Tuesday, December 31, 2013

Employees as Stakeholders

Employees are often mistaken for assets of a company - "human resources" to be bought and sold as chattel of the corporation with only a modicum of regard for their personal interests.   However, it would be more accurate to consider them as stakeholders in the organization, whose continued involvement with the firm is contingent on the satisfaction of their interests.

The bilateral obligations of the employment contract are easily set aside by firms that consider themselves to be in the advantaged position in negotiation for human capital - when  the labor market has a surplus of exactly the kind of workers that are needed,  companies can show callus indifference to keeping their part of the bargain - and find themselves in a precarious position when the market shifts and their best people leave for other firms.   Such a perception is inadvisable, but likely inevitable.

This begs the question: what are the employees' interest.  Traditionally it was assumed that the only interests employees have in a firm is the income they will derive from doing so.   However, income isn't at the top of their list of interests.   In particular consider the following:
  • Employees enjoy practicing their trade to the best of their ability
  • Employees seek challenges that enable them to learn and grow
  • Employees value the social interaction they have with colleagues
  • Employees gain a sense of purpose in contributing to a mission
  • Employees wish to belong to something greater than themselves
Each of these items is listed as being more important than compensation in various surveys of employee satisfaction and job-seeker interests, so there can be little argument that people work only for pay.

That's not to say that pay is not a critical factor - take away the paycheck and most employees would need to find work elsewhere.   But that is to say that they would "need" to do so, not that they would "want" to do so.   It is not merely fear that keeps them in their places, but the desire to have and retain these benefits.

In this sense, organizations and mangers are held responsible by their employees to ensure that these needs are fulfilled, and if it is their desire to retain their staff, rather than constantly hire and retrain more individuals whose interests will inevitable lead them elsewhere, firms would do well to give greater attention to holding up their end of the (implicit) contract.

This is especially important when a change takes place that impacts the interests of the employees.  When there is a reorganization or a merge, or even a dramatic change, the employment contract will be re-evaluated.  And while companies may assure employees their jobs, hence their income, are safe they must recognize that the change will impact the other factors that employees value more than money.

Any change to the status quo threatens the interests of employees.  Even in the best of cases, at least some of the workforce will consider the change to be unacceptable (in terms of the work they will do, the people they will work with, the mission they serve, etc.) and will therefore consider the firm to be in breach of contract, or at least reevaluate the terms of the agreement and determine whether the changes are acceptable to them.   Should they expect to be dissatisfied, they will begin the process of changing to another firm.

And again, firms who are callously indifferent (or carelessly ignorant) will adopt an attitude of "let them go, they are easily replaced" - but will soon find that hiring and training new employees is both a financial burden and a negative impact on performance, and that a great deal of institutional knowledge leaves along with the people, going to a competitor who values it more and will promise, at least for a time, to be better servants of the employees' interests.

Friday, December 27, 2013

The Spork: Symbol of Bad Customer Experience

For the first time in quite a while, I tried to eat fried chicken with a spork (and ended up eating it with my hands).  The spork was popular for a time, some decades ago and I haven't seen one in ages, and do not miss it at all.   I realize that some people wax poetic about their fond reminiscences of sporking.   For me, it's more in the nature of post-traumatic spork disorder.

For anyone who's not had the displeasure and isn't familiar with the instrument, a spork is a hybrid utensil that combines a spoon that stabs you in the tongue with a fork with tines that are too short to be of much use for anything except breaking into small, easy-to-swallow pieces of jagged plastic.   If it sounds like a particularly stupid idea for an eating utensil, that's because it is exactly that.

But what occurred to me (other than "dammit, I have to eat with a spork") is how perfect the utensil is as the embodiment of the practice of entirely ignoring the customer experience in pursuit of operational efficiency.   The only reason I can think of for a spork to ever have existed is efficiency.   It is cheaper to offer customers one utensil rather than two, and it's easier to stock and manage inventory.   Cheaper for us, more efficient for us, and terrible for the customer.  Two out of three ain't bad.

I don't think that any decent restaurant ever offered its customers a spork - it was the sole providence of factory food mills, quick-service restaurants, public school cafeterias, and other places where quality is compromised.  No reputable flatware manufacturer has ever, to my knowledge, included a spork in its product line - though a quick search of the internet turned up a few as novelty gifts.   And except for fanboys, no-one has ever relished the thought of using one.

It also occurs to me that, while the spork itself is virtually extinct (and it's a species the world is better off without), there many businesses that are still handing out sporks by the dozen in a figurative sense.   Any instance in which the customer is expected to compromise the quality of their experience because the business has found a way to save a little money or effort on its own part is a spork.

So when a restaurant makes customers wait on their own orders at a counter rather than offering table service, or when a grocery shop makes customers bag their own groceries, or when a retailer makes customers ring up their own orders ... then they are handing out sporks.  

It's likely important for designers and process owners to pause to consider, when any project's goal is efficiency for the organization, whether they might be handing our sporks as a result.   Chances are they are doing exactly that.

Monday, December 23, 2013

Consumer Behavior in the Restaurant Sector

Some time ago, I read an excerpt from a book about consumer behavior in the restaurant sector and noted that the detail found there was more broadly applicable to customer service.   I put the book on my reading list, and it's taken some time to get around to it - and I found quite a bit more of the same.

I've often used the restaurant as an example in discussions of customer service because it's common enough to enable readers to concretize some of the more esoteric discussions about the qualities customers seek in a vendor.  On closer inspection, I've found that the culinary industry to be extremely complex in terms of service, and likely one of the most multifaceted kinds of commercial operation.

