Getting Beneath the Voice of the Customer

Doesn’t it make sense that:

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

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

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

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

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

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

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

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

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

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

The Economist Subscription Options

The ad offered three subscription options:

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

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

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

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

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

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

The Vast Majority of Human Experience is Subconscious

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

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

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

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

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

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

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

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

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

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

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

Experience Miner: Creating Profitable, Evocative Experiences

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

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

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

… and how those experiences influence behavior!

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

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

Evocative Experiences… The Experiences that Matter

An experience is evocative when it positively and profitably influences:

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

Four Characteristics of an Evocative Experience

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

Creating Evocative Experiences

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

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

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

Experience Miner^TM and the Design of Evocative Experiences

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Effective Experiential Storytelling

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

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

Stories are our Primary Means of Sharing Knowledge and Transmitting Culture

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

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

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

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

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

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

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

1. A Simple, Purposeful Message

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

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

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

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

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

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

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

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

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

2. Characters that Make Sense

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

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

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

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

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

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

3. An Engaging Plotline with “Signature Scenes”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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 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

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.

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 economics,  Leon Festinger’s study of cognitive dissonance,  John Nash on the Nash Equilibrium,  Read 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:

• Designing for Customers’ Reactive, Deliberative, and Reflective Experiences
• Optimizing the Most Critical Elements of the Customer Experience:  Customer Choices
• Novelty Seeking and the Design of Differentiated Customer Experiences
• Cognitive Ergonomics: How Customers React to Violations of Justice
• Cognitive Ergonomics: Designing “Socially Influential” Experiences
• Cognitive Ergonomics: Framing and Priming the Customer Experience
• Miswanting and the Pursuit of Unhappiness

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.

Roadmap to the Customer Innovations Blog

I’ve received several requests to put together a “roadmap” to the Customer Innovations blog posts I’ve done.   Here is an organized path through the material I’ve posted so far.  I haven’t tried to be all inclusive but have just the most substantial posts.   Grab a venti dark roast and enjoy!

Customer Experience Strategy:

• Customer Innovations: Creating Experiences that Drive Measurable Business Results
• Customer Experience and Why It’s Important?
• 2008: The Year of the Customer (NYSE CEO Report 2008)
• Putting the “Customer” in Customer Experience Efforts
• Characteristics of an Outstanding Customer Experience
• Your Company Doesn’t Have Customer Experiences
• Whose Experience is it Anyway?
• Why Customer Experience Initiatives Fail?
• Overcoming Customer Experience Program Stress Points
• Experience Management Maturity: Moving from “Experience by Default” to “Experience on Demand”
• Customer Experience Specification
• Centers of Gravity: Levers for Shifting the Customer Experience
• Most Efforts to Improve Customer Relationships are Misdirected
• Optimizing B-to-B-to-C Performance: From Channel 1.0 to Channel 2.0
• Channel 1.0: Foundational Capabilities for Optimizing B-to-B-to-C Performance
• Channel 2.0: “Collaborative Ecosystem Management”
• Rapid Revenue Retention: A “Swarming” Approach to Keeping Customers During Recessionary Conditions
• Delivering Winning Experiences for the Recessionary Customer Mindset
• When the Going Gets Tough… The Tough Get Closer to Their Customers

Evocative Experience Design:

• What is an Experience Anyway?
• Designing Experiences that Fit the Customers’ Mental Model
• Experience Miner: Creating Profitable, Evocative Experiences
• Effective Experiential Storytelling
• Making Experiences Memorable
• Great Customer Experiences are Music to My Ears…
• Experiences (Mis) Remembered
• Getting Beyond the Voice of the Customer
• Observation and Elicitation: We Like to Watch
• Cognitive Affective Experience Design
• What is the Difference Between Personae and Segmentation?
• Personae-Driven Experience Design in Retail Financial Services
• Understanding Basic Drives and Experiential Temperament
• Automatic Behavioral Scripts: Don’t Overestimate Your Customers’ Interest in Having an “Experience” with You
• Novelty Seeking and the Design of Differentiated Customer Experiences
• Customer Experience and Our Search for Meaning
• Helping Customers Lose Wait
• How Customers React to Violations of Justice
• Choice Architecture: Designing Experiences that Influence Customer Behavior
• Optimizing the Most Critical Elements of the Customer Experience: Customer Choices
• Designing for Customers’ Reactive, Deliberative, and Reflective Experiences
• Framing and Priming the Customer Experience
• Influential Experiences and the Psychology of Escalating Commitment
• Designing “Socially Influential” Experiences
• Miswanting and the Pursuit of Unhappiness

