t it make sense that:

• If you want to know what customers want, just ask them.
• If you want to see if they’re satisfied with the experience, just ask them.
• If you want to know if they’re come back or will refer you, just ask them.
• If you want to understand what you can do to improve, just ask them.

Listening to customers is critical for gaining insight into their lives, their goals, their needs, as well as, their frustrations, feelings, and behaviors.  Unfortunately, we’ve found that most structured “voice of the customer” research is not only ineffective for designing influential customer experiences, but it can seriously undermine innovation by directing investment at the wrong things.

It’s common for companies to conduct customer interviews, surveys, and focus groups trying to understand what customers want.   The reality is that what customers say they want is not often well-correlated with the subconscious factors that influence their behavior.  In many cases, what customers say they want is actually quite inconsistent with what ultimately drives their behavior.  The key is to able to engage customers in fundamentally different kinds of conversations and get beneath the surface of what they say to understand the deeper experiences they’re having.

I first encountered this disconnect about 25 years ago.  At the time, I was working with Dick Larson at MIT.  Dr. Larson is an expert in the psychology of waiting.   The situation involved commercial real estate managers responsible for several high-rise office buildings in New York.  These managers were trying to figure out how to address customers’ dissatisfaction with the amount of time spent waiting for elevators during peak periods.  Not surprisingly, if you ask customers what they want, they’ll tell you that they want an increase in service levels:  faster elevators and less waiting.  Obviously, the complexity and cost of actually improving service levels are quite high; it would involve installing faster elevators, dedicating more interior space to elevator banks, improving the optimization of elevator queuing, etc…   It turned out that the most effective improvement was to install mirrors in the elevator lobbies.  This allowed people to entertain themselves by fixing their hair, straightening their tie, and checking each other out in a much more socially acceptable way.  The perceived experience improvement was greater with the relatively low cost mirrors than with the relatively high cost technology required to improve actual service levels.  Note:  Waiting is an important aspect of many experiences, for more information about designing better waiting experiences see: Helping Customers Lose Wait.

In general, the design of influential experiences involves a trade-off between two strategies:  1) improve the reality of the events, service levels, etc… and/or 2) influence the way customers experience and act on those realities.   When you ask customers what they want or what they liked or didn’t like about their experience, what do they tell you?  In most cases, they only talk about the relatively obvious service levels associated with the first strategy.

Another example of this disconnect involves customers’ surface-level desires for more choice… compared with their subconscious distaste for actually having to make choices.  When conducting traditional voice of the customer research, customers often ask for a set of choices that allow them to find the alternative they prefer.  However, when presented with the range of choices uncovered in the research, the same customers find that actually making the choice exceeds both their level of motivation and capacity for processing information at the point of purchase.  In essence, giving customers the choices they request often leads to a “choice overload” that gets in the way of profitable customer behavior… in many cases, influencing them to postpone making a decision.

In one illustrative experiment, conducted by Iyengar and Lepper, consumers shopping at an upscale grocery store were presented with a tasting booth that displayed either a limited selection (6) or an extensive (24) selection of different flavors of jam.  The experimenters measured both customers’ initial attraction to the tasting booth and their subsequent purchase behavior.  While the extensive choice booth attracted more customer attention, customers presented with the limited set of choices were 10 times more likely to make a purchase.  Customers that sampled from the limited choice booth made a purchase 30% of the time versus only 3% of the time from the extensive choice booth. Leading companies are really starting to internalize this finding.  P&G, for example, reduced the number of versions of Head and Shoulders shampoo from 26 to 15, and, in turn, experienced a 10% increase in sales.

Voice of the customer research makes the underlying assumption that people have a relatively stable, conscious, explainable, and at least somewhat consistent set of preferences.  It also makes the assumption that when ask customers about their preferences they can tell you or, in some cases, when you present them with a set of forced choice trade-offs (e.g., would you prefer to buy A or B), how they choose will reflect what they do in real life.  Unfortunately, this is far from true.  People typically don’t know what they want until they see it; they construct their preferences and work through decisions as they perceive their alternatives in the actual purchase environment.  Subtle differences in the design of that purchase environment can have a significant impact on the decisions customers make.  In fact, research in the areas of cognitive psychology and behavioral economics has shown that…

…small and seemingly insignificant contextual details have a major impact on people’s behavior.

One of my favorite recent examples comes from MIT Professor Dan Ariely.  (See Dan’s great book:  Predictably Irrational)  Dan came across the following advertisement for The Economist:

The Economist Subscription Options

The ad offered three subscription options:

• Electronic Only: $59
• Print Only: $125
• Electronic and Print: $125

Which of these options do you think people would choose?  Why would anyone choose the “Print Only” option rather than opting for the additional “FREE!” electronic subscription?  It seems very unlikely!  In fact, Ariely conducted a test with 100 Sloan School students and only 16 chose “Electronic Only” while 84 chose the “Electronic and Print” option.  No one chose the “Print Only” option! On the surface, this option seems totally irrelevant.  Why would you even offer it?   It turns out that something very interesting happens when this seemingly irrelevant option is eliminated.  When another 100 students were offered only two choices: “Electronic Only” and “Electronic and Print”, 68 chose “Electronic Only” while only 32 chose “Electronic and Print.”

The presence of an irrelevant option influenced a more than 250% increase in customers choosing the more expensive alternative!!!

Ariely observed the following, “Thinking is difficult and sometimes unpleasant.” Cues that allow us to establish the relative value of various offerings, then, reduce the cognitive load or effort required to think about your options.  What the Economist offered was a no-brainer; while we can’t be certain that the print subscription is worth more than twice the electronic version, the combination of the two was clearly worth more that the print version alone.

In another illustrative example of how subtle environmental details influence customer behavior, Cornell University researchers Sybil S. Yang, Sheryl E. Kimes, and Mauro M. Sessarego found that by dropping the “$”symbol on a restaurant menu can have a significantly positive impact on the total ticket value.  The researchers did a side by side comparison of three ways of presenting menu prices: with a preceding dollar sign (e.g., $14.95), without a dollar sign (e.g., 14.95), and as written out prices (fourteen dollars and 95 cents).  Aside from the subtle differences in price presentation, all other aspects of the actual pricing and customer experience were held constant.  They found that the average total ticket increased by $3.70 when prices were presented without the dollar sign.  They also found that the average ticket decreased by $1.85 when prices were written out.

All of these examples illustrate a level of insight into the way people have experiences and act on their experiences that cannot be accessed by most  traditional, structured voice of the customer research.

The Vast Majority of Human Experience is Subconscious

Every waking second of the day, each of us processes just over 4,000,000 bits of sensory information.  At the same time, we get to pay conscious attention to only 7+/- higher level and relatively abstract notions about what’s happening to us, what we’re doing or planning to do, and how we’re feeling about all of this.  Luckily our brain does an outstanding job of filtering, predicting, and prioritizing all if this information in a way that makes it possible for us to be reasonably effective in the world.  The challenge is every normally functioning human being on the planet lives in a state of “naïve realism.”  This naïve realism, gives us the sense that we’re experiencing our surroundings as they actually are, rather than just as a high level abstraction of what we believe them to be.

If we are asked by a researcher to describe an experience, particularly an experience we had at some point of time in the past, the best we can do is relate what we think we remember, about how we believe we felt, along with the alibis we construct for the choices we made, in an experience that was almost entirely subconscious.  However, due to the state of naïve realism we live in, we’re convinced that our explanations have merit… despite the fact that we are just reconstructing a plausible sounding story for what we think happened.  This is the way it works for all of us.  It’s also the fatal flaw for most structured, traditional voice of the customer research.

Understanding how to design highly meaningful, differentiated, influential, and profitable experiences involves engaging people in fundamentally different sorts of conversations and listening in ways that get beneath the surface of what they say to understand the deeper, subconscious aspects of how  people actually have experiences.

While there’s value to listening to customers’ recollections of the experiences they’ve had and their suggestions for improving that experience, what you really need to look for and understand are:

1. Goals and Desired States
   • What set of desired states and goals are people really trying to accomplish?
   • What kinds of experiences are people attracted to and comfortable engaging with?
2. Beliefs and Expectations
   • How do people make sense of and remember the experiences they have?
   • How do people construct situation-specific expectations and preferences?
3. Emotional States and Triggers
   • What conscious and subconscious emotional states influence peoples’ actions?
   • How do specific events trigger emotional reactions that influence behavior?
4. Natural Behavioral and Decision Pathways
   • What behavioral pathways do they naturally follow to accomplish their goals?
   • How do people make choices in light of these expectations and preferences?

We’ve developed an innovative toolset for answering these questions. Experience Miner^TM provides a rigorous way of capturing and analyzing the most critical aspects of the way people think, feel, and act  on their experiences.  It involves a fundamentally different way of listening to what people say and watching what they do in order to identify what’s going on beneath the surface.  Built on 25 years of research into the cognitive, affective, and behavioral basis of experience, it provides the specific insight required to focus design and delivery efforts on the areas of greatest influence and financial return.   Experience Miner^TM is used to identify the most influential experience elements for each target customer personae.  This insight is used to 

…design evocative experiences from the mental model of the experiencer.

The Experience Miner^TM toolset consists of the following seven elements, each designed to fill in a critical piece of insight required to design experiences that influence behavior.