In the simplest sense, a restaurant stand squarely in the blurry boundary between goods and services, and it's fairly easily to recognize that while the good (the food itself) is central to the customer's expectation and evaluation of quality, a restaurant meal also has many of the qualities of a service that are also critical factors that, depending on the individual and the occasion, may overshadow the quality of the good in these evaluations.   This, too, seems entirely portable to a broad array of commercial operations.

Quality of Good

In a previous post, I explored the factors that lead to consumer perception of the quality of a restaurant meal: its adequacy to satisfy the present appetite, its nutritional value that satisfies more long-term goals, and a combination of factors (flavor and presentation) that create a pleasant consumer experience.

These factors are not universal, but differ from one customer to the next and even an individual customer may weight them differently from one occasion to the next.   As a result, the food-service industry has spawned a multitude of retail formats, from the pushcart to the luxury restaurant, that focus on the factors to differing degrees, but which can be generally categorized into standard fare, utility food, fine dining, and specialty food service according to the degree to which each of these three fundamental factors are emphasized.

My sense is this perspective can be transported, with some translation, to any retail operation: whether you're selling a restaurant meal, a screwdriver, a jacket, an automobile, a haircut, or tax preparation services, these same three factors apply.  The perception of the quality of a good is still assessed by its short-term serviceability, its durability over time, and factors related to the pleasure of the experience derived directly from the use of the good.

Quality of Service

While the qualities of a good are fairly straightforward, those of a service are much more difficult to identify and are more subjective and variable.   In reading about the food service industry, there are generally four factors that are considered:

  • Delivery - Those elements of a service that are functionally necessary to the delivery of benefits, of which reduce the effort and inconvenience to the consumer
  • Atmosphere - The character of the environment in which service is provided, which includes the space itself as well as any items that are perceived to be a part of the environment (furnishings, decor, and physical elements encountered in the service experience) as well as that of secondary spaces (waiting rooms, bathrooms, and the like)
  • Staff - The conduct and demeanor of employees that the customer is likely to encounter during the service experience, but also before and after the experience itself.
  • Company - The conduct and demeanor of other customers, both those within the individual customer's group and in general, who not only impact the immediate experience by their interaction, but also define the tone of the venue.
  • Esteem - The social benefit of utilizing the service, whether it is to differentiate the consumer from others (generally, to elevate themselves by virtue of their consumption) or to identify the consumer as belonging to a specific group of others (to assert that he "belongs" in a specific venue merely by being there and appearing comfortable)

Likely some of these elements are transferrable not only to other kinds of business, but also to the goods sector.   While they are often considered to be factors that are outside the control of the business (in terms of esteem, a person is looking for others to react to their conspicuous consumption of a good in whatever environment they happen to be when it is consumed), they can and should at least be considered.

Price of Service

The one factor that the author largely avoided was a candid discussion of pricing concerns, except to emphasize that businesses that seek to compete on price often neglect or consciously sacrifice the good and service quality of the customer experience.  Moreover, customers have certain expectations of the quality of a service as a factor of the price, and are often tolerant of these compromises - to the point that a lowered quality of good or service is expected within a given price range.

That is to say that a customer who plans to dine in an elegant restaurant has certain expectations of the quality of service he will receive as well as expectations of a correspondingly higher price - but when the same customer approaches a quick-service restaurant to grab a quick bite while shopping, the expectation of quality is much lower in every regard, as is the expectation of price.

Specific to the food industry, the fast-food format was mentioned and while it was sneered upon for negligence to virtually every factor of quality, there was some respect for this choice as a commercial operation: some customers, in some instances, value a fast utility meal over a leisurely and sumptuous dining experience - and going by the commercial success of the quick-service sector, it's quite many customers in quite many occasions.  So while they may be derided for the quality of product and service, they are in effect catering to the market's demands and performing a necessary function in society and the economy.


This meditation seems at once long-winded and superficial, but underscores the value of the food service industry as a basic example to which most people can relate, and which demonstrates the complexity of a commercial operation in a manner that is transportable to a wide range of goods and services.

Thursday, December 19, 2013

Immigration and Innovation

I'm prefacing this meditation with a disclaimer for the folks who may have stumbled in from a search engine: this is not a political blog and I prefer to avoid the subject entirely.  This is a consideration of the (positive) effects of immigration on the development of new and revolutionary ideas and comments of a political nature will be excluded.  That said ....

I heard the most gorgeously half-witted thing today: someone claimed that America is a highly innovative country because of the diversity of the nation.  Don't get me wrong - diversity is a good thing and has been positive for America in many ways, but I don't think it is the cause of the innovative spirit in this country - however, the process of immigration likely is a cause ("a" and not "the") for the aggregation of innovative people, for reasons other than cultural diversity.

Giving Diversity its Due

I do not entirely dispute the positive effects of diversity on innovation.   When people from different cultures come together, they meet people who do things differently to themselves.   And in so doing, the rational reaction is to give fair consideration for the ways of other cultures, taking an objective position in considering if "their" way might indeed be better than "our" way.  Though most people likely have a more emotional reaction, shunning and resisting anything that is different to their culture, the rational is not entirely quashed and will win out in the long run.

Nations that have a long-standing domestic culture are often resistant to change - and it is in this sense that America and other new-world countries have a distinct advantage, in that there is no long-standing domestic culture to be defended.  Though there's is much disagreement about what culture ought to be, there is no historical record to back one side.

Those areas where culture has been static, or without immigration and diversity to any significant degree,  do not gain this perspective simply because everyone has the some culture, does things the same way, and is never given a cause to question whether "the" way (in the absence of "them") is the best alternative.

