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I have always found the science behind human behaviour fascinating! And, because of that, the talk “Using Behavioural Science To Improve Customer Success” was probably one of the sessions I was looking forward the most. The session was led by Andrea Belk Olson, Behavioural Scientist at Pragmadik, a market research organisation that uses data to improve customer engagement, differentiation, and build communities.
Andrea’s role involves helping companies better understand their customers through behavioural economics, transforming their processes into customer-centric operations that are based on purely understanding their customers’ interactions. A common mistake is to believe customers think the same way that we do and that, as a result, they will make decisions and behave in a rather similar manner. But that is simply not the case!
Emotions Dominate Logic
Needless to say, extensive research has tried to define exactly the process people undergo when trying to make a decision and, unsurprisingly, the answers has never been quite clear. According to Andrea, if you think you know why your customers are making a particular decision, chances are, you are wrong! Making a decision is a process heavily impacted by context, perception, and biases that we cannot be, and should not be, aware of.
Borrowing a quote from Gerald Zeldman, only about 10%-20% of decisions are made based on rationality, practicality, and objectivity. In fact, 95% of our purchase decisions are made subconsciously and, most often than not, powered through emotions. It is because of this tendency towards emotional decision-making that modern marketing has moved from speaking about product features or the performance of a service to more human discourses.
Using insights from psychology and economics, behavioural science aims to understand what influences people’s mindsets throughout their decision-making process. As Andrea underlines, no decisions are made in isolation! Human decisions are incredibly biased and very rarely will our rational mind actually take part in these processes. For Andrea, there are three non-rational elements that we should consider when exploring the decision-making process of our customers.
The decisions that we make are significantly influenced by the situation in which we make them. That situation is, indeed, the context. The situation in which they are considering a purchase will shape from the budget they are willing to spend, to the time that they are happy to wait for an answer or a delivery. The time of the day and place in which a decision starts to be planned can completely change the outcome of a customer's decision-making process!
A perception refers to the way in which we capture, process, and make sense of data or information, primarily through our five senses. Very often, individuals have preconceived perceptions that can led them to overlook critical details that will later have an impact in the success of their decisions. Our perceptions are shaped by our experience, our background, and our own personal knowledge, and can vary the different elements that we are expecting from the purchasing-process, as well as from the purchase itself.
Unfairly, cognitive biases have been referred to as unconscious errors that occur in our brains when we choose to simplify the information that we are processing. These are thoughts, assumptions, habits, or even solid convictions that customers gather throughout their lives. The list of cognitive biased identified by behavioural science is never ending, continuously finding different elements in our thought-process that shape the way we interact with our world.
8 Cognitive Biases You Should Know About
Understanding these subconscious elements provide us with the opportunity to better understand our audience and improve customer success! Basing our customer strategy on ideal scenarios can be particularly counterproductive. Instead, we should be looking into how our customer interactions can take advantage of them! In her session, Andrea went over some of the most common cognitive biases people display during their decision-making process.
#1 Action Bias
Action bias refers to the tendency that value can only be attained through action and that, consequently, inaction could lead to failure. This predisposition to act often involves making a decision without fully understanding the situation, particularly when in front of a complex task. Prompted by action bias, people feel more satisfied when acting even if there is no difference that acting will lead to a better outcome than doing nothing.
#2 Framing Bias
When making a decision influenced by a framing bias, people will be acting depending on whether their options are presented in a positive or a negative light! This is one of the strongest biases in decision-making and it underlines the importance of how something is described and how that description can influence on the choices of an audience. Theory on the framing effect comes from the research of authors like Daniel Kahneman, author of the bestseller Thinking Fast and Slow!
#3 Anchoring Bias
Anchoring is defined as the tendency to rely too heavily in one trait or piece of information when making a decision. The anchor is often the first piece of data, or the most recent piece of information received and shapes the decision that a customer feels compelled to make. Time-sensitive offers depend on this cognitive bias since they bargain on being the most recent add a customer views to prompt them into the decision of making a purchase.