• Goal Space Mapping^TM – Describes the desired states and situation-specific goals that motivate and direct the experience for each key persona
• Experiential Temperament^TM - Profiles how temperamental differences influence the way people are drawn to and engage with novelty seeking, harm avoidance, social orientation, and persistence
• Framing Metaphors – Surfaces the underlying physical metaphors people use to interpret, evaluate and act on their experiences in the relevant domain(s).
• Experiential Constructs^TM – Identifies the most common, learned distinctions that enable people to recognize, categorize, differentiate, and form expectations.
• Emotional States and Triggers^TM -  Surfaces the emotional states and specific triggers across the lifecycle of the experience highlighting areas of uncertainty, stress, frustration, etc…
• Experiential Pathways^TM – Maps the end-to-end set of activities and choice points that people follow in pursuit of their goals… including the unwritten rules and automatic behavioral scripts people apply along this pathway.
• Experiential Choice Dynamics^TM – Describes the situation-specific choice processes that people follow, as well as, how they construct preferences and make decisions that influence their behavior.

If you’re interested, I’ve covered various topics related to the elements of Experience Miner in a wide range of other posts, including:

• Experience Miner: Creating Profitable, Evocative Experiences
• Whatever You Do… Don’t Confuse Experience with Reality
• Understanding Basic Drives and Experiential Temperament
• Making Experiences Memorable
• Customer Experience and Our Search for Meaning
• Designing “Socially Influential” Experiences
• Designing for Customers’ Reactive, Deliberative, and Reflective Experiences
• Choice Architecture: Designing Experiences that Influence Customer Behavior
• Optimizing the Most Critical Elements of the Customer Experience: Customer Choices
• Framing and Priming the Customer Experience
• Automatic Behavioral Scripts: Don’t Overestimate Your Customers’ Interest in Having an “Experience” with You

Experience Miner: Creating Profitable, Evocative Experiences

Most of the time and money organizations invest on customer experience is wasted…

… because they focus on how the organization “delivers the experience”…

… rather than on how customers actually “HAVE the experience”…

… and how those experiences influence behavior!

Most customer experience efforts are based on touch-point oriented approaches that define the experience in terms of a customers’ interactions with the company.  These approaches are inherently company-centric and, at best, lead to improvements that create “better sameness.”  The fact is:

Customers’ experiences do not just happen at your organizations’ touch-points.

Evocative Experiences… The Experiences that Matter

An experience is evocative when it positively and profitably influences:

• What people think (cognitive outcomes)
  • What they remember about their experience
  • The story they tell themselves and others about their experience
  • The distinctions they draw that differentiate what you did for them
• How people feel (affective outcomes)
  • How doing business with you makes them feel about themselves
  • How the way they feel about themselves drives how they feel about you
  • What specific emotional states and triggers motivate behavior
• What people do (behavioral outcomes)
  • Making additional purchases
  • Diversifying what they buy from you
  • Telling stories about their experience with you
  • Recommending you to others
  • Behaving more cost effectively
  • Adopting new product, service, or process offerings

Four Characteristics of an Evocative Experience

1. Are immediately simple to understand and easy to navigate. The vast majority of peoples’ experiences are accomplished using a combination of “gist processing” and “automatic behavioral scripts.” Well-designed experiences fit easily with the mindsets and natural behaviors people have for the problem they’re trying to solve. Note: As a result of being designed around automatic behavioral scripts, evocative experiences can have a surprising subconscious influence on behavior.
2. Offer innovative solutions to peoples’ latent problems. Well-designed experiences start with a deep understanding of what people are trying to accomplish and provide solutions to problems, accomplish goals, and address needs that people may not even realize they have or be able to easily describe. These innovative solutions almost never occur at the existing company touch-points.
3. Tell a compelling and memorable story. People perceive, interpret, and recall their experiences using stories. Well-designed experiences tell a story that has a clear and distinctive message that resolves conflict using a small number of high-contrast, signature experience elements. These signature experience elements get people’s attention and are perceived as a meaningful differences in kind… rather than incremental differences in degree.
4. Trigger specific emotional states that influence behavior. The most influential experiences are designed to influence how people feel… not about the company… but about themselves. The specific emotional state(s) associated with the experience are chosen as the precursors to the behavior the experience is intended to generate.

Creating Evocative Experiences

In order to create evocative experiences you must start with an “experiencer-centric” rather than “company-centric” definition of experience.   We define an experience to be:

Experience:  A person’s cognitive, affective, and behavioral reactions… across the end-to-end process they follow… in order to realize a desired state, satisfy needs, and accomplish goals that are important to them.

This is fundamentally different than the typical company-centric definition:  Customer experience is the sum or all interactions a customer has with a supplier of goods or services, over the duration of their relationship with that supplier.

Experience Miner^TM and the Design of Evocative Experiences

The objective of any product, service, or experience design is to profitably and powerfully influence how people think… how people feel… and, most importantly, how people act.   Most organizations’ efforts fail to achieve this objective because they focus on how their organization “delivers” an experience rather than how people actually HAVE experiences.  As a result, organizations routinely over-invest in incremental improvements that deliver “better sameness” at the existing touch-points.  In the course of doing so, these organizations miss the fact that customers’ experiences don’t just happen at their touch-points.   Although these investments may have a marginal impact on reported satisfaction, they often don’t lead to any measurable change in behavior in the face of changing customer needs, priorities, expectations, and alternatives.  In order to positively influence customer behavior, experiences must be designed and delivered with a deep understanding of how people actually HAVE experiences.  For more information on this, see:  Getting Beneath the Voice of the Customer

Experience Miner^TM provides a rigorous way of capturing and analyzing the most critical aspects of the way people think, feel, and act  on their experiences.  Built on 25 years of research into the cognitive, affective, and behavioral basis of experience, it provides the specific insight required to focus design and delivery efforts on the areas of greatest influence and financial return.   Experience Miner^TM is used to describe the key elements for each target customer personae.  This insight is used to 

…design evocative experiences from the mental model of the experiencer.

The Experience Miner^TM toolset consists of the following seven elements, each designed to fill in a critical piece of insight required to design experiences that influence behavior.

Goal Space Mapping^TM – Describes the desired states and situation-specific goals that motivate and direct the experience for each key persona

Experiential Temperament^TM - Profiles how temperamental differences influence the way people are drawn to and engage with novelty seeking, harm avoidance, social orientation, and persistence

Framing Metaphors – Surfaces the underlying physical metaphors people use to interpret, evaluate and act on their experiences in the relevant domain(s).

Experiential Constructs^TM – Identifies the most common, learned distinctions that enable people to recognize, categorize, differentiate, and form expectations.

Emotional States and Triggers^TM -  Surfaces the emotional states and specific triggers across the lifecycle of the experience highlighting areas of uncertainty, stress, frustration, etc…

Experiential Pathways^TM – Maps the end-to-end set of activities and choice points that people follow in pursuit of their goals… including the unwritten rules and automatic behavioral scripts people apply along this pathway.

Experiential Choice Dynamics^TM – Describes the situation-specific choice processes that people follow, as well as, how they construct preferences and make decisions that influence their behavior.

Most of the time and money organizations invest on customer experience is wasted…

… because they focus on how the organization “delivers experiences”…

rather than on how customers actually “HAVE experiences” and how those experiences influence their behavior!

Effective Experiential Storytelling

What are the stories your customers tell about their experience with you and your business?  What do they think you really stand for?  What are the most memorable aspects of their experience?  What surprises them?  What frustrates them?  How do you make them feel?  The nature and quality of these stories has a profound impact on the success of your business.

We make sense of the world around us through the stories we tell… the stories we tell ourselves and the stories we hear from and tell to others.  If you think about the defining moments in your life, you’ll see that the stories you tell yourself about those moments have a powerful influence on your identity and the way you see the world.  Aside from these personal stories, across human history, we’ve shared meaning and knowledge with each other in the form of stories.  This includes the legends and parables shared within and across generations, as well as, the stories we share about more immediate events.

Stories are our Primary Means of Sharing Knowledge and Transmitting Culture

Humans have evolved as storytelling animals.  The story form is one of the core knowledge structures we use to encode and recall our experiences.   As I covered in a previous post (see:  Making Experiences Memorable), when we recall past experiences we actually reconstruct the experience from a limited amount of information encoded in memory.  Understanding how this happens provides powerful insight into how to design experiences that are both more memorable and more influential.

In business, the nature and quality of your relationships with customers is reflected in the nature and the quality of the stories your customers tell.  Your ability to retain customers is directly related to the nature and quality of the stories they tell themselves about their experience.  Your ability to cost-effectively acquire new customers is increasingly dependent on the nature and the quality of the stories your customers tell to other prospective customers.

The Experience Must Tell Customers the Story You Want Them to Retell

If you don’t effectively tell the story… how can ever expect that your customers will either get the message… or have the material to be able to pass the story effectively on to others.   In a previous post, I drew a parallel between experience and music.  (See:  Great Experiences are Music to My Ears).  The experience that customers have with most organizations is a lot like the Billy Preston song that goes, “I’ve got a song that ain’t got no melody.”  The experience doesn’t communicate anything effectively… it just defaults from the bunch of the things that organization does… and that bunch of things is generally all over the map.  Similarly, most organizations have a story that’s “got no message… and got no script.”

Earlier this week, I led several dozen executives from a wide range of companies through a full-day customer experience immersion event at Disneyland in Anaheim, CA.    Disney is an organization built on powerful storytelling.  There are stories of Walt; stories surrounding some of the worlds’ best loved fictional characters; the stories that unfold in movies, rides, and many of our personal memories of visits to one of the Disney theme parks.

As part of that event, we took a close look at one particularly well-crafted story; the “Pirates of the Caribbean” ride.  If you’re one of the more than half a billion people that have had the pleasure of experiencing this ride… take a moment… close your eyes and recall the experience.  What stands out as most memorable?  How do you remember feeling?  Over the course of about 13 minutes, a complete and highly immersive story unfolds.