Integrating Customer and Employee Experience:

• No Matter What Business You’re In, You’re In the Hospitality Business
• A Break in the Service Profit Chain: Why Increases in Employee Engagement Don’t Improve the Customer Experience
• Human Sigma: Strong on Description; Weak on Prescription
• Integrating Customer and Employee Experiences
• How Employee Experiences Drive Organizational Behavior

Other:

• Creating the Conditions for Outstanding Experience in Your Life
• Using Predictive Modeling to Optimize Customer Relationships
• Adaptive Customer Profiling: Integrating Quantitative and Qualitative Customer Analytics

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: 

• 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.

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.

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.

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:

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:

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:

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:

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:

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.”

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 19^thcentury.  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 Berns‘ Satisfaction:  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.

Customer Experience and Our Search for Meaning

Customers don’t buy products, they buy desired states.  One of the most significant mistakes any organization can make is to assume customers should care about their products or services.  This doesn’t imply, however, that a company can’t play a very meaningful role in the lives of customers.  The best companies enable people to have experiences that are highly meaningful in their lives.  Customers tend to care a lot about those experiences; what those experiences accomplish for them; how those experiences make them feel.  As a result, people develop strong ties to the products and experiences that create or reinforce meaning for them.  For example, many people love the experience of going to Starbucks, using their iPod, driving their Harley, shopping at Nordstrom or Whole Foods, and going to Disney World.  Witness the level of emotional attachment customers have for experiences like…  NASCAR, Jimmy Buffet, BMWs, Four Seasons Hotels, etc…

Our search for meaning is one of the central, defining characteristics of what makes us human.  At the highest level, meaning is how we make sense of the world, interpret our desires, and put the things that happen to us in perspective.  Tapping into people’s search for meaning is the essence of understanding how to help customers have a great experience.

In his outstanding book, “The Culture Code” psychiatrist Clotaire Rapaille, describes Chrysler’s struggle to clarify the meaning of the Jeep Wrangler.  After years of distinctive positioning, the Jeep Wrangler ended up sitting in the middle of a very crowded field of other SUVs.  Many of Chrysler’s natural tendencies were to make changes that tried to make the Wrangler compete more effectively against those SUVs: more luxurious, fixed doors, enclosed, etc…  After in-depth research that dug into the deepest associations that Americans have with the Wrangler, Rapaille was able to help Chrysler see that people associate the Wrangler with a HORSE.

As Rapaille states, “SUVs are not horses.  Horses don’t have luxury appointments. Horses don’t have butter-soft leather, but rather the tough leather of a saddle.  The Wrangler needed to have removable doors and an open top because drivers wanted to feel the wind around them, as they were riding on a horse.”  Subtle features like round head lights rather than square headlights were shown to positively influence sales.  After all, horses have round eyes not square eyes.  In fact, the logo for the Wrangler was redesigned to feature the grille and round headlights… like the face of a horse.

Most companies think too much about their products and what they want to say about them… and don’t really appreciate the deep meanings that influence the way customers’ think and feel.   For instance, a few years ago I had the opportunity to consult with one of the leading mattress manufacturers who, at the time, were positioning their product using the storyline… “Better Sleep Through Science.”  From the internal, mattress company perspective, science might help understand how mattress design contributes to a good nights sleep.  Unfortunately, people don’t positively associate their experience in the bedroom with science.  The company has since dropped the science angle in promoting their product.

How do you get to the bottom of what’s meaningful to people?  You can’t just ask them.  If you ask customers, much of you get are alibis for what they do.  For example, if you ask people why they go to the mall, you tend to alibis about things the customer needs to shop for rather than the deeper meanings of going to the mall to “reconnect with life,” get out of the house, see other people, explore what’s new, etc…   This is one of the reasons we’ve learned that the online shopping experience cannot replace the experience of going to a store.

