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.

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.

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.

Elevators

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.

Jam

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 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.

VOC Iceburg

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

Experience Miner Toolset

  • Goal Space MappingTM Describes the desired states and situation-specific goals that motivate and direct the experience for each key persona
  • Experiential TemperamentTM - 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 ConstructsTM – Identifies the most common, learned distinctions that enable people to recognize, categorize, differentiate, and form expectations.
  • Emotional States and TriggersTM -  Surfaces the emotional states and specific triggers across the lifecycle of the experience highlighting areas of uncertainty, stress, frustration, etc…
  • Experiential PathwaysTM – 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 DynamicsTM – 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

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 MinerTM 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 MinerTM 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 MinerTM 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.

Experience Miner Toolset

The Experience MinerTM 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 MappingTM Describes the desired states and situation-specific goals that motivate and direct the experience for each key persona

Experiential TemperamentTM - 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 ConstructsTM – Identifies the most common, learned distinctions that enable people to recognize, categorize, differentiate, and form expectations.

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

Experiential PathwaysTM – 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 DynamicsTM – 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!

Customer Innovations: Creating Experiences that Drive Measurable Business Results

Are you losing too many customers or sales opportunities?    Are you experiencing too much negative word of mouth?    Are customers’ expectations changing faster than your company’s ability to stay ahead of the competition?    Do you have trouble aligning the efforts of intermediaries in order to deliver for the customer?    Are customers behaving in a way that constrains or undermines your efficiency and profitability?    Are all your efforts just leading to “better sameness”?

Over the past couple of years, I’ve covered an extensive array of topics focused on how companies can address these issues.  In this post, I’d like to take the liberty of  describing the type of work we do and the unique tools we use in the process.

My colleagues and I at Customer Innovations have a 25 year track record helping leading organizations create experiences that improve the acquisition, retention, and profitability of customers.  In the course of our work, we’ve demonstrated 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.   Most of our work has been with organizations that create experiences across complex networks of “customers” including consumers, agents, brokers, retailers, and other influencers.

Our work generally takes the form of these types of efforts:

  • Rapid Revenue Retention. We quickly identify specific elements of the current experience that are leading to attrition, lost sales, negative word of mouth, and unproductive customer behavior.   Intensive 10-12 week efforts often lead to $10 – $100 million in benefits.
  • Accelerating Sales From the “Outside In”. Rather than starting with the internal structure, processes, tools, and training, we start with a deep understanding of how and why your customers buy and then focus improvements on shifting buying behavior.
  • Creative Customer Insight. Without breakthrough customer insight, design efforts can only produce “better sameness.”  We have a unique approach to surfacing customers’ latent motives, beliefs, needs, and priorities in a way that informs the creation of highly evocative and profitable products, services, and experiences.
  • Signature Experience Design. We design, deliver, and engage customers in experiences that capture their attention and influence the actions they take.  These evocative experiences are structured to tell a meaningful and influence customer behavior using a set of differentiated “signature experience” elements.
  • Aligning Effective Employee and Intermediary Experiences. We help create the specific employee and intermediary experiences required to ensure that those who work directly or indirectly with your customers reinforce the intended evocative experience.

We Have a Unique Technology for Creating Experiences that Influence Customer Behavior

Traditional touch-point oriented approaches rarely deliver more than “better sameness” because they focus on how the organization delivers an experience rather than on deeply understanding how people actually have experiences and how those experiences influence behavior.   Customer Innovations has a unique approach and toolset for designing evocative experiences that positively and profitably influence behavior. 

  • Experience MinerTM – Traditional “voice of the customer” approaches are insufficient for understanding the largely subconscious processes that influence customers’ desires, preferences, emotional states, choices, and behavior. Based on 25 years of cognitive and behavioral research, the Experience MinerTM toolset helps surface, analyze, and measure the ways customers think about, feel about, and act on their experiences.
  • Experience DesignerTM – The output from Experience MinerTM feeds our structured Experience DesignerTM toolset that guides every step of the experience ideation, concept development, specification, and blueprinting processes.  Experience DesignerTM also incorporates an integrated experience-chain framework that helps specify and design the specific employee and intermediary experience interventions required to generate the intended customer experience.
  • Experience EconomicsTM – It’s exceptionally easy to deliver an uneconomic experience.  Most organizations simultaneously over-invest in elements of the experience that don’t matter to customers and under-invest in elements that have significant influence on customer behavior.  The Experience EconomicsTM toolset helps companies find the optimal investment point based on the influence that individual and collective experience design elements and service levels have on the financial performance of the business.

I’ll continue to expand on these tools in upcoming posts.   In the meantime, you might want to check out the following links:

If you’d like any more information, just post a reply or send me a note at fcapek (at) customerinnovations (dot) com.   Cheers, Frank

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.

6-cards

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.

5-cards

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.”

Putting the “Customer” in Customer Experience Efforts

We’ve reached the point where most business leaders understand that their organization’s ability to effectively acquire, retain, and improve the profitability of customers is a direct result of the nature and quality of the experience those customers have.

There is, however, a fundamental problem with both the literature and management practice surrounding customer experience.  The issue is that most business leaders and management gurus focus on how companies “deliver” experiences rather than how people actually HAVE experiences. Without understanding how customers HAVE experiences, companies often end up wasting lots of time and money on improvements that don’t generate a real return because they don’t fit with and influence how customers think, feel, and act.

If you do a scan on customer experience literature, you’ll find that virtually all of the definitions start something like this:  ”A customer experience results from a set of interactions between an organization and a customer… “   In addition, most of the discussion refers to an experience as if it is a characteristic of a company.  For example, people discuss the “Disney experience” or the “Starbucks experience” or the “BestBuy experience.”   All of this represents a highly company-centric perspective.

This company-centric perspective is deeply misguided.  It often encourages business leaders to make expensive improvements that are, at best, perceived by customers as “better sameness.”  At worst, these expensive improvements go unnoticed by customers who are too busy dealing with their own priorities and their own lives to pay attention to the fine details of their interactions with the business.

Over the past 25 years, we’ve worked with and studied businesses that have effectively innovated and differentiated the experience their customers have… and, as a result, have measurably improved the acquisition, retention, and profitability of those customers.   Based on this work, there are a couple of counterintuitive things we’ve learned:

  • Companies don’t have customer experiences; only customers do. The customers’ experience takes place in one place and one place only; in the mind of the customer. That experience consists of how a customer thinks and feels across the entire behavioral path they follow in pursuit of one or more goals that important to them. Talking about a company’s “customer experience” represents a very large step in the wrong direction. It’s a company-centric way of trying to be customer-centric. (See: Whose Experience is it Anyway?)
  • Casting customers in the role of “customer” can be limiting. This is a subtle distinction with profound implications. When you consider a person or organization to be a “customer,” it’s very easy to have your focus be on what you do to serve that customer. In the course of doing that, you may not look beyond that customer role to gain a much deeper and broader perspective on who they are, what’s important to them, what they’re trying to accomplish beyond the scope of your business. The fact that they’re a customer of your business doesn’t constrain the end-to-end experience THEY’RE having.
  • Customers’ experiences don’t just happen at your touch points. In fact, we’ve seen that the most important elements of the experience don’t happen at your touch-points at all. They happen at the non-touch-points. We’ve observed that touch-point oriented approaches end up leading to incremental improvements in the service quality that either seem like “better sameness” or, worse, go unnoticed. This is one of the reasons why it’s exceptionally easy to make uneconomic improvements in the experience. Alternatively, we’ve seen that companies that can develop a deep and comprehensive understanding of what customers experience at the non-touch-points generally uncover competitively relevant ways to differentiate the experience in a way that gets the customers’ attention. (See:  The Customers’ Experience Does Not Happen At Your Touchpoints!)
  • You can’t fundamentally shift the experience by tweaking surface level cues. The experience customers have with any business is a product of complex and deeply entrenched culture, legacy effects, and unwritten rules that drive the real behavior of the organization. For example, I’m writing this on-board a Delta flight from Atlanta to Los Angeles. Delta’s been promoting the new “Delta Experience” which includes cosmetic updates to their website, changes in their pricing policies, a new highly confusing boarding process, more contemporary music during boarding, along with a couple of “signature cocktails,” and a few other peripheral cues. Do you think these surface-level improvements have had ANY deep positive effect on the overall experience customers are having? Focusing on surface-level cues is a little like hacking at the leaves rather than striking at the root of the issue. In reality, most organizations are strongly predisposed towards the experience their customers are currently having. Unless you get to the root of how deeply entrenched organizational behavior influences the customer experience, you couldn’t possibly know enough about what to do to intervene and positively shift the experience. While those cues are an important, they are insufficient. On their own they are the proverbial “lipstick on a pig.”
  • How customers feel about your business is a side effect of how their experience with your business makes them feel about themselves. If your business makes customers feel great about themselves they’ll, in turn, feel great about your business. Understandably, most business leaders want to influence and measure how customers feel about their business. This strikes me as similar to a line you might overhear on a date… “but enough about me… what do you think about me?” Very often a company can consider their interactions with a customer successful if that customer’s orders were taken, problems resolved, and questions answered. In fact, many customer satisfaction surveys simply ask customers to give the company a report card on how well they feel the company did all those things. However, in many ways companies leave the customer feeling disrespected, devalued, stupid, or frustrated. This is one of the reasons why the concept of hospitality in business is so powerful (see: No Matter What Business You’re In… You’re in the Hospitality Business).
  • The most common customer experience approaches don’t consider how customers actually HAVE experiences. If they did, they would recognize that the vast majority of the experiences people have are subconscious. In most cases, people experience the world using something that can be called “gist processing.” In other words, they get a general sense for what’s happening without having to pay attention to all the details. In most cases, this gist processing leads to the execution of “automatic behavioral scripts.” Alfred North Whitehead said it best, “Civilization advances by extending the number of important operations which we can perform without thinking about them.” Our ability to navigate the majority of our experiences on automatic pilot frees us up to focus our relatively limited train of conscious thought on the small number of things that seem most important to us.

In general, the best strategy we’ve found includes the following components:

  1. Design for Gist Processing. At the base level, you need to understand the perceptional process and basic constructs customers apply to navigate most of the experience relying on gist processing and automatic behavioral scripts.   When a customer enters a bank branch, checks into a hotel, enrolls with a health insurance provider,  etc… they have a set of constructs they’ve learned from past experiences and that operate within a perceptual framework that enables gist processing.  Experiences designed based on this perceptual framework and set of experiential constructs become inherently easy to navigate.    We use process called Experiential Construct Elicitation to surface and understand the constructs that are applied by different customer personae.
  2. Deliver Signature Experience Elements. This is all about getting the customers’ attention using a small number of high contrast and differentiated “signature experience elements.”   These signature experience elements catch customers by surprise, are perceived as a difference in kind compared to what they expected, and contribute to the brand story we want the experience to tell.  If you listen to customers talk about the Starbucks experience, the Whole Foods experience, etc…, you’ll see that customers consistently refer to a small set of experience elements that stand out for them as being the defining elements of the experience.  While you can spend a lot of time getting lots of details correct in the experience, having a small set of signature elements are the kinds of things that really resonate with and influence customers.

