3 Common Ways Customers Make Decisions


Customer Experience (CX) is a journey, not a destination. The status quo for what makes a great CX is always changing, and soon the bar is raised, forcing everyone to take it to the next level. Depending where you are on your CX journey, you might be left behind if you aren’t constantly examining your results and don’t keep pushing for the next level.

How do you take your Customer Experience to the next level? You must focus on Customer behaviors and understanding why Customers make the decisions they do. The following three areas play a large role in Customer decision-making and must be understood to understand your Customer behaviour and move to the next level of Customer Experience.

  1. Reinforcement and habit
  2. Framing and choice architecture
  3. The types of decision-making customers use

The principles are based on peer-reviewed research in the fields of psychology, marketing, and behavioral economics. What is key is understanding the underlying theory of each of these areas and learning how to apply it in your Customer Experience every day.

Reinforcement and Habit

People tend to be consistent. Many of us hang on to our beliefs diligently. The same goes for our behavior; once we start doing something a certain way, we keep doing it that way.

There are two reasons we do this: reinforcement and habit. Reinforcement means that our beliefs become consistent beliefs, despite evidence to the contrary or in some cases, any evidence at all. Habit refers to how behavior once becomes the behavior every time.

Some beliefs are self-reinforcing and later become habits. Customer behavior can become habitual, meaning their choice to buy your product or service is a response to a stimulus where the action of buying it will reap a perceived reward. However, Customers rarely notice a habit. Some organizations can mistake the habitual behavior of a Customer for Customer loyalty. However, it isn’t the same thing. Habits are easier to break than a loyal bond with a brand.

It’s amazing how people in business fail to realize that Customer loyalty is emotional. Just like the people in your life you are loyal to, the products you are loyal to have a special place in your heart. To foster this type of loyalty, you must appeal to these emotions and help your brand embed in the Customer’s brain associated with feelings of content or being cared for by your brand. You can then encourage favorable habit formation (by jarring them out of unfavorable behavior, more on that next ) in your Customers, in essence giving you the best of both worlds.

 

Framing and Choice Architecture

Habits are powerful drivers of behavior, just ask anyone who bites their nails or who is always late to an appointment. Habits are automatic and unconscious. Even when they are bad habits, we rarely notice we are doing them until after we are done. For example, we know that we should really not buy as much junk food as we do, but this habit is hard to break. .

However, even bad habits can be changed. According to a great book call the Power of Habit, you need to understand the Cue, the trigger that starts this behavior, and then the routine and reward.

The same can be true for Customers. You just have to change how you frame the decision. This is called choice architecture, which psychologists have studied for decades. How you present information affects what choices a person makes, although some presentation styles are more effective with different types of people.

For example, if you want to move people to electronic statements, start by rewarding those who do it. Then, when it’s clear the rest of the stragglers aren’t going to move away from paper (because they have ALWAYS had a paper statement), start penalizing them by charging for paper. The problem with jarring people into a new behaviors is they don’t like it, and you will suffer backlash. What you need to do is show people why another way is better and how they can gain from it. You must communicate with your Customers using different decision-framing techniques to help promote the habits and behavior you want.

How Customers Make Decisions

The study of how we make decisions isn’t new. Psychologists have been doing it for years. The great news about this is that they have discovered lots of fascinating stuff that goes into how people choose things. Unfortunately, these findings have yet to infiltrate the ranks of the business community. Why? Business doesn’t tap into it because the studies are too scientific and not relatable enough. Plus, science works slowly, and the specific conclusions are rarely aggregated at a fast pace to create more general rules.

If you want to take your CX to the next level, you must understand how Consumers form and update beliefs about products, services, and brands. Furthermore, you must know how to anticipate and diagnose the decision-making styles of your Customers. Once you see them in action, you can design an experience that offers in a way appealing to each type of Customer decision-making.

By now, many organizations have been addressing Customer Experience for some time. Some are still discovering their stride; others have mastered their redesign and are reaping the rewards of having a better experience. But if you grow complacent with your status quo, you could be left behind. Taking your experience to the next level is important, and in today’s competitive environment, there is always a next level. Be sure you understand these three areas well and you will be well equipped for the next part of your Customer Experience journey.

How are you going to take it to the next level for your Customer Experience?

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This blog post has been re-published by kind permission of Colin Shaw – View the original post

Published On: 9th Sep 2015 - Last modified: 26th Apr 2017
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