Dobrev shared some fascinating statistics about both digital transformation and Customer Experience. In 2019, companies spent over $2 trillion on digital transformation, and even more in 2020, with COVID-19 driving many of these projects this year. However, success is not high with digital transformation. Experts estimate that anywhere from 50 to 80 percent of digital transformation projects failed in 2018. These projects came with a collective price tag of around $900 billion.

Unfortunately, that trend is not improving by much, per Dobrev. While there have been improvements in common metrics this year, the movements have not been significant. When added to an overall stagnation of the Customer Experience movement, digital transformation does not deliver the results that firms expected.

There are a few reasons for this result. My best way to explain it is through a recent experience I had buying glasses online. I didn’t want to go in for glasses because of the pandemic, so I ordered them online. After placing my order, however, I noticed that it was taking a long time. When I went to the site, I found no way to track them. I later learned that the holdup was because I missed an email where they asked me to measure the distance between my eyes (because they need to know how big to make the glasses). It turns out that their solution was for me to take a photo of myself with a credit card between my eyes. To me, this solution didn’t seem very technical and did not portend a good fitting pair of glasses (that cost around $300-$400, thank you very much). Also, I felt like a bloody idiot doing it. The glasses turned out fine, but I am not sure I would do it again when I reflect on the experience.

My reaction to the digital experience is not unusual, Dobrev says. He says that organizations often come into digital transformation projects with preconceived notions of what to should do that are not necessarily true or take the existing physical customers’ process and digitize it. Also, organizations often use a set number of channels (e.g., online, mobile, and call center) without regard for whether those channels will be useful. Add that to the fact that organizations do not know what provides value for customers in digital experiences, and you have a recipe for disaster. These Value Drivers are essential to success.

Forrester’s Four Categories of Value Drivers

Before we go any further, perhaps I should first explain what Value Drivers are. Value refers to what the organization gets as a payback for their investment of resources. These paybacks can range from increased customer spend, market share, or Net Promoter Score (NPS)*. Value is the result of Value Drivers, which are the parts of the experience that would inspire this type of Customer Behavior.

Forrester, a research and consulting firm, refers to four types of Value Drivers in a recent report from September. Dobrev details them as:

1. Economic Value: Economic Value concerns the perception of the value of your product or offer. Most organizations are trying to get on level terms on this part of digital transformation; otherwise, it’s a race to the bottom on price.
2. Functional Value: This term refers to how easy the digital experience is to use and the speed of service and convenience factors. In many ways, these are the transactional areas of the digital experience.
3. Experiential Value: This area is how the customer feels during the experience. Dobrev says that per his research and Forresters’, the Experiential Value delivers more than the first two areas outlined by the report.
4. Symbolic Value: The last area is about the customers’ self-image and how they feel about themselves when purchasing a particular brand. For example, you think differently about yourself when you buy a Jaguar vs. a Chevrolet. Dobrev says an exciting subset to this term is Social Causes. Many customers like to feel that they are working with a company that supports their social reform desires, whether that’s being green or lifting a social group, etc. The Symbolic Value Driver area of digital transformation is one we talk about a lot on our podcast.

Dobrev says that Forrester identifies one of the most significant challenges to digital transformation: knowing which area of these four steers the most value for your customers. Few companies have data on which of these drivers is most important for their customers. Organizations do have data, but it tends to be fragmented.

In reviewing Forrester’s list and my glasses experience, it occurs to me that if they had injected emotion into the experience, it might have improved my feelings about it. For example, I felt silly with the credit card on my head. Perhaps if they had explained it more or had me print out a guide that seemed more “technical” to me, it would have alleviated that negative emotion for me a bit. Another way to go would have been to embrace the silly; by making the dumb part of putting the credit card on my head even sillier with graphics or funny messages, it might have improved that moment. It is these types of design adjustments that Forrester’s #3 area addresses. To me, digital transformation success depends on recognizing these moments that drive or destroy value for you.

So, What Should We Do With This Information?

Digital experience isn’t going anywhere, certainly not as the pandemic carries on. The problem with unsuccessful digital transformation isn’t going away either. However, there are some things you can do to avoid them.

One of the things I love about digital experiences is all the data you can collect, even about emotions. Customers will let you know how they feel at different moments with their behavior. You can also measure people’s emotional responses to moments with technology like facial recognition software, which detects micro-expressions that denote emotional reactions to stimuli (like a widening of the eyes, a pursing of the lips, or shifts in body posture, etc.). Moreover, concepts like the Peak-End Rule, which describes how we remember our most intense emotion in an experience and how we felt at the end, will help you define the moments people will remember. The good news is all of these things are measurable in a digital experience.

Dobrev also suggests that you analyze your current Customer Journey with an eye toward what should be digitized and what should not. Some moments can digitize beautifully, and others that require a human touch to provide value to customers. For example, he learned on a project with an insurance company that a Key-Value Driver for customers in that experience was a human interaction during claims handling. Responsiveness was vital for them there, and the insurance company was previously relying too heavily on email, which was not delivering enough for customers. Dobrev says using Forrester’s four areas of Value Drivers is essential in this exercise. Then, test your choices, he says. The test results will help you identify where you need to tweak your designs either way.

Perhaps most importantly, this effort requires a strategy rather than a “check-the-box” attitude. Empathy helps, too. You need to understand what is driving value for your firm from your Customer Experiences. If you don’t understand that, you are throwing darts in the dark and hoping for a bullseye. It can be dangerous and passes up a lot of excellent opportunities.

Furthermore, I would add that you need to look at your digital transformation from a Behavioral Science perspective. Customers are not logical, and they do not behave logically as customers. They don’t like putting credit cards on their forehead and taking their picture to get their eyeglasses to fit. You have to take those things into account and design an experience that understands that about customers

Finally, it is vital to measure everything. See how and when they came into your digital experience, where your customers went while they were there, what they felt (using facial recognition technology), how long they stayed, and which way they left. All of this data will tell you what’s working in your digital transformation and what isn’t, among other things.

Another option is to consider an outside opinion. Sometimes you are too close to the project to see what could be a potential problem for customers, and, even worse, have an inside-looking-out perspective that might not realize how different moments make people feel. We have a tool we use called a Digital Experience Health Check to assess what they are doing well in their digital experience and what can use some work. The outside-in approach is more straightforward when the person approaching is on the outside.

Honestly, $900 billion in wasted resources chasing a digital transformation goal that you can’t meet is not a winning strategy. However, by approaching your online experience with the same eye for emotional engagement and with a comprehensive strategic approach to evoke emotions that serve your customers’ unmet needs, you can improve your success and get the results your customers (and your senior managers) expect.

* Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld. Net Promoter Score℠ and Net Promoter System℠ are service marks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Digital Transformation Didn’t Work: This Is What You Should Do Now appeared first on Beyond Philosophy.

So, me, you know. You might remember how I came to this field of Customer Experience almost 20 years ago after years of working in the corporate world. Furthermore, you have likely read my schtick about how we should take these ideas “beyond the philosophy” and into the real world. However, I realize that you might not be as familiar with these other blokes. So, allow me to introduce my other colleagues.

Lewis Carbone is a Customer Experience expert and speaker, and founder of Experience Engineering™. If you haven’t already, I suggest you read his book,  Clued In: How to Keep Customers Coming Back Again and Again. In it, Carbone shares his methodology for designing clues into your Customer Experience that signal to customers that you have what they want, so they come back for more. We hosted him to discuss this on a podcast not long ago. As a pioneer in our field, Carbone was one of the first to point out that you have a Customer Experience no matter what; the difference is that some organizations are deliberate (or haphazard) about what that experience is. He was also one of the first proponents of having an “outside-in” approach regarding the experience that you deliver to customers, which, my regular readers know, is one of the principles of which I am keenly fond. Carbone thinks that right now during the COVID-19 Pandemic is probably the most exciting time for Customer Experience Management advancement that he has ever seen because people are more sensitive to the experiences they have in their lives. Furthermore, it has brought awareness that an organization can manage its experience to create an emotional bond with customers.

Joe Pine is the author of The Experience Economy that started it all. As another pioneer for Customer Experience, Pine works with his colleague Jim Gilmore at Strategic Horizons, LLP. Pine and Gilmore have been working with clients worldwide to stage experiences that provide value for customers longer than I have, which is saying something. Pine believes organizations should understand that experiences are a distinct economic offering, not just better service. An authentic, distinctive experience is more than providing good service or being “nice.” Pine says Customer Experiences should be memorable, personal, and emotionally engaging, so customers value the time they spend with your company. In other words, Pine says if customer service is time well-saved, Customer Experiences are time well spent.

What Are Some of the Mistakes of the Past for Customer Experience?

The three of us, along with moderator Chantel Botha of Brand love, discussed in the webinar and a recent podcast some of our past experiences working in this industry, where we are today, and where we are going. Botha began by asking us where we have failed and what we learned from it.

When it comes to failure, my most significant ones are assuming that people are in the same mindset as mine. For instance, when I presented to a German insurance company about how they should use emotions in their experience, the clients asked me for proof that it would work. Unfortunately, at that time, I didn’t have any; I just believed that it worked, with or without evidence. Everyone did not share that mindset, and they still don’t. You have to prove it works. From that moment on, and this occurred back around 2005, my company links our Customer Experience efforts to proof so that the champions of Customer Experience are not caught out as I was all those years ago in that German conference room.

When I shared my story, I learned that Pine was empathetic to my plight. He says he often didn’t understand why other people didn’t believe in the impact of providing an emotionally engaging Customer Experience the way he did. However, he didn’t go the data route to prove it. Instead, Pine would develop frameworks. He and Gilmore would develop frameworks that describe what’s happening and prescribe what the organization should do about it. These frameworks would feature shining examples of these concepts at work to help convert the non-believers.

