We’re Moving to the New Customer Innovations Website

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

You can find us at:  www.customerinnovations.com

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

Onwards and upwards,

Frank Capek,  CEO, Customer Innovations, Inc.

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 Economist Subscription Options

The ad offered three subscription options:

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

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

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

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

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

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

The Vast Majority of Human Experience is Subconscious

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

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

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

VOC Iceburg

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

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

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

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

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

Experience Miner Toolset

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

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

Experience Miner: Creating Profitable, Evocative Experiences

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

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

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

… and how those experiences influence behavior!

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

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

Evocative Experiences… The Experiences that Matter

An experience is evocative when it positively and profitably influences:

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

Four Characteristics of an Evocative Experience

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

Creating Evocative Experiences

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

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

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

Experience MinerTM and the Design of Evocative Experiences

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

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

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

Experience Miner Toolset

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

Goal Space MappingTM Describes the desired states and situation-specific goals that motivate and direct the experience for each key persona

Experiential TemperamentTM – Profiles how temperamental differences influence the way people are drawn to and engage with novelty seeking, harm avoidance, social orientation, and persistence

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

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

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

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

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

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

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

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

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’sSuccess, 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.

animated-pirate unforatunate-pirate

  • 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).

town-on-fire drunk-pirate begging-the-dogs jacks-final-warning

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

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

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

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

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

Making Experiences Memorable

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

There is no experience without memory

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

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

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


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

Memory is an internal rumor.” George Santayana

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


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

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

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

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

Gorillas, Doors, and Selective Attention

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

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

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

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


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

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

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

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

Encoding Favors High Contrast, Discrete Features

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

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

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

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

Encoding False Memories

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

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

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

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

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

Why All These Idiosyncrasies of Memory are Actually Helpful

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

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


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

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

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

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

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

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

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

Summary of Implications for Experience Design

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


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


Understanding Basic Drives and Experiential Temperament

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Choice Architecture: Designing Experiences that Influence Customer Behavior

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

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

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

For Example….

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

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

The Economist Subscription Options

The 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.

Whatever You Do… Don’t Confuse Experience with Reality

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

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

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

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

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

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

When you get right down to it, there are always two strategies:  1) improve the reality of the events and 2) influence the way customers experience those realities.   My first understanding of this came about 25 years ago, while working with Dick Larson at MIT.  Dr. Larson, an expert in the psychology of waiting, told me the story of commercial real estate managers that were struggling with improving the service levels of elevators in high-rise buildings during peak hours.  People were frustrated by waiting too long for the elevators.  As in most situations, the complexity and cost of actually improving service levels is quite high.  It involves installing faster elevators, improving the optimization of elevator queuing, etc…   The simpler solution and more effective solution was to install mirrors in the elevator lobbies.  This allowed people to entertain themselves by fixing their hair, straightening their tie, and checking each other out in a much more socially acceptable way.  The perceived experience improvement was greater with the relatively low cost mirrors than with the relatively high cost technology required to improve actual service levels.  (Waiting time is an important aspect of many experiences, for more information about the waiting experience see: Helping Customers Lose Wait)

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

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

Three Levels of Experiential Processing

Three Levels of Experiential Processing

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

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

Framing and Priming the Customer Experience

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Designing “Socially Influential” Experiences

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Designing for Customers’ Reactive, Deliberative, and Reflective Experiences

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

How Do Customers’ Process Experiences and Make Decisions?

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

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

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

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

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

A-B-C Brain

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

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

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

Implications for Experience Design

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Understanding How Customers Make Decisions

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

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

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

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

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

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

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

 The Search for Dominance Structure

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

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

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

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

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

Novelty Seeking and the Design of Differentiated Experiences

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Adaptive Customer Profiling: Integrating Quantitative and Qualitative Customer Analytics

Most business leaders now recognize that organic growth is a direct result of their ability to deliver a differentiated, compelling, and increasingly personalized customer experience.  Effectively delivering such an experience is dependent on the organization’s ability to understand what attracts customers’ attention and what drives customers’ behavior. 

As you know, recent advances have lowered the investment threshold for consolidating and analyzing the massive amount of data that most organizations’ have about their customers.  Predictive modeling can then be used to make increasingly effective and individualized decisions about the treatment of customers.  For example, these approaches can be used to leverage customers’ past behavior to predict: the value of each customer, how likely that customer is to respond to specific offers, that customer’s price sensitivity, or how likely that customer is to attrite, as well as, what retention actions are likely to be effective.  (See:  Using Predictive Modeling to Optimize Customer Relationships)

Despite the enormous potential, purely quantitative approaches are insufficient.  In particular, quantitative customer analysis has natural limitations, including:

  • Trying to predict the future based on information about the past
  • Data gathered at a limited number of customer touch-points rather than an end-to-end understanding of the customers’ experience, including the more important non-touch-points
  • Surface level behaviors rather than a deeper perspective on customers’ motives, goals, plans, as well as, how they think and feel about their experiences

Trying to understand the customer based purely on quantitative analysis can feel a little like trying to determine how the furniture upstairs is arranged…  by tapping on the ceiling!  Obviously, you’d get a much clearer picture if you just went and took a look… rather than trying to infer what’s going on through indirect and limited data sources.