But I don't think that this creates innovation - it creates change, and if anything that change is done in the interests of normalization.  Perhaps in some cases a third way is discovered, not theirs nor ours but some fusion of the two that yields something unprecedented in both cultures.  But in most instances I suspect that one or the other is better and is therefore adopted.  Society as a whole benefits all the same.   But this is imitative rather than innovative in that nothing new is created as a result.

Immigration, Not Diversity

Rather than the mere diversity of population that resulted from immigration of people from different lands, my sense is that the innovative spirit became concentrated in America due to the individual liberty that it affords those who live here: the right to pursue one's own definition of happiness, the right to use one's person and property in ways that others may find objectionable, is the chief driver of innovation and advancement.

That is to say that people in other countries who were visionaries were discouraged or prevented from pursuing their vision in their home nation because there was a uniformity of culture, but in the multicultural of the United States there is no formal "Department of American Culture" in government, and the structure of government was such that enforcing a singular culture was contrary to its stated purposes.

Specifically, diversity did not create innovation, but it created a condition in which people who already had innovative capacity were able to exploit it without discouragement or punishment, and with a great deal of reward and encouragement.   The net result is that people did not become innovative because they had moved to America, they came to America because they already were innovative and felt that pursuing their vision was worth leaving their homeland.   And this is where I think the person who assumed that diversity alone caused innovation got it entirely backward.

Innovative People as Resources

While it was likely not the intent of those who designed the government of the United States to create a beacon for innovation, it was the net result - and the rapid progress of the nation and its speedy rise to world dominance was a consequence of that.   While being entirely unaware of it, the Founding Fathers changed the nature of competition among nations.

Prior to the industrial revolution, and likely for several decades afterward, the struggle for power among nations was for the control of resources.  One tribe would attack another to seize its food, one nation would attack another to seize its land, timber, minerals, and other factors of production.   The competition was essentially about getting things from somewhere else, or things that could be used to make other things for the benefit of one's own citizens.

The new basis of competition is not over the control of things, but over the control of ideas.    Seizing the land and resources to manufacture something and enslaving people to participate is only of value if you know what to do with the things you have stolen.   There is much greater and sustainable power in having possession of the people who are knowledgeable and visionary enough to make good use of those resources, and it's not being fought among nations, but among corporations.

At the risk of straying into politics, conflict among nations in the present era is a conflict among ideologies: those traditionalists who want to stop new ideas from entering the old village have become more proactive in resisting the change that is proposed by other ideologies, and both sides feel their way is best and that others ought to play along.   In essence, it is a conflict of tradition and evolution - a battle for or against innovation - with America and the West leading the charge in favor of change.

The Competition for Innovators

The competition for people is not the same as the competition for things.   A thing, once seized, can be used as one sees fit - but this requires the user to know how to make use of it.   A person, once seized, can be made into a slave - but a slave does not innovate, but merely obeys a master - and the master must decide to know how to make use of the slave. That is to say that controlling people, whether through outright slavery or merely manipulation, gives one the use of the person's body, but very little access to the capabilities their mind.

It also stands to note that "countries" are less relevant now than ever before, given that many corporations are multinational, the parts of a company that happen to be located between arbitrary political boundaries are generally not self-sufficient.  An American company may have a factory in China that makes machine parts - but nationalizing the factory would give the government of China the ability to make only what is already being made, which will soon become obsolete as better parts and better machines are invented outside of its borders.

As such, the competition for innovators is a competition between companies rather than nations - whether those who provide the ideas that fuel economic growth are citizens of one nation or another is immaterial. Both the innovators who create profit and the investors who profit from their innovation are also spread among multiple nations, and the physical assets of the company are of decreasing importance to its profit potential when compared to the value of its innovative employees.

Where Was I Going With This?

I have the distinct sense I'm meandering at this point - but perhaps it's because the point has been made and I'm now chasing after loose threads: that the concentration of innovators in a country or company is the result of making itself appealing to those who wish to innovate, to attract rather than seize the creative potential of human resources.

My sense is that the value of this lesson is nebulously understood by companies - the sense I get from the current literature is that companies recognize the need for innovative people to remain competitive, but do not fully grasp the reasons why, nor the means by which they can do so.   Perhaps somewhere in all this nattering is the thread of an answer?

Sunday, December 15, 2013

The Trouble With Nagging

I read an interesting but specious remark about selling: each time a salesman asks a customer to purchase and the customer refuses, it is 24% less likely the customer will ever buy.   The person who offered that up didn’t cite a source, and I won’t cite them because I strongly suspect it was a totally made-up number in an off-the-cuff remark – and more’s the pity because I have a sense that there’s some truth to that assertion that’s worth considering.

Old-school sales tactics suggest you should “always be closing” and that persistence means asking the same question over and over until you wear down resistance and the customer gives in.   But those tricks have never worked on me as a customer, and I have the distinct sense that I’m not alone in this because it runs contrary to a number of behavioral tendencies.

The first of these tendencies is priming: a person who refuses a salesman has set a precedent that it is OK to refuse them, making it easier to continue to refuse even after a convincing argument has been presented.   Asking them over and over merely gets them used to saying “no” to your advances, putting you in a position to overcome a level of obstinacy that you created.

Another tendency is to be suspicious of strangers: a salesman is essentially someone you don’t know who wants something of you, and there’s very little trust that they have your best interests at heart.   Especially when they seem eager to get you to commit to an agreement when you don’t know the details, that’s a danger sign that raises a level of suspicion about another person’s character.   So asking for a commitment too early creates a level of mistrust that you then have to overcome – and again, it’s your fault the customer is mistrustful.