Although it might seem like a stretch, there’s a lot that most businesses can learn about customer experience by considering how they can make the experience more like “Pirates of the Caribbean.”  For example, if you work for a bank, how can you make the experience customers have opening an account, applying for a loan, developing a financial plan, etc… a “Pirates of the Caribbean” experience?  If you’re a professional or business services provider, how can you make the experience that your clients have as engaging and meaningful as “Pirates of the Caribbean?”  In order to answer that question, we must start with three common characteristics of the most engaging, memorable, and retellable stories:

1. A Simple, Purposeful Message

A simple, purposeful message is at the core of many of the experiences that people find intuitively understandable and compelling.

By “simple” I mean a message that people can understand immediately; because it’s concrete rather than abstract and doesn’t require a lot of additional explanation. In their book, Made to Stick , Chip and Dan Heath do a great job of describing how the “Curse of Knowledge” often gets in the way of communicating in ways that people can easily understand.  The more knowledge you have of the strategy and inner workings of your industry and business, the more difficult it becomes to put yourself in the shoes of customers who don’t have that knowledge.  What seems intuitively obvious, concrete, and simple to you… may be confusing, abstract, and complex for your customers.

The Heaths illustrate the “Curse of Knowledge” using an experiment conducted in 1990 by Elizabeth Newton.  In that experiment, people were assigned to be either “tappers” or “listeners.”  Tappers were asked to select from a list of 25 well-known melodies and to tap out the selection’s rhythm on the table.   The listeners would then have to guess the song the tapper was tapping.  Tappers predicted that the listeners would guess correctly one out of two times (50%).  It turns out that the listeners were only able to guess one out of about forty times (2.5%).   The tappers thought it would be easy to communicate their “message” to the listener because, as they were tapping, they were hearing the song in their head.  However, the listener wasn’t hearing that song; they were just trying to decipher the message from what sounded like Morse code.  I don’t know how many times I’ve seen people try desperately to get their customers to understand when the underlying issue is that the customer just doesn’t have the same background music playing in their heads.

Beyond being simple, the message must also be “purposeful.” It must not only clearly articulate what you stand for BUT ALSO contrast that to what you stand against.   People will find it easier to understand who you are, when it’s clear who you’re not.  Heroes are boring without villains.  Triumphs don’t make sense without understanding the challenges that made those triumphs meaningful.  Stories without tension, uncertainty, or risk aren’t worth listening to.  The conflict built into the message clarifies the things that make the experience differentiated and worth engaging in.

It’s important to choose your enemies wisely.  For example, just about every insurance company out there portrays the enemy in their story to be the uncertain outcomes they protect you against.  As a result, the message from those companies pretty much boils down to the same thing… with only minor variations on how effectively they communicate that same old story.  Compare that to Progressive that has gotten a lot of mileage out of telling a different story; a story with a message that they provide competitive quotes that enable customers to feel they’ve made a more educated decision.  Allstate is also getting traction by telling a story around the message that they recognize and reward people for safe driving.  In both of these cases, the enemies are prevailing industry practices.

One of the best examples of a simple and purposeful message is Salesforce.com’s “Success, Not Software.”  Salesforce.com’s “software as a service (Saas)” platform allows you to focus on your sales processes rather than having to implement complex and risky CRM software.  We’ve also worked with many companies that provide further examples of strong messages:

• Jewelry Store Message: “The Perfect Gift Guaranteed.” It’s not about selling you jewelry. It’s about helping you give the perfect gift, in the perfect way that contributes to your relationship with the recipient.
• Mortgage Bank Message: “A Better Way Home.” It’s not about just giving you a mortgage. It’s about a well designed and flawlessly executed home buying experience.
• Automotive Financial Products Firm Message: “Driving Dealer Performance.” Rather than just providing financing and pre-paid maintenance (to their automotive dealer customers), we work with you to measurably improve the performance of your finance and insurance operation.

In each of these cases, the message is crisp and clearly articulated.  As you may guess, this is actually quite rare.  Most organizations become enamored with a message that doesn’t really communicate anything specific or concrete.

If we take a step back and look at “Pirates,” beneath the relatively light entertainment value, the story ends up hanging together brilliantly around the message:  “Despite the adventure, there is a price to be paid for a greedy and vile life.”

2. Characters that Make Sense

The most effective stories have characters that are authentic and intuitively understandable.  These characters make the experience more concrete.  This is particularly important if the product or service you provide is complex and abstract.  For example, if you’re in the insurance business, what you sell is abstract; a policy that represents the transfer of risk in exchange for a premium.  This raises the stakes on identifying both the characters in your story, as well as, the role they play.  If you’re in the banking business, who are the characters?

The strongest brand stories have great characters.  The book “Storytelling: Branding in Practice” by Klaus Fog, Christian Budtz, and Baris Yakaboylu describe the typical characters as follows:

• The Hero. Who is fighting for the goal described in the central premise?
• The Adversary. Who or what must the hero overcome to achieve that goal?
• The Supporter(s). Who (or what) assists the hero in their quest?
• The Benefactor(s). What superior character or force(s) provides aid in the quest?
• The Beneficiaries. Who benefits in the end?

In many situations, the company and/or its representatives are the heroes; the customers’ situation or the alternatives provided by competitors are the adversary; and customers are the beneficiaries.  This is true in the case of Salesforce.com.  Many great services businesses, like the Four Seasons, really cast their frontline employees as the heroes that overcome the ordinary and predictable in order to provide the guest the most comforting and personalized experience.  In this case, the Four Seasons plays a supporting role rather than a heroic role.  (See:  A World-Class Hospitality Experience:  Four Seasons Aviara).

In  many marginally successful services businesses, like the major US airlines or many call center operations, frontline employees wind up playing the role of victims… caught between the demands of the customer and the constraints and frustrations imposed on them by their company.  In fact, there are many situations I’ve observed where the frontline associates not only play the victim but do untold damage to the brand my making their employer the adversary (e.g., “I’d like to help you but it’s against our policy”).

We’ve also seen many examples of companies that do a great job of telling the story in a way that makes the customer the hero.  One of the best examples is the wonderful grocery retailer, H.E.B., that’s core message is “Come Home a Hero.”    In the case of the jewelry store example above, the core message of “The Perfect Gift Guaranteed” is framed in a way that the male gift giver (70% of their customer base) is the hero… and the gift recipient is the beneficiary… but with a subtle message that, when the gift experience is a WOW, the gift giver becomes the ultimate beneficiary (figure it out).

3. An Engaging Plotline with “Signature Scenes”

There are common, relatively predictable patterns to the way stories are structured.  It doesn’t matter if these are verbal, or told in books and movies.  Think about your favorite movie.  With very few exceptions, the story typically opens with an Initiating Event that gets the audience hooked and encourages them care what will happen next.  That Initiating Event introduces the tension described in the message (described above).  Then, over the course of the story, there are a sequence of memorable, Signature Scenes that gradually increase the tension.  Typically each of those scenes introduces a question about what will happen next.  By doing so, it keeps the audience engaged and increases their investment in finding out how the story will eventually be resolved.  Finally, the story reaches a climax that answers most but not all of the questions that were posed over the course of the story.   The best writers and story tellers purposely don’t answer all the questions at the end.  The presence of unanswered questions is one of the reasons why people still talk about the movie the next day and, very often, the thing that leaves them wanting to see the movie again next week.

Experience Director, Adam St. John Lawrence, in his blog Work-Play-Experience has a very insightful way of putting this.  He says great experiences, like great stories go “BOOM Wow-Wow-Wow BOOM.”

One of the reasons that “Pirates” is so engaging is that it follows a very well-designed plotline and includes highly memorable “Signature Scenes.”  Here is the plotline:

• BOOM: The Initiating Event: After lazily floating through the bayou for just long enough to feel immersed in the environment, guests encounter Jolly Roger who issues the warning that sets up the  conflict, “Psst! Avast there! It be too late to alter course, mateys… and there be plundering pirates lurking in every cove, waitin’ to board…. there be squalls ahead, and Davey Jones waiting for them what don’t obey…” Guests then plummet through two rapids drops that represent a Point of No Return.

• Wow1: Guests enter the “Grotto of Lost Souls” where they see the skeletons of three unfortunate pirates, two of whom have been run through with swords. As guests progress through this scene, the skeletons progress from realistic to much more surreal states of animation… steering the ship, drinking at the bar, and finally the captain’s remains lying in bed still studying the treasure map with a magnifying glass.

• Wow2: The Attack of the Wicked Wench. After leaving the Grotto, guests are thrown into the middle of a battle as the ship, The Wicked Wench, is attacking the walls of the city while cannon balls splash all around.

• Wow3: Sacking the Town. As the guest round the corner, they find that the pirates have captured the town and are now dunking the mayor in the well asking him about where to find “Jack Sparrow” (Disney added the references to the movie characters in 2006) as the town’s leaders are tied up and led away.

• Wow4: In the Town… The Wench Auction and the Chase Scenes. In a series of memorable comedic scenes, guests are offered the opportunity to “buy a bride” and entertained as they see the brides and grooms chasing after each other. The characters are animated on turntables that circle the balconies of the buildings. As we progress through this scene, the characters are shown at progressive levels of drunkenness as the town sinks into chaos.

• BOOM: The Town in Flames and the Escape. Eventually, the town is in engulfed in flames with spectacular effects and burning beams threatening to crash down on the guest’s boat. Meanwhile, the pirates are either too drunk to care or they’re in jail desperately pleading with the dog to let them out. As the guests escape up the waterfall, they are entreated to a final warning from Jack Sparrow (again, added in 2006).