So, in summary, the essential message is… you need to understand how customers’ HAVE experiences before you can possibly know what to do to influence their experience… and ultimately, their behavior.

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 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.

Great Customer Experiences are Music to My Ears…

Listening to music is one of the most meaningful experiences in our lives.  I’ve been spending some time thinking about how great customer experiences have a lot in common with the great music that makes a difference for people.  Here are some initial thoughts:

  • It Moves You. Great music is about the transfer of emotion not just the delivery of any kind of rational value.  If you’re like most people, music has a strong impact on how you feel; it gets you up, it makes you cry, it turns you on in other ways I won’t go into here.  Both of my kids are musicians and we are always discussing the difference between music that is expressive (influences how people feel) versus music that is impressive (well executed but sort of cold).  Similarly, great customer experiences are expressive; they have an effect on the way customers feel.  It’s most important to realize that what the customer feels about the company is secondary! Of primary importance is how the company makes customers feel about themselves.  If the experience makes customers feel great about themselves, then by association, the customer will feel great about the company.   You can be effective at executing customers transactions or efficiently and effectively answering their questions… but how you make customers feel about themselves is critical.  (See: Cognitive Ergonomics: Customer Experience and Our Search for Meaning)
  • It has a Melody. Most great music has a melody.  Even the most complex, improvised jazz has a “head” or theme that ties the whole piece together.  Not only does music have a melody, but it’s kind of important that everyone in the band actually knows what that melody is.   Great customer experiences have a melody too.  It’s intentional.  Everyone in the band (organization) actually knows what it is and plays it together.  However in the large majority of organizations, the customer experience just defaults from the bunch of stuff that people do.  There’s no deliberate Customer Experience Specification and, as a result, each individual just plays their own tune… and it sounds like crap.  (See: I Got a Song it Ain’t Got No Melody… I’m Gonna Sing it to My Friends).
  • It has Memorable Hooks. Think about your favorite songs.  You remember the hooks.  Sometimes you have a hard time getting them out of your head.  Do you think the songwriter left those hooks to chance?  No way!  Effective songwriters are very deliberate about the “signature” hooks they build into their songs.  Songs without those hooks may be pleasant enough to listen to but listeners will find them difficult to remember and will be significantly less likely to want to hear them again.  The same is true with great customer experiences; they have “signature” hooks.  These are the things that you do that get the customer’s attention and help them understand how your experience is different than all the other experiences they’ve had.  Think about the best experiences you’ve had as a customer.  In most cases, you remember a small set of signature hooks that got your attention and influenced your memory of the experience.  What are the signature elements of your customer experience?  (See:  Novelty Seeking and the Design of Differentiated Customer Experiences)
  • It Balances Predictability and Surprise. Listening to music resonates with the way our brains continuously predict what will happen, are comforted when things are largely predictable and are stimulated by the occasional surprises.   This is one of the reasons why music is so important to us.  How often are you listening to a song and anticipating the lyrics and melodic phrases just before they happen.   The songs that people are most drawn to (in addition to the factors above) are the ones they’ve come to know well enough to be largely able to predict what will happen next… but have not heard so often that the song becomes totally predictable.  Great customer experiences also resonate with the way people continuously predict what will happen, are easy to engage with since things are largely predictable, and are occasionally stimulated by surprises.  (See: Customer Experience and the “Element of Surprise”)
  • It is Naturally a Social Activity. This is the thing that’s most interesting to me at the moment.  For the overwhelmingly large majority of human history, music was a communal, social activity.  People gathered around the cave or campfire and made music together.  Everyone participated.  Something strange happened as we emerged from the dark ages.  For some reasons, the world divided into the musicians and the listeners.  Musicians were often trained “professionals” that would entertain groups of passive listeners.  Occasionally, the listeners would sing along but, unfortunately, this division started to make some people feel embarrassed about their inability to carry a tune.  During the same era, the business enterprises that emerged reflected a similar divide.  There were professional producers and passive consumers.  Today, we’re seeing a significant return to both music and enterprise as a social activity.  This is being driven by the emergence of prosumers and the enabling power of social media.  The music industry is in the midst of a major shakeup now that just about any reasonably capable person or group of people has the tools to create and distribute music.  In many cases, these people can create or just mash up music in a virtual environment… often incorporating publicly available loop or even pirated samples.   Similarly, prosumers are taking control of creating or personalizing the customer experiences they want to have… not just passively consuming the experiences that companies want to give them.   The emergence of these Next Generation Experiences is one of the most profound developments I’ll cover more in future posts.

So… there are a few initial thoughts.  I’d love to hear what you think particularly any suggestions regarding how great customers experiences are like music.  Cheers, Frank

Whatever You Do… Don’t Confuse Experience with Reality

“We don’t see things as they are.  We see things as we are.”  Anais Nin

“There is nothing either good or bad, but thinking makes it so.” Shakespeare (Hamlet)

Many organizations have placed an increasing amount of attention on the quality of the experience their customers have.  However, the first mistake most organizations make is focusing on what the company does to deliver a customer experience rather than taking a step back and thinking first about how customers actually have experiences.  The second biggest mistake is the way most organizations listen to and react to customers’ suggestions about what to do to improve the experience.

So, let’s consider how people (customers or otherwise) “have” experiences.  Every waking minute of our day, we are swimming in an infinite sea of sensory information about the events unfolding around us.   In order to ensure our own survival, we’ve evolved very effective ways to subconsciously filter and react to virtually all of this information automatically… without even thinking about it.    This allows us to pay attention to the relatively small number of events that seem most important.  In dealing with the vast majority of the events in our lives, we just get the gist of the situation and respond with relatively automatic behavior. 

Our lives are not influenced as much by events, as by the ways we perceive and interpret those events.

Without understanding the idiosyncrasies in the way people perceive and interpret what happens around them, it’s very easy to invest a lot of time, energy, and money improving the reality of the events without having much of a positive impact on customers’ experience of those events.

When you get right down to it, there are always two strategies:  1) improve the reality of the events and 2) influence the way customers experience those realities.   My first understanding of this came about 25 years ago, while working with Dick Larson at MIT.  Dr. Larson, an expert in the psychology of waiting, told me the story of commercial real estate managers that were struggling with improving the service levels of elevators in high-rise buildings during peak hours.  People were frustrated by waiting too long for the elevators.  As in most situations, the complexity and cost of actually improving service levels is quite high.  It involves installing faster elevators, improving the optimization of elevator queuing, etc…   The simpler solution and more effective solution 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.  (Waiting time is an important aspect of many experiences, for more information about the waiting experience see: Helping Customers Lose Wait)

So, if you ask customers what they want, what do they tell you?  In most cases, they ask for the relatively obvious service level improvements that relate to the first strategy.  While it’s important to listen to customers’ feedback about their experiences and their ideas for improvements, it’s a big mistake to just respond to those requests.  Let’s take a look at why this is true.

One particularly useful way to understand how customers’ “have” experiences is to consider three levels of processing that get applied as people perceive, interpret, evaluate, and act on the events that occur in their lives.   At the reactive level, more than 99% of the sensory information that we are surrounded by is automatically dealt with in a way that is purely subconscious.  Our brain acts like a pattern matching and prediction machine… we are continuously sensing our environment and, as long as it behaves in a way that roughly approximates what we expect, we don’t have to spend our preciously short supply of conscious attention focused on it.  Beyond this purely reactive level of processing, we have a deliberative layer which allows us to get the “gist” of the situation and respond with learned or patterned behavior that allows us to operate on automatic pilot.  This is the capability that allows us to drive into work while talking on the cell phone or thinking about our upcoming meeting… or the capability that allows us to make dinner while talking to the kids about what happened at school.   At the highest level we can consciously reflect on our experiences.  However, what we are reflecting on is often just the gist of the situation from the lower levels.  Although we may believe we actually experience events the way they happened, the reconstructive nature of memory means that we tend to fill in facts that are consistent with our story about what happened rather than clearly and accurately recalling actual events.  (For further discussion see:  Designing for Customers’ Reactive, Deliberative, and Reflective Experiences.)

Three Levels of Experiential Processing

Three Levels of Experiential Processing

While it’s important to listen to what customers tell you about their experiences, it’s also important to realize that the “voice of the customer” is generally limited to the language customers can find… to express what they can remember… about how they think they felt… regarding an experience that was largely subconscious.  Customers are usually able to tell you about the obvious dissatisfiers in their experiences.  In most cases, however, it is more productive to look past what customers are telling you to find ways to influence customers’ experiences of the events that happen to them.  In general, the best strategy that we’ve found is to:

  1. Design for Gist Processing. At the base level, you need to understand the basic constructs that customers apply to navigate most of the experience relying on gist processing and automatic behavioral scripts.   When a customer enters a bank branch, checks into a hotel, enrolls with a health insurance provider,  etc… they have a set of constructs that they’ve learned from and apply based on their previous experiences.  Experiences that are designed based on these constructs, become inherently easy to do business with.   As Alfred North Whitehead said, “Civilization advances by extending the number of important operations which we can perform without thinking about them.“   We’ve been evolving a structured process of Experiential Construct Elicitation that I will cover in an upcoming post.
  2. Deliver Signature Experience Elements. This is all about getting the customers’ attention using a small number of highly differentiated “signature experience elements” that customers perceive as a difference in kind compared to what they expected or feel they could get from another provider.  If you listen to customers talk about the Starbucks experience, the Whole Foods experience, etc…, you’ll see that customers consistently refer to a small set of experience elements that stand out for them as being the defining components of the experience.  While you can spend a lot of time getting lots of details correct in the experience, having a small set of signature elements are the kinds of things that really stand out for and influence customers.

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.
  1. 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.
  1. 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.

Influential Experiences and the Psychology of Escalating Commitment

Would you decide to just go out and spend $15,000 on tools to do a little work around the house?  Are the improvements to your backyard worth the $12,000 you ended up spending?  Would you decide to invest $3,000 on repairs to your old, unreliable car, even though it was only worth about $4,000 in the first place?  Or, is your prize collection of beanie babies, figurines, watches, or ­­­­­________­­­­___ (fill in the blank) really worth the thousands you’ve spent on it over the years?

If these were single, rationally considered decisions, you probably wouldn’t have made them.  However, as psychologist Robert Cialdini observed, a person’s commitment to a particular course of action sometimes “grow legs.”   Once we become clearly committed, we have a strong tendency to gradually increase our level of commitment to that course of action.  In doing so, we often lose sight of the original reasons and justification for choosing that course of action in the first place.

For example, it’s not unusual for the owner of an old car keep incrementally spending money on repairs as things break down… first the brakes… then the muffler… then the transmission… etc… hoping that each of these repairs will be the last.  As the bills mount, the owner often becomes even more determined, “I’ve already spent more than $2,000 repairing this thing.  I’m not going to back down and, in effect, throw that money away.”

This very common pattern is called irrational escalation and describes situations in which people make seemingly irrational decisions in order to justify the decisions they’ve already made or the actions they’ve already taken.  Irrational escalation shows up in a wide variety of situations including:   bidding wars that occur during auctions or corporate takeovers; military strategy (consider the Vietnam and Gulf wars); corporate or market investments that wind up “throwing good money after bad;” “collector” behavior; or the escalating cycle of retribution and punishment that occurs when a husband and wife become locked into a contentious divorce.  In addition, clever salespeople or fundraisers often employ “foot in the door” techniques that take advantage of people’s tendency towards irrational escalation as small initial commitments eventually build towards large commitments.