Often, Pine would have clients acknowledge that their philosophy was innovative but then ask who else had tried it. Pine found this frustrating because if it’s creative, it means that not a lot of companies had tried it. The challenge he encountered was getting senior leaders in interested organizations to feel comfortable enough being the first ones to take Customer Experience as a value enhancement in the marketplace—even if it might lead to failure. Failure is an always-present possibility, Pine says, because you aren’t sure how it will land until you get a real, live human being in the experience. Pine says he tells companies to save some of the budget (around 20 percent) to fix things in the experience that didn’t produce the reaction you wanted.

Carbone says that he has failed in the past by confusing the issue for people, clouding the real meaning of what Customer Experience means. There is a lot of discussion and perhaps not the depth of understanding of how different an experience economy of today is versus the industrial age of the past. He thinks a new distinctive lexicon is essential to clear up these misconceptions in the world of Customer Experience.

Carbone’s primary philosophy works with constructs around Clue Consciousness, which describes how their unconscious processing of Customer Experience signals drives customer behavior. These clues affect our emotions, shape our attitudes, and guide our actions.

Many organizations confuse process improvement and defect elimination with what experience management is, per Carbone. He says we need to begin to understand customer emotions and what stimulates them. Managing that critical aspect creates real power in experience management. Building systems that align the clues and signals goes well beyond process improvement. Customer-driven organizations that are inside the mind and heart, and soul of the customer are the goal. These companies know what customers feel even when the customers don’t know themselves. Moreover, how they think of us as a company is not as crucial as how the company makes customers feel about themselves, which, in turn, is how customers ultimately think about the brand.

What Are We Going to See Next in Customer Experience?

As the discussion moved on to the future of Customer Experience, I brought up the idea of Customer Science. You might recall that I recently discussed Customer Science on a podcast. It appeals to me because it uses a data-driven approach. Customer Science is a product of a perfect storm of artificial intelligence, the information provided by Big Data, and the interpretation of that data through Behavioral Science. This combination of technology and psychology, or understanding what people really do, makes it possible to anticipate and predict what the customer will do through data use.

These psychometric profiles have outstanding value for your Customer Segmentation efforts, an area where most organizations could use some work. Moreover, it enables you to anticipate customer needs and provide them automatically, particularly in digital experiences. Amazon does this, and they do it well, especially with me. Between my activities with the platform and associated products to their brand I use, Amazon knows everything about me from what I buy and eat to when I go to bed and even how many people ring my doorbell. These data points enable them to have a profile of me and provide me with helpful suggestions that I appreciate.

Pine sees that the COVID-19 Pandemic accelerated the shift from physical to digital experiences. However, he believes that the future of Customer Experience is the fusion of the two. An example of what he means is the platform Twitch, where people play video games while recording it and then show it to other people. The critical experience of Twitch is the social interactions that people have watching somebody play a video game. With all the possibilities of what Twitch and other platforms provide, Pine says we will see fewer people going to live events, whether it’s a conference or a festival or a concert, and many more people attending it “live” online. Those watching the live event online will also interact and have a different (and potentially better) overall experience with the amplification of that live event.

Pine says that the current crisis is accelerating is the recognition among people that what we really value are those shared experiences we have with our loved ones, friends, and colleagues. We want more of those and less stuff that sucks up our time, which we don’t want to waste. We spend that time on the meaningful experiences that we value.

Carbone thinks that the future holds an understanding that experience management is a way of doing business embedded in its values. He feels that business is operating on an “industrial age” platform but living in the “fusion economics” age. Fusion economics refers to a time in business when we have a greater depth of knowledge of the science and art of experience, what Carbone refers to as experience management 2.0. Carbone says that experiences are no longer linear but more like a pinball machine, presenting challenges in creating consistency with an emotional bond. Moreover, it is not a siloed responsibility but instead runs throughout the organization and across departmental lines. For instance, a restaurant client of Carbone’s combines the HR and Marketing departments because they realized that their people were their single greatest asset. Carbone says fusion economics enter into an era of virtuality, which understands the elements and role of technology and how to humanize it. This age requires understanding the delicate balance needed for human nature and needs and how the technology works well with these (and how it doesn’t). Perhaps most importantly, this age requires the realization that product attributes, features, and benefits have less influence on consumer decision making than what customers process unconsciously, emotionally, and from the perspective of the total experience.

What Should People Focus on Right Now?

Next, the discussion turned to what people can do or focus on right now to prepare for this future. For my part, I reiterated how I think a focus on how your efforts to create an emotionally engaging experience for customers leads to results. After all, why would anyone support all this if you cannot prove an ROI? In addition to results, I would also encourage people to consider things like the customer’s lifetime value vs. the costs involved with implementing the changes to the experience you propose. Often, by comparison, the value of keeping that customer for the long-term far outweighs the expense in the short-term.

Moreover, we’ve never implemented a Customer Experience program that doesn’t save money because it reduces the costs caused by failures, overlaps, and gaps in current experience. Furthermore, organizations often spend too many resources fixing what’s wrong rather than investing in the best opportunities to have a higher return. In other words, if you can start to identify the real ROI for your Customer Experience program, you will not only find more significant opportunities, but you will also get a hell of a lot more support.

Carbone urges businesses to consider the William Arthur Ward quote that said, “The pessimist complains about the wind; the optimist expects it to change; the realist adjusts the sails.” Carbone says it is time to adjust the sails of Customer Experience. He urges businesses to deepen their understanding of the new order and let go of industrial-age thinking that looks at the experience as a service and instead becomes customer-driven and going beyond customer-centricity. Carbone also thinks it would be wise to understand how customers think versus what they think by delving into unconscious thoughts and emotions. Finally, he recommends adopting a vision of a return on strategy and creating experiential value that will result in ROI. It is crucial to become champions of Customer Experience and convince people that building a culture that understands that the ultimate value the organization creates is in the experiences they provide.

Pine agrees that you should have the right mindset like Carbone suggests. If you have that, Pine says, then everything else can follow. The first thing that people can do is recognize that you’re in the experience business, not services. The second thing is to determine what you would change if you were to charge an admission fee for your experience. Pine says this is crucial is because when you “charge admission,” it inspires you to create an experience worth having. Pine also encourages people to understand that because experiences happen inside of us, it’s a reaction. Pine says there is not enough focus on customizing to the individual customer, the target of that customer-centricity. If you customize your goods or services and your experiences, you’ll thoroughly engage people.

We have come a long way with the concept of Customer Experience from its beginnings back in the late 80s and early 90s. Even since I joined the movement back in 2002, the ideas of what a Customer Experience is, how it works, and what you can do to optimize it have changed a lot. What has not changed through all of these transformations is the need to be deliberate about what you are trying to deliver and the emotional connection with customers you want to create. That is a foundational element that all of us “pioneers” of Customer Experience believe. That can set up your organizations for success to elicit the customer behavior you want that provides the customer-driven growth you need.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post What Do The Pioneers of Customer Experience See for the Future: And What Should You Do About It? appeared first on Beyond Philosophy.

We discussed Negativity Bias on a recent podcast. The short version of explaining Negativity Bias is that we find negative information to be more compelling, important, and influential than we do positive data. It’s why we notice the 1-star review before the 5-star. It’s also why we scroll through the reviews looking for a bad review if all the reviews are glowing.

If we were using rational thinking about the two reviews, one 5-star and the other 1-star, we could make a case that one person had a terrific experience, and one person had a terrible experience. Then, the average of those two reviews should balance to the middle, 3-stars. However, we don’t. Whenever I am shopping for something on Amazon and the product has even a three-and-a-half star rating, I don’t buy it. It must be four- or five- stars for me to buy it.

Negativity Bias exists because we worry about what could go wrong instead of what could go right. Therefore, we focus on negative information. We do it in the news, too. Most of the stories, particularly now during the pandemic, are bad. It’s easy to blame the people who put together the news media for highlighting the negative, but, in reality, they are only giving us what we want.

However, even when things are going pretty well, we still have a negativity bias. It’s a top-to-bottom bias. We’re looking for the negative stuff. If we get both positive and negative information, we pay more attention to the negative than the positive, like it’s weighted more heavily. Moreover, we’ll remember the negative information more than the positive.

From an evolutionary psychological perspective, which is about the survival of the species, it makes sense. If you only look for the happy things all the time, then you might be happy but then get eaten by a saber-toothed tiger.

From a leadership and Customer Experience perspective, with nary a saber-toothed tiger in sight, we still think it makes sense. You might see Negativity Bias manifest in your looking for bad news when given many stats to review as a result. I am guilty of this, also. Last year, we doubled the number of downloads for our Podcast, The Intuitive Customer, and I didn’t think it was that good; I wanted them tripled!

Leaders should recognize that looking for the negative is what they are doing in cases like my dissatisfaction with the podcast numbers. Too many of us do not say thank you to the teams for a job well done, even though we know that gratitude and attention has a massive effect on people’s motivation and productivity.

The Inevitable Average Performance

Nobel-Prize winning economist Professor Daniel Kahneman, the author of Thinking Fast and Slow, was hired once by the Israeli Air Force to review their pilot-training programs. Professor Kahneman noticed that the Air Force trainers would always give pilots negative feedback about anything they made a mistake on, no matter how small. Moreover, if the pilot landed the plane perfectly, trainers didn’t praise the pilots and instead treated their performance as expected. When Professor Kahneman asked about it, the Israeli Air Force said they do it because that works. If the trainer yells at the pilots, the pilots fix it next time. But if the trainer praises the pilot for a job well done, the pilot gets it wrong the next time.