So… how does all this apply to you?  Let’s look at one of the cases I mentioned earlier; the case of a leading specialty jewelry retailer that designed their experience around the message, “The Perfect Gift Guaranteed.”  After agreeing on that message, the customer experience was then designed to deliver that message using a set of Signature Scenes organized into a coherent plotline.  The Initiating Event was a specific greeting that welcomed the guest into the store.  That welcome introduced the message of helping the customer give the perfect gift… not just selling them a piece of jewelry.  This was then followed by a set of supporting, highly differentiated, Signature Experience Elements (or scenes).   These Signature Experience Elements included:  collaborative gift planning (differentiated from traditional selling), preparing the male gift giver to “romance the gift,” ensuring customers know what will happen if the gift doesn’t work out (the “guaranteed” part of the experience), creating a wow on exchanges or returns, and a clienteling process designed to maintain the relationship with the customer for future gift giving occasions.

Similarly, the mortgage company mentioned earlier designed a set of five Signature Experience Elements that happen over the life of the customer relationship, all designed to tell the story, “A Better Way Home.”

Building on the above points, The Disney Institute’s book, “Be Our Guest” summarizes their set of principles for delivering a compelling story, as follows:

1. Know your audience. Clearly define who are you creating the experience for?  How do they think and what do they desire?
2. Wear your guest’s shoes.  Design and evaluate the experience from the customer’s perspective by experiencing it as a customer.
3. Organize the flow of people and ideas.  Think of a setting as a story and tell that story in a sequenced, organized way.  Build the same order and logic into the design of customer movement.
4. Create a visual magnet.  It’s a visual landmark used to orient and attract people.
5. Communicate with visual literacy.  Language is not always composed of words. Use common languages of color, shape and form to communicate through a setting.
6. Avoid overload–create turn-ons.  Do not bombard customers with data.  Let them choose the information they want when they want it.
7. Tell one story at a time.  Mixing multiple stories in a single setting is confusing.  Create one setting for each big idea.
8. Avoid contradictions; maintain identity.  Every detail and every setting should support and further your identity and mission.
9. For every ounce of treatment provide a ton of treat.  Give your customers the highest value by building an interactive setting that gives them the opportunity to exercise all of their senses.
10. Keep it up. Never get complacent and always maintain your setting.

Over the past 25 years, we’ve worked with organizations that run the range from business-to-consumer to the most complex business-to-business relationships.  In the course of this work, we’ve found that Experiential Storytelling applies equally well everywhere along this range.  In practice, the business-to-consumer companies have the easiest time understanding it… while the business-to-business companies have the most to gain.

Making Experiences Memorable

I went to a Jackson Browne concert with a group of friends a week ago.  Yes, he’s still going strong at 60.  It was a great show.  He played a sufficient number of his hits, like Doctor My Eyes and Running on Empty.   For me, the highlight of the night was a very cool version of one of my personal favorites, “Lives in the Balance.”  Like many week-old experiences, I can sit back and still visualize a few of the key moments.  At the same time, like many week-old experiences, I can feel the memories fading.  It’s not that I’m getting old (even though I am); it’s just how memory works.

There is no experience without memory

Aside from whatever you happen to be doing at this precise moment in time, all of your experiences exist only as memories.  It is, therefore, impossible to really understand the nature of experience without understanding how we remember those experiences.  In this post, I’d like to cover some of the ways that memory affects how we experience the world.  This is very important for two reasons:

1. One of the least effective ways to understand what someone has experienced is to ask them to tell you about it after the fact.  People’s memories of their experiences are notoriously unreliable.  The implications of this are significant.  For instance, it creates a substantial limitation on how effective simple voice of the customer approaches are for understanding customers’ experiences.
2. If you want to design memorable experiences for your customers, you need to understand three things about how memory works:  how and why people pay attention to certain features of their experience, how those features and the overall gist of the experience are encoded in memory, and how those memories are recalled.  As you will see, understanding these three things is critically important to designing experiences that are much more memorable and, ultimately, much more influential.

Before jumping into this, I’d like to borrow an interesting illustration that Harvard Psychologist, Daniel Gilbert included in his wonderful book, “Stumbling on Happiness.”   Look at the six royal cards below and pick one.  No, no… don’t tell me which card you picked!  Just make sure you remember it.  You might want to repeat it to yourself a couple of times or even write it down to make sure you don’t forget.

Okay good!  Now that you have your card memorized, I’d like to jump into how memory influences experiences.  We’ll see how well you did at remembering the card towards the end of this post.

“Memory is an internal rumor.” George Santayana

Our memories of past experiences are notoriously unreliable.  There are three factors that contribute to the problem:  1) limitations in how much we can pay attention to at any moment in time, 2) issues with the way information in short-term memory are encoded into long-term memory, and 3) issues with how memories that we do encode are eventually recalled.  Understanding each of these factors provides insight into how to design much more memorable experiences.  Let’s take a look at all three.

ATTENTION

Every second, every day, every year, our senses take in millions of bits of rich detail about our experiences… all of the sights, sounds, textures, smells, tastes, etc…  However, we only have a limited capacity to attend to all that information.  Our conscious stream of the thought relies on short-term memory.  This short-term memory provides capacity for holding a small amount of this rich information in an active, readily available state for a short period of time.  The duration of short-term memory is about 20 seconds and experiments demonstrate that its capacity ranges from about 3 or 4 elements (i.e., words, digits, or letters) to about 9 elements.

Experiences like a concert, a fine meal, a glass of wine, a movie, browsing through a store, or walking along the street are very complex, rich, and multidimensional.  While it’s possible to hold some of that rich detail in short-term memory, it’s not easily translated to long-term memory.   We use language or a sort of mentalese in order to extract what seems like the most salient features of our experiences in order to be able to think about them or communicate them later.  As a result, the morning after a concert, you only really remember which songs were played, a few features of the way they were played, and the sense about what you liked or disliked about them.

The transfer from short-term to long-term memory involves fast forgetting.  There are numerous example of this.  For the sake of illustration, suppose I had you memorize a sequence of three letters and then count backwards in groups of three numbers.  In experiments to this effect, after counting backwards for 6 seconds, most people only remember about 50% of the letters.  After 12 seconds, most people only remember about 15% of the letters.

The way we experience the world starts with a combination of selective attention supported by subconscious “gist processing.” We generally pay attention to those elements of our experience that seem most important; the elements that capture our attention because they we were looking forward to them or they stood out because they were particularly high-contrast or they caught us by surprise in some way.  Beyond the relatively small amount of information that we’re able to pay conscious attention to; we do something called “gist processing.”  Gist processing enables us to get a sense for what is unfolding around us without having to focus attention on all the details.  It operates through subconscious pattern matching.  We get the gist of what’s happening because it roughly matches experiences we’ve had in the past.

Gorillas, Doors, and Selective Attention

Research provides many interesting examples of selective attention and inattentional blindness.   In one of the most striking and well- known demonstrations of selective attention, participants watch a video of people passing a basketball between each other, and they are asked to count the number of passes.   As the participants are busy counting the passes, less than 50% of those participants notice that a person dressed in a gorilla suit walks right through the middle of the action, stops, turns, looks at the camera, and does a little dance before turning and walking off the scene.   You can see an example of this experiment in one of Michael Shermer’s lectures posted here.

Another well-known example is the ‘door study’.   In this experiment, pedestrians are stopped by a researcher who asks them for directions.  While the pedestrian is talking to the experimenter, two men carrying a door walk between the two.   Hiding behind the door is another experimenter who changes places with the first experimenter.  The second experimenter then continues the conversation with the pedestrian.  The two experimenters are purposely different in height, weight, coloring, dress, etc…  Shockingly, only about half of the pedestrians realized that they were now talking to someone completely different than the person they were talking to at the beginning of the conversation with.  I’m sure you’ve had similar experiences?  How many of times have you placed an order in a restaurant and not been able to remember who your waitress was five minutes later?   These are illustrations of a specific type of inattentional blindness called change blindness.  (Click here for some further examples).

So much for our powers of observation!  In both examples, the subjects were paying attention to the central aspect of the experience:  counting the passes or giving directions.  In both examples, subjects were also surprisingly unaware of very significant elements of their experience.  If you look at this from the standpoint of evolutionary psychology, it makes total sense.  Over history, our survival has been based on recognizing and paying keen attention to those elements of our environment that seem most important while filtering out and not getting distracted by large amounts extraneous detail.

There are serious implications for anyone trying to improve the experience their customers have with their business.  It’s very easy to waste a lot of time and money designing experience elements that customers just filter out because those elements are neither central to the goals they are trying to accomplish nor occur on the attentional pathway customers are following in order to accomplish those goals.  We’ve found that the subtle elements of experience need to be designed in a way that specifically takes into account how people do gist processing.  That is, just give people the cues that will enable them to identify the experience.  The worst thing you can do is design a set of experience elements that get the customers’ attention but don’t fit with the way they think… elements that ultimately cause the experience to be both distracting and confusing for the customer.

ENCODING

The second issue has to do with how what we experience gets encoded in long-term memory.   We obviously don’t ultimately remember everything that was available to us in short-term memory as we were having the experience.  If we did, we’d need a brain many times larger than our current brain.   So, essentially, our experiences are compressed for storage.  As these experiences are coded in long-term memory, we store a summary of the gist of what happened, tagged with information about how the experience made us feel, along with a small set of specific representations of key features.  This is what I have left in my week-old memory of the Jackson Browne concert.

How information is moved into long term memory depends on the depth with which we process information.   A classic experiment by Craik and Tulving (1975), tested the strength of memory traces created using three different levels of processing:

1. Shallow processing: Participants were shown a word and asked to think about the font it was written in.  In other words, they paid attention to peripheral cues rather than the core element of their experience.
2. Intermediate processing: Participants were shown a word and asked to think about what it rhymes with.  In other words, participants were asked to make an association between their current experience and other experience.
3. Deep processing: Participants were shown a word and asked to think about how it would fit into a sentence, or which category of ‘thing’ it was.  In this case, participants were asked to directly interact with the core element of the experience… rather than just paying attention to associations or peripheral cues.

Not surprisingly, participants who had encoded the information most deeply remembered the most words when given a surprise test later.   But it also took them longer to encode the information in the first place.