Although much of the research on commitment has focused on this negative behavioral cycle, the escalation of commitment is not always negative! Whenever we commit our time, energy, hearts, and minds to a worthy cause, it can have a very positive influence on our identity and our future behavior.  Over time, under the right conditions, we eventually have a hard time letting go; our positive behavior becomes less about “what we do” and more about “who we are.”  The positive escalation of commitment can describe how people adopt healthy behaviors like getting regular exercise or engaging in wellness programs… or become involved charity work and community service.

Recently, I’ve been studying the process people go through as they increasingly commit to energy conservation behaviors or “green” causes.  It seems that people typically adopt a conservative or green attitude in baby steps.  As they take each step, it reinforces their focus and awareness, as well as, their sense of identification with an aligned set of underlying values and beliefs.

Many utility companies are starting to more actively promote energy conservation or demand management (shifting use to off peak times) programs.  The effectiveness of these programs is highly dependent on the careful design of offerings, communications, and feedback mechanisms that get a “foot in the door” and build customer commitment incrementally from there.  Effective programs make it easy for customers to get started and then carefully reinforce a gradually increasing level of association with being a conservative, ecologically and economically minded consumer.  These programs can amplify customers’ commitment by providing positive feedback and by making the customer’s commitment publicly and socially visible.

Effective design of influential energy conservation and demand response programs is highly customer personae dependent. Obviously, not every customer has the same beliefs, attitudes, priorities, and behaviors related to energy use, conservation, the environment, and social responsibility.  In many ways, the adoption of energy conservation programs is similar to the adoption of wellness programs.  Some people readily adopt these programs because they fit with the way they already think.  For example, some customers have an “independently healthy” or “naturalist” personae related to their health.  On the other hand, some customers will never engage in a wellness program; they might have more of an “avoider” personae regarding their health.  However, there are several personae that are more influenceable.  The most effective programs must be designed to resonate with the mental model of these customer personae.

Cognitive Dissonance… Driving the Escalation of Commitment

One of the factors that drives the escalation of commitment is cognitive dissonance.  Cognitive dissonance was first identified in the 1950s by psychologist, Leon Festinger (see:  The Theory of Cognitive Dissonance and When Prophecy Fails).  Since that time, it has grown to become one of the central theories of social psychology.  A great, more recent book on the topic is Carol Tavris‘ and Elliot Aronson’s Mistakes Were Made (But Not by Me):  Why We Justify Foolish Beliefs, Bad Decisions, and Hurtful Acts.

Cognitive dissonance is a state of tension that occurs whenever a person simultaneously holds conflicting ideas or beliefs.  Because holding two conflicting ideas or beliefs creates an unpleasant tension, people are naturally motivated to reduce it.  Dissonance reducing behavior is ego-defensive; by reducing dissonance, a person gets to maintain their positive self-image; an image that depicts them as a good or smart person.   Cognitive dissonance often produces behavior that is apparently irrational; although, to the person, it may seem very sensible.

Understanding and leveraging cognitive dissonance is a powerful tool for designing customer or employee experiences that positively influence a person’s thinking and behavior… and drive the escalation of commitment:

  • Justification and Filtering. Following a decision, especially either a difficult one or one that involves a significant amount of time, effort, or money, customers almost always experience dissonance. Did they do the right thing? The chosen alternative is seldom entirely positive, and the rejected alternatives including the “do nothing alternative” are seldom totally negative. After a significant decision, customers typically seek reinforcement that their decisions were good ones by seeking information that is reassuring. If at all possible, they try to convince themselves and others that it was a logical and reasonable thing to do. They avoid thinking about either the negative aspects of the choice they’ve made or the positive aspects of the un-chosen alternatives. In designing customer or employee experiences, it is important to arm customers with the story they’ll tell themselves and others. In many cases, it makes sense to continue marketing after the sale in a way that provides people with the ammunition they need to justify the decision they’ve made.
  • Responsibility. Dissonance effects are greatest when (1) people feel personally responsible for their actions and (2) their actions have serious consequences. If there is a significant amount of external reinforcement or incentives, we may not “own” the decision. For example, offering rewards to individuals for performing even the most pleasant activities decreases the intrinsic value of those activities and reduces the individual’s responsibility for having done it. This is why “incentive programs” not only don’t build permanent behavior, but may undermine it in some cases.
  • Consistency and Escalation. In the absence of strong conflicting signals, dissonance reduction will reinforce actions consistent with earlier commitments and behavior. In addition, once a small commitment is made, it sets the stage for ever-increasing commitments. The behavior needs to be justified, so attitudes are changed; this change in attitudes influences future decisions and behavior. When customers commit themselves in a small way, the likelihood they will commit themselves further in that direction is increased. This process of using small commitments to encourage people to accede to larger commitments has been dubbed the “foot in the door” technique. It is effective because having done the smaller favor sets up pressures toward agreeing to do the larger favor; in effect, it provides justification in advance for complying with the large requests.
  • Irrevocability and Inevitability. Two of the most important characteristics that effect cognitive dissonance are the relative irrevocability and inevitability of the decision. Irrevocable decisions always increase not only the dissonance but the motivation to reduce it. Once we’ve committed ourselves to an irrevocable course of action, it’s in our best interests to justify the decision we made and avoid conflicting information. In addition, research shows that a person’s dissonance is reduced with choices they see as inevitable.

In summary, designing influential experiences requires an understanding of cognitive dissonance and, in particular, how cognitive dissonance drives the escalation of commitment.   More on this in future posts.

Neuroeconomics Overview: Understanding “The Mind of the Market”

The ways we think about money and make financial decisions are typically far from rational.   We get upset when we find out that another person is getting a better deal, despite the fact that we were perfectly happy a minute ago.  We spend more for well-known brands that have no difference in real quality.  We invest in punishing others for perceived “violations in justice” despite the fact that there are only negative consequences for ourselves.  We spend a lot of money on things we want that, in the end, don’t make any difference in our level of happiness.

Despite the considerable evidence that we think and act irrationally with money, most of this irrationality makes much more sense when you look at our behavior from the perspective of our long history as small bands of hunter-gatherers operating in an environment of limited resources and high risk.   We just haven’t fully adapted to the relatively recent development of our consumer-trader society.

If you’re looking for a good introduction to behavioral and evolutionary economics leading up to the emerging field of neuroeconomics, check out Michael Shermer‘s The Mind of the Market.  The Mind of the Market is an easy to read summary of some of the work of many of the brilliant contributors to this field including:  Daniel Kahneman and Amos Tversky’s  groundbreaking work in behavioral economicsLeon Festinger’s study of cognitive dissonanceJohn Nash on the Nash EquilibriumRead Montague’s work on decision making,  Daniel Gilbert’s  study of happiness and the problem of affective forecasting, and more…

For a short teaser, read Shermer’s recent essay:  Why People Believe Weird Things About Money

Most business leaders make the assumption that their customers are rational decision makers.  As a result, they make investments in developing products and services that have rational benefits.  Much of our work with clients involves helping them understand how to influence more powerful customers experiences by designing what they do from the seemingly irrational “mental model of the customer.”   If you’re interested in more perspective on this, check out the following Customer Innovations blog posts:

Framing and Priming the Customer Experience

I’ve gotten accustomed to taking my car to the Jiffy Lube near my house.  Over the 30 years that I’ve been driving, I’ve had the full range of good and bad experiences with auto service shops.  However, this Jiffy Lube has a distinctive and effective way of interacting with me regarding the cost of my service.  At the end of each visit, they bring me over to a terminal that we can look at together – side by side; they walk me through each of the service elements that were performed along with the cost of each service; then they apply a series of discounts to the individual services, as well as, loyalty discounts that consistently bring my total cost down to about 60-70% of sum of the individually itemized costs.   I have always walked out of that particular Jiffy Lube feeling like I’ve saved money and that they appreciate my business.    I’ve also always walked out feeling like many of the companies I advise could learn a lot from that relatively simply but very well designed and deliberate interaction.

This interaction is an example of category of experiential design levers called framing effects.  Rather than just presenting the price, Jiffy Lube framed it in a way that highly influenced my experience of saving money.  There are a wide set of framing effects that influence how people interpret and evaluate their experiences.  For example, consider the following two scenarios:

  1. You live around the corner from an electronics store that carries the new computer speakers you’ve been looking at for $100.  You also learn that a discounter, located ten miles from your house, has a special on the same speakers for half price: $50. Do you drive the 10 miles?
  2. You live near an electronics store that carries the new computer you’ve wanted for $2000. Ten miles from your house, another store is carrying the same computer for $1950… a savings of $50.  Do you drive the 10 miles?

As you might guess, research has shown that many customers who would make the drive for scenario 1 might not for scenario 2.  On a rational level, this makes little sense since the value of the drive is identical:  $50.  However, a $50 savings on a $100 item is framed differently than a $50 savings on the much more expensive item.

If you consider how we process the experiences we have, it’s easy to see that it’s far from rational or logical.  Our experiences are highly influenced by subconscious shortcuts that have an enormous influence on how we think, feel, and act.  Many of these shortcuts lead to apparent contradictions with what you’d expect from a more rational decision maker.  This post will cover some of the tools for positively influencing both the quality and profitability of the customers’ experience.

Pioneering behavioral economists Daniel Kahneman and Amos Tversky conducted extensive research into framing effects.  One of the other frames they studied involves loss aversion.  For example, if you were offered a gamble with a 10% chance of winning $95 and a 90% chance of losing $5… would you take it?  Most people would not.  Now suppose you were offered the chance to buy a $5 lottery ticket for a 10% chance of winning $100.  Many of the people that rejected the first alternative would accept the second despite the fact that the expected value of each alternative is exactly the same:  $5.  However, the alternative that involves voluntarily paying $5 rather than taking a chance of “losing” $5 is framed differently.

Loss-aversion framing also contributes to the fact that many customers do not make purely rational decisions regarding insurance.  For example, the expected value of many insurance policies is generally in the neighborhood of 50-60%.  You might compare this to the return on putting your money into a slot machine… an expected value of 90%.  In general, the most economically rational decision is to self-insure to the extent possible and only buy insurance as necessary to cover catastrophic events.

In addition to framing effects, another influence lever in the design of the customer experience is priming.  Priming involves activating an association in memory just before a person completes an action or task.  In an interesting experiment, also conducted by Kahneman and Tversky, subjects were asked to provide the last four digits of their social security number.  They were then asked to estimate the number of doctors in Manhattan.  Very surprisingly, the estimates that subjects gave were positively correlated with the last four digits of their social security number; people with high social security numbers gave higher estimates and people with lower social security numbers gave lower estimates.

In a similar experiment, subjects were asked the last two digits of their social security number and then asked what they would be willing to pay for a consumer product (e.g., bottle of wine, wireless computer keyboard, video game).  Similarly, the price customers were willing to pay was positively correlated with the (random) digits of the customers’ social security number.  For example, subjects with social security numbers in the bottom 20% priced a bottle of Cotes du Rhone wine at $8.64 versus subjects with social security numbers in the top 20% who priced the same bottle at $27.91.  (See: “Tom Sawyer and the Construction of Value” by Dan Ariely, George Lowenstein, and Drazen Prelec).