These trainers were observing Regression to the Mean, which means that data that is on an extreme from the average, either positive or negative, then the data will be closer to the mean if measured a second time. Essentially, Regression to the Mean tells us that it doesn’t matter what the trainer says; pilots were going to average-out in performance anyway. However, our Negativity Bias makes it feel like we’re doing good by focusing on the bad. The reality is we’re not; we only make people miserable in the process of getting the outcome that statistics say would happen anyway.

One could argue that negativity bias is adaptive, that there are good things that a negative bias can do for us. After all, no one ever accomplished a great thing by relying on complacency. On the other hand, there is something perverse about never being happy with objective successes either.

Negativity Bias is related to Loss Aversion. A focus on the negative is a focus on the loss. There will be times when Negativity Bias will lead to less rational, sound decision-making. In those cases, we should eliminate it. However, there are areas where Negativity Bias could be motivational for us or lead to improvements. Those are areas where we might be willing to tolerate more negativity bias.

Insurance companies are successful because of the Negativity Bias. We worry about losing something (i.e., Loss Aversion), so we look at things from a negative perspective. The solution is to insure yourself against the loss. In addition to providing a solution to the effects of Negativity Bias, the insurance industry also shows that there is money to be made by people thinking negatively.

We exhibit Negativity Bias in other customer situations also. If I’m looking at things from a what-could-go-wrong standpoint, I want to take actions that will make me feel more confident about a purchase. Those actions could be reading a review, talking to friends, or buying only from brands that I trust (because I feel confident that the outcome will be okay). All of these actions are part of an overall risk-mitigation strategy.

So, What Should You Do (and NOT Do) with This Bias?

The danger of Negativity Bias is it skews your view of the world, and you might miss the good stuff. For example, despite being amid a global pandemic, things are better than they have ever been over the last 50 to 100 years. Global poverty is down a lot; some types of pollution have decreased, especially in some regions of the world; there have been improvements in infant mortality rates, starvation levels, and world income increases. It’s easy for these facts to get lost in the mix because we’re so focused on the negative.

So, we can use Negativity Bias to get positive results, but we should be careful not to skew the worldview by going too far with it. If we think that our team is doing everything wrong or that our company is failing, we will make bad decisions. It would help if you had an accurate picture of what’s going on in reality.

When it comes to practical applications of Negativity Bias in Customer Experience, we would recommend the following:

• Do periodic checks to ensure any negative assessments you have are based on reality and not bias. If your negativity bias leads you to want to improve things, it could potentially be positive because you focus on what’s not going as well as it could. On the other hand, if your negativity bias leads to inaccurate assessments about the world’s state, that’s not going to help or lead to better decisions. When you find yourself thinking negative thoughts about life, business, or Customer Experience, pause and do a check to see if you can substantiate that with objective measures. Sometimes things are genuinely terrible, but make sure that that’s reality and not just your perception.
• Recognize the fact that you and your customers naturally look at things from a negative perspective. It would be best to try to counteract that. You attract more flies with honey than you do with vinegar, so praising people in your team is essential, particularly in these times.
• Provide customers with solutions to help them. I’m convinced that people will look back and recognize who helped them through these difficult times. That’s a way of building customer loyalty. So, look for ways to solve customers’ problems and help them through this difficult time.
• Think about framing what you say to customers in a positive way. Knowing that customers will receive messages from a negative perspective, avoid communicating in an off-putting way because that will increase the pessimistic atmosphere. Whether in an email, chat, or phone call or your advertising messaging, be deliberate about how you positively frame things to counteract customers’ natural bias. Moreover, you might need an outside perspective to show you how you are framing your messages. We have an Experience Health Check where we act as if we were a customer in your digital and physical experiences, analyze your current experience against the best practices in business, and come back to you with recommendations.
• Don’t forget the upside that can exist in your business. Businesses focus a lot on the things that are going wrong. However, through our Emotional Signature Research®, we discover that there often more significant opportunities that would lead to more considerable gains than the areas on which the company focuses because of losses. Moreover, these differences show that the opportunity is sometimes even two or three times more valuable than dealing with negative things.

It’s easy to slip into Negativity Bias. Despite its name, Negativity Bias isn’t all bad. It can drive us to try harder and raise the bar for performance, which leads to outstanding results sometimes. However, if we let it cloud our judgment and crowd out our successes, then it has gone too far. Like many of the concepts of the behavioral sciences, Negativity Bias requires understanding and balance, so you can reap the benefits without cutting down your successes in one fell swoop.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Diagnosing Customers’ New Behavior During the Pandemic appeared first on Beyond Philosophy.

Culture change is not easy. I was running a workshop with a utility client many years ago about the concept of Customer Experience. There were 20 people in the room, and we were kicking around ideas of what changes could deliver an improved experience. One young lady, much younger than her surrounding co-workers, had an idea, several actually. However, with every one of her suggestions, one of the others would say, “We already did that; it didn’t work,” implying that it wouldn’t work now, either. This cycle happened many times before she gave up. It was clear that changing the culture at this utility was going to be challenging.

It still happens today, too. I was talking to a chief marketing officer (CMO) of a multinational company the other day who wants to change the organization (and believe me, I know this organization; he’s right). I started to talk about how people within his organization needed to understand customer emotions and focus on customer-centricity. The CMO stopped me because he knew right away that it wouldn’t work for their company. I challenged him on this, explaining that if he took that view, the organization would never change. We will see what he decides.

However, I don’t think his situation is unique. We know this process is a challenge. To help prepare you mentally for it, we comprised these five rules for affecting real culture change.

1. Create or define a burning platform.
2. Recognize this is a long-term goal.
3. Be clear on your vision for the future.
4. Remember that “you don’t make an omelet without breaking eggs.”
5. Lead from the top.

Let’s take a closer look at each of them.

Rule #1: Create or Define a Burning Platform.

Essentially, this first rule is for you to make it clear why the organization should change. If everybody thinks business-as-usual is working, no one will bother to make any changes; it’s too inconvenient and uncomfortable. It’s the classic idea that to effect change, one must realize that the pain of change is less than the pain of staying where you are. If you don’t believe me, consider the fate of these previously successful brands: Circuit City, Sears, Blockbuster, Kodak, and probably soon, J.C. Penney. Moreover, with the pandemic and the recession and everything else that will follow looming, we could see some more big brands take a fall. However, if these former brands had a more customer-centric culture, they would probably be here today because they realized that the market is moving on and appropriately adjusted.

To illustrate what I mean, consider how diets work (or don’t work, as the case may be). Weight loss is a common goal for many people, but they often fail to do so over and over again. However, some people succeed. The difference between those that fail and those who lose weight is that people who lose weight have the goal of losing weight for a specific event, e.g., a wedding or class reunion. The special event is the burning platform, which creates a sense of urgency.

I have talked about Loss Aversion before, and one of its implications is that when you are in a gain frame, which is what most companies are in most of the time, you tend to be risk-averse, meaning you don’t want to change. However, when you get into a loss frame (aka, there is a platform on fire and it threatens to burn the whole enterprise down), your risk preferences flip, and you become more risk-seeking. In other words, you are more willing to take a chance because you can see that the status quo threatens to destroy your success.

Rule #2: Recognize that this is a long-term goal.

I’ve been in many organizations where people want to make a culture change in the next six months. In my experience, it takes a lot longer than that. You may be able to start it in six months, and even make progress, but you will still have a way to go. Cultural changes usually range from three to five years.

If you think you will achieve culture change in six months, my advice would be don’t even try it. You’re not going to see it through to completion in six months.

Rule #3: Be clear about your vision of the future.

Your articulation of the vision, the philosophy, is vital. However, it is equally crucial that you know what you want it to do. Break it down into all the new things you want to do and all of the old stuff you want to stop. Also, include how you want to measure it.

In my early career in corporate life, the philosophy flavor of the month at that particular time was Total Quality Management. I was with a big corporate telecom at the time, and we went on a training course for Total Quality Management. One of the remarkable things that came out of the training was the idea that you should have a plan and objective for every meeting. It would be best if you also articulated those things beforehand, estimate the time needed for the meeting, and then stick to it. What I like about these concepts is that these are solid, definable things you can do. Moreover, if you don’t do it, it is obvious you aren’t doing it. This level of clarity for your vision will help you achieve the same.

The culture of your organization reflects on the experience your customers have. For example, we were working with an airline that wanted to improve their experience. We discovered in getting to know their culture that internally, they referred to passengers as “self-loading freight.” In essence, this alone tells you everything you need to know about this airline. As we worked with the airline to develop a Customer Experience Statement, which defines the experience they wanted to deliver, the airline wanted to improve punctuality. However, we explained that being late was a company culture for them; they had been late to every meeting we ever had with them. While starting meetings on time has nothing to do with how quickly planes are loaded and unloaded, being late to meetings can send a powerful cultural signal within an organization that being late is acceptable.

The ability to articulate what you want people to do and what you don’t want people to do is essential here. You want to make these actions definite and measurable, too, so it’s obvious when somebody is doing it—or not doing it.

Another cultural signal I always like to check is where Customer Experience falls on the meeting agenda. If it is at the end, then that tells me a lot. What you put at the end of the list is rarely the number one priority. If you always do customer metrics last, it sends a subtle message to everyone in attendance that it is not that essential to the organization or not as critical as all the other items on the list.

Rule #4: Remember that “you don’t make an omelet without breaking eggs.”

The reality of culture changes is that they are tough, and some people will not want to go on the journey. You will encounter resistance to your plan, and it won’t always be forthright. Ultimately, you might have to sack individuals that aren’t on board with your planned cultural change.