Another tendency is to defend past decisions, even bad ones: a person who said “no” wants to feel that they made the right decision, and changing that answer to a “yes” means that they must admit to having been foolish to refuse the first time.   This can be avoided if the salesman has the patience to wait for a moment in which saying “yes” would build rather than undermine the self-image of the prospect.

Another tendency is the desire to have esteem: saying “no” to another person puts them beneath us, in terms of power and esteem.  The salesman who has made a customer refuse him has handed them the upper hand in the relationship by making them aware of their power to control the salesman merely by refusing his advances.  Admittedly, the customer always has that power and status, even from the very start, but making them acutely aware of it and eager to exercise it is a serious mistake.

There may be more to it than that – but those four tendencies come to mind immediately, and each of them causes the prospect to raise defenses that might not otherwise have been triggered, and each time a person says “no” they harden their position.

My sense is that the answer to all of this is simply to wait – work to establish trust with the prospect, convince them that purchasing your product is a smart decision, and put them in a position where saying “yes” is a demonstration of their power rather than a submission to your own.   I don’t have a sense there are any shortcuts to the goal, and while the degree to which prematurely and repeatedly pushing someone toward a commitment they are not ready to make might not be 24% exactly, I have the sense it’s not very far from the mark.

Wednesday, December 11, 2013

Marketing Arrogance and Assumptions

A common problem among sales and marketing professionals is that they assume that they have accurate knowledge about what their prospects want and need.   This assumption becomes arrogance when taken to the level that they assume that they know what their prospects need better than the prospects themselves.  

Consider this: many husbands have great difficulty in choosing a gift that their wives will appreciate.   That is to say that they struggle, and quite often fail, to identify the wants and needs of a person with whom they have been in close and constant contact for many years or decades.   How, then, can such a husband go to work and presume to have adequate knowledge of the wants and needs of thousands of people whom he has never met?

Assuming: The Worst Solution

It should not require much in the way of explanation to establish that assumption is the absolute worst thing that you can do when attempting to serve the needs of another person.   Your assumptions are only as good as your knowledge of the other person.   For the people closest to you, you may have some knowledge, but it is never perfect.  For those whom you have never met, your knowledge is largely nil.

Even when you have information about another person, it tends to be incomplete, and gaps are filled in with presumptions that are often more reflective of your own behavior, or stereotypes that you have come to accept about the behavior of other people.   In this sense, a little knowledge can be dangerous in that it instills you with a sense of certainty and a boldness to take action without further consideration.

Typical demographics often lead marketers in the wrong direction: a fifty-year-old white male tasked with marketing to Asian teenage girls is likely to make many mistakes.   Even if the task is assigned to a fifty-year-old Asian female, her thoughts are likely based on memories of her how experience as a teenager, which is likely to be significantly different to that of a teenager today ... but because she can identify with the market, she is more comfortable in the assumption that she knows what they want and need - and fails to recognize that she is still acting on assumptions.

Asking: The Second Worst Solution

The traditional approach to marketing is in research that finds a group of people who match the demographic qualities of a desired target market and asking them what they need and desire.   This is obviously a better approach, but it should be regarded as "the second worst" approach to gathering information.

Even when a focus group or questionnaire is expertly designed to gather objective information, peoples' stated "facts" about their needs and desires are always subjective.   When speaking of past experiences, their memory may be hazy and they may provide inaccurate information by confabulating to fill the gaps, or they may feel uncomfortable disclosing their actual behavior, even when there is no logical reason they should feel the need to conceal the truth.

When speaking of the future, the problems are even worse, as they engage in speculation about what they think they would like, but which they may not like at all when actually presented with it.   In effect, they are making assumptions about their own preferences, which may be no more reliable than another person's assumptions.   And there is likewise the Hawthorne effect of describing what they think is logical, or providing what they presume the research would be pleased to hear.

In all, most methods of marketing research do not dispense with assumptions, but merely ask someone else to assume rather than doing it yourself.   It may be slightly more accurate, but is still based on speculation that may not prove out in reality.

Observing: The Best Solution

Likely the best cure for arrogance and assumption is observation.   Studies of consumer behavior, when designed well, reflect actual consumer behavior without assumption or speculation, and capture data that can support a highly accurate conclusion.

Those words are chosen carefully, as observational studies capture raw data that "can support" rather than "lead to" an accurate conclusion - as there is much that can be skewed in the analysis and interpretation of the data.   By necessity, a conclusion is drawn by formulating a hypothesis and testing it against the data - but they hypothesis is formed based on assumptions, and the "testing" may involve selective attention and skewed analysis to support that assumption.

In all, there is likely no way to entirely eliminate assumption from sales and marketing - developing promotional plans and procedures will always be based on some degree of speculation about the needs and desires of the target market.   And perhaps the best we can do is to recognize that assumptions are assumptive, attempt to be aware of biases and mitigate them, and to accept that no plan is perfect or flawless - and the degree to which it turns out to be flawed is attributable to the biases inherent in assumption.

Saturday, December 7, 2013

Leveraging Marketing Funnels for User Experience

Marketing funnels are a natural fit to user experience design, so natural in fact that it's often assumed that UX designers already understand what a marketing funnel is and how it can be leveraged to optimize user experience.   Unfortunately, I've received a few "what's that?" reactions and failed to find a good reference online - and worse, saw a few references that botched the explanation - and so I figured it was worthwhile to put together a blog post.