Good sales people understand how priming creates an “anchor point” that affects a customer’s subsequent decisions.  If I’m selling men’s suits, the first suit I’ll show a customer will be well above the price I’d expect the customer to pay.  As I show the customer that suit, I’ll make sure the customer knows that I’ll find something that meets their needs, so as not to scare them away.  However, in most cases, the higher the price of the first item I show, the higher the customer will end up paying for the item they eventually choose.

In working with a leading retailer, we looked at the impact of signage on drawing customers into the store and influencing their eventual purchase.  We found that signs signaling a lower price at the store entrance would draw customers into the store while progressively higher priced signs as the customer moved further into the store increased the chances that customers would be willing to pay for higher priced items.

Several years ago, I had the chance to work with Christine Boskoff, who was one of the most successful high-altitude mountain climbers in the world and the owner of the 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.

Framing and priming effects operate at a predominantly subconscious, reactive level and can have a significant impact on the perceived quality and actual profitability of the customer experience.  For more information on how customer process the experiences they have see:   Designing for Customers’ Reactive, Deliberative, and Reflective Experiences.

Before I go, I’ll leave you with one final priming example:

You have exactly five seconds, not a second more, to multiply:

2 x 3 x 4 x 5 x 6 x 7 x 8

Write down your answer.  Now, ask a friend to multiply, again in exactly five seconds:

8 x 7 x 6 x 5 x 4 x 3 x 2

Now, compare the two answers.  Besides the fact that you both got the answer wrong (the answer is 40,320), you should notice that your answer is smaller than your friends.  If you’re like most people, you started out multiplying 2 x 3 x 4 to get 24… x 5 to get 120… then ran out of time and had to quickly estimate the rest… but didn’t multiply by enough.  Your estimate was primed by the 120.  On the other hand, your friend probably started multiplying 8 x 7 to get 65… x 6 to get 390… before running out of time and having to quickly estimate the rest… but he too didn’t multiply by enough.  His estimate was primed by the 390.

Designing “Socially Influential” Experiences

Years ago, P&G ran a promotional campaign in which customers could win prizes for writing the best essay about why they loved one of P&G’s products.  In response to this promotion, tens of thousands of customers voluntarily submitted short essays for the chance of winning.  This brilliantly influential campaign leveraged one of the same techniques used by the North Korean military to influence prisoners of war during the Korean conflict.  Prisoners were given the opportunity to describe, in writing, increasingly anti-American positions as a means of receiving better treatment. It turns out that people have a strong naturally tendency to believe and behave in ways that are consistent with positions they’ve taken in writing or in any other public setting.  The more these positions are taken voluntarily, the stronger the effect.   For P&G, having customers volunteer to take a public position on why they loved one of the products was profoundly influential; obviously the most glowing essays had the greatest chance of winning.

(Note:  Want to try this out; ask a few colleagues or other people that are important to your career if they’d be willing to post a positive recommendation of you on Linked In).

Virtually every experience we have takes place in a social environment that exerts a powerful influence on the way we think and the way we behave.  In this post, I’ll describe a couple of the social forces that shape how people think, feel, and act.  I will also illustrate some ways that organizations can create experiences that positively influence their customers and/or employees and that remove the barriers to profitable, effective behavior.  These experiences can be described as socially influential.

First let me rewind a bit… about a hundred thousand years into the past.  For 90% of human history, people lived as hunter-gathers in small nomadic groups.  In this environment, where food and other resources were in short supply, an individual’s survival and the survival of their offspring was highly dependent on collaborating effectively with others while establishing and reinforcing their position within their social group.  Virtually all exchanges took place within the context of close, ongoing relationships.

Over this extended period, natural selection reinforced a set of hardwired “mental programs” that contributed to our success in this hunter-gather environment.  These mental programs naturally and, in many ways, subconsciously lead us to: associate with people or groups that strengthen our identity; behave in a way that is consistent with that identity; worry about what others think of us; engage in reciprocal “I’ll scratch your back, you’ll scratch mine” exchanges; keep tabs on our relative levels of indebtedness with others; react in empathetic, altruistic and, in some cases, self-sacrificing ways; become envious or angry at inequities; vigorously attempt to level or punish perceived injustices; as well as, be wary of and prejudiced against strangers from outside our group.

It’s only been over the last 10,000 years, that small nomadic bands have given way to larger tribes, states, and nations.   Much of todays even more complex social environment, integrating global trade, governments, legal systems, corporations, schools, online communities, etc…, have only developed very recently.  As a result, many of our subconscious “mental programs” don’t quite fit the modern social environment… so completely different than the environment within which these programs evolved.  This leads to a wide range of behaviors that are seemingly irrational in our modern age, such as:

  • We still have a strong tendency to define the “in-groups” we’re part of while circling the wagons and behaving antagonistically towards members of our perceived “out-groups.”
  • We tend to pay substantially more for popular brands while rationally realizing there may little or no difference in quality.
  • We acquire massive amounts of stuff and then need larger and larger homes to keep all our stuff in.
  • We become angry when we learn that people who don’t appear to be more capable than us are making more money.
  • Make incur personal costs to punish “cheaters” we don’t know and may never see again. This can include getting angry at another driver who cut you off in traffic and attempting to “get back at” that driver by tailgating or other aggressive driving. It can also include becoming irate at shoppers who skip in front of you in line.
  • We have a tendency to be drawn towards hearing stories about the demise of successful people we don’t know.

Identity and Belonging. In any social environment, people tend to behave in a way that is consistent with their identity.  Outstanding customer experiences reinforce brand values that the customer can identify with or create opportunities to display that identity to others.  The most powerful customer experiences don’t focus on what the customer feels about the company; the most powerful customer experiences are focused on what the customer feels about themselves.  How do you want your customers to feel about themselves when they do business with you?   Some companies have this down:  REI (Recreational Equipment Inc) is delivers a strong identification experience; for customers that are or aspire to be hikers, climbers, campers, and outdoorsmen.  Other strong identification experiences include:  Body for Life, USAA, Apple, Nike, etc…

The groups that customers belong to, or aspire to, shape their identity.  For many customer segments, it is important to give your customer something to belong to.  This has nothing to do with blatantly self-serving loyalty programs.  Many of the strongest and most successful experiences have found ways of providing something that the customer feels good about joining.  USAA and American Express (Card Membership) are two examples.

Consistency. A powerful part of managing our social self involves consciously and subconsciously maintaining the consistency of our beliefs and our behavior.  Most people subconsciously try to justify and act consistently with their earlier commitments and behavior.  This is a powerful tool for influencing customers.  When any individual announces through their behavior, verbally, or in writing that they are taking a position on any belief, they will tend to strongly defend that belief regardless of its accuracy even in the face of overwhelming evidence to the contrary.  After many significant purchases, customers will feel compelled to act consistently in subsequent purchases or in explaining these purchases to others.

Customers will naturally feel a stronger emotional connection with experiences that reflect choices they’ve made themselves.  People tend to accept inner responsibility for behaviors or commitments when they think they’ve chosen to perform them in the absence of strong outside pressure or economic incentives.  Outstanding experiences reinforce the choices that customers have made… thank you for choosing us…

Reciprocity. Most people feel obligated to repay the genuine favors, gifts and invitations they have received.  This is particularly true when these favors are not part of an obviously institutionalized marketing or service campaign.  An authentically offered thank you call; genuine customer recognition (not programmatic); rewarding the best customers with little extras; etc…  Spontaneity and authenticity is key.  It can’t feel like it’s a programmatic thing.  While structured loyalty or rewards programs tend to drive rational repeat purchase behavior but not necessarily higher levels of satisfaction.  People habituate to rewards quickly when the rewards are relatively predictable.  However, people respond much more positively to rewards when those rewards come across as gifts that are novel, unexpected, and authentic.

Robert Cialdini, in his classic marketing book, “Influence: The Psychology of Persuasion“, reinforces the value of giving before you ask to receive.  In general, people are more compliant with requests from those who have given them something… anything, even the gesture of a gift. For example, the American Disabled Veterans organization, mailed out a donations request to its list with an 18% success rate; and, when they split tested this with a “personalized” address sticker campaign–they nearly doubled their success rate to 35%.

Customers often also feel obligated to accept things that are offered to them as long as they feel that these do not create obvious indebtedness.  But when customers do accept gifts that are authentically and individually offered, there is often a subtle, yet unshakable, feeling of indebtedness that encourages customers to return the favor.

Cialdini also describes reciprocal concessions.  Customers often feel obligated to make concessions to someone who has made concessions to us.  Asking the customer to make a very substantial commitment and then “conceding” to accept a shorter term, smaller scale or lower commitment can take advantage of this effect.  Suppose I call you up and ask if you’re willing to donate a weekend of your time to a charitable cause and then, when you say you can’t spare the time, request you make a $50 donation.  The response rate for this request is substantially higher than if I just call and ask for the $50 donation.  The request for a large commitment creates stress.  My suggestion that you make the donation in stead lets you off the hook.

Social Justice. Customers will be frustrated if they feel that others are receiving better service, preferential treatment, or lower pricing.  This happens all the time when stores, banks or toll plaza’s open new lanes.  This also shows up as customers who demand that they wait in two or more lanes simultaneously.  Service and pricing in the airline industry tends to undermine the customer experience in this area.  (See: Cognitive Ergonomics: How Customers’ React to Violations of Justice)

Social Proof. Most customers will tend to look at what other people do or think is appropriate and act accordingly.  Show your customers and prospects that others are agreeing to and using the products and services you offer.  We tend to find socially acceptable reasons to justify our actions and motivation.  It is important to provide customers with the story they will tell others about their choices and experience.

Conformity. Most people tend to agree to proposals, products, or services that will be perceived as acceptable by the majority of other people or a majority of an individual’s peer group.  One of the most powerful elements of an influential customer experience includes ways of showing the customer that “everyone’s doing it.”  This ranges from including “Top 10 lists” on websites to promoting the market leadership position of a product or service.

One of the other ways of demonstrating the popularity of a product or service is to promote its scarcity.  In general, we tend to see opportunities as more valuable to us when their availability may be limited.  The feeling of limited availability has always been used as motivator in the sales experience.

Authority. Many people find it difficult to defy the wishes of someone in authority telling them what to do.  Titles, stature, clothes and trappings that may signify authority of an influencer in the purchase decision frequently condition this.  Messages are more influential when their source is perceived to be expert and trustworthy.  Influence is increased if the message apparently opposes the source’s self-interest or if the source does not seem to be trying to influence.

Liking. We generally prefer to comply with requests from or associated with someone we know and like.  This is frequently influenced by physical attractiveness, similarity, compliments, familiarity, contacts and cooperation.

This has been a quick summary of the social influence levers that can be pulled in an experience design.  I’m looking forward to exploring these in a more comprehensive way in future posts.  Cheers.

Designing for Customers’ Reactive, Deliberative, and Reflective Experiences

In a previous post, Optimizing the Most Critical Elements of the Customer Experience:  Customer Choices, I shared a set of frameworks for understanding the decision processes that customers use to make choices.  In this post, I will build on this foundation to further describe the way customer process their experiences and outline an overall strategy for designing experiences that fit with the way customers think and act.