Getting to the bottom of what’s meaningful requires a more holistic perspective on how people experience.  You need to watch what they do and how they react in the context of their daily lives.  You need to dig into the subconscious associations that shape the ways they perceive and interpret the world.  (see observation and elicitation).   Rapaille make the point:

“The first principle… is that the only effective way to understand what people truly mean is to ignore what they say… When asked direct questions about their interests and preferences, people tend to give answers they believe the questioner wants to hear.  (This)… is because people respond to questions with their cortexes, the parts of their brain that control intelligence rather than emotion or instinct….  They believe they are telling the truth… In most cases, however, they aren’t saying what they mean.”

Rapaille goes on to describe that, “Most of us imprint the meanings of the things most central to our lives by the age of seven.”  These early associations, formed during the most emotionally impressionable stages of our lives, create our strongest beliefs about who we are, what to expect from others, and the way the world works.  Certainly significant imprinting takes place as a result of our experiences later in life.  However, the way we process these later experiences is often highly influenced by the foundation of our earliest and most deeply entrenched beliefs.

Across many of clients we’ve worked with, we’ve observed that customers’ experiences are significantly shaped by their earliest associations:

• The experiences people have moving with their family today are significantly influenced by conscious and subconscious memories, emotions, associations, and meaning attached to experiences they had moving as a child.
• The experiences people have at dinner with their families are shaped by deeply imprinted of memories and emotional associations of family dinners they had growing up.
• The current reactions many people have when a product breaks are influenced by the childhood experiences we’ve had with broken toys and how our parents responded.
• Today’s American teen attitudes have been significantly shaped by the events of 9/11 as well as the trailing emotional turmoil and extended war that has impacted the entire country.

This list goes on.  Although these associations are uniquely personal, many of these experiences are fairly consistent across a culture.  In any given culture, individuals that have grown up at a similar point in history have relatively consistent imprinting of experiences with respect to world events, safety, family, working, food, home, shopping, sex, etc…   Understanding this imprinting is critical in designing customer experiences that attach with people’s search for meaning in their lives.

What are people looking for?  Here is a list of the most meaningful basic desires many people are attached to… find a way to help customers connect with one or more of these things and you’re really on to something:

• Achievement. The need to accomplish difficult feats; to perform arduous tasks; to exercise skills, abilities or talents.
• Affiliation. The need for association with others; to belong or win acceptance; to enjoy satisfying and mutually helpful relationships; to be accepted by those we admire; to act in a socially acceptable or justifiable manner.
• Consistency. The need for order, cleanliness, or logical connection; to control our environment; to avoid ambiguity and uncertainty; to predict accurately; to have things happen as one expects.
• Diversion. The need to play; to have fun; to be entertained; to break from the routine; to relax and abandon one’s cares; to be amused.
• Dominance. The need to have power or to exert one’s will on others; to hold a position of authority or influence; to direct or supervise the efforts of others; to show strength or prowess by winning over adversaries.
• Exhibition. The need to display one’s self, to be visible to others; to reveal personal identity; to show off or win the attention and interest of others; to gain notice.
• Independence. The need to be autonomous, to be free from the direction or influence of others; to have options and alternatives; to make one’s own choices and decisions; to be different
• Novelty. The need for change and diversity; to experience the unusual; to do new tasks or activities; to learn new skills; to be in a new setting or environment; to find unique objects of interest; to be amazed or mystified.
• Nurturance. The need to give care, comfort, and support to others; to see living things grow and thrive; to help the progress and development of others; to protect one’s charges from harm or injury.
• Recognition. The need for positive notice by others; to show one’s superiority or excellence; to be acclaimed or held up as exemplary; to receive social rewards or notoriety.
• Security. The need to be free from threat of harm; to be safe; to protect self, family, and property; to have a supply of what one needs; to save and acquire assets; to be invulnerable from attack; to avoid accidents or mishaps.
• Sexuality. The need to establish one’s sexual identity and attractiveness; to enjoy sexual contact; to receive and to provide sexual satisfaction; to maintain sexual alternatives without exercising them; to avoid condemnation for sexual appetites.
• Stimulation. The need to establish one’s sexual identity and attractiveness; to enjoy sexual contact; to receive and to provide sexual satisfaction; to maintain sexual alternatives without exercising them; to avoid condemnation for sexual appetites.
• Understanding. The need to learn and comprehend; to recognize connections; to assign causality; to make ideas fit the circumstances; to teach, instruct, or impress others with one’s expertise; to follow intellectual pursuits.