Encoding Favors High Contrast, Discrete Features

The most important factor with memory encoding is that our brain does a relatively poor job of encoding rich continuous features (e.g., the way the store looked, the way the music sounded, how the food tasted, how long we waited, etc…) and are somewhat better at remembering high-contrast discrete features (e.g., whether something happened or not, what we ordered at the restaurant, the description we provided after we had the experience, etc…).

The implications of this for experience design are profound and counter-intuitive.  Many companies think about the quality of the experience their customers have in terms of a relatively large number of service levels (e.g., how long the customer had to wait for service) or subtle improvements in rich peripheral cues (e.g., store or web design).  In most cases, these improvements represent differences in degree that, even if the customer paid attention to them, would only get perceived as “better sameness.”  As important as these things seem to be to the company, the typical customer doesn’t encode their experience in a way that makes these things memorable.  As discussed earlier, these continuous variables are only important to the extent that they influence the way customers do gist processing.

We’ve found that the most memorable experiences are designed around a small number of high contrast “signature elements.”   These signature elements are the things that get the customers’ attention because they “differences in kind” rather than “differences in degree.”  Customer service is generally a difference in degree; everyone provides some level of customer service.  A specific service that is provided differently than a competitor or differently than the customer expected is a “difference in kind.”  For example, experiences at both Starbucks and Caribou coffee shops are built around differences in kind compared to other coffee shops.  There are also many specific examples, like the Renaissance Inn in Tulsa which has a totally different design for their front desk area.  This hotel has individual reception desks rather than placing a long counter between customers and the front desk clerks… like virtually every other hotel does.   As a result, out of all the hotels I’ve stayed at in the past year, this experience was memorable because it included this high contrast “signature element.”

Focusing on designing high-contrast signature elements rather than better sameness peripheral cues is a good start.  However, our memories of even the highest contrast elements of our experiences are suspect.

Encoding False Memories

“Most people, probably, are in doubt about certain matters ascribed to their past. They may have seen them, may have said them, done them, or they may only have dreamed or imagined they did so.” William James

As this quote illustrates, another very significant issue related to encoding is misattribution, bias, and the formation of false memories.  These encoding issues can have dramatic consequences.  For example, Gary Wells and his colleagues at Iowa State University did a study of 40 different miscarriages of justice that relied on inaccurate eye-witness testimony.  Many of these falsely convicted people served years in prison; some facing the death penalty.

While memory encoding errors can have disastrous consequences like this, it happens to all of us in less dramatic situations every day.  Encoding errors are a regular occurrence for most people.  These include:

• Misattributing sources. This includes things such as thinking that you read something in the newspaper when, in reality, a friend told you. It also includes unintentionally thinking you came up with an idea that, in fact, a colleague suggested to you several days earlier. (By the way, I apologize to my very forgiving colleagues for all the times this happens.)
• Mixing memories. There are a very wide range of ways that this happens. For example, you might think you knew something about a product you bought when, in fact, you learned about it after you made the purchase. It’s very common to add new information to memories after the fact.
• Confusing imagined elements of an experience with reality. There are numerous experiments that point to the fact that people often imagine elements of their experiences and create memories of those elements when, in reality, those elements didn’t actually happen. For example, I was talking with someone about how much I enjoyed Jackson Browne’s rendition of the song Load Out. I had been really looking forward to hearing him do it. The issue was, when I checked the set list that was posted online, he didn’t actually performance that song that night. (See also Goff and Roediger, 1998 for other interesting examples of “illusory recollections.)
• Consistency bias. Our memory process is “cognitively conservative.” Our lives are so much simpler if we don’t have to continually re-evaluate what we believe to be true. As a result, we tend to pay attention to and remember the information that conforms to our expectations or justifies our beliefs… while disregarding any information that contradicts those expectations or beliefs. This is an enormous factor in areas of our lives like our personal relationships or our political beliefs. Consistency bias is just one of the many biases that affect our memories.

All of these relatively simple misattributions at least have some basis in reality.  They just involve getting a little mixed up on the details.  However, we also create entirely false memories.  As William James pointed out, memories can be constructed from our realities, our imaginations, and our dreams.  For more information on this, I’d suggest checking out C. J. Brainerd and V. F. Reyna‘s  book “The Science of False Memory.”

Why All These Idiosyncrasies of Memory are Actually Helpful

Given all of the challenges illustrated above, you might think it’s amazing we can function effectively at all.  While these limitations can have a disastrous effect in certain situations, we seem to function pretty well most of the time.   It turns out that selective attention, gist processing, and limited memory encoding is a blessing.  It spares us from cluttering our minds with a massive amount of meaningless detail.   There is a positive correlation between our ability to extract and remember features of our experiences while forgetting the details and our ability to engage in abstract thought and learn from our experiences.

Consider the case of Russian journalist Solomon Shereshevskii, whose memory was so perfect he could remember everything that was ever said to him.  Shereshevskii became famous after being criticized for not taking notes while attending a speech in the mid-’20s. To the astonishment of everyone there (and to his own also, due to his belief that everybody could remember that level of detail­), he demonstrated his ability to recall the speech perfectly, word by word.  There seemed to be no limited to his detailed memory.  However, Shereskevkii’s gift had a very significant downside.  It was difficult to ignore even the most insignificant events.  He remembered every scene, word, cough, scratch, sneeze, meal, etc… In addition, all of these memories were so detailed that it was difficult for him to generalize across experiences or think in the abstract.  Shereshevskii was so tortured with the accumulation of memories over time that he had to work out ways to try to intentionally forget.

RECALL

As much as it seems like we retrieve memories from storage, this is actually a very elegant illusion.  When we remember past experiences, what we actually do is quickly reconstruct and re-imagine the events by filling in around the relatively small number of features we stored.  This whole approach is efficient because it allows us to store a large number of memories.  However, it makes the memories we do have highly suspect.  It happens so quickly and easily that we get the illusion we are actually remembering what happened while our accounts of those past experiences can be pretty inaccurate.

But our memories seem so real!  Memories of past experiences seem real because many of the same portions of the brain are activated when we remember as when we perceived the event in the first place.  For example, listening to a song on the radio involve an area of the portion of the brain called the auditory cortex.  When you sit and remember what a song sounds like, it also activates the auditory cortex.  This use of the same area of the brain is a reason why it’s so difficult to remember how one song goes while you’re listening to another song.  It’s also why you can remember the song better if you plug your ears in order to eliminate the confusion associated with the same part of the brain trying to process two different experiences at the same time.

When we remember past experiences, it has an influence on what we will remember about that event the next time around… the story gets sharpened and leveled.  Information that is inconsistent with the overall storyline or gist we remember is forgotten (leveled) and features that reinforce our beliefs about the experience are emphasized (sharpened).  Often new information is introduced after the fact.   Aside from the issues with selective attention and limited encoding of memories, this is yet another reason why relying on eye witnesses creates problems in the criminal justice system.  The way a person is questioned about their experience can subtly influence what they remember about that experience.

Daniel Gilbert also shared the following example.  Volunteers in an experiment were asked to look at a series of slides that showed a red car approaching a yield sign, turning right, and then knocking over a pedestrian.  After seeing the slides, some volunteers (the no-question group) were not asked any questions, and the remaining volunteers (the question group) were.  The question that the second group of volunteers was asked was:  “Did another car pass the red car while it was stopped at the stop sign?”  Next, all the volunteers were shown two pictures:  one with the red car approaching a yield sign and one with the red car approaching a stop sign.  They were asked to point to the picture they had actually seen.   More than 90 percent of the volunteers in the no question group correctly pointed to the yield sign.  However, 80 percent of the volunteers in the question group incorrectly pointed to the picture of the car approaching the stop sign.   Clearly, the question that was asked influenced the volunteers’ memories of their experience.

There are several interesting implications of how memories are changed as they are recalled and reconstructed.  Since I got divorced 10 years ago, I have my two wonderful children with me for just the weekends.   Since I wanted to make sure that they always remembered the time we had together in the most positive light, we’ve consistently followed a Sunday evening ritual.  In the car on their way home, we have a discussion about the weekend and we each share what we thought were our best experiences.  It’s difficult to measure the impact that this has, but I know that it’s had an effect on the positive way they remember the special things we’ve done.

In a business application of a similar approach, I had the chance to work with the late Christine Boskoff, who was one of the most successful high-altitude mountain climbers in the world and the owner of a leading outdoor adventure travel company named Mountain Madness.  Her question was how to improve word of mouth about Mountain Madness in order to attract new clients.  The recommendation I developed with her was that, on the last day of each trip, there should be a final celebration involving a ceremonial round of “storytelling.”  In this storytelling ceremony, each participant would have a chance to share the personal story of their adventure, what it meant to them, and what their most positive takeaways were.  The act of telling their own story, in addition to listening to the stories of others, has a powerful effect to prime and prepare clients with the “personal legends” they’ll share with others when they get home.  In the course of telling and retelling these legendary stories the most compelling aspects are typically “sharpened” while any of the less positive or inconsistent aspects are “leveled” in order to fit with a more compact storyline.

There are a wide range of approaches we’ve used with our clients.  For example, is there a way to provide a personalized summary of the experience the customer had as a memento but do it in a way that positively reinforces the differentiated, signature elements of the experience.

Summary of Implications for Experience Design

Over the course of this post, I’ve covered the ways that memory affects our experiences. I’ve also highlighted several of the many ways that you can design and deliver more memorable experiences by understanding how people pay attention, encode memories, and reconstruct those experiences after the fact.    Those strategies include:  1) designing for gist processing and not overinvesting in service improvements or subtle cues that customers tend to filter out, 2) focusing on a small number of high-contrast signature elements that capture the customers’ attention, are easy to encode, and all contribute to a storyline that reinforces the brand, and 3) finding ways to enable customers to recall the experiences they’ve had in the most positive light.   As always, there is much more to say about all of these topics.  Feel free to submit a comment if you have questions or points to add.