The last corporate organization I worked at was implementing a change program involving six sectors. One sector was not on board. The guy running even placed a bet that the change program wouldn’t work. It should come as no surprise that when it was time to go live, their sector wasn’t ready because that senior person convinced everybody that it wouldn’t work.

If you consider the teachings from Sun Tzu’s The Art of War, you have to choose your battles. You can’t win every battle, so you need to select the crucial ones. From a business perspective, that can mean breaking a few eggs to make your Customer Experience omelet. In other words, you might have to fire someone who isn’t on board, particularly if that person is a high-profile, senior person. If you remove them, that sends a signal that you’re serious about your program for change. I wouldn’t fire people just as a matter of course, but if they’re undermining what you’re doing, you do have to get rid of them. Which leads me to…

Rule #5: Lead from the top.

Good leadership provides an excellent employee experience and the employee experience you provide is essential. In fact, my book, Happy Employees Make Happy Customers explains in great detail how this works. Regarding culture, one of the points I make in the book is that people often stay in jobs because of great managers, and leave because of poor ones.

Your words and actions have to be the same. If you want to make that cultural change, you have to live it and demonstrate to people that you live it, even when (and particularly when) it’s causing you some pain. Principles are great, but they mean nothing unless you sacrifice something for them. Make sure that you’re doing what you’re asking your teams to do.

A vital part of that is to look at your schedule. If you say the organization needs to be more customer-centric and spend more time with customers, look at your schedule and see where you’re doing that. Otherwise, your words ring hollow to those who follow you. It goes back to the importance of these subtle signals. If you say one thing and do another, it undermines that culture change.

The first call center I managed many years ago had 550 people in Bristol, England. The call center was in one building, but their manager before me had his office in another building entirely. The effect was that the team never saw their manager in person at all. There were offices at the call center building; he just wasn’t in them.

When I took over, I wanted to make the point about being accessible. I would j sit out on the floor with everybody else. From a cultural perspective, I was saying I was equal to everybody else. Moreover, I stayed as long as the call center was open. I wanted to make myself available to the team and these tactics were my way of sending that signal to people. In a way, the most essential signal we can send is how we use our own time.

These five rules can help you in your efforts to effect change at your organization. By creating urgency with a burning platform, you prioritize the need for change. Then, working with the long-term in mind, you can present a clear vision for the culture you envision for your organization and work out what you should (and shouldn’t) do in that new environment. Recognize there could be some battles, and maybe some people you need to move on because they’re not going to be part of the new culture. Perhaps most importantly, you must match your words and actions because the little things matter and will resound around the organization.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post The Five Rules for Affecting Real Culture Change appeared first on Beyond Philosophy.

We talked about Priming on a recent podcast. From a technical perspective, Priming is a term that describes doing a little bit of something that will activate some idea in your mind and getting a response out of it. The word Priming comes from the old term “priming a water pump.” So many old water pumps would need someone to pour a little bit of water into the pump so that the water would come out.

“There is only one thing worse than being talked about, and that is not being talked about.” -Oscar Wilde

Social psychologists often use Priming in their experiments. For example, some researchers did a study in a wine store. They discovered that music playing affected customers’ choices. When playing French music, French wine sales went up by a ratio of five to one. The exciting bit was if you had asked the customer, “Why did you buy French wine?” customers wouldn’t say, “because of the French music.” Priming is a subconscious element. Customers don’t understand why the French wine looked more appealing to them that day, but the social psychologists did.

Priming Memories

Memory is crucial to customer loyalty. You can’t be loyal to something that you don’t remember. However, memories are like a fishing net, and understanding why could help you know a little about the significance of Priming.

So what do I mean by memory being like a fishing net? Imagine there’s a fishing net that’s under the water. You pull out the net by one knot. As the knot breaks the surface, some tangles are out of the water, and some under the water.

Now imagine that the one knot you are holding is a customer memory. All the other knots in and out of the water are customer memories, some above the surface and below. The memories are connected, just as the fishing net knots connect.

Those knots’ strength is affected by many things, not least because some memories were more emotional than others. Regardless of the strength, all the memories connect, and when you activate one of them, you activate the rest to a certain degree.

This fishing net example helps us understand what Priming does. 

If, in this metaphor, the water represents our subconscious and pulling some of those knots above the water level means bringing it into consciousness. Therefore, those memories are the ones that we’re aware that we’re thinking about it. Priming pulls some of those knots close to the surface, lurking just below consciousness in the subconscious. We are not aware of remembering these.

Some of those knots around the one you are holding can be different things like images or pictures, an advert that you saw the night before, or that as you walk past the aisle in the grocery store. You see the same picture that makes you remember the product or service.

For example, if I make it cold, you’re consciously aware that it’s cold. That knot of coldness and everything associated with it may have pulled above the surface. But under the surface, maybe a desire to feel warmer and situations where you felt warmer probably haven’t broken the surface. But because you pulled up a part of the net, you’ve primed one knot. Then, the other ones around it are now closer to the surface where they can start to influence your behavior even if you’re not aware of it.

Smell is a vital memory evoker and primer, too. Have you ever been to a Lush store? Lush sells bath salts, soaps, various things that have the feel of handmade or at least not mass-produced. The smell is strong. You can tell there’s a lush store a hundred yards away. If you smell something, you’re probably aware that you’re consciously smelling something, but that smell will pull up a part of that net, and that’s going to pull a lot of other things up to the surface, maybe including a desire to go into the store.

Regardless of the strength, all the memories connect, and when you activate one of them, you activate the rest to a certain degree

Priming Experiences

When you apply Priming with the Customer Experience lens, you also realize that some organizations are not aware of how the little things they are doing are priming the customer. For example, cable companies do not prime you properly. (What a surprise!) You are already fired up because your bloody Internet’s gone down for the 497th time that week, and they are trying to sell you bundles through the hold. Of course, that intermixes with the repeated message that that “your call is important to them.” The effect is the opposite. Each time the terrible music pauses to let in the “your call is important to us” message, I cringe. It reminds you of every other time you’ve been frustrated and waited on the line for resolution and every different negative feeling.

Primers pull some of those responses to the surface. So, as an organization, you have to ask yourself, are you drawing positive or negative reactions?

We worked with an insurance company in the UK, where we were looking at the fact that they had several repeat calls into a call center. We discovered that after placing an order, the insurance company agent would tell the customers, “Your policy documents should be with you within five days.” And 76 percent of people that had that experience were then phoning back after three days and saying, “I’m sorry, but when was I meant to be getting my policy documents?”

It was the word “should.” By saying, “you should,” it primed feelings of doubt. We had the agents say instead, “Your policy documents will be with you within five days.” The call volumes move from 76 percent down to six percent within three weeks.

It is important to note that the callers had no idea why they called back before making the change. If we had asked, they would have said something else. However, the words you use are essential when it comes to priming correctly. While I dislike scripts, guiding people on the type of terms you would prefer for them to use, and giving them feedback is appropriate. These subtle word changes can influence people’s reactions to their situation.

When managing your customer experiences, think about whether you can steer customers in the right direction by pulling up some of these more positive associations in their memory’s fishing net instead of some of the more negative ones.

The idea of priming properly to evoke positive associations dives down into Journey Mapping. When you’re designing your customer journeys, understanding how you prime customers can explain what causes them to do things you don’t want them to do. Furthermore, look for what you can do to prime the memories that influence customer behavior in the most important ways for your business. It would be essential to consider:

• What music are you going to be putting on hold?
• Which images are you going to be using?
• How does it smell in your physical location?
• What are the words that you want to use?

All of those things should be priming customers to do something that you want. However, it should be appropriate.

Anchoring is a heuristic, which you might recall means a shortcut in our thinking to help us make decisions, resulting in a bias. Anchoring describes where you start with something, typically a number, and then adjust from there. The bias occurs because we choose bad anchors, and then we often under-adjust from there. For example, if you have people list at the last four digits of their Social Security number and then have them estimate the price for something, the price they estimate will be biased towards whatever number they listed first—even though people know that a social security sequence has nothing to do with the cost of the item they are estimating.

Anchoring is like Priming because you put a thought in somebody’s mind. There is a sales technique that somebody was talking to me about the other week where you tell a customer the rough price. It becomes an anchor, but also it weeds out those customers who can’t afford it, helping you qualify your prospects. Moreover, much evidence shows that the first party in a negotiation who offers the opening bid becomes an anchor. Typically, it is better to open the talks yourself because you’ll end up somewhere closer to where you want to be rather than if you allow the other person to open negotiations.

Some of the things you’re priming your customer with you might not realize. It could be you are priming them to have an unrealistic expectation. A lot of advertising does this. Customers see great things on TV, these incredible images of what it’s going to be like when you interact with this organization, and then it’s something terrible in reality.

We’ve talked before about the two cognitive systems that people have, the Intuitive System and the Rational System. Priming occurs because your Intuitive System is always there in the background, trying to help monitor what’s going on. When you’re trying to decide, your Intuitive System is trying to make you more efficient. It will pull up related ideas if you might need those, pushing those closer to the surface so that they’re available. With Priming, your intuitive system is monitoring what’s going on and sees the prime and says, “oh, this might be important.” It pulls up these memories, these thoughts, these feelings, and pushes them closer to the surface if they might be useful to you, and influences your behavior.

So, we shouldn’t think of Priming as something malicious. It doesn’t turn people against their best interests, hijacking them. Instead, Priming makes ideas available that the Intuitive System processes and then can bring to bear for the person who’s for the customer.

So, What Do You Do With This Information?

The first thing you should do with this information is to recognize that you will be priming your customers now one way or the other. There’s no neutral point on this. It will impact your customer. The issue for me is, is it deliberate? Did you mean to do it?

The second thing you should consider is whether you want to continue with these primes. Are they yielding the right behavior? Are you getting the results you want?