How Do Customers’ Process Experiences and Make Decisions?

People generally have a gut feel for the situations they are in and what they want to do.  In these situations, customers’ may have already subconsciously made a provisional decision before they even begin to consciously and rationally consider tradeoffs and their ability to justify that decision.

The leading neuroscientist, Antonio Damasio, has made a series of surprising discoveries regarding the extent to which subconscious feelings are a precursor to rational thinking.  In an ingenious experiment, Damasio demonstrated that subconsciously generated physical changes in the body significantly precede a person’s deliberate and rational thinking. (See Iowa Gambling Task)

In this experiment, participants were given four decks of cards along with $2,000 in play money.  The participants were told that each time they chose a card they will either win or lose money.  The goal was to win as much as possible.  What the participants didn’t know is that the game was rigged.  Two of the decks were “high risk decks” with larger payouts and much larger losses.  The other two decks were “low risk decks” with smaller payouts but even smaller losses.  If participants consistently drew from the low risk decks, they would end up way ahead in the end.

As expected, participant’s initial card selection was random; they had no reason to favor any of the four decks.  On average, participants turned over approximately 50 cards before they began to draw more consistently from the low risk decks.  It took about 80 cards before the average participant could explain why he was drawing from these two decks.  However, the most interesting part of the experiment was that Damasio had attached electrodes to the participants’ palms.  These electrodes measured electrical conductance of the skin which correlates with nervousness.  Damasio found that, after only 10 cards, participants began to show signs of stress when reaching for a card from one of the high risk decks!   As signs of stress began to increase, the participants started to draw more frequently from the low risk decks.  The most interesting observation about these findings is that the participants began to have a preconscious feel for the game 40 cards before they consciously recognized what was happening and 70 cards before they could articulate the reasons why.

This experiment illustrates an experience that occurs on three different levels: 1) subconscious and automatic reactions, 2) deliberate planning and action, and 3) reflective thinking.  These three levels correspond with a model created by the brilliant cognitive scientist and artificial intelligence pioneer Marvin Minsky.  Along with Seymour Papert, Minksy has developed a modular theory of the mind (called “The Society of Mind“) that attempts to explain how intelligence can emerge from the interaction of large numbers of non-intelligent agents.  (See:  The Society of Mind and The Emotion Machine).  In essence, the mind can be modeled as the integration of a reactive layer (A-Brain), a deliberative layer (B-Brain), and a reflective layer (C-Brain).  This is illustrated as follows: 

A-B-C Brain

  • The A-Brain (Reactive Level) is the only part of the brain that receives signals directly from the external world. The A-Brain continuously predicts what will happen next and compares the signals it receives to these predictions. If there is a significant difference between the prediction and the actual signals, the A-Brain reacts by shifting attention, making muscles move, and/or stimulating systems that affect the person’s level of physical arousal. This A-Brain has no sense for what external events “mean.” It just responds with some combination of instinctual and learned reactions:
    • Instinctual reactions include automatic physical responses to sensations of temperature, hunger, thirst, pain, etc… It includes things like quickly removing your hand from a hot surface or focusing on finding food when you’re hungry.
    • Learned reactions can include everything from jumping out of the way of a moving car, to executing the sort of automatic behavioral scripts involved in driving a car, playing an instrument, making coffee in the morning. Learned reactions also include a wide range of subconscious associations with environmental clues… like the physical stress reaction you have when you hear someone you care about talk to you in “that tone of voice.”
  • The B-Brain (Deliberative Level) is connected in such a way that it can receive signals from the A-Brain and can respond by sending signals to the A-Brain. However, B has no direct connection to the external world. The signals that the B-Brain receives from the A-Brain are often focused on differences between the A-Brain’s predictions and what it sensed in the real world. The B-Brain then interprets what the A-Brain senses but mistakes these interpretations for the real thing. The B-Brain does not realize that what it perceives are not real objects in the external world but are merely events that occur in the A-Brain itself.” In addition, the B-Brain cannot directly perform any physical action on it’s own but it can influence the way A reacts. The B-Brain is responsible for our ability to achieve more complex goals. It applies all sorts of knowledge in order to create and carry out more elaborate plans. This knowledge is accumulated and generalized from personal experience and what we learn from others.
  • The C-Brain (Reflective Level) supervises the B-Brain while the B-Brain is dealing with the A-Brain world. Reflective thinking often begins when our usual strategies start to fail. The brain is able to reformulate and reframe its interpretation of the situation in a way that may lead to more creative and effective strategies. The C-Brain includes several levels of processing:
    • Reflection: The C-Brain reflects on it’s recollection of thoughts in the B-Brain. This includes predictions that turned out wrong, plans that encountered obstacles, and failures to access or apply the knowledge that was needed.
    • Self-Reflection: The C-Brain reflects not only on the thoughts of the B-Brain but on the self that had those thoughts. Self-reflection incorporates our model of our self with our model of the external world. For example, a person might recognize that, in the course of doing something, he’s stuck or confused. This may lead them him to recognize that: his plans have gone off track, he’s paying attention to too many details, or he’s pursuing a goal that could be revised. This self-reflection leads to a shift in perspective that allows people to work around obstacles.
    • Self-Conscious Reflection: The C-Brain also reflects on how well our actions match the values, ideals, taboos, and identify we apply to ourselves. In order to do that, the brain must have built models about the kinds of ideas and behavior one ought to have.

The interaction of these three brains creates something that Minsky calls the “Immanence Illusion.”  People have the illusion that their experience is unfolding in real-time because as they processes signals from the outside world, they are also recalling and creating a comprehensive array of predictions about what they will experience.  Whenever a real object appears before their eyes, its full description is instantly available.  “Our sense of momentary mental time is flawed; our vision-agencies begin arousing memories before their own work is fully done.”  Perceptions can evoke our memories so quickly that we can’t distinguish what we’ve seen or heard from what we’ve been led to recollect.

“We don’t see things as they are.  We see things as we are.”  Anais Nin

Implications for Experience Design

The implications for experience design are profound!  At one level, the clues that customers pick up from the experience must be roughly aligned to fit with the way their reactive, A-Brain processes the signals from the world.  At the same time, the most compelling experiences include a small number of clues that are deliberately designed to get the customers’ attention; to create an “orienting response” and shape their reflective, C-Brain.  The trick is to deliberately design an experience that naturally maps to customers’ automatic behavioral reactions while reserving a very small number of salient differences; things we call “Signature Experience Elements.”

The place to start is by understanding customers’ reactive, A-Brain processes.  One of the ways to do this is to map out their Automatic Behavioral Scripts.  These automatic behavioral scripts are like little subroutines that brains execute in a way that enables people to accomplish predictable tasks without thinking too much about them.   If you’re like most people, you have automatic behavioral scripts for tasks like:  driving to work, getting a cup of coffee, going to the bank to make a deposit, etc…  You can accomplish these tasks on “automatic pilot”… allowing you to pay attention to more pressing matters.  So, when you go to the bank branch to make a deposit at lunch, you can be thinking about your meetings this afternoon or what you’ll do this evening.

Unfortunately, most companies do exactly the opposite.  They interrupt their customers’ automatic behavioral scripts.  For example: frequent changes to a travel company’s online storefront interrupts the automatic behavioral scripts of their frequent travelers; or a bank that “greets” customers as they come in to the branch to make a deposit creating a valueless distraction from their customers’ “doing it on automatic pilot” activity and interrupting their train of thought on the six other things that were more of a priority.   In addition, if you’re going to do something different (get the customers’ attention; interrupt their train of thought; create an “orienting response”), you’d better make it good!  Most companies have a hard time being creative and focused on the small set of things that will actually make a difference to customers… and be consistent with a differentiated brand story.  So, as a result, the actual experience customers have with many companies can be summarized as varying degrees of being difficult to do business with.

Beyond fitting with the customers’ reactive, A-Brain processes, the next challenge is to create a small number of Signature Experience Elements that get the customers’ attention and are aligned to tell a story that works with how they make decisions (deliberative, B-Brain process) and consider the meaning of the experiences they have (reflective, C-Brain process).  For example, Whole Foods Market has a small number of signature experience elements that reinforce their “Whole Foods, Whole People, Whole Planet” positioning and are perceived by customers’ as a difference in kind.  These include:  organic food, artful food presentation, local growers, educational signage, novelty seeking selection, and premium pricing.

For the past several years, we’ve been working with clients on designing a small set of “Signature Experience Elements” that customers will perceive as a “difference in kind” and that fit with the overarching purpose of the organization.  Typically we design to no more than 5-7 Signature Elements that are aligned with the purpose or story the experience is trying to tell.  Another client example is a major jewelry store chain, whose brand story is “The Perfect Gift, Guaranteed.”  This company’s signature elements included:  a distinctive welcome, creative and consultative gift advice, coaching the customer on how to romance the gift, and a wow process for returns.  Each of these signature elements was designed to get the customers attention and contribute to them really internalizing the desired brand story.

Optimizing the Most Critical Elements of the Customer Experience: Customer Choices

From a business perspective, the most critical elements of the customer experience involve the choices that customers make:  the choice to buy; the choice to recommend; the choice to continue as a customer.  In practice, most organizations have insufficient insight into how customers consider their alternatives and make choices.  Even worse, many organizations do things that complicate customers’ decisions and create barriers to profitable customer behavior.  In this post, I will provide several frameworks that can help companies understand how their customers decide and inform how to design an experience that removes barriers to profitable customer behavior.

Rational economic theory makes the assumption that:  the more choices customers have, the better.  Certainly, there are several kinds of experiences where an extensive set of options increase the likelihood that customers will be satisfied.  These include:

  • Preference Matching Experiences, in which customers initiate the experience knowing what they are looking for.  For example, if they walk into a video store looking for a particular title, the greater the selection, the more likely they’ll walk out satisfied.  If they go to dinner with a diverse group of friends, all wanting to order their favorite meal, the more items on the menu, the more satisfied people in the group will be.
  • Exploratory Search Experiences, in which customers are “foraging” for novel alternatives that match their unique or even idiosyncratic interests.  The ability to search for and find novel choices similar to other choices they’ve enjoyed in the past are a significant part of the appeal of “long tail” providers like Netflix, Amazon, Apple’s i-Tunes, etc…

However, not all experiences are Preference Matching or Exploratory Search Experiences.  A growing amount of evidence suggests that, in most cases, people have a difficult time managing complex choices.  As the attractiveness of product or service alternatives rises, people experience conflict and, as a result, may put off making a decision, choose the default option, or simply opt out.  Research suggests that as the number of alternatives increases, people simplify their decision making processes by relying on heuristics, they tend to consider fewer alternatives, and process a smaller fraction of the available information regarding those alternatives.

Emerging neuroeconomic research supports a more information-processing approach based on bounded rationality.  This research demonstrates that decision makers have limitations based on both their level of motivation and their capacity for processing information; including limited working memory and computational capabilities.  The fact is, people today are overwhelmed with activities, information, and choices.  The challenge has become how to manage this complexity and keep things simple.  Evidence supports the conclusion that “choice overload” can be a barrier to profitable customer behavior.

In one representative 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 understand this.  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.