OH… I ALMOST FORGOT… BACK TO THE CARDS

I hope you still remember the card you chose.  As you’ve been reading this post, I’ve been running a little web-based subroutine that was able to read your mind.  Based on the results of that little program, I’ve removed the card that you chose from the lineup.  I’ll leave it up to you to figure out how I did this fairly simple trick.

Understanding Basic Drives and Experiential Temperament

In many ways, we are the product of the behaviors that worked for a long line of our ancestors.  When faced with a life threatening situation, say happening upon a saber tooth tiger, our ancestors were the ones that ran first and asked questions later.  Their friends that naively felt driven to go take a closer look weren’t so lucky.  Based on situation after situation like this, we are the descendants of the people that were driven to:  form and cooperate with others in reciprocal relationships, intuitively understand other peoples motives in order to be able to anticipate what they’d do; learn more about the way the world works in order to develop effective predictions and plans; and acquire the resources they needed to survive and that enhanced their status within the social hierarchy.

At the deepest level, our experiences today influenced by the same set of basic survival drives that were adaptive for our ancestors in the situations they faced.  While evolution does not pull our experiential strings directly, it has determined the design of how our brains process and act on experiences.   How we react to threats, strive to connect with others, seek to understand the ways of the world, and acquire resources are consistent with the mechanisms that contributed to the survival of those that came before us.

In the book, Driven: How Human Nature Shapes Our Choices, Paul Laurence and Nitin Nohria, two Harvard University professors, conclude that we are hardwired with four basic drives that can be used to explain a wide range of individual and collective behavior.  These four basic drives are to:  ACQUIRE (obtain essential resources as well as, intangibles that improve our social status), BOND (develop relationships with individuals and groups that provide security and pleasure), LEARN (acquire experiences and beliefs that help us make the world more predictable), and DEFEND (protect against threats to ourselves, as well as, our resources, relationships, and beliefs).

As different as we all appear to be on the surface, these four basic drives provide a common framework that apply across individuals and across cultures.   The degree to which they are satisfied directly affects our emotions and, by extension, our behavior.   As we will see, individual temperamental differences have an effect on the relative strength of these drives and how they’re expressed.

ACQUIRE:  The drive to obtain essential resources as well as, intangibles that improve our social status.  We are motivated to acquire goods that increase our sense of well-being.  We experience satisfaction when this drive is fulfilled and frustration when it is not. Our drive to ACQUIRE applies to essential resources like food, clothing, shelter, and money.  It also applies to collecting objects, symbols, and experiences that signal or improve our status relative to others.

Beyond our basic survival needs, the drive to ACQUIRE is relative rather than absolute; we tend to compare what we have to what others have.  Observers of the human condition have consistently pointed out that people are happy when they feel better off than other people they know, unhappy when they feel worse off.

In addition, the drive to ACQUIRE is often insatiable beyond any physical need.  We often want more even when there is little or no incremental benefit from having more.

BOND:  The drive to develop relationships with individuals and groups that provide security and pleasure.  There is obvious survival value to forming reciprocal relationships with others, as well as, to be part of a group that provides safety, support, and identity.  Most people experience positive emotions when they are associated with others and negative emotions when they are isolated.

The drive to BOND also leads to emergence of cooperation.  In order to stay positively connected to the group, an individual must naturally keep track of their indebtedness to others and reciprocate in a way that maintains the relationship.  It also becomes very adaptive to sacrifice on personal gain in order to contribute to the greater good of the group.  One of the other implications of the drive to BOND is the emergence of both a dominance hierarchy and attention to social justice.  (See:   Cognitive Ergonomics: How Customers’ React to Violations of Justice).

LEARN:  The drive to acquire knowledge and beliefs that help us navigate successfully in the world.   There is strong survival value in our ability to make sense of the world around us and produce theories that help us: explain what has happened, predict what will happen, and develop reasonable courses of action.   We get frustrated when things seem senseless and we feel satisfied when we can understand about how and why things happen the way they do.  While the drive to acquire is materially driven, the drive to LEARN can be considered intellectual foraging.

DEFEND:  The drive to protect against threats to ourselves, as well as, our resources, relationships, and beliefs.   This drive is rooted in the most basic fight or flight response that is common to most animals.  We all naturally defend ourselves, our possessions, our family and friends against physical harm.  By extension, we also DEFEND our ideas, beliefs, and accomplishments against psychological harm that would undermine our understanding of the world, our self-esteem, or our social status.  When we successfully fulfill our drive to DEFEND, it leads to feelings of confidence and security.  When we are faced with situations that are unpredictable and seemingly out of our control, we react with feelings of fear and resentment.

Laurence and Nohria observe that these drives are independent in that they can neither be ordered hierarchically nor substituted for each other.   This is important since it provides flexibility in our behavioral responses to the situations we face.  This is particularly important since, in many cases, these drives are competing.  We often can’t satisfy each of the four drives in every situation leading to psychological and moral dilemmas.  For example, the drive to LEARN is often in conflict with the drive to DEFEND and the drive to BOND (cooperate) is often at odds with the drive to ACQUIRE.

While these four drives are present in every effectively functioning human being, you know from personal experience that not everyone expresses the drive to BOND or LEARN or ACQUIRE or DEFEND in the same ways.  For example, people vary in the both the magnitude and the direction associated with their drive to LEARN.

Recognizing differences in the strength and expression of each of these drives is a very important part of understanding how different people have experiences… and in knowing what can be done to enable people to have more engaging experiences.  We describe these differences in terms of Experiential Temperament.  The first layer of the Experience Personae Model thus starts with a description of the how individuals differ in the way they express the four drives.

“In one way or another, all our experiences are chemically conditioned, and if we imagine that some of them are purely “spiritual,” purely “intellectual,” or purely “aesthetic;” it is merely because we have never troubled to investigate the internal chemical environment at the moment of the occurrence.”  Aldous Huxley

An individuals’ experience takes place in a biochemical environment in the brain that influences the experiences they will find compelling, engaging, and comfortable.   Different people react to experiences differently based on variations in the neuromodulation processes that influence their activity level and emotional state.

Note:  A neuromodulation process involves neurotransmitters (the chemicals that communicate across synapses in the brain) that are not reabsorbed by the neuron or broken down.  These neuromodulators end up influencing the chemical makeup of an individual’s cerebrospinal fluid (the chemical environment of the brain) and, as a result, influencing (or modulating) the overall activity level of the brain.

An individual’s unique expression of the drives we discussed above has a lot to do with variations in neuromodulation from one individual to another.   In essence, neuromodulators act like the volume and tone controls that influence magnitude and nature of our reactions to experiences.

In our work, we consider four Experiential Temperaments that influence the fundamental ways people engage with different types of experiences:  Novelty Seeking, Harm Avoidance, Social Orientation, and Persistence.  This perspective builds on work originally done by Dr. C. Robert Cloninger, a psychiatrist at Washington University School of Medicine.

Novelty Seeking is the level to which a person is comfortable with,drawn to, and exhilarated by new experiences. While everyone wants some excitement occasionally, people that express high levels of Novelty Seeking seem to live for new experiences and new ways of looking at things. High Novelty Seeking people tend to be curious, exploratory, easily bored, impulsive, quick tempered, extravagant, enthusiastic, and disorderly. On the other hand, low Novelty Seeking people tend to be more indifferent to unfamiliar experiences. They also tend to be more reflective, frugal, orderly, and regimented.

Novelty Seeking describes an individuals’ expression of the common underlying drive to LEARN.  Novelty Seeking behavior contributes to an individual’s practical and theoretical understanding of the way the world works.

In the brain, Novelty Seeking behavior is motivated and regulated by dopamine.  High Novelty Seeking people appear to have low base levels of dopamine and, as a result, experience an increased sensitivity to dopamine releases.  This gives Novelty Seekers an enhanced euphoric rush from novel stimulation that is either physical or intellectual.

Harm Avoidance is the level to which customers strive to escape from unfamiliar, uncertain, potentially dangerous, or unpleasant experiences. People that are high in Harm Avoidance tend to be cautious, apprehensive, and pessimistic in experiences that don’t worry others. They also tend to be insecure in social situations and often need reassurance and encouragement with new experiences. They tend to be critical of themselves if things don’t go smoothly. On the other hand, people that are low in Harm Avoidance are generally confident despite the unknown aspects of an experience, even those experiences that would worry other people. Overall, low Harm Avoidance individuals tend to be relaxed, courageous, carefree, and optimistic.

Harm Avoidance is an important way that different individuals express the drive to DEFEND.  While everyone has the drive to protect themselves, high Harm Avoidant individuals take this to an extreme by avoiding behavior that would lead to punishment, danger, or embarrassment.

Harm Avoidance appears to be regulated by serotonin.  Harm Avoidant individuals are more prone to the frequent release of serotonin when presented with uncertain or potentially threatening situations.  This frequent release of serotonin leads to a decrease in serotonin sensitivity and a resulting increase in cortisol which is associated with the feeling of stress.

Social Orientation is the level to which people seek to bond with and gain approval from others. Individuals with high Social Orientation are warm, dedicated, and dependent. They tend to seek communication and social contact and are sensitive to social cues which facilitate their understanding of and reciprocity with others. People that are low on Social Orientation tend to be self-absorbed, practical, cold, and more socially insensitive. They often don’t mind being alone and, in general, don’t feel a strong need to gain approval from others

Social Orientation is an expression of the underlying drive to BOND.  High Social Orientation individuals have an amplified need to BOND and tend to be effective in forming and maintaining strong reciprocal relationships.