Personae Driven Experience Design

A persona is a fictitious person created for the purpose of helping designers and decision makers understand how people actually experience their interactions with a product, service, or organization.  The use of personae was popularized by Alan Cooper in the book “The Inmates are Running the Asylum.”  In this critique of the software development industry, Cooper recommends the use of personae to help developers get a practical, visceral feel for the ways users think and behave. Since that time, the use of personae has become very popular in a wide variety of product and user interface design applications.  Personae are given a name (Bob, Sue, etc…) and a set of richly described characteristics, situations, goals, pain points, and behaviors that are relevant to the design.  For any given application, there are usually a relatively small set of personae that characterize the range of users or customers.  Cooper has suggested that one persona is usually sufficient.

The  benefits of personae in understanding and designing distinctive customer experiences are substantial.  Typically executive leaders and functional managers do not have a clear and concrete understanding of how their customers experience the world and, more specifically, their interactions with the client’s organization.   Personae are powerful because they put a specific human face on often abstract customer information.  In this way, they are fundamentally different than customer or market segments, which are generally shared characteristics of categories of customers.  This “human face” makes it easier to make decisions and design tradeoffs with an understanding of how what you do either fits or doesn’t fit for the customer.

One of the best examples of using personae for customer experience design is Best Buy, who made substantial changes to their store design, merchandise assortment, training, etc… based on the definition four customer personae.  In particular, they started to shift elements of  the experience design to work for the persona they called Jill.   Jill is a soccer mom that does most of the shopping for her family but is intimidated by electronics stores.

Unfortunately, the way most organizations develop personae appears to be very loose; more of an art than a science.  The generally accepted best practice is that personae should be based on solid ethnographic research with customers.  However, sometimes persona are just made up based on what the team thinks they know about customers (because they know so much about them already!).  Assuming research is done, the process of turning research findings into personae is also very loose.  Typically, common themes across customers are identified and clustered in a creative process that generates a plausible enough set of personae.   In addition, details are usually added to these personae in a way that “rounds them out” and makes them more believable.

Over the past couple of years, we’ve been trying to address the lack of rigor in personae development.  Our starting place for this was our emphasis on designing from “mental model of the customer” rather than the “mental model of the company.”  Not only does this perspective address the same basic objective as customer personae but the idea of defining personae precisely based on elements of a mental model is appealing.  It also provides a means of deciding how many personae are needed since the only reason to have different personae would be because there were relevant and substantial differences in the mental models of two different types of customer.

Our working definition of Cognitive Customer Personae include models that capture:  what the customer is trying to accomplish; the end-to-end behaviors the customer typically performs to accomplish those things; a structure of beliefs and temperamental characteristics that drive their rational and emotional reactions to their experience.  Each one of these personae is described by four models that are described in more detail with a few examples in the post titled:   Cognitive Ergonomics:  Designing Customer Experiences that Fit with Customers’ Mental Model.

Miswanting and the Pursuit of Unhappiness

So, if you get that Porsche, will you be happy?  How about the larger house on the other side of town?  What about the Plasma TV, new outfit, pair of shoes, etc…?  If you take a minute to reflect on all the things or situations you’ve really wanted… and eventually got.  How many of these contributed to your overall level of happiness as much as you thought they would when you were wanting them?  If you’re like most people, the things you want usually don’t make you as happy as you predict they will and that happiness tends to wear off faster than you expected.

Wanting is an emotional state that drives us to action; based on the prediction of how we’ll feel when we achieve or acquire what we desire.  Psychologists Daniel Gilbert and Timothy Wilson have observed that, while we tend to think of unhappiness as something that happens when we don’t get what we want, a lot of unhappiness has more to do with not liking what we’ve wanted as much as we expected we would before we got it.