As the complexity of the information and choice environment increases, people tend to simplify their decision making by relying on more simple rules of thumb or heuristics that reduce that complexity.  For instance, a study of the decision strategies of people presented with three, six, or nine alternatives revealed that 21% used an elimination strategy when presented with three options, 31% used an elimination strategy when presented with six options, and 77% used an elimination strategy when presented with nine options.

It’s helpful to consider a few basics regarding how people make decisions.  One way to look at it is that decision making can be characterized at four levels, based on the complexity of an individual’s goals and the intensity of their involvement:

  • Level 1 – Recognition-Based Decisions. This includes many of the quick and largely automatic, unconscious, or habitual decisions people make every day. When these decisions are made, the person does not pay much attention to attractiveness; they simply “know” from earlier experience what decision to make in a particular situation.
  • Level 2 – Simple Attractiveness-Based Decisions. This includes decisions made with reference to one or a few attractiveness attributes favoring the chosen alternative. These decision problems do not involve conflicts between attributes and often the solution is quite obvious the customer. These decisions may still be driven by habit or affect (feeling). They also may be made as quickly as Level 1 decisions.
  • Level 3 – Alternative-Based Decisions. These decisions involve choices between alternatives with either goal conflicts. In most cases, some attributes favor one alternative while some attributes favor other alternatives. Repeated decisions at Level 3 may become transformed to Level 2 or even Level 1. Most of the existing research addresses problems at this level.
  • Level 4 -Innovative Problem Solving Decisions. In these situations, alternatives are not fixed, nor is there a set of attributes that characterize these alternatives. At this level, creative problem solving is an important sub-process that leads to the generation of alternatives to be considered.

In most cases, customers would prefer to make decisions at the lowest possible level that yields a solution that meets their needs.  Customers can’t engage in alternative based evaluations or innovative problem solving as part of every experience.  In some ways, this contradicts the “buzz” on customer co-creation.  I’ve had smart people suggest that the whole idea of customer experience design is outdated because customers should just be able to design, configure, or co-create their own experiences.  I believe customer co-creation is one of those management concepts that is in the irrational exuberance phase.  There is certainly an important role for co-creation, however, across the wide range of experiences, the ability to navigate more of them on automatic pilot is the key to survival in the customers’ world of expanding complexity.

Researchers have compared customer expeiences that offer a limited, more psychologically manageable, versus an extensive, more psychologically excessive, number of alternatives and found that while experiences offering extensive alternatives may be initially perceived as desirable, they often create barriers to customers making choices and feeling satisfied with those choices after the fact.

Customers in extensive-choice situations tend to describe their decision-making process as being more enjoyable because of the wide-open opportunity it gives them but also more difficult and more frustrating.  In addition, extensive-choice participants report being more dissatisfied and having more regret about the choices they’ve made than did limited-choice participants.  This is particularly true in situations where customers feel they must make a choice for the objectively best option… rather than one that just reflects their unique personal preferences.

Understanding How Customers Make Decisions

Customers follow decision strategies that are dependent on the situation, their goals, and their persona. Rather than an invariant approach to solving choice problems, customers leverage a wide range of approaches, often developed on the spot.  Since decision makers generally cannot process all of the available information in a particular situation, they develop problem representations by filtering or restructuring the available information.  Hence, which information is selected for processing can have a major impact on their choices.

In general, it is not true that customers follow complex decision processes for complex, high involvement decisions.  In fact, as the complexity of the decision increases, the complexity of the decision process often decreases.  As decision situations become more complex, customers use rules of thumb or heuristics to reduce the complexity of the options and the information they must consider.  For example, options that are superior on the most prominent of a small set of attributes are favored as the decision task becomes more complex.

The decision process that customers follow and the options they select, will depend on the extent to which customers’ goals are:  minimizing the cognitive effort  required for making a choice, maximizing the accuracy of the decision, minimizing the experience of negative emotion during decision making, and maximizing the ease of justifying the decision, or some combination of such goals.

The way customers make choices is also highly dependent on the way their choices are presented or framed.  This creates a significant opportunity for providers that understand the psychology of their customers’ decision processes to present options in a way that improves the customer experience and drives additional revenue.  One of the ways to do this has to do with understanding customer attention.  There are two different types of attention:  voluntary and involuntary.  Voluntary attention is devoted to information perceived to relevant to the customer given their current goals.  Individuals will devote effort to examining information they believe will help them attain whichever goals are more heavily weighted in that situation.  However, attention also may be captured involuntarily by aspects of the environment that are surprising, novel, unexpected, potentially threatening, or extremely salient, thus exemplifying one aspect of accessibility.  For example, changes and losses may be particularly salient and particular problem representations may make certain aspects stand out and gain involuntary attention.  Thus, attention and selectivity can be influenced both by goal driven and more involuntary perceptual factors.

Level 3 decision strategies can be characterized based on the overall amount of information considered, the selectivity or comprehensiveness of attributes that are considered, whether the customer focuses on their top down alternatives or bottoms up attributes, and whether the customer makes cross-attribute tradeoffs.  (See Bettman, James R., Mary Frances Luce, and John W. Payne, “Constructive Consumer Choice Processes“)  Common Level 3 decision strategies include:

  • Weighted Adding.  This consists of considering one alternative at a time, examining each of the attributes for that option, multiplying each attribute’s subjective value times its weighted importance and summing these products across all of the attributes to obtain an overall value for each option.  The alternative with the highest value would be the one that is chosen.  Because weighted adding involves extensive information processing and explicit tradeoffs, it is often considered to be more the most effective approach.  However, customers don’t generally follow this approach because it places significant demands on their working memory and computational capabilities.  Nevertheless, weighted adding is the decision model that underlies many of the techniques used by marketing researchers to assess preferences.  Note: An Equal Weight Strategy is a variation of Weighted Adding, in which there is an implicit assumption that each attribute is of roughly equal importance.
  • Most Important Attribute Selection.  This strategy provides a strong contrast to weighted adding:  the alternative with the best value on the most important attribute is simply selected (assuming there were no ties on that attribute).
  • Satisficing.  Involves finding the first “good enough” option.  Options are considered sequentially, in the order in which they are encountered.  The value of each important attribute for the current option is considered to see whether it meets some sort of cutoff level for that attribute.  If the attribute fails to meet the cutoff level, the option is rejected, and the next option is considered.  One implication of satisficing is that the option chosen can be significantly influenced by the order in which the options are encountered.
  • Elimination by Aspects.  Combines elements of both the most important attribute and satisficing strategies.  Elimination by aspects rejects options that do not meet a minimum cutoff value for just the most important attribute.  This elimination process may be repeated for the second most important attribute, with processing continuing until a single option remains.
  • Majority of Confirming Dimensions.  Involves alternatives that are processed as pairs, with the highest values of the two alternatives compared on each attribute, and the alternative with a majority of winning (better) attribute values is retained.  The retained option is then compared with the next alternative from the consideration set, and this process of pairwise comparison continues until all the alternatives have been evaluated and one option remains.
  • Feature Voting is a simple approach that just counts the number of good and bad features characterizing each of the alternatives and then selects the alternative with the greatest number of good and/or the fewest number of bad features.
  • Choice Heuristics.  Individuals often use a repertoire of rules of thumb or heuristics for solving decision problems.  These heuristics are acquired through experience, imitation, or training.  This could include customers that will “pick the second least inexpensive alternative (e.g., CD player, bottle or wine) from a brand whose name I recognize.”

Customers frequently use combinations of these strategies.  A typical combined strategy might have an initial phase in which some alternatives were eliminated and a second phase where the remaining options are analyzed in more detail.  One frequently observed strategy combination is an initial use of Elimination by Aspects to reduce the choice set to two or three options followed by a compensatory strategy such as weighted adding, to select among the remaining options.

 The Search for Dominance Structure

One very interesting decision models that appears to fit well with what customers frequently do is called the Search for Dominance Structure.  The key idea is that a decision maker will attempt to structure and restructure information about attributes in such a way that one of the alternatives becomes the obvious choice… because that alternative dominates the other alternatives on key attributes.  The to-be-chosen alternative has one or more clear advantages and all the major disadvantages of that alternative have been either neutralized or deemphasized.  (See:  Montgomery, Henry, “Decision Making and Action:  The Search for a Dominance Structure” in the book, “The Construction of Preference“)  This search for dominance appears to go through four phases:

  • Pre-editing typically occurs early in the decision process.  In this phase, the decision maker attempts to simplify the decision problem by selecting those alternatives and attributes that should be included in the representation of the decision situation.  There is ample evidence that decision makers attempt to simplify the decision by focusing on a limited subset of attributes, by rounding off information about attribute levels, and by screening out alternatives that fall short on important attributes.
  • Finding-a-promising alternative.  In this phase, the decision maker finds a candidate for his or her final choice.  An alternative that appears to be more attractive than other alternatives on an important attribute may be selected as a promising alternative.  When a promising alternative has been found the decision maker has formed a preference, albeit a temporary one, for a particular alternative.  Increasingly preferential attention is paid to this alternative.  The question is whether the decision maker can justify a decision to choose this alternative.  The question is dealt with in subsequent phases of the decision making process.
  • Dominance testing.  This implies that the decision maker tests whether the promising alternative dominates the other alternatives.  These tests could be more or less systematic or exhaustive.  If the promising alternative is found to be dominant, it is chosen and the decision process ends.  The fact that the decision maker manages to increase the support for the chosen alternative does not necessarily mean that the alternative dominates its rivals.
  • Dominance structuring.   If a violation of dominance if found, the decision maker continues to this phase, in which he or she attempts to neutralize or counterbalance the disadvantage(s) found for the promising alternative.  These attempts are based on various operations.  There are four dominance structuring operations:
    • The decision maker may deemphasize a disadvantage by arguing that the probability of the disadvantage is very low and that it could be controlled or avoided in one way or another.
    • Another possibility is to bolster the advantages of the promising alternative and in this way indirectly deemphasize the disadvantages.
    • In the cancellation operation the decision maker attempts to find dominance by canceling a disadvantage by relating it to an advantage that has some natural connection to the disadvantage in question.
    • Finally, the decision make may find a dominance structure by collapsing two or more attributes into a new, more comprehensive attribute.

It is also possible that the decision maker may restructure the problem in a way that reframes existing alternatives or creates new alternatives.  If the decision maker fails to find a dominance structure he or she may go back to the previous phase and make a new start in the search for dominance or he or she may postpone the decision, if possible.  Decision makers continue differentiating and structuring after the decision.  This is called consolidation and is important to reduce dissonance, disappointment, regret, etc…

There are numerous examples of how the customer experience can be tuned to match the way that customers’ actually make decisions.  For example, one of our health insurance clients was able to significantly increase client retention by reducing the number of renewal options offered to each client from over 100 to 4.  Previously, renewal packages sent to existing clients might be over 40 pages long.  In the new design, each client was offered four basic options:  same benefits as the current plan at a new price, same price for a minimal adjustment in current plan benefits, and two new plans at a marginal discount or increase compared to the current price.  For any given client, these four options represented the most likely renewal choices the client would consider.  As a result, the client received a one-page renewal summary that fit with their decision logic.

