Monday, March 28, 2016

Brand Entitlement

A problematic and persistent mindset is that existing customers can be taken for granted – that they will continue to purchase the same brand over and over, as if it were an ingrained habit, without any other action on the part of the seller.   In spite of the fact that firms continue to lose customers, this sense of entitlement to future sales has been unshakable.

This problem of entitlement is often evident much earlier in the process.  A common complaint among salesmen is that prospects “slip off the hook” during the closing process.  But the core problem is that the salesman believes that his job is completed once a prospect has made any sign that he intends to purchase – so the salesman wanders off, assuming that other people will guide the prospect to follow through on this commitment, however weak it may have been, without any additional encouragement.

From the perspective of the customer (or prospect), many feel that they have been left adrift.  Even if they are earnestly interested in engaging with the brand, they are left not quite knowing how to act on it: how to make payment, how to take delivery of the goods, how to use the goods once they have been delivered.  The easiest way to escape uncertainty is for them to back out of the deal – or if they have singed a contract and are trapped, they will almost certainly be dissatisfied with the outcome and will seek another provider.

Reassurance is the most forgotten step in the sales process and in customer retention, and a significant cause of customer churn. The general notion is that buyer’s remorse “just happens” – but given that the salesman was critical in helping the buyer decide to buy, he is also culpable when they are not happy with what they bought.

Reassurance is merely a matter of touching base with the client after the sale was made to ensure they are getting the benefit they expected from the product they just purchased. Most salesmen fear hearing that the customer is dissatisfied – but if they did a thorough job of understanding the customer’s needs and matching the product, this should not happen.

Reassurance is necessary during the next steps of the present purchase, to make sure that the client keeps their commitment to you and that your firm keeps its commitment to him. It is also critical to getting repeat business, because any failure (regardless of whose “fault” it was) leads to dissatisfaction and poisons your reputation with the customer – they will not be back to buy again, and may encourage others to avoid you as well.

To put a positive spin on it: a prospect who is reassured and informed through the buying process will be far more likely to complete the purchase, and the customer who is supported and reassured during the period of ownership is far more likely to repurchase as well as to recommend.  But this is not something to which brands are entitled or should take for granted.

Wednesday, March 23, 2016

Fear as a Guarantor of Failure

Fear is often expressed in terms of external phenomena – but in reality it is an entirely internal crisis.  A person may be reluctant to make outdoor plans because they fear it will rain, even without checking the weather report or performing a rational assessment of the probability that rain will occur.   It is not the climate’s fault that a person is inhibited by their fear.

Likewise, many business plans are scuttled because of irrational fear: it is feared that the market will not react as expected, that competitors will outmaneuver the firm, that regulators will interfere, that suppliers and partners will not cooperate, and so on.  When this is based on a careful and rational analysis of the probability of misfortune and the degree of impact, it is risk management – and risk management typically results in contingency plans in case obstacles arise.  When it is an emotional reaction without any research, it is fear – and fear merely causes paralysis and abandonment.

Very often, the fear that prevents action from being taken in a timely manner has nothing to do with practical matters, but is more psychological in nature: an individual fears social embarrassment for failure.   In organizations, a manager fears the disappointment of his superiors, the derision of his rivals, and the loss of esteem of his followers that result from failure. 

Concerns that are logical and rational may be addressed, but those that are psychological and irrational often cannot – no amount of evidence will convince a person that they should not be afraid. Their tendency is to cling to their fear, disputing or even denying the very existence of evidence that their fear is unfounded.

The immediate consequence of fear is stress: an individual is driven for their desire for achievement, but this desire is at odds with the fear that the outcome will not be achieved and that additional damage will be incurred in its pursuit. 

A secondary consequence of fear is paralysis, very often “paralysis by analysis” in which an individual refuses to take action until they can do further research, which they then either delay or avoid which causes further delays in hopes that the plans will be forgotten or become obsolete.

And the final consequence of fear is to achieve the very failure that was feared in the first place.  That is, the fearful man feared that his goals will not be achieved – and by failing to take any action, he ensures that they are not.

Thus considered, any planning effort must consider the reaction of fear, first in the planning staff, and then in the stakeholders whose support must be enlisted to act upon the plan.   Failure to do so will practically guarantee the failure of the plan – if not as a consequence of misfortune, then as a consequence of inaction for fear of misfortune.

Friday, March 18, 2016

Inspired by Parasites

There are many instances in which an industry has arisen to solve customer experience problems with a product.  The original manufacturers consider these firms to be parasites, but it is actually their own negligence that created an opportunity for other firms.  What’s surprising is that it does not serve as a wake-up call to the manufacturers of deficient products.

