Getting Beneath the Voice of the Customer

Doesn’t it make sense that:

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

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

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

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

Elevators

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

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

Jam

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

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

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

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

The Economist Subscription Options

The Economist Subscription Options

The ad offered three subscription options:

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

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

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

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

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

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

The Vast Majority of Human Experience is Subconscious

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

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

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

VOC Iceburg

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

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

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

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

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

Experience Miner Toolset

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

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

Experience Miner: Creating Profitable, Evocative Experiences

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

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

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

… and how those experiences influence behavior!

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

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


Evocative Experiences… The Experiences that Matter

An experience is evocative when it positively and profitably influences:

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

Four Characteristics of an Evocative Experience

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

Creating Evocative Experiences

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

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

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

Experience MinerTM and the Design of Evocative Experiences

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

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

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

Experience Miner Toolset

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

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

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

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

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

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

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

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

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

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

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

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.

jolly-roger

  • 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.

wicked-wench

  • 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.

sacking-the-town

  • 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.

wench-auction

  • 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.

Understanding Basic Drives and Experiential Temperament

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Putting the “Customer” in Customer Experience Efforts

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

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

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

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

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

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

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

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

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

Choice Architecture: Designing Experiences that Influence Customer Behavior

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

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

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

For Example….

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

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

The Economist Subscription Options

The Economist Subscription Options

The ad offered three subscription options:

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

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

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

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

Choice Architecture:  Designing Choices that Influence Customer Behavior

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Great Customer Experiences are Music to My Ears…

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

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

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