Marketing Funnel Basics

A marketing "funnel" measures the number or percentage of people who were subjected to an initial stimulus (usually an advertisement) that eventually made a purchase, noting the number of people who dropped out at each step along the way: how many fliers were mailed out, how many people came to the store on sales day, how many people visited the right department, how many bought the advertised item, how many kept it, and how many bought it a second time afterward.   Here's an example:

It's called a "funnel" because if you center the bars and smooth the edges, it looks like a kitchen funnel - which makes a very nice PowerPoint graphic, but a bar chart works just as well.

From the example above, you can see the way that a prospect becomes a regular customer - and more importantly, you can see places in the funnel where a larger proportion of customers drop out.   These become areas where improvement could significantly increase your success rate and help you spend your budget in the right place.   For example, if you have a big drop-out rate between purchases and product retention, it means there is a problem that causes your customers to return the item after buying it, and you should focus your effort there instead of driving more customers into a broken flow.

Building a Funnel

Building your own funnel is fairly straightforward: you begin with an initial incident (where you first grab the attention of a prospect) and follow them each step along the way to the end.   For example, if you are running an online promotion for a specific item, the steps would be:

  1. Number of people saw the promotion (ad impressions)
  2. Number of people visited your site (click-through rate)
  3. Number of people visited the product information page
  4. Number of people added it to a shopping cart
  5. Number of people's carts was it in at check-out
  6. Number of people checked out with the item
  7. Number of people kept the item (did not return for refund)
  8. Number of people came back 30 days later and bought another

Depending on how closely you measure user activities, you can also define additional steps in the funnel.  For example, if you record when someone chooses a color before adding the item to the cart, you might find some value in measuring the number of people who did so (as a step between visiting the product page and adding it to a cart).   Or if a page asks seven questions, you can find out how many people answered each question before dropping out, which pinpoints the source of the problem with much greater accuracy rather than just measuring page-by-page clicks.

It's Not Just for Sales

Marketing funnels were created to track the effectiveness of sales promotions, and are by their nature focused on purchases - but they can be used to track any sort of user engagement that you wish to consider.   For example, consider using a Facebook post to get people to subscribe to your new Twitter feed.  That funnel might look something like this:

  1. Number of people who viewed the Facebook post
  2. Number of people who clicked the link to Twitter
  3. Number of people who followed the Twitter feed
  4. Number of people still following the feed after 60 days

Granted, your ultimate goal is likely to sell them something - but for now, your primary goal is to get them to subscribe, and it would likely be useful to create a different funnel that tracked users afterward, to see how many people who received a given twitter post and then stepped into your selling funnel.

One other thing bears remarking: the funnel above did not include Facebook "likes."   It's interesting to track those, but keep them separated because it is not a necessary step in reaching the end of this particular funnel: a person can like to post but not subscribe to the feed, or click through and subscribe to the feed without liking the post, so that factor would be very misleading.

Caveat Vendor

While marketing funnels can be highly informative and enable you to identify (and hopefully eliminate) causes of friction in your conversion flow, there are a few limitations you should consider:

First, the path you expect customers to follow is not the path they always follow.   In the brick-and-mortar world, a deli might notice a huge jump in their sales of potato salad on a Saturday when they ran a sale - but might be entirely unaware that it just so happened that two large neighborhood churches were having a Sunday picnic that weekend, and the spike in demand may be more attributable to the picnics than the advertisement.  Online this is fairly easy to remedy by checking the referring URLs to a page and cleaning out people who wandered in from other sources or deep-dived into the middle of your anticipated flow.

Second, you cannot assume that percentages will remain consistent - that is, if you can run an advertisement to get 10,000 more customers to visit and your conversion ratio is 14%, that will not automatically mean 1,400 additional sales.  The ad may have been targeted to the wrong audience, or (unintentionally) misleading, such that every one of those 10,000 "customers" will drop out immediately.  This doesn't mean the funnel is broken, but that your advertisement was in some way defective.

Third, many marketing funnels end with a sale.   In the example above, I included two additional steps.  First, I also included the number of items sold and not returned within seven days.  To me, that makes a great deal of sense to monitor because a product returned is not really sold, and any action you take that increases sales but also returns is awful - and unless you account for returns you will never recognize your mistake.    Second, I also show a number of repeat buyers, which is highly significant if your goal is to grow your customer base rather than make a one-time sale to people who might be so disappointed they never purchase again.

Working Your Funnel

Having an idea of where in your flow the customer is dropping out is very valuable to knowing where design attention is needed to improve your bottom line - and watching your funnel change over time (or in testing version of a given design by splitting the audience) will give you demonstrable proof of the effectiveness of your design changes.

Without a funnel, you can only speak in vague terms about the new design being "better" than the old one - and we all know how business partners react to statements like "increasing the font size and white space created greater affordance" (i.e., they cock their heads like spaniels, which is cute but doesn't win you much respect).  But once you have funnel metrics in place, you can speak in concrete terms that will resound with your business partners.  

That is, you can say things like "changing the messaging on the product page and improving the location of the add-to-cart button resulted in a 3.7% increase in step-to-step conversion and a revenue increase of $75,645.25 per month."   As boring as it sounds to talk in numbers, this is what wins respect and commands budget allocations - but more importantly, it's what gets more products to more customers, more subscribers to your social media feeds, and more of what you ultimately want to accomplish done.

Tuesday, December 3, 2013

Understanding Emotions

I recently read a primer on understanding emotions, with an eye toward how to leverage them in customer experience.   There's nothing sinister or underhanded on my agenda - but it does seem to me that much of what we do in designing and delivering experiences is geared toward avoiding unhappiness by removing barriers to success and there's very little knowledge of what can be done to promote happiness in a proactive manner.

