Growth Hacking

6 Psychology Hacks of an Outstanding Customer Experience

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Businesses might be good, but to really break through and drive the bottom line, your brand needs to stand out.

87% of organizations say traditional experiences no longer satisfy customers.

ACCENTURE

To create an unforgettable customer experience you have to have more than a good product. You have to create a powerful experience that will leave your customer feeling good about themselves and your brand – and coming back for more ♥️ . Often a customer’s response to a brand is less about concrete reality and objective facts and figures, and more about how they have perceived the overall experience.

So how do you go about creating an outstanding customer experience? You could do worse than learn some tricks from behavioral psychology. Psychologists know what makes our brains tick, and the drivers behind our actions. Smart businesses can get on board and do the same.

1. Peak-End Rule

Economist Daniel Kahneman discovered that our brains can’t remember everything. Instead, we use mental shortcuts, referred to as heuristics to pick out what’s important. Emotion is a key driver, and it’s been found that the more intense and recent a feeling, the more memorable the experience. This is the foundation of the psychology principle known as the Peak-end Rule.

The premise behind this rule is that people judge an experience based on how they felt and its emotional peak and at the very end, rather than averaging out the experience over each moment.

Think of concert. You’re standing there for ages as the band play new songs that you don’t know and are decidedly average. But then they play your favorite track, ever, and you dance and sing your heart out. There’s a couple more tunes, and they finish on their biggest hit yet. You’re likely to remember that experience positively, as they connecting with emotionally and ended on a high, even though 80% of the songs weren’t very powerful.

The discount grocery chain Aldi keeps things basic, with ugly metal racks and own brand products. Not the stuff of a good experience, you might think? But people are satisfied with Aldi. Why?

Because they end on a high. The checkout experience is so fast and efficient that people don’t mind the process of going round and filling their basket, as in the end, it all turns out well. This is even more powerful as usually queuing for the check out is a customer pain point, and Aldi have transformed it into a surprising pleasurable experience.

So when you’re designing experiences, remember to end with a crescendo ☝️, and keep that feeling going.


2. Designing For Perception

According to advertising guru Rory Sutherland, the facts matter less than perception. What people think has taken place is more important than what is actually on offer.

Many food products are made in the same factories, and shipped out to companies all over the world to put their brand label on. That tin of soup branded Campbell’s could be exactly the same as Walmart’s own, but most people will say that the Campbell‘s version tastes better. Why? Because we perceive something that costs more and has a well known brand attached to it is of superior quality.

Eurostar used £6 billion to reduce the travel time between Paris and London by about 45 minutes. But for less than 31 billion they could have put high-speed wifi on those trains, which would not reduce the duration, but would have improved the enjoyment customers perceived, and meant they wouldn’t worry about the length of their ride. It’s all about the experience.


3. Simplicity Over Complexity

We’re intelligent beings, but sometimes we don’t want to navigate complex systems. As mentioned before, mental shortcuts work for us.

 

People have a prediclation towards anything that reduces their cognitive load.

It’s one of the reasons Google is more successful than other search engines. Rather than throw lots of information like news and weather at them, it is a simple search bar. It’s not that it doesn’t have that functionality, it just chooses not to share it immediately.

The Simplicity Index is an annual ranking of brands with the least complicated experiences.

Their research has shown

💡 64% of consumers are more likely to recommend a brand because of a simple experience.

💡 Since 2009, the “simplest brands” have outperformed the stock market by 686%.

💡 55% of consumers are willing to pay more for uncomplicated experiences.

Powerful stuff. So make sure your customer experience is as simple as possible and people will prefer it, even if they don’t know why.


4. Choice Is Good – In Moderation

 

There’s a balance between offering enough choice that people feel like they are engaged in the process, and offering too much which leads to overwhelm. When the latter happens customers are likely to walk away and not make a purchase. It’s all down to a psychological principle known as Choice Overload.

Adding too many options can complicate the experience, which as we know, isn’t what consumers want.

In one study conducted at Columbia University, a team set up a booth of jam samples. Every few hours they would switch from a selection of 24 jams  to only six jams. Their findings were very interesting. When there were 24 jams, 60% of customers would stop to get a sample, and 3% of these customers would buy a jar. When there were only six jams on display, only 40% stopped to try them – but 30% of these people bought jam. Having lots of options did attract customers to browse, but fewer choices resulted in more sales ☝️.

Other negative effects of choice can be anxiety and depression, which cause customers to disengage, and leave them with a bad feeling about your brand.


5. Be Personal

People want to buy from a brand that understands them, and they feel a connection with. It’s about building a relationship – and to do that you need to get personal. A personalized experience has been shown to result in much greater engagement rates and sales. It’s about more than just using someone’s name on an email. It’s about utilizing loyalty data to give targeted offers, about sending the right communications for that individual, and about relating with them in a human way.

In their 2019 Personalization Development Study, Monetate shared the return on investment of personalized marketing, finding that it drove revenue growth and customer value, which increased with the level of investment.

💡 93% of companies with an “advanced personalization strategy” saw revenue growth.

💡 Companies with ROI of 2x or more said personalization made up at least 20% of their marketing budget.

💡 Brands that had the highest personalization ROI (3x or more) focused on loyalty as their top KPI.

💡 People are scared to try new things — unless everyone else is doing it too.

Why is this? It’s The Cocktail Party Effect 🍸, which was discovered in the 1950s by scientist Colin Cherry and states that people focus on the information most relevant to them. So make your brand relevant and get their attention.


6. Social Proof Stops Us Being Scared

People are often scared to try new things. When asked to try something new, people feel anxious and unsure. This fear is deeply embedded in our psychology and it’s difficult to overcome. There is one thing that is very powerful though – other people. When everyone else is doing something we are much more likely to give it a go, and take chance. It’s called Social Proof 👫.

Coined by Robert Cialdini in his book, Influence, Social Proof describes the tendency of people to look to see what others are doing and almost gain permission to try something new.

People like to follow social norms and feel like they are identifying with a community. Conformity is important to people. If you can make them believe that everyone is doing something, except for them, they will want to get involved.

Include product reviews and testimonials, so that people get reassurance. 

More than 70% of Americans ask others for their opinions before making a purchase.

Mintel research

This is even more important than ever with social media and online shopping.

And there’s one type of person people trust more than others – an expert. When experts or event celebrities recommend a product, customers are more likely to trust them and make a purchase.


How Do You Know It’s Working?

You can implement all of these tactics, but how do you track and analyze the outcome? With software like RetentionX which does not only look at the short term effects such as conversion rate and average order value, but dives deeper into the customer journey. RetentionX allows you to compare Customer Lifetime Value and other long term metrics on unlimited numbers of segments with just one click. Data backed scientific reports are generated quickly and securely, giving you the insight you need to grow your business.

 
Sources:
Eugen Eşanu, „Designing Perceptions Instead of Solutions“
Jennifer Clinehens, „5 psychological principles that will improve your customer experience“
Shubham Gupta, „Levelling Up your Product through Behavioural Psychology“
Jennifer Clinehens, „The psychology of an unforgettable customer experience“

 

Data Science Enthusiast, growing revenues with the power of data – Founder & CEO of RetentionX, the leading Software for Decision Intelligence.

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