The third thing you should do is adjust your primes. Given the experience you want to give your customer what new primers should you be putting in place? Bear in mind that these are not universal. Different groups of customers will feel other primes depending upon what’s important to them. So the whole area of customer segmentation and everything else plays a part in this.

Moreover, if you are not aware of why primes will inspire what behavior, or even what primes your customers want, we recommend undertaking research. When you understand what customers value, you can design an experience that gives it to them.

However, it can be challenging to discover what customers really want; sometimes, customers don’t know themselves. In these cases, it is vital to undertake research to uncover them. Our Emotional Signature Research® discovers what level of emotional engagement you already have with customers and which emotions will drive the most value for your organization. The method we use can uncover these hidden needs, meaning the ones even customers didn’t know they wanted. Having the hidden-needs-want list is an excellent way to design Priming elements that inspire the customer behavior you want.

Most importantly, remember that you’re already doing this. People’s Intuitive Systems are already on the lookout for these primes because that’s what the Intuitive System does to help. So, give some thought to it. Are there ways to improve the customer experience by being sensitive to the primers you’re sending out instead of being ignorant and potentially making things worse accidentally?

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Small Things That Have a Dramatic Impact on Your Customer’s Experience appeared first on Beyond Philosophy.

Lewis Carbone, a Customer Experience management expert, speaker, and founder of ExpereinceEngineering™, was on a recent podcast to discuss how to get inside the customer’s mind and move to this next level of Customer Experience Management. He compares where we are for the transformation of Customer Experience as the transition from driving cars with gauges to driving Indy cars. Moreover, he sees it as a fusion of art and science, a science that has evolved over the years.

Per Carbone, people are aware of the impact of unconscious thought. Moreover, the study of neuroscience and psychology has amassed more knowledge about the best way to apply it to consumers over the last ten years than it has over those disciplines’ entire history. The key, it seems, is in the clues we leave for customers in our Customer Experience design. In Carbone’s Book, Clued In How to Keep Customers Coming Back Again and Again, Carbone emphasizes the significance of clues and signals for our unconscious mental processes. The brain takes in information, interprets, and filters it all the time. Much of it is unconscious, and all of it is essential to understand.

Lewis Carbone, a Customer Experience Management Expert sees [CX] as a fusion of art and science, a science that has evolved over the years.

Many years ago, Carbone made Deep Metaphor Elicitation his preferred methodology and applied it to experience management. He and his team learned that the unconscious mind decides even before we articulate or rationalize it. It happens at a primitive and emotional level. Therefore, Carbone’s team uses this fact as a fundamental building block for all their experience design and management programs, aiming to create greater emotional engagement with customers.

Both Carbone and I agree that emotions are the key to designing and delivering excellent Customer Experiences. However, we are both still surprised by how few organizations adopt this methodology. Carbone thinks that could be because they don’t know what to do with this information, so firms stick with what they know because it’s comfortable. Or companies only take a shallow dive into the idea, hoping that a little effort will yield big results.

Clues Send Signals in Experiences

Carbone says he would rather know how people think about something versus what they think. With that “code,” he can unlock how to help them experience what they want and feel the way they want to feel. Carbone does this in experiences by leaving clues. Clues, he says, are the signals that help our brains process information.

Carbone did some work with hotels over the years and learned that people thought of the hotel room as a “safe container.” If there is a breach of safety, then, unconsciously, it reflects poorly on the experience.

Consider a time you walked into your hotel room after checking in. The first time you use the bathroom, you might remember there is a triangle that is folded at the end of the toilet paper. This triangle is a clue or signal that the staff has just cleaned the bathroom toilet you are using. Carbone says if he notices that the triangle is missing, then unconsciously, he feels uneasy and wonders if someone has been there before him or forgot to clean the room.

For my part, I understand what he means. I feel the same way about hotel rooms and the idea that people have been in there that I didn’t know about. Although, it depends on who was in there. For example, I don’t feel weird when I come to my hotel room and realize I have received turn-down service. (The chocolate didn’t hurt with that feeling, either.) However, if someone came in to do some maintenance and I wasn’t aware it would happen, it would bother me. I would also wonder why the front desk didn’t tell me about it. These little things are essential.

More than hotel stays at the moment, digital experiences are crucial these days. Digital experiences present an excellent opportunity for many organizations to manage Customer Experiences. After all, one of the beautiful things about digital experiences is that you can measure everything. However, one of the daunting things about digital experiences is that you can measure everything. The danger I see is that few people are trained in using the information they measure to identify what it means for customer behavior. They lack the training in the behavioral sciences and misinterpret the underlying behavior that exists. In other words, they have the data, but they don’t know what to do with it.

Carbone says that what’s under the data and the depth you dive into the data will help move digital Customer Experiences forward. Many times, data analysis will result in fixing broken things in the experience, which is excellent. However, it is not enough. Carbone and I would both like to see more organizations move beyond remedying problems and get into creating digital experiences that consider the customer’s mind. The signals and clues we unconsciously process demand it, especially now in the COVID Era.

These same considerations of our mindset during the COVID Era also carry over into physical experiences. Carbone says designing experiences that appeal to the unconscious mind’s need for safety are crucial. He recalls a recent stay in Wisconsin where the hotel staff had seals on the door to indicate the room had been sanitized from its previous occupant. The team also opened doors and pushed elevator buttons for guests, so people didn’t have to touch too many surfaces. Carbone said that he had the distinct feeling that the hotel was showing they cared about him. These actions had an improvisational feel, meant to adapt the hotel experience to a customer’s needs in a COVID environment. Carbone calls this type of experience management adaptive impulsivity.

However, Carbone says that intentional design is critical to experience management. In other words, understanding in depth how customer emotions work in experiences, creating a deliberate strategy that appeals to customer emotions, and then implementing them consistently is critical. Moreover, he wants organizations to think of it as an integrated system.

Organizations should ask themselves how to determine the emotional end frame and then make it a reality from the fusion of their experience. Carbone also says that organizations should understand that the ultimate value they create is the experiential value, which can be managed to make an emotional response.

If you want customers to feel comfortable, safe, or cared for, paying attention to these little things […] will make a big difference.

I talk a lot about decision shortcuts that customer use, called heuristics. Many times, heuristics place importance on small things in experiences. Our subconscious mind processes information and makes decisions differently than our rational mind. It relies a lot on these shortcuts, symbols, and signals. Therefore, if you want customers to feel comfortable, safe, or cared for, paying attention to these little things—like toilet paper triangles or opening doors for customers during COVID—will make a big difference.

So, What Should You Do With This Information?

Carbone says that the most critical factor for getting inside the customer’s mind is self- awareness. Understanding where you are on this continuum of increased knowledge and sophistication in experience management will help you move forward into the next era of Customer Experience. Carbone also has five absolutes to Customer Experience Management:

1. Move from the world of making and selling to sensing and responding.
2. Think about emotional and rational bonds with customers.
3. Understand and leverage the role of unconscious thought.
4. Become “Clue conscious” of your signals in language, physical space, and gestures.
5. Develop a rigorous system that manages clues and creates a Clue-Conscious culture at your organization.

It would be best to understand that we are entering a whole new era of opportunity to apply these new thoughts and move beyond this improvisational bridge we have created. The behavioral sciences have led to understanding experiences more deeply than we’ve ever understood them before. Applying new tools and techniques to understand how experiences make the customer feel is essential.

Carbone says that organizations need to go back and look at signals they send in their experience and understand those signals’ power. Moreover, you have to change your approach to research. Surveys tend to be a popular way to get feedback from customers. Unfortunately, Carbone says that the way you ask the question changes the answer. Instead, he would try open questions that do not aim for specifics and then “wander through the maze of their mind and let them take you where they want to go.”

Many organizations have yet to grasp what the new world is going to look like post-COVID.

Sometimes it takes an outsider’s perspective, too. We often undertake Customer Experience Health Checks, where we assess an organization’s Customer Experience by acting as a customer and performing internal interviews within the organization. After a couple of weeks, we will present our recommendations based on our findings.

The world has changed, and before we could experiment, we moved ahead. Many organizations have yet to grasp that and what the new world is going to look like post-COVID.

What we do know is it’s going to be a lot different. Getting under the skin of what that means and what clues you should be sending is critical for all organizations.

Understanding your customers’ motivations is also vital, whether they want safety, convenience, or feeling cared for—or all three at the same time! Knowing that opens up what you can do creatively to facilitate those motivations. In problem-solving mode, your solutions are going to be much more tactical and much more narrow. But if you widen your scope, you can create a robust experience with the proper clues and signals that deliver the appropriate customer emotions.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Getting Inside the Customer’s Mind appeared first on Beyond Philosophy.

We discussed these five rules on a recent podcast. The rules are as follows:

1. Do not think there is one “silver bullet.”
2. Do not over-emphasize the easily-measured costs.
3. Strive for balance.
4. Look at the lifetime value of the customer.
5. Select the areas that drive the least value for you.

Let’s take a deeper dive into each of these.

Rule #1: Do not think there is one “silver bullet.”

Clients often tell me that they need a big idea to cut costs. They are looking for one thing they can do, like reducing the call centers or moving the labor force offshore, and other solutions like these. It tells me that deep down, my client thinks that cutting costs can be a single, dramatic action. However, in my experience, which is extensive, I know it’s the sum of many efforts essential to cutting costs. Moreover, a five percent reduction across several different areas is also going to be less painful and traumatic than a single action would be.

Instead, I would advise taking a lateral look. When I was working in corporate life at British Telecom, and we were looking at reducing costs, I discovered the benefits of taking this approach. For example, the knee-jerk reaction was to adjust our headcount (salaries) to reduce our costs. However, we chose to consider other expenses, like recruitment and training costs and advertising costs. We had much more significant cost savings by including these different areas than if we only considered headcount salary costs. Therefore, if your target was to achieve X amount of savings, thinking laterally is critical.