I don't think I found a solution - but the study of this topic has given me food for thought: mainly, that the default setting for human emotions is a neutral state called "contentedness" in which individuals are neither happy nor unhappy, but quite indifferent to external stimuli in general, being neither elated nor distressed at the goings on in their external surroundings and internal ruminations.

Motivation to act arises when there is an immediate stimulus that causes a change in the contented state.   Pain and discomfort motivate a person to action, whereas pleasure causes them to remain inert and savor the experience while it lasts.   More significant to motivation is the perceived potential for something to interrupt the contented state: the prospect of being subject to pain or the opportunity to experience pleasure prompt an individual to take preventative or proactive measures to avoid one and seize the other.

It is likely significant that both immediate and potential pain is motivational, whereas only potential pleasure is motivational.   Though it can be argued that an individual who is presently experiencing pleasure would be motivated to take action to prolong the experience and forefend against the potential that it will be interrupted or diminished.   I don't have the sense that sustaining pleasure can be entirely equated to avoiding pain, but my sense of now is that they are likely analogous in many ways.

It is also likely significant that emotional reaction (or pre-action) is regarded as being motivational - it provides an inclination to take action but does not govern action itself.   It's generally accepted that emotion hands off to reason when a desire is discovered, such that an emotional reaction causes a person to want to take action whereas reason guides a person in choosing the action to take.

This would seem to indicate that emotion precedes action, such that by the time a customer visits a store or a website, the emotional influence has played its part and the individual is likely now following a course dictated by logic.   And while there has been some consideration of sustaining emotion throughout a sequence of actions, my sense is now that it may be a bit misguided.

More aptly, the emotions an individual experiences while pursuing a course of action are different to those that prompted them to undertake the action in the first place.   These emotions are not reactions to the original stimulus, but to the progress that is being made toward the goal.

That is to say that the emotions experienced while acting are those of engagement and anticipation of an outcome, rather than sustaining the emotion that caused the action to be undertaken - that moment has passed, and the emotion of that moment along with it.

As such a person who is motivated by a sense of discomfort to take action to diminish or terminate those emotions then experiences a different set of emotions as they progress toward their intended goal - they are no longer upset because of the initial discomfort, but anxious about achieving an escape from panic, and that anxiety can express itself as hope or despair that the outcome will be achieved.

This might help to better understand the reason customers ultimately decide not to make a purchase: their engagement in the shopping process, with the anxiety it entails, may distract them from whatever emotional state motivated them to begin shopping in the first place - and if they are significantly distracted by the process, it is no longer necessary to make a purchase to escape the motivational state because the act of pursuit has involved stimuli, the reaction to which as replaced the motivational state with different emotions.

Aside of that, there is the notion of happiness as an ephemeral state - which sheds some light on consumerism and materialism.   In effect, success at a goal that delivers a sustained sensation of pleasure resets the parameters for the contented state.   Gaining something that was acutely desired satisfies desire and conveys a sense of accomplishment, but when "normal" becomes a state in which the desire is satisfied, the subject returns to mere contentment.

Even so, I'm not discouraged in my search for an answer, though I'm beginning to understand that, given the way in which emotions are currently understood, a solution may be difficult to identify.

Friday, November 29, 2013

Testing in the Wild

There is much to be said for testing user experience design in the wild – it has a number of advantages if used properly, but using it properly is something of a delicate matter – but for the moment, I’d like to focus on the various kinds of tests that are run in a production environment, as there seems to be a great deal of confusion among them.  

Aside of being persnickety about calling things by the proper name (many people use “A:B Test” when what they really mean is a multivariate or champion-challenger test), it’s also important to make the distinction so that you can plan the right test to get the information you need and relate the results in a meaningful and accurate way, using each method to its best advantage.

Champion-Challenger Test

A champion-challenger test is the most commonly used variety.   It compares an as-is design to a proposed to-be design to confirm that the desired effect on user behavior is effected.   Consider these two examples:

The “challenger” version of the element has many differences to the “champion” version: the headline is different text, font, and color; the call-to-action button is a different color, a different phrase, a different size, and in a different position; the image is different; and the copy is different.     As such, if you should notice a difference in their performance, you have no idea which of these changes caused the difference to occur.

That’s not necessarily a bad thing – since the ultimate goal is to increase click-through, you likely do not care which of these elements is to credit, so a champion-challenger test effects a one-time improvement but does not “teach” you anything that could be used to improve any future design.

A:B Test

The A:B test is the one most often claimed, but often mistakenly so.   It is misunderstood because the parameters of an A:B test are very stringent: only one thing, and one very specific thing, can be tested. Consider these two examples:

The only difference between them is the color of the button.  If you change anything else about the layout, or even another aspect of the button (the words, the size, or the position), you are no longer running an A:B test but a champion-challenger test, with the combined impact of all changes commingled and inseparable.

The greatest benefit of an A:B test is that it supports not merely a one-time decision (this layout is better than that one) but a general observation (green buttons perform better than blue ones) that is very likely to be applicable across all such layouts on your site, and possibly across multiple sites.

Multivariate Test

A multivariate test combines the best of both worlds: it enables you to make multiple changes to a layout, but test them in such a way that you can identify the degree of influence each change has on the outcome.  Consider these examples:

These four variations test two elements: the wording and color of the button.   By doing so, you can be informed not only that one does better than the rest, but also the influence of each factor.  That is to say that A:B testing might suggest a green button is better than a blue one and “get info” is better than “learn more,” leading you to conclude that a green “get info” button is the best of all – but when you actually test every possible combination, you may discover that the blue “learn more” button outperforms is.