In addition, inferences drawn from purely quantitative approaches are prone to interpretation errors.  Without an adequate qualitative context for understanding the data, we’ve seen too many organizations draw conclusions akin to “Our customers in South Florida are born Hispanic and die Jewish.

The most powerful results come from the synergy between qualitative insight and quantitative analytics.

  • Qualitative Insight: Leveraging knowledge from in-depth research, observation, elicitation, as well as, listening to the conversations that take place between customers in emerging social networks.  This qualitative insight is used to frame and guide quantitative analysis.
  • Quantitative Analytics: Leveraging patterns in demographic and transactional customer data in order to predict, classify, and optimize elements of the customer experience. This quantitative analysis is to validate, refine, and populate the context created via qualitative insight.

In practice, organizations and the functional departments within them tend to have a strong bias for one of these modes.  More “left brained” organizations or functions emphasize the quantitative approach and feel uncomfortable with going out to actually observe what’s happening with customers.  More “right brained” organizations or functions emphasize the qualitative approach, are out living with their customers, but also tend to make decisions that aren’t supported by sufficient analytical rigor.  As a result, it’s difficult for organizations to put together the pieces in a way that generates a holistic perspective on the customer.

In our customer experience work with clients we are beginning to create Adaptive Customer Profiles that can be used to integrate quantitative and qualitative knowledge about the customer. 

An Adaptive Customer Profile is…  

… a formal knowledge representation structure used to capture the customer intelligence necessary to effectively customize communications, effectively assign service resources, optimize the presentation of high probability offers, and adapt pricing to customers’ price sensitivity.

Adaptive Customer Profiles for a given business situation generally include:

  • Descriptive Information:  Identifiers, demographic characteristics, etc…
  • Potential and Current Value:  The expected and current value of this customer.
  • Customer Network Information:  The customers’ role and placement in an influence network of customer relationships.
  • Personae Classification:  The degree to which the customer demonstrates an affinity for one or more personae classes that exist in the marketplace.  These personae classes are an extension of psychographic segments that define the predominant “mental models” in the marketplace.  These personae are characterized by shared customer goals and preferences, goal-directed behavioral patterns, cognitive schema, and temperamental characteristics.  These temperamental characteristics include the customers’ orientation towards novelty seeking, harm avoidance, reward dependence, and persistence.  (See Cognitive Ergonomics:  Designing Experiences that Fit the Customers’ Mental Model)
  • Relationship State:  The level of attachment this customer feels towards our business as evidenced by their transactional and interactional behavior.
  • Context Sensitive Behavioral History:  key behavioral indicators derived from inquiry and order history, service records, etc…

Adaptive Customer Profiles are derived through an integrated set of qualitative and quantitative activities.  Qualitative work includes customer observation and elicitation (See:  Observation and Elicitation:  We Like to Watch!) in order to uncover insight that is used to develop an effective personae classification scheme.  Quantitative work involves predictive modeling focused on the leading indicators of customer behavior and measuring the affinity that customers demonstrate for one or more personae.

For example, we are working with a leading healthcare organization to design an integrated patient-physician experience that can adapt to the fact that different patients have fundamentally different mental models associated with 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 design integrates an Adaptive Customer Profiling module that identifies the extent to which each customer fits one or more of the common personae that exist in the marketplace.  Based on that Adaptive Customer Profile, we can then customize patient communications, instructions on courses of treatment, the presentation of wellness programs, etc…

We are also developing a similar personae classification scheme focused on Mass Affluent consumers of financial services.  Almost every financial services company is currently targeting this valuable “segment.”  The issue is that, by its’ very nature, the “Mass Affluent” segment is an exceptionally diverse group of individuals that only share the fact that they have assets and/or income above a certain level.  Companies that attack this market with a mass market mentality will almost certainly lose.  However, financial institutions that can target meaningful sub-segments of this market with a highly differentiated offer can create an experience that is attractive and differentiated with a substantial group of these customers.  You might imagine a hip and differentiated “I Hate to Plan” themed experience for the sub-segment of Mass Affluent customers that are Avoiders… or a more conservative, goal-driven experience customized to the customers that are Achievers.   A financial institution that embeds an Adaptive Customer Profiling process in their interactions with customers could more effectively customize the experience to the customers’ goals, behavior, mental model, and temperament.

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.”