Humans can sometimes seem irrational, can’t they? A person who drives a $75,000 car but won’t pay $2 to park it for an hour. Parents who feel less guilty when they have to pay a “fine” for picking their kids up late from school or daycare. People who prefer to wait in long lines yet they become exasperated when waiting in a short line. This behavior starts to make a lot more sense when you look at it from a human psychology perspective. You quickly come to realize that we all act unpredictably at times given our unique experiences, perspectives, emotions, and inclinations.
With this lens, seemingly irrational behavior can actually become quite predictable - which is great news for those of us hoping to make sense of the purchasing decisions of our current and future customers. Psych-savvy marketers know to leverage human psychology when developing their marketing strategies. Every marketer should strive to understand the reasons consumers act the way they do and which factors shape the way they think. To get started with this human-centric mode of marketing and discover the rationale behind the irrational, you first have to understand some of the fundamental principles of human psychology that impact consumer behavior. Here are the big three:
1. Customers don’t like to make decisions.
In general, customers tend to seek the path of least resistance. This looks like asking a friend which dishwasher they purchased or where they sent their kids to school so they don’t have to make these hard decisions on their own.
Understanding this human behavior can fundamentally impact your product and marketing decisions and encourage you to prioritize three major actions: First, focus on developing a product experience - in particular, an on-boarding process and check-out flow - that streamlines decision-making. Second, develop tools for customers to share the product with friends to expedite the referral process. Third, develop content (email, social, ads) that’s relevant to their needs and wants so that decision-making is as simple as possible.
2. Cognitive dissonance is an enemy.
Cognitive dissonance is the mental discomfort or stress experienced when a person holds two or more contradictory beliefs, ideas, or values. This discomfort is triggered when a person's belief clashes with new evidence received. Rather naturally, people try to find a way to resolve the contradiction to reduce the discomfort when presented with contradictory information.
Cognitive dissonance can occur when consumers’ expectations are not met. When a consumer expects a certain experience and gets something different, this can result in stress and discontent. One critical aspect of a marketer’s role is to ensure that customers’ expectations are met. This requires that messaging in the sales process be consistent with the product or service. Avoid over-promising and exaggerating in your marketing.
3. Emotions matter. A lot.
There are six primary human emotions - anger, disgust, fear, happiness, sadness, and surprise. Humans tend to make a lot of decisions based on how they feel in the moment.
Interestingly, a study conducted by Georgia Tech and Yahoo Labs looked at more than 1 million online reviews on sites like TripAdvisor and found that restaurants received significantly better ratings on days with nice weather and worse reviews on any day with rain. “The best reviews are written on sunny days between 70 and 100 degrees,” researcher Saeideh Bakhshi concluded. Emotions and mood have a substantial impact on how customers view the world in general as well as their experiences and their interaction with product and services.
Building feedback loops into your marketing process
All this mind-reading may sound daunting, particularly to young, scrappy companies who do not have robust marketing budgets - let alone market research budgets. But understanding and influencing consumer behavior is at the core of a marketer’s job. There are many cost-effective ways to ensure that your marketing organization is getting the customer feedback necessary to leverage human psychology into its brand strategy. Here are the easiest to implement:
Conduct frequent qualitative customer research
It’s incredibly important to get out of the office and talk to your customers early and often. Ideally, these interviews are conducted face-to-face, either in person or via video conferencing. You can glean more about customers by interacting with them personally; their body language says a lot. In the earliest stages of a company, qualitative research will likely provide more insight and value than quantitative research (i.e., surveys) simply because you don’t have the sample size to make quantitative research statistically significant.
Customer research doesn’t have to be overwhelming and unwieldy. In fact, I’ve found that after about 10 customer interviews, themes start to emerge. By talking to less than a dozen customers, you can start to get a real sense of their needs, frustrations, and preferences.
A word of caution: As a general rule, people are not very good at predicting what they want and/ or need. So, in order to understand a person’s pain points and needs, it’s important to pose questions in indirect ways. Try to frame questions to counteract a person’s inherent bias. One way to do so is to use neutral language. Neutral questions or statements do not carry a hidden agenda. They include open-ended phrases like "tell me about", "describe a time when you" and "explain when you…," and invite people to think deeply about their answers.
Read customer service “tickets” and emails
There’s an immense amount of customer feedback coming into your organization on a daily basis already - from customer emails and service tickets to comments on Twitter and Instagram. You can surface a lot of consumer insights by simply dedicating 15-20 minutes each day to reading this feedback. It’s not always fun or uplifting but the insights are incredibly helpful as they provide visibility into customers’ preferences and successes as well as their pain points and frustrations. Customer feedback is, in the truest sense, the voice of the customer.
Institute and frequently review NPS surveys
Net Promoter Score (NPS) is a short survey that gauges customer satisfaction with your product or service. The standard NPS question is “How likely are you to refer a friend to <Company Name>?” and is sent immediately after interacting with the product or service. I’m a big fan of Delighted as a quick and easy tool for implementing NPS surveys.
One thing I always suggest is adding a comment field to the survey. While the raw NPS score is helpful, the verbatims and commentary from the open text field are a great way to learn why customers love or hate your brand or product - not just that they do. It helps put context around a score of 1 (bad) or 10 (great). I recommend looking at the raw NPS score every week to monitor any dramatic changes - up or down - and reserving 30 minutes or so each week to read through the verbatims and open text fields. You may start to see themes around product or brand issues, bugs, or more, which can inform your future product and marketing strategy.
Human psychology influences how customers make decisions about your business, how they interact with your brand, how they talk about you on social media, and how they decide to stay or go. By understanding this psychology and carving out room to listen to your customers, you can better predict and influence your customers’ behavior. This human-centric approach to marketing demystifies the irrational and supercharges your marketing decisions.
As always, I'm available to chat about human-centered branding or anything marketing related. I can be reached at jamie@fuelcapital.com.