Rule #2: Do not overemphasize the easily measured costs. 

Many people attribute Einstein with a quote that is useful here:

“Not everything that can be counted counts and not everything that counts can be counted.” —Albert Einstein.

When you are looking to cut costs, some things on balance sheets, income statements, or financial records are easy to see (e.g., the salary costs we mentioned in rule 1). Other hidden costs are easy to miss (e.g., the recruitment costs). By making changes that save you some money in the short term, like reducing head counts, you could incur much higher hidden costs in the long-term by accident, like recruitment. So, your overall savings will be less than if you considered all the harder to pinpoint costs. In other words, it would be best to avoid taking a siloed perspective to this exercise and considering even the harder to measure cost areas.

Rule #3: Strive for balance.

I’ve never been involved in a Customer Experience improvement program that has not ended up saving costs. Why? When you are providing a poor experience, there are two forms of expenses. First, there is usually a lot of operational overlap that causes poor experience and increases your costs. Second, there is a lost opportunity cost.

For example, I was running a workshop for a client in the mobile communications market. The VP of customer service was late and came into the workshop after about an hour looking fraught. I asked him what the problem was. He said one of the marketing teams had decided to reduce their costs by bundling a mailer that was going out to all their customers, which numbered around 500,000. The call center was in meltdown. Customers were upset about the fact that they couldn’t get through, which led to loads of angry tweets. And, well…you can probably imagine the rest.

This story is an example of unintended consequences. The marketing department had good intentions. They chose to send the mailer out at once to save costs; it seemed like a good idea. However, that well-intended decision concluded with the call center unable to handle the response.

In another client situation, I spoke with a senior manager at a water utility we were consulting. He had been reviewing a customer complaint. He explained that the process was that complaints start in the call center, and then escalate up the chain until the customer is satisfied with their resolution. In this case, the complaint landed in a big meeting with ten senior managers hashing it out.

“How much was the complaint about?” I asked.

“$1,500.”

“The meeting that you just had cost more than the $1,500, let alone everything else that happened before that,” I said, astonished.

If the water utility had resolved that complaint at the first call with the customer, it would be better off. Moreover, all the stats will tell you that when you deal with a complaint and the customers happy with it, they are more satisfied with a lower monetary amount and have a higher level of loyalty than when they aren’t pleased with the resolution.

It’s a matter of balance. Taking action earlier would have cost less and improved customer satisfaction. Also, empowering the front line employees to make decisions up to a certain amount can drive costs down. For example, employees at Ritz Carlton can give people up to $2,500 to compensate a guest with no questions asked.

Striving for balance emphasizes that you can reduce costs in more ways than to stop doing something. It could be the experience design you implement that improves the process and saves money at the same time.

Rule #4: Look at the lifetime value of the customers. 

It is essential to consider the revenue generated by your customers over the lifetime of your relationship. So, not just the revenue over the next year, but several years, maybe even 20 or 30 years. That value is the number it would be best to be mindful of when cutting costs.

You also need to realize how much it costs you when you need to replace customers, i.e., customer acquisition costs. You are likely to lose some customers between the effects of the COVID-19 economic downturn and cost-lowering efforts that could impact the experience. Ensuring that you don’t lose your best customers is critical because their lifetime value and customer acquisition costs are high.

With the Ritz Carlton example, the $2,500 they are authorized to use to satisfy a customer complaint was not pulled out of thin air. That was based on extensive customer lifetime value calculations. Ritz Carlton knows how valuable their customers are to them over the long haul, which drives their decisions. If we were advising Motel 6, we would probably not suggest that they spend $2,500 per customer at the drop of a hat because there’s a different lifetime value calculation.

Think about these long-term relationships, know what your customers’ value is, and incorporate that into your decision-making.

My favorite example of what not to do is cable companies, who have terrible customer service, as I have mentioned more than once. Let’s say you pay them $150 a month for 12 months. Your annual value is $1,800. That is a significant number, but not as significant as your 10-year value of $18,000, or a 20-year value of $36,000. When you consider those long-term values, it should impel the cable company to carefully consider how they treat their customer—especially when you factor in the acquisition and onboarding expenses associated with the service. It would be best to ensure that cost-cutting measures do not drive a customer out after two or three years instead of the natural, longer life cycle most customers have.

Think about these long-term relationships, know what your customers’ value is, and incorporate that into your decision-making. Perhaps most importantly, avoid short-term cost-cutting strategies, especially if it’s going to increase the friction of interacting with your firm marginally. Over multiple interactions, your customers could determine it’s not worth it and go somewhere else, which can be higher than what you saved.

Rule #5: Select the areas that drive the least value for you. 

There are parts of your experience that drive value for your customers and other factors that don’t. What you don’t want to do is throw the baby out with the bathwater. In other words, don’t cut your costs and reduce your experience quality in the areas that drive the most value for you now.

I have a story about the milkman that explains what I mean. A few years back, my wife Lorraine used to have the milk delivered daily to the house by the milkman. I told her we should cancel and get our milk at the market like everyone else. She disagreed. Lorraine explained that the milkman, Kevin, came around on Friday to collect money, and they had a friendly chat, and she didn’t want to cancel. Eventually, Kevin moved on, and his replacement decided that he would leave a bill and collect a check on Friday, that we would place under the mat. After a couple of months, Lorraine canceled. She wasn’t getting the laugh and joke anymore, which was what she valued in the experience.

My milkman story illustrates how essential it is that you know what parts of your experience drive the most value for your most valuable customers, so you can make the best possible choices. You need to know your different types of customers and what that group values because it could differ. If you don’t know, then find out. An outside perspective can also help. For example, our consultancy services can help you discover what drives (and destroys) value for your firm and even how to discover what customers want that they might not know themselves.

Even when there isn’t a global pandemic wreaking havoc on the economy, it is essential to reduce your costs. However, it is equally critical to cut costs without driving away customers, which is by all accounts trickier. If you can avoid looking for the silver bullet fix and overemphasizing the easy-to-measure costs while striving for balance in your cost vs. customer satisfaction processes, you are off to an excellent start. Just remember to consider the lifetime value of the customer when you manage customer experiences so that you don’t drive the best ones away. Moreover, ensure that you select the areas that drive the least value for the organization or you could end up driving down costs—and your profits in one fell swoop.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post 5 Rules for Driving Down Costs in a Customer-Focused Way appeared first on Beyond Philosophy.

Naïve Diversification bias happens a lot at the supermarket. For example, have you ever bought a variety of snack packs of chips only to realize that everyone wants the same kind? Maybe you purchased an assortment of yogurt flavors at the store and then threw them out after they expire because you never ate the key lime ones you were sure you wanted to try? I have too. We all do this stuff because of the natural bias we all have for overestimating our preference for variety—and your customers also have it.

It doesn’t only happen at the grocery store. As I look at my bookshelf, I see some books I bought because I thought I should read them. I call them aspirational books. However, I haven’t read them. I also subscribe to a list of podcasts. I listen to five or six of them, but I will never get to the fifteenth. Nonetheless, I continue to subscribe…because maybe I’ll listen to it next week.

(By the way, my podcast is The Intuitive Customer, and you can subscribe to it – I hope you listen to it, too)

In reality, we are not as interested in variety as we thought.

As we discussed in a recent podcast, there are many reasons in the Behavioral Sciences for why this stuff happens. However, Naïve Diversification Bias is a significant driver of these particular forecasting errors. Some of it aspirational, meaning we think we should try new things. Sometimes we do it because we anticipate a need for variety, like with the yogurt flavors. In reality, we are not as interested in variety as we thought.

Itamar Simonson, PhD, The Sebastian S. Kresge Professor of Marketing at Stanford University, is one of the more influential researchers in this area of the behavioral sciences.  In a paper published in 1990, he demonstrated how we choose more variety for the future than when we choose for the moment. Professor Simonson brought snacks to the students every week for three weeks. He had them choose ahead of time what the students wanted as a snack from a list of options for one group. In another group, the students chose the snack each week. For both groups, everybody made three snack choices over three weeks and consumed them one per week. The only difference was when the students made their decisions about what to choose. Professor Simonson found that when people were deciding for the next three weeks combined, the students chose more variety, but when people were selecting each week, students would go for the same snack. It showed that “at the point of consumption,” students knew what they wanted—and it was their favorite snack.

I have seen this effect at work in a trip I take with friends. There are 12 of us that travel together (you know, back when that was something one did), and when we would book at restaurants, the establishment will sometimes ask us to order ahead of time. I was organizing one of these meals when it was my turn, and it nearly drove me round the bloody bend! Everyone would choose what they wanted and then, as the day approached, would change their orders.

Of course, I am no different. I use a service called Graze. It’s a mail-order subscription service where they send you little snacks each week, mostly healthy stuff. Although I chose my snacks ahead of time, I now have a cupboard full of dried fruit that I didn’t eat. Why? When I was ordering, I thought eating dried fruit would be good for me, but when push comes to shove, and it’s time to snack, I don’t eat it.

When you give customers choices that look into the future, they will do the same. Customers look into the future, anticipate a desire for variety, and then don’t want the variety once it comes.

So, does that mean people don’t want a variety of choices? The answer is complicated. People want options, yes, but having choices does not improve their experience as much as customers think it will. Moreover, too many choices can cause problems, including Naïve Diversification. Too much variety can also cause confusion, frustration, and loss of motivation. However, if you ask customers, they will tell you they want more choices. After customers find themselves in a situation where they have too many options, customers are surprised that it’s challenging for them.