Gilbert and Wilson describe miswanting as a lack of coordination between what we want and what actually makes us happy.    It can include wanting things that don’t actually make us as happy as we predict they will.  It also includes wanting to avoid situations that, in the end, are not as bad as we expect they’ll be.

This effect is pervasive across human experience.  It has a dramatic influence not only on our experiences as customers but on experiences that result from choices we make about the work we do, where we live, who we marry, and virtually every aspect of how we live our lives. 

Research on affective forecasting demonstrates that people routinely overestimate the how much pleasure or displeasure will be associated with future events.  Therefore, people often work hard to create or avoid situations that do not maximize their happiness.  It’s difficult enough to understand what makes us happy or unhappy in the moment.  In most situations, it’s next to impossible to predict what will make us happy or unhappy in the future.

This challenge is amplified in situations that involve tradeoffs between stressful, short-term events and chronic conditions.  For example, do you risk the turmoil of changing careers to pursue your dreams or face the certainty of sticking it out in a job you dislike?  Or are you willing to go through a painful breakup or do you just go on living in a persistently unsatisfying relationship?  In these situations, people generally overestimate the intensity and duration of pain of the short-term events (which they tend to get over faster than expected.)  They also tend to underestimate the cumulative effect of persistent dissatisfaction.  As a result, many people avoid making changes that can lead to a more satisfying life.

Why is it so easy to get what you want and then end up not liking what you get?  This results from the combination of several prediction challenges:

1. Accurately predicting the details of the future situation.  How do you know what it will really be like to:  own the car, live in that house, get the job, or live with the spouse of your dreams?  In most cases, the situations we desire involve a lot of uncertainty.  We don’t really know what it will be like to be in that situation.  For example, many people might dream about being a movie star without understanding that movie stars have stressful careers, lives, and very little privacy.
2. Predicting your preferences in that future situation.  Assume you’ve dealt with the first challenge; you can accurately predict all the details of the future situation.  The next challenge is:  does that future situation actually fit with your preferences?  When you evaluate a new job and consider the content of work, who you’ll be working with, the amount of travel, the culture of the organization, etc… does that combination of characteristics fit your preferences?  When you envision your relationship with your potential partner, do your partners’ characteristics and the foundation of how you relate to each other fit your preferences?  In some cases, people can estimate their preferences based on past experience.  However, in most cases they don’t really know their preferences about a specific situation until they’re in that situation.  (We’ll cover this in a future discussion on the Construction of Preferences).
3. Separating feelings about the future situation from feelings about the current situation.  Assume you could address the first two challenges;  you know exactly how the future situation will unfold and you have complete knowledge of your preferences about that situation… there’s still an additional challenge.   How will that future situation make you feel?  Unfortunately, your prediction about how you’ll feel in the future has a lot to do with how you already feel in the present.  For example, it’s really difficult to make a good decision about a new job when you’re so miserable in your current job that anything looks better.  Similarly, it’s difficult to make a good decision about a new relationship when you’re still in the middle of your current dissatisfying relationship.  It’s like the old rule of thumb… don’t go grocery shopping when you’re hungry.  Or don’t go to the mall when you’re depressed (unless you want to buy a lot of stuff you don’t need).

So why is this whole topic important for an organization that creates the conditions for their customers’ satisfaction?  Why is it important that an organization pay attention to miswanting in their customers’ experience?  I see two great economic reasons why designing an experience that minimizes miswanting is important:

• The profitability of most businessses is driven by the “second sale.”  Usually the first sale just offsets the cost of attracting, acquiring, and getting to know the customer.  The second sale is where you have a chance to build positive value in the customer relationship.
• Attracting and acquiring new customers is increasingly driven by word of mouth recommendations from other customers.

So, if it’s important, how might we address miswanting in the experience design?  This is far from a “solved problem” but I’ll introduce a few of the ideas that we’ve been working with here and elaborate on them in future posts.