#4 Loss Aversion
Linked to the action bias mentioned above, loss aversion is a cognitive bias that describes how the pain derived from a loss is twice as powerful as the pleasure gained from a victory! This perception encourages people to place greater value on avoiding losses than on achieving potential gains. The research on this particular cognitive bias reveals that people’s everyday lives are, quite often, governed by a feeling of fearfulness.
#5 The Eaton Rosen Phenomenon
Probably the most fun of the biases described by Andrea, this cognitive bias claims that any statement is regarded as more accurate and truthful if written as a ride! This phenomenon, also known as the rhyme-as-reason effect, explains why rhyming slogans tend to be more effective when communicating a message, not only become the musicality will make people process that information as familiar, but also because they will perceive it as more persuasive!
#6 Availability Bias
A thought is regarded as available if it comes to a person’s mind when evaluating a specific topic, concept, or method, and, more than anything, a decision. Some events tend to stand out in our minds more than others, either for positive or negative reasons but, they stick! Unfortunately, our selective memory can lead us to ignore less easily remembered information, such as statistics or even prices, that can prompt us into making not very wise decisions…
#7 Gamblers Fallacy
This cognitive bias refers to the incorrect belief that if a particular event occurs more frequently than normal, it is less likely to happen in the future, and vice versa! This fallacy is often associated with gambling and referred to as the Monte Carlo fallacy, but it is present in almost all our decisions and, ultimately, relies on the belief that the last outcome of a series is unlikely to occur again.
#8 Endowment Effect Bias
The endowment effect occurs when people irrationally overvalue an object they own regardless of its market value. This cognitive bias is often triggered when an item has an emotional or symbolic significance for the customer and can have a particularly important role when combined with the loss aversion bias explained above. Owning an object can be sufficient reason for a customer to believe its value to be higher!
5 Tactics to Influence Customer Decisions
While understanding the cognitive processes your customers go through when deciding to purchase one of your products or services, controlling every final outcome should not be your goal. Your efforts should focus on make the most of your awareness of these biases and direct your prospects along the path to purchase. Applying some of the behavioural science research that Andrea has found most helpful, she underlines four keys to a customer success.
#1 Get Granular and Use Nudging
Getting granular refers to, basically, getting close to the customer in their individual context to increase the chances that we have of resonating with them! Our customer strategy should not be based on generalities, but on specific and individual processes that, additionally, should be understood in simple, easy, and intuitive terms. Personalisation can be key when it comes to resonating with your customers and can be achieved by asking what they are looking for when browsing on your website or following you on social media. You really do not need to overcomplicate it!
#2 Focus on Your Customer’s Goals
Understand the pain that your customers are trying to solve when looking at your product and make sure that you deliver that solution if appropriate. You need to think about that one characteristic that makes your product unique and appeals to your prospect’s curiosity. And that uniqueness comes by explaining how your product solves problems, and, most importantly, their problems. There is a reason a prospect found you, and that is because they were looking for a solution. And your construction marketing strategy should show them that you are indeed the solution they were looking for.
#3 Identify Your Customer’s Mindset
When designing your customer strategy, think of the different scenarios in which your customers might be considering a decision and explore the through-process behind a customer that decides to buy, behind a customer that changes their mind and abandons the idea of purchasing your solution and, ultimately, behind a customer that choses not to buy anything. Recreating these situations requires you to conduct a thorough research that will bring you to the same environment where customers make those decisions.
#4 Remove Barriers
Making a process more accessible and streamlined can significantly influence the behaviour of a customer. Addressing your prospects with the right message is only one element of the equation. If that message reaches them at the right time, you will most likely prompt a response from them and you must be ready to start a conversation. Details like keeping an active presence on social media, installing a live chat on your website, setting up a meeting link or making sure that your phone number and your email address is visible on your page can help you avoid that situation.
Iterating with your customers involves finding out what is stopping them from proceeding, understanding the cognitive biases that might be at play and adapting your strategy to accommodate your concerns and optimise your process to facilitate customer success! If you have not yet asked yourself how your construction product helps your prospects make their life a little bit easier, it is a task that your need to prioritise in your to-do list. You can get more insights on the problems your prospects might be experiencing by asking them to fill up a questionnaire or suggesting arranging an interview with existing customers.
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