Consider the software industry, for example.   Computer manufacturers produce a device that doesn’t do anything useful on its own because it requires programs to be written.   The original manufacturers left it to users to create their own software, which was asking too much: and so, the software industry arose in order to provide the value that customers needed.  And today, software firms are far more numerous and profitable than computer manufacturers.

Even Apple, which is hailed as a paragon of user experience, has made a number of very obvious failures with its iPhone device.   In addition to failing to provide software so that their device delivers value to users, it also made (and continues to make) some fundamental mistakes with the device itself.   The iPhone’s screen was easily scratched, so other firms created a simple solution (a small piece of clear plastic film).  The device itself is very fragile, so other firms created protective cases.   Had Apple made its device sufficiently useful and durable, there would have been no need for these other firms to step in to provide solutions – and Apple itself would have retained the revenue that these other firms have won.

There can be little argument that the need for other firms to customize and accessorize a product means that the original manufacturer failed to consider the needs of its users.   Perhaps in some instances it can be justified as risk mitigation – if a firm doesn’t know what its users want, it can allow other firms to attempt to solve the problems and take on the risk that their solutions will not be desirable to the market.   But when parasitic firms draw large markets and reap significant profits, it should be clear to the original manufacturer that their product is not delivering the value users desire.

Sometimes, manufacturers do make amends – but this tends to be rare.  Of the three problems with the iPhone (and there may be many more), Apple has chosen to address the most negligible and least profitable: it has improved the screen to make it more scratch resistant.  It seems rather callow and uninspired, given that this was the least profitable problem to address – the firms that made the small sheet of clear plastic to address this problem are far less profitable than manufacturers of cases and software.

And so rather than viewing the customization/accessories firms as unwanted parasites, manufacturers should be grateful to them for saving a flawed product, and perhaps inspired by them to make their own products more useful.   For example, consider the way in which Microsoft handles its parasites: they recognize the value that software enhancements provide to user, and their approach is to buy out their parasites and include the functionality in the next version upgrade.

Monday, March 14, 2016

Control and Customer Experience

In customer experience design, ease has been overemphasized.   It is assumed, often without the proper research, that the customer’s deepest wish is a one-click buying process for a product that will operate with the push of a button.   For some customers and for some products, this may be the case – but in many instances it is entirely possible to make things too easy, such that the customer finds the acquisition and operation process unappealing and disempowering.

The Need for Control

Philosophically, it is a defining characteristic of human beings to attempt to control their environment.  Psychologically, the feeling of being out-of-control is one of our greatest horrors.   Having control gives a feeling of safety and empowerment - and while the ethics of exerting control over other human beings is debatable (this is the basis of most political conflicts), it is clear that man demands to have dominion over things and expects to have control over the people who accept payment for service.

While the ultimate desire of the customer is to solve their problem, their satisfaction with the solution often depends on the level of control they were able to exert.  If something seems “too easy” then there is suspicion about whether it will provide a satisfactory outcome – and if the customer overcomes their apprehension in advance, a too-easy solution creates no sense of satisfaction in having performed the task, hence no sense of satisfaction with the brand.

Granted, it is a matter of balance: “too difficult” is worse than “too easy” because it frustrates customers and prevents them from deriving the benefit of the product – but this is a scalar rather than binary decision.   It is a matter of finding the right level of difficulty for a given customer in a given buying situation.

Levels of Control

 The concept of control considers what a person must do to accomplish an outcome.  The less they do, the less control they can be said to have.  In this sense, the level of control can be generalized into four categories:
  • Primary Control - An individual is able to directly interact with the environment to achieve a desired outcome.  A homeowner waters his lawn to cause the grass to grow.
  • Secondary Control - An individual is able to give instruction to other people who will perform the task that will achieve his desired outcome.  The homeowner tells his gardener to water the lawn.
  • No control - An individual understands that he is at the mercy of the environment and has no method of achieving a desired outcome.  The homeowner hopes that it will rain so his lawn will not die.
  • Illusion of Control - An individual performs activities that have no actual connection to an outcome, but which he believes to be correlated.  The homeowner does a rain dance to cause the spirits to water his lawn.

Psychologically, the individual discounts the participation of objects and agents when considering the outcome of his control.   He will say "I watered the lawn" rather than "the sprinkler watered the lawn" or "my gardener watered the lawn."   It is in the same way that video game players speak in the first person about activities their avatar performed (I leapt the gorge and slew the dragon).  To the individual, it is the intention to do the act, rather than the physical requirements of performing it, that convey a sense of power to see that his will has been done.

As an aside, there are even products for which the satisfaction of exerting control is the sole benefit.   No-one climbs a mountain or wears jewelry to achieve any functional benefit – these tasks are done for the sake of doing them, and the psychological benefit (self-esteem or social esteem) of performing the task itself.