In summary, from a business perspective, the most critical elements of the customer experience involve the choices that customers make:  the choice to buy; the choice to recommend; the choice to continue as a customer.  This post provided several frameworks that can help companies understand how customers decide.  As always, comments and suggestions are appreciated.

Creating the Conditions for Outstanding Experience in Your Life

My colleagues and I have been lucky enough to have the chance to help a wide range of companies improve their customers’ experiences.  As we’ve done this work, we’ve always started with the customer.  Who are the customers?  What are their priorities and underlying needs?  What are they trying to accomplish?  What is the natural path they follow to accomplish those things?  What influences the emotional and rational reactions they have to situations they encounter along the way?

As a result of this customer-centric perspective, we’ve ended up thinking long and hard about a couple of basic questions such as:  Just what is an experience?  What is it that makes an experience outstanding?  In what ways can people create more outstanding experiences in their lives?  While virtually all of our work has been with companies, in the end, it’s all about people and the experiences they have in their lives.

Earlier this week, I led a workshop titled “Creating the Conditions for Outstanding Experience in Your Life” at The Lodge at Pebble Beach.  Many of the participants asked for a summary of the material we discussed and I received several requests from people that wanted to attend the session but couldn’t.  So, this post will cover the highlights of the session.

What is an Experience?

Before we can have a meaningful discussion of outstanding experiences, it’s worth spending a few minutes considering “what is an experience?”  The answer I propose is that an experience is the way a person makes sense of the world.  An experience is the way a person’s mind perceives, interprets, and evaluates what they do and the things that happen to them.

Early in our design work with companies, we developed a model that describes the major components that influence an individual’s experience.  We call this model the Cognitive Experience Cycle.  Like most models, it is a useful over-simplification.

Cognitive Experience Cycle

The components of the Cognitive Experience Cycle are:

  • Motives. What do you want?  Each of us has some motives we know about; that we can put our finger on; that we can describe to others.  We also have a set of deeper, more basic motives that may be tough to put into words but that have a profound impact on our experiences.  Many of these deeper motives eventually trace back to the biological imperative to ensure the survival of our genes.  Over many generations, we’ve evolved a wide range of motives or drives that have “survival value.”  Aside from basic needs for food, water, etc… we are motivated to: attract a suitable mate, affiliate and cooperate with others in small groups, assert our position in a dominance hierarchy within those groups, penalize cheaters, acquire knowledge that improves our predictions about the world, etc… These motives create an overall backdrop for the way we experience the world.
  • Goals. Within the context of these motives, we each have goals we want to achieve.  Some of these goals are concrete, specific, and well-defined.  However, you probably have other goals that are no more than fuzzily-defined wished-for outcomes.  While rational economic theory has always assumed that people have well defined preferences, experimental evidence shows that people tend to construct their preferences in the moment.  They don’t know what they want until they see it.  Most of us also have espoused goals that we’re not doing much to realize.  Often these espoused goals are not fully consistent with either our underlying motives or our beliefs about ourselves and what’s possible for us.  I’ll have more to say about this later.
  • Expectations. We are all “programmed” to continuously predict what will happen next; form plans; and predict the results of those plans.  Our ability to predict what will happen next is a skill with a lot of survival value.  We’re the descendents of the people who, when they heard a distinctive rustle in the bushes, predicted whether it was a predator or a source of food, and acted accordingly.  These predictions in a wide range of situations are strongly influenced by our beliefs about the way the world works and what to expect from its other inhabitants.  This includes things like: What course of action will be required to achieve our goals?  What can we expect from other people?  What are the likely barriers and risks?
  • Actions. What actions are we prepared to and capable of taking given our beliefs about what’s required.  Some of these actions will be automatic or even habitual; the kind of things we do without deliberately planning or even thinking about them.  Some of these actions will be based on the kind of creative problem solving we do in the more novel situations we encounter.
  • Interactions. How does the world around us respond to our actions?  This includes the things and the people we interact with.  While these interactions are the only concrete part of the experience cycle, this reality is relatively minor part of our overall experience.
  • Perceptions. While it seems like we interact with the world directly, this is an illusion.  There are actually many layers of subconscious filtering and preprocessing that takes place before the light that touches our eyes or sound that touches our ears makes it through to the working memory associated with our train of thought.  At any point in time, we are bombarded with literally billions of bits of environmental information.  Our brains are the ultimate labor saving device; optimized to filter out and deal with virtually all of that information subconsciously.  This allows us to pay selective attention to the small number of things that appear to be most important or most interesting.  We apply some amount of “gist processing” to information that is dealt with subconsciously.  In other words, we get the gist of what happened without attending to the details.
  • Interpretations. Interpretation has a lot to do with interaction of the current experience with our memories of past experiences.  As we perceive aspects of our current experience, our brains are continuously elaborating on the current experience by recalling categories, beliefs, and autobiographical memories of prior experiences that seem relevant. This happens because, as stated earlier, our brains are “programmed” to continuously predict what’s going to happen. If our predictions roughly correspond to the way our current experience is unfolding, we don’t need to pay attention to them.  This doesn’t always work so well.  Sometimes we stop paying attention to the current experience and just assume that it’s the same old thing we’ve seen or heard before.  As a result, our interpretations of the current experience can have more to do with our beliefs and memories than with what is actually happening.  Our interpretations might be just the story we’re telling ourselves.  You can see how this might get us into trouble in conversations with our spouse, family, friends, or close co-workers.
  • Evaluations. What meaning do we attach to our experiences?  How would we describe the experience we had?  How does it confirm or change our beliefs?  In general, the mind is conservative.  It’s easier to preserve what it knows than it is to challenge or change our beliefs.  As a result, we tend to pay attention to evidence that confirms our beliefs and minimize or throw away evidence that is inconsistent with them.  We only change our beliefs when we can no longer reasonably justify them.  These evaluations that occur in the last part of the Cognitive Experience Cycle then reinforce our motives, goals, and expectations that begin the cycle all over again.

What Makes an Experience Outstanding?

I suggest we probably each have our own answers to this question.  Your answer will have a lot to do with the specific things you’re interested in.  However, across the many conversations I’ve had about this question, several common themes have emerged:

  • Identity. Outstanding experiences allow a person to reinforce and express a positive self-image
  • Challenge. Outstanding experiences allow a person to work at the edge of their capabilities.
  • Learning. Outstanding experiences generate learning; a person comes out of these experiences smarter, more capable, and more confident than they were when they started.
  • Engaging. Outstanding experiences tend to be absorbing and, in many cases, a person may lose track of time.

In the book, Flow: The Psychology of Optimal Experience, Mihaly Csikszentmihalyi outlined his theory that people are most happy when they are in a state of flow- a state of concentration or complete absorption with the activity at hand and the situation.  The idea of flow is identical to the feeling of being in the zone or in the groove. The flow state is an optimal state of intrinsic motivation, where the person is fully immersed in what he or she is doing.  This is a feeling everyone has at times, characterized by a feeling of great freedom, enjoyment, fulfillment, and skill-and during which temporal concerns (time, food, ego-self, etc.) are typically ignored.

At a deeper level, experimental evidence also demonstrates that satisfaction is driven as much, if not more, by the process of attaining a goal than the ultimate realization of that goal.  Several prominent neuroscientists have theorized and have begun to demonstrate that the interaction of the neurotransmitter dopamine with a small area of the brain called the striatum is responsible for the reward prediction process that motivates our behavior and leads to our feelings of satisfaction (see:  Your Brain Is (Almost) Perfect: How We Make Decisions by Read Montague and Satisfaction:  The Science of Finding True Fulfillment by Greg Burns).

How Do We Generate More Outstanding Experiences?

Let me start by saying that I will share only a partial answer to this question; one that builds on the Cognitive Experience Cycle we just discussed.  From this perspective, I believe there are three interrelated and mutually reinforcing levers for the generating more outstanding experiences in our lives.  These three levers are: 1) Taking Purposeful Action, 2) Mastering Beliefs, and 3) Being Fully Present and Open.

3 Levers on Cognitive Experience Cycle

1. Taking Purposeful Action

I believe the first steps a person can take to generate more outstanding experiences is to get clear on: 1) What they want, 2) Why they want it, and 3) What’s required to get it.  Until an individual understands these things, their “goals” run the risk of being not much more than wishful thinking. They end up drifting.

In the workshop, we walked through the development of a Strategy on a Page for taking purposeful action.  This Strategy on a Page (a.k.a., SOAP), is a template for considering and summarizing clear answers to the following important questions:

SOAP - Personal

The last of these questions is particularly critical.  Self-limiting beliefs are one of the most significant barriers to clearly setting and working towards achieving goals.  We’ll be talking about these beliefs in the next section.

I also shared the following personal example of a completed Strategy on a Page focused on the goals I’d set for myself related to my health and fitness:

FWC SOAP Example

An additional perspective related to Taking Purposeful Action is that, for many of the most significant decisions in our lives, we have trouble aligning what we want today with what will actually make us happy in the future.  This phenomenon, called Miswanting, can describe situations where we want things that don’t actually make us as happy as we predict they will.  It also can describe our desire to avoid situations that, in the end, are not as bad as we expect they’ll be.  See Miswanting and the Pursuit of Unhappiness for more insight into this phenomenon and perspectives on how to avoid it.

2.  Mastering Beliefs

George Bernard Shaw said, “Our lives are shaped not as much by our experience as by our expectations.”  Our beliefs limit and enable what’s possible for each of us in our lives.  Regardless of what we’re willing to admit… our behavior is always fully aligned with our core beliefs.  In fact, we cannot activate, maintain, decide about, prefer, plan for, or pursue any goal which is not grounded (implicitly or explicitly) on a set of underlying beliefs.

For example, every one of us has powerful beliefs regarding intelligence that are formed early in life.  While some people have a deeply held belief that intelligence is a fixed trait, others believe that intelligence is more malleable.  This fundamental distinction has a profound impact on many dimensions of our experience.  Carol Dweck describes some of the implications in her book Self-Theories:

  • The belief that intelligence is a fixed trait causes many people to worry about how much of this fixed intelligence they have.  People with beliefs about fixed intelligence tend to focus on performance rather than learning.  They get worried about looking smart and avoiding looking dumb.  Even if the person is confident in his or her capabilities, their beliefs require a steady diet of easy successes.  They’ll tend to look for opportunities to demonstrate their intelligence rather than challenge or increase it.  They might pass up opportunities to learn if those opportunities involve the risk of making mistakes that might make them look inadequate.  They also tend to quickly disengage from experiences when those experience present obstacles.
  • On the other hand, some people have a deep-seated belief that their intelligence is malleable. They don’t deny that differences exist; it’s just that they believe that everyone can increase their intellectual abilities with effort. They want to learn and don’t waste time worrying about looking smart or looking dumb. In fact, they’re likely to pass up opportunities to look smart in favor of opportunities to challenge themselves and to learn. Even individuals with lower overall confidence in their current abilities can still thrive on challenge, throwing themselves into difficult tasks and sticking with them… knowing they’ll come out of that experience smarter. The challenge of mastering new skills is what makes these people feel smart.

Beyond intelligence, we each have beliefs that pertain to other aspects of who we are and the way the world works.   For example:

Belief Categories

The trick is to actively uncover and master your beliefs rather than be controlled by them.  This is both critically important and easier said than done.  Your beliefs are so much a part of how you think that it can be difficult to recognize them.  It’s like a fish being unaware of the water it’s swimming in.