I’m not too fond of too many choices. For example, when I go on Amazon and put in a search, I rarely go to the second page. However, there are multitudinous pages of products on Amazon to choose from, which is, in part, what drew me to Amazon in the first place. However, Amazon customers rarely scroll past the second page. One way Amazon shoppers respond is by using filters or sorting by different criteria. “Average customer reviews” is one I use a lot. The more the reviews there are, the better. Another one I use is “verified purchase.” With this strategy, it feels like there are many choices, but then I can narrow and prioritize the field of options by inputting specific criteria.

Another good strategy for avoiding the Naïve Diversification bias is to make choices as close to the moment of consumption as possible. For instance, I should re-examine my Graze order. At a certain point, I will realize how much money I am wasting on dried fruit I don’t eat, which will lead to my canceling my subscription. However, if Graze sent me a prompt to refresh my preferences, I could revise my list and pick the stuff I want and feel good about keeping my subscription. So, if organizations can decrease the time between choice and consumption, then people will make improved forecasting decisions.

Finally, understanding how these feelings of dissatisfaction affect customer behavior is essential. We know that many organizations have customer journey maps prepared, which is excellent for showing you a process. However, it does not show you customer behavior. Moreover, COVID-19 has changed your customers’ journeys. People are buying differently, which means that Customers will now have a new process. It is essential to know what these are and to understand their behavior along the way. Behavioral Journey Mapping takes this exercise a step further by charting customer behavior throughout the process. In essence, it is showing you how your experience affects what your customers do.

So, what should you do with this information?

1. Recognize Naïve Diversification Bias. First, I recommend recognizing the Naïve Diversification Bias when people make choices for future consumption. These choices will be different than what people choose for immediate consumption. If you are in a situation where the bias can come into play, acknowledge that it is a potential source of customer dissatisfaction.
2. Understand that people change their minds. Know that customers will have dissatisfied feelings regarding their forecasting errors, i.e., my cupboard full of dried fruit. It is essential to identify these moments and find ways to mitigate these by customer communication and opportunities to make changes. We recommend discovering this by mapping behavior rather than only the customer process.
3. Develop strategies around the negatives of the bias.  Offer customers opportunities to send stuff back or re-evaluate their subscribed choices periodically.
4. Compress the time between choice and consumption as much as possible. People make much better choices for what they want at the moment than they do in a projected time frame. Whenever possible, give them a shorter interval or allow for individual decisions rather than a “set” to decrease the opportunity to forecast errors on behalf of their future selves.
5. Build filtered-diversification into your offer.  When the choice is for future consumption, it would be best to have a variety of options, but also a way to narrow down choices based on customer-driven criteria. So, as I said about Amazon, it’s great to have several pages of options but help customers by allowing them to filter by criteria, so the best recommendations are on pages one or two. Having various options presented satisfies the psychological need for choice, but the filter helps to prevent overwhelming customers with options and lose them in the process.

Naïve Diversification bias is a common trait we share. We aren’t always great about knowing what we will want in the future, and neither are your customers. It can lead to less than optimal outcomes with experiences, and customer feelings about your experience that are less than optimal, too, and the kind that does not lead to customer-driven growth.

However, suppose we recognize our tendency to overestimate our preference for variety in the future and minimize the opportunity to make forecasting errors for our customers. In that case, you can mitigate the consequences of customers’ actions that can lead to their choosing a variety of providers for your product and service in the future.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post How Well Do You Know What You Really Want? appeared first on Beyond Philosophy.

Customer Science is the fusion between technology (mainly AI), behavioral science, and data.

Let’s break it down a bit more, starting by defining science. Professor Ryan Hamilton is the only scientist I know. Fortunately, he is also the co-host of our podcast, The Intuitive Customer, and we discussed what Customer Science is on a recent episode. Professor Hamilton explained that science is a rigorous identification and measurement of phenomena, leading to understanding it systematically and then presenting it with a causal link or a theory. Science doesn’t say we know for sure that we will be right, but it does say when we get new information, we know more than when we started. I agree.

So, I ask you, is your company good at the rigorous identification of customer experiences in a systematic way that you can explain with a theory? I am sure most of you will say no because most businesses don’t. When I look at organizations today, the vast majority have neither rigor nor an in-depth understanding of customers and their experiences. Moreover, most organizations do not look at a rational, emotional, subconscious, and psychological level of a Customer Experience, which is vital to understanding customer behavior. These organizations can go into incredible depth using science in other areas like products, finances, operations, and so on, but not customers. Therein lies the problem. Without this in-depth understanding of customer behavior, organizations can’t interpret the data or adequately train their AI.

For example, I talked to a client and asked him if he had any client research in a specific area. He said he did—from seven years ago. I thought, “Blimey! That is a lifetime ago! The world has changed drastically in the last seven months, let alone seven years!” When I asked to see data on how a customer feels and which specific emotions they were evoking with their present experience, my client did not have any data on these areas either. Without this information, how can a business claim to have a rigorous identification of Customer Experiences systematically or explain customer behavior with a causal link? However, that doesn’t bother me nearly as much as the fact that they don’t even realize it is necessary. But I digress…

As I mentioned before, Customer Science is an embryonic idea. When you google Customer Science, it doesn’t yield many results. There are a few out there, but not an overwhelming amount. Customer Science is not fully defined; it’s more of a fusion between technology, Customer Experience, and behavioral science.

It reminded me of 2002 when I first started talking about getting into Customer Experience. Back then, Customer Experience(CX) was still solidifying as a concept. I spent most of my time in the first five years educating people on what CX was and what it meant. Moreover, it morphed into all kinds of areas and focused over 18 years as different opinions surfaced and changed the conversation. Customer Science is here now, at the beginning of this journey into meaning.

“Nothing is more powerful than an idea whose time has come.” -Victor Hugo

Data Collection is the First Step Toward Customer Science

A vast reservoir of Customer Data exists for science to rigorously identify and explain. Take Amazon, for example.

I love Amazon just as much as I love Apple (which, as many of you know, is a lot). I have a couple of Echo Dots in the house, shop on the site and the pantry, use their entertainment options, etc. This means that Amazon knows when I get up and when I go to bed, what I like to listen to, what I want to eat, what I like to do with my free time, and everything else.

Amazon can consolidate and aggregate all this data, apply what they know about customer behavior, and understand my buying behavior. Amazon knows what I buy when and how much and, perhaps most importantly, they can see where they can influence my behavior. The difference between Amazon and many other companies is using this data to understand their customers at a behavioral science depth. They have a division called Amazon Science. What I love about Amazon Science is this division is all about “customer obsession.” Also, they refer to their team as “our scientists.”

Is your company customer-obsessed, and do you employ scientists to look at customer behavior based on the data you have collected? Again, the majority of you will answer no. However, what would be possible if you used that data for segmentation by customers’ buying habits, hobbies, values, and spending amounts, too? It would be a powerful package.

In other words, with all the technology and the data, you can apply the rigor of science to it to explain why people are doing things, and then employ those findings to get people to buy more. Voila! Customer Science.

Reinventing What Already Exists

Do you remember what life was like before the iPhone? I do. You could take a digital picture, talk or text on the phone, listen to digital music, check your email, and shop on the internet, just like you do today. However, we did all these things on separate devices. The iPhone brought them all together, and the advantage was the integration. The consolidation of functionality makes them more potent than they were as individual devices.

It’s the same idea of consolidation with the concept of Customer Science. The term is a repackaging of existing theories—Customer Experience, AI, technology, cloud, 5G’s potential for data collection, Customer Experience Management, and the behavioral sciences’ psychological concepts—in a new way. It’s not wrong to repackage, either. If making an old idea new again makes people excited about it, and the old theory is a sound and important one, I am all for it.

Another significant influence on the idea is that organizations feel pressure to change. The marketplace has changed drastically over the pandemic. The increasingly widespread adoption of cloud computing, digital transformation, and 5G fuel the fusion of these ideas and encourage organizations to embrace them. Customer Science presents an opportunity to test our theories against our data using increasingly advancing tools to explain customer behavior and improve what we do.

We aren’t there yet. There is no Customer Science lab hard at work, optimizing the way to foster customer-driven growth. The concept is nascent, little more than a label at the moment. However, it’s a label with potential, and perhaps even an idea whose time has come.

The iPhone was also an idea whose time had come. Apple did pull the existing technology together to address a saturated phone market with a unique and advanced approach. Perhaps, in time, Customer Science can do the same for business.

The INTERPRETATION of Data is the Next Competitive Battleground

We all know we have masses of data. The issue is not the collection of data but instead the interpretation of data that is the issue. Behavioral scientists can look at data and interpret customer behavior to see patterns. The Apples and the Googles of this world recognize that there are patterns within the data. They also know if they look at the data differently with more advanced thinking, they can uncover what the customer really wants. Most organizations do not have this capability.

The evidence of this opinion lies in the company’s segmentation. Data enables improved segmentation. When you look at people’s psychological attributes, like their personality characteristics, lifestyle, interests, and social classes, you can infer something about their behavior. However, few organizations do this. Most segment their customers into large, medium, and small, or other such basic segmentation, which isn’t nearly enough differentiation, and certainly doesn’t include any rigor or explanation.

When you look at people’s psychological attributes, like their personality characteristics, lifestyle, interests, and social classes, you can infer something about their behavior. However, few organizations do this.

The opportunity is in science. Firms that have taken a scientific approach, as Amazon does with their data. Amazon has developed theories about customers and tested them to see if they work. Google runs thousands of A/B Tests every year to see what works and what doesn’t. They collect data, develop theories, test the hypotheses, and then develop new ideas based on their findings.

