Five tips to help you boost the quality of customer experience

Behavioral economics focuses on the way people behave and its effect on money. In a customer experience context, behavioral economics helps us understand the emotional, subconscious and psychological influences that make customers do the things they do. We discussed this in our recent webinar with Freshworks.

We discussed the five key principles for understanding customer behavior and enhancing your customer experience.

Embrace customer irrationality

Many organizations think customers make logical decisions. But this isn’t true! Even in a business to business context, the decision makers are human beings, and humans are fundamentally irrational.

For example, our customer experience company, Beyond Philosophy, was working with a construction equipment manufacturer in India. We watched people walk up to one of their machines, look at it, and then walk away. We asked these people why they were unhappy with the machine, and were told the machine did not have enough lucky numbers in its serial number. This is not logical, it’s irrational but important to them. One of the things you must do is recognize and embrace the irrational nature of your customers. 

Customers’ minds can be in conflict with each other

We’ve all heard people say, “Well, I’m of two minds about that.” We think we should buy something and then we start debating it in our heads. That is our rational decision making system at work. But there’s also an intuitive system that operates automatically and effortlessly.

For example, if I’m taking a trip, I always fly Delta airlines. I do this intuitively, and I do not stop to consider whether another airline might be cheaper or more convenient. This intuitive system is fast, while the rational system is much slower and takes much more effort. Customers want things to be easy and effortless, and they prefer to make decisions that they don’t have to think too hard about. Sometimes, though, the rational system overrides the intuitive one.

Understand and predict customers’ habits

Habits are automatic behaviors triggered by something in our lives. An alarm clock ringing triggers us to get up and start our morning routine. 

Your customers have habits, and if you understand those habits you can predict the ways you can trigger them. For example, I like Starbucks coffee. If I am passing a Starbucks and I smell coffee, this prompts me to go in and buy a cup.

Seemingly irrelevant parts of a customer experience can be important

In a political campaign, the candidates spend months debating policies and showcasing their track record. But in the end, many people simply vote for the candidate they like the best—even though likeability seems far less relevant than other factors. 

Here’s another way this can play out. I always buy Apple products when I can. So when I needed an uninterruptible power supply recently, I intuitively looked for one made by Apple. Because that didn’t exist, I started researching. I quickly became overwhelmed by technical specifications I did not understand. So I based my decision on one basic criteria that made sense to me, which was how long did the power supply last.

Customer loyalty is a function of memory

Loyalty is an emotional attachment to your brand. People do not choose between experiences, they choose between their memories of those experiences. 

For example, I like to go fishing when I am in Florida. I could buy my fishing tackle from a nearby big chain store, but I go out of my way to shop at a place called Discount Tackle. This is because my past experiences there have been so good. I go in, I talk about fishing with the people who work there, they are friendly, knowledgeable and welcoming. These are emotional memories that I have. 

Nobel Prize winning behavioral economist Daniel Kahneman says we have the most vivid memories of the peak and end of any experience. In a customer experience, then, it is important to design peak and end experiences that are positive and will create value for your organization.