While it is difficult to directly identify self-limiting beliefs, it is possible to recognize times that you’re feeling frustrated, angry, anxious, or depressed regarding something you’d like to accomplish.  When you notice these feelings, a productive exercise is to stop, reflect, and write down answers to the following questions:

1.  What am I feeling?

2.  What is the situation?

3.  What is the internal monologue I’m having with myself about this?

4.  What assumptions and self-statements are embedded in that monologue?

5.  If these assumptions and statements are true, what are the implications?

It’s important to answer question 5 with additional assumptions and self-statements not feelings, like I’d be unhappy.  You may need to repeat question 5 each time getting closer to statements that are core beliefs about the world and yourself.  Once question 5 gets closer to a set of core beliefs, the next step is to consider:

6.  Are these beliefs I’d chose for myself? Are they productive ways to think?

If the answer is no, the most important steps are to:

Develop a comprehensive list of every bit of evidence you can find that contributes to proving the case against this self-limiting belief.

7.  Clearly state the positive beliefs you’d chose in this situation

8.  Regularly (e.g, daily) reflect on the chosen belief and supporting evidence

For example, in order to accelerate progress towards my health and fitness goals described in my Strategy on a Page above, part of every workout has included time spent reflecting on the more productive set of beliefs required for me to be successful.

3.  Being Fully Present and Open

Our beliefs also have a profound impact on the way we perceive, interpret, and evaluate our interactions with the world and its other occupants.  Dr. Leonard Orr said this succinctly as, “What the thinker thinks, the prover proves.”

The brain works hard to preserve the consistency of what it already believes to be true.  It does this on a subconscious as well as conscious level.  There are good reasons for doing this.  We are continually bombarded with billions of bits of information.  You can consider the brain a very effective labor saving device.  It continually predicts what it expects to see and, based on those predictions, sorts through and filters the flood of perceptual information in order to allow us to pay attention to a relatively small number of things that appear most important.  A side effect of this process is that the brain often discards valuable information about what’s really going on in order to simplify our interpretations of this information.

What we expect to see has a powerful influence on how we perceive and interpret what is there.  For example:

Paris in the the Spring

Psychologist Richard Gregory’s Charlie Chaplin Mask video demonstrates a powerful example of how our top-down beliefs subconsciously change our bottoms-up perceptions in a way that reinforces “seeing what we expect to see.”

There are also numerous examples of how, once we have a belief about what we’re seeing, our perceptions tend to be resistant to change:

Face to Woman

The essence of Being Fully Present and Open starts with being aware of these perceptual filters and how our beliefs reinforce automatic assumptions.

In a fascinating CIA paper titled “The Psychology of Intelligence Analysis” Richard Hauer describes not only the issues surrounding the perception and interpretation of information but also outlines an approach to overcoming this bias.  The approach, called the “Analysis of Competing Hypotheses” forces analysts to more deliberately evaluate evidence for alternative conclusions rather than searching for evidence to confirm a pre-existing hypothesis.  I’ve found that following a simplified version of this approach to be invaluable on a personal level.  It avoids the tendency we all have to just look for and see the evidence that supports our pre-existing beliefs.  The basic steps of this approach are to:

  1. Identify a wide range of competing hypotheses
  2. Gather evidence for and against each of these hypothesis
  3. Prioritize each hypothesis on the basis of evidence that disproves rather than proves it

There are many examples of beliefs that don’t reflect reality.  For example:

“I know horoscopes can predict the future… I’ve seen it happen.”

“Couples that adopt are more likely to conceive a child… this happened to two couples I know.”

Evidence of the type mentioned in these statements is certainly necessary for a belief to be true.  If a phenomenon exists, there must be some positive evidence of its existence – “instances” of its existence must be visible to oneself or to others.  But it should also be clear that such evidence is very hardly sufficient to warrant these beliefs.  Unfortunately, people do not always appreciate the distinction between necessary and sufficient evidence, and they can be overly impressed by data that, at best, only suggests that a belief might be true.

Consider the common belief that infertile couples who adopt a child are subsequently more likely to conceive.  A major reason for such unsupported beliefs is just paying attention to the instances that confirm the belief.  This is the easiest thing for the brain to deal with.  However, to adequately assess whether adoption leads to conception, it is necessary to compare the probability of conception after adopting:  a / (a + b), with the probability of conception after not adopting c / (c + d).  cells “a” and “d.”

Conceive 2×2

In addition, we exhibit a tendency to focus on positive or confirming instances when we gather, rather than simply evaluate, information relevant to a given belief or hypothesis.  When trying to assess whether a belief is valid, we tend to seek out information that would potentially confirm ours belief, over information that might disconfirm it.  This creates two kinds of self-fulfilling prophecies:

  • True self-fulfilling prophecies… in which a person’s expectation elicits the very behavior that was originally anticipated. For example, behaving in an unfriendly and defensive manner because you think someone is hostile will generally produce the very hostility that was originally expected.
  • Seemingly self-fulfilling prophecies… that alter another person’s world, or limit another’s responses, in such a way that is difficult or impossible for the expectations to be disconfirmed. For example, if someone thinks that I’m unfriendly, I might have little chance to correct that misconception because he or she may steer clear of me. Another example would be when little-league baseball players are thought to be incompetent only occasionally get to play… right field… providing few opportunities to overcome the unfortunate reputation.

In summary, I believe there are three interrelated and mutually reinforcing levers for generating more outstanding experiences in our lives: 1) Taking Purposeful Action, 2) Mastering Beliefs, and 3) Being Fully Present and Open.   I’m sure this will continue to be a field that we have a chance to continue to explore as we continue our work.  I’m looking forward to getting comments from any of the workshop participants who care to contribute.  And remember:

The quality of life is not measured by the number of breaths you take…

but by the moments that take your breath away!

Novelty Seeking and the Design of Differentiated Experiences

Over millions of years of human development, our ability to predict has translated into our ability to survive.  We live in an inherently unpredictable world.  As a result, we have evolved a strong motivation to learn in a way that improves our predictions.  Not only does this motivation lead to a clear survival advantage, but, in a social setting, learning how to better predict other people’s behavior leads to small group cooperation and to attracting the fittest members of the opposite sex.  Our drive to predict leads to an overarching behavior – novelty seeking.

Brains want novelty.  This was first observed by Wilhelm Wundt, one of the founding fathers of the field of psychology, in the 19thcentury.  Wundt observed that the more complicated an experience is, the more a person will be stimulated by it.  Up to a certain level; at which point the experience starts to get overwhelming.  He described this diagrammatically as a bell-shaped curve, called the Wundt Curve, showing the state of arousal increasing as experiential complexity increases up to a point at which arousal starts to decrease as complexity continues to increase.

This explains why experiences with intermediate levels of complexity are generally the most pleasurable.  Why a movie whose plot is unpredictable, but not too unpredictable.  Why it’s pleasurable to listen to music that strikes a balance between predictability and novelty.  Why humor that helps us see things differently is inherently engaging.

Novelty seeking is actually hard-wired into the way your brain works.  Novelty seeking is stimulated by the neurotransmitter dopamine.  In a way, dopamine is the driver of all experience.  It works like a key for unlocking one of the most critical parts of your brain:  the striatum, which contains the highest concentration of dopamine receptors.  This is well described in two outstanding books: Greg BernsSatisfaction:  Sensation Seeking, Novelty, and the Science of Finding True Fulfillment and Read Montague‘s Why Choose this Book?  How We Make Decisions.

The striatum is where the interaction between you as an individual and the environment happens.  It works like a switching station with many inputs from other parts of your brain but limited capacity.  As a result, only a few signals can get through at any point in time.  What makes it through has to do with dopamine.  Dopamine is a chemical “reward” predictor that encourages your striatum to pay particular attention to novel input signals.  This interaction commits your motor system to a course of action, selected from the many different possibilities.  It produces your ability to decide what you want to do.

Doing something just past the edge of your predictability zone releases dopamine.  As a result, novel information flows through your striatum.  This, in turn, forces you to act on the information and, subsequently, reinforces the motivational system.

However, too much novel information creates an overload and a lack of attention.  The point at which too much information becomes… too much information… is related to the capacity of working memory.  It’s been demonstrated that people can maintain no more than 7+/- 2 chunks of information in working memory at any point in time.  By the way, this is why AT&T originally determined that telephone numbers should have 7 digits.

What are the implications for designing customer experiences?  For the past several years, we’ve been focusing our clients on the development of a small set of “Signature Experience Elements” that customers will perceive as a “difference in kind” and that fit with the overarching purpose of the organization.  Typically we design to no more than 5-7 Signature Elements that are aligned with the purpose or story the experience is trying to tell.  Sticking to this relatively small set of highly novel elements, it’s possible to create experiences that are closer to the optimum point of the Wundt Curve… (aka,  wundt-erful experiences).  The natural tendency for many organizations are to invest too heavily in a large number of incremental improvements that don’t stimulate the customers’ desire for novelty seeking.

For example, Whole Foods Market has a small number of signature experience elements that reinforce their “Whole Foods, Whole People, Whole Planet” positioning and are perceived by customers’ as a difference in kind.  These include:  organic food, artful food presentation, local growers, educational signage, novelty seeking selection, and premium pricing.

Another client example is a major jewelry store chain, whose brand story is “The Perfect Gift, Guaranteed.”  This company’s signature elements included:  a distinctive welcome, creative and consultative gift advice, coaching the customer on how to romance the gift, and a wow process for returns.  Each of these signature elements was designed to get the customers attention and contribute to them really internalizing the desired brand story.

In addition, predictable experiences lead to habituation.  Changes in happiness or satisfaction are driven by relative changes from our recent past.  This is why, as we adjust to any positive change in our circumstances, satisfaction or happiness fades.  Social psychologist Philip Brickman describes this as the hedonic treadmill; we need to seek higher levels of reward in order to maintain the same level of satisfaction.

Some sensations habituate more quickly than others.  For example, we tend to quickly get used to changes in their financial status.  A positive improvement in financial fortunes leads to a short term increase in the feeling of satisfaction followed quickly by a return to indifference.

This may be one of the reasons why structured loyalty or rewards programs tend to drive rational repeat purchase behavior but not necessarily higher levels of loyalty.  People habituate to rewards quickly when the rewards are relatively predictable.  However, I’ve observed that people respond more positively to rewards when the rewards are novel, unexpected, and authentic.

Personal relationships tend to habituate more slowly.  The balance of predictability and novelty is an issue in long-term relationships.  After a long time together, two people get too good at predicting each others responses.  And they also become more certain that they “know” the other person’s underlying intentions.  This can be both comforting and highly constraining.   As people get to know each other, they may lose their sense of novel individuality.  People tend to believe that relationship harmony depends on stability and constancy.  This is an issue.  While novelty in a relationship may be inherently destabilizing, it is essential to the maintenance of any long-term relationship.  This is as true for business relationships and collegial relationships, as it is for married relationships.

In future posts, I’ll describe the implications of other neuromodulated processes (Harm Avoidance, Reward Dependence, and Persistence) that influence how people experience the world, as well as, provide guidance for the design of the most compelling customer experiences.

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