Social Orientation appears to be related to levels of oxytocin (strong bonding with mates and family) and vasopressin, the only known hormones released by the posterior pituitary gland that act at a distance.  Studies have reported that higher levels of oxytocin enhance an individual’s ability to read others’ emotions based on eye cues.  In addition, a 2005 study in reported in Nature magazine found that people sprayed with oxytocin were more trusting in cooperation situations.  Subjects whose oxytocin levels were mildly increased could infer significantly better what a target person was thinking about, based only on eye cues.  The effect was more pronounced for emotions harder to read through eye cues.

Persistence is the level to which a person feels the drive towards behavioral inhibition (put it off) versus behavioral activation (just do it!). High Persistence individuals are eager to initiative experiences, tend to see roadblocks as personal challenges, and intensify their efforts in response to anticipated rewards. Low Persistence individuals require the deliberate removal of barriers to action and more powerful encouragement to engage in experiences.

Persistence can be considered an amplifier or modulator of the drive to ACQUIRE resources, experiences, relationships, etc…   Persistence appears to be connected with the complex interaction of neurotransmitters including dopamine (motivation based on reward-prediction), and serotonin.

So what does this all mean?  The ability to understand and rigorously describe the Experiential Temperament of a person has a profound impact on designing products, services, interactions, etc… that fit with and influence the way people think.   Designing high Novelty Seeking experiences for low Novelty Seeking customers is not ideal.  Not taking into account the high Harm Avoidant temperament of some customers can lead to experiences that make people feel uncomfortable.

For example, we are currently helping a leading healthcare organization design an integrated patient-physician experience that is sensitive to the fact that people have fundamentally different mental models for their health and the consumption of health-related services.  Some customers will be high novelty seeking “naturalists;” some customers will be low persistence “avoiders;” others will be more high harm avoidant “active consumers,” etc…   The experience that works for each of the personae involves different ways of communicating, prescribing courses of treatment, reinforcing behaviors like wellness programs, etc…

Another client is a leading retail chain expressed a desire to “Disneyize” their experience.  What they hadn’t taken into account in developing that vision is that the current customer experience could be described as:  low novelty seeking; moderately high harm avoidant; and high social orientation.  Some of the ideas this company had for improving the experience were brilliant.  However, many of those “improvements” would have led to an unintended shift in the temperament of the overall experience; one that would have created tension for existing customers.

The most effective experiences either match the temperament of the target ideal individual or avoid stressing people by providing a “temperament neutral experience.”

Choice Architecture: Designing Experiences that Influence Customer Behavior

Well-designed experiences influence behavior.   A well-designed customer experience can influence customers to return for additional purchases, spend more money during each purchase, and tell lots of other potential customers about the experiences they’ve had with your business, etc…    In addition, a well-designed customer experience can influence customer behavior in a way that decreases the cost of service.   For example, the experience can be designed to increase the likelihood the customer will place an order or look for service on the web rather than calling the call center.  Additionally, I’m doing an increasing amount of work with energy companies who traditionally haven’t paid much attention to customer experience.  However, many of those companies are now focused on designing services and experiences that influence customers’ conservation and consumption behavior.

In order to keep things simple, classical economics has always assumed that people act based on a relatively stable set of preferences.  However, in real life, this is far from true.  People typically don’t know what they want until they see it… they construct their preferences and work through decisions as they understand their alternatives in context.  Subtle differences in the design of that context can have a significant impact on the decisions customers make.  In fact, research in the areas of cognitive psychology and behavioral economics has shown that…

…small and seemingly insignificant contextual details have a major impact on people’s behavior.

For Example….

…How Including an Irrelevant Choice Can Influence Customers to Spend More?

One of my favorite recent examples comes from MIT Professor Dan Ariely.  (See Dan’s great book:  Predictably Irrational)  Dan came across the following advertisement for The Economist:

The Economist Subscription Options

The ad offered three subscription options:

• Electronic Only: $59
• Print Only: $125
• Electronic and Print: $125

Which of these options do you think people would choose?  Why would anyone choose the “Print Only” option rather than opting for the additional “FREE!” electronic subscription?  It seems very unlikely!  In fact, Ariely conducted a test with 100 Sloan School students and only 16 chose “Electronic Only” while 84 chose the “Electronic and Print” option.  No one chose the “Print Only” option! On the surface, this option seems totally irrelevant.  Why would you even offer it?   It turns out that something very interesting happens when this seemingly irrelevant option is eliminated.  When another 100 students were offered only two choices: “Electronic Only” and “Electronic and Print”, 68 chose “Electronic Only” while only 32 chose “Electronic and Print.”   

The presence of an irrelevant option influenced a more than 250% increase in customers choosing the more expensive alternative!!!

Ariely observed the following, “Thinking is difficult and sometimes unpleasant.” Cues that allow us to establish the relative value of various offerings, then, reduce the cognitive load or effort required to think about your options.  What the Economist offered was a no-brainer; while we can’t be certain that the print subscription is worth more than twice the electronic version, the combination of the two was clearly worth more that the print version alone.

Choice Architecture:  Designing Choices that Influence Customer Behavior

Customers always have choices.  Choice architecture is the deliberate design of both the choices and the context for those choices in order to influence a person’s behavior.  The most obvious, classic examples of choice architecture come from the design of retail stores and merchandise displays, restaurant menus and buffet lines, print and online catalogues, etc…  I got my start in customer experience 25 years ago designing store layouts, merchandise displays, signage, and promotions that increased customer profitability.   I’ve learned that there are three components that need to be addressed: 1) the Choice Design (the customer options including the information provided about those options), 2) the Choice Pathways… the sequence or placement of those choices in time and space, and 3) the Choice Environment including peripheral cues like signage, lighting, other people in privacy/public space, etc…

Let’s look at a simple illustrative case.  A well-designed restaurant menu can be a great example of choice architecture based on sophisticated menu psychology.   It turns out that there is a predictable Visual Choice Pathway people typically follow when they read a menu.  For example, when most people open a four page menu, their eyes go first to the top of the page on the right side.  A smart menu designer generally places one of the highest profitability items at the top of this page.  Then, most people’s eyes will move down towards the center of that same page.  An even smart(er) menu designer will put the most expensive item towards the center of the page… not because they think the customer will order it… but because it will tend to prime the customers’ expectations about what they’re likely to spend.  In most cases, customers will then look at the items immediately above and below the most expensive item.  Those two items immediately above and below the most expensive item are deliberately two of the most compelling selections on the menu… and are the most commonly ordered items designed to generate the most profit on the menu.  There have been numerous examples of restaurants that have been able to significantly shift their average ticket size based on the design of the menu.  (See:  Reading Between the Lines: The Psychology of Menu Design or Basics of Menu Psychology).

A similar thing happens in high end retail boutiques.  The sight of those $295 jeans (I still can’t believe it!) subtly prime the customer to feel that $125 jeans are a bargain.   The $295 jeans sell a lot more $125 jeans.  We’ve seen the same sort of thing in jewelry stores, hospitality companies, and many other diverse situations.

Although these examples are intriguing, it’s important to recognize that examples of choice architecture are literally everywhere.   For example:

• The design of an election ballot is an example of choice architecture. Experiments have shown, if a candidate is listed first on the ballot, he may well get a 4% increase in votes.
• When a doctor describes alternative treatments available to a patient, it is also an example of choice architecture. Research has shown that if a doctor says 90% of patients are alive five years after a certain procedure, far more people opt for that procedure than if the doctor says 10% of patients are dead five years after having it.

Choice architecture applies just about any product or service company that offers alternatives to their customers.   This can be anything from insurance companies that offer coverage options, banks that offer different financing or deposit products, business services firms that propose alternative approaches to their clients, etc…

Unfortunately, most companies don’t think about choice architecture effectively… actually in most cases, they don’t think about it at all.  Often a company will just throw a bunch of alternatives at their customers and count on the customers to sort it out.  As a result, they miss significant opportunities to drive additional revenue and profit.  The most important starting place is to understand much clearer how customers make decisions and design an experience that fits the way customers think (i.e.,  Design from the Mental Model of the Customer).  See:  Optimizing the Most Critical Elements of the Customer Experience: Customer Choices and Cognitive Ergonomics: Framing and Priming the Customer Experience.

This is an area that is getting an increasing amount of academic attention. Richard Thaler, Director of the Center for Decision Research at the University of Chicago Graduate School of Business, and Cass R. Sunstein are authors of the excellent book, Nudge: Improving Decisions About Health, Wealth, and Happiness (see also:  Designing Better Choices (LA Times Commentary) by Richard H. Thaler and Cass R. Sunstein).  Thaler and Sunstein provide several interesting examples of how organizations can improve the decision making effectiveness for their customers and employees.  This includes:

• If we want to increase savings by employees, employers might … enroll them automatically in a 401k plan, unless they specifically choose otherwise.
• If we want to increase the supply of transplant organs in the United States, we could assume that people want to donate, rather than treating non-donation as the default.
• If we want to increase charitable giving, we could give people the opportunity to join a plan, in which some percentage of their future wage increases are automatically given to charities.
• If we want to respond to the recent problems in the credit markets, we could design disclosure policies that ensure consumers can see exactly what they are paying and make easy comparisons amongst their possible options.