This arises due to covariance, a statistical concept that is best explained as being the combined effect of many different factors, and it is ultimately what is significant to the user, who does not mentally dissect your layout into its component elements but experiences it as a whole, whose impact may be greater or lesser than the sum of its parts.

Multivariate testing yields the same general result as a champion-challenger test, identifying the combination of elements that has the greatest impact for a very specific instance.   And because the influence of each factor is examined, it also has the benefit of providing the general insight that would be yielded by multiple A:B tests of each factor.

Informed Decisions, Informed Interpretations

It is important to make the distinction between types of tests in order to decide which kind of test is appropriate to the information you wish to learn, as well as in knowing whether you can rely on test results to guide future decisions.

For example, if you run a champion-challenger test in which the champion has a blue button and the challenger (which wins) has a green button, you cannot accurately or reliably state that green buttons outperform blue because you do not really know which of several changes effected the difference in outcome.  Sadly, claims of this sort are very frequently made, and the result is proceeding boldly on bad information.

Of importance: consider (and report upon) each test for what it’s actually worth:

  • A champion-challenger test enables you to make an accurate one-time decision but yields no reusable observations
  • An A:B test enables you to make a precise observation that may be too limited or granular to make a practical decision
  • A multivariate test supports both one-time decisions and general observations, plus it tests for covariance among the factors

Thus considered, the multivariate test would seem to be the best of the three in terms of outcomes – but depending on the decision with which you are faced, one of the other two may be more relevant, and so long as you are aware of what the results actually mean, may be entirely acceptable to a given decision-making scenario.

Monday, November 25, 2013

Social Media and Personal Integrity

Social media troubles me less than it used to - it seems to me a matter of personal integrity being stressed in the too-visible world, where everything you say is visible to everyone you know (or at least everyone you have included or who subscribes to your feed) and that certain things are acceptable to share with some audiences but not with others.   It still concerns me, but less than before - and my present thoughts are that it shouldn't concern me at all.

I've never been one of those people who puts on different faces when he interacts with different crowds, and have generally subscribed to the notion that people can take me as I am, or bugger off.   I don't need "friends" who demand that I mitigate my personality in their presence, and I'm really not particularly fond of the kind of person that tailors themselves in order to trick people into perceiving them as something they're not - most people can tell that they are fakes, and no-one likes or trusts them very much.

I still subscribe to the notion that some things are acceptable in some groups but not others.  There are jokes you'd tell a friend that you wouldn't tell an elderly relative, and some things that you can share with close friends but not with more distant acquaintances that don't know you well enough to understand the context.   That's not disingenuousness, but discretion.

But having said that, I realized that I haven't really filtered myself that much.  Years ago I set up groups and lists of people so that I could better direct my posts.   There was a group of "friends and family" with whom I could share more intimate details, and a group called "humorless" from whom I'd withhold any amusing story or any joke that didn't begin with "knock-knock" because I knew they wouldn't get it.   Once I created those lists, I very seldom used them and have not kept them up to date.

I still have that moment's pause before tapping the "post" key when I consider whether what I have provided is of sufficient interest to and appropriate for everyone I know - family, close friends, coworkers, and the like.    And I do have the sense that this prevents me (for my own good) from being too forthcoming.   But again, discretion and disingenuousness are two different things and I can live with the former.

Neither do I feel the need to share every event or thought with everyone: most people just don't care to know me that well.   My sense is that a lot of the more intimate details of my life and some of the more amusing (but questionable) stories are still reserved for face-to-face encounters - and it also suits my sense of justice, as anyone who doesn't care to invest face-time with me doesn't deserve that level of intimacy in a friendship anyway.

I wonder if that's just me ... looking though the posts I see from other people, it really is a mixed bag.  Some people share a lot of information, others share very little.   And to be specific, it's sharing information about themselves, not content that they found in other places that reveals nothing personal except that they happened to find it amusing.

And it's probably not fair to lump everyone who is reticent about themselves into the category of impostors and fakes, but there are a few whom I feel fairly certain that they are trying to present a public image that doesn't match the one that people meet in real life - or at least, some people meet in real life, as people who are false in one channel are likely false in others as well.

I've probably a lot more thinking to do on the topic, but it's shifted a bit over the past few years, and will likely shift a bit futher.

Thursday, November 21, 2013

Ethics and the Mobile Consumer

I heard it said that mobile technology levels the playing field in sales situations by removing the customer's greatest foible: his own ignorance.   That struck a chord with me, because exploiting the ignorance of another person is the basis of many unethical practices, in many situations other than sales - but for now I'll stick to those situations that are related to commercial interactions between deceitful merchants and their victims.

It's likely important to pause for a moment to concede that not every merchant is deceitful.  However, it does figure into the tactics of many, and otherwise honest merchants stoop to deceit when their minds are more focused on satisfying the revenue metrics placed upon them by their management and investors.   There are those who are, at most times, motivated by a genuine interest to serve the needs of customers with the benefits of a good or service - but even the most scrupulous of merchants may pass along their own misinformation.

But to return to the topic: merchants have long been able to count upon the ignorance of the customer, and could make grandiose and patently false claims that the customer, lacking any way to verify or validate the information, tends to accept as valid, or at least play along for various psychological and sociological reasons.