I am baffled by companies that invest millions of dollars based on a hunch rather than research. Sure, you can invest in whatever you want; it’s your money. But even if you do succeed, it’s more luck than anything else—and one day, your luck is going to run out.

However, if you can predict what the customer wants by examining the data through a behavioral sciences lens, you can see what customers want. Moreover, you know what they want even when they might not know themselves.

Unfortunately, many firms don’t have the data to examine. If you count yourself among them, our Emotional Signature® Research determines what emotional engagement you have currently with your customers and how you could gain more. Moreover, it’s research, not a “hunch.”

Customer Science is the Future for Customer Growth Analysis

It is also important to remember that the world is a messy place. With a non-scientific approach to business, which almost all companies take, it can be challenging to know whether your efforts were successful or not. Sure, there are outliers where a business makes a small adjustment to the process and ends up with 300% growth, or, to the contrary, a 50% loss in sales. However, it’s more likely that sales and the Net Promoter Score (NPS)® go up by five percent, but your competition also went up or down a little bit, or the market got more competitive or any other host of influences. With a non-scientific approach, it is difficult to know what change affected sales the most.

I am hopeful that if business embraces the idea of Customer Science, it will result in much more fundamental changes in the approaches that people take to managing Customer Experiences, as well as cultural differences about how we make decisions and evaluate success. Perhaps most importantly, it gives you the rigor and to identify and measure whether what you are doing is creating customer-driven growth—so you can keep doing it for more.

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post What is Customer Science? Is This the Next Wave of Change? appeared first on Beyond Philosophy.

We discussed this phenomenon in a recent podcast and how we all do this. For example, I think the Luton Town Football Club is the best team in the world. The team demonstrates how football (aka, soccer, for those unfamiliar with the British version of the word) should be played. Or they do in my mind anyway. 

However, my mind is at odds with itself. If I am honest, I also know Luton Town Football Club is not that great. While they are in the Championship tier, which is the second of the four levels of the English Football League, the team probably should play in the third tier, called League One. As bad as that assessment sounds for the team, Luton Town Football Club is doing well compared to their history. Not so long ago, my team dropped out of the professional tiers altogether and played semi-professional teams. The Semi-professional league means that somebody, who was a postman in the morning, turns up to play football in the afternoon. 

Many sports fans are familiar with this dichotomy. Your love for the team makes them the best, and your “hope springs eternal” that this year will be their year. However, at the same time, you know deep down that it probably isn’t. 

These contradictory beliefs cause discomfort for us. The two simultaneously-held and conflicting views create tension for us. If we could admit that one of our ideas is wrong, it would relieve that tension. Nonetheless, we still hold onto the contradictions despite feeling uncomfortable about it. 

One time, a gentleman who worked at an oil company picked me up for a speaking engagement in Austin, Texas. Our conversation from the airport led to him telling me how environmentally-friendly he was. However, we had this conversation in the most massive pickup truck I have ever seen that he owns, not to mention that he works for an oil company. 

It’s a funny story, and we can all laugh at his lack of self-awareness in this instance, but he isn’t alone. We all create Cognitive Dissonance. Conflicts abound all the time in all of us. 

We have several common ways we resolve these conflicts and relieve that tension. One way we reduce the conflict is to align our behavior with our beliefs. Another way is to do the opposite, meaning we update our ideas to be consistent with what we see out in the world. 

However, this type of resolution is less common than it probably should be. Moreover, resolving your conflict by changing either your thoughts or actions is a bit dull to study. Psychologists have instead focused on the dysfunctional ways that we address this conflict. The third way people resolve Cognitive Dissonance is to change their perception of the beliefs, which means rationalizing your actions. 

These contradictory beliefs cause discomfort for us. The two simultaneously-held and conflicting views create tension for us. If we could admit that one of our ideas is wrong, it would relieve that tension.

Cognitive Dissonance Theory and the Real World

The Cognitive Dissonance Theory is the work of psychologist Leon Festinger. His book, A Theory of Cognitive Dissonance, was published in 1957. Most psychologists run experiments and analyze results across conditions, and Festinger did that, too. However, he also did some anthropological work with a UFO cult in Chicago around that time called The Seekers to see how the cult resolved Cognitive Dissonance about an imminent apocalypse they forecasted but didn’t happen. 

Here’s who The Seekers were and what happened. The cult’s leader, Mrs. Keech, thought she was receiving messages from aliens. The messages told her that the aliens were coming to take them, the “true believers,” away in their spaceship on a specific date. Many of the cult members were all in, leaving their spouses, selling all their possessions, and eventually turning up in a field in rural Illinois to wait for the Rapture. They waited and waited, but the aliens never showed.

You can imagine that giving up your earthly existence for a ride on a spaceship you are sure is coming to get you and realizing that it didn’t create significant Cognitive Dissonance. As a result, Festinger and his team could observe what happened with the cult members next. 

There were different reactions to the situation. Some cult members resolved the dissonance by stopping their beliefs. They admitted they were wrong, left the cult, and attempted to restart their lives. However, other cult members resolved the dissonance by committing to it more intensely and changing their perception of their beliefs. These reinvigorated cult members started proselytizing, trying to attract new members. Perhaps the argument was that if this group could believe hard enough, it would make it so. 

I have been guilty of similar thinking—but not about spaceships coming to whisk me away to outer space. Some of you might remember that I love Apple products. But before it was all about Apple for me, it was all about Sony. There was a design that Sony used that held my fascination. I bought everything Sony made, computers, Walkman, TVs, and so on. However, I noticed that as my relationship went on with them, Sony could use some improvements in their usability. As the usability interface worsened, I started to make excuses for them as a loyal customer. Over time, however, I admitted that Sony was not that good anymore, and I moved on to greener pastures.

When we talk about Cognitive Dissonance objectively, it indicates a stickiness where we want to hold onto our beliefs. So, we will minimize by explaining away bad experiences if we’re loyal to the brand. By contrast, if we were all robots, our first disappointing experience with a brand that we were faithful to should then reduce our evaluation of the brand. A linear map could show where every good experience increased our evaluation and where negative experiences decreased it. However, we are not robots, and our maps look different. 

Another form of dissonance reduction takes place where we change the story. Then, once we flip our beliefs, we can then adjust our memories of our own opinions. We do it to get things to line up in our heads. For example, I could revise my account of my erstwhile relationship with Sony by changing my belief that Sony was a good brand and replacing it with the idea that it was not as good as I thought it was. Moreover, I could further amend that recollection to state that I was never overly enthusiastic about Sony in the first place. 

Cognitive Dissonance also happens internally at an organization. Marketing makes a brand promise in advertising, but then the organization doesn’t follow through with it in reality. It creates a conflict for customers, which is terrible for your customer-facing employees on the front lines. In turn, many employees will get fed up with the contradictions and leave in search of greener pastures. Therefore, resolving Cognitive Dissonance is imperative for those in leadership roles at an organization.

So, what should you do about Cognitive Dissonance?

As far as practical applications, I have a few suggestions:

1. Recognize that Cognitive Dissonance is uncomfortable for people. This psychological concept is at play in people’s thinking all the time. If you are customer-facing, understanding that your customers are often dealing with it and recognizing how it changes their behavior is essential. Leadership should look for ways of resolving it for customer-facing positions, whether that means changing policies or operational directives or something else in your organization. 
2. Find Cognitive Dissonance reductions strategies that you or your organization will use. Find ways to ease the discomfort for your customers in their buying decisions by appealing to what they say they need but delivering what they really want. For example, when someone like the oil-company employee wants to buy an environmentally-friendly car, but only looks interested in the enormous trucks, highlight the ways the giant vehicle is environmentally-friendly for its class. Using empathetic humor could be another way to alleviate the dissonance-induced tension that people feel.
3. Remember that customers can’t always tell you what they want. I have said it before, and I will say it again: people don’t always tell you what they want because they don’t know themselves. You have to dig a little deeper, under the surface, to discover what is motivating their behavior and possibly creating dissonance. Our Emotional Signature Research takes into account what people say and what emotions they feel to identify what drives an organization’s value. It can help you find out what customers really want and not just what they say they do.

So, What Next?

Cognitive Dissonance is everywhere. Many of the psychological concepts we regularly discuss in this newsletter are a form of it somehow or another. It is helpful to think of it as a broad umbrella theory with many more specific phenomena under it. Moreover, it’s everywhere because we all participate in activities that create it, and we all take action to resolve the discomfort Cognitive Dissonance causes. 

In situations with human thinking and recall, there’s also only one thing happening. There is also an element of Confirmation Bias, which, you might recall, is our tendency to turn new evidence into that which supports our previously-held beliefs. In other words, I have this view; therefore, I’m going to look out for the things that confirm it. Furthermore, our Intuitive System, which is the type of thinking we use that is fast and automatic, is looking for patterns. So, it notices one part of the experience was terrible, and so was this other part, and then that other thing was bad, too, so maybe that means the provider is not as good as they used to be. 

So, remember, as you’re trying to use this concept and apply it, the desire to reduce Cognitive Dissonance is universal. Moreover, there are many different ways to do it. However, it is essential to reduce the occurrences of it where you can. While there will be a hardcore group of hyper-enthusiastic people who will never change their behavior, most people will resolve the dissonance they feel in your experience. It will often be by abandoning the brand or, in some cases, even turning against the brand to go to your competition. 

To hear more about this idea in more detail, listen to the complete podcast here.

Colin Shaw is the founder and CEO of Beyond Philosophy, one of the world’s leading Customer experience consultancy & training organizations. Colin is an international author of six bestselling books and an engaging keynote speaker.

Follow Colin Shaw on Twitter @ColinShaw_CX

The post Why We Think Things Are Good When They Are Bad appeared first on Beyond Philosophy.