Tuning the Level of Control

 Ideally, the product will provide the user with the level of control that he desires to have – and there is no one level of control that is suitable for all users.  This is the foible of the assumption that everyone wants everything to be as easy as possible at all times: it inherently assumes that no-one ever wants to exert any control at all.   This cannot be safely assumed, and some consideration (preferably based on or confirmed by actual customer research) must be given to the level of control that the user wishes to have.   But there are some general principles that can be applied:

  1. Importance.   How important is it to achieve a good or precise outcome by performing a task?
  2. Capability.  Does the customer have the knowledge and skills to leverage the controls that are provided by a given solution?
  3. Self-Esteem.   To what degree does the customer take pride in his own ability to perform the task?
  4. Social Esteem.  To what degree do others demonstrate respect for the customer for demonstrating his skill/ability to do the task?
  5. Value.   Is the value of the benefit perceived as being worth the time and effort of using a solution that provides a given level of control?

And finally, there is no single level of control that is “just right” for all customers in all situations – which is the reason there are markets for various products that represent different levels of control.    The customer who wants a cake may be satisfied to buy one from a bakery, or they may prefer to purchase a cake mix and ready-made icing, or they may purchase the ingredients and utensils to make it “from scratch.”

Correspondingly, there are markets for the various products that provide different levels of control.  The mass-producers generally seek to serve the preferences of the majority of customers, but there are markets to serve customers who want to exercise a greater or lesser degree of control than the masses.  Hence the existence of bakeries did not wholly demolish the market for cake pans.

Ultimately, getting the level of control right for a given customer is critical to winning the market – and making things too easy is just as disastrous as making them too difficult.   There is a common example, possibly an urban legend, about the first cake mixes that required the customer to “just add water” – and these failed horribly, but when the mix was adjusted so that the customer was required to also add an egg, they found success.  That one extra step was not a nuisance, but a means for customers to feel that they had just the right level of control.   This same principle applies to any product and any market, and merits careful consideration.

Wednesday, March 9, 2016

Consciousness and Consumer Behavior

There is an ongoing debate over the degree to which people are conscious of their decisions: whether they are fully rational in everything they do, or completely random and spontaneous.   Unfortunately, the “one extreme or the other” approach serves little purpose – both are true for certain people at certain times.  So the question to consider is the degree to which a given person in a given situation is conscious of their decisions.

This will likely vary from person to person and situation to situation.   Everyone has certain habits in terms of being observant and careful, and a given person may be very deliberate in one decision and very reckless in another.   So there are various levels of consciousness to consider, each of which is based on two factors – the information that was available to the decision and how that information is used in making a choice.

  • Godlike Consciousness – This level of consciousness requires omniscience and the ability to employ flawless logic in making a decision.   This is an unattainable ideal, and too often people are assumed to be capable of thinking on this level.
  • Heroic Consciousness – Entails a concerted effort to gather as much information as possible and apply highly disciplined logic in making a decision.   It is the best that a mere mortal can do, and far more than people put into the majority of decisions.
  • Deliberate Consciousness – Requires a reasonable effort to gather information and apply a methodical process to making a decision, both to the best of his ability.   This is the level of effort put into “very important” decisions that have significant impact on our lives.
  • Convenient Consciousness – Decisions made at this level apply a logical process that seems appropriate to the information that is known or easily accessed.   This is a fairly typical behavior for consumers for purchases that have moderate importance due to a cost/benefit that merit taking time to decide.
  • Instinctive Consciousness – Involves decisions made on superficial information and non-systemic logic.    These decisions are often said to be made “naturally” and “without thinking too much about it” because the consequences of making a bad decision are perceived to be minor.
  • Reflexive Consciousness – Behavior that requires no thought in the moment, but reflects thinking that has been done in the past.  This is employed in decisions to repurchase the same brand from the same vendor – the individual isn’t analyzing the problem and evaluating options, but doing what he did before.
  • Spontaneous Consciousness – Decisions that are made “off the cuff” and action that is taken immediately without consideration of the consequences.   It is not accurate to say that this is without thinking, but it involves so little thought that it is assumed to be unconscious or subconscious.
  • Reflex Consciousness - Actions that are taken extemporaneously without any thinking at all, and which often referred to as “accidents” when the outcome was damaging or “luck” when it was beneficial.   Dodging a flying object without knowing what it is or whether it will actually strike a person is a reflex action.

Naturally, the categories presented here are subject to argument, and it’s likely that many decisions fall somewhere between two of these categories – a bit more than convenient, a bit less than deliberate – but my intention here was to derive a system that’s more granular than the all-or-nothing approach that often characterizes discussions of consumer decisions.