"This product is effective at solving your problem" is a common lie that customers would not discover until long after the sale was final.   "This product comes highly recommended" is another that could scarce be disputed.   Even claims such as "you won't find a better price anywhere else" stand when there is no ability to refute it with facts.

Prior to the Internet, the customer was completely bereft of information.   It was not impossible to conduct independent research, but doing so often meant a trip to the library, poring over periodicals, sending letters to get information.  For the vast majority of purchases, it simply wasn't worth the time and effort required to gather information in advance of visiting a merchant, or to stall a needed purchase until the research could be done.

Even with the Internet, gaining the information required some effort: the customer would have to conduct this research at their home or office, either in advance or in arrears.   But there was still the effort required to gather the information, analyze it, and memorize it - unless you wanted to carry a stack of notes and print-outs and knew exactly what you needed in advance.   Even then, it's a very simple matter for a liar to invent a different lie, and cause the customer to have to do additional hours of research to confirm.

But with mobile, the information resources are portable: the customer can bring their device with them to the sales floor and reference whatever information is needed in that location.  There's still some degree of effort necessary to retrieve the information, as it is dispersed in various sources, buried in passages of text that are too lengthy to consume on the small screen, and search engines still aren't very good in spite of decades of effort to improve them.

And so, when a merchant claims that a product is effective, the mobile-empowered customer can find evidence to support or refute the claim.   When the merchant claims the product is recommended, the customer can verify whether this is true.  When the merchant claims to offer the best price anywhere, the customer can pretty easily check up on that assertion.

The ability to reference and validate empowers the customer to overcome his ignorance and the deceit of merchants at any time, and in any medium - whether he is negotiating with a live salesman, considering an advertising message, or even reading the claims printed on a package as he is considering an in-store purchase.

Moreover, I expect that this will become even easier over time: what's needed is software that enables the customer to scan a bar-code or type in the name of a product or vendor to retrieve reliable information relevant to the product's functions, qualities, values, price, and other qualities that are germane to making a purchase decision in a format that is easy to use and easy to consume on the mobile platform.

To my knowledge, that does not yet exist, though several different firms have attempted to provide a solution, none of them are entirely satisfactory for various reasons - but again, I expect with time and effort, this will improve.    But even now, there are enough sources of information that only a few minutes (well, maybe ten or fifteen) are required to gather sufficient information to be adequately confident in whether a claim or belief about a product is true or false.

And in the end, this is likely a good thing: many merchants live in fear of  the informed customer - or more aptly, they lived in fear of the customer who could easily disprove the lies that they routinely tell to get revenue to which they are not entitled.   Those who were honest in their claims and fair in their dealings never had any reason to worry, and still do not - and ultimately, if the honest merchants prevail and the deceitful ones perish, that's likely a good thing for everyone.

Sunday, November 17, 2013

Consumer Emotionalism

The approach to marketing that ignores human emotion in favor of more rational appeals, while largely satisfactory, seems incomplete in that it lacks an equally intensive consideration of the emotions of customers.   Chiefly, the problem is that the analytical types are not well in touch with the emotional elements of psychology, and prefer to ignore what cannot be easily quantified.  Equally to blame are the proponents of emotionalism themselves, who seem not to fully grasp the very thing they are proposing - treating emotion as mystical and unpredictable does their cause more harm than good and discredits that which they desperately want to grant credibility.

This is not to say that the choice is purely between one or the other: it cannot be denied that consumers act on reason, seeking products that can be logically correlated to the objectives they wish to achieve (to gain advantages or rid themselves of problems), and neither can it be denied that emotions have a role to play, particularly where the rational mind fails and actions are motivated by seemingly irrational beliefs and attitudes.

The first-time buyers of a brand do not act on fact: they have a vague understanding about a product and imagine the benefits of its use.  That is to say that they act upon a vague sense of attraction and a feeling of hope - which are entirely emotional matters.    The rational evaluation of the product, matching its features to the benefits they seek, may be an entirely logical process - but if they do not "feel" confident in the facts, they will not proceed.   Consider that there are any number of products that meet the minimum functional benefits that the consumer seeks - and the reason he does not purchase the cheapest are the simplest cannot be explained by fact alone.

The second-time buyer of a brand can be said to be motivated primarily by experience, in that he will return to a product that worked well for him the previous time he purchased it.   This has the appearance of fact, but once again relies on emotion - not only must the product have provided a solution to his needs, but he must "feel" that it did so to his satisfaction.   It is not a matter of cold calculation, as the benefits a person might seek to achieve in purchasing a product are not always quantifiable - while a consumer may be asked to rate satisfaction on a scale of one to ten, what leads them to state that a product is a five or a six?   There may be facts, but they are merely used to justify a fundamentally emotional reaction to their experience.

Ultimately, dismissing the emotional factor from the equations does not purify them, but instead eliminates the most essential factors for the sake of less important criteria on the basis of their quantitative nature, not their relevance or significance to the buyer's decision-making process.  In effect, reduction to the quantifiable factors makes such models inaccurate and unrealistic.

As such, emotions are real, and they have a significant impact on the choices consumers make in the marketplace, and in many cases likely outweigh the rational elements of the problem-solving process: hope, anticipation, excitement, confidence, certainty, disappointment, and the like are all emotional terms.   Trust is not the outcome of an equation, but a feeling.

Moreover, the positioning of emotion as a phenomenon outside of rationality is likely to mischaracterize it.   Emotions are not mystical forces, invisible demons that beset us from outside of the mind, but are elements of the mind itself - and I expect that the relationship between emotion and reason is far less combative and far more collaborative than many, including the proponents of emotionalism, seem to assume.

But that is another matter, best left for another day.