• Design a pre-purchase shopping experience that is as similar as possible to the customers’ post-purchase usage experience. 
• Reinforce low-pressure sales as a differentiating “signature element” of the experience design.
• Design sales processes and sales training that emphasize consultative questioning around understanding “why the customers’ buying” not just “what are they looking for.”
• Institute liberal return policies and communications that ensure that customers’ feel safe returning something that’s not what they expected.
• Create opportunities for the customer to “rent” or “lease” rather than buy products and services.

These things may seem counterintuitive compared to what most companies do to drive their own short term performance.  However, when the customer feels you are fully on their side and committed to their long term happiness… that’s the kind of experience that leads to high levels of customer loyalty and one that worth it for customers to tell other customers about.  A few of the companies that do elements of this well include:  Guitar Center, Fleet Feet Sports, REI, and Nordstrom.

Well, this post has gone on for a while.  I’m looking forward to getting comments (and criticisms) on this.  I’m expecting there will be some differences of opinion.

How Customers’ React to Violations of Justice

A couple of months ago, the Harvard Business Review carried a great article “Companies and the Customers Who Hate Them” by Gail McGovern and Youngme Moon.  In this article, the authors describe several situations where companies generate a significant portion of their profit by penalizing customers for bad behavior.  Examples cited by the authors include:

• Video rental stores that generate a significant portion of their profits from late fees
• Credit card companies that approve rather than decline over limit transactions and then charge the customer fees
• Banks that present checks in reverse order of magnitude to increase the likelihood that more checks will be drawn against insufficient funds
• Cellular providers that lock customers into lengthy contracts rather than creating loyalty through good service.

In addition to the examples cited in that article, there are no shortage of others including:

• Car dealers that raise the price of popular models above list if there is a shortage.
• Stores that raise the price of umbrellas when it’s raining or snow shovels when it’s snowing.

While leveraging antagonistic customer practices can generate higher profits in the short term, it also creates a competitive risk as customers can quickly migrate to more customer-friendly offerings from competitors as they arrive on the scene.

Potentially more important is a growing body of research that indicates customers will actively find ways to penalize companies they believe have treated them unfairly.  These penalties include defection and negative word of mouth (often using electronic means that now reach hundreds if not many thousands of other potential customers).

Customers intuitively and automatically sense when they are engaging in relationships that aren’t fair at some basic level.  The evolutionary path of the human brain has reinforced the development of instinctual, subconscious mechanisms for recognizing fairness in individual or group exchanges.  This capability dramatically improved the success of our hunter-gather ancestors who relied on cooperative group behavior for survival.  Every one of us has had emotional experiences of situations being “just not fair,” even if we have a hard time putting our finger on why we feel that way.  Usually our automatic emotional experience and resulting feeling of injustice happens before we can consciously label that feeling with some rational explanation or principal that tells us why it’s not fair.

One of the simplest ways to observe our instinctual fairness response is the Ultimatum Game.  This is a one-round bargaining game played by two people.  The first person, called the Proposer, is given a sum of money, say 100 dollars.  The Proposer then makes an offer to split some of the money with the second person, called the Responder.  The Responder can either accept the offer, in which case the two players each get their share, or reject the offer, in which case both players get nothing.  Since this is a one-round game, the only rational choice for the Responder is accept any non-zero offer.

However, the actual results of playing the game are very different.  In most cases, Responders reject non-zero offers that are perceived as “unfair” splits.  This experiment has been done across very different cultures and the results are essentially the same.  Non-zero offers are rejected at a rate that increases as the offer size decreases.  The overwhelming insight is the people feel an automatic, instinctual need to penalize unfairness even if that behavior involves a personal cost to them.

The Ultimatum Game is just the start.  There are a wide range of situations that reinforce the automatic drive that people have to penalize unfairness.  In essence, people are willing to spend their own capital (money, time, energy, etc…) to penalize others that treat them in ways that they perceive as unfair.  In his book “Passions Within Reason,” Robert H. Frank emphasizes that people “often do not behave as predicted by the self-interest model.”

The emerging field of neuroeconomics looks at the neuropsychological basis for decision making that does not follow rational economic theory.  It appears that our subconscious, automatic reactions to violations in social exchanges is handled by a particular area of the brain – the anterior insula.  Brain imaging of players in the Ultimatum Game demonstrate stronger activations in the anterior insula as the Responder is presented with increasingly unfair splits.  The anterior insula is also activated when people are shown objects and situations that they find disgusting.   This is one of the reasons why many people experience being treated unfairly as similar to feelings of disgust.