Thaler and Sunstein describe three key elements that are important to designing a choice architecture that leads to better results for individuals and society:

1. Default Design. Whatever you chose as the default option has the highest likelihood of being selected.  For example, the states that have organ donation as the default option when individuals get a drivers license have a much higher acceptance rate.  In fast food restaurants, highly profitable combo meals have become the default option… customers often need to explicitly ask for just the burger. Design architects need to pay careful attention to the default option.
2. Providing Feedback. People respond to feedback about their decisions.  For example, in some markets electric utilities are starting to provide specially designed bulbs (called orbs) that glow red as homes use higher levels of energy.  These devices have influences customers consumption behavior and have proven to reduce energy use during peak periods by 40% in Southern California. (find reference and make sure I’m using the right terminology)
3. Anticipating Errors. People make mistakes and it’s possible to design a choice architecture which anticipates these mistakes and thus leads to better outcomes.  Thaler and Sunstein have been promoting the example of “Save More Tomorrow” programs, which help employees set aside future pay hikes for retirement. “Save More Tomorrow is based on the same principle of expecting error,” he said. “We ask people if they want to commit now to saving more later, because all of us have more self-control in the future. The first company that adopted it tripled savings rates, and the program is now spreading.“  They also use the example of the Paris subway card, which allows users to insert it into an electronic turnstile in any of four ways to gain entrance to the subway.  Compared that to most payment kiosks in which there are 4 possible ways to insert your credit card… only one of which will work.

This is a topic with a lot of subtlety and power… if you’re looking for additional practical insights, feel free to post a reply or get in touch.  In summary…

If you offer customers options and you don’t think about choice architecture…

…you are almost certainly missing significant opportunities to improve profitability.

Behavioral Engineering and the Design of Influential Experiences: Example – Influencing Sustainable Behavior

Let me start this important topic with a few points that should be intuitively obvious:

• The benefits associated with delivering an outstanding customer experience accrue from influencing customer behavior
• Customers either deliberately or incidentally change what they do when they experience something that makes them feel or think differently
• In most competitive markets, there are straightforward financial benefits associated with changing customer behavior. These positive changes in customer behavior lead to increased retention, wallet share, referral rates, etc…
• The levers for changing customer behavior generally involve finding ways to understand and influence customers’ perceptions of the value they receive

Moving beyond these obvious points, things get much more interesting when the objective is design experiences that influence behavior towards more altruistic ends.  For example, many regulated utilities are launching energy conservation and demand response programs.  The objective of these programs is to shift customer behavior related to energy consumption and conservation.  While there might be marginal direct benefits (e.g., reduced rates, etc…) experienced by the customer as a result of changing their behavior, there are also environmental and social benefits the customer may not easily perceive. 

As we’ve been engaged with clients working on this problem, it’s become clear that there’s a lot that any company can learn from this more challenging experience design problem.  For example, the airlines have done a good job of influencing customer behavior regarding online check-in and the use of kiosks rather than agents, despite initial customer tentativeness and resistance.

What Comes First:  Attitudes or Behavior?

While it seems natural to assume that customers’ beliefs and attitudes are precursors to their behavior, practical experience supported by numerous academic studies have demonstrated that the linkage is highly complex.  For example, many people have attitudes and beliefs consistent with environmental conservation yet do not exhibit any significant conservative behavior.  A person’s expressed beliefs and attitudes about environmental issues are not a strong indicator of how that person will act relative to those issues.  In fact, you can’t even assume that a person who identifies themselves as an environmentalist will necessarily have either a solid understanding of the issues or be any more willing to modify their behavior to make it more environmentally friendly.  

As discussed in Doug McKenzie-Mohr’s and William Smith’s book, “Fostering Sustainable Behavior,” a few illustrative examples include:

• “Participants in an intensive 3 hour energy conservation workshop indicated greater awareness of energy issues, more appreciation for what could be done in their homes to reduce energy use, and a willingness to implement changes. However, based on follow up visits, actual behavior did not change. The only difference in behavior between participants and non-participants is that eight of the forty participants had installed the low-flow shower head they were given for free at the workshop.” Geller, E.S. “Evaluating Energy Conservation Programs: Is Verbal Report Enough?” Journal of Consumer Research, 8, 331-335
• “Individuals who hold attitudes that are strongly supportive of energy conservation were found to be no more likely to conserve energy.” Archer, D., Pettigrew, T., Constanzo, M., Iritani, B., Walker, I. & White, L. “Energy Conservation and Public Policy: The Mediation of Individual Behavior” Energy Efficiency: Perspectives on Individual Behavior, 69-92.
• “500 people were interviewed and asked about personal responsibility for picking up litter, 94% indicated that individuals have a responsibility for picking up litter. However, when leaving the interview, only 2% actually picked up the litter that had been “planted” by the researcher.” Bickman, L “Environmental Attitudes and Actions” Journal of Social Pscyhology, 87, 323-324.
• “An investigation of the differences between recyclers and non-recyclers found that they did not differ in their attitudes towards recycling.” DeYoung, R. “Exploring the Difference Between Recyclers and Non-Recyclers: The Role of Information” Journal of Environmental Systems, 18, 341-351.

There are several factors that contribute to a disconnect between a person’s attitudes and their behavior.  Each of the following reasons influence whether or not a person engages in any new behavior, despite their attitudes towards that behavior:

1. Lack of Knowledge.  Inconsistency between a person’s expressed attitudes and their behavior might be partially attributable to a lack of understanding of what to do or a lack of understand the implications of their actions.  While numerous studies show that information or education alone has little or no effect on behavior, it is still a critical enabler.

2. Perceived Barriers.  External barriers and constraints set limits on what can be accomplished by just changing a person’s attitudes.  The higher the barriers, including expense, inconvenience, and technical difficulties, the less the effect attitudes will have on a person’s behavior.

3. Perceived Benefits.  A person may have to incur immediate and well-defined inconvenience, uncertainty, and monetary costs in exchange for longer term benefits experienced by the broader population rather than the individual themselves.  This is related to Hardin’s metaphor of the Tragedy of the Commons.

In general, behavior competes with behavior.  People consciously or automatically make choices between alternative behaviors.  When they do, people naturally gravitate to behaviors that have high perceived benefits and few perceived barriers or costs.  In general, people also naturally pay the most attention to short-term benefits and costs.  While perceived benefits and barriers / costs vary dramatically by individual, there are usually common elements shared by customers within a given customer “personae.”

As a result, a behavioral engineering approach is often most effective.  It is generally more cost effective to try to change behavior directly than to do so via a change in attitudes across a large population.  We have found that attitudes are just as likely to be a consequence of behavior than the cause of behavior.  Or, as we like to say, you often “act your way into a new way of thinking, rather than thinking your way into a new way of acting.” 

As McKenzie-Mohr and Smith summarize, much of the practice involves influencing behavior in specific ways by:

• Increasing the customers’ perceived benefits of the desired behavior
• Decreasing the customers’ perceived barriers to the desired behavior
• Decreasing the customers’ perceived benefits of the current or competing behavior(s)
• Increasing the customers’ perceived barriers of the current or competing behaviors(s)

The high level steps include:

1. Identifying Specific Perceived Barriers and Benefits.  This requires field-based observation and elicitation research (See:  Observation and Elicitation: We Like to Watch!) focused on surfacing:  What makes the desired behavior difficult/easy?  What are the perceived positives and negatives?  Who wants you to do it and who doesn’t care?  This qualitative research is used to clearly identify the ways that  customers experience the barriers and benefits.
2. Clustering Perceived Barriers and Benefits by Personae.  The initial observation and elicitation research is generally followed by a more quantitative study that clusters and prioritizes barriers and benefits for different customer personae.  (See:  Personae-Driven Customer Experience Design)
3. Designing Behavior Change Programs by Personae.  In general, program design starts by targeting the most “influencable” personae first.  Characteristics of effective program design typically include the following elements (See:  Influential Experiences and the Psychology of Escalating Commitment):
   • “Easy to get started” initiating actions and reinforcement
   • Gaining visible commitment (e.g. written commitments)
   • Creating meaningful incentives and penalties
   • Emphasizing personal contact
   • Encouraging development social norms and leveraging social pressure
   • Designing prompts / reminders for new behaviors.  Helping people remember – making it difficult for them to forget.
   • Measuring and reporting progress against individual and community goals.
4. Piloting and Refining Behavior Change Programs.  It is very important that any programs be tested and refined in the field.  This can be done with a sample or segment of customers.  The purpose of this pilot is not just to evaluate the design but to improve it with observation and feedback gained from the participating customers.
5. Rollout and Evaluate Results.

Here are a few situation-specific lessons learned:

• Efforts to encourage people to conserve energy must provide information that can help them understand what the effects of specific changes in behavior will be. For example, the information on a typical electric bill is not detailed enough. These bills typically summarize overall usages. This doesn’t give consumers any clue as to the relative effect of various resource-conserving actions. As a result, misconceptions about the impact of various actions persist despite educational efforts to change them (e.g., the impact of turning off lights vs. making less frequent use of the clothes dryer).
• Providing incentives can be effective. However, if incentives are significant, many people come to believe they are acting only for the incentives. They may begin to require larger incentives to do things that they might previously have done only with small incentives. In these situations, the behaviors often stop as soon as the incentives are removed. In general, people tend to sustain changes in behavior when they have chosen those behaviors without the influence of significant incentives or penalties.
• Attitudes about specific threats are more predictive of behavior related to those threats than general concerns about the environment are predictive of general environmentally friendly behavior. For example, attitudes towards recycling are more predictive of recycling behavior than are general concern about the environment.
• Stronger commitments yield more persistent behavior. A commitment accompanied by an agreement to promote target behavior among neighbors has more behavioral influence than just the expression of commitment by itself. Encouraging customers to commit to a more specific goal is more effective than more general goals to conserve energy.
• Aligning consequences to behavior is critical. For example, having customers pay for trash pickup based on the amount of trash they produce is more effective than impassioned pleas to reduce trash.
• While publishing typical customer behaviors can generate peer pressure, it is a double edged sword. It can encourage people who are already doing both better and worse than average regress to the norm. Publishing exemplary behavior is an alternative to publishing average behavior.

This is a topic we’ll continue to explore as we progress in our work with utilities on the design of more influential programs and experiences.