Across the research that’s been done in this area, three types of “justice” are important to consider in the customer experience:

• Distributive justice. Does the customer perceive the outcome they received to be fair given either their perceived investment or what they believe has been received by other customers?
• Procedural justice. Was the process that was used to arrive at the outcomes fair?  Did the customer see that their time was treated as highly valuable or did they believe they had to wait too long?  Were others who arrived after me served first?
• Interactional justice. Was the customer treated fairly and with respect by the individuals that they encountered?

How different customers perceive, interpret, and evaluate violations in justice are personae dependent.  The basic components involved in understanding these different customer personae is covered in the post “Cognitive Ergonomics:  Designing Experiences that Fit the Customers’ Mental Model.”  For example, a customers’ temperamental orientation towards Harm Avoidance acts as an amplifier in automatic reactions to perceived violations of justice.  In addition, more Reward Dependent customer personae tend to react more strongly to perceived violations in Interactional Justice.  In general, the way you design interactions with customers have to be sensitive to the personae of the target customers.

Today customers 1) have an increasing ability to communicate their dissatisfaction with other customers and 2) base more of their purchase decision on word of mouth. Regardless of the company’s policy or the fine print on the back of the service agreement, if any company doesn’t design what they do to be highly sensitive to creating an experience that customers’ perceive as fair is just…  ”roadkill waiting to happen.”

Designing Experiences that Fit the Customers’ Mental Model

In a previous post (What is a Customer Experience Anyway?), I discussed the fact that a customer experience exists only in the mind of the customer.  We define a customer experience to be… how the customer reacts both rationally and emotionally… across their end-to-end process… of accomplishing one or more things that are important to them.

For years, we’ve been helping organizations enable their customers to have better experiences by designing what they do from “mental model of the customer” rather than the “mental model of the company.”  In virtually every case we’ve seen, these two perspectives are fundamentally different.  In fact, we’ve told our clients, “You’ve got to be out of your mind to design a great customer experience.”  We don’t mean going insane; we do mean that you need to set aside the internal, organizational mental model in favor of adopting the customers’ way of thinking.  In most cases, people inside the organization know too much about all the intricacies of what’s involved in producing the product or service.  This makes it very difficult to get their head around the customers’ often flawed, simplistic, irrational, and biased way of looking at how that product or service fits their needs and makes them feel.

If you agree that it’s a good thing to design from the “mental model of the customer,” the next logical question is, “What the #($*&# is a mental model?”  Over the past several years, my colleagues and I have been evolving a rigorous way to efficiently describe the customers’ mental model; a way that allows you to use that model in designs that influence the way customers’ experience what you do.

In order to accomplish this, we’ve been formalizing models that define a set of Customer Cognitive Personae that describe the way different types of customers experience things.  Generally there are several Personae that must be described based on the fundamentally different customer mental models that exist within the target customer population.  Each Personae is defined by a unique instance of four models:

1. Customer Goal Model: What is the customers’ understanding of what they are trying to accomplish?  Very often the customers’ understanding of their goals are fuzzy and ill-defined.  Although these goals may include a desire for rationally considered benefits, very often the customer has strong latent goals that involve desired emotional states and a means of self-expression and social acceptability.  Customers’ do not buy products; they buy desired states!  Obviously, you can’t design effective products, services, or customer-facing processes that work for the customer without a clear understanding of the customers’ desired state.
2. Customer Lifecycle Model: What is the end-to-end set of activities a customer would naturally follow to realize their goals and achieve the desired state described above?  As mentioned in a previous post (The Customer Experience Does Not Happen at Your Touchpoints), the customer does a lot outside their touchpoints with your organization.  Understanding what they do is the key to understanding where you might help them have a better experience.  Although this may include improvements in the existing touchpoints, more often, it involves the creation of new touchpoints.  It’s important to acknowledge that, in the real world, every customer follows a somewhat different set of activities.  However, we’ve found there are typically a small number of common customer lifecycles that capture the essence of the natural behaviors for that different types of customer.
3. Cognitive Schema: As mentioned earlier, a customer’s experience is that customer’s rational and emotional reactions.  In order to understand these reactions, it’s necessary to understand the way customers’ brains process customers’ experiences.  Schemaare a way of doing that.  A schema is a knowledge structure used to describe an individual’s memories and beliefs about a category of experiences.  For example, customers’ schema for the experience they have in a casual dining restaurant allows them to have that experience without having to “figure it out” each time they go out to dinner.   Understanding the customers’ schema for that category of experience is critical for understanding how to design things that really work for the customer.   The knowledge captured in an individual’s schema allows that individual to:
   • Easily identify how current sensory information is similar to or different than what they’ve sensed in past experiences.  Identification knowledge supports a pattern matching process that helps customers recognize what is familiar or unusual about the situation.
   • Quickly elaborate or fill in additional knowledge of the essential characteristics of similar experiences in order to predict what will happen and interpret what does happen.  Elaboration knowledge is related to how an individual recalls past experiences and uses that information to make predictions about what will happen this time.  Elaboration includes the customers conscious and subconscious expectations.
   • Draw inferences, make estimates, create goals and plan one or more alternative actions.  The customers’ Planning Knowledge includes not only what the customer consciously believes is an appropriate set of actions but also includes the triggers for automatic behavioral scripts that make it efficient for customers to act in an experience while consciously attending to other matters.
   • Act utilizing learned skills, rules, procedures, or automatic behaviors that appear relevant to the current situation or problem.  Action Knowledge includes the routines that customers are comfortable following.  The most ergonomic experiences don’t require customers to act in ways that are uncomfortable for them.
4. Temperamental Profile: On top of the cognitive structure described above, the customers’ subconscious emotional reactions take place in a biochemical environment that defines what experiences different types of customers will find compelling, engaging, and comfortable.   This profile builds on work done by Dr. C. Robert Cloninger, a psychiatrist at Washington University School of Medicine.   Different customer personae will react to experiences differently based on variations in neuromodulator processes that influence their emotional state.  The most effective experiences either match the temperament of the target customer or avoid stressing the customer by providing a “temperament neutral experience.”  A simplified explanation of each of these Temperamental Profiles is:
   • Novelty Seeking is the level to which the customer is both comfortable with, drawn to, and exhilarated by new experiences.  Novelty seeking is regulated by dopamine.  Novelty seeking customers 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.
   • Harm Avoidance is the level to which customers desire to escape from unfamiliar, uncertain, or potentially unpleasant experiences.  Harm Avoidance is regulated by serotonin.  Harm Avoidant customers 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 stress.
   • Reward Dependence is the level to which customers seek approval from others.  Reward Dependence is related to norepinephrine.   Reward Dependent customer are warm, dedicated, and dependent people that seek and are comfortable with experiences that involve social contact and communication.
   • Persistence is the level to which customers have behavioral inhibition (put it off) versus behavioral activation (just do it!).  Persistence appears to be connected with prolactin.  High persistance customers are eager to initiative experiences, tend to see roadblocks as personal challenges, and intensify their efforts in response to anticpated rewards.  Low persistence customers require deliberate removal of barriers to action and more subtle encouragement to engage in the experience.

The ability to rigorously describe the “mental model of the customer” has had a profound impact on designing products, services, interactions, etc… that fit with what customers are trying to accomplish; how they go about accomplishing those things; how they percieve, interpret, and evaluate what you do for them; what they feel comfortable with, stimulated by, etc…

For example, we are currently working with a leading healthcare organization to 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 will be low persistence avoiders; some will be more high harm avoidant active consumers, etc…   The experience that works for each of the personae involve different ways of communicating, prescribing courses of treatment, reinforcing behaviors like wellness programs, etc…

Another client that is aleading quick serve restaurant chain express a desire to “Disneyizing” 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 reward dependent.  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.

Well this post has gone on for a while and, as always, we’ve just scratched the surface.  I’m happy to provide more perspective to readers with an interest in more detail.  In addition, there will an opportunity to expand and illustrate several of these points in future posts.